NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-5731-11T4
HONORABLE DANA L. REDD, Camden City Mayor, and HONORABLE FRANCISCO MORAN, Camden City APPROVED FOR PUBLICATION Council President, October 29, 2013 Plaintiffs-Respondents, APPELLATE DIVISION v.
VANCE BOWMAN, LARRY GILLIAMS, EULISIS DELGADO, MARY I. CORTES, and ROBERT DAVIS, individually and collectively as the Committee of Petitioners,
Defendants-Appellants,
and
LUIS PASTORIZA, Clerk of the City of Camden, JOSEPH RIPA, Clerk of Camden County; PHYLLIS PEARL, Camden County Superintendent of Elections; and the CAMDEN COUNTY BOARD OF ELECTIONS,
Defendants-Respondents,
CAMDEN CITY COUNCIL,
Defendant. _____________________________________________________
Argued June 4, 2013 – Decided October 29, 2013
Before Judges Messano, Lihotz and Ostrer. On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. L-2019-12.
Anthony Valenti argued the cause for appellants (Caplan, Valenti & Murray, PC, attorneys; Mr. Valenti and Karen M. Murray, on the brief).
John C. Eastlack, Jr. argued the cause for respondent Honorable Dana L. Redd, Camden City Mayor (Weir & Partners, L.L.P., attorneys; Mr. Eastlack, on the brief).
Jay J. Blumberg argued the cause for respondent Honorable Francisco Moran, Camden City Council President (Law Offices of Jay J. Blumberg, attorneys; Mr. Blumberg, on the brief).
The opinion of the court was delivered by
MESSANO, P.J.A.D.
The government of the City of Camden (Camden) operates
pursuant to the Optional Municipal Charter Law, N.J.S.A. 40:69A-
1 to -210, commonly known as the Faulkner Act (or the Act). The
voters in a Faulkner Act municipality "may propose any ordinance
and may adopt or reject the same at the polls, such power being
known as the initiative . . . ." N.J.S.A. 40:69A-184. They
"also have the power of referendum[,] which is the power to
approve or reject at the polls any ordinance submitted by the
council to the voters or any ordinance passed by the council,
against which a referendum petition has been filed . . . ."
N.J.S.A. 40:69A-185.
2 A-5731-11T4 We have said that "[t]he 'salutary purposes' of both
initiative and referendum include 'arousing public interest' and
'placing in the hands of the voters . . . direct means of
controlling proposed or already enacted municipal legislation
and also of accomplishing the enactment of legislation which has
neither been proposed nor adopted.'" City of Ocean City v.
Somerville, 403 N.J. Super. 345, 352 (App. Div. 2008) (quoting
Maese v. Snowden, 148 N.J. Super. 7, 11 (App. Div. 1977)
(citations omitted)). The "[t]wo statutes ensure that the
voters have that right both before and after the council adopts
an ordinance on any particular subject." Ibid. (citations
omitted).
This appeal involves an initiative petition and proposed
ordinance filed with the Camden city clerk, defendant Luis
Pastoriza, by defendants Vance Bowman, Larry Gilliams, Eulisis
Delgado, Mary I. Cortes and Robert Davis, collectively known as
the Committee of Petitioners (the Committee). The ordinance was
proposed in response to Camden's decision to disband its
municipal police department and join a newly-formed county
police force. Plaintiffs, Mayor Dana L. Redd and City Council
president Francisco Moran, filed a complaint seeking to declare
the petition-initiated ordinance invalid before it was submitted
to the City Council or placed on any ballot.
3 A-5731-11T4 The Law Division judge determined that the proposed
ordinance did not "unduly restrict" Camden's "statutory
authority" under N.J.S.A. 40A:14-118, which grants every
municipality the right to "create and establish" a police force.
However, the judge entered restraints "prohibiting" the city
clerk "from accepting the petition and proposed ordinance for
filing" because the proposed ordinance "create[d] an undue
restraint on the future exercise of municipal legislative
power," was "invalid," and could not "be placed on the ballot
for voters to act upon." The judge specifically refrained from
considering whether the proposed ordinance was pre-empted by the
Municipal Rehabilitation and Economic Recovery Act, N.J.S.A.
52:27BBB-1 to -75 (MRERA), and the Special Municipal Aid Act,
N.J.S.A. 52:27D-118.24 to -118.31 (SMAA). The Committee filed
this appeal.
We have considered the arguments raised in light of the
record and applicable legal standards. We reverse and remand
for further proceedings consistent with this opinion.
