Borough of Sea Bright, Monmouth County v. Board of Education of the Shore Regional High School District, Monmouth County, 1/14/19, (#16-19)

16-19
Borough of Sea Bright 	:
Monmouth County,
:
Petitioner, 	Commissioner of Education
:
V. 	Decision
:
Board of Education of the
Shore Regional High School District, 	:
Monmouth County,
:
Respondents.
:
Synopsis
This case arose out of a dispute between the Shore Regional Board of Education (Board) and one of its
constituent members, the Borough of Sea Bright (Sea Bright), over the formula used to apportion the tax
burden supporting the regional school district. Sea Bright challenged the action of the Board in declining
to place a referendum on the ballot to modify the apportionment method. 	Specifically, a Sea Bright
representative to the Shore Regional school board made a motion to include a referendum on the ballot at
its November 2015 meeting, which motion died without a vote after not receiving a second on the motion.
Sea Bright alleged that the failure to place the referendum on the ballot was arbitrary, capricious and
unreasonable. The parties filed cross motions for summary decision.
The ALJ found, inter alia, that: the Shore Regional School District was established in the 1960s on a per-
pupil funding basis; subsequently, the funding formula changed in 1975 to equalized valuation, but
allowed the voters of each municipality to approve an apportionment method based upon (a) equalized
valuation, (b) per pupil basis, or (c) a combination of the two; in April 2015, Sea Bright sought to raise
its concerns over the apportionment method with the Board due to a disparity between the percentage of
Shore Regional’s budget provided by Sea Bright and the percentage of students Sea Bright sent to the
regional school district; 	in November 2015, a Sea Bright Board member made a motion at a public
meeting to submit a change to the apportionment method to voters in the next election; no other Board
member seconded the motion, and no further vote was taken regarding the request; the decision to place a
change to the apportionment method on the ballot is discretionary and, as a result, the Board’s decision
not to place a referendum on the ballot – in the absence of a second to the motion – was not arbitrary,
capricious or unreasonable. Accordingly, the ALJ granted summary decision in favor of the Board.
Upon comprehensive review, the Commissioner concurred with the ALJ that the Board is entitled to
summary decision. In so determining, the Commissioner found, inter alia, that this matter is limited to a
determination as to whether the Board acted in an arbitrary, capricious or unreasonable manner by failing
to place a referendum on the ballot; as the motion in question was never seconded, the Commissioner
cannot find that the Board was arbitrary, capricious or unreasonable. 	Accordingly, the Initial Decision
was adopted as the final decision in this matter and the petition was dismissed.
This synopsis is not part of the Commissioner’s decision. It has been prepared for the convenience of the reader. It
has been neither reviewed nor approved by the Commissioner.
January 14, 2019

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OAL Dkt. No. EDU 4004-16
Agency Dkt. No. 25-2/16
Borough of Sea Bright, 	:
Monmouth County,
:
Petitioner, 	Commissioner of Education
:
V. 	Decision
:
Board of Education of the
Shore Regional High School District, 	:
Monmouth County,
:
Respondents.
:
The record of this matter and the Initial Decision of the Office of Administrative
Law (OAL) have been reviewed – as have the exceptions filed pursuant to N.J.A.C. 1:1-18.4 by
the petitioner, the Borough of Sea Bright (Sea Bright), and the Board of Education of the
Shore Regional High School District’s (Board) reply thereto. 	In this case, Sea Bright is
challenging the Board’s failure to place on the ballot a referendum to modify the method by
which taxes are apportioned among the constituent members of the Shore Regional High School
District. Sea Bright’s representative to the Board made a motion to include a referendum on the
ballot to change the apportionment method at its November 2015 meeting; however, the motion
was not seconded by any other member of the Board, resulting in no further action. 	The
Administrative Law Judge (ALJ) found that a decision to place such a change on the ballot is
discretionary, and as a result, the Board’s decision not to place a referendum on the ballot in the
absence of a second to the motion was not arbitrary, capricious or unreasonable. Therefore, the
ALJ granted summary decision in favor of the Board.

