Title: TULSA COUNTY BUDGET BOARD v. TULSA COUNTY EXCISE BOARD

State: oklahoma

Issuer: Oklahoma Supreme Court

Document:

TULSA COUNTY BUDGET BOARD v. TULSA COUNTY EXCISE BOARD  TULSA COUNTY BUDGET BOARD v. TULSA COUNTY EXCISE BOARD 2003 OK 103 81 P.3d 662 Case Number: 98780 Decided: 12/02/2003 THE SUPREME COURT OF THE STATE OF OKLAHOMA THE TULSA COUNTY BUDGET BOARD AND THE BOARD OF COUNTY COMMISSIONERS OF TULSA COUNTY, KEN YAZEL, IN HIS CAPACITY AS TULSA COUNTY ASSESSOR AND MEMBER OF THE TULSA COUNTY BUDGET BOARD, Plaintiffs/Appellants, v. THE TULSA COUNTY EXCISE BOARD, BYRON BURKE and JANICE LINTELMAN, MEMBERS IN THEIR OFFICIAL CAPACITIES, Defendants/Appellees, INDEPENDENT SCHOOL DISTRICT NO. 1 OF TULSA COUNTY, OKLAHOMA (THE "TULSA SCHOOL DISTRICT"), INDEPENDENT SCHOOL DISTRICT NO. 9 OF TULSA COUNTY, OKLAHOMA (THE "UNION SCHOOL DISTRICT"), INDEPENDENT SCHOOL DISTRICT NO. 5 OF TULSA COUNTY, OKLAHOMA (THE "JENKS SCHOOL DISTRICT"), INDEPENDENT SCHOOL DISTRICT NO. 3 OF TULSA COUNTY, OKLAHOMA (THE "BROKEN ARROW SCHOOL DISTRICT"), INDEPENDENT SCHOOL DISTRICT NO. 11 OF TULSA COUNTY, OKLAHOMA (THE "OWASSO SCHOOL DISTRICT"), INDEPENDENT SCHOOL DISTRICT NO. 2 OF TULSA COUNTY, OKLAHOMA (THE "SAND SPRINGS SCHOOL DISTRICT"), INDEPENDENT SCHOOL DISTRICT NO. 13 OF TULSA COUNTY, OKLAHOMA (THE "GLENPOOL SCHOOL DISTRICT"), INDEPENDENT SCHOOL DISTRICT NO. 8 OF TULSA COUNTY, OKLAHOMA (THE "SPERRY SCHOOL DISTRICT"), INDEPENDENT SCHOOL DISTRICT NO. 14 OF TULSA COUNTY, OKLAHOMA (THE "LIBERTY SCHOOL DISTRICT") AND TULSA TECHNOLOGY CENTER SCHOOL DISTRICT, D/B/A TULSA TECHNOLOGY CENTER (THE "TULSA TECHNOLOGY CENTER"), Intervenor Defendants/Appellees. APPEAL FROM THE DISTRICT COURT OF TULSA COUNTY Honorable Deborah C. Shallcross, District Judge ¶0 The plaintiff/appellant, Tulsa County Assessor (Assessor), submitted two budgets totaling $5,775,169 for the 2002-2003 fiscal year to the plaintiff/appellant, Tulsa County Budget Board (Budget Board): a general budget of $2,605,330 and a visual inspection budget of $3,169,835. The Budget Board approved both requests submitting them to the defendant/appellee, Tulsa County Excise Board (Excise Board), for review. Although the Excise Board agreed that the total amount of the Assessor's combined budgets was reasonable, it reduced the visual inspection budget by $1,889,835 allowing $1,280,000 for the visual inspection program and recommending that the funding cut be included in the Assessor's general budget. The Board of County Commissions of Tulsa County (County Commissioners) joined the Budget Board and the Assessor as plaintiffs/appellants requesting the trial court to issue either a writ of mandamus directing the Excise Board to restore and approve the visual inspection budget to $3,169,835 or a temporary injunction enjoining the Excise Board from obstructing the Assessor's mandatory duties. Various Tulsa County School Districts (School Districts) intervened. Following a hearing, the trial judge, Honorable Deborah C. Shallcross, found that the Excise Board had authority to review the Assessor's budget and that the visual inspection budget's reduction was not arbitrary or capricious. The trial judge denied requests to amend the petition to require the School Districts to place the excluded $1,889,835 in their respective budgets. Having retained the cause, we hold that: 1) the Excise Board has discretion in resolving funding disputes concerning the visual inspection budget. Our determination is supported by: the clear, explicit, mandatory and unmistakable language of AFFIRMED IN PART; REVERSED IN PART; AND REMANDED. Robert A. Nance, Gretchen M. Schilling, Oklahoma City, Oklahoma, for Plaintiffs/Appellants. Scott D. Boughton, Assistant Attorney General, Oklahoma City, Oklahoma, for Defendants/Appellees. J. Douglas Mann, Jerry A. Richardson, Oklahoma City, Oklahoma, for Intervenors/Defendants/Appellees. KAUGER, J.: ¶1 The issues presented are: 1) whether the defendant/appellee, Tulsa County Excise Board (Excise Board), has authority to review the budget of the plaintiff/appellant, Tulsa County Assessor (Assessor); and 2) if so, whether the Excise Board abused its discretion or acted arbitrarily or capriciously in reducing the visual inspection budget. We determine that the Excise Board may resolve funding disputes concerning the visual inspection budget. We also determine that the evidence presented does not demonstrate an abuse of discretion in the Excise Board's shift of personnel costs from the visual inspection to the regular budget. Nevertheless, the Excise Board acted arbitrarily in eliminating all valuation costs from the visual inspection budget. FACTS ¶2 In fiscal matters, ¶3 Assessors are required to conduct a comprehensive countywide program for the individual visual inspection of all taxable property within their respective counties. Under the program, all taxable property must be visually inspected once every four years. ¶4 For fiscal year 2002-2003, the