Sweeney v. Farrington

• Decision Date: 02 April 1963
• Citation: 38 Misc.2d 882,239 N.Y.S.2d 254
• Parties: Daniel T. SWEENEY, a taxpayer of the Town of Hempstead, County of Nassau, on behalf of himself and all other persons similarly situated, Plaintiff, for an Order pursuant to Section 51 of the General Municipal Law v. Palmer D. FARRINGTON, Presiding Supervisor, Ralph G. Caso, Supervisor, John Benoit, Easa Easa, John S. Lockman and James F. Niehoff, Councilmen, individually and constituting the Town Board, of the Town of Hempstead and the Town of Hempstead, Defendants.
• Court: New York Supreme Court

Page 254

239 N.Y.S.2d 254

38 Misc.2d 882

Daniel T. SWEENEY, a taxpayer of the Town of Hempstead County of Nassau, on behalf of himself and all other persons similarly situated, Plaintiff, for an Order pursuant to Section 51 of the General Municipal Law v. Palmer D. FARRINGTON, Presiding Supervisor, Ralph G. Caso Supervisor, John Benoit, Easa Easa, John S. Lockman and James F. Niehoff, Councilmen, individually and constituting the Town Board, of the Town of Hempstead and the Town of Hempstead, Defendants.

Supreme Court, Special Term, Nassau County, Part I.

April 2, 1963.

Wager & Shane, Mineola, for plaintiff; Eli Wager, Mineola, of counsel.

John A. Morhous, Town Atty., Hempstead, for defendants; George W. Marthen, Hicksville, of counsel.

WILLIAM R. BRENNAN, Jr., Justice.

Both sides move for summary judgment in this taxpayer's action brought pursuant to Section 51 of the General Municipal Law. The complaint seeks a judgment declaring certain items in the 1963 Budget of the Town of Hempstead illegal and enjoining the defendants from levying and collecting such portions of the 1963 Town Highway Tax as are attributable to the alleged illegal items.

Such facts as are before the court are not in dispute. Some time prior to October 30, 1962, the Town officials, pursuant to law, formulated the preliminary 1963 budget and provided for a public hearing on that date. Plaintiff appeared at the public hearing and attacked at least two items in the preliminary budget as being illegal. The first of these was one in the amount of $445,439.18 which was set forth at 'Highway Item No. 1' and was designated by the authors of the preliminary budget as 'Contingency'. It was the contention of the plaintiff that such provision constituted a violation of Section 112, subd. 2(a), of the Town Law. The second item was one in the sum of $230,875.93 contained in 'Highway Item No. 3', and it was the contention of the plaintiff that the portion of the appropriation in excess of the sum of $200,000 was contrary to the limitation imposed by Section 271 of the Highway Law of the State of New York and, accordingly, illegal and void to the extent of $30,875.93.

Apparently somewhat impressed by the first legal objection, the Town Board on November 2, 1962, by resolution adopting the budget, modified the preliminary budget, not by eliminating the $445,439.18 item, but by changing the description thereof from 'Contingency' to 'Operational Reserve.' Plaintiff now attacks the legality of the 'Operational Reserve,' and claims that in fact, if not in name, it is still a contingent item prohibited by law. As a final confusion in this labyrinth of labels, somewhat reminiscent of Robert Benchley's 'Treasurer's Report,' the Town Board on January 8, 1963, after this action was commenced, established by resolution a so-called 'Repair Reserve Fund,' and thereafter transferred to that fund the same $445,439.18 previously budgeted as 'Operational Reserve.'

The first question presented is simply whether or not the $445,439.18 item is in fact such a contingent appropriation as is barred by law, regardless of what name is given it. Ordinarily this would call for a factual determination to be made upon a trial, or to be ascertained upon affidavits and documentary proof on a motion of this kind. In making the motion, and in opposing the cross motion, the Town Board could well have annexed, as part of its moving papers, an affidavit of the Town Superintendent of Highways shedding some light upon the true purpose of the budgeted item. It did not do so. The Board could have submitted pertinent extracts of the departmental requests from which the budget is made. It did not do so. It could have submitted the preliminary budget and the final adopted budget, or extracts thereof. It did not do so. It could have come forward with facts showing how the precise figure of $445,439.18 was arrived at, i. e., whether it was a total of a number of smaller figures, a flat percentage of a larger figure, a carry-over of a prior unexpended budgetary item, or a wild guess. Again, it did not do so.