I
The facts are not disputed. Camden's existing municipal
police department was established and organized by ordinance as
authorized by N.J.S.A. 40A:14-118. On June 17, 2008, Camden
entered into a Memorandum of Understanding (MOU) with the
4 A-5731-11T4 Division of Local Government Services (DLGS) in the Department
of Community Affairs (DCA) for the provision of $61.5 million in
aid pursuant to the SMAA. The MOU required Camden to accept
certain oversight measures and other conditions imposed by the
State. Camden entered into similar MOUs in order to receive
additional aid in 2009 and 2010.
Nevertheless, Camden's financial woes continued. On June
23, 2010, DLGS published qualification standards for the
"Transitional Aid to Localities" program (TAL), which superseded
prior programs, including the SMAA. As declared by DLGS, TAL
was intended for "municipalities that have the most severe
structural financial problems," "despite aggressive cost
reductions and service modifications," and need additional
assistance "to mitigate significant property tax increases."
The standards emphasized "labor cost reductions and changes in
service delivery" as "preconditions for receipt of aid." Such
reductions and changes would require the elimination of
"redundant or excessive services." A municipality's application
for TAL funding needed to demonstrate cost reductions compared
to its 2009 budget, including "documented efforts to share
public safety dispatch, code enforcement, public health
services, and other services offered by neighboring
municipalities, area boards of education, local authorities, or
5 A-5731-11T4 the county, if those costs are less than the current full cost
of providing equivalent service."
Camden sought $54 million in TAL funding for 2011. The
application painted a dire picture of increasing costs and
projected budget shortfalls, as well as the anticipated adverse
impact that reductions in Camden's police force would have upon
the acknowledged historic, and intractable, violent crime rate
in the city. Camden agreed to enter into an MOU by which DLGS
would have outside "management, financial, and operational
specialists" assess municipal operations, and the city would
"[i]mplement actions as recommended . . . ." On November 24,
2010, DLGS awarded Camden $69 million in TAL funding for 2011,
and, on December 15, Camden and DLGS entered into a new MOU for
2011. The MOU required Camden to reduce staffing further for
2012, and make other efforts to reduce costs, maximize recurring
revenue, and eliminate the need for TAL funding within four
years. Camden continued to negotiate collective bargaining
agreements with those unions representing its police department,
which had experienced a significant reduction in force. Camden
came under some degree of DLGS oversight and control, although
it is unclear from the record its nature and extent.
In a February 15, 2011 notice, DCA clarified that the
receipt of TAL funding required a municipality to show it "ha[d]
6 A-5731-11T4 moved beyond planning for operational efficiency and ha[d] begun
to reduce costs." DCA "expect[ed] that the municipality . . .
[had] engaged with its unions and non-union employees to
effectuate savings through reduced salary costs, reduced
staffing levels, modified work rules, modified controllable
benefits costs, or other efforts to mitigate" salary and wage
costs. Participation would require the municipality to
"[s]ubmit[] to broad State controls over hiring, procurement,
and other matters[,]" and "additional fiscal control measures as
may be directed by [DLGS]."
In June 2011, Camden issued "Camden Forward, the Transition
Plan for 2011-2015." While recognizing the intended use of non-
TAL funding to rehire laid-off police officers as a short-term
measure, the plan noted Camden's intention to explore
"regionalized or shared services for police and fire services as
a long-term solution for public safety and the fiscal challenges
confronting the City."
On August 9, 2011, the City Council passed a resolution
authorizing Camden to enter into an MOU with DCA and the County
of Camden (the County) "for the purpose of preparing a plan for
the creation of the Camden County Police Department," a new
countywide agency. On August 29, 2011, the MOU was executed by
plaintiffs, County officials and the Director of DLGS. Under
7 A-5731-11T4 the terms of the MOU, Camden agreed to "act as a co-applicant on
submittals and filings . . . with respect to the creation of the
Camden County Police Department." The County would act as the
"lead agency" in forming the County police department which
would be "available to all municipalities within the County on a
voluntary basis."
On the same day, Camden requested $67.5 million in TAL
funding for 2012. The application represented that the 2012
budget anticipated an agreement with the County "under which
[Camden] would pay $14,000,000 for police services." On October
7, DLGS advised Camden that it would receive $61.4 million in
TAL funding for 2012.
