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006 GERALD A. VERGILlS * KENNETH M. STENGER ALBERT P. ROBERTS THOMAS R. DAVIS STEPHEN E. DIAMOND JOAN F. GARRETI** VERGILIS, STENGER, ROBERTS, DAVIS & DIAMOND LLP ATTORNEYS AND COUNSELORS AT LAW 1136 ROUTE 9 WAPPINGERS FALLS, NEW YORK 12590 (845) 298-2000 FAX (845) 298-2842 Sender's e-mail address:jhoran@vsrp.com OF COUNSEL: KAREN MacNISH LEGAL ASSISTANTS: AMY E. DECARLO MARIA L. JONES SANDRA OAKLEY CLOSING COORDINATOR: SUSAN E. CAFFINE KEVIN T. McDERMOTI ANGEL 1. FALCON ANTHONY M. DEF AZIO*** JAMES P. HORAN*** LISA M. COBB * ADMITTED TO PRACTICE IN NY & FLA. *' ADMITTED TO PRACTICE IN NY & CONN. '" ADMITTED TO PRACTICE IN NY & NJ July 16, 2009 POUGHKEEPSIE OFFICE 276 MAIN MALL POUGHKEEPSIE, NY 12601 (845) 452-1046 NEWBURGH OFFICE 299 N. PLANK ROAD, SUITE 106 NEWBURGH, NY 12550 (845) 567-3783 Via Facsimile 518-474-5119 & First Class Mail Re: Tax Warrant/Tax Levy Town of Wappinger Grinnell Library Funding RECEIVED JUL 11 2009 70"". rvlV CLERk Mitchell Morris, Esq. Department of Audit and Control Alfred E. Smith Building State Office Building Albany, New York 12236 Dear Mr. Morris: Please be advised I represent the Town of Wappinger, Dutchess County, New York. By letter dated March 31, 2009 sent to you via fax and first class mail, I had requested guidance on how the Town of Wappinger could make up a $28,000.00 shortfall in the tax levy with respect to the funding for the Grinnell Library. A copy of my letter of March 31, 2009 is enclosed. To date we have not received a response and time is becoming critical. Accordingly, I respectfully request that you provide some guidance as quickly as possible. To summarize, the voters of the Town of Wappinger approved a proposition pursuant to Education Law S259 (1 )(b)(1) which authorized increasing funding for the Grinnell Library to the sum of $542,874.00 at the 2008 General Election. Since my letter of March 31,2009, my office completed a more detailed investigation. It now appears that the amount of funding for the Grinnell Library was incorrectly reported to the Dutchess County Real Property Tax Department in preparation ofthe Tax Warrant for the Town of Wappinger. The amount reported, and subsequently levied for the Grinnell Library was the sum of$514,874.00 which was $28,000.00 less than the amount approved by the voters. As previously reported, I find no authority for a supplemental tax levy, and even if one were permitted, the cost to do so would be prohibitive. To complicate matters, our subsequent research has disclosed additional issues which require clarification. The immediate issue is how to fund the $28,000.00 shortfall between the amount approved by the voters pursuant to Education Law s259(1)(b)(l) and the amount collected by the tax levy. In C:\Documents and Settings\Chris Masterson\Local Settings\Temporary Internet Files\OLK4B\Letter 2009-07-16 to Mitch Morris re shortfall of tax levy.doc Vergilis, Stenger Roberts, Davis & Diamond LLP Request for Comptroller's Opinion Page 2 of8 accordance with 15 Opinion State Comptroller 14,1959, may the Town Board, by resolution, transfer surplus funds, unexpended balances, or contingent funds of an authorized borrowing to the library to make up the $28,000.00 shortfall? At present, it appears the most viable option for the Town is to borrow the $28,000.00 and then appropriate an amount in the 2010 Town Budget to repay the amount borrowed. It is respectfully requested that this question be addressed with all deliberate speed. ADDITIONAL QUESTIONS PRESENTED As noted, our research has raised additional questions which will require resolution prior to the submission of the Supervisor's tentative budget for 20 10. These questions are also of interest to the Grinnell Library. 1) Maya Town Board, as an authority named in Education Law ~ 255 and pursuant to Education Law ~ 259(1)(a), reduce appropriations for a library "by further vote" of the Board where the voters of the Town passed a proposition to increase library funding under Education Law ~ 259(1)(b)(1) at a General Election? 2) If question 1 is answered in the affirmative, when may a town board reduce the appropriation for a library "by further vote?" 3) If question 1 is answered in the negative, please advise what, if any, statutory authority is available to reduce library appropriations since a proposition to reduce library funding is prohibited by Education Law ~ 259(1)(b)(1)? 4) Maya town board condition the funding of a Free Association Library by requiring the entry into a contract for library services under Education Law S 256 where the voters of the Town have successfully passed a proposition to increase library funding under Education Law S 259(1 )(b )(1)? 5) Where a Free Association Library is unwilling to enter into a contract under Education Law S 256, may a Town Board terminate funding even if there was a prior successful vote to fund the library under Education Law S 259(1)(b )(1)? 