This failure to come forward with an explanation, when taken together with the actions of the Board in adopting the resolutions of November 2nd and January 8th, leads the court to agree with both parties that there is no factual dispute, and that this is a proper case for summary judgment.

The Town Board is prohibited by law from including in its budget any contingent estimates for the repair and improvement of highways. Town Law, § 111, requires that between September 20th and 30th of each year all departments prepare and file detailed estimates of expenditures for the ensuing fiscal year. Highway Law, § 141(1), further specifies the items which the Superintendent of the Highway Department must include in his detailed estimate.

Between October 5th and 10th each year, after the departmental estimates are made, the Town Board is mandated by Town Law, § 112, to prepare a preliminary budget containing the estimated revenues and expenditures of the Town for the succeeding fiscal year. That estimate must contain (Section 112, subd. 2):

'(a) An estimate of the several amounts which the town board deems necessary to provide for conducting the business of the town in each office, board and department thereof, separately stated * * *. The town board may include in such estimate appropriations for contingent purposes as follows:

'(1) For general contingent purposes, an amount not to exceed ten percentum of the total amount which the town board shall estimate as necessary to provide for the operation of town government exclusive of * * * estimates for the repair and improvement of highways and estimates for purposes for which real property taxes are required to be levied on an area less than that of the entire town.

'(2) For special contingent purposes, an amount not to exceed ten per centum of the total amount which the town board shall estimate as necessary to provide for the operation of town government and for which real property taxes are required to be levied on the area of the town outside of villages exclusive of * * * estimates * * * for the repair and improvement of highways. Taxes to meet the appropriation for special contingent purposes shall be levied on the area of the town outside of villages.' (Emphasis supplied)

The prohibition against using estimates for the repair and improvement of highways as an element in the calculation of the 10 percent contingency was added to the law in 1959. (Laws 1959, Ch. 182). When the Legislature enacted this law, it did so on the basis of a legislative memorandum submitted to it by the Department of Audit & Control, which stated:

'This bill would exclude from the computation for either contingent fund the amount estimated for highway Item I, repair and maintenance of highways. This exclusion is consistent with what is now general practice. It recognizes that appropriations for highway Item I depend largely on state aid revenues and less on tax moneys than other appropriations. A result of including such amount in the computation would be a disproportionately high contingent fund contrary to the desirable detailed and estimated budget contemplated by Town Law § 112 generally.' (Emphasis supplied)

Even prior to the 1959 amendment, Highway Item No. 1 could not contain contingency items. What was and is contemplated in that item are '* * * detailed estimates * * * of the amount of * * * expenditures to be made during the next fiscal year * * *' (Town Law, § 111) for '* * * the repair and improvement of highways * * *' (Highway Law, § 141). Nowhere in the statutes is any permission granted to the Town to include contingencies in these detailed estimates.

Town boards are creatures of statute and possess no powers other than those conferred by statute. Holroyd v. Town of Indian Lake 180 N.Y. 318, 73 N.E. 36; Wells v. Town of Salina, 119 N.Y. 280, 23 N.E. 870, 7 L.R.A. 759; Brothers v. Town of Leon, 198 App.Div. 144, 189 N.Y.S. 590; Olin v. Town of North Hempstead, 34 Misc.2d 853, 231 N.Y.S.2d 286, aff'd 18 A.D.2d 831, 237 N.Y.S.2d 991. Section 112, Town Law, even before the 1959 amendment, granted to the Town Board only a limited and circumscribed power to include appropriations for contingent purposes not to exceed 10 percent of the total budget exclusive of debt service and special district purposes. This was the only power granted, and must be construed, under the maxim expressio unius est exclusio alterius, as prohibiting all appropriations for contingent purposes other than those permitted in the statute. The 1959 amendment went one step further. It not only continued the prohibition against contingency items in the detailed departmental budgetary estimates, but also excluded the highway item from the base figure upon which the contingency percentage could be calculated. Thus, the Town Board is clearly prohibited from including in its budget any estimate for repair and improvement of highways which is based on contingent purposes.

The $445,439.18 item contained in the budget was in fact, at the time of its adoption, intended as a contingent item. The Town Board originally labeled it as such. In order to defeat summary judgment against it, the Board was required to come forth with evidentiary facts, Shapiro v. Health Ins. Plan, 7 N.Y.2d 56, 194 N.Y.S.2d 509, 163 N.E.2d 333; O'Meara Co. v. National Park Bank, 239 N.Y. 386, 146 N.E. 636, 39 A.L.R. 747, tending to show that the sum was not contingent, but an estimate for the repair and improvement of highways under Highway Item No....