Court rules appointing authority's imposing the disciplinary penalty of termination "shocking to one's sense of fairness" under the circumstances

Petitioner in this CPLR Article 78 proceeding challenged the appointing authority's [Town] dismissing her from her position with the Town after she was found guilty of four charges alleging misconduct and insubordination arising from an incident in which Petitioner "took approximately $181 from the Town's petty cash fund."*

At her Civil Service Law §75 disciplinary hearing Petitioner maintained that she intended only to borrow the money and to replenish the fund later. Addressing this representation, the Appellate Division said "it was undisputed that [Petitioner] left a note in the [Town's] petty cash envelope indicating that she owed money to the fund."

The Appellate Division modified the Town's determination "on the law" and annulled that part of the Town's determination finding Petitioner guilty of charges 1 and 2,  finding charges 1 and 2, which charged her respectively with theft and larceny, was not supported by substantial evidence** and vacated the penalty of termination.

The court explained that "A person "commits larceny when, with intent to deprive another of property or to appropriate the same to him[- or her]self or to a third person, he [or she] wrongfully takes, obtains or withholds such property from an owner thereof." Here, said the Appellate Division, it concluded that Petitioner's actions, "particularly the creation and placement of the note" indicating that she "owed money to the fund" are inconsistent with an intent to deprive or appropriate and annulled that part of the Town's finding Petitioner guilty under charges 1 and 2.

However, said the court, with respect to charges 3 and 4, alleging Petitioner had violated certain Town's policies, Petitioner's contention that the charges 3 and 4 are not supported by substantial evidence of insubordination "is not properly before us because it [was] not raised in the petition."

In light of Petitioner's "32 years of service to the Town, her impending retirement, and the absence of grave moral turpitude," the majority of the court, citing the so-called Pell Doctrine,*** concluded that the penalty of termination was "so disproportionate to the offense, in the light of all the circumstances, as to be shocking to one's sense of fairness." 

The matter was then remitted to the Town for imposition of an "appropriate penalty less severe than termination."

* The decision notes that Petitioner contended, and the Town "correctly conceded," imposing a penalty of a six-month suspension without pay would be "illegal."

** Presiding Justice Carni and Justice Curran, dissenting, said that in their view [1] the determination of Petitioner's guilt with respect to charges 1 and 2 was supported by substantial evidence; [2] there was evidence from which a reasonable mind could conclude that Petitioner did not intend to return the funds taken; and [3] the penalty of termination was not "so disproportionate to the offense[s] as to be shocking to one's sense of fairness and thus does not constitute an abuse of discretion as a matter of law."

*** Pell v Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34 NY2d 222.

Click HERE to access the text of the Appellate Division's ruling.

 

If, in the course of collective negotiations, the parties agree to certain terms until "an agreement is reached by the parties," such terms become inoperative when the contemplated agreement between the parties is reached

Supreme Court granted the motion submitted by Board of Education of the City of New York [DOE] to dismiss a hybrid CPLR Article 78 proceeding brought by a Union [UFT] for failure to state a cause of action. The UFT complaint-petition* had alleged:

[1] a breach of contract by DOE; and 

2] DOE's decision not to give retroactive salary increases  to union-member managers that were given to City-wide managerial employees paid pursuant to the Pay Plan for Management Employees was arbitrary and capricious.

The Appellate Division unanimously affirmed the Supreme Court's decision, explaining that the "complete, clear and unambiguous terms of the "Agreement" entered into by the parties require that union-member managers receive the same salary increases received by nonunion managers "[u]ntil an agreement is reached." In other words, as characterized by the court, the Settlement Agreement was operative only as long as collective bargaining negotiations between DOE and the UFT were "ongoing"

The Appellate Division pointed out that UFT's complaint-petition alleged that the nonunion managers received the salary raise and benefits demanded by the Union approximately one year after UFT and DOE entered into the Memorandum of Agreement [MOA]. In the words of the Appellate Division, "[t]hus, the receipt of the salary increase occurred outside the time period contemplated by the Settlement Agreement."

