IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Catasauqua Area School District, :

Petitioner :

:

v. : No. 89 C.D. 2018

: ARGUED: December 11, 2018

Pennsylvania Department of :

Education, :

Respondent :

BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge

HONORABLE ANNE E. COVEY, Judge

HONORABLE ELLEN CEISLER, Judge

OPINION NOT REPORTED

MEMORANDUM OPINION 

BY JUDGE CEISLER FILED: January 18, 2019

Catasauqua Area School District (School District) petitions for review of the 

December 20, 2017 Order of the Secretary of Education (Secretary) of the 

Pennsylvania Department of Education (Department), which dismissed School 

District’s Petition to Reverse Deductions from its Basic Education Funding Subsidy 

for Fiscal Year 2016-2017 (Petition to Reverse Deductions). The deductions at issue 

occurred on August 25, 2016 and December 29, 2016, in the amounts of $73,354.39 

and $67,054.25, respectively.1 For the reasons that follow, we reverse the 

Secretary’s Order and remand this matter to the Department for further proceedings.

 

1 The deductions were made by the Department’s Division of Subsidy Data and 

Administration. For clarity, we refer to both the Department and the Division of Subsidy Data and 

Administration as “Department” herein.
2

Background

School District is a third-class school district in Lehigh County, Pennsylvania. 

Sec’y’s Finding of Fact (F.F.) No. 1.2 The Pennsylvania Public School Employees’

Retirement Board (Retirement Board) is an independent administrative board of the 

Commonwealth of Pennsylvania, which transacts business under the Public School 

Employees’ Retirement System (PSERS). Id. No. 3.

Medical Academy Charter School (Charter School) previously operated a 

public charter school pursuant to a charter granted by School District in February 

2012 and renewed in April 2015. Id. No. 4. In June 2016, at the conclusion of the 

2015-2016 school year, Charter School closed and ceased operations. Id. No. 5. For 

the 2016-2017 school year, School District received basic education funding 

payments from the Commonwealth pursuant to the state budget. Id. No. 6.

By email dated July 22, 2016, PSERS notified Charter School that it owed 

$73,354.39 to PSERS for outstanding employer and member contributions attributed 

in June 2016 and before. Id. No. 7. PSERS did not send a copy of the July 22, 2016 

email to School District. Id. No. 8. By email dated August 3, 2016, PSERS sent the 

Department a list of employers that were delinquent in PSERS contributions, 

including the $73,354.39 owed by Charter School. Id. No. 9. PSERS did not send 

a copy of the August 3, 2016 email to School District. Id. No. 10.

On August 16, 2016, the Department sent an email to School District stating

that School District’s Financial Accounting Information Statement (Financial 

Statement) was available for review. Id. No. 11. The Financial Statement is a 

secure, web-based application that allows school districts to see state and federal 

payments made by the Department and deductions from those payments. Id. No. 12. 

 

2 The parties submitted a Joint Stipulation of Facts and Exhibits to the Secretary, which he 

adopted and incorporated in his Opinion.
3

The August Financial Statement showed two deductions from School District’s basic 

education funding payment, one of which was a $73,354.39 deduction for “PSERS 

[Charter School] Delinquency.” Id. No. 13. Because Charter School was certified 

as being delinquent by PSERS in its retirement contributions, the Department

deducted $73,354.39 from School District’s basic education funding payment on 

August 25, 2016. Id. No. 14. School District first reviewed its August Financial 

Statement on August 25, 2016. Id. No. 15.

On September 15, 2016, the $73,354.39 deducted from School District’s

August 25, 2016 basic education funding payment was transferred to the Public 

School Employees’ Retirement Fund (Retirement Fund) and credited to Charter 

School’s employer and member accounts. Id. No. 16. 

By email dated November 18, 2016, PSERS notified Charter School that it 

owed $72,827.19 to PSERS for outstanding employer and member contributions 

attributed in June 2016 and before. Id. No. 17. PSERS later updated its records to 

reflect that Charter School owed only $67,054.25 in employer and member 

contributions. Id. No. 18. PSERS did not send a copy of the November 18, 2016 

email to School District. Id. No. 19. 

