NEW TOWN PUBLIC SCH. DIST. NO. 1 v. State Bd. of Pub. Sch. Educ., 20020071.

• Decision Date: 15 August 2002
• Docket Number: No. 20020071.,20020071.
• Citation: 650 N.W.2d 813,2002 ND 127
• Parties: NEW TOWN PUBLIC SCHOOL DISTRICT NO. 1, Plaintiff and Appellant, v. THE STATE BOARD OF PUBLIC SCHOOL EDUCATION OF THE STATE OF NORTH DAKOTA, Defendant and Appellee.
• Court: North Dakota Supreme Court

650 N.W.2d 813

2002 ND 127

NEW TOWN PUBLIC SCHOOL DISTRICT NO. 1, Plaintiff and Appellant, v. THE STATE BOARD OF PUBLIC SCHOOL EDUCATION OF THE STATE OF NORTH DAKOTA, Defendant and Appellee.

No. 20020071.

Supreme Court of North Dakota.

August 15, 2002.

Gary R. Thune, Pearce & Durick, Bismarck, for plaintiff and appellant.

Douglas A. Bahr, Solicitor General, Attorney General's Office, Bismarck, for defendant and appellee.

MARING, Justice.

[¶ 1] New Town Public School District No. 1 ("New Town") appealed from a judgment affirming an order by the State Board of Public School Education ("State Board") granting a February 2001 petition to annex land from New Town to Stanley Public School District No. 2 ("Stanley"). We conclude the State Board's findings of fact are supported by a preponderance of the evidence, its conclusions of law are supported by the findings of fact, and its decision is in accordance with the law. We affirm.

I

[¶ 2] On August 9, 2000, the State Board denied a petition, to annex 18.62 sections of land with four school-age children from New Town to Stanley, finding:

the petition for annexation should be denied for the following reason which weighed most importantly to the Board:

1. The taxable valuation per-student of the petitioned property is too high. The petitioned property would provide $18,103 in taxable valuation for the 4 students, 2 of which are age 17. This amount of per-student taxable valuation is high, considering the current per-student taxable valuations of the New Town and Stanley School Districts are $2,714 and $13,924, respectively.

[¶ 3] In February 2001, a second petition was filed to annex 10.95 sections of land with two school-age children from New Town to Stanley. The 10.95 sections of land and two school-age children involved in the February 2001 petition had been part of the previous petition to annex 18.62 sections of land with four school-age children from New Town to Stanley. The Mountrail County School Reorganization Committee denied the February 2001 annexation petition, stating:

the education of the two students listed in the petition will not be affected as they are already enrolled in the Stanley School and busing has no affect, the per student valuation of $22,295 is too high, and the acres of land being taken for the Meiers' residence to be contiguous with the Stanley School District is far too great.

[¶ 4] The denial of the February 2001 annexation petition was appealed to the State Board. After a hearing, the State Board approved the February 2001 petition, finding that, although the taxable valuation per student for the second petition was $22,295, the $44,589 taxable valuation of the 10.95 sections of petitioned land was less than the $72,412 taxable valuation of the 18.62 sections of land in the first petition. The State Board concluded the taxable valuation for the land in the second petition was reasonable even though the per student taxable valuation was greater, because the second petition's total financial impact on New Town was less than the first petition. The district court affirmed the State Board's decision.

II

[¶ 5] The State Board is an administrative agency. Dunseith Pub. Sch. Dist. v. State Bd. of Pub. Sch. Educ., 401 N.W.2d 704, 706 (N.D.1987). See N.D.C.C. § 28-32-01(1). When an administrative agency decision is appealed from the district court to this Court, we review the agency's decision and the record compiled before the agency, rather than the decision and findings of the district court. Eckes v. Richland County Soc. Services, 2001 ND 16, ¶ 6, 621 N.W.2d 851. Our review of an agency decision is governed by N.D.C.C. § 28-32-46, which requires us to affirm the agency unless:

1. The order is not in accordance with the law.

2. The order is in violation of the constitutional rights of the appellant.

3. The provisions of this chapter have not been complied with in the proceedings before the agency.

4. The rules or procedure of the agency have not afforded the appellant a fair hearing.

5. The findings of fact made by the agency are not supported by a preponderance of the evidence.

6. The conclusions of law and order of the agency are not supported by its findings of fact.

7. The findings of fact made by the agency do not sufficiently address the evidence presented to the agency by the appellant.

8. The conclusions of law and order of the agency do not sufficiently explain the agency's rationale for not adopting any contrary recommendations by a hearing officer or an administrative law judge.

