Title: In the Matter of Robert P. Meegan, Jr. v. Byron W. Brown / In the Matter of Joseph E. Foley v. Byron W. Brown / Buffalo Teachers Federation, Inc. v. Buffalo Board of Education for City School District of City of Buffalo

State: new-york

Issuer: New York Appellate Court

Document:

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This opinion is uncorrected and subject to revision before
publication in the New York Reports.
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No. 37  
In the Matter of Robert P. 
Meegan, Jr., &c. et al.,
            Respondents,
        v.
Byron W. Brown, &c., et al.,
            Appellants.
---------------------------------
In the Matter of Joseph E. Foley, 
&c. et al.,
            Respondents,
        v.
Byron W. Brown, &c., et al.,
            Appellants.
---------------------------------
Buffalo Teachers Federation, 
Inc., et al.,
            Respondents,
        v.
Buffalo Board of Education for 
City School District of City of 
Buffalo et al.,
            Appellants.
A. Vincent Buzard, for appellant Buffalo Fiscal
Stability Authority. 
Matthew C. Van Vessem, for appellants Byron W. Brown et
al.
James N. Schmit, for appellants Buffalo Board of
Education for City School District of Buffalo et al.
W. James Schwan, II, for respondents Robert P. Meegan,
Jr. et al.
E. Joseph Giroux, Jr., for respondents Joseph E. Foley
et al.
Andrew D. Roth, for respondents Buffalo Teachers
Federation, Inc. et al.
New York State School Boards Association, Inc.; Buffalo
Niagara Partnership, amici curiae.
PIGOTT, J.:
In 2003, because of concern for the City of Buffalo's
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No. 37
financial problems, the Office of the State Comptroller conducted
a review of the City's finances and issued a report, concluding
that the City had been operating with a deficit for many years
and was only able to fund its operations because of increasing
state aid and by using its reserves.  Based on these and other
findings, the Comptroller proposed legislation to establish a
City of Buffalo Oversight and Recovery Board whose mission was to
ensure effective long-term restructuring of the City's fiscal
condition.
In response, the State Legislature created the Buffalo
Fiscal Stability Authority (BFSA), a public benefit corporation,
to assist in achieving fiscal stability in the City by the
2006-2007 fiscal year (see id. § 3857 [1]).  The Legislature
stated,
"It is hereby found and declared that the
city [of Buffalo] is in a state of fiscal
crisis, and that the welfare of the
inhabitants of the city is seriously
threatened.  The city budget must be balanced
and economic recovery enhanced. Actions
should be undertaken which preserve essential
services to city residents, while also
ensuring that taxes remain affordable.
Actions contrary to these two essential goals
jeopardize the city's long-term fiscal health
and impede economic growth for the city, the
region, and the state" (2003 N.Y. Sess. Laws
Ch. 122 § 5695 [McKinney]).
Among other powers, the BFSA was authorized to impose a
wage freeze upon finding that such a freeze was essential to the
adoption or maintenance of a City budget or financial plan (see
id. § 3858 [2] [c] [i]).  In April 2004 it did just that,
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No. 37
determining "that a wage freeze, with respect to the City and all
Covered Organizations, is essential to the maintenance of the
Revised Financial Plan and to the adoption and maintenance of
future budgets and financial plans that are in compliance with
the Act."  The freeze, effective April 2004, prevented any
increase in wages, including increased payments for salary
adjustments according to "plan and step-ups or increments".
The freeze was lifted in July 2007, whereupon the BFSA
and the City indicated that City employees would immediately be
entitled to a one-step increase in salary and wages.  The Unions
objected, however, contending that the employees were entitled to
advance the four salary steps that they would have received had
the freeze not been imposed. 
I.
In 2007, petitioners and plaintiffs (hereinafter "the
Unions") commenced these CPLR article 78 and declaratory judgment
proceedings and action against respondents (hereinafter "the
City") challenging, among other things, the suspension of step-up
plan wage increases.  Supreme Court granted the petitions,
finding that Public Authorities Law Section § 3858 (2)(c)(iii)
applies only to wages lost during the freeze and not to longevity
and promotional steps provided in the various contracts between
the City and its unions and therefore petitioners were "entitled
to their previously negotiated wage increase benefits going
forward immediately."  
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No. 37
The City appealed.  The Appellate Division affirmed for
essentially the same reasons as Supreme Court (63 AD3d 1673 [4th
Dept 2009]).  This Court granted leave and we now reverse.
II.
Public Authorities Law § 3858 provides, in relevant
part:
"In carrying out the purposes of this title
during any control period, the [BFSA] . . .
may impose a wage and/or hiring freeze:
 