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In its exceptions, Sea Bright maintains that the Initial Decision must be rejected
because its holding would thwart the Legislature’s explicit intent to have voters determine the tax
allocation method for regional school districts. 	Under N.J.S.A. 18A:13-23, the tax levy for
regional school districts “shall be apportioned among the municipalities included with the
regional district, as may be approved by the voters for each municipality at the annual election or
a special school election.” Therefore, Sea Bright argues that upon receiving a request from one
of the constituent members to revise the tax apportionment method, the Board was required to
designate and submit the public question to be voted upon by the constituents of the district.
Sea Bright also contends that equitable and remedial principles should be applied in this case to
allow the voters of Sea Bright, Monmouth Beach, Oceanport and West Long Branch to weigh in
on the allocation method.
Sea Bright also suggests that the Initial Decision is flawed because the ALJ found
that an arbitrary, capricious or unreasonable analysis was not necessary since the Board’s
decision was discretionary, and no formal action was taken. 	Almost every decision made by a
board of education involves some form of discretion; further, a public entity’s inaction can be
challenged as arbitrary, capricious or unreasonable in the same manner as formal action. Despite
clear case law to the contrary, the Initial Decision wrongfully upheld the Board’s refusal to
certify the referendum and determined that no analysis of whether the decision was arbitrary,
capricious or unreasonable was necessary.
Moreover, Sea Bright contends that the only way to determine whether a public
entity’s decision was arbitrary, capricious or unreasonable is for the public entity to provide an
explanation for its decision. Caporusso v. New Jersey Dep’t of Health and Senior Services, 434
N.J. Super 88, 109 (App. Div 2014). 	For years, the Board has continuously refused to provide

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Sea Bright’s taxpayers, and the taxpayers from the other constituent municipalities, with an
explanation of how it reached its determination not to certify the referendum. 	Importantly, the
Board did not have any public discussion or deliberation on placing the referendum on the ballot.
Finally, there is no legitimate reason for the Board to deny a constituent’s formal request to place
a referendum on the ballot as the tax allocation method has no impact on the educational services
provided to Shore Regional’s students, and there also would be no additional cost to the Board.
Each year the Board approves its annual budget based on a myriad of factors that allow it to
provide the appropriate educational services to its students. After the budget is formally adopted,
the total amount to be collected through local taxes is determined. The tax levy is then divided
among the constituent municipalities, and – whether it is calculated through pupil enrollment,
equalized property value or some combination thereof – does not affect the Board’s annual
budget or the amount of taxes it receives. Therefore, the Board’s failure to place a referendum to
modify the school funding formula on the ballot must be overturned as arbitrary, capricious or
unreasonable.
In reply, the Board argues that the statutory scheme and the record on appeal does
not support the modification of the Initial Decision. Nowhere in N.J.S.A. 18A:13-23, nor in the
case law, is there any suggestion that the Legislature ever contemplated that the placing of such a
question on the ballot was automatic. 	Instead, school law and election law should control
regarding how this matter is placed on the ballot. Additionally, the motion made by Sea Bright’s
representative to the Board was extremely vague, simply stating “…to have a vote on conducting
a referendum to change the State funding.” (Respondent’s Exceptions at 2) 	There was no
indication as to what the proposed change to the tax collection method would be based on the
ambiguous motion.

