Botter, Antell and Furman.
The Public Advocate appeals from an order of the Department of Transportation (DOT) granting intrastate bus fare increases to respondent Suburban Transit Corporation (Suburban) on two interstate routes, designated the Princeton and South Plainfield routes, and three intrastate recreational routes, designated the Asbury Park, Atlantic City Race Track and Garden State Race Track routes.
The prior bus fares on these routes were set in 1974. DOT rejected the recommendation of the administrative law judge (ALJ), subsequent to a formal hearing before him, that the application for intrastate fare increases be denied on the Princeton and South Plainfield routes and granted, but in lower percentages than proposed, on the Asbury Park and Atlantic City Race Track routes. DOT granted the proposed intrastate fare increases on all five routes, including the fare increase recommended by the ALJ on the Garden State Race Track route which has not operated since the race track buildings burned down in 1975.
Both parties to the appeal stipulate that the exception in N.J.S.A. 48:2-21.2, subd. 1(b) is applicable to Suburban's application, that is, that its rate base need not be found because its gross operating revenues for the preceding year exceeded the
depreciated book value of its property used and useful in its business as a bus company. N.J.S.A. 48:2-21.2 provides further that, in prescribing a just and reasonable rate, the agency with jurisdiction "shall, in its determination, make a finding of the facts on the basis of which it prescribed such rate, fare or charge."
DOT substantially accepted the ALJ's fact findings with respect to the Asbury Park routes. The fare increase granted by the ALJ on this route was based on a calculation of allocable expenses and revenues. Average expense per mile in all Suburban operations was multiplied by actual travelled miles on this route. Calculating the volume of travel by the actual number of passengers in the base year 1979, the ALJ then set fares to provide revenues offsetting expenses.
Without expressing its disagreement with the ALJ's calculation of operating expense per mile, DOT, in granting the percentage increase proposed by Suburban for the Asbury Park route, implicitly adopted Suburban's calculation of operating expense per mile, not the ALJ's. We agree with Suburban's contention that the sale of retired equipment in the amount of $82,250 in the base year, a credit against depreciation expense in that year, should not have been continued as a credit against depreciation expense for rate making purposes.
With this revision by DOT, the fare increase granted on the Asbury Park route by DOT was in accordance with findings reasonably reached on sufficient credible evidence in the record and should be sustained on appeal. Close v. Kordulak Bros. , 44 N.J. 589, 599 (1965).
Neither DOT nor the ALJ states findings of facts on the basis of which substantial fare increases for the Atlantic City Race Track route were set, contrary to the requirement of findings in N.J.S.A. 48:2-21.2. Due to declining ridership, this route has not been operating. Another Suburban intrastate route is in operation for casino patrons into Atlantic City, several miles
further than the race track. Fares were set for that route in 1978.
The ALJ recommended that fares be increased on the Atlantic City Race Track route by 111%. The Public Advocate seeks a vacation of DOT's grant of a further fare increase of 148% to 175%. But any fare increase on this route, whether 111% or higher, is unexplained and unsupported in the record. We are constrained ...