IN RE RENEWAL APPLICATION OF TEAM ACADEMY CHARTER SCHOOL IN RE RENEWAL APPLICATION OF ROBERT TREAT ACADEMY CHARTER SCHOOL IN RE RENEWAL APPLICATION OF NORTH STAR ACADEMY CHARTER SCHOOL OF NEWARK IN RE AMENDMENT REQUEST TO INCREASE ENROLLMENT OF MARIA L. VARISCO ROGERS CHARTER SCHOOL IN RE AMENDMENT REQUEST TO INCREASE ENROLLMENT OF UNIVERSITY HEIGHTS CHARTER SCHOOL IN RE AMENDMENT REQUEST TO INCREASE ENROLLMENT OF GREAT OAKS LEGACY CHARTER SCHOOL IN RE AMENDMENT REQUEST TO INCREASE ENROLLMENT OF NEW HORIZONS COMMUNITY CHARTER SCHOOL (NEW JERSEY DEPARTMENT OF EDUCATION) (CONSOLIDATED)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3416-15T1
A-4384-15T1
A-4385-15T1
A-4386-15T1
A-4387-15T1
A-4388-15T1
A-4398-15T1
IN RE RENEWAL APPLICATION
OF TEAM ACADEMY CHARTER
APPROVED FOR PUBLICATION
SCHOOL.
May 7, 2019
IN RE RENEWAL APPLICATION APPELLATE DIVISION
OF ROBERT TREAT ACADEMY
CHARTER SCHOOL.

IN RE RENEWAL APPLICATION
OF NORTH STAR ACADEMY
CHARTER SCHOOL OF NEWARK.

IN RE AMENDMENT REQUEST
TO INCREASE ENROLLMENT OF
MARIA L. VARISCO-ROGERS
CHARTER SCHOOL.

IN RE AMENDMENT REQUEST
TO INCREASE ENROLLMENT OF
UNIVERSITY HEIGHTS CHARTER
SCHOOL.

IN RE AMENDMENT REQUEST
TO INCREASE ENROLLMENT
OF GREAT OAKS LEGACY
CHARTER SCHOOL.
IN RE AMENDMENT REQUEST
TO INCREASE ENROLLMENT
OF NEW HORIZONS COMMUNITY
CHARTER SCHOOL.

Argued January 16, 2019 – Decided May 7, 2019

Before Judges Alvarez, Nugent, and Mawla.

On appeal from the New Jersey Department of
Education.

David G. Sciarra argued the cause for appellant
Education Law Center (Pashman Stein Walder
Hayden, PC and Education Law Center, attorneys;
Michael S. Stein, Brendan M. Walsh, Ranit S. Shiff,
David G. Sciarra, Elizabeth A. Athos, and Jessica A.
Levin, on the briefs).

Thomas O. Johnston argued the cause for respondents
TEAM Academy Charter School, Robert Treat
Academy Charter School, North Star Academy
Charter School of Newark, University Heights Charter
School, Great Oaks Legacy Charter School, and New
Horizons Community Charter School (Johnston Law
Firm LLC, attorneys; Thomas O. Johnston, of counsel
and on the brief; Rula Alzadon Moor, on the brief).

Adam S. Herman argued the cause for respondent
Maria L. Varisco-Rogers Charter School (Adams
Gutierrez & Lattiboudere, LLC, attorneys; Adam S.
Herman, of counsel and on the brief; Daniel A.
Schlein, on the brief).

Geoffrey N. Stark, Deputy Attorney General, argued
the cause for respondent Commissioner of Education
(Gurbir S. Grewal, Attorney General, attorney;
Melissa Dutton Schaffer, Assistant Attorney General,
of counsel; Geoffrey N. Stark, on the brief).

A-3416-15T1
2
 The opinion of the court was delivered by

ALVAREZ, P.J.A.D.

The Education Law Center (ELC), on behalf of Abbott1 school children,

appeals the Commissioner of Education's (Commissioner) February 18, 2016

and February 29, 2016 final decisions approving increases in enrollment and

expansions of physical plants for seven Newark charter schools. The schools

and the Commissioner are the respondents. We affirm.

I.

ELC is a non-profit organization which, for many years, has litigated on

behalf of children in the State's poorest school districts. Educ. Law Ctr. v. N.J.

Dep't of Educ., 198 N.J. 274, 279 (2009). Abbott school children, whom ELC

claims to represent in this case, include the residents of thirty-one urban school

districts in New Jersey that the Supreme Court long ago found were not

receiving the "thorough and efficient" education guaranteed by our State

Constitution. Abbott II, 119 N.J. at 394. Efforts to extend to those students

that basic right and to adequately fund the process, have sparked years of

litigation and legislative action. See, for example, Abbott v. Burke (Abbott

XXI), 206 N.J. 332, 340-41 (2011).

1
Abbott v. Burke (Abbott II), 119 N.J. 287, 394 (1990).

A-3416-15T1
3
 The Newark School District (District), formerly an Abbott school

district, is now a New Jersey Schools Development Authority (SDA) District.

The designation guarantees particular benefits, such as 100% facilities

funding. See Educational Facilities Construction and Financing Act (EFCFA),

N.J.S.A. 18A:7G-1 to -48. For the school year 2013-2014, as cited by the

seven charter schools in support of their applications, the District's sixty-four

traditional schools had the following demographics:

Demographic Free or Special LEP 2 Asian Black Hispanic White Other
reduced Ed. Ethnic
price Group
lunch
Percentage 84% 18% 9% 1% 51% 40% 8% 0%

The State Board of Education returned full operating authority to the

District in 2018, after approximately twenty-three years. Shortly after the

State's takeover of the District, the Legislature authorized the establishment of

charter schools. The first one opened in Newark in 1997. As of the 2017 -2018

school year, nineteen charter schools were open in the District.

https://www.nj.gov/education/chartsch/ (last visited April 12, 2019). The

Charter School Act (the Act), N.J.S.A. 18A:36A-1 to -18, defines an initial

charter term as four years. The schools are required to renew for subsequent

2
Limited English Proficiency student.

A-3416-15T1
4
five-year periods. N.J.S.A. 18A:36A-17. The Act authorized "the

establishment of not more than 135 charter schools during the 48 months

following the effective date" of the law state-wide, with a minimum of three

charter schools allocated to each county. N.J.S.A. 18A:36A-3(b). During that

time, enrollment could not exceed "500 students or greater than 25% of the

student body of the school district in which the charter school is established,

whichever is less." N.J.S.A. 18A:36A-4(e). The Commissioner was directed

to "actively encourage the establishment of charter schools in urban school

districts with the participation of institutions of higher education." N.J.S.A.

