HIGHLAND PARK BOARD OF EDUCATION VS. KIMBERLY HARRINGTON (NEW JERSEY DEPARTMENT OF EDUCATION)

NOT FOR PUBLICATION WITHOUT THE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-3455-16T1
HIGHLAND PARK BOARD OF
EDUCATION and PISCATAWAY
TOWNSHIP BOARD OF EDUCATION,
Petitioners-Appellants,
v.
KIMBERLY HARRINGTON,
ACTING COMMISSIONER OF
EDUCATION, NEW JERSEY
STATE BOARD OF EDUCATION,
and HATIKVAH INTERNATIONAL
ACADEMY CHARTER SCHOOL,
Respondents-Respondents.
___________________________________
Argued May 30, 2019 – Decided June 7, 2019
Before Judges Haas, Sumners and Mitterhoff.
On appeal from the New Jersey Department of
Education.
David B. Rubin argued the cause for appellants (David
B. Rubin, PC, and The Busch Law Group, LLC,
attorneys; David B. Rubin and Douglas M. Silvestro,
on the brief).
Thomas O. Johnston argued the cause for respondent
Hatikvah International Academy Charter School
(Johnston Law Firm, LLC, attorneys; Thomas O.
Johnston, of counsel and on the brief; Rula Alzadon
Moor, on the brief).
Geoffrey N. Stark, Deputy Attorney General, argued
the cause for respondents Kimberly Harrington, Acting
Commissioner of Education and State Board of
Education (Gurbir S. Grewal, Attorney General,
attorney; Melissa Dutton Schaffer, Assistant Attorney
General, of counsel; Donna Arons and Jennifer J.
McGruther, Deputy Attorneys General, on the brief).
PER CURIAM
Appellants Highland Park Board of Education (Highland Park) and
Piscataway Township Board of Education (Piscataway) (collectively appellants)
appeal from the February 28, 2017 final decision of the Commissioner of
Education (Commissioner), approving an application by Hatikvah International
Academy Charter School (Hatikvah) to increase its enrollment from fifty to
seventy-five students in kindergarten and first grade, and to implement a
weighted enrollment lottery affording preference to economically disadvantaged
students. We affirm. 1
1
This case was calendared back-to-back with three other appeals, and we heard
oral argument on all four matters on the same day. In re Approval of Charter
Amendment of Cent. Jersey Coll. Prep (Central Jersey), No. A-3074-16, North
Brunswick Twp. Bd. of Educ. v. Harrington (North Brunswick), No. A-3415-
A-3455-16T1
2
I.
We begin by reciting the essential background facts and procedural history
of this matter. In March 2009, Hatikvah submitted a charter school application
to the New Jersey Department of Education (Department or NJDOE), seeking
to serve students in East Brunswick Township, Middlesex County—its "district
of residence."2 During its initial four-year charter period, it planned to serve
students in kindergarten through fifth grade, with a projected maximum
enrollment of 240 students. The goal was to eventually "expand grade levels
through eighth grade, completing growth with a maximum of 396 students with
44 students per grade." It sought to build on the "multicultural strength" of the
district through an International Baccalaureate (IB) program, which included a
partial-immersion Hebrew language program. In compliance with the Charter
School Program Act of 1995, N.J.S.A. 18A:36A-1 to -18 (Charter School Act or
16, and Bd. of Educ. of Twp. of Piscataway v. N.J. Dep't of Educ. (Piscataway),
No. A-5427-16. Because some of the issues in these appeals overlap, the reader
is encouraged to review all four of our opinions in these cases, which are being
released simultaneously.
2
The term "district of residence" is defined as "the school district in which a
charter school facility is physically located; if a charter school is approved with
a region of residence comprised of contiguous school districts, that region is the
charter school's district of residence." N.J.A.C. 6A:11-1.2.
A-3455-16T1
3
CSPA), East Brunswick students were given preference for enrollment.
N.J.S.A. 18A:36A-8(a).
On May 14, 2009, the East Brunswick Board of Education (East
Brunswick) adopted a resolution recommending that the Commissioner deny
Hatikvah's application. See In re Approval of Hatikvah Int'l Academy Charter
Sch., No. A-5977-09 (App. Div. Dec. 21, 2011) (slip op. at 5), certif. denied,
210 N.J. 28 (2012). East Brunswick alleged that Hatikvah's application
interfered with the separation of church and state, had
a negative economic impact on the district's taxpayers,
and did not comport with the requirements for charter
schools as codified in N.J.A.C. 6A:11 because it did not
include an educator from East Brunswick. [It] . . .
further asserted Hatikvah's single-cultural, single-
emersion Hebrew language charter school would be at
odds with and would not serve the multi-cultural
community; it would unfairly compete with the
Solomon Schechter Day School in East Brunswick; its
proposed full day kindergarten would result in a lack of
educational equity and access for East Brunswick
residents; the petition did not accurately demonstrate
East Brunswick's community interest in the charter
school; and its needs analysis was flawed, inaccurate
and did not document a need for the charter school.
[Ibid.]
On July 6, 2010, the Commissioner granted final approval of Hatikvah's
charter, effective from July 1, 2010 to June 30, 2014, to operate a school for
grades kindergarten through fifth, with a maximum of fifty students per grade
A-3455-16T1
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for a total of 300 students, for an initial four-year period. East Brunswick
appealed, arguing that Hatikvah failed to present evidence of sufficient
enrollment under N.J.A.C. 6A:11-2.1(i)(14), because as a "district of residence"
charter school it could not include non-district students in the count. Id. at 13.
This court affirmed the Commissioner's decision, finding that "[t]he record
reflect[ed] that Hatikvah cooperated with the Department in diligently providing
requested information and documentation pertaining to a variety of matters,
including student enrollment, by emails, faxes, and site visits." Id. at 19. The
Supreme Court denied certification. Hatikvah, 210 N.J. at 28.
In 2013, Hatikvah submitted an application to the Department for a charter
renewal and for an expansion to add grades sixth through eighth. The
Commissioner granted the renewal, effective through June 2019, but denied the
expansion "due to a decline in the school's academic performance in the 2012-
13 school year."
In November 2014, Hatikvah filed another application for an amendment,
seeking again to add grades sixth through eighth and to increase enrollment in
its existing grades. See Highland Park Bd. of Educ. v. Hespe (Highland Park I),
No. A-3890-14 (App. Div. Jan. 24, 2018) (slip op. at 3), certif. denied, 233 N.J.
A-3455-16T1
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485 (2018). East Brunswick, Highland Park, and the South River Board of
Education (South River) opposed the application. Id. at 4.
On March 19, 2015, the Commissioner issued a final decision granting
Hatikvah's request to expand into the middle school grades, at the same fifty-
student maximum enrollment, but denied the request to expand the enrollment
in kindergarten through fifth grade. Id. at 7. The Commissioner found that
Hatikvah's academic performance had improved from the 2012-2013 school
year, placing its students "in the ninety-sixth percentile in language arts literacy
and eighty-seventh percentile in mathematics, in comparison to other schools
across the State." Id. at 8.
Highland Park appealed, arguing that it was not required to fund its
students' attendance at Hatikvah, a charter school located outside its school
district. Id. at 8-19. We granted East Brunswick's motion to intervene, and
granted Manalapan-Englishtown Board of Education's (Manalapan) and the
New Jersey Charter School Association's (NJCSA) motions to participate as
amici curiae. Ibid.
This court affirmed, finding that the record was sufficient to support the
Commissioner's decision, and we rejected Highland's contention "that only the
charter school's 'district of residence' is obligated to pay for its students to attend
A-3455-16T1
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the school." Id. at 19-21. The court also rejected, because it had not been raised
below, East Brunswick and Manalapan's argument that Hatikvah was operating
in violation of its charter by enrolling out-of-district students, stating that:
If East Brunswick and Manalapan-Englishtown wish to
pursue this issue, the districts may submit a complaint
to the Hatikvah board of trustees asserting that the
school is not being operated in accordance with its
charter and, if the complaint is not "adequately
addressed," the districts may present the complaint to
the Commissioner pursuant to N.J.S.A. 18A:36A-15.
We express no opinion on the merits of such a
complaint, if filed.
[Id. at 14.]
The Supreme Court denied certification. Highland Park I, 233 N.J. at 485.
In November 2015, Hatikvah filed a third application to amend its charter,
seeking to expand its enrollment from fifty to seventy-five students per grade
by the 2024 school year. On February 29, 2016, the Commissioner issued a final
decision denying that request.
II.
We now turn to the application that is at the center of the current appeal.
On November 10, 2016, Hatikvah filed a fourth application with the
Commissioner to expand its charter, again seeking to increase enrollment from
fifty to seventy-five students per grade, and, conditioned upon that approval, to
A-3455-16T1
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implement a weighted enrollment lottery for economically disadvantaged
students. In support of that application, Hatikvah submitted board resolutions
and rationale statements.