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Additionally, in its exceptions, Sea Bright wrongfully contends that the Board
was arbitrary, capricious or unreasonable because it failed to offer a reasonable explanation for
why the motion died for lack of a second. 	There is no case law to suggest that any individual
board member must discuss his or her reasons for not seconding a motion. 	Further, there is no
case law that would compel the Commissioner to find that every motion made by a board
member must be seconded and discussed, or that any request for a public question under the
applicable statute must be debated. Therefore, the Initial Decision should be adopted as the final
decision in this matter.
Upon a comprehensive review of the record in this matter, the Commissioner
concurs with the ALJ – for the reasons thoroughly set forth in the Initial Decision – that the
Board is entitled to summary decision. 	Although there may be a longstanding disagreement
between the parties regarding the funding formula,1 this matter is limited to a determination as to
whether the Board acted in an arbitrary, capricious or unreasonable manner by failing to place a
referendum on the ballot. 	To that end, Sea Bright has the burden to prove that the Board’s
inaction was arbitrary, capricious or unreasonable. 	Kopera v. Board of Education of West
Orange, 60 N.J. Super. 288 (App. Div. 1960). The Commissioner cannot find that the Board was
arbitrary, capricious or unreasonable in the absence of the motion being seconded. 	Further,
N.J.S.A. 18A:13-23 does not address the Board’s obligation to place a referendum on the ballot
based on a request by one municipality; 	rather, it simply states that the tax levy for regional
school districts shall be apportioned among the municipalities and approved by the voters for
each municipality. 	Moreover, despite Sea Bright’s characterization of the Initial Decision, the
ALJ did evaluate the Board’s inaction under the arbitrary, capricious or unreasonable standard.
1 The Initial Decision outlines previous efforts made by Sea Bright to explore the possibility of modifying the
funding formula, beginning in 2015.

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Finally, 	the 	Commissioner 	is 	also 	in 	accord 	with 	the 	ALJ’s 	determination 	concerning
Sea Bright’s claim that the Board violated the Open Public Meetings Act, N.J.S.A. 10:4-6 et seq.2
Accordingly, the recommended decision of the ALJ is adopted as the final
decision in this matter and the petition of appeal is hereby dismissed.
IT IS SO ORDERED.3
COMMISSIONER OF EDUCATION
Date of Decision: January 14, 2019
Date of Mailing: 	January 15, 2019
2 Although claims against local school boards that do not arise under school laws are typically adjudicated in
Superior Court, it is well established that the Commissioner has additional incidental jurisdiction to determine
claims arising under the OPMA as they relate to school law controversies. Sukin v. Northfield Bd. of Educ., 171 N.J.
Super. 184, 197 (App. Div. 1979). Here, the incident jurisdiction is broad enough to encompass the claims made by
Sea Bright in connection with the Board’s decision not to place a referendum on the ballot.
3 Pursuant to P.L. 2008, c. 36 (N.J.S.A. 18A:6-9.1), Commissioner decisions are appealable to the Superior Court,
Appellate Division.

1
State of New Jersey
OFFICE OF ADMINISTRATIVE LAW
INITIAL DECISION
BOROUGH OF SEA BRIGHT, 	OAL DKT. NO.: EDU 04004-16
MONMOUTH COUNTY, 	AGENCY NO.: 25-2/16
Petitioner,
v.
BOARD OF EDUCATION OF THE
SHORE REGIONAL HIGH SCHOOL
DISTRICT, MONMOUTH COUNTY,
Respondent.
_____________________________________
Vito A. Gagliardi, Jr., Esq. and Kerri A. Wright, Esq., for petitioner (Porzio
Bromberg and Newman, P.C., attorneys)
Dennis 	A. 	Collins, 	Esq., 	for 	respondent 	(Collins 	Vella 	and 	Casello, 	LLC,
attorneys)
Record Closed: September 6, 2018 	Decision: October 15, 2018
BEFORE SARAH G. CROWLEY, ALJ:
PROCEDURAL HISTORY AND STATEMENT OF CASE
This 	case 	arises 	out 	of 	a 	dispute 	between 	the 	Shore 	Regional 	Board 	of
Education (Shore Regional or Board) and one of its constituent members, the Borough
of Sea Bright (Sea Bright) over the funding formula used to allocate the final burden
supporting the regional school district. 	Sea Bright challenges the action of Shore