On December 27, 2011, the City Council adopted a resolution
immediately implementing the MOU regarding formation of a County
police department. The resolution noted that the County police
department would include a Camden Metro Division "to provide for
public safety and law enforcement in . . . Camden," while
"requiring the County Police Department to offer employment to
qualified officers previously employed" by the Camden police
department. Camden's police department would be dissolved upon
the creation of the Camden Metro Division. On January 26, 2012,
the County adopted a resolution establishing the county police
department.
8 A-5731-11T4 On April 10, 2012, the Committee submitted a petition
seeking consideration of an initiative ordinance amending
Camden's municipal code to read:
A. There shall be created and maintained in continued existence, in, for and by the city of Camden, its own Police Department which shall remain the police department for the City of Camden and which shall consist of a Police Director, a Chief of Police and members and officers as shall be deemed necessary by the governing body of the City of Camden which shall, from time to time, determine the number of persons, including, without limitation, temporary officers and members in an emergency, to be appointed to these positions, together with their compensation, all as provided for under N.J.S.A. 40A:14-118.
B. The City of Camden shall not disband its Police Department pursuant to the creation of any county wide Police Department established by or for the County of Camden and shall not participate or join in the creation of any such police department established by or for the County of Camden, nor participate in any consolidation of or regionalization of police services sought to be created by any establishment of a county wide police department, and shall instead continue to maintain its own police department.
Pastoriza reviewed the petition, and, on April 20, concluded it
was legally sufficient. See N.J.S.A. 40:69A-187 (requiring all
initiative and referendum petitions to be filed with the
municipal clerk who "shall determine whether . . . the petition
has a proper statement of the circulator and . . . is signed by
9 A-5731-11T4 a sufficient number of qualified voters"). Pastoriza advised
the Committee, plaintiffs and other interested parties that he
would "move the certified petition forward as an ordinance on
[second] reading and public hearing [at] the next regularly
scheduled City Council meeting (May 8[], 2012) for City Council
consideration and action as required by law."1
Plaintiffs filed their complaint on May 2, 2012, naming
the Committee and its individual members, the City Council,
Pastoriza, and various County officials as defendants.
Plaintiffs sought a declaration that the "proposed petition-
initiated ordinance [was] null and void," and injunctive relief,
specifically enjoining Pastoriza from submitting the ordinance
to the City Council and the City Council from considering it.
The Committee answered and asserted a counterclaim and
crossclaim, seeking a declaration that the ordinance was valid,
requiring its submission to the City Council and, if rejected,
its placement on the ballot for consideration by the voters.
The judge granted plaintiffs temporary restraints, and the
parties stipulated to the dismissal of the complaint as to the
1 N.J.S.A. 40:69A-190 provides: "Upon a finding by the municipal clerk that any petition . . . is sufficient, the clerk shall submit the same to the municipal council without delay. An initiative ordinance so submitted shall be deemed to have had first reading and provision shall be made for a public hearing."
10 A-5731-11T4 City Council with prejudice. Following a hearing on June 11,
2012, the judge placed his oral decision on the record and
entered the order under review.
II
The Committee claims that the proposed ordinance was a
valid exercise of the initiative powers granted by the Faulkner
Act, and the judge erred by concluding the proposed ordinance
impermissibly restrained future municipal legislation. The
Committee also asserts that the initiative ordinance was not
prohibited by N.J.S.A. 40A:14-118, nor preempted by the
statutory regimes impacting local finance and budgeting in
Camden.2
A.
We begin by noting that "a question of statutory
interpretation[] . . . is a purely legal issue and, thus, we owe
no deference to the trial court's legal conclusions." In re
Trenton Ordinance 09-02, 201 N.J. 349, 358 (2010) (citing
Manalapan Realty v. Twp. Comm. of Manalapan, 140 N.J. 366, 378
(1995)). "'Our task . . . is to determine and effectuate the
2 The judge concluded the ordinance did not violate N.J.S.A. 40A:14-118. Plaintiffs have not cross-appealed from that determination. We therefore need not consider the Committee's argument in this regard.
11 A-5731-11T4 Legislature's intent.'" Ibid. (quoting Bosland v. Warnock Dodge
Inc., 197 N.J. 543, 553 (2009)).
As noted, N.J.S.A. 40:69A-184 allows the voters in a
Faulkner Act municipality to "propose any ordinance and . . .
adopt or reject the same at the polls . . . ." (Emphasis
added). The Faulkner Act "does not limit the power of
initiative to only those areas of municipal concern which have
never been the subject of favorable council action." Smith v.
Twp. of Livingston, 106 N.J. Super. 444, 450 (Ch. Div.), aff'd
o.b., 54 N.J. 525 (1969). Instead, it lets voters seek "to
amend a long-standing ordinance" when "there is either a change
in the circumstances or in the will of the people." Ibid.
