IN THE MATTER OF THE PETITION OF THE VILLAGE OF LOCH ARBOUR TO FORM AN INDEPENDENT SCHOOL DISTRICT
Annotate this CaseNOT 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.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1985-16T1
IN THE MATTER OF THE
PETITION OF THE VILLAGE
OF LOCH ARBOUR TO FORM
AN INDEPENDENT SCHOOL
DISTRICT.
_________________________________
Argued April 16, 2018 – Decided October 18, 2018
Judges Messano, O'Connor and Vernoia.
On appeal from the New Jersey Department of
Education.
Michael Jay Gross argued the cause for
appellant/cross-respondent Township of Ocean Board
of Education (Kenney Gross Kovats & Parton,
attorneys; Michael Jay Gross, on the brief).
Martin J. Arbus argued the cause for respondent/cross-
appellant Township of Ocean (Arbus, Maybruch &
Goode, LLC, attorneys; (Martin J. Arbus, on the
brief).
James M. Hirschhorn argued the cause for intervenor-
respondent Loch Arbour Board of Education and
Village of Loch Arbour (Sills Cummis & Gross, PC,
attorneys; James M. Hirschhorn, of counsel and on the
brief).
Gurbir S. Grewal, Attorney General, attorney for
respondent Department of Education (Caroline G.
Jones, Deputy Attorney General, on the statement in
lieu of brief).
PER CURIAM
Appellants Ocean Township and the Ocean Township Board of
Education appeal from the Board of Education's Commissioner's decision
authorizing the Village of Loch Arbour (Loch Arbour) to hold a referendum on
the question of whether it should withdraw from the Ocean Township School
District (OTSD). We affirm.
I
Loch Arbor became a municipality when incorporated as a village in
1957. Before that, the territory that ultimately became Loch Arbour was part
of and included within the boundaries of Ocean Township. Despite becoming
a municipal entity separate from Ocean Township after its incorporation, in
accordance with the law at that time, Loch Arbour remained a part of Ocean
Township's school district. See N.J.S.A. 18A:5-1.1.1 Thus, the children of
Loch Arbour who attended public school attended school in Ocean Township's
school district.
1
In pertinent part, N.J.S.A. 18A:5-1.1 stated: "[e]ach township, city,
incorporated town and borough shall be a separate local school district, except
as hereinafter provided . . . but each incorporated village shall remain a part of
the district in which it is situated at the time of its incorporation."
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A-1985-16T1
In 2015, Loch Arbour had only seventeen school-age students residing in
its municipality. Pursuant to N.J.S.A. 18A:8-5 and N.J.S.A. 18A:8-6, Loch
Arbour filed a request with the Monmouth County Executive County
Superintendent (ECS) seeking that he investigate the feasibility of Loch
Arbour: (1) ceasing to be a part of Ocean Township's school district; and (2)
establishing its own independent but non-operating school district, so that it
could enter into send-receive relationships with the West Long Branch school
district, where Loch Arbour students in grades kindergarten through eight
would attend school, as well as with the Shore Regional school district, where
Loch Arbour students in grades nine through twelve would enroll in school. In
accordance with N.J.S.A. 18A:38-19, Loch Arbour's board of education
intended to pay the boards of education of the two receiving districts a tuition
rate in an amount not in excess of the actual cost per pupil. See ibid.
Before the ECS's review, the OTSD and Loch Arbour retained experts,
who each prepared feasibility studies and submitted them to the ECS.
Thereafter, the ECS issued a report setting forth his findings and conclusions,
the highlights of which were as follows.
The ECS found all three districts provide a "quality education" to their
respective students. He noted the Department of Education designated the
Ocean Township, West Long Branch, and Shore Regional school districts as
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A-1985-16T1
"high performing," insofar as meeting core curriculum content standards.
Therefore the educational impact of Loch Arbour's students withdrawing from
the OTSD and enrolling in schools in the West Long Branch and Shore
Regional school districts was essentially non-existent. The ECS also
determined there would "be insignificant racial impact on the involved
districts" if the seventeen Loch Arbour students were to withdraw from the
OTSD and enroll in the other two school districts. We note OTSD's feasibility
expert arrived at the same conclusion.