6) In accordance with Op. State Compt. 67-771, is a Town prohibited from making lump sum payments to a free association library when no contract is in place under Education S 256? 7) If a Town enters into a contract for specifically defined library services with a free association library under Education Law S 256 in return for a specific level of payments, are the amount of payments increased by a vote of the electors under Education Law S 259(1)(b)(1)? 8) Which voters of the Town, which includes one or more villages are entitled to vote under Education Law S259(1)(b)(1)? The Grinnell Library is located in the Village of Wappingers Falls; the Village is located partly within the Town of Poughkeepsie and partly within the Town of Wappinger. The Village ofWappingers Falls provides separate Vergilis, Stenger Roberts, Davis & Diamond LLP Request for Comptroller's Opinion Page 3 of8 funding for the Grinnell Library. Are those residents of the Village who are located in the Town also entitled to vote on the Town's appropriation to the library? 9) Are Library Districts subject to Education Law S259(1 )(b)(1)? BRIEF HISTORY The Grinnell Library Association is chartered by the New York State Board of Regents as a "Free Association Library." An Association Library is a private entity established and controlled by private individuals. Free means that the library is "maintained for the benefit and free use on equal terms of all the people of the community in which the library is located." NY Education Law S253(2). Grinnell Library Association is not a public library. The Town Clerk has no record of a contract between the Grinnell Library Association and the Town of Wappinger under Education Law S 256. At the November 2001 general election the voters of the Town approved a proposition to increase the annual contribution ofthe Town of Wappinger for the operating budget of Grinnell Library Association from $100,000 to the sum of$314,874 annually. In 2002, the Town of Wappinger investigated the creation of a library district for Grinnell Library; however, the Education Department informed the Town that creation of such a library district could not take place without the consent of the Grinnell Library Association. Pursuant to Chapter 652 ofthe Laws of2002, the Legislature authorized the Town of Wappinger to have the statement of taxes show on a separate line "the amount of any tax or other charge levied by or on behalf of such town for purposes of the Grinnell Library Association." The Town Board adopted a resolution to create a line entry for the Grinnell Library and notified Dutchess County of such action. Dutchess County incorrectly notes that taxes are for the "Grinnell Library District." No district has been created. 2008 Vote In 2008, a petition was presented and signed by the necessary 10% of the voters which got the question on the ballot at the 2008 General Election. The petition stated: Shall the annual contribution of the Town of Wappinger for the operating budget of the Grinnell Library Association be increased by the sum of $228,000 dollars to the sum of $542,874 dollars annually? The proposition was approved by the voters of the Town of Wappinger with 3,133 in favor and 2,647 opposed. Grinnell Library also receives funding from the Town of Poughkeepsie and the Village of Wappingers Falls. It is our understanding that the proposition to increase funding did not appear on the ballot in the Town of Poughkeepsie or the Village ofWappingers Falls. All voters in the Town of Wappinger voted on the proposition including the voters within the Village of Wappingers Falls. The Town of Poughkeepsie has a contract with Grinnell Library and appropriates $50,000 for library purposes. Residents of that portion of the Village ofWappingers Falls that lies within the Town of Poughkeepsie, receive their library services from Grinnell Library. Other Poughkeepsie Vergilis, Stenger Roberts, Davis & Diamond LLP Request for Comptroller's Opinion Page 4 of8 residents are provided library services by the Greater Poughkeepsie Library District. The Village ofWappingers Falls appropriated $35,000 for the Grinnell Library in its 2008-2009 Budget. 