In its "Resolution One," Hatikvah sought an amendment to its charter to
progressively increase the maximum approved number of students per grade
from fifty to seventy-five, starting with kindergarten for the 2017-2018 school
year and ending with eighth grade for the 2025-2026 school year. In the
alternative, in "Resolution Two," Hatikvah sought to amend its charter to
increase enrollment from fifty to seventy-five students, starting with
kindergarten, first, and second grade for the 2017-2018 school year, and ending
with eighth grade for the 2023-2024 school year.
With respect to the request for expanded enrollment, Hatikvah represented
that there was "excess demand in the community by parents/guardians to enroll
their children at the School." It claimed that the number of applicants
outnumbered the available seats in every grade, and that as of June 30, 2016,
there were 214 students on the waitlist for kindergarten through second grade,
as follows:
District Grade K Grade 1 Grade 2
East Brunswick 11 6 8
Non-East Brunswick 76 56 57
Total (waitlisted 87 62 65
students)
A-3455-16T1
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Additionally, for the 2016-2017 school year, twenty-four of the available fifty
kindergarten seats went to siblings of students thereby "greatly limiting access
to the school for new families."
Hatikvah maintained that expanded enrollment would allow it to
"implement an even more robust instructional staffing model" and "enhance the
extracurricular programs that it can offer to middle school students." It
represented that "the unique educational approaches of the School have resulted
in strong academic performance and year-to-year growth on the NJ PARCC
State tests." For example, in 2016, its third through sixth grade students
significantly outperformed their peers:
Subject Hatikvah Weighted Average of All NJ State NJ Charters
Sending Districts
ELA 67.8% 64.8% 51.6% 47.9%
Math 67.2% 62.7% 47.2% 41.0%
With regard to the weighted lottery system, Hatikvah sought to amend its
charter to "allow economically disadvantaged students to have an increased
priority for admission using a 2:1 margin." At the time of the application,
Hatikvah operated a random blind lottery under the supervision of an
independent official, where each child was assigned a number and each grade
level was "divided into three groups drawn in order of the preferences afforded
A-3455-16T1
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to the groups as delineated in its charter: Siblings, East Brunswick residents and
non-East Brunswick residents." It "targeted recruitment efforts in areas within
five miles of its location in East Brunswick, including most importantly, Section
8 housing in East Brunswick," utilizing direct mailers, flyers, and television
advertisements in English and Spanish. Under that system, Hatikvah asserted it
had been "extremely successful in creating a diverse school community."
Indeed, many of its students were first-generation Americans whose parents
came from about thirty different countries and spoke a variety of languages.
Hatikvah represented that increasing the economic diversity of its student
body through the weighted lottery system would "further social cohesion across
a broader spectrum of students." It posited that charter schools "are uniquely
positioned to create economically diverse student bodies where economically
disadvantaged students can thrive," because
[u]nlike traditional public schools whose seats are
limited to students who live within their local
geographical boundaries, charter schools can draw
students from its resident and neighboring districts.
Thus charter schools' student bodies do not reflect
residential segregation patterns driven by local
geography, be they economic, racial or ethnic. Charter
schools have means to intentionally create
economically diverse student bodies. . . .
A-3455-16T1
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As for the fiscal impact of its application, Hatikvah stated that increasing
enrollment would have a "very limited financial impact on taxpayers in East
Brunswick" because the majority of the waitlisted students come from districts
other than East Brunswick, and thus those districts would be required to pay fo r
the added students. Increased enrollment would thus have a "negligible and
immaterial fiscal impact" on both "Hatikvah's resident district East Brunswick
as well as non-resident sending districts." Hatikvah calculated that under its
Resolution One, the impact on the sending districts' budgets ranged from .077%
to .011%, based on enrollment of the waitlisted students:
Sending District 2015-2016 2016-2017 Projected Fiscal Impact
Total Waitlisted Costs to (Projected Costs
District Applicants Who Sending as a Percent of
Revenue ($) Would be Able Districts Total District
to Enroll to Fill Revenue)
New Capacity
East Brunswick 149,628,859 9 114,833 .077%
South River 32,316,812 2 15,203 .047%
Highland Park 32,655,815 1 14,571 .045%
North Brunswick 89,484,289 3 25,020 .028%
Old Bridge 141,098,853 3 31,607 .022%
Sayreville 85,365,388 2 15,145 .018%
Edison 235,500,869 3 35,553 .015%
South Plainfield 57,169,108 1 10,000 .017%
East Windsor 85,800,550 1 9752 .011%
Total Waitlisted 25
Under its Resolution Two, Hatikvah calculated that the impact on sending
districts' budgets ranged from .196% to .004%, as follows:
A-3455-16T1
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Sending District 2015-2016 2016-2017 Projected Fiscal Impact
Total District Waitlisted Costs to (Projected Costs
Revenue ($) Applicants Sending as a Percent of
Who Would be Districts Total District
Able to Enroll Revenue)
to Fill New
Capacity
East Brunswick 149,628,859 23 293,457 .196%
North Brunswick 89,484,289 13 108,420 .121%
South River 32,316,812 5 38,005 .118%
Highland Park 32,655,815 2 29,142 .089%
Milltown 16,216,247 1 10,694 .066%
Sayreville 85,365,388 7 53,011 ..062%
Edison 235,500,869 9 106,659 .045%
East Windsor 85,800,550 3 29,256 .034%
Old Bridge 141,098,853 4 42,144 .030%
Marlboro 86,394,503 2 22,363 .026%
South Plainfield 57,169,108 1 10,000 .017%
Manalapan 82,300,339 1 12,542 .015%
Franklin Park 156,416,249 1 13,266 .008%
Piscataway 111,295,663 1 8400 .006%
New Brunswick 180,444,475 1 10,973 .006%
Perth Amboy 233,538,204 1 9648 .004%
Total Waitlisted 75
Further, Hatikvah estimated that under both its Resolution One and Two,
the cost for appellants to send their students to Hatikvah would be less than the
projected costs if the students remained in appellants' districts:
Resolution One
District Projected Costs to Sending Districts Projected Costs to Sending
of Students Who Transfer to Districts of Students Who
Hatikvah Remain in District
Highland Park $14,571 $15,789
A-3455-16T1
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Resolution Two
District Projected Costs to Sending Projected Costs to Sending
Districts of Students Who Transfer Districts of Students Who
to Hatikvah Remain in District
Highland Park $29,142 $31,578
Piscataway $8400 $13,289
In response to Hatikvah's application, appellants Highland Park and
Piscataway submitted almost identical resolutions calling for a moratorium on
new charter school seats in Middlesex and Somerset Counties.3 They raised
general objections asserting that payments to the charter schools drained funds
from, and diminished money available to serve students in, the traditional public
schools. Appellants represented that for the 2016-2017 school year, 2316
students attended the five existing charter schools in Middlesex and Somerset
Counties (including Hatikvah), and that if the applications for expansions were
approved for these schools, and a sixth charter school was added, the number of
charter school seats would increase by 128% to 5283.
Appellants alleged there was already a lack of demand for the existing
charter schools located in Middlesex and Somerset counties, and that the
expansion of these schools would exacerbate that issue. They also argued that
3
Similar resolutions were submitted by North Plainfield Board of Education,
Educational Services Commission of New Jersey, Monroe Township Board of
Education, South River Board of Education, South Brunswick Board of
Education, Middlesex Borough Board of Education, New Brunswick Board of
Education, and South Amboy Board of Education.
A-3455-16T1
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many charter schools, "in direct contradiction to the letter and spirit of the "
CSPA, were seeking to "expand in order to enroll additional students from
districts outside of the charter schools' approved districts or regions of residence
due to a lack of interest from students who live in the very communities for
which the charters were created to serve."
Appellants took no position on Hatikvah's weighted lottery system, and
instead represented that only 48% of the students enrolled in Hatikvah resided
in the school's district of residence. However, they also alleged, without
providing any statistics, that Hatikvah and another charter school, Thomas
Edison EnergySmart Charter School (TEECS), enrolled "a significantly more
segregated student body than any of the resident or non-resident sending districts
with respect to race, socioeconomic status, and need for special education."
East Brunswick, Hatikvah's district of residence, also opposed Hatikvah's
application. It argued that the Commissioner should not approve Hatikvah's
fourth request to increase its enrollment because "[t]he conditions that existed
at the time of each of the Commissioner's denials have only negatively
escalated." It alleged that enrollment of East Brunswick students in Hatikvah,
A-3455-16T1
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which had not been approved as a regional charter school, 4 had dropped from
50% in 2015-16 to 45% in 2016-17, and thus there was no community need for
increased enrollment. It represented that enrollment totaled:
Grade Approved Enrollment East Brunswick Actual Enrollment
2016-2017 2016-2017
K 50 23
1 50 23
2 50 23
3 50 33
4 50 24
5 50 21
6 50 18
7 50 16
Total 400 181
Therefore, East Brunswick maintained that:
The supposed need for increasing enrollment from 50
to 75 students per grade is based on a "reported" wait
list of non-resident students from 24 communities
scattered across multiple counties. Wait lists reported
by the Charter School for non-East Brunswick residents
should not be considered in reviewing the Charter
School's application. Clearly there is more than enough
room for any East Brunswick residents if they choose
to attend the Charter School.
