The opinion
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APPROVAL OF THE APPELLATE DIVISION
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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.
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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.
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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."
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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:
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[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.
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