2009 Town Budeet The Town of Wappinger 2009 Final Budget appropriated $514,874.00. $314,874.00 was appropriated in 2007 and 2008. Dutchess County issued a tax warrant for $514,874.00. The Town Tax Collector has turned over $514,874.00 to the Grinnell Library Association. A shortfall of$28,000.00 remains, assuming the appropriation for the library cannot be reduced. The Town Board wishes to enter into a contract with Grinnell Library Association which would provide the Town Board with some oversight over the Town funds appropriated to the library and some guarantees as to the services that would be received by the residents of the Town. The Town is also concerned that it is providing a markedly disproportionate amount of funding for the library. LEGAL BACKGROUND Education Law S 259(1 )(a) provides: Taxes, in addition to those otherwise authorized, may be voted for library purposes by any authority named in section two hundred fifty-five of this part and shall, unless otherwise directed by such vote, be considered as annual appropriations therefor until changed by further vote and shall be levied and collected yearly, or as directed, as are other general taxes. Education Law S 255 sets forth the following authorities for levying taxes: the electors of "any county, city, village, town, school district or other body authorized to levy and collect taxes;" or the governing elected body of a county, city, town or village. The electors of a Town and a Town Board are both authorities under Education Law S255. The petition provisions of Education Law S 259( 1 )(b)( 1) were added by Chapter 414 of the Laws of 1995. Senator Farley's Sponsor's Memo stated: This bill would permit concerned citizens to place the question of increased library funding directly on a local ballot, and would thus allow local taxpayers to affirmatively opt for increased local funding. The mechanism is similar to the existing funding votes undertaken in school district public libraries. 1 The drafters of Chapter 414 failed to understand a crucial difference between school districts and other municipalities; school district budgets are subject to vote by the electors each year, while the budgets of counties, cities, towns and villages are not subject to the vote of the electors. This crucial distinction manifests itself in Education Law S255 as well. In the case of a school district, the electors of the district are authorities, but the Board of Trustees of the School District is not. In the case of a town, the electors of a Town are an authority and the Town Board is also an authority under Education Law S255. 1 Education Law ~2008(2) provides the electors of a school district to vote on an increase in library funding. See, Appeal of the Beaver Falls Librarv, 43 Educ. Dept. Rpts. _, Jud. Dec. No, 15,002,2003. Vergilis, Stenger Roberts, Davis & Diamond LLP Request for Comptroller's Opinion Page 5 of8 "Further Vote" bv What Authoritv? Education Law 9 259(1)(a) provides that any authority under 9255 may vote to levy taxes for library purposes, and such vote shall be considered an annual appropriation, unless the original vote stated otherwise, or the appropriation is "changed by further vote." In the case of a school district, the electors are the only authority under 9255, so it is they who must cast the further vote. There are a number of court decisions, opinions of the Comptroller and the Education Commissioner that indicates that annual funding shall continue until the voters declare otherwise. Peninsula Public Library v. Board of Education of Union Free School District No. 15. Town of Hempstead, New York Law Journal, June 2, 1959, p.15, coI.3; Locust Valley Library et at v. Board of Education of Central School District No.3 of the Town of Oyster Bay, 54 Misc. 2d. 315,282 NYS 2d 376 (Sup. Ct. Nassau Cty. 1967); 1 Educ. Dept. Rpts. 715, Formal Op. of Counsel No.8, 1951; 26 Op. State Compt. 117 (1970); 29 Educ. Dept. Rpts. 316, Jud. Dec. No. 12,306,1990; Op. State Comp, 1992 No. 92-28; Appeal of Jack L. Cole et aI., 37 Educ. Dept. Rpts. 407 1998; Appeal ofthe Beaver Falls Library, 43 Educ. Dept. Rpts. _, Jud. Dec. No, 15,002,2003; Appeal of the Board of Trustees of the New Rochelle Public Library, 42 Educ .Dept.Rpts. _, Jud. Dec. No. 14,827, 2002} In the case of the New Rochelle Public Library, the Commissioner of Education opined: "The statute contemplates that any authorized authority may vote to levy a tax which shall be considered an annual appropriation unless changed by "further vote" of that same authority (see, e.g., 7 Gp. State Compt. 70, 1951)." It should be noted that Education Law 9259(1)(a) does not use the language "same authority" in conjunction with "further vote." In the case of a school district, the further vote must be by the same authority, since a school district has only one authority under 9255, the same is not true in a Town. Education Law 9259(1)(a) does mention "any authority" in respect to voting the original appropriation, however the statute is silent as to whether "any authority" or the same authority may conduct the "further vote" to change the appropriation. That ambiguity is the catalyst for the instant request for an opinion. Because the electors of a school district are the only authority that may change a library appropriation in a school district, those cases are not controlling with respect to a Town. In the case of a Town, the electors and the Town Board are both authorities under 9255 and either may establish a public library and set an initial annual appropriation for the library. The wording of Education Law 9259(1)(a), does not prohibit one authority from changing the appropriation of the other authority. Prior Comptroller Opinions re Municipal Public Libraries My research has uncovered four Comptroller's Opinions that interpret Education Law 9259 as it applies to taxes for Town and Village libraries; however, all ofthose opinions were issued prior to the amendment creating Education Law 9 259(1)(b)(1) in 1995. The opinions seem to be split as to whether a governing board has the authority to change an appropriation set by the voters. The latest opinion, Op. State Compt. 