IN RE PETITION FOR EQUITABLE MODIFICATION OF THE COST APPORTIONMENTS FOR THE RIVER DELL REGIONAL SCHOOL DISTRICT, BERGEN COUNTY (NEW JERSEY COMMISSIONER OF EDUCATION)

• Court: New Jersey Superior Court Appellate Division
• Decided: June 21, 2018
• Docket: A-5393-13T3
• Status: Unpublished

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-5393-13T3

IN RE PETITION FOR EQUITABLE MODIFICATION OF THE COST APPORTIONMENTS FOR THE RIVER DELL REGIONAL SCHOOL DISTRICT, BERGEN COUNTY. ______________________________

Argued April 5, 2017 – Decided June 21, 2018

Before Judges Fuentes, Simonelli and Gooden Brown.

On appeal from the New Jersey Commissioner of Education, Docket No. 12-1/12.

Vito A. Gagliardi, Jr. and Kerri A. Wright argued the cause for appellant Borough of Oradell (Porzio, Bromberg & Newman, PC, attorneys; Vito A. Gagliardi, Jr., of counsel and on the brief; Kerri A. Wright and Phillip C. Bauknight, on the briefs).

Francis J. Campbell argued the cause for respondent Borough of River Edge (Campbell & Pruchnik, LLC, attorneys; Francis J. Campbell, of counsel and on the brief; Roslynne G. Novack, on the brief).

Geoffrey N. Stark, Deputy Attorney General, argued the cause for respondent New Jersey Commissioner of Education (Christopher S. Porrino, Attorney General, attorney; Melissa Dutton Schaffer, Assistant Attorney General, of counsel; Geoffrey N. Stark, on the brief).

The opinion of the court was delivered by

FUENTES, P.J.A.D.

In In re Petition for Authorization to Conduct a Referendum

on the Withdrawal of the Borough of Oradell from the River Dell

Reg'l Sch. Dist., 406 N.J. Super. 198 (App. Div. 2009), this court

upheld the Board of Review's decision to deny the Borough of

Oradell's (Oradell) petition for authorization to conduct a

referendum to withdraw from the River Dell Regional School District

(River Dell). We held:

The Board's determination was primarily informed by its finding that dissolution of the District would produce an excessive debt burden for the constituent school districts. Petitioner appeals, and we affirm substantially for the reasons expressed by the Board. In doing so, we conclude that a school district's excessive debt burden may be determined by factors in addition to a district's borrowing margin.

[Id. at 201 (emphasis added).]

In April 2011, two years after this court affirmed the Board's

decision and the Commissioner of Education Lucille Davy denied

Oradell's reapportionment request, Oradell held a referendum on

the tax contribution formula. The referendum failed because,

although Oradell's voters approved the measure, River Edge's

voters rejected it.

2 A-5393-13T3 Relying on the Supreme Court's decision in Petition for

Authorization to Conduct a Referendum on Withdrawal of N. Haledon

Sch. Dist. from the Passaic Cty. Manchester Reg'l High Sch. Dist.,

181 N.J. 161 (2004), five months after the voters rejected the

referendum, Oradell filed a petition seeking to have the

Commissioner of Education reapportion the costs for supporting

River Dell. On January 24, 2012, Acting Commissioner Christopher

Cerf transmitted Oradell's request to the Office of Administrative

Law as an uncontested case in accordance with N.J.A.C. 1:1-21.1,

asking an Administrative Law Judge (ALJ) to

make recommendations concerning whether Oradell has established that its situation is substantially similar to North Haledon's in [North Haledon] so as to entitle it to the extraordinary relief directed by the Supreme Court in that case, and if so, to recommend what would be an equitable funding formula for the River Dell Regional District.

The "extraordinary relief" the Court granted North Haledon

was to remand the matter to the Commissioner "to develop, in

consultation with the constituent municipalities, an equitable

cost apportionment scheme for the Regional District." N. Haledon,

181 N.J. at 186. The Court did not declare that the Commissioner

had the legal authority to unilaterally reapportion the funding

schemes between participating municipalities.