The ECS next analyzed the financial impact upon the OTSD if Loch
Arbour's students were to withdraw from its district. Before addressing his
findings, we note that, for the 2015-16 school year, the school tax levy
imposed in the aggregate upon Ocean Township's residents was $60,054,172
and upon Loch Arbour's residents $2,014,486. Ocean Township's school tax
levy was apportioned between Loch Arbour and Ocean Township on the basis
of equalized assessed value of taxable property. However, Loch Arbour's
taxpayers' contribution was $125,900 per pupil for the seventeen Loch Arbour
students that were to attend OTSD schools during the 2015-16 school year, in
contrast to the $16,300 Ocean Township taxpayers paid per pupil.
Loch Arbour's position was that if it were an independent, albeit non-
operating, school district, it could send its students to the West Long Branch
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A-1985-16T1
and Shore Regional school districts at a far lower cost, because N.J.S.A.
18A:38-19 limits a sending district's costs to educate its children to the actual
cost of educating a pupil in the receiving district.2 In fact, Loch Arbour had
already entered into send-receive agreements with the West Long Branch and
Shore Regional school districts for the 2017-18 school year. In those
agreements, the tuition for the Loch Arbour students who attended schools in
the West Long Branch school district was set at $14,000 per pupil for the
school year, and at $15,500 per pupil who attended schools in the Shore
Regional school district for the same year.
In addition, Loch Arbour had two children who required special needs
placements. OTSD had sent those children to special education placements
outside of its district, at a cost of approximately $150,000 per year in the
aggregate for both children. Notwithstanding these added expenses, it was
Loch Arbour's position it would still fare far better financially by withdrawing
2 N.J.S.A. 18A:38-19 states in relevant part:
Whenever the pupils of any school district are
attending public school in another district . . . , the
board of education of the receiving district shall
determine a tuition rate to be paid by the board of
education of the sending district to an amount not in
excess of the actual cost per pupil as determined under
rules prescribed by the commissioner and approved by
the State board. . . .
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A-1985-16T1
from the OTSD and entering into a send-receive relationship with the West
Long Branch and Shore Regional school districts, given the savings it would
realize overall. The ECS determined that if Loch Arbour withdrew from the
OTSD, Ocean Township would be able to recover the revenue it would lose
from Loch Arbour, as long as Ocean Township increased its local levy by 3.4
percent, which he calculated would necessitate raising the taxes on each
residence by $182 per year.
Despite the aforementioned findings, the ECS found Loch Arbour had
not provided sufficient information about the expenses associated with
establishing and operating a new school district in Loch Arbour, such as the
cost of office space, computer equipment, support staff, hiring an officer to
track the Loch Arbour students' attendance in school, etc. He also observed
Loch Arbour did not supply the projected cost to "phase out" Loch Arbour
students from the OTSD to the new school districts, or provide an analysis of
the social/emotional impact to Loch Arbour students if they were to leave one
and enter another school district. Because the latter three issues were not
addressed, the ECS declined to recommend that Loch Arbour be permitted to
withdraw from the OTSD.
In response to the ECS's decision, Loch Arbour filed a verified petition
with the Commissioner of Education, seeking permission to submit to the
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A-1985-16T1
voters of Loch Arbour the question of whether it should become a separate,
independent school district. See N.J.S.A. 18A:8-9. In its petition, Loch
Arbour also advised it wished to withdraw from the OTSD and enter into send-
receive agreements with the West Long Branch and Shore Regional school
districts.
In addition to submitting the materials it provided to the ECS, in its
petition Loch Arbour addressed the issues the ECS found Loch Arbour had
failed to cover in the application it had submitted to him. Loch Arbour
verified that, to ease the transition for students transferring from the OTSD to
the new districts, it would not object to any child continuing to attend an
OTSD school until such child completed the level of school – elementary,
intermediate or high school – he or she was currently attending. Loch Arbour
pointed out it would pay for such child on a "tuition paying basis," noting the
tuition for a school in the OTSD for the 2015-16 school year would be $17,132
per pupil.
