IN THE MATTER OF NEW JERSEY SPORTS AND EXPOSITION AUTHORITY RESOLUTION 2016-70 (NEW JERSEY SPORTS AND EXPOSITION AUTHORITY) (CONSOLIDATED)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
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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-2602-15T4
A-2815-15T4
IN THE MATTER OF NEW JERSEY
SPORTS AND EXPOSITION
AUTHORITY RESOLUTION 2016-70.
_________________________________________
Submitted October 3, 2017 – Decided November 9, 2017
Before Judges Yannotti and Mawla.
On appeal from the New Jersey Sports and
Exposition Authority.
Castano Quigley LLC, attorneys for appellant
Town of Kearny in A-2602-15 and respondent
Town of Kearny in A-2815-15 (Gregory J.
Castano, Jr., on the briefs).
Pearce Law, LLC, attorneys for respondent
Borough of North Arlington in A-2602-15 and
appellant Borough of North Arlington in
A-2815-15 (Randy T. Pearce and Gregory A.
Randazzo, of counsel and on the briefs).
Basile Birchwale & Pellino, LLP, attorneys for
intervenor Borough of Ridgefield (Stephen F.
Pellino, on the brief).
Lowenstein Sandler LLP, attorneys for
respondent New Jersey Sports and Exposition
Authority (James Stewart and Rachel Warren,
on the brief).
PER CURIAM
On January 14, 2016, the New Jersey Sports and Exposition
Authority (Authority) adopted Resolution 2016-70 (2016
Resolution), which certified the 2016 meadowlands adjustment
payments for constituent municipalities, pursuant to the
Hackensack Meadowlands Agency Consolidation Act (Act), N.J.S.A.
10A-1 to -68. The Town of Kearny and the Borough of North Arlington
appeal from the 2016 Resolution. Thereafter, we granted the
Authority's motion to consolidate the appeals, and permitted the
Borough of Ridgefield to intervene.1
For the reasons that follow, we conclude that Ridgefield may
not challenge its 2015 adjustment payment; the Authority erred by
failing to calculate the 2016 adjustment payments in the manner
prescribed by N.J.S.A. 5:10A-59(a); and the Authority did not err
by including a $1.1 million payment that North Arlington received
in 2012 when determining the amount of North Arlington's pre-
adjustment payment for 2012 and the adjustment payments for 2015
and 2016. Accordingly, we reverse Resolution 2016-70 and remand
for recalculation of the 2016 adjustment payments in accordance
with N.J.S.A. 5:10A-59(a).
1
East Rutherford also was granted leave to intervene, but did not
file a brief and is no longer participating in the appeal.
2 A-2602-15T4
I.
The Hackensack Meadowlands District is comprised of fourteen
constituent municipalities, which include Kearny, North Arlington,
and Ridgefield. The Act provides in pertinent part for the
establishment of an intermunicipal account and requires the
Authority to compute the amounts that the constituent
municipalities should pay to the account and be paid from the
account each year. N.J.S.A. 5:10A—59(a). The Authority then must
certify the adjustment payments for each constituent municipality.
Ibid. The payments are
determined by adding all the payments payable
to that municipality from the intermunicipal
account for school district service payments,
guarantee payments, and apportionment
payments, if any, and by subtracting therefrom
the obligations of that municipality to the
intermunicipal account, as calculated
pursuant to [N.J.S.A. 5:10A-53 to -58]. The
amount so derived shall be referred to as the
meadowlands pre-adjustment payment. For
calendar year 2015, the meadowlands adjustment
payment shall be the average of the
meadowlands pre-adjustment payments for
calendar years 2012, 2013, and 2014. For
calendar year 2016 and subsequent years, the
meadowlands adjustment payment shall be the
average of the meadowlands pre-adjustment
payments for the prior three calendar years.
[Ibid. (emphasis added).]
The adjustment payments are funded primarily through the
Meadowlands Regional Hotel Use Assessment, which is imposed
3 A-2602-15T4
pursuant to N.J.S.A. 5:10A-85(a). The Act provides that in the
event the assessment generates insufficient revenue for the
adjustment payments, the State Treasurer must provide the
Authority with the funds needed to make up the shortfall. N.J.S.A.