18A:36A-3(b).

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." Ibid. 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 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." Ibid.

A-3416-15T1
5
 Funding for charter schools comes from the local school district, and

state and federal aid, but is not equivalent to traditional public school per pupil

funding. N.J.S.A. 18A:36A-12(b). At first, Charter School Senate Bill S.

1796, § 13 (1995), provided for 100% of the local levy budget per pupil. In re

Grant of the Charter Sch. in re Englewood on the Palisades Charter Sch. , 164

N.J. 316, 332 (2000). During the three public hearings conducted by the

Senate and Assembly Education Committees on the proposed bill, "[t]he most

frequently expressed objection was charter schools would divert tax dollars

from existing districts without any corresponding decrease in their costs." In

re Grant of Charter Sch. in re Englewood on Palisades Charter Sch., 320 N.J.

Super. 174, 189-90 (App. Div. 1999), aff'd as modified, 164 N.J. 316 (2000).

Therefore, the Legislature moderated the impact charter schools would have on

funding for traditional public schools by reducing the per-pupil amount

payable by the District to 90%. Englewood, 164 N.J. at 333; School Funding

Reform Act of 2008 (SFRA), N.J.S.A. 18A:7F-43 to -63.

In addition to the concern regarding the financial impact charter schools

have on traditional public schools, see In re Proposed Quest Academy Charter

School of Montclair Founders Group, 216 N.J. 370, 377 (2013), the statute and

the Supreme Court direct that in evaluating charter school applications, the

Commissioner must consider "the racial impact that a charter school applicant

A-3416-15T1
6
will have on the district of residence[.]" Ibid. (quoting Englewood, 164 N.J.

at 329). Once an applicant makes the requisite preliminary showing, the

Commissioner must also "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." Id. at 377-78 (quoting Englewood, 164 N.J. at 334-35).

The Commissioner annually assesses whether a charter school is meeting

the goals of its charter. N.J.S.A. 18A:36A-16(a). The Commissioner also

scrutinizes "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. 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.

II.

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 based upon a comprehensive review of the

school, including the annual reports, recommendation of the district board of

education or school superintendent, and student performance on statewide

A-3416-15T1
7
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).

A charter school may also apply to the Commissioner for an amendment

to the charter. N.J.A.C. 6A:11-2.6(a). The amendment, as in this case, can

include an expansion of enrollment and the opening of new satellite campuses.

N.J.A.C. 6A:11-2.6(a)(1)(i) and (iv).

Similar to the initial approval process, boards of education in the district

of residence can submit comments in response to the amendment application.

N.J.A.C. 6A:11-2.6(c). Furthermore, "[t]he Department shall determine

whether the amendments are eligible for approval and shall evaluate the

amendments based on" the Act and implementing regulations. N.J.A.C.

6A:11-2.6(b). "The Commissioner shall review a charter school's performance

data in assessing the need for a possible charter amendment." Ibid. The

Commissioner shall notify charter schools of the decision to approve or deny

an amendment request. If approved, the amendment becomes effective

immediately unless a different effective date is designated. N.J.A.C.

6A:11-2.6(d).

ELC appeals the Commissioner's decisions to approve the respondent

schools' applications to expand their charters. ELC argues:

A-3416-15T1
8
 POINT I
THE COMMISSIONER VIOLATED HIS
AFFIRMATIVE OBLIGATION TO EVALUATE
THE IMPACT OF THE CHARTER SCHOOL
APPLICATIONS FOR EXPANSION ON A
THOROUGH AND EFFICIENT EDUCATION IN
THE NEWARK DISTRICT.

A. The Commissioner Failed to Evaluate the Loss
of the District Funding from the Proposed Charter
School Expansions.

B. The Commissioner Failed to Evaluate the
Segregative Effects of the Proposed Charter
Expansions.

C. There is No Support in the Record for the
Commissioner's Decisions to Approve the Charter
Expansions.

POINT II
THE COMMISSIONER VIOLATED THE ACT BY
APPROVING CHARTER EXPANSIONS
REQUIRING MULTIPLE SCHOOLS UNDER ONE
CHARTER.

III.

Preliminarily, respondents contend that ELC lacks standing to challenge

the Commissioner's decision. "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

A-3416-15T1
9
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 Courts 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).

Insofar as standing to intervene in the charter school approval process,

N.J.S.A. 18A:36A-4(d) provides only that "[t]he local board of education or a

charter school 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 governs the "charter appeal process," states: "[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." When a charter school board of

A-3416-15T1
10
trustees' response to a complaint is unsatisfactory, an individual or group may

"present that complaint to the commissioner who shall investigate and

respond[.]" N.J.S.A. 18A:36A-15.

Only the district board of education and the charter school appear to

have statutory standing to challenge the Commissioner's decisions. N.J.S.A.

18A:36A-4(d). ELC as an individual or group can present a complaint to a

charter school's board of trustees, and then to the Commissioner, but has no

express right to appeal the Commissioner's decisions. N.J.S.A. 18A:36A-15.

But our courts take "a liberal approach to standing to seek review of

administrative actions[.]" In re Camden Cty., 170 N.J. at 448. "A party has

standing to challenge an administrative agency's decision when the party has '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 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 449).

"[W]hen an issue involves a 'great public interest, any slight additional

private interest will be sufficient to afford standing.'" Ibid. (quoting Salorio v.

Glaser, 82 N.J. 482, 491 (1980)). "'[I]t takes but slight private interest, added

to and harmonizing with the public interest to support standing to sue.'"

A-3416-15T1
11
People For Open Gov't v. Roberts, 397 N.J. Super. 502, 510 (App. Div. 2008)

(quoting Hudson Bergen Cty. Retail Liquor Stores Ass'n v. Bd. of Comm'rs,

135 N.J.L. 502, 510 (E. & A. 1947)).

"[T]he standing of nonprofit associations to litigate in varying contexts

has historically been upheld in New Jersey." In re Ass'n of Trial Lawyers of

Am., 228 N.J. Super. 180, 185 (App. Div. 1988). Nonprofit organizations

have representative standing to pursue claims on behalf of their members that

are of "common interest" and could not more appropriately be pursued by

individual members. Crescent Park Tenants Ass'n, 58 N.J. at 109.