Budget Board approved the Assessor's general budget in the amount of $2,605,330 and a visual inspection budget of $3,169,835. It is undisputed that the total dollar amount of the combined budgets is reasonable and necessary for operation of the Assessor's office. ¶5 Both of the proposed budget amounts were submitted to the Excise Board for approval. As mill fund recipients and entities responsible for funding of the visual inspection budget, the school districts appeared before the Excise Board on June 28, 2002, to protest the budget as excessive. ¶6 Following the June meeting, Byron Burke, as Chairman of the Excise Board (Chairman), questioned the nature of the visual inspection budget and the items included in the program. In comparing figures between Oklahoma County and Tulsa County, Burke's inquiries revealed that, over a four-year period, Tulsa County spent $4.6 million more than Oklahoma County to inspect 42,500 fewer parcels -- Oklahoma County budgeted $7.11 million to visually inspect 276,000 properties while Tulsa County expended $11.47 million to inspect 233,500 locations. Oklahoma County's per-parcel inspection cost was $25.75 as compared to a per-parcel inspection cost of $49.14 in Tulsa County. ¶7 After the Assessor informed the Excise Board that statutory law provided no clear guidance as to the separation of charges between the visual inspection and general budgets and that the respective excise boards and assessors in the state's seventy-seven counties could not agree on which charges belong in either budget, ¶8 On July 9, 2002, the Excise Board adopted a revised budget for the Assessor -- cutting $1,889,835 from the visual inspection budget and recommending that the Budget Board fund the cut to the Assessor's budget in another manner, i.e. by adding the amount to the Assessor's general budget. ¶9 The Budget Board, County Commissioners and Assessor filed a petition for writ of mandamus and request for declaratory judgment and injunctive relief in the district court on September 24, 2002. On October 9, 2002, various Tulsa County school districts (School Districts) intervened. The matter was tried to the court on December 6, 2002. The trial judge, Honorable Deborah C. Shallcross, issued an order on December 26, 2002, denying the request for a writ of mandamus or injunction and refusing to allow an amendment to the petition requesting that the school districts be required to place the originally computed reimbursement amounts for the visual inspection program in their respective budgets. In so ruling, the trial court found that the Excise Board: had final approval authority over the Assessor's budget; exercised its discretion in reviewing the budget; and did not act in an arbitrary or capricious manner. Pursuant to ¶10 On January 24, 2003, the Budget Board, the County Commissioners and the Assessor appealed requesting that the cause be retained. We retained the cause on March 14, 2003. On May 22, 2003, the court-ordered briefing cycle was completed. I. ¶11 THE COUNTY EXCISE BOARD IS AUTHORIZED TO RESOLVE FUNDING DISPUTES RELATED TO THE VISUAL INSPECTION PROGRAM. ¶12 The Assessor submitted Tulsa County's proposed visual inspection plan ¶13 The Excise Board's general supervisory powers over the budgeting process are contained in 19 O.S. 2001 §1414. Under the statute, the Excise Board may strike and disregard any amounts deemed unlawful or reduce figures exceeding legally supported appropriations. ". . . Any disputes as to the amount authorized to carry out the countywide visual inspection program shall be resolved by the county excise board; provided, the Oklahoma Tax Commission shall take such action as may be necessary to ensure that such amounts are used exclusively to carry out the countywide visual inspection program and that the allocation of such amounts does not serve to decrease other funds allocated to the office of county assessor." [Emphasis supplied.] The Legislature has used clear and mandatory language ¶14 Clay v. Independent School Dist. No. 1 of Tulsa County, ¶15 Clay also involved the authority of the Excise Board to determine the Assessor's budget. The school districts challenged the Assessor's placement of twenty-two employees in the revaluation budget. The school districts did not present evidence to show the Excise Board's abuse of discretion in approving the budget or in the trial court's upholding of the decision. Therefore, the school districts were denied relief. In doing so, this Court specifically recognized that "[T]he Excise Board has discretion in determining the budget of the Assessor." ¶16 To adopt the County Commissioner's, the Budget Board's and the Assessor's position -- that the Tax Commission's approved plan governs funding disputes -- we would be required to read a nonexistent exception into the specific statutory mandate of II. ¶17 THE EVIDENCE PRESENTED DOES NOT DEMONSTRATE AN ABUSE OF DISCRETION IN THE EXCISE BOARD'S SHIFT