Court Opinion

ID: 4360144
Source: CourtListenerOpinion
Date Created: 2019-01-18 14:39:14.435266+00
Date Added: 2024-06-11T14:19:22.618873
License: Public Domain

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.
                                         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.

                                                2
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

                                        3
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:

                                             4
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.

                                                  5
       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).

                                                 6
      [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.

                                           7
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.

                                               8
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.

                                          9
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”

                                         10
      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

                                          11
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).

                                                12
      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

                                          13
       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.

                                             14
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.

                                               15
                                          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.

                                                16
           IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Catasauqua Area School District,     :
                 Petitioner          :
                                     :
      v.                             : No. 89 C.D. 2018
                                     :
Pennsylvania Department of           :
Education,                           :
                 Respondent          :

                                   ORDER

      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