§ 2601-a. Procedures for adoption of school budgets in small city
school districts. 1. The board of education of each city school district
subject to this article shall provide for the submission of a budget for
approval of the voters pursuant to the provisions of this section and in
accordance with the requirements set forth in section two thousand
twenty-three-a of this title.

2. The board of education shall conduct all annual and special school
district meetings for the purpose of adopting a school district budget
in the same manner as a union free school district in accordance with
the provisions of article forty-one of this title, except as otherwise
provided by this section. The annual meeting and election of each such
city school district shall be held on the third Tuesday of May in each
year, provided, however that such annual meeting and election shall be
held on the second Tuesday in May if the commissioner at the request of
a local school board certifies no later than March first that such
election would conflict with religious observances, and any school
budget revote shall be held on the date and in the same manner specified
in subdivision three of section two thousand seven of this title. The
provisions of this article, and where applicable subdivision nine-a of
section twenty-five hundred two of this title, governing the
qualification and registration of voters, and procedures for the
nomination and election of members of the board of education shall
continue to apply, and shall govern the qualification and registration
of voters and voting procedures with respect to the adoption of a school
district budget.

3. The board of education shall prepare a proposed school district
budget for the ensuing year in accordance with the provisions of section
seventeen hundred sixteen of this chapter, including all provisions
relating to required notices and appendices to the statement of
expenditures. No board of education shall incur a school district
liability except as authorized by the provisions of section seventeen
hundred eighteen of this chapter. Such proposed budget shall be
presented in three components: a program component, a capital component
and an administrative component which shall be separately delineated in
accordance with regulations of the commissioner after consultation with
local school district officials. The administrative component shall
include, but need not be limited to, office and central administrative
expenses, traveling expenses and all compensation, salaries and benefits
of all school administrators and supervisors, including business
administrators, superintendents of schools and deputy, assistant,
associate or other superintendents under all existing employment
contracts or collective bargaining agreements, any and all expenditures
associated with the operation of the board of education, the office of
the superintendent of schools, general administration, the school
business office, consulting costs not directly related to direct student
services and programs, planning and all other administrative activities.
The program component shall include, but need not be limited to, all
program expenditures of the school district, including the salaries and
benefits of teachers and any school administrators or supervisors who
spend a majority of their time performing teaching duties, and all
transportation operating expenses. The capital component shall include,
but need not be limited to, all transportation capital, debt service,
and lease expenditures; costs resulting from judgments in tax certiorari
proceedings or the payment of awards from court judgments,
administrative orders or settled or compromised claims; and all
facilities costs of the school district, including facilities lease
expenditures, the annual debt service and total debt for all facilities
financed by bonds and notes of the school district, and the costs of
construction, acquisition, reconstruction, rehabilitation or improvement
of school buildings, provided that such budget shall include a rental,
operations and maintenance section that includes base rent costs, total
rent costs, operation and maintenance charges, cost per square foot for
each facility leased by the school district, and any and all
expenditures associated with custodial salaries and benefits, service
contracts, supplies, utilities, and maintenance and repairs of school
facilities. For the purposes of the development of a budget for the
nineteen hundred ninety-seven--ninety-eight school year, the board of
education shall separate its program, capital and administrative costs
for the nineteen hundred ninety-six--ninety-seven school year in the
manner as if the budget for such year had been presented in three
components. Except as provided in subdivision four of this section,
nothing in this section shall preclude the board, in its discretion,
from submitting additional items of expenditure to the voters for
approval as separate propositions or the voters from submitting
propositions pursuant to sections two thousand eight and two thousand
thirty-five of this chapter subject to the requirements set forth in
subdivision nine of section two thousand twenty-three-a of this part.

4. The budget adoption process shall conform to the requirements set
forth in section two thousand twenty-three-a of this title. In the event
the qualified voters of the district reject the budget proposed pursuant
to subdivision three of this section, the board may propose to the
voters a revised budget pursuant to subdivision three of section two
thousand seven of this title or may adopt a contingency budget pursuant
to subdivision five of this section and subdivision five of section two
thousand twenty-two of this title. The school district budget for any
school year, or any part of such budget or any propositions involving
the expenditure of money for such school year shall not be submitted for
a vote of the qualified voters more than twice. In the event the
qualified voters reject the resubmitted budget, the board shall adopt a
contingency budget in accordance with subdivision five of this section
and subdivision five of such section two thousand twenty-two of this
title.