"N.J.S.A. 40:69A-184 . . . by its very terms admits of no
qualification." Ocean City, supra, 403 N.J. Super. at 357.
Yet, while the express language permitting the proposal by
initiative of "'any ordinance' means 'all ordinances,' . . . no
one disputes that the power of initiative is not without
limitation." Ibid. (citing In Re Ordinance 04-75, 192 N.J. 446,
454, 460-61 (2007)). "[T]here are certain ordinances . . .
which are simply not subject to initiative and referendum
because of the subject matter involved or because they are
statutorily excluded from the initiative and referendum
provisions." Id. at 359 (citations omitted).
12 A-5731-11T4 For example, in In re Ordinance 04-75, supra, 192 N.J. at
465, the Court recognized that the referendum provision of the
Faulkner Act "contains at least a partial, if not total,
exception to the referendum rule for municipal budgets." The
Court also set forth a non-exhaustive list of statutes that
exempt ordinances enacted thereunder from the referendum
provisions of the Act. Id. at 466-67. "That sampling clearly
establishes that the Legislature has determined, on multiple
occasions, those municipal matters that should not be called
before the voters in a referendum." Id. at 467.
"But even where the legislative directive has not been as
express or precise, limitations on initiative authority may be
inferred or implied from comprehensive State supervision,
regulation or occupation of the field." Ocean City, supra, 403
N.J. Super. at 360. We need not repeat the examples of this
proposition we previously cited in Ocean City. Id. at 360-70.
In declaring the initiative ordinance invalid in this case,
the Law Division judge did not rely upon either the express
language of the Faulkner Act or some other statute, or the
"comprehensive State supervision, regulation or occupation of
the field." Id. at 360. Indeed, he specifically declined to
address whether the SMAA or MRERA preempted the initiative-
generated ordinance. Instead, the judge concluded the ordinance
13 A-5731-11T4 was invalid because it "create[d] an undue restraint on the
future exercise of municipal legislative power." We now
consider that issue.
B.
In Ocean City, supra, we recognized another limit "on the
power of initiative [that] stems from the settled principle that
a governing body cannot, absent specific legislative permission,
divest its successors of legislative power." Id. at 359 (citing
Maese, supra, 148 N.J. Super. at 13 (quoting McCrink v. West
Orange, 85 N.J. Super. 86, 91 (App. Div. 1964))); (citing 4
McQuillin on Municipal Corporations § 13.03(b) (3d rev. 1968))
(emphasis added); see also N.J. Educ. Ass'n v. State, 412 N.J.
Super. 192, 214-15 (App. Div.), certif. denied, 202 N.J. 347
(2010) ("[A]bsent specific legislative permission, a governing
body cannot divest its successors of legislative power.").
"It stands to reason . . . that if a governing body cannot by
ordinance presently adopted restrain the future exercise of
municipal legislative power, neither may the citizenry through
initiative or referendum create an ordinance divesting the
municipal governing body of that power." Ocean City, supra, 403
N.J. Super. at 359.
In McCrink, supra, 85 N.J. Super. at 88-89, an initiative
ordinance sought to fix maximum salary ranges for fire personnel
14 A-5731-11T4 that could not be raised for two calendar years. We declared
the "ordinance [was], on its face, defective[,]" noting "[i]t is
fundamental that a governing body could not, by an ordinance
presently adopted, place a restraint upon the future exercise of
municipal legislative power." Id. at 91.
In Maese, supra, an initiative ordinance sought to prohibit
the governing body or officials of the township "from committing
or spending any public funds," "incurring any indebtedness" or
"pledging or obligating public funds" to construct a municipal
complex on township land. 148 N.J. Super. at 10.
Relying on McCrink, supra, the trial judge concluded the
"ordinance was invalid on its face 'because it acts as a
restraint on all future actions, not only by this governing body
but by any other governing body.'" Id. at 11. We affirmed,
holding,
[t]he invalidity of the proposed initiative ordinance . . . springs from an attempt to shackle, if not to completely immobilize, the governing body in connection with construction on the municipally-owned tract. Since the governing body itself could not enact such an ordinance, it follows from what has been said that the voters were likewise without that authority.
No governing body, certainly without specific legislative permission, may divest its successors of legislative power.
[Id. at 13 (citing 4 McQuillin, supra, §13.03b at 477) (emphasis added).]