East Brunswick also alleged that the "financial impact of the expansion
combined with ongoing costs to support the Charter School would increase to
4
A regional charter school serves a region or collection of districts, as opposed
to a single district. In re Charter Sch. Appeal of Greater Brunswick Charter
Sch., 332 N.J. Super. 409, 423-24 (App. Div. 1999).
A-3455-16T1
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107% of the amount of the State's imposed budget cap" and that the "estimate
of the cost of their proposed expansion to East Brunswick Public Schools in
2016-2017 is an additional $114,833-$293,457. The additional cost of the grade
expansion would escalate to over $1 million per year over the next five years."
Further, in order to meet the required financial support of the Charter School,
East Brunswick asserted that in 2011, it cut opportunities for traditional public
school students, including the elimination of the World Language Program and
summer academy, and the reduction in teaching staff.5
On February 28, 2017, the Commissioner, based on the Department's
recommendation and her review of the record, issued a one-page final decision
approving Hatikvah's application to amend its charter to increase enrollment and
to implement a weighted lottery. The Commissioner stated that the Department
had "completed a comprehensive review, including, but not limited to, student
performance on statewide assessments, operational stability, fiscal viability,
public comment, fiscal impact on sending districts, and other information in
order to make a decision regarding the school's amendment request."
5
Three New Jersey legislators also wrote to the Commissioner opposing
Hatikvah's application. The Commissioner also considered a petition submitted
on behalf of more than 1400 individuals urging denial of the application, and
approximately 300 other public comments.
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The Commissioner approved the expansion for kindergarten and first
grade only, and confirmed the school's maximum approved enrollment through
June 2019, the end of the charter renewal period, as follows:
Grade 2016-2017 2017-2018 2018-2019
K 50 75 75
1 50 50 75
2 50 50 50
3 50 50 50
4 50 50 50
5 50 50 50
6 50 50 50
7 50 50 50
8 50 50
Total 400 475 500
This appeal followed.
On appeal, appellants raise the following contentions:
POINT I
The Commissioner Failed To Analyze Hatikvah's
Application Or To Disclose The Basis For Her
Approval.
POINT II
The Commissioner Failed To Consider The Segregative
Impact Of Hatikvah's Charter Amendment.
POINT III
Other Significant Deficiencies [I]n Hatikvah's
Application Render The Commissioner's Approval
Arbitrary, Capricious and Unreasonable.
A-3455-16T1
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POINT IV
There Is No Authority To Compel Highland Park [A]nd
Piscataway To Fund Students' Attendance [A]t
Hatikvah.
III.
In Point I of their brief, appellants argue that the Commissioner's decision
approving the amendment was arbitrary, capricious or unreasonable because she
failed to analyze Hatikvah's application or to provide any discernable reason for
the approval. We disagree.
By way of background, charter schools are public schools that operate
under a charter granted by the Commissioner, operate independently of a local
board of education, and are managed by a board of trustees. N.J.S.A. 18A:36A-
3(a). In the CSPA, the Legislature found and declared that
the establishment of charter schools as part of this
State’s program of public education can assist in
promoting comprehensive educational reform by
providing a mechanism for the implementation of a
variety of educational approaches which may not be
available in the traditional public school classroom.
Specifically, charter schools offer the potential to
improve pupil learning; increase for students and
parents the educational choices available when
selecting the learning environment which they feel may
be the most appropriate; encourage the use of different
and innovative learning methods; establish a new form
of accountability for schools; require the measurement
of learning outcomes; make the school the unit for
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educational improvement; and establish new
professional opportunities for teachers.
The Legislature further finds that the establishment
of a charter school program is in the best interests of
the students of this State and it is therefore the public
policy of the State to encourage and facilitate the
development of charter schools.
[N.J.S.A. 18A:36A-2.]
Charter schools are "open to all students on a space available basis. . . ."
N.J.S.A. 18A:36A-7. A charter school may not discriminate in its admissions
policies and practices, but "may limit admission to a particular grade level or to
areas of concentration of the school, such as mathematics, science, or the arts."
N.J.S.A. 18A:36A-7. Enrollment in a charter school is voluntary, and a student
may withdraw from a charter school at any time. N.J.S.A. 18A:36A-9.
Preference for enrollment must be given to students who reside in the
school district in which the charter school is located, and the school cannot
charge those resident students tuition. N.J.S.A. 18A:36A-8(a). "If there are
more applications to enroll in the charter school than there are spaces available,
the charter school shall select students to attend using a random selection
process." N.J.S.A. 18A:36A-8(a). "If available space permits, a charter school
may enroll non-resident students. The terms and condition of the enrollment
shall be outlined in the school’s charter and approved by the commissioner."
A-3455-16T1
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N.J.S.A. 18A:36A-8(d). A charter school shall maintain a waiting list of grade-
eligible students, divided into two groups, students from the district or region of
residence and students from non-resident districts. N.J.A.C. 6A:11-4.6(a)(2).
Funding for charter schools comes from the local school district, but is
not equivalent to the per pupil funding that a traditional public school receives.
N.J.S.A. 18A:36A-12(b). The CSPA funding provision provides in part that "the
school district of residence shall pay directly to the charter school for each
student enrolled in the charter school who resides in the district an amount equal
to 90%" of certain per pupil state aid and any federal funds "attributable to the
student." N.J.S.A. 18A:36A-12(b).
Applications to establish a charter school are governed by N.J.S.A.
18A:36A-4 to -5, and the implementing regulation, N.J.A.C. 6A:11-2.1. The
Commissioner has final authority to grant or reject a charter. N.J.S.A. 18A:36A-
4(c). "The notification to eligible applicants not approved as charter schools
shall include reasons for the denials." N.J.A.C. 6A:11-2.1(f) (emphasis added).
An initial charter is for a term of four years and may be renewed for a five -year
period. N.J.S.A. 18A:36A-17.
After approval, the Commissioner annually assesses whether the charter
school is meeting the goals of its charter. N.J.S.A. 18A:36A-16. The
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Commissioner also annually assesses "the student composition of a charter
school and the segregative effect that the loss of the students may have on its
district of residence." N.J.A.C. 6A:11-2.2(c). To facilitate that review, charter
schools must submit an annual report to the Commissioner, local board of
education, and the county superintendent of schools. N.J.S.A. 18A:36A-16(b);
N.J.A.C. 6A:11-2.2(a). The Commissioner may revoke a charter at any time if
the school has not fulfilled or has violated any of the conditions of its charter.
N.J.S.A. 18A:36A-17.
Applications to renew a charter are governed by N.J.S.A. 18A:36A-17,
and the implementing regulation, N.J.A.C. 6A:11-2.3. The Commissioner shall
grant or deny the renewal of a charter based upon a comprehensive review of
the school, including, among other things, the annual reports, recommendation
of the district board of education or school superintendent, and student
performance on statewide tests. N.J.A.C. 6A:11-2.3(b). "The notification to a
charter school that is not granted a renewal shall include reasons for the denial."
N.J.A.C. 6A:11-2.3(d) (emphasis added).
As in this case, a charter school may also apply to the Commissioner for
an amendment to its charter, including for an expansion of enrollment and the
establishment of a weighted lottery. N.J.A.C. 6A:11-2.6(a)(1)(i), (v). In support
A-3455-16T1
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of that application, the board of trustees of a charter school shall submit the
request in the form of a board resolution. N.J.A.C. 6A:11-2.6. Similar to the
initial approval process, boards of education in the district of residence can
submit comments in response to the application. N.J.A.C. 6A:11-2.6(c). The
Department "shall determine whether the amendments are eligible for approval
and shall evaluate the amendments based on" the Charter School Act and
implementing regulations, and the "Commissioner shall review a charter
school's performance data in assessing the need for a possible charter
amendment." N.J.A.C. 6A:11-2.6(b). "The Commissioner may approve or deny
amendment requests of charter schools and shall notify charter schools of
decisions." N.J.A.C. 6A:11-2.6(d).
With this essential regulatory background in mind, and before moving to
a consideration of appellants' contentions concerning the sufficiency of the
Commissioner's decision, we will briefly address Hatikvah's argument that
appellants lack standing to challenge the Commissioner's decision because the
CSPA does not specifically permit an appeal from a decision approving an
amendment to a charter.
As we recently stated in In re Renewal Application of TEAM Acad.
