AQN Associates, Inc. v. FLORENCE TP.

591 A.2d 995, 248 N.J. Super. 597
CourtNew Jersey Superior Court Appellate Division
DecidedJune 7, 1991
StatusPublished
Cited by3 cases

This text of 591 A.2d 995 (AQN Associates, Inc. v. FLORENCE TP.) is published on Counsel Stack Legal Research, covering New Jersey Superior Court Appellate Division primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
AQN Associates, Inc. v. FLORENCE TP., 591 A.2d 995, 248 N.J. Super. 597 (N.J. Ct. App. 1991).

Opinion

248 N.J. Super. 597 (1991)
591 A.2d 995

AQN ASSOCIATES, INC., PLAINTIFF-APPELLANT,
v.
TOWNSHIP OF FLORENCE AND THE MAYOR AND TOWNSHIP COUNCIL OF THE TOWNSHIP OF FLORENCE, DEFENDANTS-RESPONDENTS.

Superior Court of New Jersey, Appellate Division.

Argued May 15, 1991.
Decided June 7, 1991.

*601 Before Judges SHEBELL, HAVEY and SKILLMAN.

William J. Wolf argued the cause for appellant (Bathgate, Wegener, Dugan, Wouters, Neumann & Wolf, attorneys; William J. Wolf, of counsel; William R. Mayer, Howard P. Lakind and Michael M. DiCicco, on the brief).

Michael D. Matteo argued the cause for respondents (Montgomery, McCracken, Walker & Rhoads, attorneys; Michael D. Matteo, of counsel; Ramiro M. Carbonell, on the brief).

The opinion of the court was delivered by SHEBELL, J.A.D.

*602 Plaintiff, AQN Associates, Inc. (AQN), appeals contesting grants of summary judgment dismissing its complaints that sought to invalidate bond ordinances adopted by the Township of Florence (Florence). The bonds were to finance Florence's obligation to the Township of Pemberton (Pemberton). The obligation arose out of a Regional Contribution Agreement (RCA) between the two municipalities, under which Florence transferred 103 units of its fair share obligation to Pemberton in exchange for the payment of $15,000 per unit. Pemberton will use the monies to rehabilitate units of housing within its borders.

In January 1987, Florence filed a petition for substantive certification with the Council on Affordable Housing (COAH), which petition is currently pending. AQN owns approximately 130 acres in Florence. AQN has filed an objection with COAH to Florence's fair share plan asserting essentially that AQN's property was more appropriate for high density development than the property identified in Florence's plan. See N.J.S.A. 52:27D-314; N.J.S.A. 52:27D-315. Mediation failed to resolve AQN's objections. Issues raised in the mediation have been referred to the Office of Administrative Law. See N.J.S.A. 52:27D-315.

A major element of the fair share plan supporting Florence's petition is the RCA, which it seeks to bond. Florence and Pemberton entered into their RCA on June 21, 1989. The RCA was made contingent on adoption of a bond ordinance by Florence. The RCA was approved by the Burlington County Planning Board on February 27, 1990, and by COAH on March 19, 1990. See N.J.S.A. 52:27D-312(c).

On February 7, 1990, Florence held a public hearing and adopted an ordinance that authorized the issuance of $1,545,000 in general obligation bonds to finance its RCA payments. On March 2, 1990, AQN filed an action in lieu of prerogative writs claiming that the ordinance was "illegal and invalid." Florence *603 received notice that AQN had filed a complaint challenging the ordinance, and on March 23, 1990, Florence obtained an order to show cause why AQN's complaint should not be dismissed by way of summary judgment or for failure to state a claim. The hearing was scheduled for April 2, 1990.

On March 19, 1990, Florence issued a $245,000 bond anticipation note, and used the proceeds to make the non-refundable first payment due to Pemberton under the RCA. On March 28, 1990, AQN amended its complaint to include six counts, each of which set forth a specific reason why the bond ordinance should be invalidated.

On April 2, 1990, the court, by consent, proceeded as if it had received cross-motions for summary judgment. The Law Division judge rendered an oral opinion dismissing all but one of AQN's claims. The only claim not dismissing at that time was the assertion that the ordinance had been adopted in violation of the Open Public Meetings Act, N.J.S.A. 10:4-6 to -21. The court directed Florence to file an affidavit from the municipal clerk providing details of the notice given. Florence submitted an affidavit from its clerk, which demonstrated that the notice required by the Open Public Meetings Act had been given. AQN then asserted that although the clerk's affidavit demonstrated that Florence had complied with N.J.S.A. 10:4-18, there was a failure to comply with N.J.S.A. 10:4-10(a). On April 11, 1990, the judge rejected this assertion and entered an order for summary judgment in favor of Florence. AQN filed a timely notice of appeal from that order.

On September 4, 1990, Florence adopted an ordinance "amending and supplementing" its original bond ordinance. The supplemental bond ordinance revised section one of the original ordinance and authorized the raising of $1,665,000 by bonding. It also revised section five of the original bond ordinance to increase the amount to be raised to cover Florence's interest costs, issuance costs, and "other items of expense listed and permitted under Section 40A:2-20 of the [Local *604 Bond] Law." The amended ordinance preserved the declaration in the original bond ordinance that its purpose was not to satisfy a "current expense" and that the period of usefulness of the purpose was not less than ten years.

On October 10, 1990, AQN filed a complaint raising virtually the same challenges to the supplemental ordinance that it had raised to the original ordinance. On November 2, 1990, the court, with the consent of the parties, executed an order dismissing the complaint for the reasons set forth in its April 2 oral opinion and April 11 order regarding the earlier action. AQN filed a timely notice of appeal. We have consolidated both appeals.

Appellant asserts that Florence's obligations pursuant to its RCA with Pemberton constitute "current expenses" because the municipality's payments are due and payable within twenty-five months. It therefore urges that bonds may not issue to finance Florence's RCA obligations as N.J.S.A. 40A:2-3(b) prohibits the bonding of current expenses. Florence contends that the trial court correctly determined that the satisfaction of its RCA obligations has a useful life of at least six years and therefore may be financed with bonds. We hold that the RCA payments under review are bondable.

The Local Bond Law, N.J.S.A. 40A:2-1 to -64, grants municipalities the power to issue bonds for "any capital improvement ..., or any purpose for which it is authorized or required by law to make an appropriation, except current expenses. ..." N.J.S.A. 40A:2-3(a) and (b) (emphasis added). The statute does not define the term "current expenses." AQN contends that if RCA contributions were capital expenditures and not current expenses, there would have been no reason for the Legislature to include a specific exemption from the Cap Law, N.J.S.A. 40A:4-45.2 et seq., in N.J.S.A. 52:27D-312(d). N.J.S.A. 40A:4-45.2 prohibits municipalities from increasing their "final appropriations" by more than five percent per annum. Excepted from the Cap Law are a variety of expenditures, including *605 "capital expenditures." N.J.S.A. 40A:4-45.3(b). N.J.S.A. 52:27D-312(d) specifically provides that RCA contributions are exempt from the limitations imposed by the Cap Law. AQN reasons that because the Legislature created the specific exemption in N.J.S.A. 52:27D-312(d), it must have considered RCA contributions to be current expenses covered by the Cap Law.

It is just as likely that the Legislature enacted N.J.S.A.

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Bluebook (online)
591 A.2d 995, 248 N.J. Super. 597, Counsel Stack Legal Research, https://law.counselstack.com/opinion/aqn-associates-inc-v-florence-tp-njsuperctappdiv-1991.