15 A-5731-11T4 As the above discussion demonstrates, this restriction on
the legislative power of voters in a Faulker Act municipality
arose from a basic tenet of municipal corporate law, not the
express language of the Faulkner Act or any other statute.
"Although a council has the power, unless restricted by charter,
to enact an ordinance to take effect after the expiration of the
terms of office of its members, it cannot, by ordinance, divest
its successor of legislative power . . . ." McQuillin on
Municipal Corporations § 13:03.15 (3d Ed. 2011) (citing Ocean
City, supra, and Maese, supra). However, as we recognized in
Ocean City and Maese, an exception to the general rule exists
when the Legislature specifically permits present legislative
bodies to restrict the legislative power of their successors.
Ocean City, supra, 403 N.J. Super. at 359; Maese, supra, 148
N.J. Super. at 13.
C.
N.J.S.A. 40:48-1 provides that "[t]he governing body of
every municipality may make, amend, repeal and enforce
ordinances . . . ." However, the Legislature has bestowed a
unique characteristic on an ordinance passed by initiative.3 The
3 As the subsequent discussion makes clear, we respectfully disagree with our colleagues who stated in Ocean City, supra, 403 N.J. Super. at 357-58, "ordinances passed by initiative are (continued)
16 A-5731-11T4 Faulkner Act specifically strips away the power of the governing
body to repeal a validly-approved initiative ordinance and
bestows that power solely on the voters.
If a majority of the qualified electors voting on the proposed ordinance shall vote in favor thereof, such ordinance shall thereupon become a valid and binding ordinance of the municipality and be published as in the case of other ordinances. No such ordinance shall be amended or repealed within [three] years immediately following the date of its adoption by the voters, except by a vote of the people. The council may, within [three] years immediately following the date of adoption of the ordinance, submit a proposition for the repeal or amendment of that ordinance to the voters at any succeeding general election or regular municipal election. If the proposition submitted shall receive a majority of the votes cast at that election, the ordinance shall be repealed or amended accordingly.
[N.J.S.A. 40:69A-196(a) (emphasis added).]
This highlighted provision was added to the Faulkner Act in
1982, five years after our decision in Maese. See L. 1982, c.
145, § 6 (eff. Sept. 28, 1982) (the Amendment).
The Amendment also changed the terms of the Commission Form
of Government Law, known as the Walsh Act, N.J.S.A. 40:70-1 to
40:76-27, which theretofore had provided, without limitation,
(continued) subject to amendment or repeal in the same manner that ordinances passed by the governing body of a municipality are."
17 A-5731-11T4 that any ordinance passed by initiative "shall not be repealed
or amended except by a vote of the people." N.J.S.A. 40:74-18
(1982). The Amendment added a similar three-year limit during
which an initiative ordinance could not be repealed or amended
in a Walsh Act municipality unless submitted to, and approved
by, the voters. L. 1982, c. 145, §§ 16, 17. The Legislative
statement accompanying the Amendment makes clear its purpose:
"[T]o establish a uniform [three] year time limit within which a
governing body may, solely by submission to the voters, amend or
repeal an ordinance adopted by initiative . . . ." Bill
Sponsor's Statement to S.763 (1982).
Prior to the Amendment, an ordinance approved by initiative
in a Faulkner Act municipality "bec[a]me a valid and binding
ordinance of the municipality and [would] be published as in the
case of other ordinances." N.J.S.A. 40:69A-169 (1982).
Presumably, like any other ordinance, it was subject to
immediate repeal by the municipal governing body. Hence,
application of a general principle of municipal corporate law to
initiative ordinances – a present legislative body may not bind
the hands of it successors — was logical. The voters could not
restrict the legislative powers of a successor governing body
any more than the present governing body could.
18 A-5731-11T4 However, through passage of the Amendment, the Legislature
has given the voters in a Faulkner Act municipality the power to
restrict the legislative actions of the present governing body
and its successor for a period of three years, which restriction
may only be removed if the governing body returns the issue to
the people for a vote. In other words, the Legislature has
granted to the people "specific legislative permission," Maese,
supra, 148 N.J. Super. at 13, to divest the governing body of
its legislative power for a finite period of time, thereby
creating an exception to the general rule that "[n]o governing
body . . . may divest its successors of legislative power."
Ibid.