By email dated December 5, 2016, PSERS sent the Department a list of 

employers that were delinquent in PSERS contributions, including the $67,054.25 

owed by Charter School. Id. No. 20. PSERS specifically requested a basic education 

funding deduction from the December 29, 2016 basic education subsidy for the 

outstanding contributions. Id. PSERS did not send a copy of the December 5, 2016 

email to School District. Id. No. 21.

On December 15, 2016, the Department sent an email to School District 

stating that its Financial Statement was available for review. Id. No. 22. The 
4

December Financial Statement showed three deductions from School District’s basic 

education funding payment, one of which was a $67,054.25 deduction for “PSERS 

Delinquency [Charter School].” Id. No. 23. Because Charter School was certified 

as being delinquent by PSERS in the payment of its retirement contributions, the 

Department deducted $67,054.25 from School District’s basic education funding

payment on December 29, 2016. Id. No. 24. 

School District first reviewed its December Financial Statement on January 3, 

2017. Id. No. 25. On January 20, 2017, the $67,054.25 deducted from School 

District’s December 29, 2016 basic education funding payment was transferred to 

the Retirement Fund and credited to Charter School’s employer and member 

accounts. Id. No. 26.

On January 9, 2017, School District filed its Petition to Reverse Deductions 

with the Secretary, seeking reversal of the Department’s August 25, 2016 and 

December 29, 2016 deductions from School District’s basic education funding 

subsidy. In its Petition to Reverse Deductions, School District argued that under the

Pennsylvania Supreme Court’s recent decision in Pocono Mountain School District 

v. Pennsylvania Department of Education, 151 A.3d 129 (Pa. 2016),

3

the 

Department’s deductions from School District’s basic education funding subsidy 

were improper. In Pocono Mountain, the Supreme Court concluded that Section 

1729-A(i) of the Charter School Law4 prohibits the Department from withholding 

 

3 The Supreme Court issued Pocono Mountain on December 28, 2016, approximately two 

weeks before School District filed its Petition.

4 Act of March 10, 1949, P.L. 30, as amended, added by the Act of June 19, 1997, P.L. 

225, 24 P.S. § 17-1729-A(i). Section 1729-A(i) of the Charter School Law provides:
5

funds from a school district for a charter school’s PSERS delinquencies after the 

charter school is closed. The Pocono Mountain Court held that the school district 

was not financially responsible, after the charter’s revocation, for the charter 

school’s prior failure to make payments to its employees’ retirement fund.

5

In response to the Petition to Reverse Deductions, the Retirement Board6

requested that the Secretary dismiss the appeal because the Secretary lacks 

jurisdiction over PSERS. The Retirement Board argued that the relief requested 

would require the Secretary to issue an order to PSERS, which is beyond the 

Secretary’s scope of authority. The Retirement Board also argued that Pocono 

Mountain should not be applied retroactively to the deductions at issue because 

School District had not previously challenged the propriety of the deductions.

 

When a charter is revoked, not renewed, forfeited, surrendered or otherwise ceases 

to operate, the charter school shall be dissolved. After the disposition of any 

liabilities and obligations of the charter school, any remaining assets of the charter 

school, both real and personal, shall be distributed on a proportional basis to the 

school entities with students enrolled in the charter school for the last full or partial 

school year of the charter school. In no event shall such school entities or the 

Commonwealth be liable for any outstanding liabilities or obligations of the 

charter school.

24 P.S. § 17-1729-A(i) (emphasis added).

5 The Opinion Announcing the Judgment of the Court was authored by Justice Donohue 

and joined by Justices Todd and Wecht. Chief Justice Saylor and Justice Wecht filed Concurring 

Opinions. Justices Baer and Dougherty filed Dissenting Opinions.

6 On March 9, 2017, the Secretary granted the Retirement Board’s Petition to Intervene in 

the matter. The Retirement Board did not petition to intervene before this Court and is not a party 

to this appeal.
6

By Opinion and Order dated December 20, 2017, the Secretary dismissed 

School District’s Petition to Reverse Deductions.

