SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF ULSTER In The Matter of ELLIOT AUERBACH, ULSTER COUNTY COMPTROLLER, JENNIFER FUENTES and STEVEN GREENFIELD, CITIZENS VOTERS OF ULSTER COUNTY, Petitioners/Plaintiffs, DECISION/ORDER -against- Index No. 16-3330 RJ.L. No, 55-16-2085 Richard Mott, [S.C. MICHAEL P. HEIN, ULSTER COUNTY EXECUTIVE, and THE ULSTER COUNTY LEGISLATURE, Respondents/Defendants. For a Judgment Pursuant to Article 78, and/or Section 3001. and Article 63 of the CPLR Practice Law and Rules. Petition/Motion Return Date: February 8, 2017 APPEARANCES: Petitioners/Plaintiffs: Michael R. Siegel, Esq 80 Deer Run Lane Box 373 Wawarsing, NY 12489 Evan R, Gallo, Esq. Office of the Ulster County Comptroller 244 Fair Street, 5 Floor Kingston, NY 12401 Of Counsel Respondents/Defendants: Robert D. Cook, Esq. Cook, Netter, Cloonan, Kurtz & Murphy, PC 85 Main Street PO Box 3939 Kingston, NY 12402Mott, J. In this combined Article 78 proceeding and action for a preliminary injunction and declaratory judgment, Petitioners/Plaintifis seek a determination that Respondent/Defendant Ulster County Legislature's (hereinafter, "Logislature”) 2017 budget Resolution (hereinafter, “Resolution’) is invalid, an order directing a budget modification to “match the average of the County Comptroller's Office's across the state” and restoring staff positions and hours, and for attorney's fees and costs. Respondents oppose. Background On December 7, 2016, the Resolution approved an overall 10% reduction in the Petitioners'/Plaintiffs’ Elliott Auerbach/Ulster County Comptroller's (hereinafter, “Comptroller”) budget (approximately $100,000.00), including a 15% per cent reduction in staff hours represented primarily by a line item veto of the confidential secretary to the Comptroller position. Further, it appropriated funds for a Legislative Audit Unit and increased the budget for the Ulster County Executive's departments by 1.4% on average. The Resolution ultimately restored half of Respondents’ /Defendants’ Michael P. Hein and the Ulster County Executive's (hereinafter, collectively, “Executive") proposed 20% reduction for the Comptroller's office. ‘The budget approval process included exchanges of information between the Comptroller and legislators prior to and at public hearings which were held on November 15, 16 and 17, 2016, at which the Comptroller appeared and spoke. The Legislature alsoheard from comptrollers of two other counties who urged rejection of the proposed reduction, * A report titled “Analysis and Review of the 2017 Executive Budget” (hereinafter, “Budget Analysis and Review") was published on the Executive's website in accordance with Ulster County Charter § 36 (hereinafter, “Charter”. The Executive later issued a report, authored by the Director of Accountability, Compliance and Efficiency and Ulster County's Deputy Commissioner of Finance (hereinafter, “ACE Report”), dated November 14,2016, The ACE Report was not published on the website and contains a detailed analysis of the Executive's rationale for the proposed reductions to the Comptroller's budget, including a critical performance evaluation. Charter § 57 establishes the elective office of Comptroller, having “all the powers... conferred or imposed by law upon a county comptroller and [who] shall perform such other related duties required by the County Executive or County Legislature...” The Charter lists the Comptroller's powers and duties as, inter alia: + Examine, audit and verify all books records and accounts kept by the administrative Units, offices and officials paid from County funds, institutions and other agencies of the County ...; Prepare an annual audit report...; Audit records of appropriations... Certify the availability of funds for all requisitions... Audit any department, program or function of County government to assess the degree to which its operation is economical, efficient and/or effective... as he or she determines necessary or appropriate. Further, the Legislature is empowered to appoint Deputy Comptrollers, assistants and employees “as shall be authorized by the County Legislature,” all of whom “shall be 1 Bight counties in New York State have a comptroiler's office. 