Cape May makes new push to dissolve Lower Cape May Regional school district

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 CAPE MAY – A legal team looking into the city’s school funding fights presented its latest finding to city council this week, submitting that “the dissolution of the Lower Cape May Regional (school district) is both feasible and beneficial.”

“Lower Township would become a PK-12 district and…each of the other communities would have an opportunity for both tax savings and for the education of grade seven through 12 students in a PK-12 district by virtue of sending-receiving relationships,” according to a 94-page report from the four-member team summarized for council on Tuesday, June 18.

“This process is time consuming and much of it is cutting edge, but if we can’t help you you can’t be helped,” said Vito Gagliardi, chairman of the education taw team at the Morristown law firm of Porzio Bromberg & Newman P.C. “This process has been undertaken successfully by this team, only by our team.”

Gagliardi worked on the report with attorney Kerri Wright, Certified Public Accountant James L. Kirtland, and educational consultant Virgil Johnson.

The fifth member of Gagliardi’s team, Richard Grip, director of Statistical Forecasting, LLC in Secaucus, and a co-author of the feasibility report, was not present.

Gagliardi said he has overseen the only two regional school district dissolutions in New Jersey state history, resolving hundreds of employment issues raised under law, statutes, regulations and collective bargaining agreements. All disputes were addressed successfully and all litigations challenging any aspect of the dissolution were defeated, according to information from his law firm.

“We understand the special importance of this issue here, especially in terms of what the regional tax levy has done to this community, backing you into a situation where you are paying millions more per year than your public agreed to pay when the district was formed.”

Cape May’s extra $5 million annually is “among the most burdensome of all regional school districts in the state of New Jersey,” he said.

Cape May residents pay $72,000 more per pupil than neighboring Lower Township.

“In 2012-13 Cape May City is subsidizing the education of students from Lower Township and West Cape May in the amount of $5.7 million annually,” according to the report, entitled “A Feasibility Study to reconfigure the Lower Cape May Regional School District.”

The regional school district was formed in 1956 and now serves as a limited purpose regional school district educating students from Cape May, Cape May Point, West Cape May and Lower Township. Cape May Point students attend on a “sending-receiving” basis. Under the original agreement, the constituent districts’ respective tax levy to support the annual operating costs was set on a per pupil basis.

Gagliardi said that the state legislature changed that formula by statute in the mid-1970’s, requiring that the tax levy be calculated on an equalized property value basis – under the mistaken belief that the “per pupil” formula did not meet constitutional requirements. However, in 1993, the state’s lawmakers revised the statutes to permit the regional school funding formula to be based on per pupil amounts, equalized property values, or some combination thereof.

The problem for Cape May is that the legislature said that existing districts – like Lower Cape May Regional – could only change its formula by a referendum, or special vote, where all of the regional district constituent municipalities approved the change.

By that 1993 change, it had “become clear that regional sending communities with relatively fewer children and relatively higher property wealth had wound up subsidizing the education of pupils in other towns,” Gagliardi said.

“The challenge is, is there a way we can modify the formula and reduce the crushing tax burden experienced by citizens of City of Cape May,” he said, explaining that a number of remedies for the situation most be sought before the matter can be brought to court to compel a resolution.

“The diagnosis to cure your ills is to follow the administrative remedies to try to solve the problem, after you exhaust those, if you have been unsuccessful, you can try to get the courts or the commissioner of education to forcibly change the relationship,” Gagliardi said.

Gagliardi said that the city had already taken its first required step, having its representative move before the regional school board for a referendum on the issue. That motion, made earlier this year, died for lack of a second on the board.

Next, the city must seek an “advisability report” from the county’s superintendent of schools, Gagliardi said.

“They will ask for an analysis, so we recommended that you do that up front to make sure the problem is as you perceive,” he said.

Wright presented council with draft language for a resolution asking for the county superintendent’s report.

Council members said they would vote on that proposed resolution at the first meeting in July.

“It is almost irrelevant what the county superintendent reports,” said Gagliardi. “This is the next step we have to complete.”

Upon receipt of the report on the advisability of dissolving the regional school district from the county superintendent, the city would have 30 days to file a petition asking the state’s commissioner of education to authorize a referendum. That step, to the special election, should not take more than one year from now, Gagliardi said.

Only eight members of the public attended the meeting. Mayor Ed Mahaney said that he hoped the public would appear for the July session, when the resolution sending the question to the county superintendent of schools would be heard.

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