NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0285-12T2
NORTHWEST BERGEN COUNTY
UTILITIES AUTHORITY,
Plaintiff-Respondent,
v.
KATHLEEN A. DONOVAN, COUNTY
EXECUTIVE OF THE COUNTY OF
BERGEN, and COUNTY OF BERGEN,
Defendants-Appellants,
and
BERGEN COUNTY BOARD OF CHOSEN
FREEHOLDERS,
Defendant.
_________________________________________
Argued October 29, 2013 – Decided September 10, 2014
Before Judges Espinosa, Koblitz, and
O'Connor.
On appeal from the Superior Court of New
Jersey, Law Division, Bergen County, Docket
No. L-3073-12.
Frank P. Kapusinski, Assistant County
Counsel, argued the cause for appellants
(James X. Sattely, Bergen County Counsel,
attorney; Mr. Kapusinski, of counsel and on
the brief).
Jeffrey A. Zenn argued the cause for
respondent (Sokol, Behot & Fiorenzo,
attorneys; Mr. Zenn, of counsel and on the
brief; Steven Siegel, on the brief).
PER CURIAM
Plaintiff Northwest Bergen County Utilities Authority
(Authority) provides sewage treatment services in defendant
Bergen County (County).
In 1985, the county adopted the county
executive plan of government, pursuant to the Optional County
Charter Law (Charter Law), N.J.S.A. 40:41A-31 to -41.
Defendant
Kathleen Donovan (executive) has been the executive of the
county since 2010.
In 2011, the executive vetoed that portion of the
authority's 2012 proposed budget that provided health care
benefits and a stipend of $5,000 to the authority's nine Board
of Commissioners (commissioners).
When the authority failed to
amend its budget to remove the stipend and benefits, the
executive summarily terminated seven of the authority's
commissioners.
The authority filed a complaint in lieu of prerogative
writs seeking, among other things, a ruling that the executive's
actions were ultra vires.
The trial court granted the authority
summary judgment, which the executive and the county appeal.
We
affirm in part and reverse in part.
I
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In 1979 the authority, then known as the Northwest Bergen
County Sewer Authority, was reorganized into the Northwest
Bergen County Utilities Authority by the county freeholders,
pursuant to the Municipal and County Utilities Law (Utilities
Law), N.J.S.A. 40:14B-1 to -78.
The resolution stated that:
the following persons [shall] be appointed
as members of the Bergen County Northwest
Utilities Authority at an annual salary of
$5,000.00 effective immediately[.]
The resolution specifically named each commissioner and the
year his or her term expired; none of the commissioner's terms
extended beyond February 1, 1984.
Since 1979, the authority's
commissioners have been receiving an annual stipend of $5,000;
however, no resolution was ever passed after 1979 authorizing a
stipend for any of the authority's commissioners other than
those specifically named in the 1979 resolution.
In or about
2004, 1 the authority commenced providing health care benefits to
its commissioners although the freeholders have never passed a
resolution authorizing such benefits.
During a meeting on November 1, 2011, the authority passed
a resolution approving its preliminary budget for 2012 and
forwarded its budget to the executive for her consideration.
Included in the budget was a provision that authorized each of
1
The authority does not have a record of when it first began
providing health benefits to the commissioners, but maintains it
was likely in 2004.
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the authority's nine commissioners to receive health care
benefits and a $5,000 stipend in 2012.
On November 10, 2011,
the executive vetoed the minutes of the meeting that approved
the stipend and benefits for the commissioners.
The authority sought a review of the veto by the Director
of the Division of Local Government Services.
On March 19,
2012, the Director determined the veto was valid and binding.
During an emergency meeting on March 22, 2012, the authority
passed a resolution authorizing the filing of an appeal to the
Local Finance Board.
The following day, the executive vetoed
the minutes of the emergency meeting on the grounds the
authority violated various provisions of the Open Public
Meetings Act, N.J.S.A. 10:4-6 to -21.
Although the authority took the position it had not
violated this Act, the authority addressed the executive's
concerns and held another meeting on March 28, 2012.