7

 The Secretary concluded that he

lacked jurisdiction over the Petition to Reverse Deductions because: (1) Section 

8327(b)(2) of the Public School Employees’ Retirement Code (Retirement Code), 

24 Pa. C.S. § 8327(b)(2),

8 does not authorize the Department to reverse a deduction 

previously made from a school district’s basic education subsidy; (2) the matter

involves interpretation and application of the Retirement Code, a statute not 

administered by the Department; and (3) the matter involves PSERS, an agency not 

within the Department’s jurisdiction. The Secretary explained:

 

7 As a threshold matter, the Secretary concluded that School District’s Petition to Reverse 

Deductions was timely filed, as PSERS had challenged its timeliness before the Secretary. The 

timeliness of the Petition to Reverse Deductions is not at issue on appeal.

8 Section 8327(b)(2) of the Retirement Code states:

To facilitate the payments of amounts due from any charter school, as defined in 

Article XVII-A of the act of March 10, 1949 (P.L. 30, No. 14), known as the Public 

School Code of 1949, to the fund and the trust through the State Treasurer and to 

permit the exchange of credits between the State Treasurer and any employer, the 

Secretary of Education and the State Treasurer shall cause to be deducted and paid 

into the fund and the trust from any funds appropriated to the Department . . . for 

basic education of the chartering school district of a charter school and public 

school employees’ retirement contributions amounts equal to the employer

contributions, employer defined contributions and pickup contributions which a 

charter school is required to pay to the fund and the trust, as certified by the 

[Retirement B]oard, and as remains unpaid on the date such appropriations would 

otherwise be paid to the chartering school district or charter school. Such amounts

shall be credited to the appropriate accounts in the fund and the trust. Any reduction 

in payments to a chartering school district made pursuant to this section shall be 

deducted from the amount due to the charter school district pursuant to the Public 

School Code of 1949.

24 Pa. C.S. § 8327(b)(2) (emphasis added).
7

[R]egardless of the Department’s legal basis for the transfer of the 

[d]eductions to PSERS and the [Retirement] Fund, it is evident that the 

[d]eductions now remain in the [Retirement] Fund. It is plain under the 

Retirement Code that the exclusive responsibility to control and 

manage the [Retirement] Fund lies with PSERS, not the Department. 

24 Pa. C.S. § 8521 (stating that “the [PSERS] trustees shall have 

exclusive control and management of the [Retirement F]und” and that 

“[a]ll payments from the [Retirement F]und shall be made by the State

Treasurer in accordance with requisitions signed by the secretary of the 

[Retirement B]oard, or his designee, and ratified by resolution of the 

[Retirement B]oard.”) Unlike Section 8327(b)(2) [of the Retirement 

Code], which gives the Secretary an express role (along with the State 

Treasurer) in the process of making deductions from subsidy payments, 

the Secretary appears to have no role under the Retirement Code in the 

payment or transfer of funds from the [Retirement] Fund.

Sec’y’s Op., 12/20/17, at 15-16.

Because the Secretary determined that he lacked jurisdiction, he declined to 

consider the parties’ arguments regarding whether the holding in Pocono Mountain

applies to the deductions at issue, stating:

[W]hile I am sympathetic to [School District’s] situation of apparently 

having “lost” an amount of basic education funding with the hindsight 

of Pocono Mountain, I also appreciate the situation faced by the 

[Department] and PSERS having been caught by a change in the 

interpretation of a provision of the Retirement Code. As noted 

previously, the Supreme Court in Pocono Mountain did not address 

what remedy the school district was entitled to in that case. Clearly 

many of the Justices were concerned about the potential impact of the 

decision on PSERS and the employees involved but did not resolve 

those thorny issues. However, an administrative proceeding before the 

Secretary is not well suited to resolve the issues presented by the 

Petition. Regardless of the equities of the Petition, I am not permitted

to expand my jurisdiction beyond the bounds of administrative law. It 

is also beyond my power to order PSERS or the State Treasurer in any 

sense to reverse the [d]eductions.
8

Id. at 19. Therefore, the Secretary dismissed School’s District’s Petition to Reverse 

Deductions. School District now appeals to this Court.9

Issues

(1) Were the Department’s deductions from School District’s basic education 

funding subsidy improper under Pocono Mountain?

(2) Did the Secretary have jurisdiction to reverse the improper deductions

from School District’s basic education funding subsidy?