The ELC, as a nonprofit law center, has historically represented the class

of Abbott school children in the Abbott litigation, Abbott v. Burke (Abbott V),

153 N.J. 480, 527 (1998), and in ongoing litigation focused on funding for

education to "the State's poorest school districts." Educ. Law Ctr., 198 N.J. at

279. It represents the class of students in poorer urban districts, including

Newark, who might be prevented from receiving a thorough and efficient

education as a result of the Commissioner's decisions. Therefore, it contends,

it has a sufficient stake in the outcome.

Respondents argue it is improper to allow ELC standing because the

members of the represented class include all of Newark's school children—a

group including charter school students and those who wish to enroll, but

A-3416-15T1
12
cannot because of lack of available space. Additionally, respondents further

argue that allowing ELC to pursue the matter essentially permits individual

students, contrary to N.J.S.A. 18A:36A-4(d), to appeal a decision by the

Commissioner. Lastly, they assert that ELC should not be permitted to

challenge the decision when the affected District does not oppose the proposed

expansion.

ELC responds that the class of Abbott students it represents includes

only traditional public school students, whose right to a thorough and efficient

education is jeopardized by the Commissioner's action. Further, all District

students, in charter schools or not, have a direct interest in obtaining adequate

funding and in ameliorating the effect of student segregation within the

District. Without its participation, traditional public school students would

lose their voice, as the State cannot be expected to challenge its own decision s.

Given our State's goal of providing a thorough and efficient education to

all public school students, ELC's standing seems clear. That the statute does

not explicitly allow for organizations such as ELC to appeal the

Commissioner's decisions is inconsequential. The unfortunate reality is that,

despite systemic improvements, public school children in Abbott districts

continue to need representation in order to ensure their constitutional right to a

thorough and efficient education is enforced. At no time has the overall

A-3416-15T1
13
statutory scheme regarding education expressly granted standing to entities

such as ELC, yet ELC has over many years successfully litigated on behalf of

New Jersey's school children. To coin a phrase, if not ELC, then who?

The issues raised in this appeal, notably the effect of a substantial

increase in charter school enrollment on traditional schools in a former Abbott

school district, are of "great public interest[.]" Merit Preparatory, 435 N.J.

Super. at 279 (quoting Salorio, 82 N.J. at 491). Thus, even if ELC had

demonstrated only a "slight additional private interest," it has standing. Ibid.

IV.

Four of the charter schools, Great Oaks, University Heights, TEAM, and

North Star, participate in a universal enrollment system in which students rank

their preferred schools (both public and charter) and are then assigned pursuant

to an algorithm overseen by the District. Students with the highest needs, that

is, those who have an Individualized Education Program (IEP) 3 or are eligible

for free lunch, are given greater preference to attend the school of their choice.

There is no "cap"—the system does not stop filling seats with high needs

students once a certain percentage of available seats have been filled. Students

3
Disabilities of students with IEPs include a specific learning disability,
communication impairment, intellectual disability, autism, other health
impairments, an emotional disturbance, or those eligible for speech and
language services.

A-3416-15T1
14
have a neighborhood preference for grades pre-K through eighth (although that

preference does not take priority over high-need student preferences), and

preference is given for siblings of already-enrolled students. All of the charter

schools have the ability to serve special needs and LEP or English Language

Learners (ELL) students.

Newark's charter schools are party to a "Compact" 4 agreeing to serve "all

students in the city, especially the highest need students requiring special

education services, students who are [ELL], students who qualify for free or

reduced-price lunch, and other underserved or at-risk populations[.]" Each of

the schools, either through One Newark Enrolls, or through its own marketing

and recruitment efforts, attempts to reach parents through their websites,

flyers, ads, open houses, and billboards. The Department of Education (DOE)

oversees the charter school's "access and equity" for "highest needs students."

The mere fact that the demographics of the charter schools do not mirror

the demographics of the District does not alone establish a segregative effect.

4
The Compact, which was forged by the Newark Charter School Fund, is
available at https://ncsfund.org/schools (last visited April 23, 2019) and
https://www.nj.gov/education/chartsch/equity/NewarkCharterCompact.pdf
(last visited April 23, 2019). According to the Newark Charter School Fund's
website, to date, five of the seven charter schools (Team, North Star, Treat,
Great Oaks, and University Heights) have signed the Compact, while two
schools have not (Varisco-Rogers and New Horizons).
https://ncsfund.org/schools (last visited April 23, 2019).

A-3416-15T1
15
See In re Red Bank Charter Sch., 367 N.J. Super. 462, 476-77 (App. Div.

2004). Thus, ELC has not created a record that demonstrates the schools

engage in enrollment practices that worsen the District's racial, ethnic, or

special needs balance.

A. TEAM

The DOE ranks TEAM as a Tier 1 school based on its academic

standings within the State's Academic Performance Framework for charter

schools. Seventy-seven percent of its students attend college, and in 2014, the

school "sent more African American students to college than any other high

school in Newark." Its students outperform 62% of schools statewide and 83%

of students from schools with similar demographics.

TEAM's October 15, 2015 application to renew its charter initially

sought a maximum enrollment expansion from 4120 to 9560 students through

the 2020-2021 school year. At the time, it served 3252 students in

kindergarten through grade twelve, including 194 students from other school

districts. It had 1891 students on its waiting list. It reported the following

demographics for the 2015-2016 school year:

Demographic Free or Special LEP Asian Black Hispanic White Other
reduced Ed. Ethnic
price Groups
lunch
Percentage 88% 12% ≤ 1% ≤ 1% 89% 6% ≤ 1% 5%

A-3416-15T1
16
 The District 5 opposed TEAM's request for expansion, but recommended

an alternative outcome of partial approval: "State is requesting a revised

expansion request with lower enrollment; net increase is based on straight

articulation except backfill at [fif]th grade to 315." ELC opposes TEAM's

enrollment expansion because it had not applied for an amendment to open a

satellite location, and instead sought "substantial increases in enrollment over

the next five years, to be accommodated in numerous new facilities in

unidentified locations in the district."