5:10A-85(d).
For calendar year 2015, the Authority calculated the
adjustment payments by taking the average of each municipality's
pre-adjustment payments for 2013, 2014, and 2015. On January 30,
2015, the Authority adopted Resolution 2015-01, certifying the
payments due to the constituent municipalities for that calendar
year. Based on information received from a constituent
municipality, the Authority revised the payments for 2015 and on
April 16, 2015, adopted Resolution 2015-12, which certified a
revised payment schedule for 2015.
The Authority then paid the designated amounts to the
municipalities, as required by N.J.S.A. 5:10A-59(b). None of the
constituent municipalities filed an appeal challenging the
approved payments for 2015.
For calendar year 2016, the Authority calculated the
adjustment payments using the average of the municipality's pre-
adjustment payments for years 2014, 2015, and 2016. The Authority
then adopted Resolution 2016-70 certifying the payments for 2016.
These appeals followed.
4 A-2602-15T4
On appeal, Kearny, North Arlington, and Ridgefield argue that
the Authority erred by calculating the adjustment payments for
2016 because the Authority did not use the average of the pre-
adjustment payments for the three prior calendar years, as required
by N.J.S.A. 5:10A-59(a). Ridgefield challenges the 2015 adjustment
payments for the same reason. In addition, North Arlington argues
that the Authority erroneously calculated its 2016 adjustment
payment by applying the amount of a payment North Arlington
received in 2012 pursuant to a settlement of a tax appeal.
II.
The Authority argues that Ridgefield is precluded from
challenging its 2015 adjustment payment because it failed to file
a timely appeal from the resolutions the Authority adopted in
2015, which approved the adjustment payments for that calendar
year. The Authority also argues that the doctrine of laches bars
Ridgefield from challenging its 2015 adjustment payment.
Rule 2:4-1(b) states that appeals must be taken from final
decisions or actions of state administrative agencies within
forty-five days after "the date of service of the decision or
notice of the action taken." When an appeal is not filed within
the time prescribed by the rule, the court lacks jurisdiction to
decide the matter on the merits. Alberti v. Civil Serv. Comm'n,
5 A-2602-15T4
41 N.J. 147, 154 (1963); In re Hill, 241 N.J. Super. 367, 372
(App. Div. 1990).
The forty-five-day filing requirement applies to an
administrative "agency's quasi-judicial decisions that adjudicate
the rights of a particular individual." Nw. Covenant Med. Ctr. v.
Fishman, 167 N.J. 123, 135 (2001) (quoting Pressler, Current N.J.
Court Rules, comment 2 on R. 2:4-1 (2001)). In determining whether
an agency's decision is a quasi-judicial act, the key question is
"whether the fact finding involves a certain person or persons
whose rights will be directly affected." Id. at 136 (quoting
Cunningham v. Dep't of Civil Serv., 69 N.J. 13, 22 (1975)).
The Authority's 2015 resolutions are quasi-judicial acts
because those resolutions represent factual determinations
pertaining to the adjustment payments due to the District's
constituent municipalities in 2015. Because Ridgefield did not
file a timely appeal from the Authority's 2015 resolutions, it may
not challenge its adjustment payment, which was authorized by
those actions.
In view of our decision, we need not address the Authority's
argument that the laches doctrine also precludes Ridgefield from
challenging the 2015 adjustment payment.
6 A-2602-15T4
III.
Kearny, North Arlington, and Ridgefield argue that the
Authority erred in calculating their 2016 adjustment payments.
These municipalities argue that the Authority erroneously based
the payments on the average of each municipality's pre-adjustment
payments for 2014, 2015, and 2016, rather than the pre-adjustment
payments for 2013, 2014, and 2015, as expressly required by
N.J.S.A. 5:10A-59(a).