OAL DKT. NO. EDU 04004-16
2
Regional in declining to place a referendum on the ballot to modify the school funding
formula. 	A Sea Bright board member made a motion to include such a referendum on
the ballot at its November 2015, meeting. 	No member of the Board seconded the
motion, and thus, it died without a vote. 	There was no discussion regarding the motion
and/or the reason why no one chose to second the motion.
The petitioner filed the instant action challenging the Board’s failure to put the
proposed 	referendum 	on 	the ballot. 	The allege 	that 	the 	decision 	was 	arbitrary,
capricious 	and 	unreasonable. 	The 	matter 	was 	filed 	with 	the 	Commissioner 	of
Education, 	who 	transmitted 	the 	matter 	to 	the 	Office 	of 	Administrative 	Law 	as 	a
contested matter on March 11, 2016. 	On April 11, 2018, the respondent filed a motion
for summary decision. 	On April 16, 2018, the petitioner filed a cross motion for
summary decision. 	Opposition was filed by the petitioner to the motion of respondent
on May 16, 2018. 	Opposition was filed by the respondent to the petitioner’s motion on
May 16, 2018. 	Reply briefs were filed by both parties and oral argument conducted on
September 6, 2018, and the record closed at that time.
Issue:
Whether the failure of the Shore Regional Board of Education to place a change
in the funding formula for its constituent districts on the ballot was arbitrary, capricious
or unreasonable where a Sea Bright’s Board member introduced a motion to place that
question on the ballot, no other member seconded the motion, and consequently the
motion failed?
FACTUAL BACKGROUND
A brief history of the funding mechanism for regional school districts is helpful to
contextualize 	this 	dispute. 	Originally, 	in 	“1931 	the 	Legislature 	authorized 	the
establishment of regionalized school districts” with a “per pupil” funding mechanism.
Borough of Seaside Park v. Comm’r of New Jersey Dept. of Educ., 432 N.J. Super. 167,
177 (App. Div. 2013). However, the New Jersey Supreme Court “[i]n a series of

OAL DKT. NO. EDU 04004-16
3
decisions in the 1970s . . . held the existing system of public school funding in New
Jersey unconstitutional[.]” Ibid.
“In response, the Legislature passed an amendment . . . in 1975 that altered the
[funding formula] from a per pupil basis to an equalized value of real estate situated in
each district[.]” 	Ibid. 	“The Legislature also adopted procedures for initiating withdrawal
from a limited purpose regional school district[.]” “In 1993, the Legislature again passed
an amendment to allow regional districts to choose among equalized valuation, per
pupil enrollment, or a combination of the two through voter approval at an annual or
special election. 	Id. at 178. The Legislature also created a procedure allowing regional
school districts to dissolve themselves as an alternative to withdrawal.
Shore Regional School District was established in the 1960s on a per-pupil
funding basis. 	The members of Shore Regional are Sea Bright, West Long Branch,
Oceanport and Monmouth Beach. 	Subsequently, Shore Regional’s funding formula
changed in 1975 to equalized valuation and has not been amended since.4 	In April
2015, Sea Bright sought to raise its concerns over the funding formula with the Board
due to a disparity between the percentage of Shore Regional’s budget provided by Sea
Bright and the percentage of students Sea Bright sent to the regional school district.
While the disparity varies somewhat from year to year, the disparity amounts to
approximately twenty percent of the budget compared to five percent of the student
body.5
On July 23, 2015, the Mayor of Sea Bright submitted a letter to Shore Regional
requesting that the Board “explore the possibility of modification of the school budget
apportionment method.” The letter specifically requested an update on the status of the
request. 	On November 19, 2015, the Sea Bright Board member made a motion at the
public meeting of the Board to submit a funding formula change to the voters in the next
4 Sea Bright unsuccessfully challenged the validity of the 1975 amendment. See Borough of Sea Bright v. State,
Dep't of Educ., 242 N.J. Super. 225 (App. Div. 1990) (affirming constitutionality of the regional school district
funding formula under the New Jersey Constitution).
5 Monmouth Beach, similarly, sends roughly 15% of the total pupils enrolled at Shore Regional but pays around
25% of the total appropriations. See Pet. Brief, p. 17.

