From the Office of the State Comptroller

From the Office of the State Comptroller

Published during the week of November 26 - December 2, 2012

DiNapoli: New Yorkers Facing $43 Billion in Added Taxes if Congress Fails to Act on Fiscal Cliff

If Congress fails to act to avert sweeping federal tax hikes and sharp spending cuts by January 1, New Yorkers could face more than $43 billion in tax increases and lose $609 million in federal aid in 2013, New York State Comptroller Thomas P. DiNapoli said Thursday in a speech to the Business and Labor Coalition of New York in New York City. Read DiNapoli’s report.

DiNapoli: Ulster County Waste Management Agency Likely Overpaid for Services

The Ulster County Resource Recovery Agency likely overpaid for landfill use, waste hauling and fuel because of questionable bidding practices, according to an auditreleased Friday by State Comptroller Thomas P. DiNapoli.

DiNapoli: Excelsior Charter School Lease Costing An Extra $800,000 Annually

Board members of the Brooklyn Excelsior Charter School approved the lease of Excelsior’s school building from a related business at a rate almost $800,000 per year above market value, according to a reportissued Friday by State Comptroller Thomas P. DiNapoli. DiNapoli’s auditors also cited that the company that manages the school, National Heritage Academies, refused to divulge financial records supporting expenses it charged to Excelsior.

DiNapoli: DOCCS Could Save Millions on Health Care

New York State could save as much as $20 million a year if the Department of Corrections and Community Supervision applies to the federal Medicaid program for inpatient care for eligible inmates, according to an auditreleased Wednesday by State Comptroller Thomas P. DiNapoli.

Comptroller DiNapoli Releases Municipal Audits

New York State Comptroller Thomas P. DiNapoli Wednesday announced his office completed the audits of:

the Town of Binghamton;

the Town of Decatur;

the Town of Fallsburg;

the Hamilton College Sewer District; and,

the Village of Marathon.

Amounts paid to an individual “as compensation” required by contract to be returned to the employer ignored in determining a final average salary upon retirement

Amounts paid to an individual “as compensation” required by contract to be returned to the employer ignored in determining a final average salary upon retirement
Licopoli v New York State Teachers' Retirement System, 2012 NY Slip Op 08400, Appellate Division, Third Department

This CPLR Article 78 action challenged the calculation of a retiree’s [R] retirement benefit by the New York State Teachers’ Retirement System [TRS].

R served as superintendent of the School District from 2001 until his retirement in 2009.

In 2006 R and the district entered into an employment contract covering the period of July 1, 2006 through June 30, 2009 that provided for basic annual salary increases of four percent. The agreement, however, required R to make a gift of one percent of his annual salary to the school district each year.

Additionally, the agreement provided that in the event R was to "resign" from his position for any reason other than for "retirement,” he was required to make a gift of $15,000 to the school district.*

When R retired in 2009 TRS determined that the sums he was contractually obligated to refund to the school district annually were to be excluded in determining his final average salary for the purposes of retirement.  

R filed a petition pursuant to CPLR Article 78 challenging TRS’s decision. Supreme Court dismissed R's petition and R appealed.

The Appellate Division said that TRS must determine R’s retirement benefits by first determining his final average salary, noting that a TRS member's final average salary is based on the individual’s “actual compensation earned during either the last three or five years of his or her employment, whichever is higher.” 

Further, said the court, in order to prevent any “artificial inflation of this figure,” any form of extra payment made in anticipation of retirement must be excluded, citing Palandra v New York State Teachers’ Retirement System, 84 AD3d 1689.

R argued that those monies that were paid to him that were to be ”gifted back to the school district” in accordance with the contract between the parties constituted regular compensation “because they did not reflect unusual or extraordinary increases in his annual salary and he would have made the gifts whether or not required to pursuant to the agreement.”

The court disagreed, commenting that although a four percent annual salary increase would not, in and of itself, appear extraordinary, there is no dispute that R was required to return a portion of that amount to the school district to satisfy his contractual obligation to the district.

Accordingly, the Appellate Division concluded that, in effect, R did not actually receive the monies he was contractually obligated to return to the district as employment compensation.