(3) With regard to the December 29, 2016 deduction, should Pocono 

Mountain be applied prospectively?

(4) With regard to the August 25, 2016 deduction, should Pocono Mountain

be applied retroactively?

Analysis

On appeal, School District asserts that the Department’s deductions from 

School District’s basic education subsidy on August 25, 2016 and December 29, 

2016 were improper under Pocono Mountain because the deductions were made

after Charter School had ceased operations. School District contends that Pocono 

Mountain should be applied prospectively to the December 29, 2016 deduction and 

retroactively to the August 25, 2016 deduction.

In response, the Department asserts that School District cannot avail itself of 

Pocono Mountain’s holding because it failed to challenge the propriety of the 

deductions, despite having prior notice of Charter School’s delinquencies, before 

that case was decided. The Department further contends that prior to Pocono 

Mountain, the long-standing rule was that upon PSERS’ certification that a charter 

school was delinquent in its retirement contributions, the Department would deduct 

 

9 Because the issues on appeal involve purely legal questions, our standard of review is de 

novo and our scope of review is plenary. Pocono Mountain, 151 A.3d at 134.
9

the amount of the delinquency from the next basic education funding payment made 

to the school district. Thus, the Department asserts that the deductions were proper 

under the law in effect at the time they were made.

Before we reach the merits of the parties’ arguments, we will first examine 

the Pocono Mountain decision, as it is directly on point and central to the issues on 

appeal.

1. Pocono Mountain

In Pocono Mountain, a charter school in the Pocono Mountain School District 

failed to pay its employees’ retirement contributions to PSERS. 151 A.3d at 133. 

After the charter school closed at the end of the 2013-14 school year, the Department 

deducted $87,700.32 from the school district’s basic education subsidy due to the 

charter school’s failure to make mandatory payments to PSERS. Id. 

The school district appealed the deduction to the Secretary. The Department 

filed a motion to dismiss the school district’s administrative appeal, arguing that 

Section 8327(b)(2) of the Retirement Code required the Department to deduct the 

money from the school district’s basic education subsidy and constituted a 

ministerial act that was not subject to administrative review. Id. at 133. The school 

district opposed the motion to dismiss, arguing that the Department’s deduction 

constituted an adjudication subject to administrative review. Id. The Secretary 

granted the motion to dismiss, finding that the deduction constituted a ministerial act 

and was not the proper subject of an administrative hearing. Id.

The school district filed a petition for review with this Court, which upheld 

the Secretary’s decision in an unreported memorandum opinion. Id. We determined 

that Section 8327(b)(2) of the Retirement Code required the Department to deduct 

the deficiency from the school district’s basic education subsidy. Id. at 134. 
10

Therefore, we concluded that “[a]lthough the deduction was taken after the [c]harter 

[s]chool’s charter was revoked, the [s]chool [d]istrict was the chartering school 

district during the period in which the deficiency arose and, thus, it is on the hook 

for the amount of the deficiency.” Pocono Mountain Sch. Dist. v. Pa. Dep’t of Educ.

(Pa. Cmwlth., No. 2052 C.D. 2014, filed July 8, 2015), 2015 WL 5457139, at *7-8.

The school district appealed, and the Supreme Court reversed this Court’s 

decision. Pocono Mountain, 151 A.3d at 141. The Supreme Court extensively 

examined the interplay between Section 8327(b)(2) of the Retirement Code and 

Section 1729-A(i) of the Charter School Law, focusing on the language in, and the 

purposes of, both statutes. Id. at 137-38. After analyzing both statutes, the Supreme 

Court determined:

Section 8327(b)(2) [of the Retirement Code] facilitates the payment of 

a charter school’s outstanding obligations to PSERS by withholding 

those amounts from the funding due to the chartering school district. 

Section 1729-A(i) [of the Charter School Law] precludes, under any 

circumstance, making a school district responsible for a closed charter 

school’s outstanding obligations. Reading these two statutes as one, 

and giving effect to every provision, we conclude that it was the intent 

of the General Assembly that the directive in [S]ection 8327(b)(2) is 

only operative if the charter school remains open and operational at 

the time the [Department] withholds the money from the chartering 

school district.