OAL DKT. NO. EDU 04004-16
4
election. 	Sea Bright, Exh. L, p. 95. It is undisputed that no other Board member
seconded the motion. Consequently, no further vote was taken regarding the request to
place the funding formula on the ballot, and there was no discussion regarding same.
The minutes reflect that the Board went into closed executive session to discuss
its response to the Mayor of Sea Bright’s July 23, 2015, letter regarding the issue of the
funding formula. 	Ultimately, a response was sent to Sea Bright indicating that Shore
Regional Board of Education decided not to explore the possibility of a change in
apportionment formula of the Shore Regional High School District. 	Long Cert., Exh. B.
Sea Bright has also argued that the executive session was in violation of the Open
Public Meetings Act. 	However, there was no action taken in the meeting, and even
assuming there was a violation, it has no bearing on the failure of the motion for a
referendum to carry.
The above facts are undisputed and are, thus, FOUND as FACT.
LEGAL ANALYSIS
Under the Uniform Administrative Procedure Rules, N.J.A.C. 1:1-1.1 to -21.6, “[a]
party may move for summary decision upon all or any of the substantive issues in a
contested case.” 	N.J.A.C. 1:1-12.5(a). 	Summary decision may be granted “if the
papers and discovery which have been filed, together with the affidavits, if any, show
that there is no genuine issue as to any material fact challenged and that the moving
party is entitled to prevail as a matter of law.” N.J.A.C. 1:1-12.5(b).
Shore Regional argues that placing the funding formula on the ballot is a
discretionary act. 	Moreover, the Board entertained a motion in an open pubic meeting
and no one seconded the motion. 	There was no discussion on this motion and that
after there was no second, the motion died. 	Sea Bright argues that a discussion
regarding the reasons for not seconding the motion were required, and the absence of
such a discussion is arbitrary, capricious and unreasonable as a matter of law. 	The
Board maintains that there was no need for any discussion, and assuming a reason is

OAL DKT. NO. EDU 04004-16
5
required, there are legitimate non-arbitrary reasons for the Board’s rejection of the
motion, which are entitled to deference.
Sea Bright argues that a “regional board, upon receipt of [a request to change
the funding apportionment], has a duty to submit the question to the voters . . .” Sea
Bright Brief, p. 15. 	However, the statute does not mandate any such action. Moreover,
N.J.S.A. 18A:13-23 provides three options for regional school districts to apportion the
appropriations from its constituent members. 	First, a district may utilize a “equalized
valuation” method based on property values. N.J.S.A. 18A:13-23(a). Second, a district
may now elect to apportion appropriations based on the “proportional number of pupils
enrolled.” N.J.S.A. 18A:13-23(b). 	Last, a district may opt for “any combination of
apportionment” 	between 	equalized 	valuation 	and 	per 	pupil 	contribution. 	N.J.S.A.
18A:13-23(c). In addition, N.J.S.A. 18A:13-23.3 provides that a “regional district may
modify 	[how 	appropriations] 	are 	apportioned” 	as 	long 	as 	a 	qualifying 	event 	has
occurred. 	Ibid. 	There is nothing in the statute that mandates the Board to put the
referendum on the ballot, in the absence of a vote by the Board.
It is well settled that a modification of the funding formula is a discretionary act by
the Board. Moreover, the plain language of N.J.S.A. 18A:13-17 and N.J.S.A. 18A:13-23
to 23.3, reflect that such an act is permissive not mandatory. The School Elections law
sets a deadline for the submission of public questions but does not impose additional
procedural requirements on the Board’s conduct. 	Under N.J.S.A. 18A:13-23 the role of
the voting public is to approve or disapprove of the apportionment method placed on the
ballot by the Board. Nothing mandates that a district place such a referendum on the
ballot.
The 	foregoing 	interpretation 	is 	consistent 	with 	the 	provisions 	concerning
withdrawal and dissolution of regional school districts. N.J.S.A. 18A:13-51 provides that
the board of education of any . . . district constituting part of a limited purpose regional
school district or the governing body of the [district’s] municipality . . . may, by
resolution, apply to the superintendent . . . [for] an investigation as to the advisability of
withdrawal.” N.J.S.A. 18A:13-51.