The scope of our review in an appeal from a final
determination of an administrative agency is strictly limited. In
re Proposed Quest Acad. Charter Sch. of Montclair Founders Grp.,
216 N.J. 370, 385 (2013). An agency's decision will not be reversed
unless it is arbitrary, capricious, or unreasonable. Ibid. (citing
In re Petition for Rulemaking, N.J.A.C. 10:82-1.2 & 10:85-4.1, 117
N.J. 311, 325 (1989)). Therefore, the court's role in reviewing
an agency's decision is limited to three inquiries:
(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)).]
7 A-2602-15T4
Furthermore, we are "not bound by the agency's legal
opinions." A.B. v. Div. of Med. Assistance & Health Servs., 407
N.J. Super. 330, 340 (App. Div.) (quoting Levine v. State Dep't
of Transp., 338 N.J. Super. 28, 32 (App. Div. 2001)), certif.
denied, 200 N.J. 210 (2009). The construction of a statute is "a
purely legal issue [that is] subject to de novo
review." Ibid. (citing Mayflower Sec. Co. v. Bureau of Sec., 64
N.J. 85, 93 (1973)).
Here, the municipalities challenge the Authority's
interpretation and application of N.J.S.A. 5:10A-59(a). When the
court interprets statutory language, "the goal is to divine and
effectuate the Legislature's intent." State v. Shelley,
205 N.J. 320, 323 (2011) (quoting DiProspero v. Penn, 183 N.J.
477, 492 (2005)). We begin our inquiry with the language of the
statute, giving the words used therein their ordinary and accepted
meaning. Ibid. (citing DiProspero, supra, 183 N.J. at 492). If the
statutory language is clear and unambiguous, we must "construe and
apply the statute as enacted." In re Closing of Jamesburg High
Sch., 83 N.J. 540, 548 (1980).
N.J.S.A. 5:10A-59(a) states that for calendar year 2015, the
adjustment payments "shall be the average of the meadowlands pre-
adjustment payments for calendar years 2012, 2013, and 2014." The
statute also states that for calendar year 2016 and all subsequent
8 A-2602-15T4
years, "the meadowlands adjustment payment shall be the average
of the meadowlands pre-adjustment payments for the prior three
calendar years." Ibid.
Thus, N.J.S.A. 5:10A-59(a) plainly and unambiguously requires
that the 2016 adjustment payments must be based on the average of
the pre-adjustment payments for 2013, 2014, and 2015. It is
undisputed that for 2016, the Authority based the adjustment
payments upon the average of each municipality's pre-adjustment
payments for 2014, 2015, and 2016. Therefore, the Authority did
not calculate the payment in accordance with N.J.S.A. 5:10A-59(a).
The Authority maintains, however, that its calculation of
the 2016 adjustment payments was reasonable. According to the
Authority, it calculated the 2016 payments in accordance with the
prior statutory formula, which required the Authority to base the
adjustment payments upon the average of the pre-adjustment
payments for three calendar years — the current year and the two
prior years. See N.J.S.A. 13:17-74(a).2 The Authority asserts its
continued use of the prior statutory formula is entitled to
deference. We disagree.
2
N.J.S.A. 5:10A-2(j) provides that in the event there is any
conflict between the Act and L. 1968, c. 404 (codified at N.J.S.A.
13:17-1 to -86), the provisions of the Act will control.
9 A-2602-15T4
The Authority's action is inconsistent with the plain
language of N.J.S.A. 5:10A-59(a). Although the Authority may have
made its calculations based on the former statutory formula, the
Act established a new formula and required that it be applied
beginning in 2015. Ibid. The Authority was required to apply the
new formula in determining the adjustment payments for 2016. It
erred by failing to do so.
The Authority further argues that if the court determines
that the 2016 adjustment payments should have been calculated
based on the average of the pre-adjustment payments for the three
prior calendar years, it should be allowed to address any issues
resulting from the erroneous calculation of the 2016 payments,
including any underpayments or overpayments, when it calculates
the next annual adjustment payments, which now would be in February
2018. We conclude it would be reasonable for the Authority to
address these issues when it next calculates the adjustment
payments.
Accordingly, the 2016 Resolution is reversed and the matter
remanded to the Authority to recalculate the 2016 adjustment
payments in accordance with N.J.S.A. 5:10A-59(a). Furthermore, the
Authority may address any issues arising from the erroneous
calculation of the 2016 adjustment payments when it calculates the
payments for 2018.