By letter dated January 30, 2016, TEAM submitted a revised expansion

request to 2696 new students, with a maximum enrollment of 6816 students. It

also sought permission to open a fifth and sixth elementary school, a fourth

middle school, and a second high school "in order to complete the existing

feeder pattern for current students," but abandoned its request to seek approval

to open a pre-kindergarten, a fifth and sixth middle school, and a third high

school.

The Commissioner issued a final decision approving TEAM's

application for renewal based on the DOE's comprehensive review of the

school's "application, annual reports, student performance on state

5
The Newark School District was a State-operated school district in 2015,
when each of the seven charter schools at issue in this appeal applied for
increases in enrollment.

A-3416-15T1
17
assessments, site visit results, public comments, and other information[.]" The

Commissioner found that the school, in operation for fourteen years, had

a history of providing a high-quality education to its
students. From 2011-12 to 2013-14, the school
received a Tier Rank of 1, the highest rank possible
based on the standards within the Performance
Framework. In the 2014-15 school year, based on
[Partnership Assessment of Readiness for Collect and
Careers (PARCC)] results, the school outperformed its
home district of Newark in English language arts in
elementary, middle and high school. Additionally, on
January 30, 2016, the school submitted a letter
revising its expansion request.

Based on the Commissioner's evaluation, he confirmed the school's

maximum approved enrollment, as follows:6

Grade Level 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
K 480 600 720 720 720
1 480 600 720 720 720
2 480 600 720 720 720
3 480 600 720 720 720
4 480 600 720 720 720
5 360 480 600 720 720
6 360 480 480 600 720
7 360 480 480 480 600
8 360 480 480 480 480
9 211 360 480 480 480
10 182 211 360 480 480
11 155 182 211 360 480
12 137 155 182 211 360
Total 4525 5828 6873 7411 7920

6
It is not clear from the record why the above configuration included in the
commissioner's February 18, 2016 renewal letter differs so substantially from
TEAM's January 30, 2016 revised expansion request. Notwithstanding,
appellant only challenges expansion generally and does not focus on these
specific numbers.

A-3416-15T1
18
 B. NORTH STAR

North Star is classified as a Tier 1 school. Its students have consistently

outperformed other students in the District across all grade levels, and it has a

science partnership for high school seniors with Seton Hall University and

other local universities.

When North Star submitted its charter renewal application on October

15, 2015, it served 3998 students in kindergarten through twelfth grade, with a

maximum enrollment of 4950, and operated eleven campuses in Newark, with

three more campuses scheduled to open beginning in the 2016-2017 school

year. It had 2535 students on its waiting list. It reported the following

demographics for the 2015-2016 school year:

Demographic Free or Special LEP Asian Black Hispanic White Other
reduced Ed. Ethnic
price Groups
lunch
Percentage 85.5% 8.4% 0.4% 0.4% 84.6% 8.7% 2.0% 4.4%

North Star proposed expansion of maximum enrollment from 4950 to

6216 students through the 2020-2021 school year, with 540 students in each of

grades kindergarten through eighth. After discussions with the DOE, North

Star revised the maximum enrollment expansion to 6550 students by the

school year 2020-2021, noting that the 540 seats in kindergarten through fifth

grade had previously been approved during the 2010 charter renewal.

A-3416-15T1
19
 The District did not offer a recommendation regarding North Star's

application, noting only that, "[n]et increase based on [kindergarten] increase

of 90, net [fif]th [grade] increase to 540 (as requested), remaining grades

articulate upward."

The Commissioner's final decision approved North Star's application for

renewal based on the DOE's comprehensive review of the school's

"application, annual reports, student performance on state assessments, site

visit results, public comments, and other information[.]" The Commissioner

found that the school, in operation for nineteen years, had

a history of providing a high-quality education to its
students. From 2011-12 to 2013-14, the school
received a Tier Rank of 1, the highest rank possible
based on the standards within the Performance
Framework. In the 2014-15 school year, based on
PARCC results, the school outperformed both the state
and its home district of Newark in English language
arts and in mathematics in elementary, middle and
high school. Through the renewal process, it has been
determined that the school is performing well
academically and is organizationally and fiscally
sound.

The Commissioner thus approved the following maximum enrollment:

Grade Level 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
K 540 540 540 540 540
1 450 540 540 540 540
2 450 450 540 540 540
3 426 450 450 540 540
4 425 426 450 450 540
5 540 540 540 540 540
6 450 540 540 540 540

A-3416-15T1
20
 7 360 450 540 540 540
8 340 360 450 540 540
9 312 340 360 450 540
10 193 312 340 360 450
11 140 193 312 340 360
12 86 140 193 312 340
Total 4712 5281 5795 6232 6550

C. ROBERT TREAT

Robert Treat, a Tier 1 school, applied for renewal of its charter on

October 15, 2016. At the time of the application, Robert Treat served 651

students in grades kindergarten through eighth grade, with a maximum

approved enrollment of 695. It had 898 students on its waiting list, and

reported the following demographics for the 2015-2016 school year:

Demographic Free or Special LEP Asian Black Hispanic White Other
reduced Ed. Ethnic
price Groups
lunch
Percentage 74% 6% 0.5% 1% 33% 60% 4% 2%

Robert Treat sought to expand from 695 students for the 2015-2016

school year, to 860 students for the 2020-2021 school year, conditioned on

relocation of the school.

The District recommended approval, noting a "[n]et increase in [2016 -

2017] due to straight articulation; [r]ecommend approval of [2017-2018]

expansion request only for [kindergarten]."

The Commissioner approved Robert Treat's application based on the

DOE's comprehensive review of the school's "application, annual reports,

A-3416-15T1
21
student performance on state assessments, site visit results, public comments,

and other information." The Commissioner found that Robert Treat had a

history of providing a high-quality education to its
students. From 2012-13 to 2013-14, the school
received a Tier Rank of 1, the highest rank possible
based on the standards within the Performance
Framework. In the 2014-15 school year, based on
PARCC results, the school outperformed both the state
and its home district of Newark in English language
arts and in mathematics on PARCC in elementary and
middle high school. Through the renewal process, it
has been determined that the school is performing well
academically and is organizationally and fiscally
sound.