83-96 indicates that a municipal public library has no authority to mandate the amount of money appropriated by the sponsoring municipality. Obviously, Education Law 9 259(1)(b)(1) supersedes that opinion, but to what extent? Earlier opinions indicate that a Town Board may not change the appropriation for a municipal public 2 Op. State Compt. 63-176 reaches the conclusion that the appropriation is not an annual one. This opinion appears to conflict with those listed above. It is suggested that this opinion is erroneous. Vergilis, Stenger Roberts, Davis & Diamond LLP Request for Comptroller's Opinion Page 6 of8 library where an amount has been set by the voters. See, 4 Op. State Compt. 97 (1948); 7 Op. State Compt. 70 (1951); 16 Gp. State Compt. 495 (1960); 29 Gp. State Compt. 194, (1973). As all of these opinions predate the 1995 amendments, a determination as to their continuing applicability is requested. Education Law ~ 259(1) (b) (1) Onlv Allows Petition to Increase Fundim! In George F. Johnson Memorial Library v. Town Bd. of Town of Union, 55 A.D.3d 1036, 865 N.Y.S.2d 727 (3d Dept. 2008), the Third Department held that Education Law S 259(1)(b)(1) prohibits a petition to decrease library appropriations. In a footnote, the Third Department indicated that a Town Board may have other ways to decrease appropriations for libraries. It is suggested, that the Third Department is alluding to the fact that the Town Board is an authority under S 255 that may change the appropriation as suggested above. If only the voters in a town may change library appropriations after a proposition under Education Law S 259(1)(b)(1) is adopted by the voters, then the decision in George F. Johnson Memorial Library means that library funding may never be decreased, since Education Law S 259(1)(b)(1) does not allow for a vote to decrease funding. How Lon1!Must Town Board Wait If a Town Board may lower the appropriation for library purposes after the adoption of a proposition under Education Law S 259(1 )(b)(1), there is a question as to when a Town Board may lower the appropriation since the statute is silent in that regard. Education Law S 259(1 )(b)(1) provides that the vote on the proposal takes place during the General Election. In the case of a Town that is November. Education Law S 259(1)(b)(1) law provides that it does not affect the budget in existence at the time ofthe vote, so the November vote could only effect the appropriation for the next fiscal year beginning in the ensuing January. Education Law S 259( 1 )(b)( 1) creates turmoil in the town budgeting process because the vote takes place in the middle of the budget process. Pursuant to Town Law S 1 06(2), the tentative Town Budget must be filed by September 30. Pursuant to Town Law S109(2), the final Town Budget must be adopted by November 20. In the case ofthe Grinnell Library Vote, the proposition adopted is broadly worded: Shall the annual contribution of the Town of Wappinger for the operating budget of the Grinnell Library Association be increased by the sum of $228,000 dollars to the sum of $542,874 dollars annually? This proposition places no limitations as to "further vote" by the electors or the Town Board. Assuming that a Town Board can reduce the library appropriation after the adoption of a proposition under Education Law S 259(1 )(b )(1), the statute must be read so that the vote has meaning, that is, a Town Board may not have a "further vote" to reduce library funding on November 20, after the voters appropriated a greater amount at the general election on November 8. If that were the case, the vote would have no meaning. It is submitted, that if the Town Board may reduce library appropriations by "further vote" it must wait until the second fiscal year after the vote is approved, unless the vote says otherwise. Vergilis, Stenger Roberts, Davis & Diamond LLP Request for Comptroller's Opinion Page 7 of8 Pavment to Free Association Librarv Without Contract The New York State Constitution prohibits municipalities from making gifts to public entities, however, the Courts have ruled that a statute allowing grants and contracts with a free association library is allowed by the NY Constitution. Petker v. City of New York, 87 Misc.2d 534,385 N.Y.S.2d 495 (Sup. Ct. 1976). A municipality may fund an Association Library by contract or grant pursuant to Education Law S 256. Education Law S256(1) provides that a