At that
time, the authority passed another resolution authorizing an
appeal to the Local Finance Board.
The executive vetoed the
minutes of the meeting that authorized the appeal, as well as
those minutes that approved the use of authority funds to
prosecute the appeal.
The authority refused to amend its budget and remove the
provision that gave the commissioners a stipend and health care
benefits for 2012.
In response, on April 16, 2012 the executive
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summarily dismissed seven commissioners.
The authority filed
the complaint in lieu of prerogative writs seeking, primarily, a
ruling that the executive did not have the authority to:
terminate the commissioners; veto the meeting minutes that
authorized the stipend and benefits for the commissioners; and
veto the meeting minutes that authorized the appeal to the Local
Finance Board and funding for the appeal.
The trial court agreed with the authority and reinstated
the commissioners, and further found the commissioners were
entitled to continue receiving the annual stipend and health
care benefits.
The trial court also ruled the authority had the
right to pursue legal action against defendants and use
authority funds to finance any lawsuit.
While the matter was
pending before the trial court, the Local Finance Board reversed
the Director of the Division of Local Government Services,
finding the Director and the Local Finance Board lost
jurisdiction over the matter once the prerogative writs
complaint was filed.
This ruling has not been appealed.
A
On appeal, defendants claim that, under a provision in the
charter law, specifically N.J.S.A. 40:41A-37(c), the executive
had the power to terminate the commissioners.
5
We disagree.
A-0285-12T2
This statute states, in relevant part, that the county
executive:
(b) [w]ith the advice and consent of the
[Freeholder] board, shall appoint the county
counsel, the administrator, the heads of all
departments and any divisions created within
such departments, and the members of all
county boards, commissions and authorities;
(c) [m]ay, at his discretion, remove or
suspend any official in the unclassified
service of the county over whose office the
county executive has power of appointment.
[Emphasis supplied.]
Subsection (c) does allow a county executive to remove an
official in the unclassified service of the county -- and there
is no dispute that the authority's commissioners are in the
unclassified service -- but an executive also must have the
power to appoint an official in order to remove him.
Under
subsection (b) of the statute, a county executive does not have
the power to appoint a commissioner.
Subsection (b) requires
that both a freeholder board and a county executive, not merely
a county executive, appoint a commissioner.
As the executive
did not have the power to appoint the authority's commissioners,
she did not have the power to remove them.
See generally Bd. of
Chosen Freeholders of the Cnty. of Hudson v. Cnty. Exec. of
County of Hudson, 357 N.J. Super. 242, 250 (App. Div.), certif.
denied, 177 N.J. 222 (2003).
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Further, under N.J.S.A. 40:14B-16, a commissioner is
entitled to remain in office until his term expires and his
successor is appointed and qualified.
Otherwise, a commissioner
cannot be removed, except for inefficiency, neglect of duty, or
misconduct.
Ibid.
Moreover, before any removal, a commissioner
must receive a copy of the charges against him and be given an
opportunity to be heard by the governing body 2.
Ibid.
Here,
there were no charges leveled against the commissioners and none
was given an opportunity to be heard by the governing body.
We are satisfied the executive exceeded the bounds of the
authority conferred upon her by statute when she terminated the
commissioners.
B
Defendants contend the executive had the power to veto the
authority's meeting minutes that approved the stipend and health
benefits for the commissioners in the authority's 2012 budget.
We agree.
A provision in the charter law, specifically N.J.S.A.
40:41A-37(h), provides that a county executive has the
discretion to veto all or part of the minutes of every meeting
2
Under the county executive form of government, both the
freeholder board and the county executive constitute the
"governing body" of the county. N.J.S.A. 40:41A-32(b).
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of a county authority organized under the utilities law.