The Commissioner confirmed the maximum approved enrollment, as

follows:

Grade Level 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
K 80 108 108 108 108
1 80 108 108 108 108
2 80 80 108 108 108
3 80 80 80 108 108
4 80 80 80 80 108
5 80 80 80 80 80
6 80 80 80 80 80
7 80 80 80 80 80
8 80 80 80 80 80
Total 720 776 804 832 860

D. VARISCO-ROGERS

Varisco-Rogers, also a Tier 1 school, serves 484 students in kindergarten

through eighth grade and has a waiting list of 529 students. It is a high

performing school, and for grade levels third through eighth, its students

outperformed the District in both math and language arts literacy. The school

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22
utilizes two teachers in each classroom to maintain a ten-to-one student-

teacher ratio. It reported the following demographics for the 2013-2014 school

year:

Demographic Free or Special LEP Asian Black Hispanic White Other
reduced Ed. Ethnic
price Groups
lunch
Percentage 83% 6% 6% 5% 13% 81% 1% 0%

On December 8, 2015, Varisco-Rogers submitted an application

pursuant to N.J.A.C. 6A:11-2.6(a)(2)(ii), to amend its charter to increase

enrollment for the 2016-2017 school year to sixty students in each grade, for a

maximum enrollment of 540 students. It represented the increase was

necessary to meet the growing needs of the community and to offer more

students with an opportunity for school choice. The District recommended full

approval of the expansion.

The Commissioner issued a final decision approving Varisco-Rogers's

application for expansion based on the DOE's review of the school's

"academic, operational, and fiscal standing as well as an analysis of public

comments, fiscal impact on sending districts, and other information[.]" The

Commissioner found that Varisco-Rogers had

a history of providing a high-quality education to its
students. In the 2012-13 and 2013-14 school years,
the school received a Tier Rank of 1, the highest rank
possible based on the standards within the

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23
 Performance Framework. In the 2014-15 school year,
based on PARCC results, the school significantly
outperformed its home district of Newark in English
language arts and in mathematics in elementary and
middle high school.

The Commissioner confirmed the maximum approved enrollment as

follows:

Grade Level 2016-2017 2017-2018
K 60 60
1 60 60
2 60 60
3 60 60
4 60 60
5 60 60
6 60 60
7 60 60
8 60 60
Total 540 540

E. UNIVERSITY HEIGHTS

University Heights is a Tier 2 school, serving 545 students in

kindergarten through eighth grade. Beginning in 2014, its proficiency rates

did not show an overall increasing trend in testing measures for mathematics

and language arts. The school attributes those difficulties to its

implementation of a blended educational program. It reported the following

demographics for the 2013-2014 school year:

Demographic Free or Special LEP Asian Black Hispanic White Other
reduced Ed. Ethnic
price Groups
lunch
Percentage 96% 9% 1% 0% 88% 12% 0% 0%

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24
 On November 25, 2015, University Heights requested an amendment to

its charter to increase its enrollment over the next four years from two schools

with 750 students, to four schools with 1500 students; it estimated it would

need two additional facilities to accommodate the expansion. In support of the

increase, it cited to its students' achievement, strong family demand, high need

demographics, successful track record, distinctive contributions to Newark's

portfolio of school choice, developed core academic model, deep bench of

human capital, and demonstrated commitment to serve special needs students.

The District recommended partial approval of an alternative outcome,

that is, the approval of the expansion in pre-K and kindergarten to 100

students, and denial of expansion in fifth grade. The Commissioner approved

University Heights's application, with some limitations, based on the DOE's

review of the school's "academic, operational, and fiscal standing as well as an

analysis of public comments, fiscal impact on sending districts, and other

information[.]"

The Commissioner found that the school had a

history of providing a high-quality education to its
students. In the 2014-15 school year, based on
PARCC results, the school outperformed its home
district of Newark in English language arts in
elementary and middle school. In mathematics, the
school outperformed the Newark school district in the
elementary grades but underperformed the district in
middle school. The Department also reviewed the

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25
 school's submission, which included detailed
information regarding the proposed expansion.

Nonetheless, the Commissioner limited the maximum enrollment:

Grade Level 2016-2017 2017-2018 2018-2019 2019-2020
Pre-K 75 75 75 75
K 150 150 150 150
1 75 150 150 150
2 75 75 150 150
3 75 75 75 150
4 75 75 75 75
5 75 75 75 75
6 50 75 75 75
7 50 50 75 75
8 50 50 50 75
Total 750 850 950 1050

F. GREAT OAKS

Great Oaks is a Tier 1 school serving 333 students in grades six through

twelve. For the 2015-2016 school year, it had 1181 applicants but space for

only 462 students. Its students consistently outperformed the District across

grade levels. It reported the following demographics for the 2013-2014 school

year:

Demographic Free or Special LEP Asian Black Hispanic White Other
reduced Ed. Ethnic
price Groups
lunch
Percentage 67% 13% 0% 0% 82% 17% 0% 1%

Great Oaks sought to amend its charter to add a second middle school

campus and to increase enrollment by approximately 100 students per grade

level, or from 462 to 939 students through the 2019-2020 school year. The

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26
impetus for the application was "parent demand for more seats and ultimately

[to] allow the high school to be fully enrolled with Great Oaks students from

the two middle school campuses[.]" It also represented it had "made

significant investments in leadership development to prepare for the expansion

and sustainability of a leadership pipeline for the future of the school."

Additionally, nineteen out of thirty-six of its staff members reside in Newark,

which, by design, cultivated commitment to the community.

The District recommended partial approval of the request, expansion at

sixth grade to only 125 students, not 177 students, and the "straight

articulation of [the] remaining grades[.]" Nonetheless, the Commissioner

issued a final decision approving Great Oak's request based on the DOE's

"review of its academic, operational, and fiscal standing as well as an analysis

of public comments, fiscal impact on sending districts, and other

information[.]" The Commissioner found that Great Oaks had a

history of providing a high-quality education to its
students. In the 2012-13 and 2013-14 school year, the
school received a Tier Rank of 1, the highest rank
possible based on the standards within the
Performance Framework. In the 2014-15 school year,
based on PARCC results, the school significantly
outperformed its home district of Newark in English
language arts and in mathematics in middle school and
high school.