Given the legislative changes made to the Faulkner Act
since Maese and McCrink were decided, those cases have limited
vitality.4 Lest our opinion be read too broadly, we reiterate
that the Faulkner Act's provisions only limit the governing
body's right to repeal an initiative ordinance for three years,
unless the voters choose otherwise. Because the issue is not
4 We agree with an argument made by the Committee before the trial judge and on appeal, i.e., that the discussion in Ocean City of this judicially-imposed limit on the power of initiative was dicta. Our decision in that case turned squarely on the fact that the proposed ordinance impermissibly tread on the municipality's budgetary powers, and, hence, was not a permitted subject matter for initiative. See Ocean City, supra, 403 N.J. Super. at 363-70.
19 A-5731-11T4 before us, we need not consider, for example, whether an
initiative ordinance that expressly prohibited the governing
body from taking action for a period longer than three years, or
committed the governing body to a particular action for more
than three years, would be permissible.
In this case, the proposed ordinance contained no such
restrictions. Paragraph A called for the creation and
"continued existence" of the municipal police department,
pursuant to N.J.S.A. 40A:14-118. As we noted, Camden had
already created a municipal police department by ordinance, and
the department's continued existence was implicit unless, and
until, the existing police ordinance was repealed or modified.
See, e.g., Inganamort v. Ft. Lee, 72 N.J. 412, 421 n.2 (1977)
("[A]n ordinance may be promulgated which continues in force
until repealed or superseded.") (citation omitted).
Paragraph B of the initiative ordinance prohibited the city
from disbanding the police force and joining any County police
force, requiring that Camden "shall instead continue to maintain
its own police department." Such general language certainly
does not violate the expressed or implied terms of the Faulkner
Act. By analogy, in Concerned Citizens of Wildwood Crest v.
Pantalone, 185 N.J. Super. 37, 40, 47 (App. Div. 1982), we held
a Walsh Act initiative ordinance that, without temporal
20 A-5731-11T4 limitation, "affirmatively provide[d] that the beaches in
Wildwood Crest w[ould] be free," was not an improper restraint
on the future exercise of legislative action.
Furthermore, based upon the Court's recent guidance,
judicially-constructed limits on the right to initiative and
referendum are inappropriate.
[W]here the legislative intent is not clear "from the statute's text, legislative history, or place in the larger statutory scheme[,]" an intention to immunize an ordinance from a Faulkner Act challenge will not be found. . . . Put another way, in the absence of an unequivocal legislative expression to the contrary, citizens in a Faulkner Act municipality are empowered to protest any ordinance under the Act. The burden is on the party seeking to defeat the Faulkner Act to clearly establish the existence of a contrary legislative intent.
[In re Ordinance 09-02, supra, 201 N.J. at 362 (quoting In re Ordinance 04-75, supra, 192 N.J. at 467).]
"It is the function of the Legislature, not the courts, to
determine how much direct democracy through referendum should be
conferred on the voters of a municipality." In re Ordinance 04-
75, supra, 192 N.J. at 467. "[T]he democratic processes
reserved to the people by the Faulkner Act referendum provision
cannot be abridged except with express legislative approval."
In re Ordinance 09-02, supra, 201 N.J. at 368. "The Legislature
has occupied the field in this area, and there is no place for a
21 A-5731-11T4 separate judicial policy exempting municipal ordinances from
referendum." In re Ordinance 04-75, supra, 192 N.J. at 470; see
also Roseff v. Byram Twp., 432 N.J. Super. 8, 13 (App. Div.
2013) ("[A] court's role is limited to determining whether the
Legislature's intention to exempt an ordinance . . . from
referendum is indicated by the authorizing 'statute's text,
legislative history or place in the larger statutory scheme.'")
(quoting In re Ordinance 04-75, supra, 192 N.J. at 467)).
There is no principled reason to treat the Faulkner Act's
initiative process any differently. See Great Atl. & Pac. Tea
Co. v. Borough of Point Pleasant, 137 N.J. 136, 146 (1994)
(stating initiative and referendum under N.J.S.A. 40:69A-184 and
-185 are similar because "[b]oth forms of action result in
action that is binding on the governing body"); Twp. of Sparta
v. Spillane, 125 N.J. Super. 519, 523, 525 (App. Div. 1973)
("The initiative and referendum processes authorized by the act
comprise two useful instruments of plebiscite power . . . ."),
certif. denied, 64 N.J. 493 (1974). We therefore reverse
those provisions of the Law Division's order that declared the
proposed ordinance to be "invalid" and restrained its further
consideration by the Council or the voters because it improperly
restricted future municipal legislative action.