This
provision states, in relevant part, that the county executive:
h. [s]hall review and approve or veto,
within 10 days of delivery to him, except as
otherwise provided herein, all or part of
the minutes of every meeting of a county
authority organized pursuant to the
provisions of . . . [N.J.S.A. 40:14B-1 to
-78]. If, within the 10-day period, the
county executive returns to the authority
and to the board of freeholders the copy of
the minutes with a veto of any action taken
by the authority or any member thereof at a
meeting, together with a written explanation
of the reasons for his veto of the action,
[the action of the authority] shall be of no
effect unless the board of freeholders
overrides the veto of the action by a
majority vote of its full membership within
10 days of the receipt of the veto action.
The county executive may approve all or any
part of an action taken at a meeting prior
to the expiration of the 10-day period. If
the county executive takes no action with
respect to the minutes within the 10-day
period, the minutes shall be deemed to be
approved. . . .
If two-thirds or more of the members of an
authority make a determination that an
action taken at a meeting is in response to
an emergency situation, a copy of the
minutes of that meeting shall be delivered
to the county executive as soon as
practicable following the meeting and the
county executive shall have up to 24 hours
after the copy of the minutes has been
delivered to approve or veto the minutes of
that meeting. If the county executive takes
no action with respect to the minutes within
the 24-hour period, the minutes shall be
deemed approved. If, within the 24-hour
period, the county executive returns to the
authority and to the board of freeholders
the copy of the minutes with a veto of any
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action taken by the authority or any member
thereof at the meeting, together with a
written explanation of the reasons for his
veto of the action, [the action by the
authority] shall be of no effect unless the
board of freeholders overrides the veto of
the action by a majority vote of its full
membership within 48 hours of the receipt of
the veto action.
The statute is clear and unambiguous.
The Legislature
unmistakably gave the executive the power to veto any action
taken by a county utility authority organized under N.J.S.A.
40:14B-1 to -78, and placed no limit on the matters that can be
vetoed.
The authority relies upon a provision in the utilities law
in support of its argument that the executive lacked the power
to eliminate the commissioners' compensation.
The authority
contends N.J.S.A. 40:14B-17 prohibits the reduction or
elimination of any compensation a commissioner receives while
serving in office.
This statute states:
A municipal authority may reimburse its
members for necessary expenses incurred in
the discharge of their duties. The
resolution, ordinance or parallel ordinances
for the creation of a municipal authority or
for the reorganization of a sewerage
authority as a municipal authority may
provide that the members of the municipal
authority may receive compensation for their
services within an annual and other
limitations to be stated in such resolution,
ordinance or parallel ordinances, and in
that event, each member may receive from the
municipal authority such compensation for
his services as the municipal authority may
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determine within the limitations stated in
such resolution, ordinance or parallel
ordinances. The said provisions or
limitations stated in any such resolution,
ordinance or parallel ordinances may be
amended or added by subsequent resolution,
ordinance or parallel ordinances, as the
case may be, but no reduction of any such
limitation shall be effective as to any
member of the municipal authority then in
office except upon the written consent of
such member. No member of any municipal
authority shall receive any compensation for
his services except as provided in this
section.
The authority argues the resolution passed by the
freeholders in 1979 provided an annual stipend of $5,000 to its
commissioners indefinitely.
The authority also contended that,
regardless how a stipend, benefit or other kind of compensation
originates, N.J.S.A. 40:14B-17 prohibits the reduction or
elimination of such compensation.
First, we do not read the 1979 resolution as authorizing a
stipend to the commissioners in perpetuity.
The resolution
authorized the annual stipend of $5,000 to only those
commissioners identified in the resolution, none of whom is
still in office.
It is undisputed the freeholders never passed
a resolution authorizing a stipend to any commissioners other
than those set forth in the 1979 resolution. 3
Second, the
3
In response to the trial court's finding that the incumbent
commissioners were entitled to continue receiving an annual
stipend and health care benefits, on August 1, 2012, the
(continued)
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freeholders never passed any resolution authorizing health care
benefits for the commissioners, and N.J.S.A. 40:14B-17 clearly
states that no member of any municipal authority shall receive
compensation except as provided in this statute.
Therefore, in
order for those commissioners who were in office at the time of
the executive's veto to be eligible for a stipend or health care
benefits, a resolution had to have been passed or an ordinance
adopted authorizing such compensation.