Loch Arbour also submitted an analysis of its costs to operate a school
district. It estimated that even if all children stayed in the OTSD as part of the
transition process and Loch Arbour expended what it required to establish a
new school district, it would spend approximately $600,000 during the first
year of the district's existence. It anticipated start-up costs for its school
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A-1985-16T1
district would drop forty percent after the first year, making its plan to
withdraw from the OTSD still more practical than not. In addition, Loch
Arbour noted that because OTSD would not need to pay the tuition and other
costs associated with educating Loch Arbour's special needs students, OTSD
would only need to raise taxes on each residence by $166 – not $182 – per
year in order to recover those costs previously paid for by Loch Arbour.
The OTSD and Ocean Township answered Loch Arbour's petition,
challenging Loch Arbour's claims. For simplicity, because these two parties'
positions are identical, we shall refer to these two parties as the OTSD or
appellants, unless otherwise indicated.
The Acting Commissioner of Education (Commissioner) ultimately
determined Loch Arbour could withdraw from the OTSD pursuant to N.J.S.A.
18A:8-4, as long as Loch Arbour's residents approved following a referendum.
In her written decision, the Commissioner noted N.J.S.A. 18A:8-11(b) permits
a municipality to oppose a petition to withdraw from a school district on only
four grounds. Those grounds are:
1. [a]n excessive debt burden will be imposed
upon the remaining district,
2. [a]n efficient school system cannot be
maintained in the remaining district without
excessive costs,
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A-1985-16T1
3. [i]nsufficient pupils will be left in the
remaining district to maintain a properly graded
school system, or
4. . . . any other reason, which it may deem
to be sufficient[.]
[Ibid.]
The OTSD's arguments predominantly fell into the fourth category. One
of those arguments was that villages are not entitled to avail themselves of the
remedy in N.J.S.A. 18A:8-4. This statute provides that when a municipality is
divided into two, the school district that had existed for the one, undivided
municipality shall serve as the district for both municipalities, unless the
district is divided as provided by N.J.S.A. 18A:8-4 to 18A:8-24. The OTSD
contended N.J.S.A. 18A:8-4 does not permit a village to be separated from any
other form of municipality and, thus, a district that had served a municipality
and a village cannot be divided and must continue to serve both the
municipality and village as one district. The Commissioner rejected such
argument as contrary to the plain language of N.J.S.A. 18A:8-4.
The OTSD also argued the district it shared with Loch Arbour was a
"consolidated" one and, thus, could not be severed because there was no law
authorizing "deconsolidation." The Commissioner reasoned that, because the
OTSD and Loch Arbour never had separate school districts that, after
9
A-1985-16T1
formation, subsequently joined together as one, the OTSD could not be a
consolidated district. Therefore, she found, Loch Arbour could avail itself of
the remedy provided in N.J.S.A. 18A:8-4 to 18A:8-24 and seek to withdraw
from the OTSD.
The OTSD further contended permitting Loch Arbour to withdraw from
its district would undermine the purpose of the School Funding Reform Act,
N.J.S.A. 18A:7F-43 to -63, legislation that had revised the State's school
funding formula to ensure all school districts contributed an equitable share to
the statewide school tax levy. The OTSD argued the send-receive relationship
Loch Arbour entered into with the West Long Branch and Shore Regional
school districts would result in Loch Arbour's tax levy to be based upon per
pupil cost of the receiving districts and not upon Loch Arbour 's equalized
assessed property values. The Commissioner spurned OTSD's argument,
noting the tax levy imposed by the State upon Loch Arbour – as well as all
other school districts, even if non-operating – still would be calculated on a
district's equalized assessed property values.
The OTSD further maintained Loch Arbour was not permitted to create a
non-operating school district, but the Commissioner found that it was, citing in
support Edmondson v. Bd. of Educ. of Borough of Elmer, 424 N.J. Super. 256,
265 (App. Div. 2012) (holding that a municipality is not prohibited from
10
A-1985-16T1
forming a non-operating school district so that it may enter into a sending-
receiving relationship with another district). Crediting the ECS's findings, the
Commissioner also rejected the OTSD's claim Ocean Township would be
saddled with an excessive debt burden, see N.J.S.A. 18A:8-11(b)(1), if Loch
Arbour withdrew from its district. Finally, the Commission noted Loch
Arbour would not assume any indebtedness if it withdrew from Ocean
Township's district, because no educational facilities would exist within Loch
Arbour.