Id. at 139 (emphasis added). 

The Supreme Court further concluded that unpaid retirement contributions 

constituted an outstanding financial obligation of a closed charter school under 

Section 1729-A(i) of the Charter School Law. Id. at 130. The Court explained its 

reasoning as follows:

[T]he opening sentence of [S]ection 8327(b)(2) [of the Retirement 

Code] establishes the payment system as a means to “facilitate” 
11

payments from a charter school to PSERS, but does not, as the 

[Retirement] Board contends, guarantee the amounts due. By using 

the word “facilitate” instead of “guarantee,” the General Assembly 

clearly contemplated circumstances in which the [Department] would 

not be able to withhold funding from the school district that originally 

approved the charter to obtain delinquent PSERS payments owed by a 

charter school. It codified one such circumstance in [S]ection 1729-

A(i) [of the Charter School Law], effectively prohibiting the 

withholding of funding from the school district to cover a now-closed 

charter school’s outstanding liability to PSERS.

. . . [W]e hold that following the dissolution of a charter school, 

the school district that originally approved the charter is not financially 

responsible for the charter school’s prior failure to remit the 

mandatory payments to its employees’ retirement fund. Here, the 

[Department] withheld money from the [s]chool [d]istrict’s basic 

education subsidy on August 28, 2014, two months after the [c]harter 

[s]chool lost its charter. This is prohibited by [S]ection [1729-A(i)] of 

the Charter School Law. As the [s]chool [d]istrict was not the 

chartering school district on the date the [Department] withheld the 

[s]chool [d]istrict’s funding, [S]ection 8327(b)(2) [of the Retirement 

Code] was inapplicable.

Id. at 141 (second emphasis added). Accordingly, the Supreme Court held that 

Section 1729-A(i) of the Charter School Law prohibits the Department from 

withholding funds from a school district for a charter school’s PSERS delinquencies 

after the charter school is closed. Id.

2. Pocono Mountain’s Applicability to this Case

Next, we must determine whether the holding in Pocono Mountain applies to 

this case. If it does, then the deductions at issue would be improper, because both

deductions were made after Charter School had ceased operations.

The Supreme Court decided Pocono Mountain on December 28, 2016.

Although School District filed its Petition to Reverse Deductions after Pocono 

Mountain was decided, we must look to the dates of the deductions to determine 
12

whether Pocono Mountain’s holding applies. The first deduction, on August 25, 

2016, pre-dated Pocono Mountain; the second deduction, on December 29, 2016, 

post-dated the decision by one day. Therefore, based solely on the date of the 

December 29, 2016 deduction, we conclude that Pocono Mountain’s holding applies 

prospectively to that deduction.

The only question that remains is whether Pocono Mountain applies 

retroactively to the August 25, 2016 deduction. The Pocono Mountain Court did 

not address whether its holding should apply retroactively or only prospectively. 

Generally, Pennsylvania appellate courts apply the law in effect at the time of 

appellate review. Passarello v. Grumbine, 87 A.3d 285, 307 (Pa. 2014). However, 

the Supreme Court has cautioned against applying this rule “rotely.” Id. Rather, the 

determination of whether a judicial decision announcing a new rule of law should 

be applied retroactively or prospectively “is a matter of judicial discretion to be 

decided on a case-by-case basis.” Id.; see Dana Holding Corp. v. Workers’ Comp. 

Appeal Bd. (Smuck), 195 A.3d 635, 641 (Pa. Cmwlth. 2018).10

 

10 Our Supreme Court has identified four approaches to deciding what effect to give a 

decision announcing a new rule of law:

One approach is to give the new rule purely prospective effect so that it is not even 

applied to the parties in the case in which the new rule is announced. . . . Another 

approach is to limit retroactive application to the case in which it is announced. A 

third choice is to apply the new rule to the case in which it is announced and to all 

cases pending at the time the new rule is announced. A fourth approach is to give 

the new rule fully retroactive effect. Under this fourth choice, the new rule is 

applied to the case in which it is announced, to all cases pending at the time the new 

rule is announced, and to cases which are final at the time the new rule is 

announced.