10 A-2602-15T4
IV.
In addition to arguing that the Authority erred by basing its
2016 adjustment payment on the basis of the average of the pre-
adjustment payments for 2014, 2015, and 2016, North Arlington
argues that the Authority erred by including $1.1 million that it
received in 2012 pursuant to a settlement of a tax appeal.
A constituent municipality's adjustment payment is based in
part on the amount that municipality is required to pay into the
intermunicipal account. Ibid. The amount payable to the account
is based in part upon the increase, if any, in the aggregate true
value of taxable real property in the municipality in a comparison
year. N.J.S.A. 5:10A-53(f).3 Any payments in lieu of taxes (PILOT)
on real property that the municipality has received are taken into
account in determining the increase or decrease in the aggregate
true value of taxable real property in the municipality. N.J.S.A.
5:10A-53(e).
The record shows that in April 2011, the New Jersey
Meadowlands Commission (Commission) filed a tax appeal challenging
North Arlington's real estate tax assessment upon property that
the Commission owned in that municipality. The parties eventually
3
The term "comparison year" is defined as "the second calendar
year preceding the adjustment year." N.J.S.A. 5:10A-3.
11 A-2602-15T4
settled the appeal, and the Commission agreed to pay North
Arlington $1.1 million.
The settlement agreement required North Arlington to execute
a PILOT agreement, which states in part that the $1.1 million
would be paid to the municipality as a payment in lieu of taxes
"for the period from May 2008 through December 31, 2011[,] and in
settlement of all future payments in lieu of taxes on the
[p]roperty through December 31, 2030[,] or until such time as use
of the [p]roperty changes . . . [.]" The PILOT agreement also
states that the parties agreed the payment would be made "in
satisfaction of all past and future taxes or payments in lieu of
taxes on the [p]roperty for the period through December 31, 2030[,]
. . . ." It is undisputed that the $1.1 million was paid to North
Arlington in 2012.
On appeal, North Arlington argues that the Authority
erroneously included the $1.1 million it received in 2012 in
calculating its pre-adjustment payment for 2012. North Arlington
contends that if the Authority had not included the $1.1 million
payment in determining that pre-adjustment payment, its adjustment
payments for 2015 and 2016 would have been significantly greater.
We reject North Arlington's arguments because they are not
supported by the plain language of N.J.S.A. 5:10A-53(e). As noted,
the statute expressly provides that if a constituent municipality
12 A-2602-15T4
has received in any comparison year "a payment in lieu of real
estate taxes on property located within the district," that payment
must be taken into account when determining whether there has been
an increase or decrease in the aggregate true value of all taxable
real property in the municipality. Ibid.
As noted, the aggregate true value of all taxable property
is part of the calculation that ultimately results in the
determination of the municipality's adjustment payment. N.J.S.A.
5:10A-53(b)-(f); N.J.S.A. 5:10A-59(a). The 2012 payment was
properly considered in determining North Arlington's pre-
adjustment payment for 2012, and therefore properly taken into
account in calculating the adjustment payments for 2015 an 2016.
North Arlington contends that, at best, the payment it
received in 2012 was largely for unpaid real estate taxes and not
future tax assessments. It argues that the revenue was not related
to any 2012 tax assessments. North Arlington further contends that
the Commission labeled the payment a PILOT payment for its
"internal purposes." North Arlington therefore maintains that the
payment should not have been used in determining its 2012 pre-
adjustment payment, or the adjustment payments for 2015 and 2016.
We are not persuaded by these arguments. As noted, the PILOT
agreement declares the payment to be a PILOT payment, and North
Arlington received the payment in 2012. The Authority's decision
13 A-2602-15T4
to take the 2012 payment into account when calculating North
Arlington's 2012 pre-adjustment payment was consistent with the
plain language of N.J.S.A. 5:10A-53(e) and supported by sufficient
credible evidence in the record.
Reversed and remanded to the Authority for recalculation of
the 2016 adjustment payments in accordance with this opinion. We
do not retain jurisdiction.
14 A-2602-15T4