IN RE AMENDMENT REQUEST TO INCREASE ENROLLMENT OF CLASSICAL ACADEMY CHARTER SCHOOL (NEW JERSEY DEPARTMENT OF EDUCATION)

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APPROVAL OF THE APPELLATE DIVISION
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SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2889-18T4

IN RE AMENDMENT REQUEST
TO INCREASE ENROLLMENT
OF CLASSICAL ACADEMY
CHARTER SCHOOL.
____________________________

Argued March 4, 2020 – Decided March 18, 2020

Before Judges Haas, Mayer and Enright.

On appeal from the New Jersey Department of
Education.

Perry L. Lattiboudere argued the cause for appellant
Clifton Board of Education (Adams Gutierrez &
Lattiboudere, attorneys; Perry L. Lattiboudere, of
counsel and on the briefs).

Fiona E. Cousland argued the cause for respondent
Classical Academy Charter School of Clifton (Riker
Danzig Scherer Hyland & Perretti LLP, attorneys;
Brenda C. Liss, of counsel and on the brief; Fiona E.
Cousland, on the brief).

Laurie L. Fichera, Deputy Attorney General, argued the
cause for respondent Commissioner of Education
(Gurbir S. Grewal, Attorney General, attorney; Donna
Sue Arons, Assistant Attorney General, of counsel;
Laurie L. Fichera, on the brief).
PER CURIAM

Appellant Clifton Board of Education (Clifton) appeals from a decision

by respondent New Jersey Commissioner of Education (Commissioner),

approving a request by respondent Classical Academy Charter School (Classical

Academy) to amend its charter and increase student enrollment by sixty pupils

starting in the 2019-2020 school year. Because the Commissioner's decision

was not arbitrary or capricious and was amply supported by the record, we

affirm.

Classical Academy, a charter school serving students in sixth, seventh,

and eighth grade, is located in Clifton. It received charter approval in 1998.

Maximum enrollment from 1998 until 2019 was 120 students. The school has

been the recipient of the National Blue Ribbon Award for academic excellence,

recognized as a Top Ten New Jersey School and a Title 1 Rewards School, and

ranked the highest performing middle school in Passaic County.

Classical Academy submitted a charter renewal request to the

Department of Education (Department) in September 2016. The Department

evaluated the school under a Performance Framework based on its academic

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performance, fiscal viability, and organizational stability.1 In accordance with

the Charter School Program Act of 1995, N.J.S.A. 18A:36A-1 to -18 (CSPA),

and implementing regulations, the Department "completed a comprehensive

review of the school including, . . . the renewal application, annual reports,

student performance on statewide assessments, a structured interview with

school officials, public comments, and fiscal impact on sending districts in order

to make a renewal decision." See N.J.S.A. 18A:36A-17 and N.J.A.C. 6A:11-

2.3(b).

Based on the Department's review, the Commissioner issued a February

28, 2017 decision, renewing the school's charter for five years with the following

maximum enrollments:

Grade 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022
Level
6 40 40 40 40 40
7 40 40 40 40 40
8 40 40 40 40 40
Total 120 120 120 120 120

1
The "Performance Framework" is the Department's accountability system used
to evaluate charter schools' performance and sustainability. The Performance
Framework consists of three sections: academic, financial, and organizational.
N.J.A.C. 6A:11-1.2.

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 Although the Commissioner approved charter renewal for Classical

Academy, he placed the school on "organizational probation until February 28,

2018" for failure to meet certain indicators in the organizational section of the

Performance Framework. As a condition of probation, Classical Academy was

required to, and did, submit a plan to the Department, outlining steps to remedy

the organizational deficiencies.

On May 16, 2018, the Commissioner rescinded Classical Academy's

probationary status, finding it "made significant strides in addressing the

deficiencies that lead to probation." The Commissioner concluded Classical

Academy "satisfied the conditions of probation."

On October 15, 2018, Classical Academy sought to amend its charter to

increase maximum approved enrollment from 120 to 180 students, adding one

class of twenty students at each grade level in sixth, seventh and eighth grade

for the 2019-2020 school year. In support of the application, Classical Academy

maintained it demonstrated "evidence of consistent high academic performance,

a full enrollment, a robust wait list, 2 and minimal student attrition." The school

also represented it had "fiscal stability to support an enrollment increase," and

2
Classical Academy reported an enrollment waiting list of over one hundred
students, which continued "to grow daily."
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"recently relocated to a new facility to accommodate the continued academic

success" of its students.

On November 18, 2018, Classical Academy provided the following

additional information in support of its request:

Our decision to expand is grounded in providing a
stellar educational option for the families of Clifton
who are seeking public-school choices. Many Clifton
parents often call our school requesting to enroll their
children. However, as a result of reaching our
maximum capacity at only 120 students, on numerous
occasions, we have had to turn them down for the
current school year. Moreover, several parents whose
children's names are on the waiting list call in
periodically to check for the possibility that a seat is
available . . . .