Moreover, when there is a conflict between a provision in
the charter law and a general law, the former prevails.
See
Amato v. Bd. of Chosen Freeholders, 240 N.J. Super. 313, 316-17
(App. Div. 1990); Shapiro v. Essex County Bd. of Chosen
Freeholders, 177 N.J. Super. 87, 94 (Law Div. 1980), aff’d, 183
N.J. Super. 24 (App. Div.), aff’d, 91 N.J. 430 (1982).
N.J.S.A.
40:41A-25 provides that, when a county operates under one of the
optional plans of government set forth in the charter law (and
the county executive form of government is one of those plans 4),
the county shall be governed by the plan, the charter law, and
all general laws.
The charter law defines what constitutes a
(continued)
freeholders passed a resolution terminating all stipends and
benefits for any commissioners appointed after April 18, 2012.
This resolution has not been challenged.
4
The other plans are the county manager plan, county supervisor
plan, and the board president plan. The provisions applicable to
all plans are set forth in detail in N.J.S.A. 40:41A-86 to -149.
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"general law."
N.J.S.A. 40:41A-26, the charter law, defines a
general law as one that:
a. is not inconsistent with this act; and
b. is by its terms applicable to or
available to all counties, or;
c. is applicable to all counties or to any
category or class of counties, and deals
with one or more of the following subjects:
the administration of the judicial system,
education, elections, health, county public
authorities, taxation, and finance, and
welfare.
. . . .
A provision in N.J.S.A. 40:14B-17, a general law,
prohibits the reduction of a commissioner's compensation.
A
provision in N.J.S.A. 40:41A-37, a charter law, permits a
reduction in compensation, through the exercise of a county
executive's veto power.
As there is an inconsistency between
the subject provision in N.J.S.A. 40:14B-17 and the subject one
in N.J.S.A. 40:41A-37, the provision in N.J.S.A. 40:14B-17 is
not part of the general law.
Therefore, in this case, there can
be a reduction or elimination of these commissioners'
compensation while they are serving in office.
We reverse the trial court's finding that the
commissioners are entitled to receive the stipend and health
care benefits that the authority included in its 2012 budget.
The commissioners may receive compensation if provided in
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accordance with N.J.S.A. 40:14B-17, unless vetoed by the
executive pursuant to N.J.S.A. 40:41A-37.
C
Defendants appeal the trial court's decision that the
authority could appeal the executive's veto of those meeting
minutes which approved the appeal of the Local Government
Services' Director's decision.
In light of our decision that
the executive can veto the meeting minutes that approved the
stipend and health care benefits for the authority's
commissioners, this issue is moot.
However, the issue whether
the authority can use its funds to pay for the appeal to both
the Director and the Local Finance Board persists.
The
fundamental issue is whether the authority can appeal an
executive's veto of its meeting minutes.
Any county powers must be consistent with the New Jersey
Constitution.
N.J.S.A. 40:41A-30.
The New Jersey Constitution
states that appeals may be taken as provided by law.
Const. art. V, § 4, ¶ 1(e).
N.J.
N.J.S.A. 52:27BB-15 provides that
determinations of the Director of Local Government Services are
subject to review by the Local Finance Board.
See Rumana v.
County of Passaic, 397 N.J. Super. 157, 173 (App. Div. 2007).
Accordingly, the authority had a constitutional right to appeal
the Director's decision to the Local Finance Board.
Although a
county executive has extensive veto powers under N.J.S.A.
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40:41A-37(h), those powers do not trump those rights afforded
under the New Jersey Constitution.
N.J.S.A. 40:41A-30.
As the
authority had a right to appeal the executive's veto of its
meeting minutes, it also had a concomitant right to expend funds
to finance that appeal.
After carefully considering the record and the briefs, we
conclude the parties' remaining arguments are without sufficient
merit to warrant discussion in a written opinion.
R. 2:11-
3(e)(1)(E).
Affirmed in part and reversed in part.
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