Opinion ID: 1992142
Heading Depth: 1
Heading Rank: 5

Heading: Has the DEP fairly allocated the aggregate costs of the program among the categories of dischargers?

Text: In reviewing this issue, we must consider the second and third prongs for agency review: whether there is substantial evidence in the record to sustain the allocation and whether the allocation is arbitrary in light of the evidence. The DEP sets forth in the record the overall budgeted allocations for 1982-1983 in the amount of $2,561,825. The Department made a further breakdown into the three broad categories: industrial dischargers ($1,140,550), municipal waste-water treatment plants ($768,547), and thermal dischargers ($652,728). Although arguing that the DEP's $2.5 million figure is self-justifying and not based upon an objective analysis of need, the thermal dischargers recognize that the record is adequate to sustain an overall agency budget of $2.5 million for the NJPDES permit program. The thermal dischargers vigorously challenge the factual basis for the allocation of $652,728 to their group. [6] The amount in dispute appears to be about $210,000. In its August 5, 1982 comments to the DEP, the electric utility group stated that it had assumed that the deletion of the costs of processing certain federal variance activities as a result of the resolution of the 1981-1982 budget dispute would reduce the thermal budget to $440,000. [7] More fundamentally, the group challenged the 1982-1983 allocation on the basis that the DEP had not demonstrated the factual basis for the allocation. In the 1981 stipulation of settlement, the DEP agreed to furnish the data adequate to support the lawfulness of future NJPDES fees. In particular, the group argues that the DEP has not responded to its specific inquiries during the course of the regulatory process. The DEP relies upon the following record facts in support of its cost-based allocation. First, the permit process has a certain level of functional equivalence for each basic category of permits: municipal, industrial, and thermal. [8] Second, the proportion of costs related to the categories is roughly derived from the number of permits processed. There are 465 industrial permits, 358 municipal permits, and 338 thermal permits. The percentage of NJPDES efforts directed to thermals is therefore approximately 30%. Since the total budget is $2,561,825, DEP contends that the $652,728 allocation is rationally related to the Department's effort. Finally, the DEP points out that in constructing its fee schedule, it has, in fact, created a schedule that generates only 25% of program costs from thermal dischargers. The utility group counters by arguing, in an attachment to its brief before us, that the group's audit experience belies such assumptions. It takes the DEP's budget classifications for the various items of effort, such as the development of draft permits, compliance inspection reports, inspections and conferences, and attempts to demonstrate that in fact the fees charged are vastly disproportionate to the actual work effort. The argument is persuasive but not dispositive in an appellate attack because it comes outside the record and does not permit the agency to respond on the record, as it does in its brief, that the exhibit contains erroneous assumptions, covers a small number of permits examined, and does not cover all permit-related activities in the regulatory process. Suffice it to say that as an appellate court reviewing agency action, we do not sit to resolve factual disputes. See Bergen Pines County Hosp. v. New Jersey Dep't of Human Servs., 96 N.J. 456, 474 (1984) (to permit a party in court to raise objections to a rule and to submit evidence concerning those objections that it failed to raise before the administrative agency at the appropriate time would be to undermine the very purpose of administrative agencies). In some circumstances, remand to the agency for elaboration of its decisional basis is the appropriate course. See, e.g., Riverside Gen. Hosp. v. New Jersey Hosp. Rate Setting Comm'n, 98 N.J. 458, 473 (1985) (remanding to Commission to examine facts, apply pertinent regulations, and clearly set forth conclusions). In others, a rulemaking or hearing process is recommended. See, e.g., Texter v. Department of Human Servs., 88 N.J. 376, 389-90 (1982) (remanding matter to Commissioner for completion of administrative proceedings consistent with Court's opinion). In the circumstances of this case, however, where we deal with a one-year fee schedule, we do not consider a remand appropriate. The Legislature did not contemplate that the agency would be able to calculate these costs with precision. The legislative intent is evident from use of the critical phrase directing recovery of the estimated cost of processing the permits. N.J.S.A. 58:10A-9. This language was carefully chosen for its particular significance and we cannot ignore it. The Legislature did not intend to limit the Department's authority strictly to generating revenues equal to expenditures in any given fiscal year; budgeting practicalities simply do not permit this kind of exactitude. By definition, [a]n estimate is a mere approximation.    The word estimate precludes accuracy, and its ordinary meaning is to calculate roughly or to form an opinion from imperfect data. The word estimate has no more certainty than the words about or more or less. [ Middlesex County Sewerage Auth. v. Borough of Middlesex, 74 N.J. Super. 591, 604 (Law Div. 1962), aff'd, 79 N.J. Super. 24 (App.Div.), certif. den., 40 N.J. 501 (1963) (citations omitted).] See also Borough of Kenilworth v. Raubinger, 15 N.J. 581, 586-87 (1954) (statutory requirement that Commissioner of Education estimate[] that new educational facilities will be fully utilized is not a guarantee of construction). Thus, we believe the Legislature desired only to reaffirm its long-standing practice under which regulatory licensing programs of agencies are not taxing mechanisms but a means of generating enough revenue to be self-sustaining. In light of this statutory policy, we cannot say that there is an insufficient factual basis for the agency to act, or that in applying the policies of its enabling legislation to the record facts before it the Department made a clear error in judgment with respect to the allocation of costs between the categories. Hence, although we are left with a sense of some unease about the basis for the allocation among the categories, we cannot say that an allocation that is roughly related to the number of permits in each category and does not generate disproportionately-excessive costs against the category members is invalid as a matter of law.