(i) During a control period, upon a finding
by the [BFSA] that a wage and/or hiring
freeze is essential to the adoption or
maintenance of a city budget or a financial
plan that is in compliance with this title,
the [BFSA] shall be empowered to order that
all increases in salary or wages of employees
of the city and employees of covered
organizations which will take effect after
the date of the order pursuant to collective
bargaining agreements . . . now in existence
or hereafter entered into, requiring such
salary or wage increases as of any date
thereafter are suspended.  Such order may
also provide that all increased payments for
. . . salary adjustments according to plan
and step-ups or increments for employees of
the city and employees of covered
organizations which will take effect after
the date of the order pursuant to collective
bargaining agreements . . . requiring such
increased payments as of any date thereafter
are, in the same manner, suspended.
. . .
(iii) Notwithstanding the provisions of
subparagraphs (i) and (ii) of this paragraph,
no retroactive pay adjustments of any kind
shall accrue or be deemed to accrue during
the period of wage freeze, and no such
additional amounts shall be paid at the time
a wage freeze is lifted, or at any time
thereafter" (emphasis added).
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The City argues that under §§ 3858 (2)(c)(i) and (iii),
contractual salary increases, step increases, and other pay
adjustments were suspended and did not accrue during the wage
freeze period and that, therefore, the union members were only
entitled to a one-step increase -- rather than four step
increases -- once the wage freeze ended.  The Unions, on the
other hand, acknowledge that the Act prohibits the accrual of
retroactive pay, but argue that their members accrued service
credit in the step-salary plan and, upon the lifting of the wage
freeze, should receive those salary step increases.  
Both parties argue that the plain language of the
statute supports their position.  In our view, neither
interpretation is unreasonable.  Ultimately, however, the
interpretation proffered by the City most comports with the
meaning and purpose of the statute.
The legislation plainly permits the BFSA to suspend all
salary and wage increases, including any "step-ups" and
"increments" (§ 3858 [2][c][i]).  It further provides that "no
retroactive pay adjustments of any kind shall accrue or be deemed
to accrue during the period of wage freeze" (§ 3858 [2][c][iii]
[emphasis added]).  The term "retroactive pay adjustments of any
kind" must be read broadly.  Section (2)(c)(iii) refers back to
(2)(c)(i), which defines the type of adjustments, including
differentials, step-ups and increments, that the BFSA is
empowered to suspend.  Thus, the Legislature's use of the term
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No. 37
"accrue" in section (iii) provides further evidence of its intent
under section (i) that step increases and increments were
suspended and did not accrue during the wage freeze.
III.
While examining the specific language of statutory
provisions is part of our inquiry, we must also look to the
underlying purpose and the statute's history as "we are mindful
that in 'the interpretation of statutes, the spirit and purpose
of the act and the objects to be accomplished must be considered.
The legislative intent is the great and controlling principle'"
(Ferres v City of New Rochelle, 68 NY2d 446, 451 [1986] quoting
People v Ryan, 274 NY 149, 152 [1937]).
Public Authorities Law § 3850-a sets forth the
Legislature's intent.  In that provision, the Legislature
declared that the "maintenance of a balanced budget by the city
of Buffalo is a matter of overriding state concern."  This
remedial legislation was enacted to provide the city of Buffalo
with "long-term fiscal stability," ensuring confidence of
investors in the City's bonds and notes and to protect the
economy of the region (id.).  The Act further provides that
"[t]he provisions of this title shall be liberally construed to
assist the effectuation of the public purposes furthered hereby"
(id. § 3873).  Thus, the entire purpose of the statute was to
place the city of Buffalo on sound financial ground over the long
term.  In order to accomplish such purpose, BFSA was empowered to
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No. 37
freeze wages and salary increments until the City's growth and
stability were renewed.  The intent of the statute supports the
City's position.
Accordingly, the order of the Appellate Division should
be reversed, with costs, the amended petitions in Matter of
Meegan v Brown and Matter of Foley v Brown dismissed, and
judgment granted to defendants in Buffalo Teachers Federation,
Inc. v Buffalo Board of Education declaring in accordance with
this opinion.
*   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *
Order reversed, with costs, the amended petitions in Matter of
Meegan v Brown and Matter of Foley v Brown dismissed, and
judgment granted to defendants in Buffalo Teachers Federation,
Inc. v Buffalo Board of Education declaring in accordance with
the opinion. Opinion by Judge Pigott. Chief Judge Lippman and
Judges Ciparick, Graffeo, Read, Smith and Jones concur.
Decided March 29, 2011
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