3directly responsible to, and serve at the pleasure of, the Comptroller...” Charter § 58. Further, the Charter authorizes the Legislature "to appropriate funds for the annual audit of the books and records of the County by independent auditors” Charter § 11(P), and it establishes a Legislative Audit Committee to: “select the independent auditor to perform the annual audit of the books and records of the County,” “report the independent auditor’s findings to the Legislature, County Executive and County Comptroller.” Charter § 11.1. ‘The Comptroller and the County Executive are non-voting members of the Audit Committee. Id. Parties’ Contentions Petitioners claim that the Resolution violates Municipal Home Rule Law (MHRL) § 23(2) because it “abolishes, transfers or curtails the powers” of the Comptroller's elective office by reducing its budget and directing funds to a Legislative Audit Unit without having first conducted a referendum, Further, they urge that the Resolution is arbitrary and capricious because it relies upon false premises stated in the ACE Report which they claim was prepared with a retaliatory purpose and the objective of limiting the Comptroller's powers. Moreover, they insist that the failure of the Executive to timely publish the ACE Report on its website renders the Resolution invalid. Finally, they seek attorney's fees and costs, claiming that this combined proceeding/action has been brought in the public interest to protect the Comptroller's function of chief financial watchdog. In support of their contentions, Petitioners/Plaintiffs proffer their affidavits, those of two Ulster County Legislators who claim the budget reductions are disparate, punitive in apparent retaliation for the audit of Executive initiatives and an attempt at intimidationthat has the potential to chill reports of waste in county government spending and constitutes the abolition, transfer or curtailment of the powers of the Comptroller's elective office. Further, the affidavits of the Albany and Onondaga County comptrollers state that, these types of retaliatory budget reductions, which they have also experienced, constitute an encroachment on upon their powers and independence, resulting in a chilling effect and real limitations on county comptroliers’ ability to carry out their duties. Respondents/Defendants maintain that the Resolution is not subject toa MHRL § 23(2) analysis in that it neither refers to, nor limits, the Comptroller's Charter powers and Guties. Further, they cite the Legislature's authorization to independent audits to explain the funding appropriation to the Legislative Audit Unit. Moreover, they claim that because the budget process is discretionary and the Resolution violates no law, Petitioners have failed to state a justiciable claim. In support thereof, Respondents proffer the affidavits of the Ulster County Commissioner of Finance, Ulster County Legislators and the ACE Report's author, stating that the Resolution is the consequence of a fully vetted and appropriately conducted budget process and the ACE report a product of extensive research. Finally, they contend that this combined proceeding and action was brought to litigate a political dispute and lacks any good faith basis in the public interest, thereby precluding an award of attorney's fees or costs, Discussion MHRL § 23(2)(f) provides that: “Except as otherwise provided by or under authority of a state statute, a local law shall be subject to mandatory referendum if it. f. Abolishes, transfers or curtails any power of an elective officer.” The term, “Local Law” is defined as:Alaw...adopted pursuant to this chapter or to ... charter by the legislative body of a local government, [...] but shall not mean or include an ordinance, resolution or other similar act of the legislative body...” MHRL § 2 Here, because the Resolution is not a “local law, MHRL § 23(2) is inapposite, Biffer v City of Saratoga Springs, 279 AD2d 749, 751 [3d Dept 2001]. Further, the creation of anew department transferring functions and employees does not constitute an abolition, transfer or curtailment of an elected official's statutory duties “where such action merely complements or aides such function and does not supplant it.” Shields v County of Delaware, 35 AD3d 1001, 1003 [3d Dept 2006] (where county created new office to carry out accounting activities while county treasurer continued to exercise her statutory authority, there was no MHRL § 23 violation). Further, courts may not substitute their judgment for that of the legislature because the budget process is a matter of legislative discretion. Korn v Gulotta, 72 NY2d 363 [1988]; Saxton v Carey, 44 NY2d 545 [1978]. Indeed, “the concept of justiciability is that the judiciary not undertake tasks that the other branches of government are better suited to perform” and such restraint is particularly important where the allocation of scarce resources is involved. Klostermann v Cuomo, 61 NY2d 525 [1984]. However, court’s may intervene where a county executive fails to comply with a county charter's explicit requirements, Korn v Gulotta, 72 NY2d 363 (budget resolution invalid because it failed to account for all estimated revenues in its budget as required by local law) or a resolution improperly encroaches upon an elected official's powers. Henry v Noto, 50 NY2d 816 [1980] (resolution giving the executive unilateral power to frustrate a legislative funding authorization held invalid).Here the Resolution’s 10% reduction in the Comptroller’s 2017 budget and its appropriation of funds to the Legislative