Blackwell v. State Ethics Comm’n, 589 A.2d 1094, 1098-99 (Pa. 1991) (internal citations omitted).
13

Before considering the breadth of Pocono Mountain’s application, we must 

first determine, as a threshold matter, if the decision announced a new rule of law. 

Office of Disciplinary Counsel v. Surrick, 749 A.2d 441, 444 (Pa. 2000). 

Our Court has set forth the following analysis for determining whether a 

judicial decision announces a new rule of law:

The Supreme Court announces a new rule of law when it “issues a 

ruling that overrules prior law, expresses a fundamental break from 

precedent, upon which litigants may have relied, or decides an issue of 

first impression not clearly foreshadowed by precedent.” . . . In cases 

where the Supreme Court is construing a statute, a new rule of law is 

not created where the decision “adopts a view of the statute which was 

not wholly without precedent” or it involves the Court’s first 

opportunity to construe the provision at issue. . . . In cases where the 

Supreme Court is issuing its first ruling interpreting the specific statute, 

the Court’s “first pronouncement on the substance of a statutory 

provision is purely a clarification of existing law” and the construction 

of the statute by the Court becomes a part of that statute from its 

enactment. Furthermore, the fact that the Supreme Court decision 

overrules established intermediate appellate court precedent is 

irrelevant; as the Supreme Court has explained, if the decision in 

question “did not overrule, modify, or limit any previous case from [the 

Supreme] Court on the question,” then the decision did not announce 

a new rule of law.

Anderson v. Talaber, 171 A.3d 355, 361-62 (Pa. Cmwlth. 2017) (emphasis added) 

(bold in original) (internal citations omitted). Furthermore, with regard to cases 

involving statutory interpretation, our Supreme Court has stated:

Our role is to interpret statutes as enacted by the [General] Assembly. 

We affect legislation when we affirm, alter, or overrule our prior 

decisions concerning a statute or when we declare it null and void, as 

unconstitutional. Therefore, when we have not yet answered a specific 

question about the meaning of a statute, our initial interpretation does 

not announce a new rule of law. Our first pronouncement on the 
14

substance of a statutory provision is purely a clarification of an existing 

law.

Fiore v. White, 757 A.2d 842, 848 (Pa. 2000) (emphasis added); see also Surrick, 

749 A.2d at 444 (“A new rule of law is established where an abrupt and fundamental 

shift from prior precedent, upon which litigants may have relied, has occurred.”).

Applying these principles, we conclude that Pocono Mountain did not

announce a new rule of law for the following reasons. First, the Supreme Court 

interpreted the meaning of a statutory provision, determining that unpaid PSERS 

contributions constitute an “outstanding obligation” of a closed charter school under 

Section 1729-A(i) of the Charter School Law. Second, the Supreme Court’s ruling 

was the first pronouncement on the applicability of Section 1729-A(i) of the Charter 

School Law to the PSERS delinquencies of a closed charter school, holding that 

Section 1729-A(i) prohibits the Department from withholding funds from a 

chartering school district to cover such delinquencies. Finally, Pocono Mountain

did not overrule prior Supreme Court precedent, nor was its holding a shift from 

prior precedent upon which the parties relied. As School District correctly points 

out in its brief, the only prior appellate decision addressing the issue presented in 

Pocono Mountain was this Court’s unreported memorandum decision, which the 

Supreme Court overturned.

Because Pocono Mountain merely clarified the legislative meaning of Section 

1729-A(i) of the Charter School Law, the Supreme Court’s “construction of [Section 

1729-A(i)] bec[ame] a part of that statute from its enactment.”11 Anderson, 171 A.3d 

at 362; see Kendrick v. Dist. Attorney, 916 A.2d 529, 538 (Pa. 2007) (holding that 

the Supreme Court’s prior decision, interpreting the term “enterprise” in 

 

11 Section 1729-A(i) was added to the Charter School Law in 1997. The specific language 

interpreted by the Pocono Mountain Court was added to Section 1729-A(i) by amendment in 2004.
15