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27
 The Commissioner confirmed the following maximum approved

enrollment:

Grade Level 2016-2017 2017-2018 2018-2019 2019-2020
6 177 177 177 177
7 77 177 177 177
8 77 77 177 177
9 77 77 77 177
10 77 77 77 77
11 77 77 77 77
12 77 77 77 77
Total 639 739 839 939

G. NEW HORIZONS

New Horizons is a Tier 1 school serving 480 students in kindergarten

through fifth grade. Its students outperformed the District in mathematics and

language arts. It reported the following demographics for the 2013-2014

school year:

Demographic Free or Special LEP Asian Black Hispanic White Other
reduced Ed. Ethnic
price Groups
lunch
Percentage 96% 8% 0% 0% 93% 7% 0% 0%

New Horizons requested amendment to its charter to increase maximum

enrollment from 504 to 756 students to serve grades sixth, seventh, and eighth

for the 2016-2017 school year. The request was based on a significant

decrease in fifth grade enrollment because parents chose to enroll their

children in schools that offered higher grades levels. Further, beginning in

2002, parents had petitioned for expansion to grades sixth, seventh, and eighth.

A-3416-15T1
28
In anticipation of that expansion, New Horizons had received permits for the

construction of a new facility and had added a new wing to provide students

with state of the art learning materials.

The District recommended denial of the request for expansion based on

New Horizons students' unimpressive results on the PARCC tests, but a partial

approval of an alternative outcome, that is, expansion to serve sixth grade

only.

The Commissioner partially approved New Horizons' request based on

the DOE's "review of its academic, operational, and fiscal standing as well as

an analysis of public comments, fiscal impact on sending districts, and other

information[.]" The Commissioner found that New Horizons had

a history of providing a high-quality education to its
students. In the 2012-13 and 2013-14 school year, the
school received a Tier Rank of 1, the highest rank
possible based on the standards within the
Performance Framework. In the 2014-15 school year,
based on PARCC results, the school outperformed its
home district of Newark in English language arts and
in mathematics in elementary and middle school.

The Commissioner limited the school's expansion to one additional

grade level each year and thus confirmed the following maximum approved

enrollment:

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29
Grade Level 2016-2017 2017-2018
K 84 84
1 84 84
2 84 84
3 84 84
4 84 84
5 84 84
6 84 84
7 84
Total 588 672

V.

ELC's main contention is the Commissioner failed to address

overwhelming proof the expansions would severely impair the District's ability

to deliver a thorough and efficient education. ELC argues the decisions were

arbitrary, capricious, and unreasonable because they lacked detailed

consideration of the effect the approvals would have on funding for District

students remaining in traditional public schools, as well as the segregative

effects—leaving the District with high concentrations of students with

disabilities and English language needs.

Since the charter school population in Newark has nearly tripled since

2008, from 4559 to 12,885, ELC contends when the current expansion of 8499

students is complete over the next five years, approximately 50% of the

District's current total enrollment will be made up of charter school students.

In support, ELC relies upon an internal budget report it generated regarding

the lack of full funding in the District in the 2011-2012 school year and

thereafter. ELC also relies upon a Rutgers University report noting that the

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30
State's charter schools were overwhelmingly concentrated in seven urban

communities, serving a population demographically different than the host

district.

It is undisputed that failure to consider all the evidence in the record

"would perforce lead to arbitrary decision making." Quest Acad., 216 N.J. at

386. A decision based on misperception of the facts "would render the

agency's conclusions unreasonable." Id. at 387.

"[T]he standard for judicial review of administrative agency action is

limited: An appellate court may reverse an agency decision if it is arbitrary,

capricious, or unreasonable." Id. at 385. Our role in reviewing an agency

action is restricted 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)).]

"[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." Id. at 386.

A-3416-15T1
31
 However, "[w]hen the Commissioner is not acting in a quasi-judicial

capacity," and is instead acting in his legislative capacity, as he was doing

here, he "need not provide the kind of formalized findings and conclusions

necessary in the traditional contested case." Englewood, 320 N.J. Super. at

217 (citing Bd. of Educ. of E. Windsor Reg'l Sch. Dist. v. State Bd. of Educ.,

172 N.J. Super. 547, 551-52 (App. Div. 1980)); see Red Bank, 367 N.J. Super.

at 476 (Commissioner was acting in his legislative, not quasi-judicial capacity,

in investigating a charter-school renewal application).

The applicable arbitrary, capricious, or unreasonable standard, however,

demands only "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 ("the

reasons for the decision need not be detailed or formalized, but must be

discernible from the record"); E. Windsor, 172 N.J. Super. at 552 (explaining

detailed findings of fact not required by Commissioner in reducing amount

local school board sought to increase its budget).

VI.

Funding for charter schools is provided by "the school district of

residence[,]" which pays the charter school directly 90% of its program budget

A-3416-15T1
32
per pupil for each of its resident students enrolled in the school. N.J.S.A.

18A:36A-12(b). Despite the statute's limit on funding:

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
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).]

"[T]he District must be able to support its assertions." Englewood, 164 N.J. at

336.

The Commissioner does not, however, 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 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.

A-3416-15T1
33
 For example, in Red Bank, 367 N.J. Super. at 482, the Board of

Education argued that the Commissioner erred in granting the charter renewal

and expansion without adequately considering the detrimental impact on its

ability to provide a thorough and efficient education. The Board alleged that

the charter school would cause the District's budget to be reduced by $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. Even in that case, we

affirmed the Commissioner's decision because "[t]he paucity of specificity in

the Board's charges is fatal." Id. at 483. Because of the clear expression of the

legislative will supporting charter schools, the proofs must be "reliable."

Englewood, 164 N.J. at 336.

In the cases before us, the District does not join in ELC's appeal. It does

not object to the expansions on the basis of budgetary or other detrimental

effect.

ELC did not make any showing, much less a preliminary showing, on

which the Commissioner could rely as to the effect the expansions would have

on the District's budget. Id. at 334. Furthermore, although the Commissioner

can consider unsolicited comments from local citizens, Quest Acad., 216 N.J.

at 389, there is no statutory or case law requiring the Commissioner to evaluate

A-3416-15T1
34
the potential impact of funding on the District when that assertion is made by

another entity, and not the District itself. In fact, there are sound reasons for

limiting such challenges, notably, that it is the affected district that can best

gauge the impact of charter school funding on its own budget.