We currently have students still on the waiting list from
the lottery we hosted this past school year who are still
interested in attending Classical Academy. In addition,
we also have new parents who have made inquiries
about enrolling their children for the upcoming school
year. There is a strong and positive demand on behalf
of the families in the Clifton community to send their
children to Classical Academy.

As further support for its request, Classical Academy described proactive

measures taken since the Department's visit to the school in April 2017,

including: relocating to a larger, renovated school facility with the capacity to

provide additional programs; designing a new curriculum aligned with core

curriculum standards; increasing professional development opportunities;

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developing interim and formative assessments to inform student performance;

implementing a quality individualized education program (IEP) to address

students' behavioral, social, and academic needs; effecting an English Language

Learners (ELL) policy; and establishing a "school operations coordinator" to

further strengthen organizational capacity. The school also represented its

curriculum maps were near completion in math, English, social studies, and

science.

In the area of academic performance, Classical Academy reported its

students outperformed middle school students statewide on the PARCC

standardized tests in English and math. In addition, Classical Academy reported

that 56% of its eight grade students scored "advanced proficient" on the NJASK

science assessment for the 2016-2017 school year.

Clifton opposed Classical Academy's application in a December 20, 2018

one-page letter authored by the Superintendent of the Clifton School District

(Superintendent). The Superintendent urged the Commissioner to deny the

application for several reasons. He challenged Classical Academy's

organizational stability because certain promised improvements had yet to be

implemented and the school was still operating under an improvement plan. He

also questioned Classical Academy's academic performance, contending

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students struggled in mathematics upon entering Clifton High School. The

Superintendent further claimed Classical Academy's students entering the

district's high school did not reflect the district's demographic profile,

particularly ELL and special education students. The Superintendent also

contended the proposed "increase in student population would remove an

additional $750,000 from [Clifton's] proposed 2019-2020 budget, forcing the

possible elimination of some key programs."

However, no supporting documents accompanied the Superintendent's

objections to Classical Academy's request to amend its charter. Specifically, the

objection letter lacked any details regarding the claimed financial impact to the

district if Classical Academy's request to increase student enrollment was

approved.

On February 1, 2019, the Commissioner issued a final decision, granting

Classical Academy's application to increase its maximum enrollment. The

Commissioner stated the Department reviewed Classical Academy's academic,

organizational, and fiscal standing based on the Performance Framework, and

considered the public comments, demand for seats, and fiscal impact of the

expansion on the district.

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 Based on preliminary statewide assessment test results for the 2017-2018

school year, the Commissioner concluded Classical Academy "continues to be

a high-performing charter school, outperforming the Clifton Public Schools and

state averages in English language arts (ELA) and mathematics," thus meeting

the academic section of the Performance Framework.

In the category of fiscal performance, the Department assessed the

school's financial viability based on measures of near-term financial health,

longer term financial sustainability, and fiscal-related compliance, and

considered "the fiscal impact of the expansion on sending districts." According

to the Commissioner, "[r]eview of the fiscal standing of Classical Academy

indicates that it is fiscally sound and there are no foreseen financial issues with

the granting of this amendment request."

In assessing organizational performance, the Commissioner found "[t]he

amendment request describes the administrative capacity, performance

management, and strategic plans for the expansion. After review of Classical

Academy's request and annual report submissions, the Department has

determined that Classical Academy has the capacity to support the requested

amendment to the charter."

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 Based on these findings, the Commissioner approved the following

maximum enrollment for Classical Academy:

Grade 2018-19 2019-2020 2020-2021
Level (current maximum)
6 40 60 60
7 40 60 60
8 40 60 60
Total 120 180 180

Clifton appealed the Commissioner's determination. After Clifton filed

its appeal, we permitted the Commissioner to submit an amplification of reasons

in support of his February 1, 2019 decision.

In a June 14, 2019 amplification letter, the Commissioner addressed, in

more detail, Clifton's concerns regarding Classical Academy's satisfaction of the

Performance Framework. The Commissioner wrote:

Each charter school amendment is holistically reviewed
on its own merits, and Classical [Academy]'s request
was no exception. Many factors are considered in
rendering a final decision in accordance with N.J.S.A.
18A:36A et seq., with primary consideration given to
the charter school's potential to improve pupil learning
and ability to increase educational options available to
New Jersey families. My decision to approve Classical
[Academy]'s amendment request was informed by a
review of student performance on statewide
assessments, [organizational] stability, fiscal impact,
demographic data, and public comment.