22 A-5731-11T4 III
"A statute has supremacy over an ordinance." In re
Ordinance 04-75, supra, 192 N.J. at 469. "[A] State mandate
embodied in a legislative enactment 'that does not allow for the
exercise of municipal discretion cannot be overridden by a
referendum.'" Ocean City, supra, 403 N.J. Super. at 356
(quoting In re Ordinance 04-75, supra, 192 N.J. at 469).
However, the Legislature must have intended such preemption.
Mack Paramus Co. v. Mayor of Paramus, 103 N.J. 564, 573 (1986).
The Court has long utilized a five-part test to determine
whether the doctrine of preemption applies:
1. Does the ordinance conflict with state law, either because of conflicting policies or operational effect (that is, does the ordinance forbid what the Legislature has permitted or does the ordinance permit what the Legislature has forbidden)?
2. Was the state law intended, expressly or impliedly, to be exclusive in the field?
3. Does the subject matter reflect a need for uniformity? . . . .
4. Is the state scheme so pervasive or comprehensive that it precludes coexistence of municipal regulation?
5. Does the ordinance stand "as an obstacle to the accomplishment and execution of the full purposes and objectives" of the Legislature?
23 A-5731-11T4 [Overlook Terrace Mgmt. Corp. v. Rent Control Bd. of W.N.Y., 71 N.J. 451, 461-62 (1976) (citations omitted).]
We have recognized the pervasive nature of the State's
supervision of municipal finances. See Ocean City, supra, 403
N.J. Super. at 363 ("Perhaps state supervision of local affairs
is no more fully developed than in the area of municipal
finance, where the Legislature has established a comprehensive
system pertaining to municipal budgets, debt and salaries.");
and see Roseff, supra, 432 N.J. Super. at 10-11 (concluding an
ordinance enacted pursuant to the Local Budget Law, N.J.S.A.
40A:4-1 to -89, was not subject to a referendum challenge).
Plaintiffs argue that, although the proposed initiative
ordinance dealt solely with the police function, it impacted
Camden's budget and finances, which are uniquely subject to
additional statutory regimes.
MRERA was enacted in 2002. L. 2002, c. 43, § 75. Since
that time, Camden has been subject to its terms. The
Legislature found that, with regard to certain municipalities,
State aid filled their "structural [financial] deficits" but
failed to "function as an economic impetus toward the rebuilding
of those municipalities" by addressing the elements needed "to
ensure [their] long-term economic viability," including
healthcare services, public safety, and "market-rate housing"
24 A-5731-11T4 that would "expand the local tax base and provide a greater
diversity of income levels among municipal inhabitants."
N.J.S.A. 52:27BBB-2(j) to (m).
The Legislature intended MRERA to address those needs
through "exceptional measures, on an interim basis," to
"strategically invest" funds that would help the subject
municipalities achieve such viability. N.J.S.A. 52:27BBB-2(n),
(o). MRERA requires the State Treasurer to prepare "an economic
stimulus package designed to foster the revitalization" of the
municipality, along with a "project list" and a specification of
costs. N.J.S.A. 52:27BBB-44.1, 44. In addition, upon notice by
the Commissioner of DCA of a municipality's eligibility, the
Governor appoints a "chief operating officer [(COO)] in
consultation with the mayor and the governing body." N.J.S.A.
52:27BBB-7(a). The COO is charged with "reorganizing
governmental operations . . . in order to assure the delivery of
essential municipal services and the professional administration
of that municipal government." N.J.S.A. 52:27BBB-3. The goals
are "municipal rehabilitation" and "economic recovery," pursuant
to a "strategic revitalization plan" that also addresses
"regional issues, including public safety." N.J.S.A.
52:27BBB-6, -29, -38 and -40.
25 A-5731-11T4 The COO serves during a "rehabilitation term" of five
years, N.J.S.A. 52:27BBB-2.2(a), -6(a), -7(c)(1), although the
Commissioner of DCA may extend it upon the COO's recommendation.
N.J.S.A. 52:27BBB-3, -7(c). The COO has all the authority
allocated by law to the mayor, although the mayor and the
governing body retain a degree of participation in budget
decision-making. N.J.S.A. 52:27BBB-9, -11, -23, -25. The end
of the rehabilitation term marks the expiration of the COO's
term. N.J.S.A. 52:27BBB-6(a), -7(c)(1).