In any event, ELC did not specifically demonstrate how the District

students would be deprived of a thorough and efficient education by the

expansion. ELC represented that the District's budget crisis was caused by

both the chronic underfunding of the SFRA formula and the rapid expansion of

charter schools in Newark. See Abbott XXI, 206 N.J. at 359 ("The State made

a conscious and calculated decision to underfund the SFRA formula when

enacting the FY 2011 Appropriations Act."). ELC was required to separate the

two sources it claimed contributed to the budget crisis and failed to do so.

ELC maintains that the District had to implement cost reductions,

including employee layoffs. It does not, however, account for the fact that the

District has to pay the charter schools only 90% of certain student funding

categories, and retains 10%—an amount designed to respond to concerns about

the loss of funding. Englewood, 164 N.J. at 333; N.J.S.A. 18:36A-12(b). On

paper, the reduced per pupil allocation should ease the budgetary pressures —

not worsen them.

A-3416-15T1
35
 ELC does not account for the fact that the legislative formula is designed

to maintain school funding at the constitutionally required level despite the

existence of charter schools. Nor does ELC address the fact that in 2011 at

least, 205 districts out of New Jersey's 560 school districts, in addition to

Newark, were similarly underfunded. Abbott XXI, 206 N.J. at 458.

Further, under the SFRA, the District's Adequacy Budget is weighted to

reflect the number of special education and LEP students. As a result, should

the District educate more special needs students, it will be entitled to

additional funding. The District's budget is reduced by charter school

expansion. But it is educating significantly fewer students. It is simply not

clear whether the reductions in available funds is attributable to reduced

enrollment.

In support of its argument that the Commissioner has a heightened

obligation to scrutinize and evaluate appropriate funding in Abbott school

districts, ELC cites to Englewood. That case, however, was decided eight

years before the SFRA was enacted. Even in Englewood, the Court held that

"the 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." Englewood, 164 N.J. at 334.

A-3416-15T1
36
 The Court in Englewood cited to two key provisions of the Act: one that

granted the District the authority to challenge a charter school applicant's

submission, and the other, the funding provision, which then imposed a

"presumptive amount equal to 90%" on the District, L. 1995, c. 426, § 12

(subsequently amended). Ibid. As a result, when "[r]ead in combination, those

statutory provisions require a district of residence to make an initial showing

that imposition of the presumptive amount, or a proposed different amount for

the charter school applicant's pupils would impede, or prevent, the delivery of

a thorough and efficient education in that district." Ibid. However, the Court

noted that the "application of this standard in the context of an [Abbott]

district is not part of this case. We leave that question for another day." Ibid.

ELC contends the day has arrived, and that the State, not the District,

should bear the burden of proving the District can provide a thorough and

efficient education to its public schools even if the charter schools appli cations

are approved. In the nineteen years since Englewood was decided, the Court

has reaffirmed the holding without addressing the Abbott school issue. Quest

Acad., 216 N.J. at 377-78. We have as well in former Abbott school districts.

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 20).

A-3416-15T1
37
 Most significantly, the funding provision of the Act, intended to buffer

public school students while allowing for the growth and maintenance of

charter schools, was amended after Englewood. The Commissioner no longer

has merely the discretion to reduce funding rates for charter school children;

the Commissioner must implement the SFRA formula. N.J.S.A. 18A:36A-

12(b).

ELC has not demonstrated the reason, given the SFRA formula, that a

different standard should today be applied to former Abbott districts. See J.D.

ex rel. Scipio-Derrick v. Davy, 415 N.J. Super. 375, 378 n.1 (App. Div. 2010)

("Under the SFRA, former Abbott districts no longer receive supplemental and

parity aid."). Therefore, the Commissioner was not required to evaluate the

impact of the potential loss of funding allocated to charter schools over time

because of the District's former classification as an Abbott district, and current

status as an SDA district, in the absence of objection by the District. Districts

should continue to bear the burden to demonstrate that charter school funding

will prevent delivery of a thorough and efficient education, even in former

Abbott districts.

VII.

Segregation is strictly prohibited in our schools, and is specifically

prohibited in charter schools. See N.J.S.A. 18A:36A-7. This ban includes not

A-3416-15T1
38
just race or ethnicity, but discrimination against those with different

intellectual or athletic abilities, or proficiency in the English language. The

law further provides that although a charter school can establish reasonable

criteria to evaluate prospective students, the criteria must be included in the

school's charter and is subject to review by the Commissioner when the charter

school obtains initial approval.

The Supreme Court has found that the "form and structure" of the

appropriate analysis when determining segregative effect is within the

discretion of the Commissioner and the State BOE. Englewood, 164 N.J. at

329. However, to advance the obligation on charter schools, the DOE has

adopted regulations requiring the Commissioner, prior to approval of a charter

and on an annual basis thereafter, 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." N.J.A.C. 6A:11-2.1(j); N.J.A.C. 6A:11-2.2(c); 32

N.J.R. 3560(a), 3561 (Oct. 2, 2000).

ELC does not suggest that any of the respondents' enrollment policies

are other than color blind, random, or keep the schools from being "open to all

students in the community[.]" See Red Bank, 367 N.J. Super. at 478.

Similarly, there is no suggestion that post-enrollment practices deliberately

have a segregative effect. ELC's argument is that the prospective increase in

A-3416-15T1
39
numbers will result in de facto segregation, which the Commissioner must

discourage.

However, the respondents admit students based on a random blind

lottery. Furthermore, four respondents participate in a universal enrollment

system that employs algorithms that include, and weigh in an advantageous

manner, the applicants who are eligible for free lunch, have IEPs, and those

who otherwise have higher needs. All the schools are party to a Compact

designed to provide for all students in the District, including those in the

highest at-risk populations. There is no indication that nefarious post-

enrollment practices are engaged in by any of the charter schools.

That the demographics of the individual charter schools do not precisely

reflect the overall demographics for the District is not sufficient to

demonstrate a segregative effect. Red Bank, 367 N.J. Super. at 476-77. Thus,

although the Commissioner did not specifically address the issue, ELC's

submissions fail to substantiate a segregative effect, either in the pre- or post-

enrollment practices, such that the Commissioner's decisions can be

characterized as arbitrary, capricious, and unreasonable.

A-3416-15T1
40
 VIII.

ELC contends that the Commissioner's decisions were arbitrary,

capricious, and unreasonable because he did not address its submissions or

provide a reasoned analysis for the approvals.