Thus, opined the court, TRS’s determination that the portions of R annual salary that were required to be gifted back to the district must be excluded from the calculation of his retirement benefit was not irrational and dismissed R’s appeal.

* The agreement was subsequently amended at R's request to permit him to make the $15,000 gift to the school district's parent-teacher associations in the event this provision in the agreement was triggered by P's resigning for other than reasons of retirement.  

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2012/2012_08400.htm

Employer met its burden of showing employee failed to establish her age discrimination, hostile work environment, constructive discharge and retaliation claims

Employer met its burden of showing employee failed to establish her age discrimination, hostile work environment, constructive discharge and retaliation claims

2012 NY Slip Op 08248, Appellate Division, First Department

In this action, the plaintiff [P] alleged that she was the target of unlawful age discrimination, served in a hostile work environment, and was subjected to constrictive discharge and retaliation.

The Appellate Division sustained the Supreme Court’s dismissal of the P’s petition, finding that the employer had met its burden of demonstrating P failed to establish her claims of age discrimination, hostile work environment, constructive discharge, and retaliation.

The Appellate Division, with respect to P’s unlawful discrimination claim, explained that there was no evidence that P suffered from an adverse employment action. The assignment of P to certain non-supervisory tasks ordinarily performed by teachers constituted "merely an alteration of her responsibilities and did not result in a materially adverse change,' since [she] retained the terms and conditions of her employment, and her salary remained the same."*

The court said that P failed to raise a triable issue of fact as to her hostile work environment claim, since the alleged conduct and insults by her employer and coworkers were not "sufficiently severe or pervasive to alter the conditions of [her] employment"

Addressing P’s claim of constructive discharge, the court said that standard for establishing "constructive dismissal" is higher than the standard for establishing a hostile work environment, “where, as here, the alleged constructive discharge stems from the alleged hostile work environment.” As P failed to raise a triable issue of fact with respect to her hostile work environment claim, "her claim of constructive discharge also fails.” 

Finally, the Appellate Division held that with respect to P's retaliation claim in found no evidence of an adverse employment action resulting from her filing of a notice of claim against the employer nor was there any evidence of a causal connection between P's commencement of litigation and the allegedly adverse actions against her, commenting that the conduct at issue began months before P filed the notice of claim

* As to P’s complaint alleged disciplinary memoranda in her file, threats of unsatisfactory ratings, disciplinary meetings and allegations of corporal punishment, these did not constitute adverse employment actions as P received "satisfactory end-of-year performance rating[s], and none of the [alleged] reprimands resulted in any reduction in pay or privileges."

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2012/2012_08248.htm

Imposing a greater penalty than that recommended by a disciplinary hearing officer

Imposing a greater penalty than that recommended by a disciplinary hearing officer
2012 NY Slip Op 08219, Appellate Division, Third Department

Disciplinary charges were filed against a correction corporal [P] alleging that P struck an inmate across the face with an open hand fracturing the inmate's nose while the inmate allegedly was handcuffed and apparently intoxicated.

In the course of the disciplinary hearing P admitted that he struck the inmate and a surveillance video that recorded the incident was admitted into evidence. The Hearing Officer sustained the charges and imposed as penalty a 30-day suspension without pay.

The Ulster County Sheriff adopted the findings of the Hearing Officer as to P’s guilt but concluded that the appropriate penalty was termination of P's employment with the Sheriff's Department.

Supreme Court dismissed P’s Article 78 petition seeing to vacate his dismissal notwithstanding his “unblemished record of employment with the Department” and P appealed.

The Appellate Division sustained the lower court’s ruling, indicated that its review of the penalty imposed was "limited to whether the penalty is so disproportionate as to be shocking to one's sense of fairness" – the so-called Pell Doctrine [Pell v Board of Education, 34 NY2d 222].

Concluding the P’s dismissal was not shocking to one's sense of fairness given the supervisory nature of his position in the Department and the fact that when this incident occurred, the inmate was handcuffed and under restraint, the court explained that the Sheriff had the right, in determining the penalty to be imposed, to take into account that P did not fully disclose what transpired in the Department's official report, including the fact that he had struck the inmate while he was under restraint.

The decision is posted on the Internet at: 

http://www.courts.state.ny.us/reporter/3dseries/2012/2012_08219.htm

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