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 In addressing the Superintendent's comment regarding the fiscal impact

on the district if enrollment at Classical Academy was increased, the

Commissioner stated the Department considered both the financial viability of

the school and the "fiscal impact of the expansion on sending districts." Because

Clifton did not submit any "documentation demonstrating an adverse fiscal

impact on the district," the Commissioner was unable to conclude "that there

would be any such impact based on a detailed review of the record."

Regarding the Superintendent's statement addressed to Classical

Academy's required organizational improvements, the Commissioner found the

two items yet to be completed (curriculum maps and aligned assessments), were

undergoing continual revision year-to-year, and that fact did not undermine his

decision to approve the charter amendment, "especially in light of the school's

academic performance."

In reviewing academic performance, the Commissioner reiterated

Classical Academy achieved a Tier 1 rank during the years that were evaluated

as part of the school's requested amendment. While Tier ranks for 2017-2018

had yet to be published, preliminary statewide assessment results suggested

Classical Academy "continues to be a high-performing charter school."

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 In addressing Clifton's claim that Classical Academy students did not

reflect the district's demographic profile, the Commissioner found the school

demonstrated its admission policy, to the maximum extent practicable, sought

to enroll "a cross-section of the community's school age population including

racial and academic factors" in accordance with N.J.S.A. 18A:36A-8(e). He

further determined Classical Academy demonstrated compliance with N.J.S.A.

18A:36A-7, requiring a charter school be open to all students, on a space

available basis, and prohibiting discrimination in admission policies or practices

on the basis of intellectual or athletic ability, status as a handicapped person,

and proficiency in the English language.

Clifton moved to accelerate its appeal.3 In a certification in support of

accelerating the appeal, the Business Administrator and Board Secretary for the

Clifton Board of Education (Business Administrator) provided additional

information regarding the financial impact to the district if the Commissioner

approved Classical Academy's charter amendment to increase enrollment.4

3
We granted Clifton's motion to accelerate the appeal in a July 19, 2019 order.
4
The Business Administrator failed to explain why the information contained
in his certification was not provided to the Commissioner as part of Clifton's
objections to Classical Academy's request to amend its charter.
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 According to the Business Administrator, Clifton operated two

preschools, fifteen elementary schools, two middle schools, and one high school,

serving over 10,965 students in the district. He explained revenue from the local

tax levy, the main source of its general fund, totaled $131,825,892 in 2017-2018,

and $133,094,682 in 2018-2019, and was projected to yield $134,259,260 in

2019-2020. Additionally, Clifton received $30,054,160 in state aid from the

Department for the 2017-2018 school year, and $31,556,868 for the 2018-2019

school year. He stated that during this period, costs associated with Clifton's

contractual obligations for employee benefits increased significantly.

The Business Administrator also indicated the Department allocated

$3,786,448 in charter school aid in Clifton's general appropriations fund for the

2017-2018 school year, $6,074,332 for the 2018-2019 school year, and

$8,076,553 for the 2019-2020 school year. As a result of the increased

allocation of aid to charter schools for the 2019-2020 school year, the Business

Administrator claimed Clifton would experience a net loss of $2,002,221 in total

funding. He calculated Classical Academy's requested enrollment increase

would remove approximately $800,000 from the district's proposed budget. The

Business Administrator maintained the Department's "preliminary budget,

including the portion of the budget accommodating Classical Academy's

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requested enrollment increase, will therefore have immediate and significant

repercussions for the [d]istrict's costs."

On appeal, Clifton argues the Commissioner's decision approving

increased student enrollment at Classical Academy was arbitrary, capricious,

and unreasonable because the Commissioner failed to consider the fiscal impact

the expansion would have on the school district's budget, disregarded Classical

Academy's failure to meet performance standards, and failed to consider

whether the school's demographics were representative of the district.

Our review of a final decision of the Commissioner on a charter school

application is limited. In re Proposed Quest Acad. Charter Sch. of Montclair

Founders Grp., 216 N.J. 370, 385 (2013). We may reverse only if the

Commissioner's decision "is arbitrary, capricious, or unreasonable." Ibid. In

making that determination, our review is generally restricted to three inquiries:

(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)).]

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 "[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] failure to consider all the evidence in a

record would perforce lead to arbitrary decision making." Ibid. 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." In re TEAM Acad. Charter Sch., 459 N.J. Super.

111, 140 (App. Div. 2019), certif. granted, ____ N.J. ____ (2020) (quoting In re

Grant of Charter Sch. Application of Englewood on the Palisades Charter Sch .,

320 N.J. Super. 174, 217 (App. Div. 1999), aff'd as modified, 164 N.J. 316

(2000)). Although the arbitrary, capricious, or unreasonable standard demands

"that the reasons for the decision be discernible, the reasons need not be as

detailed or formalized as an agency adjudication of disputed facts; they need

only be inferable from the record considered by the agency." Ibid. See also In

re Red Bank Charter Sch., 367 N.J. Super. 462, 476 (App. Div. 2004) (holding

reasons need not be detailed or formalized, but must be discernible from the

record).