Charter Sch., ___ N.J. Super. ___, ___ (App. Div. 2019) (slip op. at 8-9):
A-3455-16T1
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"Standing 'refers to the plaintiff's ability or
entitlement to maintain an action before the court.'" In
re Adoption of Baby T, 160 N.J. 332, 340 (1999)
(quoting N.J. Citizen Action v. Riveria Motel Corp.,
296 N.J. Super. 402, 409 (App. Div. 1997)). Standing
is a threshold issue that "neither depends on nor
determines the merits of a plaintiff's claim." Watkins
v. Resorts Int'l Hotel & Casino, 124 N.J. 398, 417
(1991). "Unlike the Federal Constitution, there is no
express language in New Jersey's Constitution which
confines the exercise of our judicial power to actual
cases and controversies. U.S. Const. art. III, § 2; N.J.
Const. art. VI, § 1." Crescent Park Tenants Ass'n v.
Realty Equities Corp., 58 N.J. 98, 107 (1971).
Our [c]ourts do not, however, render advisory
opinions, function in the abstract, or consider actions
brought by plaintiffs who are "merely interlopers or
strangers to the dispute." Ibid. (citation omitted). "To
possess standing in a case, a party must present a
sufficient stake in the outcome of the litigation, a real
adverseness with respect to the subject matter, and a
substantial likelihood that the party will suffer harm in
the event of an unfavorable decision." In re Camden
Cty., 170 N.J. 439, 449 (2002) (citation omitted).
Hatikvah correctly points out that there are no provisions in the CSPA or
the implementing regulations providing for an appeal from the Commissioner's
decision approving an amendment to a charter, nor is there any provision
permitting an appeal of any decision by a non-district of residence. In this
regard, N.J.S.A. 18A:36A-4(d), which governs the establishment of charter
schools, provides only that "[t]he local board of education or a charter school
A-3455-16T1
23
applicant may appeal the decision of the commissioner to the Appellate Division
of the Superior Court." Similarly, N.J.A.C. 6A:11-2.5, which controls the
"charter appeal process," provides that "[a]n eligible applicant for a charter
school, a charter school, or a district board of education or State district
superintendent of the district of residence of a charter school may file an appeal
according to N.J.S.A. 18A:6-9.1."
However, in "New Jersey, courts take 'a liberal approach to standing to
seek review of administrative actions.'" In re Grant of Charter to Merit
Preparatory Charter Sch. of Newark, 435 N.J. Super. 273, 279 (App. Div. 2014)
(quoting In re Camden Cty., 170 N.J. at 448). In Merit Preparatory, the New
Jersey Education Association (NJEA) appealed from the Commissioner's
decision granting charters to two "blended" charter schools, where students were
instructed both in person and online. Id. at 276-77. In addressing standing, we
concluded that although it was not clear that NJEA's members would be
"adversely affected" by approval of the charter schools, the NJEA had
nevertheless "demonstrated a slight private interest that, together with the
substantial public interest, affords it standing to pursue this appeal." Id. at 280.6
6
We have also entertained challenges by boards of education to renewals and
amendments of charters in other cases, including In re Red Bank Charter Sch.,
A-3455-16T1
24
We are satisfied that a similar conclusion is appropriate here. The record
indicates that appellants will be directly affected by the Commissioner's decision
that they are required to fund their students' attendance at Hatikvah, and they
have a private interest in addressing the application to expand enrollment, which
will potentially open more seats for students from their districts. Moreover, the
issues raised in this appeal, notably the effect of an increase in enrollment on
the sending districts and the interpretation of the funding provision, are of "great
public interest" and thus, even if appellants had demonstrated only a "slight
additional private interest," they should be afforded standing. Merit
Preparatory, 435 N.J. Super. at 279 (quoting Salorio v. Glaser, 82 N.J. 482, 491
(1980)). Therefore, we reject Hatikvah's contention on this point.
Turning to the merits of appellants' arguments under Point I, we note that
the scope of judicial review of a final decision of the Commissioner on a charter
school application is limited. In re Proposed Quest Acad. Charter Sch. of
Montclair Founders Grp., 216 N.J. 370, 385 (2013). We may reverse only if the
Commissioner's decision is "arbitrary, capricious, or unreasonable." Ibid. In
making that determination, our review is generally restricted to three inquiries:
367 N.J. Super. 462, 467 (App. Div. 2004) (Red Bank Board of Education
opposed renewal and expansion of a charter school) and Highland Park I, No.
A-3890-14 (appeal from amendment).
A-3455-16T1
25
(1) whether the agency's action violates express or
implied legislative policies, that is, did the agency
follow the law; (2) whether the record contains
substantial evidence to support the findings on which
the agency based its action; and (3) whether in applying
the legislative policies to the facts, the agency clearly
erred in reaching a conclusion that could not reasonably
have been made on a showing of the relevant factors.
[Id. at 385-86 (quoting Mazza v. Bd. of Trs., 143 N.J.
22, 25 (1995)).]
"When an agency's decision meets those criteria, then a court owes
substantial deference to the agency's expertise and superior knowledge of a
particular field." In re Herrmann, 192 N.J. 19, 28 (2007). The court "may not
substitute its own judgment for the agency's even though the court might have
reached a different result. . . ." In re Carter, 191 N.J. 474, 483 (2007) (quoting
Greenwood v. State Police Training Ctr., 127 N.J. 500, 513 (1992)).
"[T]he arbitrary, capricious, or unreasonable standard . . . subsumes the
need to find sufficient support in the record to sustain the decision reached by
the Commissioner." Quest Acad., 216 N.J. at 386. "[A] failure to consider all
the evidence in a record would perforce lead to arbitrary decision making." Ibid.
However, in cases where "the Commissioner is not acting in a quasi-judicial
capacity," and is instead acting in [her] legislative capacity, as [s]he was doing
here, [s]he "need not provide the kind of formalized findings and conclusions
A-3455-16T1
26
necessary in the traditional contested case." TEAM Acad., ___ N.J. Super. ___
(slip op. at 30) (quoting In re Grant of Charter Sch. Application of Englewood
on the Palisades Charter Sch., 320 N.J. Super. 174, 217 (App. Div. 1999), aff'd
as modified, 164 N.J. 316 (2000)).
Thus, although the arbitrary, capricious, or unreasonable standard
demands "that the reasons for the decision be discernible, the reasons need not
be as detailed or formalized as an agency adjudication of disputed facts; they
need only be inferable from the record considered by the agency." Englewood,
320 N.J. Super. at 217. See Red Bank, 367 N.J. Super. at 476 ("[T]he reasons
for the decision need not be detailed or formalized, but must be discernible from
the record."); Bd. of Educ. of E. Windsor Reg'l Sch. Dist. v. State Bd. of Educ.,
172 N.J. Super. 547, 552 (App. Div. 1980) (detailed findings of fact not required
by Commissioner in reducing amount local school board sought to increase its
budget).
Furthermore, there is no statutory or regulatory provision requiring the
Commissioner to include reasons for granting an application to amend. The
regulations provide only that the notification shall include reasons for the denial
of an initial charter school application, N.J.A.C. 6A:11-2.1(f), and an
application for renewal, N.J.A.C. 6A:11-2.3(d). The Commissioner is not
A-3455-16T1
27
required to include reasons for granting an initial charter or a renewal, nor is he
or she required to include reasons for granting or denying an application to
amend.
To that end, Quest Academy, 216 N.J. at 390, as cited by appellants, is
distinguishable. In that case, the operator of a proposed charter school appealed
from the Commissioner's decision denying the charter. Id. at 373. The
Commissioner's initial decision was "short on detail with respect to th e
application's deficiencies." Ibid. However, after the appeal was filed, the
Commissioner submitted a written amplification of his reasons for denying the
application. Id. at 374. The Court affirmed, finding in relevant part that:
Although the letter of denial did not detail the
deficiencies found in the application, it offered instead
a face-to-face meeting to review in detail the
shortcomings in the application that Quest Academy
submitted. According to the Commissioner, the large
number of applicants (forty-five) who were reviewed in
the batch with Quest Academy rendered lengthy written
responses difficult and taxing of precious departmental
resources. While it would be naturally preferable from
the applicant's perspective to receive initially more than
a generic form letter denying an application, here Quest
Academy received a bit more than that. Some
information about the application's shortcomings was
provided in the denial letter, and the subsequent
amplification fully detailed those issues. In reviewing
as complex a proposal as that required for a newly
proposed charter school, there is a benefit to offering a
discussion, instead of a written cataloguing, of mistakes
A-3455-16T1
28
or deficiencies in the application that has been rejected.
We do not fault the Commissioner for choosing a
dialogue involving constructive criticism as her
preferred approach for producing approvable
applications when resubmitted.
[Id. at 390.]