3 A-5393-13T3 Two years later, the ALJ issued a Report and Recommendation

to the Commissioner, recommending that the Commissioner modify

River Dell's tax contribution formula and suggesting that the

formula use the following ratio: one-fifth based on property

valuation and the rest based on the per-pupil cost. On June 2,

2014, then-Commissioner David C. Hespe rejected the ALJ's report,

finding his office did not have the legal authority to grant

Oradell the extraordinary relief it sought. The Commissioner

advised Oradell to "follow the prescribed legal procedure for

gaining relief from statutory mandates, i.e.[,] urge the

Legislature to amend the law." The Commissioner provided five

reasons for his decision.

First, the present case is factually distinguishable from

North Haledon. Before our Supreme Court decided North Haledon and

ordered the Manchester Regional School District to devise a new

tax contribution formula, North Haledon's per-pupil cost had risen

to $18,400, while Haledon and Prospect Park's costs had dropped

to $5400 and $3400, respectively. N. Haledon, 181 N.J. at 168.

The "$5000-$6000 disparity between the per-pupil costs of Oradell

and River Edge is far less severe than . . . the differences of

$15,000 and $13,000[,] which existed between North Haledon and the

other constituents of Manchester Regional."

4 A-5393-13T3 Second, Oradell differs procedurally from North Haledon

because North Haledon met the threshold requirements for

withdrawing from its regional district when the voters authorized

its withdrawal via a referendum organized under N.J.S.A. 18A:13-

58. N. Haledon, 181 N.J. at 172. By contrast, the voters here

rejected Oradell's proposal.

Third, Oradell's present petition involves "an exercise of

simple ministerial prudence and common sense" rather than a

constitutional problem worthy of extraordinary action. Although

all issues related to education contain a constitutional element,

"the Commissioner [did] not find that the dispute over the

advisability of the proposed breakup of River Dell, in and of

itself, pose[d] a direct constitutional question" under North

Haledon.

Even if Oradell's petition involved constitutional issues,

Oradell would be responsible for inspiring such concerns because

our State's Constitution and related statutory scheme bar Oradell

from splitting a high-performing school district into two smaller

districts, neither of which could survive on its own, just to save

itself some money. Unlike the situation in North Haledon, nothing

suggests that Oradell's withdrawal implicates a "constitutional

issue [that] arose by way of a demographic circumstance beyond the

control of [the departing municipality], which . . . would have

5 A-5393-13T3 created racial imbalance in . . . [River Dell]." (Emphasis added).

See also N. Haledon, 181 N.J. at 184.

Fourth, the ALJ's report in support of Oradell's position

suffered from significant legal and factual defects. The report

failed to consider the jurisprudence developed by our Supreme

Court that described property valuation, rather than per-capita

counts, as the most equitable way of funding schools. See

Robinson v. Cahill, 62 N.J. 473 (1973). The Report also failed

to closely analyze the parties' property values and median incomes

before recommending a contribution plan based upon a 1:5 property-

to-pupil ratio.

Finally, Oradell acted unreasonably when it relied on

unofficial advice contained in a letter to the Commissioner from

his counsel, i.e., the Office of the Attorney General, Department

of Law and Public Safety, Law Division. This letter did not

legally bind the Commissioner nor did it hold any precedential

value. See Bd. of Educ. of W. Windsor-Plainsboro Reg'l Sch.

Dist., Mercer Cty. v. Bd. of Educ. of Twp. of Delran, Burlington

Cty., 361 N.J. Super. 488, 493-94 (App. Div. 2003).

Oradell now appeals from the Commissioner's decision arguing

it was arbitrary, capricious and inconsistent with the Supreme

Court's decision in North Haledon. Our standard of review of a

final agency decision is well-settled:

6 A-5393-13T3 [A]n appellate court will not upset an agency's ultimate determination unless the agency's decision is shown to have been arbitrary, capricious, or unreasonable, or [] not supported by substantial credible evidence in the record as a whole. That standard is applicable on appellate review of an administrative agency's actions regardless of whether that action followed a quasi- adjudicative hearing or . . . an assessment of the relevant submissions and standards by an administrative head.

[Barrick v. State, 218 N.J. 247, 259 (2014) (alteration in original) (citations omitted).]

We discern no legal basis to disturb the Commissioner's

decision. The Commissioner's decision not to reapportion the

funding formula of this regional district was consistent with the

Court's reasoning in North Haledon. Oradell did not demonstrate

that it was compelled to remain a member of the River Dell School

District because of a constitutional defect. Oradell does not

suffer from an inequitable tax burden. This case is substantially

different from the salient facts in North Haledon.

Affirmed.

7 A-5393-13T3