In Re City of Trenton Ordinance

984 A.2d 895, 411 N.J. Super. 135
CourtNew Jersey Superior Court Appellate Division
DecidedDecember 17, 2009
DocketA-5864-08T3
StatusPublished
Cited by2 cases

This text of 984 A.2d 895 (In Re City of Trenton Ordinance) 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
In Re City of Trenton Ordinance, 984 A.2d 895, 411 N.J. Super. 135 (N.J. Ct. App. 2009).

Opinion

984 A.2d 895 (2009)
411 N.J. Super. 135

In re Petition for Referendum on CITY OF TRENTON ORDINANCE 09-02.

No. A-5864-08T3.

Superior Court of New Jersey, Appellate Division.

Argued October 14, 2009.
Decided December 17, 2009.

*898 George T. Dougherty argued the cause for appellant Committee of Petitioners Against Ordinance 09-02 (Katz & Dougherty, attorneys; Mr. Dougherty, on the brief).

William W. Northgrave argued the cause for respondent City of Trenton (McManimon & Scotland, attorneys; Edward J. McManimon, III and Mr. Northgrave, Newark, on the brief).

Ira G. Megdal, Cherry Hill, argued the cause for respondent/intervenor New Jersey American Water Company, Inc. (Cozen O'Connor, attorneys; Mr. Megdal and Douglas W. Frankenthaler, on the brief).

Joseph L. Mooney, III, Trenton, and Zachary B. Corrigan, of the Washington bar, admitted pro hac vice, attorney for amicus curiae Food & Water Watch, Inc. (Mr. Corrigan, on the brief).

Before Judges CARCHMAN, LIHOTZ and ASHRAFi.

The opinion of the court was delivered by

CARCHMAN, P.J.A.D.

This appeal requires us to consider: 1) whether the Optional Municipal Charter Law (the Faulkner Act), N.J.S.A. 40:69A-1 to -210, mandates a referendum when a portion of a city's water system is sold; and 2) whether N.J.S.A. 40:62-3 to -4 excepts this sale from the assertedly mandated referendum. Here, respondent City of Trenton (the City) proposed to sell a portion of its water system to intervenor New Jersey American Water Company, Inc. (NJAWC).[1] Petitioner, the Committee of Petitioners, a group of citizens in Trenton, opposes the sale and asserts that the ordinance enabling the sale must be placed on the ballot consistent with the public referendum provisions of N.J.S.A. 40:69A-185 (Section 185).

In response to petitioner's challenge, the City sought a declaratory judgment that the ordinance was not subject to a public referendum. Following a plenary hearing, Assignment Judge Feinberg, in the Law Division, granted the relief. Petitioner appealed.

We agree with the judge's finding that the sale was subject to the exception provisions of N.J.S.A. 40:62-3.1 (Section 3.1), involving a sale "serving less than 5% of the population of the municipality" and was not subject to a referendum under the Faulkner Act. We affirm.

*899 I.

A.

Our consideration of the relevant statutes requires a brief review of the factual underpinnings of this dispute. The City, a Faulkner Act municipality, operates a water utility system, the Trenton Water Works (TWW). The City has identified two components of TWW: the Inside Water Utility System (IWUS), which serves the City, its residents and businesses; and the Outside Water Utility System (OWUS), which serves and delivers potable water exclusively to residents and businesses within the Townships of Ewing, Hamilton, Hopewell and Lawrence (the Townships). The water facilities located in IWUS are physically and hydraulically interconnected to the water facilities in OWUS. Physically, OWUS is located in the Townships, outside the City.

In 2000, the City retained Killam Associates to prepare a study (the Killam Report) to determine whether OWUS and IWUS could operate as separate entities. The City took no action following the completion of the report. In 2005, however, the City commissioned MWH, an engineering consulting firm, to prepare a comprehensive report (the MWH report) to update and supplement the Killam report. The MWH report provided the City with an assessment of the feasibility of dividing the Trenton water distribution system into two separate systems, proposed a plan to separate the systems and submitted an estimate of probable construction costs for separation.

Based on these findings, the City determined that separating OWUS and IWUS would promote public health and safety and would benefit both the City and the Townships. The City also determined that subject to the supervision and regulation of the New Jersey Board of Public Utilities (BPU), as required by Section 3.1, the best interests of the public would be served by selling OWUS to a private water utility.

On February 27, 2007, the City prepared and distributed a Request for Proposals (RFP) for the sale of the OWUS. After receiving responses to the RFP, the City determined that NJAWC submitted the most advantageous proposal. The offered purchase price was $100 million. The City negotiated a contract (the agreement) with NJAWC for the sale of OWUS, conditioned upon NJAWC purchasing water from the City on a long-term basis. The City Council, by ordinance adopted in December 2007, authorized the implementation of the transaction.

The City submitted the agreement to the BPU for review and approval. Since several parties affected by the terms of the agreement submitted petitions to intervene in the BPU proceedings, the BPU sent this matter to the Office of Administrative Law as a contested matter. Several meetings were held with regard to BPU's approval of the Agreement, including a July 23, 2008 public hearing, at which members of the public voiced their concerns. As a result, the City and NJAWC accepted some changes to the Agreement. The Administrative Law Judge reviewed the stipulation and Agreement, issued an initial decision accepting the settlement and referred the case back to the BPU for approval. On February 3, 2009, the City Council adopted Ordinance 09-02, which approved the final terms of the sale of OWUS to NJAWC with amendments made to the original agreement. Mayor Douglas Palmer approved the agreement on February 5, 2009.

B.

Not all parties viewed the sale positively. On February 25, 2009, petitioner filed *900 a petition demanding that Ordinance 09-02 be placed on a ballot for approval by voters pursuant to the Faulkner Act public referendum provisions, Section 185. The City responded by seeking a declaratory judgment that the Petition was null and void. NJAWC sought and was granted intervention.

The inquiry in the Law Division focused on whether Section 3.1 supersedes Section 185; whether OWUS served more than five percent of the City's population; and whether OWUS and IWUS constitute a single system or two separate systems.

After the initial filings, without taking testimony,[2] the judge concluded:

In this particular case, the petitioner[] challenge[s][] the sale to the New Jersey Water Company, they allege that the system is one and they allege that a sale requires that it go before the voters. Now when you look at 40:62-3.1, it's really quite clear and is really not subject to more than one interpretation. It permits a municipality to sell its water and to do that without submitting it to the voters, if the sale involves services or water that does not serve — that serves less than 5 percent of the population in the City of Trenton. So, the issue is will the City of Trenton be impacted by the sale.
What I have before me from the Board of Public Utilities and prior cases, representations from the New Jersey Water Company, the City of Trenton, review of the public hearings is that sale of the water company only impacts residents from outlying municipalities. It will not affect people in the City of Trenton. It will affect Ewing, Hamilton, Lawrence and Hopewell. The fact that they share [pipes] is not dispositive as indicated by counsel. That is not unusual. The water comes in and ultimately the water is distributed.
The certification of Mr.

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Related

In Re Referendum on City of Trenton Ordinance 09-02
990 A.2d 1109 (Supreme Court of New Jersey, 2010)

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Bluebook (online)
984 A.2d 895, 411 N.J. Super. 135, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-city-of-trenton-ordinance-njsuperctappdiv-2009.