5. If the qualified voters fail or refuse to vote the sum estimated to
be necessary for teachers' salaries and other ordinary contingent
expenses, the board shall adopt a contingency budget in accordance with
this subdivision and shall levy a tax for that portion of such sum
remaining after applying thereto the moneys received or to be received
from state, federal or other sources, in the same manner as if the
budget had been approved by the qualified voters; subject to the
limitations imposed in subdivision four of section two thousand
twenty-three of this chapter, subdivision eight of section two thousand
twenty-three-a of this title and this subdivision. The administrative
component shall not comprise a greater percentage of the contingency
budget exclusive of the capital component than the lesser of (1) the
percentage the administrative component had comprised in the prior year
budget exclusive of the capital component; or (2) the percentage the
administrative component had comprised in the last proposed defeated
budget exclusive of the capital component. Such contingency budget shall
include the sum determined by the board to be necessary for:

(a) teachers' salaries, including the salaries of all members of the
teaching and supervising staff;

(b) items of expense specifically authorized by statute to be incurred
by the board of education, including, but not limited to, expenditures
for transportation to and from regular school programs included as
ordinary contingent expenses in subdivision twelve of section
twenty-five hundred three of this chapter, expenditures for textbooks,
required services for non-public school students, school health
services, special education services, kindergarten and nursery school
programs, and the district's share of the administrative costs and costs
of services provided by a board of cooperative educational services;

(c) items of expense for legal obligations of the district, including,
but not limited to, contractual obligations, debt service, court orders
or judgments, orders of administrative bodies or officers, and standards
and requirements of the board of regents and the commissioner that have
the force and effect of law;

(d) the purchase of library books and other instructional materials
associated with a library;

(e) items of expense necessary to maintain the educational programs of
the district, preserve the property of the district or protect the
health and safety of students and staff, including, but not limited to,
support services, pupil personnel services, the necessary salaries for
the necessary number of non-teaching employees, necessary legal
expenses, water and utility charges, instructional supplies for
teachers' use, emergency repairs, temporary rental of essential
classroom facilities, and expenditures necessary to advise school
district voters concerning school matters; and

(f) expenses incurred for interschool athletics, field trips and other
extracurricular activities; and

(g) any other item of expense determined by the commissioner to be an
ordinary contingent expense in any school district.

6. The commissioner shall determine appeals raising questions as to
what items of expenditure are ordinary contingent expenses pursuant to
subdivision five of this section in accordance with section two thousand
twenty-four and three hundred ten of this chapter.

7. Each year, the board of education shall prepare a school district
report card, pursuant to regulations of the commissioner, and shall make
it publicly available by transmitting it to local newspapers of general
circulation, appending it to copies of the proposed budget made publicly
available as required by law, making it available for distribution at
the annual meeting, and otherwise disseminating it as required by the
commissioner. Such report card shall include measures of the academic
performance of the school district, on a school by school basis, and
measures of the fiscal performance of the district, as prescribed by the
commissioner. Pursuant to regulations of the commissioner, the report
card shall also compare these measures to statewide averages for all
public schools, and statewide averages for public schools of comparable
wealth and need, developed by the commissioner. Such report card shall
include, at a minimum, any information on the school district regarding
pupil performance and expenditure per pupil required to be included in
the annual report by the regents to the governor and the legislature
pursuant to section two hundred fifteen-a of this chapter; and any other
information required by the commissioner. School districts (i)
identified as having fifteen percent or more of their students in
special education, or (ii) which have fifty percent or more of their
students with disabilities in special education programs or services
sixty percent or more of the school day in a general education building,
or (iii) which have eight percent or more of their students with
disabilities in special education programs in public or private separate
educational settings shall indicate on their school district report card
their respective percentages as defined in this paragraph and paragraphs
(i) and (ii) of this subdivision as compared to the statewide average.