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 Nor is there any statutory or regulatory provision requiring the

Commissioner to include reasons for granting an application to amend a charter.

TEAM Acad., 459 N.J. Super. at 140 (citing Englewood, 320 N.J. Super. at 217).

Only in cases where an application to amend a charter is denied must the

Commissioner provide detailed findings in support of the denial. See id. at 146.

Here, the record supports the Commissioner's decision to approve

Classical Academy's request to amend its charter. The Commissioner

considered Classical Academy's organizational and academic performance

standards, and the school's demographics in comparison to the demographics of

the district. Clifton's concerns regarding Classical Academy's deficiencies were

adequately addressed in the Commissioner's June 14, 2019 amplification letter.

Classical Academy was continuing to improve, as shown by the school's strong

academic performance and removal from probationary status, which the

Commissioner determined carried more weight under the Performance

Framework analysis.

Clifton failed to provide any statistical evidence to support its position

that students attending Classical Academy struggled in math upon returning to

the district's schools. The Commissioner's initial decision and amplification

letter concluded Classical Academy students out-performed students attending

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district schools in standardized testing. He further noted that students enr olled

in Classical Academy performed better on mathematical testing compared to

students statewide.

Despite Clifton's failure to provide any statistical evidence to support its

concerns regarding Classical Academy's demographic profile related to ELL and

special needs students, in his amplification letter, the Commissioner determined

the school complied with all statutory and regulatory requirements to ensure its

admissions practices were non-discriminatory. The Commissioner found

Classical Academy complied with charter school admissions policies and

demonstrated an increased enrollment of disadvantaged and special needs

students.

Having reviewed the record, the Commissioner thoroughly evaluated

Classical Academy's application to increase enrollment and considered Clifton's

objections to the requested enrollment increase. We are satisfied the

Commissioner's decision was not contrary to his legislative authority and is

supported by substantial evidence in the record.

We next consider Clifton's argument that the Commissioner failed to

consider the fiscal impact on the district associated with an increase in

enrollment of students at Classical Academy. Funding for charter schools is

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provided by the school district of residence, which directly pays the charter

school 90% of its program budget per pupil for each of its resident students

enrolled in the school. N.J.S.A. 18A:36A-12(b). Despite this statutory limit on

funding, case law requires that

if the local school district "demonstrates with some
specificity that the constitutional requirements of a
thorough and efficient education would be jeopardized
by [the district's] loss" of the funds to be allocated to a
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." [5]

[Quest Acad., 216 N.J. at 377-78 (quoting Englewood,
164 N.J. at 334-35).]

However, the district "must be able to support its assertions" regarding

any fiscal impact. Englewood, 164 N.J. at 336. The Commissioner does not

have "the burden of canvassing the financial condition of the district of residence

in order to determine its ability to adjust to the per-pupil loss upon approval of

the charter school based on unsubstantiated, generalized protests." Ibid. "[T]he

Commissioner is entitled to rely on the district of residence to come forward

5
Our State Constitution imposes an obligation on the Legislature to "provide
for the maintenance and support of a thorough and efficient system of free public
schools for the instruction of all the children in the State between the age s of
five and eighteen years." N.J. Const. art. VIII, § 4, ¶ 1.

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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. See also TEAM Acad., 459 N.J.

Super. at 142 (holding the district failed to "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").

Here, Clifton posited no specifics as to how district students would be

deprived of a thorough and efficient education by the proposed expansion of

students enrolled at Classical Academy. The Superintendent argued, without

supporting documentation or financial data, that the increase in Classical

Academy's student population would "remove an additional $750,000" from the

district's proposed 2019-2020 budget, "forcing the possible elimination of some

key programs."

Even if Clifton provided such information in objecting to Classical

Academy's charter amendment, Clifton failed to demonstrate the requirements

of a thorough and efficient education could not be met as a result of sixty

additional charter school seats in a district that serves over 10,965 students. Nor

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did Clifton establish how an estimated loss of $800,000, from a total budget of

$170 million, would deprive district students of a thorough and efficient

education. The Commissioner was not required to evaluate the loss of funds to

the district. Clifton failed to satisfy its burden by demonstrating how expansion

of enrollment at Classical Academy by sixty students would prevent delivery of

a thorough and efficient education.

In sum, we affirm the Commissioner's decision allowing Classical

Academy to amend its charter and increase student enrollment by sixty students

for the 2019-2020 and 2020-2021 school years. The decision was not arbitrary,

capricious, or unreasonable, promoted the legislative intent of the CSPA, and

was amply supported by the record.

Affirmed.

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