Quest Academy is distinguishable from the present case because there is
no requirement that the Commissioner detail her findings in approving an
amendment. Although it would have been helpful for the Commissioner to make
some findings in support of her decision, particularly since she had denied an
identical request one year earlier, she was not required to do so. TEAM Acad.,
___ N.J. Super. ___ (slip op. at 40). Instead, the focus on review is whether the
reasons for the Commissioner's decision are discernible from the record. Red
Bank, 367 N.J. Super. at 476. As explained below, they clearly are.
Here, the Commissioner's decision approving Hatikvah's request to amend
its charter to increase enrollment in kindergarten and first grade by fifty students
is supported by the record and achieves the legislative policy of promoting
charter schools. Most notably, it is undisputed that Hatikvah's performance data,
a significant factor in assessing a request to amend a charter, N.J.A.C. 6A:11 -
2.6(b), was, as represented by its students' PARCC scores, significantly highe r
than the State average. Further, the approval was in conformance with the
A-3455-16T1
29
legislative policy of encouraging innovative approaches by charter schools, in
that, Hatikvah had implemented a partial English/Hebrew language immersion
program, which is not widely available in the traditional public schools in the
State. N.J.S.A. 18A:36A-2.
The record also demonstrates that there was a need for the increase in
enrollment for kindergarten and first grade because there was a waiting list of
eighty-seven students for kindergarten and sixty-two students for first grade.
Expansion of enrollment will allow Hatikvah to meet that need, strengthen its
academic program, and enhance its extracurricular program.
Further, the record shows that Hatikvah, which had been submitting
detailed annual reports to the Commissioner since it was approved to operate in
2010, and had submitted a financial audit prior to having its charter renewed in
2014, was organizationally sound and fiscally viable. N.J.S.A. 18A:36A-16(b);
N.J.A.C. 6A:11-2.2. Hatikvah represented that it had a stable and qualified
board of directors, and a "finding-free audit for the three years prior to the
amendment request." Moreover, Hatikvah presented evidence that the
expansion would have little fiscal impact on East Brunswick, its district of
residence, and the other sending districts. Lastly, appellants do not dispute that
the weighted lottery will foster expanded enrollment of economically
A-3455-16T1
30
disadvantaged students.
Because the Commissioner's decision was amply supported by the record
and achieves the legislative goals of the CSPA, we reject appellants' contentions
on this point.
IV.
In Point II, appellants argue that the Commissioner's decision was
arbitrary, capricious, or unreasonable because she failed to consider the alleged
segregative impact of Hatikvah's charter amendment on the district. However,
appellants failed to provide sufficient evidence of a segregative effect to warrant
either more detailed scrutiny or the denial of the application and, therefore, we
conclude that this argument also lacks merit.
In its resolution in support of its application for an amendment to its
charter, Hatikvah asserted that it had "been extremely successful in creating a
diverse school community," and that it sought to "increase the diversity of its
student body by including more students at risk of academic failure and greater
demographic diversity."
In opposition to the amendment, appellants asserted without any statistical
evidence, that Hatikvah and TEECS enrolled "a significantly more segregated
student body than any of the resident or non-resident sending districts with
A-3455-16T1
31
respect to race, socioeconomic status, and need for special education." They
also asserted that it was "unclear whether the NJDOE gives due consideration to
the increased segregation of students caused by expanding charter schools ."
On appeal, appellants submitted additional enrollment data, which they
contend demonstrated that Hatikvah had become "an enclave for white students
that does not even remotely reflect the demographics of the local community it
purports to serve." They compared Hatikvah's enrollment with the local public
school's enrollment for the 2016-2017 school year, as follows: 7
Ethnic/Racial Hatikvah East Brunswick Highland Park Piscataway
Group Students Students Students Students
White 69.7% 53.7% 37.5% 15.7%
Asian 13.0% 33.5% 24.0% 33.6%
Hispanic 8.2% 6.5% 22.4% 19.0%
Black 6.4% 4.7% 10.8% 28.8%
Appellants also asserted that for the 2016-2017 school year, only 5.1% of
Hatikvah students qualified for free or reduced lunches, in contrast to 15.7% in
East Brunswick, 36.9% in Highland Park, and 32% in Piscataway. They argue
that these statistics are prima facie proof that Hatikvah does not reflect a "cross
section of the community's school age population including racial and academic
factors." N.J.S.A. 18A:36A-8(e).
In response, Hatikvah cited to the 2010 census data, which indicated that
7
Available at https://rc.doe.state.nj.us/PerformanceReports.aspx
A-3455-16T1
32
the racial/ethnic breakdown of the school age population in East Brunswick
(including both public and private school students) was: 60% white; 5% black
or African American; 27% Asian; and 8% Hispanic. Hatikvah maintained that
that data was similar to its students' racial/ethnic breakdown, which was as
follows:
Hatikvah's White Black Asian Hispanic
School Year
2014-2015 69.5% 5.4% 16.1% 7.4%
2015-2016 70.1% 6.6% 13% 8.5%
Further, Hatikvah represented that for the 2016-2017 school year, 5% of its
students qualified for free or reduced lunch, 13% had disabilities, and 3% were
English language learners (ELL).
It is well established that, "[r]ooted in our Constitution, New Jersey's
public policy prohibits segregation in our public schools. . . ." Englewood, 164
N.J. at 324. Segregation is also "specifically prohibited in charter schools."
TEAM Acad., ___ N.J. Super. ___ (slip op. at 37) (citing N.J.S.A. 18A:36A-7).
Thus, the CSPA provides that "[t]he admission policy of the charter school shall,
to the maximum extent practicable, seek the enrollment of a cross section of the
community’s school age population including racial and academic factors."
N.J.S.A. 18A:36A-8(e). Further, N.J.S.A. 18A:36A-7 states that:
A charter school shall be open to all students on a space
A-3455-16T1
33
available basis and shall not discriminate in its
admission policies or practices on the basis of
intellectual or athletic ability, measures of achievement
or aptitude, status as a person with a disability,
proficiency in the English language, or any other basis
that would be illegal if used by a school district;
however, a charter school may limit admission to a
particular grade level or to areas of concentration of the
school, such as mathematics, science, or the arts. A
charter school may establish reasonable criteria to
evaluate prospective students which shall be outlined in
the school’s charter.
Our Supreme Court has held that the "form and structure" of the
segregative analysis is up to the Commissioner and the Department to determine.
Englewood, 164 N.J. at 329. "The Commissioner must consider the impact that
the movement of pupils to a charter school would have on the district of
residence" and "be prepared to act if the de facto effect of a charter school were
to affect a racial balance precariously maintained in a charter school's district of
residence." Id. at 328. "The Commissioner must vigilantly seek to protect a
district's racial/ethnic balance during the charter school's initial application,
continued operation, and charter renewal application." Red Bank, 367 N.J.
Super. at 472.
[S]egregation, however caused, must be addressed. To
be timely addressed, assessment cannot wait until after
a charter school has been approved for operation and is
already taking pupils from the public schools of a
district of residence. The Commissioner must assess
A-3455-16T1
34
whether approval of a charter school will have a
segregative effect on the district of residence of the
charter school. Once a charter school is operating, the
Commissioner must also assess whether there is a
segregative effect in any other district sending pupils to
the approved charter school.
[Englewood, 164 N.J. at 330.]
In response to the Court's decision in Englewood, and to the companion
case, In re Greater Brunswick Charter School, 164 N.J. 314, 315 (2000), the
Board adopted regulations requiring the Commissioner, prior to approval of a
charter, N.J.A.C. 6A:11-2.1(j), and on an annual basis thereafter, N.J.A.C.
6A:11-2.2(c), to "assess the student composition of a charter school and the
segregative effect that the loss of the students may have on its district of
residence." The assessment shall be based on the enrollment from the initial
recruitment period pursuant to N.J.A.C. 6A:11-4.4(a) and (b). 32 N.J.R.
3560(a), 3561 (Oct. 2, 2000). N.J.A.C. 6A:11-4.4(a) provides that "a charter
school shall submit to the Commissioner the number of students by grade level,
gender and race/ethnicity from each district selected for enrollment from its
initial recruitment period for the following school year."
Appellants argue that the Commissioner's decision granting the expansion
of enrollment is arbitrary and capricious because "there is nothing discernable"
in either her decision or the record to suggest that she considered its assertions
A-3455-16T1
35
that Hatikvah enrolled a significantly more segregated student body than any of
the resident or non-resident school districts. However, as set forth above, the
Commissioner was not required to include reasons for granting the application
to amend the charter. See Red Bank, 367 N.J. Super. at 476 (Commissioner did
not specifically address the segregation argument in his letter approving the
charter school's renewal and expansion). Nor did appellants present to the
Commissioner sufficient evidence of a segregative effect to warrant more in-
depth scrutiny. Id. at 472-85.