There is no statutory or regulatory requirement that the Commissioner

include reasons for granting, as opposed to denying, an application to renew or

amend. Indeed, the only requirement found in the regulations is, with regard

to initial charter school applications and applications for renewal, that "[t]he

notification to eligible applicants not approved as charter schools[,]" or "not

granted a renewal shall include reasons for the denial[s]." N.J.A.C.

6A:11-2.1(f); N.J.A.C. 6A:11-2.3(d) (emphasis added). Relevant precedent

does require the reasons for the Commissioner's decision to be discernible

from the record. Red Bank, 367 N.J. Super. at 476.

Here, each of the charter schools were high performing schools (six were

Tier 1), and all of the schools were in great demand with long wait lists. All of

the schools' performance data, a significant factor in assessing a request to

amend a charter, was higher than the District or State average, as represented

by students' PARCC scores. Further, all of the schools, which had for years

been submitting detailed annual reports, were organizationally sound and

fiscally viable.

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41
 The record also shows that there is a need for an increase in charter

school enrollment in Newark, as the District acknowledged in recommending

full approval of two applications, the partial approval of one application, and

the denial, with an alternative partial approval recommendation for three

applications. Thus, the Commissioner's decision was sufficient as to each

respondent and is supported by the record.

IX.

ELC also contends in its second point that the Commissioner authorized

the creation of new charter school facilities on incomplete information and in

unidentified locations. The District did not object to proposed enrollment

expansions by University Heights, Great Oaks, Robert Treat, North Star, and

TEAM.

We are not bound by an agency's interpretation of a statute, applying de

novo review. US Bank, N.A. v. Hough, 210 N.J. 187, 200 (2012). In doing

so, we "defer to an agency's interpretation of . . . [a] regulation, within the

sphere of [its] authority, unless the interpretation is 'plainly unreasonable.'"

Ibid. (alterations in original) (quoting In re Election Law Enf't Comm'n

Advisory Op. No. 01-2008, 201 N.J. 254, 262 (2010)). "This deference comes

from the understanding that a state agency brings experience and specialized

A-3416-15T1
42
knowledge to its task of administering and regulating a legislative enactment

within its field of expertise." In re Election Law, 201 N.J. at 262.

The Act requires that a school's application for a charter must include,

"[a] description of, and address for, the physical facility in which the charter

school will be located[.]" N.J.S.A. 18A:36A-5(j). A "satellite campus" is

defined as "a school facility operated by a charter school that is in addition to

the facility identified in the charter school application or charter, i f

subsequently amended." N.J.A.C. 6A:11-1.2. "A charter school may operate

more than one satellite campus in its district or region of residence, subject to

charter amendment approval, pursuant to N.J.A.C. 6A:11-2.6." N.J.A.C.

6A:11-4.15(b). To that end, N.J.A.C. 6A:11-2.6(a)(1)(i) and (iv) provide that

in addition to seeking an increase in enrollment, a charter school may also seek

an amendment to open a new satellite campus.

In Education Law Center ex rel. Burke v. N.J. State Board of Education,

438 N.J. Super. 108, 111 (App. Div. 2014), the ELC challenged the Board's

adoption of the amended regulations N.J.A.C. 6A:11-2.6(a)(1)(iv) and

N.J.A.C. 6A:11-1.2, permitting existing, successful charter schools to open

satellite campuses. We concluded that the Board did not exceed its statutory

authority in adopting the amended regulations and affirmed. Id. at 112.

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 In Burke, ELC unsuccessfully argued that the Act required the DOE to

conduct "a full initial review before a satellite location can be approved." Id.

at 121. We concluded that "the addition of a satellite campus is more like the

expansion of grade and enrollment levels than the opening of an entirely new

charter school." Ibid. Burke explains that

[i]n the case of an existing charter school that seeks to
expand into additional physical space, it makes little
sense to require a whole new application and the
resulting review process. While a satellite campus is
not the same as expanding into additional physical
space immediately adjacent to the existing facility, the
satellite campus would still be part of the same school.
A school is more than a building. It is an educational
program, and the teaching, administrative, and
operational staff that devises and runs the program.
Site unity is an appropriate consideration in evaluating
the potential success or problems of a proposed
charter school, but a remote site does not make a
wholly different school.

[Id. at 120.]

Further, ELC's argument that the Commissioner and the DOE could "not

adequately evaluate satellite campuses for the physical safety and suitability of

the site for educational use[,]" was rejected. Id. at 122. In proposing the

amendments to the regulations the DOE indicated, in response to comment

five, that the "[f]acilities identified by an amendment request for a satellite

campus are subject to the same review and approval procedures as for new

charter school facilities[,]" pursuant to the proposed amendment at N.J.A.C.

A-3416-15T1
44
6A:11-2.1(i). Ibid. (quoting 44 N.J.R. 26(a), 27 (Jan. 7, 2013)). We found

that it

must assume the Commissioner will require an
adequate evaluation of a proposed satellite campus
site and reject any charter amendment that fails to
meet appropriate standards for a school building. If a
proposed campus presents safety concerns or is
otherwise unsuitable for the educational needs of
children[,] . . . interested parties should raise specific
objections to the proposed amended charter.

[Ibid.]

Approval of increases in enrollment is a necessary precursor to the

addition of satellite campuses or any investment in additional structures. It is

reasonable for the Commissioner to have approved expansion before a charter

school could be expected to go through the arduous process of identifying and

securing a site.

Additionally, prior to the opening of the satellite campus, the school

must submit to the DOE a description and address of the physical facility,

N.J.S.A. 18A:36A-5(j), and the lease, mortgage or title to the facility, a

certificate of occupancy for educational use, a sanitary inspection report with a

satisfactory rating, and a fire inspection certificate with an "Ae" (education)

code life hazard. N.J.A.C. 6A:11-2.1(i)(6)-(9). Moreover, a charter school

must obtain the Commissioner's approval before locating at a site other than

the one identified in the charter.

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 It is also possible that the Commissioner, who has specialized expertise

in this area, understood that the process of obtaining a satellite campus was

much less involved than obtaining the original site for the school. The

Commissioner's interpretation of the regulation, which allowed for the

approval first of the expansion and only then for the approval of the satellite

campus, was therefore "not plainly unreasonable." Once having obtained

approval for their expansions, the affected respondents were then in a position

to secure approvals for any proposed satellite locations. Nothing in this record

suggests approval would be improvidently granted.

Affirmed.

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