OF PERSONNEL COSTS FROM THE VISUAL INSPECTION TO THE REGULAR BUDGET. ¶18 Having concluded that the Excise Board has authority to review the Assessor's budget, we must now consider whether the Excise Board acted arbitrarily and whether the trial court abused its discretion in failing to give relief to the Budget Board, the County Commissioner and the Assessor. ¶19 In cutting the number of employees' salaries to be included in the visual inspection budget, the Excise Board considered the minimum number of employees recommended by the Oklahoma Tax Commission -- ten field and twelve office personnel. Looking to the number of parcels requiring visual inspection under the program, the Excise Board doubled the number of recommended field personnel and kept the office personnel number at the recommended twelve. ¶20 The Assessor admits that as many as four employees' salaries may have been listed for payment out of the visual inspection budget when they actually should have been paid out of the general budget. ¶21 The Budget Board, the County Commissioners' and the Assessor had the burden of showing an abuse of discretion to obtain relief from the Excise Board's shift of employees from the proposed visual inspection budget to the Assessor's regular budget. III. ¶22 BOTH THE STATUTORY SCHEME AND VALIDLY PROMULGATED ADMINISTRATIVE RULES CLEARLY CONTEMPLATE THAT VALUATION WILL BE INCLUDED IN THE VISUAL INSPECTION BUDGET. THEREFORE, THE EXCISE BOARD ABUSED ITS DISCRETION IN ELIMINATING ALL VALUATION COSTS FROM THE VISUAL INSPECTION BUDGET. ¶23 The Excise Board asserts that the removal of all costs related to the valuation of property from the visual inspection budget is justified under ¶24 The Excise Board's argument centers on the theory that, because it is the Assessor's job to assess all real property annually, the expenses of valuation exist outside the visual inspection program and, therefore, are not chargeable to mill fund recipients pursuant to ¶25 Recognizing that it is the Assessor's duty to assess all property annually, we might be inclined to accept the argument that ¶26 Section 2823(B) of title 68 provides that the visual inspection budget shall contain only those items of expense which would not exist in absence of the program. However, the statute goes on to indicate that, where items of expense are attributable to the visual inspection program and would also exist in its absence, the items -- including, but not limited to salaries, employee benefits, office supplies and equipment -- may be prorated. Although inartfully drawn, §2823(B) most certainly indicates that there are some items which will be attributable both to the Assessor's regular budget and to the visual inspection budget. When that contingency exists, §2823(B) does not, as the Excise Board would have us determine, require that the totality of the expense be attributed to the regular budget. Instead, it allows for the cost item to be prorated between the regular and the visual inspection budgets. ¶27 The Legislature defined the visual inspection program as the program required to gather data about real property from physical examination to establish the fair case values of the properties at least once every four years and to provide similar values on like properties on an annual basis. ¶28 Excise boards are required to authorize and levy amounts sufficient to carry out the countywide program of visual inspection approved by the Oklahoma Tax Commission. ¶29 In connection with the visual inspection program, the Tax Commission has promulgated a number of rules clearly indicating that valuation of property is an integral part of the program. The visual inspection program, which an assessor presents to the Tax Commission for consideration and approval, must include: a detailed plan to complete the valuation methodology; information on the methodology to be used in determining fair cash values; and evidence sufficient to establish a representative sample from each use category to properly value all property in the county. ¶30 Although the statutory language utilized in CONCLUSION ¶31 In holding that the Excise Board has discretion in resolving funding disputes concerning the visual inspection budget and that items of valuation may be included in costs assessed against mill fund recipients, we are not unaware of, or without sympathy, for school districts which have been adversely impacted by the budgetary crisis. It is a sad day when school administrators must choose between providing teachers of core subjects and the creative arts, janitors, bus drivers or nutritionists. However, the same financial squeeze is being felt at all levels of government, including in the counties. ¶32 Despite our sympathies, we may not sit as a super legislature, AFFIRMED IN PART; REVERSED IN PART; AND REMANDED. WATT, C.J., OPALA, V.C.J., HODGES, LAVENDER, HARGRAVE, KAUGER, BOUDREAU, WINCHESTER, J.J. concur. SUMMERS, J. not participating. FOOT