SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1559-18

IN THE MATTER OF THE

REQUEST FOR EMERGENCY

AID SUBMITTED BY THE

BOARD OF EDUCATION OF

THE NORTH WARREN

REGIONAL SCHOOL DISTRICT.

_____________________________

Submitted June 3, 2020 – Decided July 16, 2021

Before Judges Fuentes, Haas, and Enright. 

On appeal from the New Jersey Commissioner of 

Education.

Fogarty & Hara, attorneys for appellant Board of 

Education of the North Warren Regional School 

District (Robert D. Lorfink, of counsel and on the 

briefs).

Gurbir S. Grewal, Attorney General, attorney for 

respondent Commissioner of Education (Melissa 

Dutton Schaffer, Assistant Attorney General, of 

counsel; Michal Czarnecki, Deputy Attorney General, 

on the brief).

The opinion of the court was delivered by

FUENTES, P.J.A.D.

NOT FOR PUBLICATION WITHOUT THE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.
2

A-1559-18

The North Warren Regional School District challenges a decision made 

by the Commissioner of Education to deny its application for emergency state 

aid. On March 15, 2018, the District learned that it was projected to receive 

$5,034,937 in state aid from the Department of Education for the 2018-2019 

school year or FY2019. However, on July 13, 2018, the District discovered that 

its projected state aid for FY2019 would be reduced by $253,897, lowering the 

total amount of state aid to $4,781,040.

On August 30, 2018, the District applied to the Commissioner for 

$153,897 in emergency state aid. The Commissioner has the authority to 

determine the repayment terms for emergency aid applications and decided to 

defer acting upon the District's application until the Department of Education 

conducted a "district needs assessment." The Commissioner ultimately denied 

the District’s emergency aid application because the District has alternative 

financial resources that may be utilized to offset the reduction in state aid. 

In this appeal, the District argues the Commissioner’s decision to deny its 

application was arbitrary, capricious, and unreasonable because he failed to 

employ a "readily identifiable standard for the district needs assessment." The 

District maintains that this approach violated the Administrative Procedures 

Act. We reject these arguments and affirm.
3

A-1559-18

On March 15, 2018, the District received its projected State financial aid 

for the 2018-2019 school year. In this document, the Department of Education 

(DOE) apprised appellant that it would receive $5,034,937 in State aid for the 

2018-2019 school year. On July 13, 2018, the Commissioner issued a Fiscal 

Year 2018-2019 State Budget Notification to all chief school administrators and 

charter school leads in which he explained that the Governor had "reached an 

agreement with the [L]egislature on the Fiscal Year 2019 state budget, which 

includes revised state aid for all school districts." The Commissioner made clear 

that "[a]ny district that is set to receive less state aid in the revised notice must 

follow the instructions in the [attached] guidance document." 

On that same date, appellant became aware that its total aid for FY2019 

had been reduced by $253,897, bringing the total amount of state aid for FY2019 

to $4,781,040. This revised budget fell below the amount of state aid received 

by appellant during the 2017-2018 school year. The DOE memorandum 

attached thereto explained that "[a]ny district notified of a reduction in state aid 

must reduce its budgetary basis state aid revenue and receivable" for 2018-19. 

The DOE provided school districts that experienced a reduction in state aid with 

several options to be adopted by local board of education resolution:

1. Use unassigned general fund surplus to maintain 

budgeted appropriations; or
4

A-1559-18

2. Request Commissioner approval to withdraw from 

emergency reserve; or

3. Pursuant to N.J.A.C. 6A:23A-14.2(d), withdraw 

from maintenance reserve to cover budgeted required 

maintenance costs; or

4. Reduce appropriations for 2018-19; or 

5. A combination of 1, 2, 3, and 4 above.

The DOE Notice made clear that those school districts that received a 

reduction in general fund state aid were entitled to apply for emergency aid, 

provided they "are able to demonstrate fiscal distress." (Emphasis added). On 

August 3, 2018, the DOE issued a supplemental "guidance" document that 

provided school districts with comprehensive instructions on how to navigate 

the application process successfully. This included a two-page list of twentyfour required documents. 