The ESC scheduled a referendum and, on April 4, 2017, Loch Arbour
residents voted 93-4 to withdraw from Ocean Township's school district and
establish an independent one. Thereafter, the Loch Arbour Board of Education
was organized and entered into send-receive agreements with West Long
Branch and Shore Regional school districts for the 2017-18 school year.
II
Appellants assert the following arguments for our consideration.
POINT ONE: LOCH ARBOUR'S PETITION TO
THE COMMISSIONER WAS FATALLY
PROCEDURALLY DEFECTIVE FROM THE
OUTSET, AND THEREFORE THE
COMMISSIONER WAS WITHOUT JURISDICITON
TO RULE ON THE SAME.
POINT TWO: AS A VILLAGE, LOCH ARBOUR
HAD NO LEGAL ABILITY TO UTILIZE THE
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A-1985-16T1
STATUTORY PROCESS SET FORTH AT N.J.S.A
18A:8-4, REQUIRING THIS COURT TO REVERSE
THE DECISION OF THE ACTING
COMMISSIONER.
POINT THREE: THE ACTING COMMISSIONER
FAILED TO CONSIDER RELEVANT EVIDENCE
CONCERNING THE IMPACT OF SEPARATION
ON THE OTSD, AS WELL AS LOCH ARBOUR
PUPILS, INCLUDING THE LACK OF
APPRECIABLE DIVERSITY IN THEIR NEW
SETTING, AND THE LACK OF EDUCATIONAL
BASIS FOR THE CHANGE.
POINT FOUR: THE ACTING COMMISSIONER'S
FINDING THAT THE OTSD IS NOT A
CONSOLIDATED SCHOOL DISTRICT IS
CONTRARY TO THE EVIDENCE AND IS
ARBITRARY, CAPRICIOUS AND
UNREASONABLE.
POINT FIVE: THE ACTING COMMISSIONER
ERRED IN FINDING THAT LOCH ARBOUR'S
SEPARATION FROM THE OTSD, FORMULATION
OF A NON-OPERATING SCHOOL DISTRICT,
AND ENTRY INTO SENDING/RECEIVING
AGREEMENT AT A LOWER PER PUPIL COST,
DID NOT VIOLATE THE NON-OPERATING
SCHOOL DISTRICT ACT OR THE SCHOOL
FUNDING REFORM ACT.
We reject these contentions and affirm.
This court's review of agency determinations is limited. In re
Stallworth, 208 N.J. 182, 194 (2011). This court "defer[s] to the specialized or
technical expertise of the agency charged with administration of a regulatory
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A-1985-16T1
system." In re Application of Virtua-West Jersey Hosp. Voorhees for a
Certificate of Need, 194 N.J. 413, 422 (2008). For that reason, this court will
"not disturb an administrative agency's determinations or findings unless there
is a clear showing that (1) the agency did not follow the law; (2) the decision
was arbitrary, capricious, or unreasonable; or (3) the decision was not
supported by substantial evidence." Ibid. "The burden of demonstrating that
the agency's action was arbitrary, capricious or unreasonable rests upon the
[party] challenging the administrative action." In re Arenas, 385 N.J. Super.
440, 443-44 (App. Div. 2006). These principles apply to appellate review of
administrative decisions involving "disputes arising under school laws."
Kaprow v. Bd. of Educ., 131 N.J. 572, 591 (1993) (citations omitted).
However, this court is not bound by the agency's legal conclusions, G.S. v.
Dep't of Human Servs., 157 N.J. 161, 170 (1999), but does defer to the
"agency's interpretation of statutes and regulations within its implementing and
enforcing responsibility." Wnuck v. N.J. Div. of Motor Vehicles, 337 N.J.
Super. 52, 56 (App. Div. 2001) (quoting In re Appeal by Progressive Cas. Ins.
Co., 307 N.J. Super. 93, 102 (App. Div. 1997)).
We first address appellants' argument that, as a village, Loch Arbour
cannot avail itself of the remedy provided in N.J.S.A. 18A:8-4, which permits
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A-1985-16T1
a municipality to seek to withdraw from a school district pursuant to N.J.S.A.
18A:8-5 to -21 because, as a village, Loch Arbour is not a municipality.
In pertinent part N.J.S.A.18A:8-1 provides:
Each municipality shall be a separate local school
district . . . except that each incorporated village shall
remain a part of the district in which it is situated at
the time of its incorporation.
