NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION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,

and

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,

(App. Div. 2008) (quoting

Maese v. Snowden,

(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."

(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,

(2010) (citing

Manalapan Realty v. Twp. Comm. of Manalapan,

(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.'"

(quoting Bosland v. Warnock Dodge

Inc.,

(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,

(Ch. Div.), aff'd

o.b.,

(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."

"N.J.S.A. 40:69A-184 . . . by its very terms admits of no

qualification." Ocean City, supra,

.

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."

(citing In Re Ordinance 04-75,

(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,

, 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.

. "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."

.

"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,

. We need not repeat the examples of this

proposition we previously cited in Ocean City.

.

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."

. 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

(quoting McCrink v. West

Orange,

(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,

(App. Div.), certif. denied,

(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,

.

In McCrink, supra,

, 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."

.

In

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.

.

Relying on

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

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,

;

.

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,

, "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,"

, 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."

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,

.

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,

, 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,

(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,

(quoting In re Ordinance 04-75, supra,

).]

"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,

. "[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,

. "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,

; see

also Roseff v. Byram Twp.,

(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,

)).

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,

(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,

(App. Div. 1973)

("The initiative and referendum processes authorized by the act

comprise two useful instruments of plebiscite power . . . ."),

certif. denied,

(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,

. "[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,

(quoting In re Ordinance 04-75, supra,

).

However, the Legislature must have intended such preemption.

Mack Paramus Co. v. Mayor of Paramus,

(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.,

(1976) (citations omitted).]

We have recognized the pervasive nature of the State's

supervision of municipal finances. See Ocean City, supra,

("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

(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,

("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,

(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