Further, appellants' unsubstantiated generalized protests did not provide a
basis to deny the application. Ibid. It is undisputed that Hatikvah did not
discriminate in its admission policies or practices. Hatikvah operated a random
race-blind lottery under the supervision of an independent official. It does not
interview or otherwise pre-screen applicants based on intellectual ability, race,
or ethnicity. It recruited from a cross-section of the school age population, in
accordance with its charter agreement, targeting recruitment within a five-mile
radius of the school, most notably in Section 8 housing complexes, using direct
mailings, face-to-face solicitations, flyers, and television ads in English and
Spanish. It also sought to increase its diverse student population through
implementation of a weighted lottery system affording preference to
A-3455-16T1
36
economically disadvantaged students.
Additionally, even if appellants had presented the information about
student enrollment data to the Commissioner that they now present for the first
time in their appellate brief, it would not have provided a basis to reject the
application. The data provided by appellants on appeal shows a disparity
between the enrollment of minority students in Hatikvah and students in the
public schools in East Brunswick, Highland Park, and Piscataway. However,
the census data provided by Hatikvah, which includes both public and private
school-aged children in East Brunswick (its district of residence, where the
majority of students reside), is much closer to the racial/ethnic breakdown of
Hatikvah. In any event, appellants do not argue that the school districts are
becoming more segregated, or that Hatikvah's existence has worsened the
existing racial imbalance. See Bd. of Educ. of Hoboken v. N.J. State Dep't of
Educ., No. A-3690-14 (App. Div. June 29, 2017) (slip op. at 15) (affirmed
charter renewal where there were no allegations that the charter school's
practices after the enrollment of students by an impartial lottery exacerbated the
racial or ethnic balance); see also TEAM Acad., ___ N.J. Super. ___ (slip op. at
14) (stating that "[t]he mere fact that the demographics of the charter schools do
not mirror the demographics of the [d]istrict does not alone establish a
A-3455-16T1
37
segregative effect").
In that regard, this case is distinguishable from Red Bank, 367 N.J. Super.
at 462. In that case, the Board of Education (Board) appealed from the
Commissioner's decision approving an application by a charter school to renew
its charter. Id. at 467. The Board opposed the application on the basis that the
school's operation had worsened the racial/ethnic imbalance, citing to data
showing that since the charter school opened, the percentage of non-minority
students in the traditional public schools had decreased from 32% to 18%, and
a disproportionate number of non-minority students were enrolled in the charter
school. Id. at 469. The Board also alleged that prior to standardized testing, the
charter school frequently returned enrolled minority students with poor
academic records to the traditional public schools. Id. at 479.
The Commissioner in Red Bank did not specifically address the
segregation argument in the final decision. Id. at 476. However, this court
discerned from the entire record, including the Commissioner's brief on appeal,
that the Commissioner had concluded there was "no evidence in the record to
suggest that the charter school has promoted racial segregation among the
district's school-age children," and "there is no requirement that the two schools
have exactly the same minority/non-minority enrollment figures." Ibid.A-3455-16T1
38
(internal quotation marks omitted). We held that "the Commissioner is to assess
whether or not the charter school is seeking 'a cross section of the community's
school age population.'" Ibid. (quoting N.J.S.A. 18A:36A-8(e)).
Despite the disparity in the enrollment, we affirmed the Commissioner's
decision, finding that:
The Charter School should not be faulted for
developing an attractive educational program.
Assuming the school's enrollment practices remain
color blind, random, and open to all students in the
community, the parents of age eligible students will
decide whether or not to attempt to enroll their child in
the Charter School and any racial/ethnic imbalance
cannot be attributed solely to the school. To close this
school would undermine the Legislature's policy of
"promoting comprehensive educational reform" by
fostering the development of charter schools. N.J.S.A.
18A:36A-2.
[Id. at 478.]
Nonetheless, this court found that the school's post-enrollment practices
were "disturbing and difficult to dismiss on this record." Id. at 480. "While the
Charter School's enrollment practices might not be the sole cause of existing
racial/ethnic imbalance, the manner of operation of the school after its color -
blind lottery, warrants closer scrutiny to determine whether some of the school's
practices may be worsening the existing racial/ethnic imbalance in the district
schools." Ibid. Thus, we remanded the matter to the Commissioner to determine
A-3455-16T1
39
"whether remedial action is warranted." Ibid.Here, and unlike in Red Bank, there are no allegations that Hatikvah's
practices, after the enrollment of students by an impartial lottery, exacerbated
the racial, ethnic, or economically disadvantaged population balance in its
district of residence. Instead, appellants simply claimed, in the most general of
terms, that Hatikvah was more segregated than the districts—a bald claim
insufficient to warrant further review on an application to amend.
It is also undisputed that the Commissioner considered the segregative
effect of the charter school in approving the school in 2010, N.J.A.C. 6A:11-
2.1(j), in renewing Hatikvah's application in 2013 and 2018, N.J.A.C. 6A:11 -
2.3(b)(8), and on an annual basis, N.J.A.C. 6A:11-2.2(c). There is no indication
in this record that there was any challenge based on the segregative effect either
before this application to amend, or after (during the second renewal). See
Hatikvah, No. A-5977-09; Highland Park I, No. A-3890-14. Nor is there any
indication in this record that the Commissioner found a segregative effect during
the annual review. N.J.A.C. 6A:11-2.2(c).
Accordingly, we are satisfied that the Commissioner's decision approving
the expansion was not arbitrary, capricious, or unreasonable because appellants
did not provide sufficient evidence of a segregative effect to warrant either more
A-3455-16T1
40
detailed scrutiny or the denial of the application. Therefore, we reject
appellants' contention on this point.
V.
In Point III, appellants argue that the Commissioner's decision approving
Hatikvah's application to amend its charter was arbitrary, capricious, and
unreasonable because she failed to consider "significant deficiencies" in
Hatikvah's application, namely, the financial burden of the expansion on the
sending districts and the lack of demand for the increased enrollment. Again,
we disagree.
Before the Commissioner, appellants raised only general objections in
opposition to Hatikvah's application to amend its charter, calling for a
moratorium on new charter seats in Middlesex and Somerset Counties because
of the alleged financial impact on the sending districts. Appellants did not
submit any specific financial data to support those assertions.
East Brunswick, the district of residence, alleged, more specifically, that
the "financial impact" of Hatikvah's "expansion combined with ongoing costs to
support the Charter School would increase to 107% of the amount of the State's
imposed budget cap" and estimated that the cost to East Brunswick Public
Schools in 2016-2017 was an additional $114,833 to $293,457, or "over $1
A-3455-16T1
41
million per year over the next five years." East Brunswick also alleged that in
order "to meet the required financial support of the Charter School," it had, in
2011, cut educational opportunities for its public school students. Specifically,
it: eliminated the World Language program for 2000 public school students
(which it partially restored by the 2016-2017 school year); eliminated the
Summer Academy serving over 2000 students with remedial needs; and reduced
its elementary teaching staff thereby raising class size.
The Commissioner relied on the Department's comprehensive review of
the "fiscal impact on sending districts" in approving the amendment.
The Education Clause of the New Jersey Constitution imposes an
obligation on the State Legislature to "provide for the maintenance and support
of a thorough and efficient system of free public schools for the instruction of
all the children in the State between the ages of five and eighteen years." N.J.
Const. art. 8, § 4, ¶ 1. Funding for charter schools is provided by "the school
district of residence," which is required to pay directly to the charter school 90%
of its program budget per pupil for each of its resident students enrolled in the
school. N.J.S.A. 18A:36A-12(b). Case law requires that
if the local school district "demonstrates with some
specificity that the constitutional requirements of a
thorough and efficient education would be jeopardized
by [the district's] loss" of the funds to be allocated to a
A-3455-16T1
42
charter school, "the Commissioner is obligated to
evaluate carefully the impact that loss of funds would
have on the ability of the district of residence to deliver
a thorough and efficient education."
[Quest Acad., 216 N.J. at 377-78 (quoting Englewood,
164 N.J. at 334-35).]
The district must, however, "be able to support its assertions."
Englewood, 164 N.J. at 336. The Commissioner does not have "the burden of
canvassing the financial condition of the district of residence in order to
determine its ability to adjust to the per-pupil loss upon approval of the charter
school based on unsubstantiated, generalized protests." Ibid. "[T]he
Commissioner is entitled to rely on the district of residence to come forward
with a preliminary showing that the requirements of a thorough and efficient
education cannot be met." Id. at 334. The Court held that "[t]he legislative will
to allow charter schools and to advance their goals suggests our approach which
favors the charter school unless reliable information is put forward to
demonstrate that a constitutional violation may occur." Id. at 336.