The Appellate Division then opined that UFT's claim that the Settlement Agreement requires the UFT-represented managers to receive retroactive raises granted even after the MOA has taken effect, would inappropriately "add or excise terms or distort the meaning of ... particular words or phrases." Thus, said the court, the breach of contract claim was correctly dismissed by Supreme Court.

Pointing out the UFT's claim that the failure to provide the raise to the union-member managers was arbitrary and capricious was correctly dismissed by the lower court for the reasons stated in the above paragraph, the Appellate Division opined that "DOE determined rationally that the Mayor's Personnel Order, which applied to management-level employees 'in active pay status in a position under the Pay Plan for Management Employees' as of the day before the raise was made retroactive and in active status on the date of this order,' excluded the union-member managers at issue."

* The Appellate Division noted that the complaint-petition alleged that the union-member managers' salaries "were governed by the MOA, not the Pay Plan for Management Employees," when the MOA became effective in November 2017.

Click HERE to access the Appellate Division's decision.

 

Audits and reports issued during the week ending April 30, 2021 by the New York State Comptroller

New York State Comptroller Thomas P. DiNapoli announced the following audits and reports were issued during the week ending April 30, 2021.

Click on the text highlighted in color to access the complete audit report.

MUNICIPAL AUDITS

Brighton Fire Department, Inc. – Board Oversight of Financial Operations (Monroe County) The board did not provide adequate oversight of financial operations. The department lacked detailed financial procedures and the board did not enforce compliance with existing bylaw and policy provisions. They also did not present the statutorily-required annual directors’ report or any interim financial information to the membership. Of 220 disbursements reviewed totaling $545,658, 155 (70 percent) totaling $190,160 did not have documented approval and 93 (42 percent) totaling $92,605 did not have adequate supporting documentation.

Brighton Fire District – Non-Payroll Disbursements (Monroe County) District officials did not ensure non-payroll disbursements were properly procured, approved or adequately supported. Of 97 disbursements tested totaling $1.13 million, seven disbursements totaling $568,648 lacked adequate documentation. Of 19 professional service providers paid $769,931 in 2019, officials did not seek competition or provide documentation that competition was sought for 11 totaling $133,567. The district may have saved about $7,100 for meals and lodging if the United States General Service Administration per diem rates were used. The financial software allowed changes to transaction data without approval and officials did not use available software controls to further safeguard transactions.

Town of Marcy – Justice Court Operations (Oneida County) The justices generally provided adequate oversight of court financial activities and ensured collections were deposited timely and intact and were properly reported and remitted. However, the justices did not document their review of the clerk’s monthly bank reconciliations and accountabilities. They did not ensure the court clerk properly handled or made reasonable efforts to collect payment on 12 pending traffic tickets (30 percent) of 40 tickets tested. The justices also did not ensure the court was using the most up-to-date and secure recordkeeping software.

Town of Milo – Financial Condition (Yates County) The board did not effectively manage the town’s financial condition. More real property taxes and user fees were levied than needed to fund operations. The board did also not adopt realistic budgets for each of its funds from 2017 through 2020, multiyear financial and capital plans or the following policies in fund balance, reserve and budgeting. As of December 31, 2020, the general, highway and water funds unrestricted fund balances were excessive, ranging from 97 percent to 178 percent of 2020 expenditures.

Town of New Windsor – Information Technology (Orange County) Town officials did not ensure information technology systems were adequately secured and protected against unauthorized use, access and loss. Officials did not provide employees with cybersecurity training. They did not have a disaster recovery plan. In addition, officials did not ensure online banking agreements comply with New York State General Municipal Law. Sensitive IT control weaknesses were communicated confidentially to officials.