Audit Unit are within the Legislature's discretion and do not violate any Charter provision. Further, the failure to post the ACE Report on the Executive's website does not violate Charter § 36 because the Budget Analysis and Review was timely posted, regardless of the truthfulness of its assertions. Moreover, the ACE Report was available during the budget approval process which involved significant public debate, after which 10% of the Executive's proposed reductions were restored. Further, no evidence has been presented that said reduction has actually resulted in the abolition, transfer or curtailment of the Controller's statutorily assigned duties. In conclusion, because Petitioners have failed to demonstrate a likelihood of ultimate success on the merits or the existence of a justiciable controversy, neither a preliminary injunction nor a declaratory judgment is warranted. Family-Friendly Media, Inc. v Recorder Tel. Network, 74 AD3d 738 [2d Dept, 2010]; CPLR § 3001. Attorney's Fees and Costs Notwithstanding lack of specific statutory authority, a municipal officer “possesses implied authority to employ counsel in the good faith prosecution [...] of an action undertaken in the public interest, and in conjunction with its or his official duties where the municipal attorney” either refuses to act or is incapable or disqualified from acting. Cahn v Town of Huntington, 29 NY2d 451, 455 [1972]. This limited exception is “designed as a safeguard against the extravagance or corruption of municipal officials, as well as against their collusion with attorneys.” Id. ‘Where, as here, the County Attorney has a clear conflict of interest in prosecuting this combined proceeding/action on the Comptroller's behalf and the claims pertain to thepublic’s interest in a fully functioning Comptroller's office, an attorney fee award may be appropriate, even where Petitioners/Plaintiffs have not prevailed. Shields v County of Delaware, 35 AD3d 1001, 1003 [3d Dept 2006] (finding that plaintiff prosecuted the action in good faith and in the public interest following a two-day hearing sufficient to sustain counsel fee award, notwithstanding loss on the merits). Notwithstanding, and without impugning the good faith of the Comptroller, the Court declines to award fees or costs herein because there is insufficient evidence of a concrete public interest benefit beyond the budget debate which has already occurred in the appropriate forum. ‘Accordingly, the petition /complaint is dismissed. Any remaining contentions have been rendered academic by this determination or are otherwise without merit. This constitutes the Decision and Order of this Court. The Court is forwarding the original Decision and Order directly to the Respondents/Defendants, who are required to comply with the provisions of CPLR §2220 with regard to filing and entry thereof. A photocopy of the Decision and Order is being forwarded to all other parties who appeared in the proceeding. All original motion papers are being delivered by the Court to the Supreme Court Clerk for transmission to the County Clerk. /) / / : Hudson, New York / March 27, 2017 | RICHARD MOTT, J.S.C. Papers Considered: 1, Verified Petition/Complaint of Michael R. Siegel, Esq., and Evan R. Gallo, Esq., with Verifications of Elliott Auerbach, Jennifer Fuentes and Steven Greenfield, dated December 20, 2016 with Exhibits A-R, Affirmation of Michael R. Siegel, Esq., in Support of TRO and Affidavit in Support of Request for Attorney's Fees, Affidavits of Elliott 8Auerbach and John R. Parete, Jennifer Fuentes and Steven Greenfield, dated December 20, 2016, Affidavit of David Donaldson, dated December 21, 2016, and Affidavits of Robert E. Antonacci II, CPA, Esq., and Michael F. Conners, II, dated December 19, 2016; . Verified Answer to Petition/Complaint of Robert D. Cook, Esq. and Michael P. Hein, dated January 10, 2017 with Verification of Michael Hein, dated January 11, 2017; . Verified Answer to Respondents/Defendants’ Answer of Michael R. Siegel, Esq., with Verification of Elliott Auerbach, dated February 8, 2017, with Exhibits S and T; . Amended Verified Complaint of Michael R. Siegel, Esq., with Verifications of Elliott Auerbach, Jennifer Fuentes and Steven Greenfield, dated January 31, 2017; . Verified Answer to Amended Petition/Complaint of Robert D. Cook, Esq., dated February 14, 2017 with Verification of Michael P. Hein, dated February 15, 2017; . Opposition Affidavit and Memorandum of Law of Robert D. Cook, Esq., dated January 12, 2017, with Exhibits 1-9, Affidavits of Burton Gulnick, Jr, dated January 12, 2017, and of Kenneth J. Ronk, Jr., and Richard A. Gerentine, dated January 10, 2017; Verified Reply to Respondents /Defendants Answer to Amended Complaint of Evan R. Gallo, Esq,, with Verifications of Elliott Auerbach and Jennifer Fuentes dated February 21, 2017 and of Steven Greenfield, dated February 22, 2017.