For example, in Red Bank, 367 N.J. Super. at 467, the Board argued that
the Commissioner erred in granting the renewal without adequately considering
the detrimental impact on its ability to provide a thorough and efficient
education. Id. at 482. It claimed that the expansion would cause reduction in
A-3455-16T1
43
the District's budget of $720,000, requiring the elimination of four teaching
positions resulting in bigger classes, the elimination of courtesy busing, and the
reduction of hall monitors, instructional assistants, and cafeteria monitors. Ibid.On appeal, we affirmed the Commissioner's decision, finding that "[t]he
paucity of specificity in the Board's charges is fatal." Id. at 483. Notably, the
Board had failed to reference the regulations adopted to measure a thorough and
efficient education. Ibid. (citing N.J.A.C. 6:8-1.1 to 4.2 (subsequently repealed,
now N.J.A.C. 6A:8-1.1 to 5.3)). Further, a reduction in force would "be
expected given that there will be fewer students to educate by the Board after
they move to the expanded charter school." Ibid. Moreover, while "courtesy
busing" might be important for Red Bank, it was not mandated or necessary for
a thorough and efficient education. Ibid. Nor did the Board demonstrate how
the elimination of monitors and other assistants would impair its thorough and
efficient education efforts. Ibid.Similarly, here, appellants presented only unsubstantiated generalized
protests against the entire charter school scheme and thus did not make a
preliminary showing on which the Commissioner could rely. Englewood, 164
N.J. at 334.
Further, East Brunswick's allegations of financial impact were less
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specific than in Red Bank, and it failed to demonstrate that the requirements of
a thorough and efficient education could not be met as a result of the expansion.
As was the case in Red Bank, East Brunswick did not refer to the regulations
establishing standards for the provision of a thorough and efficient education.
N.J.A.C. 6A:8-1.1 to -5.3. Although the "New Jersey Student Learning
Standards" (NJSLS) include a world language requirement, N.J.A.C. 6A:8-1.3,
it is not clear from East Brunswick's submission why the program was
eliminated in 2011, and more significantly, how it was partially reinstated after
the approval of Hatikvah's expansion in 2014.
Moreover, East Brunswick did not account for the fact that although it has
to pay the charter school 90% of certain student funding categories, it retains
10%—an amount designed to respond to concerns about the loss of funding to
the District. Englewood, 164 N.J. at 333; N.J.S.A. 18:36A-12(b). Nor does it
account for the fact that the CSPA funding formula, as amended by the School
Funding Reform Act of 2008 (SFRA), N.J.S.A. 18A:7F-43 to -63, was
specifically designed to fund students at the constitutionally required level.
Abbott v. Burke (Abbott XX), 199 N.J. 140, 147 (2009). Therefore, appellants'
claim on this point lacks merit.
Appellants also argue that the Commissioner failed to consider the lack of
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demand for the increased enrollment, as allegedly demonstrated by the fact that
only 48% of Hatikvah's students reside in East Brunswick. This contention must
also be rejected.
Preference for enrollment in a charter school is given to students who
reside in the district where the charter school is located. N.J.S.A. 18A:36A-
8(a). A charter school may, however, enroll non-resident students, if available
space permits. N.J.S.A. 18A:36A-8(d). As in this case, a charter school may
apply to the Commissioner for an amendment to its charter to expand its
enrollment. N.J.A.C. 6A:11-2.6(a)(1)(i). There is no statutory or regulatory
provision limiting the requested amount of an expanded enrollment, or limiting
the expansion to in-district students. The Commissioner evaluates whether
amendments are eligible for approval under the CSPA and the implementing
regulation, N.J.A.C. 6A:11-2.6(b), under which a charter school must include
information showing a "[d]emonstration of need" in its initial application.
N.J.A.C. 6A:11-2.1(b)(2)(vi).
Here, Hatikvah demonstrated that need. As of June 2016, there were 149
students, from both East Brunswick and non-resident districts, on the waiting
list for kindergarten through second grade. Additionally, for the 2016-2017
school year, twenty-four of the available fifty kindergarten seats went to siblings
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of students thereby, according to Hatikvah, "greatly limiting access to the school
for new families." Thus, the record fully supported the Commissioner's decision
approving an increase in enrollment from fifty to seventy-five students in
kindergarten and first grade and, therefore, we discern no basis for disturbing it.
VI.
Appellants argue in Point IV that there is no statutory authority under the
CSPA to obligate them to fund their students' attendance at Hatikvah and,
therefore, the Commissioner's decision was arbitrary, capricious, or
unreasonable because it violated express or implied legislative policies. They
contend, as other appellants do in two of the companion cases, Piscataway, and
North Brunswick, that N.J.S.A. 18A:36A-12(b) explicitly limits financial
responsibility for students' attendance at charter schools to the "school district
of residence," which they interpret to mean the district where the charter school
is located, or at most, the contiguous districts identified in the school's approved
"region of residence." Thus, appellants argue that since the Commissioner's
approval of the expansion was based on the presumed ongoing flow of revenue
from appellants, non-resident school districts, it was inherently arbitrary and
should be vacated. For the reasons that follow, however, we conclude that the
Commissioner's interpretation of the funding provisions was entirely consistent
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with the Act and the policies expressed by the Legislature.
In their resolutions calling for a moratorium on all new charter school
seats in Middlesex and Somerset Counties, appellants only generally claimed
that the Department had interpreted the CSPA "to require all public school
districts statewide to pay charter schools for students enrolled in those schools
regardless as to whether the charter serves the district's community as part of the
charter's approved district or region of residence."
The scope of judicial review of a final decision of the Commissioner is
limited. Quest Acad., 216 N.J. at 385. Although the Appellate Division is not
bound by an agency's determination on a question of law, Hargrove v. Sleepy's,
LLC, 220 N.J. 289, 301 (2015), "[c]ourts afford an agency 'great deference' in
reviewing its 'interpretation of statutes within its scope of authority and its
adoption of rules implementing' the laws for which it is responsible." N.J. Ass'n
of Sch. Adm'rs v. Schundler, 211 N.J. 535, 549 (2012) (quoting N.J. Soc'y for
Prevention of Cruelty to Animals v. N.J. Dep't of Agric., 196 N.J. 366, 385
(2008)).
"[T]he goal of statutory interpretation is to ascertain and effectuate the
Legislature's intent." Cashin v. Bello, 223 N.J. 328, 335 (2015). "[T]he best
indicator of that intent is the statutory language." DiProspero v. Penn, 183 N.J.
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477, 492 (2005). "Accordingly, '[t]he starting point of all statutory
interpretation must be the language used in the enactment.'" Spade v. Select
Comfort Corp., 232 N.J. 504, 515 (2018) (quoting N.J. Div. of Child Prot. &
Permanency v. Y.N., 220 N.J. 165, 178 (2014)).
Courts "construe the words of a statute 'in context with related provisions
so as to give sense to the legislation as a whole.'" Spade, 232 N.J. at 515
(quoting N. Jersey Media Grp., Inc. v. Twp. of Lyndhurst, 229 N.J. 541, 570
(2017)). If the plain language leads to a clear and unambiguous result, then the
court's "interpretative process is over." Johnson v. Roselle EZ Quick LLC, 226
N.J. 370, 386 (2016). Courts "turn to extrinsic tools to discern legislative intent
. . . only when the statute is ambiguous, the plain language leads to a result
inconsistent with any legitimate public policy objective, or it is at odds with a
general statutory scheme." Shelton v. Restaurant.com, Inc., 214 N.J. 419, 429
(2013).
At issue here, N.J.S.A. 18A:36A-12(b) provides that:
The school district of residence shall pay directly to the
charter school for each student enrolled in the charter
school who resides in the district an amount equal to
90% of the sum of the budget year equalization aid per
pupil, the prebudget year general fund tax levy per
pupil inflated by the CPI rate most recent to the
calculation, and the employer payroll tax per pupil that
is transferred to the school district pursuant to
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subsection d. of section 1 of P.L.2018, c.68. In
addition, the school district of residence shall pay
directly to the charter school the security categorical
aid attributable to the student and a percentage of the
district’s special education categorical aid equal to the
percentage of the district’s special education students
enrolled in the charter school and, if applicable, 100%
of preschool education aid. The district of residence
shall also pay directly to the charter school any federal
funds attributable to the student.
[(Emphasis added).]
The term "school district of residence" is not defined in the CSPA or the
implementing regulations. The term "district of residence" is defined in the
regulations as "the school district in which a charter school facility is physically
located; if a charter school is approved with a region of residence comprised of
contiguous school districts, that region is the charter school's district of
residence." N.J.A.C. 6A:11-1.2; N.J.A.C. 6A:23A-15.1.8 A school district does
not, however, reside in a district; instead, it is located in a district. Moreover,
the district of residence where the charter school is located does not receive
8
A "region of residence" is defined as the "contiguous school districts in which
a charter school operates and is the charter school's district of residence."