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New York State Comptroller Thomas P. DiNapoli's analysis of New York State's 2021-2022 budget is posted on the Internet

The Enacted State Budget for New York State's Fiscal Year* [SFY] 2021-22 is boosted by a substantial influx of new resources, totaling an estimated $26.7 billion in SFY 2021-22. These resources include federal support, better-than-expected tax collections, revenues from tax increases, and other new resources, resulting in the largest budget in state history at an estimated $212 billion, according to an analysis released on April 29, 2021 by New York State Comptroller Thomas P. DiNapoli.

“The American Rescue Plan provided fiscal relief to the state and local governments, school districts and transit systems at a critical time,” DiNapoli said. “While the Enacted Budget makes important investments in education, health care and other important areas, it’s critical to maintain a long-term view and ensure the state’s spending does not grow to unsustainable levels. Federal support is finite and there were missed opportunities in this budget to ensure the state is well-positioned to weather future emergencies and recessions.”

The American Rescue Plan will give $12.6 billion in fiscal relief to the state and additional funds for other programs to directly benefit New Yorkers. The budget will use $5.5 billion of federal aid in SFY 2021-22 and is required to use the rest by the end of 2024. Revenue actions including increases to top personal income tax rates and corporate franchise tax rates are expected to generate $3.7 billion in SFY 2021-22, growing to $4.8 billion by SFY 2024-25. Increases to the corporate franchise rates expire after 2023 while higher personal income tax rates will expire after 2027.

The new resources provide substantial funding for education and relief programs for struggling New Yorkers and industries. State funding for K-12 public school education is expected to grow by $1.4 billion annually, in addition to federal funding provided directly to districts. New programs, backed mostly by federal funds, include $2.4 billion for rent and homeowner relief, $2.4 billion for child care resources to aid providers and improve subsidies to low-income parents, and $1.6 billion in small business recovery grants and loans, including specific programs for restaurants, cultural establishments, and theater and musical productions.

DiNapoli noted there were also several chances to take steps to improve New York’s long-term fiscal position that were not acted upon. The state continued to defer up to a total of $3.5 billion in Medicaid payments and did not make any new deposits to statutory rainy day reserve funds, which remain at $2.5 billion. Despite a strong cash position, short-term borrowing was also reauthorized. And, for the second year, state leaders circumvented the state’s debt cap for debt to be issued in the coming year—with new state issuance likely to exceed the limits, rendering the cap meaningless.

In the coming weeks, the state Division of Budget will release an updated financial plan for SFY 2021-22 through SFY 2024-25 which will clarify the use and timing of federal aid, spending planned for future years, and the impact of revenue and expense actions on recurring budget gaps. DiNapoli said the financial plan should also provide detail on several risks, including the volatility and temporary nature of new tax revenues and the sustainability of spending on key programs.

*  Click HEREto access the full text of Comptroller DiNapoli's analysis.

 

The plaintiff's failure to file a timely notice of claim as required by Education Law §3813(1) will typically result in the granting of a motion to dismiss the complaint

§3813 of the Education Law sets out the procedures to be followed with respect to the filing of claims against the governing body of any school district in New York State and certain state supported schools.

Supreme Court granted the New York City Department of Education's [DOE] motion for summary judgment dismissing the Plaintiffs' action alleging DOE had unlawfully discriminate against them, finding that Plaintiffs had failed to file a timely "notice of claim" with DOE as required by §3813(1) of the Education Law.

Plaintiffs appealed the Supreme Court's ruling. The Appellate Division, however, sustained the lower court's decision, explaining:

1. Plaintiffs' argument relying on Margerum v City of Buffalo, 24 NY3d 721, and its progeny, was "raised improperly for the first time in [Plaintiffs'] reply brief on appeal;"

2. Were Margerum properly before the court, Plaintiffs' reliance on Margerum for the proposition that no notice of claim is required where the complaint alleges violations of the State and City Human Rights Laws is misplaced "where a notice of claim is required pursuant to Education Law §3813(1)"; and

3. The fact that the individually named defendants were not DOE officers is irrelevant with respect to the issue of whether DOE is within the ambit of §3813(1) notice of claim requirement.

Click HERE to access the Appellate Division's decision.