Court unequivocally sides with lawmakers in budget dispute wiht Belknap Commission

LACONIA — Justice James D. O'Neill, III of Belknap County Superior Court yesterday granted the request of the Belknap County Convention for a preliminary injunction forbidding the Belknap County Commission from transferring funds of more $300 between line items in 2014 county budget without the written approval of the executive committee of the convention.

The ruling represents a unqualified victory for the convention in its dispute with the commission over their respective authority for the county budget, which has roiled the county government for the past two years.

Last month, the convention brought suit against the commission. Attorney David Horan, representing the convention, argued that state statutes authorize the convention to itemize appropriations "in detail" and to require its executive committee to approve any transfers. Furthermore, the convention resolved to require the commission to submit requests for transfers of more than $300 to the executive committee for its approval.

Turning to the 2014 budget process, Horan said that the convention voted not to fund the annual increase in the employer's contribution to the cost of health insurance, but instead to freeze appropriations for health insurance at 2013 levels. However, shortly after the convention adopted the budget, he explained that the commission shuffled monies from other line items within departmental budgets to restore $209,919 of funding for health insurance. Altogether the commission changed 132 line items, many of them by more than $300.

"The commission," Horan told the court "ignored the appropriations by the convention and this was all done without the approval of the executive committee."

In a brief filed in response on behalf of the commission, attorney Robert Desrosier countered that the convention had no authority to bring suit against any party, let alone the commission. Furthermore, he argued that although the convention voted to file suit with respect to the 2013 county budget, it did not reauthorize litigation by majority vote with respect to the 2014 county budget. Nor, Desosier claimed, did the convention satisfy the criteria required to warrant the injunction it requested. First, the convention cannot show that its suit is likely to succeed on the merits. Second, he argued that neither the convention nor the taxpayers would suffer "immediate and irreparable harm" if the commission spent some or all funds for health insurance, since it would not increase either expenditures or taxes. " Finally, Derosier said that the convention cannot show that the public interest would be adversely affected if the injunction were not granted.

O'Neill rejected each of the commission's arguments in turn. If county conventions had no authority to litigate, he held, "this would in effect render controversies over how county commissioners use budgeted money non-justiciable." In order to bring suit an individual taxpayer would have to show that his or her individual rights were infringed or impaired, which O'Neill considered near impossible in a case like this one. "Thus," he concluded, "unless county conventions have standing to sue, no judicial remedy would exist to redress the potential harms caused by such activity.

O'Neill also held there are no reasons to suppose that a majority vote of the convention is require to authorize it to file suit. State statutes, he noted, "reveal that majority votes are by no means the only way in which a county convention may act." While a majority vote may be one way of authorizing litigation, he held that it is not a requirement.

Finally O'Neill ruled that the convention was likely to prevail on the merits of the case and therefore, unless an injunction was granted the conduct of the commission would create "the prospect of immediate and irreparable harm to the taxpayers of Belknap County" and place "a substantial hardship" on the convention."

The convention contended that line items in the budget represent "appropriations"as defined by statute. The commission countered that "appropriations" refers to the allocation of funds to the various departments of county governments and it has authority to transfer funds between line items within this allocation so long as the total appropriated to each department remains unchanged.

The statute defines an appropriation as "an amount of money authorized for a specific purpose by the legislative body." O'Neill concluded "in this definition, the legislature made no distinction between money allocated to departments generally and to specific line-items within each department. Instead it defined appropriations broadly," he continued. "The definition on its face suggests that line-items fall under this provision."

Furthermore, O'Neill noted that the statute reads "appropriations by the county convention shall be itemized in detail" and found that the convention is not only permitted but required to itemize county budgets. Likewise, the convention is authorized to require the commission to seek the approval of the executive committee before transferring all or part of an appropriation. O'Neill found that if line items were not appropriations, the ability of the convention top exercise this authority would be hampered.

The commission argued that the public interest would be adversely affected if an injunction were granted, claiming if health insurance plans for county employees were not funded, collective bargaining agreements would have to renegotiated or employees would have to be laid off. In dismissing the argument, O'Neill wrote that "the primary interest the public has in how health benefits are funded is how tax revenues are being expended to that end" and held that the effect of an injunction on the public interest would be "at the very most neutral." Nor, the justice found, has the commission has demonstrated that the funding is insufficient and, if it is, has not requested the executive committee to approve a transfer of funds.

The commission also suggested that granting an injunction would involve the court in a political dispute between two branches of government. O'Neill disagreed, noting that the dispute hinged on the definition of "appropriation," which is a matter of statutory interpretation well within the authority of the court.