During the rehabilitation term, the COO may veto any
ordinance or resolution adopted by the governing body, but "the
governing body may override the veto by a two-thirds vote of the
fully authorized membership thereof." N.J.S.A. 52:27BBB-
23(a)(1)(a). If the COO believes the override to be "contrary
to the rehabilitation or economic recovery goals which justified
the rehabilitation declaration," he or she may submit the matter
to the "special arbitrator" for a final and unappealable
determination. N.J.S.A. 52:27BBB-23(a)(1)(b). The special
arbitrator may uphold the override "only upon a finding that the
action is consistent with the rehabilitation and economic
recovery of the qualified municipality." Ibid.; see also
N.J.S.A. 52:27BBB-5.
26 A-5731-11T4 In 2007, the Legislature accepted the recommendation of
Camden's COO for a rehabilitation term of ten years rather than
five. N.J.S.A. 52:27BBB-2.2(c), (d); L. 2007, c. 176, § 1. The
Committee asserts in its brief that the ten-year period ended on
October 28, 2012. The rehabilitation term is followed by a
five-year "economic recovery term." N.J.S.A. 52:27BBB-3, -6(a).
During that term the mayor resumes full authority, with certain
enhanced appointment and veto power over municipal boards and
authorities. N.J.S.A. 52:27BBB-6(b)(1) to (5). However, the
municipality remains subject to annual State compliance audits,
N.J.S.A. 52:27BBB-6(b)(6), and the financial assistance
continues until the municipality no longer meets the eligibility
criteria of SMAA. N.J.S.A. 52:27-BBB-6(b)(7).
TAL superseded SMAA. See S. Budget & Approps. Comm.,
Statement to S. 3118 (Dec. 8, 2011) ("Transitional Aid to
Localities replaced three existing municipal aid programs:
Extraordinary Aid, Special Municipal Aid, and Trenton Capital
City Aid."). TAL funding is a "discretionary aid program."
N.J.S.A. 52:27D-118.42a. DLGS was accordingly allowed to impose
the same kinds of rigorous and intrusive conditions on a
municipality that SMAA had authorized:
Conditions, requirements, or orders deemed necessary by [DLGS] may include, but not be limited to, the implementation of government, administrative, and operational
27 A-5731-11T4 efficiency and oversight measures necessary for the fiscal recovery of the municipality, including but not limited to requiring approval by [DLGS] of personnel actions, professional services and related contracts, payment in lieu of tax agreements, acceptance of grants from State, federal or other organizations, and the creation of new or expanded public services.
[N.J.S.A. 52:27D-118.42a.]
The statutory scheme described seemingly demonstrates the
Legislature's decision to fully occupy the field of municipal
finance in Camden. The proposed initiative ordinance was not a
budget ordinance; yet, it cannot be disputed that elimination of
the police force, and Camden's membership in, and support of, a
County police force was an integral part of the city's overall
financial strategy as mapped out in the various MOU's referenced
above. On its face, the statutory scheme does not mandate that
Camden enter into a particular regionalized or shared service
plan. If it did, the initiative ordinance would be barred.
See, e.g., In re Trenton Ordinance 09-02, supra, 192 N.J. at 469
("A state mandate that does not allow for the exercise of
municipal discretion cannot be overridden by a referendum.").
Yet, certain provisions of the MRERA, including the powers of
the COO during the "rehabilitation term," and the extraordinary
device of appointment of a special arbitrator to render
unappealable decisions, impliedly leave little room for other
28 A-5731-11T4 voices to be heard. Perhaps, even the voices of the voters of
Camden.
The record before the Law Division and before us consists
of several certifications from municipal officials along with
voluminous supporting documentation. However, there is nothing
provided, for example, from DLGS or DCA regarding the actual
implementation of the MOUs and the nature of State oversight as
to the provision of municipal services that impact the budget.
In other words, the record inadequately explains if adoption of
the proposed initiative ordinance creates "an obstacle to the
accomplishment and execution of the full purposes and objectives
of the Legislature[.]" Overlook Terrace Mgmt. Corp., supra, 71
N.J. at 462 (internal quotation marks and citation omitted).
We have been told, without apparent dispute, that the MRERA
rehabilitation term has ended. Yet, we cannot state with
certainty how the passage of time since the matter was before
the Law Division may have changed the municipal landscape,
particularly as it relates to the preemption issue.
Therefore, we are compelled to remand the matter to the Law
Division for further consideration of whether the various
statutory schemes at issue have preempted consideration by the
voters of the proposed initiative ordinance in this case. We
29 A-5731-11T4 leave the conduct of the remand to the sound discretion of the
Law Division.
Reversed and remanded for further proceedings consistent
with this opinion. We do not retain jurisdiction.
30 A-5731-11T4