BOARD OF EDUCATION OF THE TOWNSHIP OF LACEY, OCEAN COUNTY V. NEW JERSEY STATE DEPARTMENT OF EDUCATION, 1/14/05 (#29-05)

29-05
OAL DKT. NO. EDU 8659-98 (http://lawlibrary.rutgers.edu/oal/html/initial/edu08659-98_1.html)
AGENCY DKT. NO. 401-9/98
BOARD OF EDUCATION OF THE 	:
TOWNSHIP OF LACEY,
OCEAN COUNTY, 	:
PETITIONER, 	: 	COMMISSIONER OF EDUCATION
V. 	: 	DECISION
NEW JERSEY STATE 	:
DEPARTMENT OF EDUCATION,
:
RESPONDENT.
:
The record of this matter and the Initial Decision of the Office of
Administrative Law (OAL) have been reviewed. 	Pursuant to
N.J.A.C. 1:1-18.4, the
Lacey Township Board of Education (Board) filed timely exceptions, to which the
Department of Education (Department) duly replied.
In its exceptions, the Board contends that the Administrative Law Judge
(ALJ) erred in concluding that the Department did not engage in unlawful rulemaking.
According to the Board, the ALJ focused on only one of the six criteria enumerated by
the 	Court 	for 	determining 	whether 	an 	agency 	action 	must 	be 	rendered 	through
rulemaking, while ignoring the other five, all of which weigh in the Board’s favor for the
reasons expressed in briefing before the ALJ. 	(Board’s Exceptions at 3-5) 	The ALJ
further erred, the Board avers, in relying on a conclusion that the Department’s
determinations were statutorily authorized, which the Board has never contested, without
going on to examine the
manner in which the Department exercised its discretion; such
examination, according to the Board, clearly demonstrates that the determinations at issue
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should have been promulgated by rule. 	(
Id. at 5-7) 	Finally, the Board argues that the
ALJ erred in considering factors irrelevant to an assessment of whether unlawful
rulemaking occurred, specifically the lack of factual evidence that the calculations
resulting from the Department’s determinations were erroneous, and the fact that the
Board could raise local property taxes in the event of an insufficient school budget. (
Id.
at 8-10)
In reply, the Department urges adoption of the Initial Decision. Contrary
to the Board assertions, the Department states, the ALJ did indeed consider the full
holding of, and the six-factor test set forth in,
Metromedia, supra:
***ALJ Miller noted that this was not a case where an agency acted
beyond its legislative authorization. 	Thus, as ALJ Miller found, the
fourth factor of
Metromedia was inapplicable since Treasury did not
prescribe a legal standard or directive that is not otherwise expressly
provided by or clearly inferable from the enabling statute. Rather,
Treasury acted within the broad authority granted to it under CEIFA.
ALJ 	Miller 	also 	held 	that 	neither 	the 	fifth 	[n]or 	sixth 	factors 	of
Metromedia were present, since he concluded that Treasury "did not
create policy nor did it deviate from existing policy." 	Additionally,
although ALJ Miller may not have specifically mentioned it, Treasury's
methodology in providing municipal income estimates was applicable at
the time of the 1998-1999 CEIFA calculation, and thus did not violate
the third
Metromedia factor either, since it was not merely prospective.
Therefore, 	contrary 	to 	Lacey's 	arguments, 	ALJ 	Miller 	properly
considered
Metromedia to reach his conclusion that neither Treasury nor
the Department violated the APA.
(Department’s Reply at 3-4, citations omitted)
In response to the Board’s contention that the ALJ erred by considering
irrelevant factors, the Department counters that the ALJ properly encompassed in his
decision the entire controversy concerning the Board’s claim of entitlement to additional
State 	aid, 	rather 	than 	limiting 	himself 	to 	the 	Board’s 	legal 	argument 	based 	on
Metromedia, and further, that the Board misunderstands its full burden in this matter:
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***In its petition, Lacey claimed that the March 1998 Core Curriculum
Content Standards Aid ("CCSA") and Debt Service Aid [DSA] awards
were incorrect and that it should be awarded the State aid that was
originally calculated in February 1998. 	However, as ALJ Miller stated,
"[t]here is no dispute that an error occurred in the initial calculation of
the funding amount." 	Thus, the evidence clearly established that the
original numbers issued in February 1998 were in error, and that Lacey
Township was not entitled to the original award. Lacey's assertion that it
does not possess the burden to demonstrate that the State aid numbers
provided to it in March 1998 were in error is meritless. 	It was Lacey's
burden, as petitioner, to demonstrate that the subsequently corrected award
was erroneous. 	It failed to do that. 	Contrary to Lacey's assertions, ALJ
Miller's finding that "petitioner failed to put forth any evidence of its own
that the aid calculations were skewed, unfair or unreasonable," is relevant,
since Lacey utterly failed to meet its burden to demonstrate that the CCSA
and [DSA] awards provided in March 1998 were in error, or that they
were unreasonable. Also, ALJ Miller's consideration of the municipality's
ability to raise tax levy is relevant to an inquiry of an improper State aid
calculation since it could affect the assessment of harm, if any, to the
district, and a determination of an appropriate remedy.***
(Department’s Reply at 4-5, citation omitted)
Upon review, the Commissioner concurs with the ALJ that, under the
undisputed 	facts 	of 	this 	matter, 	no 	rulemaking 	occurred 	with 	respect 	to 	the
determination of State Aid for the 1998-99 school year in violation of
Metromedia,
supra, or the Administrative Procedure Act. 	Indeed, under the circumstances here
presented, where the responsible State agency devised a facially reasonable method for
culling and analyzing the mass of raw data necessary for first-time calculation of State
aid under the Legislature’s post-1997-98 formula, and such method was found upon
application to require adjustment because it clearly resulted in error, the Board cannot
reasonably 	seek 	to 	invalidate 	the 	revised 	methodology 	developed 	immediately
thereafter so as to provide, on a timely basis, more accurate State aid figures to school
districts because such methodology was not promulgated by rule in accordance with the
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Administrative Procedure Act.1 Moreover, the Commissioner concurs that, while the
factors the Board contends the ALJ should not have considered are not germane to legal
analysis strictly based on
Metromedia, supra, they are directly pertinent to the Board’s
claims overall and to assessment of the Board’s entitlement to relief.
Accordingly, the Initial Decision of the OAL is adopted for the reasons
expressed therein and the Petition of Appeal is dismissed.
IT IS SO ORDERED.2
COMMISSIONER OF EDUCATION
Date of Decision: 	January 14, 2005
Date of Mailing: 	January 19, 2005
1 It is interesting to note that the relief sought by the Board is the difference in aid between the State’s first
calculation and its second, notwithstanding that the method used for the first calculation was likewise
newly developed and not promulgated by rule.
2 This decision may be appealed to the State Board of Education pursuant to
N.J.S.A. 18A:6-27
et seq. and
N.J.A.C. 6A:4-1.1
et seq.
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