municipality may individually or jointly with another municipality: grant money for the support of the cost of maintaining or the cost of any capital improvements to or expenditure for one or more: free association libraries, provided such libraries are registered by the regents; .. .or ... contract with the trustees of a free association library registered by the regents, . . . to furnish library services to the people of the municipality, district or reservation for whose benefit the contract is made, under such terms and conditions as may be stated in such contract. Education Law S 259(1 )(b)(1) authorizes a petition to provide funding for a free association library. As stated in the document INCH BY INCH, Row BY Row (January 2009 ed.), published by the Mid-Hudson Library System and available at midhudson.org/trustee/414mhls.pdf, there is no requirement in Education Law S 259(1)(b)(1) that the library even be located within or near the municipality where the vote takes place. There is no requirement in Education Law S 259( 1)(b)( 1) that a free association library even provide services to the residents of a municipality to receive a grant. This is arguably true because Education Law S 256 does not require any relationship between a municipality and library to make a grant. At present, Grinnell Library has no contractual obligation to provide library services to residents ofthe Town of Wappinger, so any appropriation must be viewed as a grant allowed under Education Law S256. The voters ofthe Town of Wappinger have directed that a grant of $542,874.00 dollars be annually appropriated without conditions. Op. State Compt. 67-771 prohibits the Town from making a lump sum payment to the library without a contract in place. Appropriations must be held by the Town's fiscal officer and paid out on vouchers from the library trustees. Is Op. State Compt. 67-771 still valid in light of Chapter 414 ofthe Laws of 1995? ReQuirine A Contract Under Education Law ~ 256 Prior to the enactment of Education Law S 259(1 )(b)(1), a Town had the right to deny payments to a free association library unless it entered into a contract for library services. The enactment of Education Law S 259(1 )(b)( 1) brings into question a municipality's bargaining power with a Free Association Library. It is unclear what effect Education Law S 259(1)(b)(1) has on the provisions of Education Law S 256. May the Town of Wappinger condition the payment of funds authorized by a vote upon the entry into a contract to provide library services to Town residents? Prior opinions of the Attorney General and the Comptroller indicate that contracts are strongly favored. 1961N.Y. Gp. Atty. Gen. No. 141; Gp. State Compt. 74-1097; Op. State Compt. 76-391. Vergilis, Stenger Roberts, Davis & Diamond LLP Request for Comptroller's Opinion Page80f8 . Which Voters Get to Vote on the Proposition Education Law S 256(2) provides: 2. When the municipality agreeing to make the payment or grant is a town in which there are one or more incorporated villages, which village or villages jointly with such town contract with the trustees of a cooperative library system, a free association library or with another municipal district or body having control of a public library whether or not such district or body is an incorporated village in such town, the amount appropriated by the town board in such town shall be a charge upon the taxable property of that part of the town outside of any such incorporated village. The Town of Wappinger and the Village ofWappingers Falls, a portion of which lies within the Town of Wappinger, both provide grants to the Grinnell Library. As a result of the vote, the Town of Wappinger makes a grant of $542,874 and the Village provided a grant of$35,000.00 in its most recent budget. There is no formal agreement between the Town and the Village regarding the funding of Grinnell Library. Since there is no agreement between the Town and the Village as to support of the Grinnell Library, is the Town's appropriation for the Library a charge upon the whole town or is it only a charge "upon the taxable property of that part of the town outside of any such incorporated village. " This raises are corollary issue regarding a proposition under Education Law S 259(1)(b)(1). If the funding to support Grinnell Library is a charge "upon the taxable property of that part of the town outside of any such incorporated village" may voters within an incorporated village vote on a proposition under Education Law S 259(1)(b)(1)? Your prompt attention to these questions is urgently and respectfully requested. Please contact me if you have any questions. Very truly yours, VERGILIS, STENGER, ROBERTS & DAVIS, LLP ALBERT P. ROBERTS JAMES P. HORAN APR/jm cc: Senator Steven Saland Assemblyman Joel Miller Supervisor Christopher J. Colsey Town Board Douglas Goodfriend, Esq. Roderick MacLeod, Esq. Grinnell Library Trustee Thomas Mahar, Esq.