N.J.A.C. 6A:11-1.2. See Greater Brunswick Charter Sch., 332 N.J. Super. at
424 ("[R]egulations allowing regional charter schools are a legitimate means of
effectuating the Act's purpose of encouraging the establishment of charter
schools."). A non-resident school district is defined as "a school district outside
the district of residence of the charter school." N.J.A.C. 6A:11-1.2.
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equalization aid, security categorical aid, or federal funds "attributable" to a
charter student who is not a resident of that district. See N.J.S.A. 18A:7F-43 to
-63 (SFRA). Thus, it would make no sense to interpret "school district of
residence" to mean the "district of residence." N.J.S.A. 18A:36A-12(b).
In fact, the State Board of Education promulgated N.J.A.C. 6A:23A-15.2
and -15.3, which as discussed in more detail in our decision today in Piscataway,
require both a "district of residence" and a "non-resident district" to fund its
students' attendance at a charter school. However, appellants argue that under
N.J.A.C. 6A:23A-15.2 and -15.3, a "non-resident district" should be interpreted
to mean only those "non-resident districts" that are within a charter school's
region of residence, because those districts would be entitled to the same
opportunity for input as the district where the charter school is located. N.J.A.C.
6A:11-2.1; N.J.A.C. 6A:11.2.6(a)(2). They contend that the Department's
interpretation of N.J.S.A. 18A:36A-12(b) to require all non-resident districts to
fund their students' attendance at charter schools is inconsistent with the Act,
because non-resident districts located outside the approved region of residence
are not entitled to receive notice or input as to the approval or amendment
process.
Significantly, after the parties filed briefs in this case, we rejected this
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identical argument in Highland Park I.9 In that case, Highland Park (one of the
appellants in this case), appealed from the Commissioner's March 19, 2015 final
decision approving Hatikvah's second application to amend its charter to expand
its grades. Highland Park I, (slip op. at 2).
In Highland Park I, this court initially noted that Highland Park had not
raised this issue in March 2014 when Hatikvah sought to renew its charter, or in
November 2014 when Hatikvah sought to expand its enrollment. Id. at 14.
Highland Park had never challenged the regulations requiring resident and non -
resident school districts to fund their students' attendance at a charter school,
and had "paid tuition for its students to attend the school for at least six years."
Id. at 15. Nonetheless, because it involved "an issue of law," the court decided
to exercise its discretion and address the argument even though it was raised for
the first time on appeal. Ibid.
Turning to the merits, the court found that the plain language of N.J.S.A.
18A:36A-12(b) "expressly provides that the 'school district of residence' must
pay the charter school for 'each student' enrolled in the school." Id. at 16. Thus,
9
Although the case is unpublished, it involved most of the same parties and the
identical issue raised here, and thus even if not binding under the doctrine of
collateral estoppel, the legal analysis is persuasive and properly constitutes
secondary authority in connection with the present appeals. R. 1:36-3.
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the court held that "as used in N.J.S.A. 18A:36A-12(b), the term 'school district
of residence' refers to the district where the student resides, not the district where
the charter school is located." Ibid. The court further found that the CSPA
expressly envisions that students may enroll in a charter
school, even though they reside in a district other than
the district where the charter school is located. See
N.J.S.A. 18A:36A-8(a) (requiring charter schools to
give preference for enrollment to students who reside
"in the school district in which the charter school is
located"). There is nothing in the Act that would allow
these students to attend a charter school without a
financial contribution from the school districts in which
they reside. Thus, under N.J.S.A. 18A:36A-12(b),
obligation of a school district to attend a charter school
is not limited to the charter school's "district of
residence."
[Id. at 16-17.]
Further, we found that the regulations adopted pursuant to the CSPA were
"consistent with this interpretation of N.J.S.A. 18A:36A-12(b). Indeed, the
regulations expressly provide that both a charter school's 'district of residence'
and the 'non-resident school districts' must pay for their students to attend a
charter school. N.J.A.C. 6A:23A-15.3(g)(2), (3)." Id. at 17. See also N.J.A.C.
6A:23A-15.2 (resident and non-resident school districts shall use projected
charter school aid).
The court in Highland Park I also found support for this interpretation in
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the legislative history, explaining that in its fiscal estimate for S. 1796 (1995),
which, combined with A. 592 (1995), became the CSPA, the Office of
Legislative Services (OLS), included the following statement:
In regard to the funding of charter schools, the bill
provides that the school district of residence would pay
directly to the charter school for each student enrolled
who resides in the district an amount equal to the local
levy budget per pupil in the district for the specific
grade level. . . . The cost for out of district pupils would
be paid by the district of residence of the pupil. . . .
[Id. at 17-18 (quoting Legislative Fiscal Estimate to S.
1796 1 (Sept. 14, 1995) (emphasis added)).]
That statement "makes clear that all school districts of residence must pay for
students to attend a charter school, and the financial obligation is not limited to
the charter school's 'district of residence.'" Id. at 18.
In so ruling, we found unpersuasive Highland Park's citation to other
provisions of the Charter School Act that pertain to a charter school's "district
of residence." Id. at 18. For example, the court found that
Highland Park cites N.J.S.A. 18A:36A-4(c), which
requires a proposed charter school to provide a copy of
its application to the "local board of education."
However, the statute does not support Highland Park's
argument. N.J.S.A. 18A:36A-4(c) also requires the
Commissioner to provide notice to "members of the
State Legislature, school superintendents, and mayors
and governing bodies of all legislative districts, school
districts, or municipalities in which there are students
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who will be eligible for enrollment in the charter
school."
Highland Park also cites N.J.S.A. 18A:36A-14(b), a
statute that limits a charter school's salaries to the
salaries of the highest step in the district where the
school is located; and N.J.S.A. 18A:36A-16(b), which
requires a charter school to serve a copy of its annual
report on the local board of education in the district
where the school is located. However, these statutes
have no direct bearing on whether a student's "school
district of residence" must pay for students from that
district to attend at a charter school.
[Id. at 18-19.]
Thus, we concluded that
under N.J.S.A. 18A:36A-12(b), the term "school
district of residence" means the school district where
the student resides, and each "school district of
residence" must pay the charter school for its student to
attend the school, in the amounts required by the Act
and the regulations. We therefore reject Highland
Park's contention that only the charter school's "district
of residence" is obligated to pay for its students to
attend the school.
[Id. at 19.]
Similarly, as addressed in Piscataway, the Commissioner issued a final
decision in which she interpreted the CSPA and the regulatory provisions,
N.J.A.C. 6A:23A-15.1 to -15.4, to require school districts to "provide funding
for its students enrolled in charter schools located in other school districts." Bd.
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of Educ. of Twp. of Piscataway v. NJ Dep't of Educ., EDU 10995-16, final
decision, (July 27, 2017) (the Piscataway Board of Education was obligated to
pay for its resident students to attend a number of out-of-district charter schools,
including Hatikvah).
Appellants argue that under that interpretation, non-resident school
districts will be deprived of due process because non-resident districts are not
entitled to receive formal notice of a charter school's application to amend its
charter, or input into the amendment process. See N.J.A.C. 6A:11-2.6(a)(b).
They argue that "the net effect of these regulations as applied by the Department
is to render every New Jersey district the 'district of residence' of every ch arter
school in the state."
However, because preference for enrollment in a charter school is given
to students who reside in the school district in which the charter school is
located, N.J.S.A. 18A:36A-8(a), it is likely that the majority of students will
reside in that district, and thus it makes sense that the district of residence should
receive formal notice and an opportunity for input. Moreover, it was undisputed
that appellants in this case, and in the back-to-back companion appeals, were
aware of the amendment and had an opportunity to submit comments on the
amendment requests involved in these cases. In fact, the Commissioner
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received, and considered, comments from several school districts, individuals,
an educational service commission, and even several legislators. Thus, the
notice provisions simply do not relieve non-resident districts from bearing
financial responsibility for their students' attendance at charter schools.
We are persuaded by the reasoning expressed in Highland Park I, and by
the Commissioner in her final decision in Piscataway. The plain language of
the statute requires each student's district of residence to pay for the student to
attend a charter school. N.J.S.A. 18A:36A-12(b). That interpretation is entirely
consistent with the Act and the policy expressed by the Legislature. Charter
schools are open to all students, both resident and non-resident students, and
there is no indication in the Act that the Legislature intended to exclude non -
resident districts from funding their students' attendance at a charter school. It
is also consistent with the legislative history and the implementing regulations,
which require a non-resident district to fund its students' attendance at a charter
school. N.J.A.C. 6A:23A-15.2 and -15.3. Thus, appellants are obligated to
provide funding for their students enrolled in Hatikvah.
VII.
In sum, we affirm the Commissioner's decision approving Hatikvah's
application to amend its charter, and compelling appellants to fund their
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students' attendance at that school. The decision was not arbitrary, capricious,
or unreasonable, promoted the legislative policy of the CSPA, and was fully
supported by the record.
Affirmed.
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