After it received this information, appellant modified its recently 

negotiated employee health care base and reduced its budgeted appropriations 

by $100,000. On August 30, 2018, appellant submitted to the DOE a 211-page 

application requesting $153,897 in emergency aid. The application identified 

the following six indicators of fiscal distress: (1) "[a]n inadequate fund balance 

mandate;" (2) the tax levy cap; ( 3) "[a]n error on the Aid Reduction 
5

A-1559-18

Calculation;" (4) "[s]udden [c]hanges to [g]uidance on State [a]id;" (5) 

"[c]ontinued [r]eductions to [e]xtraordinary [a]id;" and 6) "[u]nreasonable 

[a]djusted [t]uition [r]ates by Warren County Special Services School District." 

On October 26, 2018, the Commissioner denied appellant’s application 

for emergency aid. The Commissioner noted the DOE had reviewed the school 

district's application and considered other "fiscal information necessary for a 

thorough review including, but not limited to, historical reserve balances and 

statistical trend information . . . obtained from the district's fiscal year end June 

30, 2017, Comprehensive Annual Financial Report (CAFR) and from the

district's 2018-2019 original budget certified for taxes." Based on these data, 

the Commissioner found approximately $496,000 in unbudgeted available 

funds. 

Appellant argues the Commissioner’s denial of its emergency aid 

application is unreasonable because it would require appellant "to invade" the 

meager funds it has in reserves. According to appellant, the Commissioner 

unreasonably failed to recognize that the combination of the District's tuition 

adjustment and an unexpected loss of $253,897 in state aid constitutes "fiscal 

distress" within the meaning of the DOE's guidelines. Under these 

circumstances, appellant maintains the Commissioner unreasonably 
6

A-1559-18

contravened the legislature’s intent for emergency aid to be more accessible by 

denying appellant’s application. L. 2018, c. 54, §34. 

In response, the Commissioner argues appellant’s application did not 

accurately reflect the District's true fiscal status. The Commissioner found that 

North Warren's projection of $250,000 in surplus for FY18 significantly 

undervalued its actual unspent appropriations of approximately $565,100. 

Furthermore, the DOE authorized the District to withdraw funds from its 

maintenance reserve account to appropriate funds for required maintenance 

costs. See N.J.A.C. 6A:23A-14.2(d). According to the Commissioner, the 

availability of these funds supported his determination that emergency aid was 

unnecessary.

Our Supreme Court has recently reaffirmed the guiding principle of 

judicial review of a decision made by a State administrative agency. 

We will not overturn an agency determination unless it 

is arbitrary, capricious, or unreasonable. The party 

challenging the agency action has the burden to show 

that the administrative determination is arbitrary, 

capricious or unreasonable.

The deferential standard that governs administrative 

appeals

is consistent with the strong presumption 

of reasonableness that an appellate court 

must accord an administrative agency's 
7

A-1559-18

exercise of statutorily delegated 

responsibility. The standard also 

recognizes the "agency's expertise and 

superior knowledge of a particular field," 

as well as the Judiciary's "limited role . . . 

in reviewing the actions of other branches 

of government.

[In re Renewal TEAM Acad. Charter Sch., 

____ N.J. ____, ____ (2021), slip op. at 36. 

(internal citations omitted). 

Against this standard of review, we discern no legal basis to disturb the 

Commissioner's decision. Appellant's argument is predicated in large part on 

how the DOE decided different school districts' applications for emergency aid 

as an indicator of arbitrary, disparate treatment. This argument is unavailing. 

The Commissioner found that the District had sufficient funds available to react 

to the reduction in State aid without requiring emergency aid. It is beyond this 

court's role to substitute our judgment and overrule the Commissioner's 

expertise displayed in his well-grounded decision.

Finally, appellant argues that the Commissioner reached this decision in 

violation of the Administrative Procedures Act and urges this court to 

characterize the DOE's actions here as the functional equivalent of promulgating 

a regulatory scheme. This argument lacks sufficient merit to warrant discussion 

in a written opinion. R. 2:11-3 (1)(e)(E). The informational memoranda the 
8

A-1559-18

DOE distributed to the school districts merely explained the application process. 

The information contained therein informed districts of the parameters of the 

needs assessment required by the FY19 Appropriations Act. The 

Commissioner's decision to grant or deny an emergency aid application for 

FY19 is an exercise of the powers of his office and do not create a new legal 

standard. 

Affirmed.