There is no question that, because it is a village, consistent with this statute
Loch Arbour continued to be a part Ocean Township's school district after
Loch Arbour was incorporated in 1957.
N.J.S.A. 18A:8-4 states:
Whenever a municipality is divided into two or more
municipalities, the school district shall continue as a
single school district unless and until the same shall be
divided as provided in this article.
N.J.S.A. 18A:8-4 thus provides that if a municipality divides and creates an
additional municipality or municipalities, the new municipality or
municipalities become a part of the original municipality's school district.
However, a school district may be divided if it separates or divides as provided
in N.J.S.A. 18A:8-5 to 18A:8-24. Loch Arbour sought to do exactly that in its
petition – divide Ocean Township's school district and create a new, separate
school district for Loch Arbour.
14
A-1985-16T1
As stated, appellants contend N.J.S.A. 18A:8-4 does not apply to Loch
Arbour because it is a village and they claim villages are not municipalities.
Therefore, they contend, because N.J.S.A. 18A:8-4 refers to only
municipalities, this statute does not permit a village to divide a school district
of which it is a part and create a new one. We reject this premise, because it is
plain N.J.S.A.18A:8-4 applies to all municipalities, which include villages.
It is well established that when interpreting a statute, "we look first to
the plain language of the statute, seeking further guidance only to the extent
that the Legislature's intent cannot be derived from the words that it has
chosen." Pizzullo v. N.J. Mfrs. Ins. Co., 196 N.J. 251, 264 (2008). "[T]he best
indicator of that intent is the statutory language." DiProspero v. Penn, 183 N.J. 477, 492 (2005) (citing Frugis v. Bracigliano, 177 N.J. 250, 280 (2003)).
"A court may neither rewrite a plainly-written enactment of the Legislature nor
presume that the Legislature intended something other than that expressed by
way of the plain language." O'Connell v. State, 171 N.J. 484, 488 (2002)
(citing State v. Afanador, 134 N.J. 162, 171 (1993)).
Of course, if the meaning of a term is not clear, we may resort to
extrinsic evidence, "including legislative history, committee reports, and
contemporaneous construction." DiProspero, 183 N.J. at 492-93 (quoting
Cherry Hill Manor Assocs. v. Faugno, 182 N.J. 64, 75 (2004)). In addition,
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A-1985-16T1
"[i]n determining the common meaning of words, it is appropriate to look to
dictionary definitions." Macysyn v. Hensler, 329 N.J. Super. 476, 485 (App.
Div. 2000) (citing Matthews v. State, 187 N.J. Super. 1, 7-8 (App. Div. 1982),
appeal dismissed, 93 N.J. 298 (1983)). If applicable, we may also resort to
N.J.S.A. 1:1-2, which states:
Unless it be otherwise expressly provided or
there is something in the subject or context repugnant
to such construction, the following words and phrases,
when used in any statute and in the Revised Statutes,
shall have the meaning herein given to them. . . .
Significantly, the statute specifically defines the term "municipality" to
include cities, towns, townships, villages and boroughs, and any
municipality governed by a board of commissioners or an
improvement commission.
[ N.J.S.A. 1:1-2 (emphasis added).]
Because a village is a municipality and there is no indication the Legislature
intended to exclude villages from seeking to divide a school district pursuant
to N.J.S.A. 18A:8-5 to -21, we affirm the Commissioner's determination
N.J.S.A. 18A:8-4 does not bar Loch Arbour from withdrawing from the OTSD.
We note further that, in In re Incorporation of Loch Arbour, 25 N.J. 258
(1957), our Supreme Court observed over sixty years ago that a village is a
municipality, stating "[t]he village as a separate municipal unit, both
16
A-1985-16T1
unincorporated and corporate, has had a long period of acceptance in the law. "
Id. at 266.
We next turn to appellants' contention the OTSD is consolidated and,
because there is no provision in the law permitting a consolidated school
district to become "deconsolidated," Loch Arbour cannot separate from Ocean
Township's district. We need not examine the merits of this premise because
appellants have failed to show the Ocean Township school district was ever
consolidated with any district formed by Loch Arbour.