Pennsylvania’s corrupt organizations statute, did not establish a new rule of law, 

where the decision did not overrule, modify, or limit any prior Supreme Court cases, 

but merely explained the meaning and scope of a statutory term); Surrick, 749 A.2d 

at 445 (concluding that a prior Supreme Court decision interpreting a rule of 

professional conduct “did not create a new legal standard; it merely provided explicit 

clarification of existing law,” where no prior precedent had interpreted the rule in 

that manner, and it was not unforeseeable that the Supreme Court would so interpret 

the rule).12

As construed by our Supreme Court in Pocono Mountain, Section 1729-A(i) 

of the Charter School Law prohibits the Department from withholding funds from a 

chartering school district’s basic education subsidy for a closed charter school’s 

PSERS delinquencies. It is undisputed that the deductions at issue here were made 

after Charter School had ceased operations. Therefore, we conclude that the 

deductions were improper.

With regard to jurisdiction, the Pocono Mountain Court did not address 

whether the Secretary had the authority to order PSERS or the Retirement Board to 

return the improperly transferred funds to the chartering school district. 

Nonetheless, because we conclude that the Department improperly deducted the 

funds from School District’s basic education subsidy, the Department must make 

School District whole by reversing the deductions.13

 

12 But cf. Oz Gas, Ltd. v. Warren Area Sch. Dist., 938 A.2d 274 (Pa. 2007) (holding that 

Supreme Court’s prior decision interpreting a state tax statute announced a new principle of law 

and applied prospectively only, where the prior decision invalidated the tax provision and the 

equities weighed in favor of prospective-only application).

13 “[A]dministrative agencies are creatures of the legislature and can only exercise those 

powers which have been specifically conferred upon them, by the legislature, in clear and 

unmistakable language.” Prop. Owners, Residents, and/or Taxpayers of Pleasant Valley Sch. Dist. 
16

Conclusion

Accordingly, because we conclude that the Department’s August 25, 2016 and 

December 29, 2016 deductions from School District’s basic education subsidy were 

improper, we reverse the Secretary’s Order, remand this matter to the Department, 

and direct the Department to reverse the withholding of $140,408.64 from School 

District’s basic education funding subsidy.

__________________________________

ELLEN CEISLER, Judge

 

v. Pleasant Valley Sch. Dist., 515 A.2d 85, 88 (Pa. Cmwlth. 1986). This general rule, “however, 

‘is tempered by the recognition that an administrative agency is vested with the implied authority 

necessary to the effectuation of its express mandates,’ because the Legislature ‘cannot foresee all 

the problems incidental to’ the agency’s carrying out its duties and responsibilities.” Sewer Auth. 

v. Pa. Infrastructure Inv. Auth., 81 A.3d 1031, 1039 (Pa. Cmwlth. 2013) (citation omitted). 

Section 8327(b)(2) of the Retirement Code gives the Department the express authority “to 

facilitate” payments from a school district’s basic education subsidy to PSERS when a charter 

school is delinquent in making payments to PSERS. However, as Pocono Mountain makes clear, 

facilitating those payments is not a mere ministerial act, but requires some exercise of the 

Department’s discretion, namely, to determine if a charter school is still in existence. In other 

words, as the Supreme Court recognized, Section 8327(b)(2) is meant to “facilitate” payments, not 

to “guarantee the amounts due. By using the word ‘facilitate’ instead of ‘guarantee,’ the General 

Assembly clearly contemplated circumstances in which the [Department] would not be able to 

withhold funding from the school district.” Pocono Mountain, 151 A.3d at 141. Because Section 

8327(b)(2) gives the Department the express authority to facilitate payments and that facilitation 

involves some discretion on the Department’s part, then the Department must also have the implicit

power to determine that a deduction it approved was improper. Therefore, we conclude that the 

Department has jurisdiction to determine that it erred in facilitating a payment.
IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Catasauqua Area School District, :

Petitioner :

:

v. : No. 89 C.D. 2018

:

Pennsylvania Department of :

Education, :

Respondent :

O R D E R

AND NOW, this 18th day of January, 2019, the December 20, 2017 Order of 

the Secretary of Education of the Pennsylvania Department of Education 

(Department) is hereby REVERSED, and this matter is REMANDED to the 

Department for further proceedings consistent with the foregoing Opinion.

Jurisdiction relinquished.

__________________________________

ELLEN CEISLER, Judge