SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO . A - 5393
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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 Comm issioner of Education, Docket No . 12
- 1/12. Vito A. Gagliardi , Jr. and Kerri A. Wright argued the cause for appellant Borough of Oradel l (Porzio, Bromberg & Newman, P C , 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 Atto rney General , argued the cause for respondent New Jersey Commissioner of Education (Christopher S. Porrino, Attorney General, attorney; Melissa

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court . " A lthough 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 - 5393
- 13T3 Dutton Schaffer, Assistant Attorney General, of counsel; Geoffrey N. Stark, on the brief). The opinion of the c ourt 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 Revie w ' 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 tha t 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 d ebt 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 r eapportionment 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.3 A - 5393
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R elying on the Supreme Court ' s decision in Petition for Authorization to Conduct a R eferendum on Withdrawal of N. Haledon Sch. Dist. from the Passaic C ty . 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
Com missioner 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

c onsultation 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 fundi ng schemes between participating municipalities.4 A - 5393
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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." T he 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 contri bution 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.
Th e "$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."5 A - 5393
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Second, Oradell differs procedurally from North Haledon
because North Haledon met th e 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 . Thi rd, 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 constituti onal element,
"the Comm issioner [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 . E ven 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 have6 A - 5393
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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

s uffered from significant legal and factual defects. The report failed to consider the juri sprudence 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' p roperty 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., th e 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 T w p. of Delran, Burlington Cty . , 361 N.J. Super. 488, 493
- 94 (App. Div. 2003). Oradell now appeals from the Commissioner ' s d ecision arguing it was arbitrary, capricious and inconsistent with the Supreme
Court ' s decision in North Haledon . Our standard o f review of a final agency decision is well
- settled :7 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 sub stantial credible evi dence 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 submi ssions 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 inequit able tax burden. This case is substantially different from the salient facts in North Haledon . Affirmed.