In reviewing an agency's findings of fact, we exercise restraint and do not make independent findings of fact or substitute our judgment for that of the agency; rather, we determine only whether a reasoning mind could have reasonably determined the agency's factual conclusions were supported by the weight of the evidence from the entire record. Schmidt v. Ward County Soc. Services Bd., 2001 ND 169, ¶ 5, 634 N.W.2d 506.

III

[¶ 6] Under N.D.C.C. § 15.1-12-05(4), the State Board must consider the following factors in deciding annexation petitions:

a. The value and amount of property held by each affected school district;

b. The amount of all outstanding bonded and other indebtedness of each affected district;

c. The levies for bonded indebtedness to which the property will be subjected or from which the property will be exempted, as provided for in section 15.1-12-08;

d. The taxable valuation of each affected district and the taxable valuation under the proposed annexation;

e. The size, geographical features, and boundaries of each affected district;

f. The number of students in each affected district;

g. The general population of each affected district;

h. Each school in the district, including its name, location, condition, the grade levels it offers, and the distance that students living in the petitioned area would have to travel to attend school;

i. The location and condition of roads, highways, and natural barriers in each affected district;

j. Conditions affecting the welfare of students residing on the property to be annexed;

k. The boundaries of other governmental entities;

l. The educational needs of communities in each affected district;

m. Potential savings in school district transportation and administrative services;

n. The potential for a reduction in per student valuation disparity between the affected districts;

o. The potential to equalize or increase the educational opportunities for students in each affected district; and

p. All other relevant factors.

[¶ 7] When the State Board receives testimony and documentary evidence concerning the factors listed in N.D.C.C. § 15.1-12-05(4), it "must consider and `make specific findings with reference to every one of those factors to which testimony or documentary evidence was directed.'" Dunseith Pub. Sch. Dist., 401 N.W.2d at 708 (remanding for specific findings regarding statutory requirements). See also Dunseith Pub. Sch. Dist. v. State Bd. of Pub. Sch. Educ., 437 N.W.2d 825, 830 (N.D.1989)

(appeal after remand).

A

[¶ 8] We initially consider New Town's argument the State Board violated New Town's constitutional right to due process and a fair hearing and acted arbitrarily and capriciously by granting an annexation petition involving fewer students and less land with a greater per student taxable valuation than the petition denied by the State Board less than ten months earlier.

[¶ 9] Under N.D.C.C. § 15.1-12-05(9), if the State Board denies an annexation petition, another petition involving any of the same property may not be submitted to the appropriate county committee for a three-month period after the State Board's denial, and a petition involving any of the property in a previous petition may not be considered by the State Board more than twice in a twelve-month period. Here, the February 2001 annexation petition complied with the time requirements of N.D.C.C. § 15.1-12-05(9).

[¶ 10] Moreover, other courts have recognized an administrative agency may reexamine a prior decision, and the agency may depart from a prior decision if it distinguishes, or rationally explains its departure. See Matter of Charles A. Field Delivery Serv., Inc., 66 N.Y.2d 516, 498 N.Y.S.2d 111, 488 N.E.2d 1223, 1226 (1985); Melvindale-Northern Allen Park Fed'n of Teachers v. Melvindale-Northern Allen Park Pub. Sch., 216 Mich.App. 31, 549 N.W.2d 6, 10 (1996). See generally Richard J. Pierce, Jr., Administrative Law Treatise § 11.5 (4th ed.2002). This Court has recognized an analogous principle regarding an agency's interpretation of a statute. See Amerada Hess Corp. v. Conrad, 410 N.W.2d 124, 129 n. 5 (N.D. 1987)

(stating agency need not use rulemaking process to correct erroneous interpretation of statute). Under those authorities and N.D.C.C. § 15.1-12-05(9), to the extent New Town argues the State Board is precluded from deviating from its decision in the first annexation petition, we reject that argument. Rather, we conclude the State Board may deviate from a prior decision if it rationally explains the reason for its departure.

[¶ 11] Here, in denying the first annexation petition, the State Board found:

P. The following are other factors which the Board finds relevant in making its decision:

1. The taxable valuation of the petitioned property is $72,412. There are 4 students, ages 6-17, who will attend school next year in the Stanley School District, who reside on the petitioned property. Thus, the petitioned property will provide $18,103 in taxable valuation for each of the 4 students ($72,412 ÷ 4). This amount of per-student taxable valuation is high, considering the current per-student taxable valuations of the New Town and Stanley School Districts are $2,714 and $13,924, respectively.

Two of the 4 students are juniors, who are age 17; thus, in the 2001-2002 school year there will be only 2 students from the petitioned property who will attend school in the Stanley School District.

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