OAL DKT. NO. EDU 04004-16
6
The Legislature also gives individual constituent municipalities the power to begin
the withdrawal process. The Executive County Superintendent must then produce a
report pursuant to N.J.S.A. 18A:13-52 and, within thirty days of the issuance of that
report, the “municipal governing body or the board of education of the withdrawing
district . . . may . . . petition the commissioner [to place the issue on the ballot].” N.J.S.A.
18A:13-23 to 23.3, in contrast, does not require the regional board of education or
commissioner to conduct an impact study for modification of the funding formula. Nor
does the statute set timelines or other decisional factors for consideration. Essentially,
not only is the decision to place a funding formula change on the ballot discretionary,
the Legislature did not place limitations on that discretion beyond the qualifying events
listed under N.J.S.A. 18A:13-23.3—unlike for withdrawal and dissolution.
In conclusion, a decision to hold a referendum to change the funding formula is a
discretionary act within the powers of the regional school board. 	Moreover, there was
no need for a discussion of the reasons for the failure of the motion to receive event a
second. Finally, since there was no second on the motion, it clearly failed. 	There was
nothing substantively or procedurally improper regarding the decision of the Board not
to place a referendum on the ballot. As to the allegation of a violation of the Open Public
Meetings Act, the Board argues that no decision 	or vote occurred in the closed
executive 	session 	because 	no 	further 	vote 	was 	required 	after 	the 	Sea 	Bright
apportionment motion failed. Board Reply, p. 14. 	Finally, the Board’s closed executive
session was entirely proper under the Open Public Meetings Act because the Board
was aware of the likelihood of litigation resulting from their decision and went into
Executive Session to discuss a response to the letter from the Mayor only. 	There was
no formal action taken in the executive session, as there was no formal action taken on
the motion which failed to carry.
CONCLUSION
For the foregoing reasons, I GRANT the Board’s motion for summary decision
and DENY Sea Bright’s motion for summary decision for the following reasons:

OAL DKT. NO. EDU 04004-16
7
ORDER
I hereby ORDER that the Motion of Sea Bright is hereby DENIED, and the
cross-motion of Shore Regional is GRANTED, and the petition of Sea Bright is hereby
DISMISSED.
I 	hereby 	FILE 	this 	initial 	decision 	with 	the 	COMMISSIONER 	OF 	THE
DEPARTMENT OF EDUCATION for consideration.
This 	recommended 	decision 	may 	be 	adopted, 	modified 	or 	rejected 	by 	the
COMMISSIONER OF THE DEPARTMENT OF EDUCATION, who by law is authorized
to make a final decision in this matter. 	If the Commissioner of the Department of
Education does not adopt, modify or reject this decision within forty-five days and unless
such time limit is otherwise extended, this recommended decision shall become a final
decision in accordance with N.J.S.A. 52:14B-10.
Within thirteen days from the date on which this recommended decision was
mailed to the parties, any party may file written exceptions with the COMMISSIONER
OF THE DEPARTMENT OF EDUCATION, ATTN: 	BUREAU OF CONTROVERSIES
AND DISPUTES, 100 Riverview Plaza, 4th Floor, PO Box 500, Trenton, New Jersey
08625-0500, marked “Attention: Exceptions.” A copy of any exceptions must be sent to
the judge and to the other parties.
October 15, 2018
DATE 	SARAH G. CROWLEY, ALJ
Date Received at Agency: 	October 15, 2018 (emailed)
Date Mailed to Parties:
/mel