N.J.S.A. 18A:8-25 to -41 govern consolidated school districts. Despite
the ample use of the term "consolidated" in these statutes, such word is not
defined in these or any other statute. Accordingly, we resort to the dictionary
to ascertain the meaning of this term. See Macysyn, 329 N.J. Super. at 485.
Black's Law Dictionary defines this term as, "[i]n a general sense, to unite or
unify into one mass or body, as to consolidate several small school districts
into a large district . . . ." Black's Law Dictionary With Pronunciations 279
(5th ed. 1979). Merriam-Webster defines "consolidate" as "to join together
into one whole: UNITE [,] consolidate several small school districts[.]"
Merriam-Webster, Consolidate, MERRIAM -WEBSTER ONLINE DICTIONARY,
http://www.merriam-webster.com/dictionary/consolidate (Last Updated
August 28, 2018).
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A-1985-16T1
Applying these dictionary definitions, we are convinced that, as used by
the Legislature in N.J.S.A. 18A:8-25 to -41, the term "consolidated" means or
refers to separate school districts that have been joined together to form one
district. Here, neither Loch Arbour nor Ocean Township ever had separate
school districts that combined or joined to form one, consolidated district. In
fact, by operation of law, when Loch Arbour was incorporated as a village
back in 1957, it was required to remain a part of Ocean Township's school
district.
Second, we note the authority upon which appellants rely for the premise
that Ocean Township's district is consolidated is not binding upon this court.
Appellants rely upon an unpublished Chancery Division opinion, an
unpublished Appellate Division opinion in which we specifically declined to
rule on this particular issue, and correspondence authored by two previous
Commissioners of Education who clearly did not make a specific ruling that
Ocean Township's school district is a consolidated one. Accordingly, because
there is no evidence the school district from which Loch Arbour seeks to
withdraw is consolidated, we need not address whether it can sever itself from
such a district.
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A-1985-16T1
Appellants maintain Loch Arbour cannot form a non-operating school
district. In support, they cite N.J.S.A. 18A:8-44(a), enacted in 2009, which
states:
Except as otherwise provided in subsection b. of this
section, the executive county superintendent of
schools shall eliminate any non-operating district and
merge that district with the district with which it
participates in a sending-receiving relationship.
Appellants contend this provision evinces the Legislature's intent to
eliminate not only non-operating school districts from the State, but also to
preclude the formation of new non-operating districts. We disagree. As we
noted in Edmondson v. Bd. of Educ. of Borough of Elmer, 424 N.J. Super.
256, 265 (App. Div. 2012):
As recently as June 2009, the Legislature devised a
plan that responds to, but does not prohibit,
arrangements where, as here, one of the districts in a
sending-receiving relationship no longer operates any
school. N.J.S.A. 18A:8-43 to -49; N.J.S.A. 18A:7-8
(L. 2009, c. 78 §§ 1-11). In general terms, these
statutes direct the executive county superintendent to
eliminate these "non-operating districts," in
accordance with a plan and schedule approved by the
Commissioner, providing for merger with the district
"best able to accommodate the merger." N.J.S.A.
18A:8-43, -44; N.J.S.A. 18A:7-8(g).
In recognizing the existence of sending-receiving
relationships that leave a non-operating district and
directing merger of non-operating districts, the
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A-1985-16T1
Legislature did not amend Chapter 38 of Title 18A to
prohibit arrangements that result in [the] creation of a
non-operating district. Rather, the Legislature
addressed the consequences in a way that provides
another avenue for reaching the goal of consolidation
through mergers that are consistent with the thorough
and efficient education of children. N.J. Const. art.
VIII, § 4, ¶ 1.
[Id. at 265].
Therefore, although an ECS may well be required to eliminate any non-
operating school district in a county and merge it with the district with which it
is participating in a send-receive relationship, a municipality is not barred from
forming a non-operating school district so that it may enter into such a
relationship with another district. Here, that is exactly what Loch Arbour
endeavored to achieve by filing its petition.
We considered appellants' remaining arguments, and determined they are
without sufficient merit to warrant discussion in a written opinion. R. 2:11-
3(e)(1)(E). Satisfied the Commissioner's decision was supported by
substantial evidence and was not arbitrary, capricious or unreasonable, we
affirm.
Affirmed.
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