[105 NJSuper Page 485] Plaintiffs, consisting of taxpayers, voters and The Avalon Home and Land Owners Association, all of the Borough of Avalon, primarily seek by this action to enjoin the borough and its officials from enforcing the provisions of ordinance No. 395. Following answers made by defendants, plaintiffs moved for a summary judgment, relying on defendants' admissions and the pleadings on file.
At the oral argument of the motion, counsel agreed that since the facts, as disclosed by said admissions and pleadings, were not controverted, the matter should be considered as if all parties moved for summary judgment and that a determination should be made on the basis of the pleadings, admissions and affidavits.
The facts leading to these proceedings disclose that the borough is governed by a three-man commission form of government as provided in N.J.S.A. 40:70-1 et seq., the Walsh Act or "Commission Form of Government Law." Grogan v. DeSapio, 11 N.J. 308 (1953). For a number of years the borough had supplied its inhabitants with water drawn from wells through a system of underground conduits, charging therefor flat rates based on the size of the lateral service conductors to each property. On August 2, 1967 the New Jersey State Department of Health made a routine inspection which resulted in a report of certain defects and inadequacies in the public water system. The report, recommending action to remove the substandard conditions, suggested that the borough obtain an additional source of water. Engineering studies were made. Application was made to the Division of Water Policy and Supply (N.J.S.A. 58:4 A -14) to permit it to drill a new well and to divert water from the subterranean source. Authorizations were granted upon certain specified conditions, including a requirement that all services to consumers should be metered and bills submitted to them quarterly at metered rates.
In March 1968 the municipality adopted ordinance No. 388, entitled "Bond Ordinance Providing for Improvement of the Water Supply and Distribution System * * *." It described the improvements to be made in the water supply and distribution system, provided for issuance of $468,000 bonds to finance the improvement, and appropriated this sum therefor. The ordinance also contained provisions calculated to comply with the Local Bond Law, N.J.S. 40 A:2-1 et seq. In November 1968, by ordinance No. 388-1, the authorized
amount of bonds to be issued and the appropriation were increased to $584,000.
On December 18, 1968 the borough adopted ordinance No. 395, the operative effect of which plaintiffs seek to enjoin. It regulates the use of water, fixes metered rates and sets out rules and regulations with respect to the supply and distribution.
On December 27, 1968 a petition was filed with the borough, signed by more than 15% in number of the electors of the entire vote cast at the last general municipal election. The petition requested that defendants suspend operation of the ordinance. When, on January 6, 1969, the governing body rejected the petition by a formal resolution, this action was instituted.
Plaintiffs contend that the provisions of R.S. 40:74-5, by virtue of the terms of which the petition was filed, mandate the suspension of the operation of the ordinance, so that the borough commissioners are obliged either to repeal the ordinance or submit it to the voters by means of a referendum. Defendants are of the view that the filing of the petition is without effect upon the ordinance.
Since plaintiffs never sought a referendum with respect to ordinances 388 or 388-1, it is obvious (and they admit) that their real objective is to secure a decrease in the metered water rates prescribed by ordinance No. 395. They agree that the improvement in the water system is needed for reasons of public health, safety and welfare. Thus, in effect they seek to have the electorate determine the ultimate rates to be charged by securing or requiring referenda until the governing body reduces the rates to meet their approval.
N.J.S.A. 40:74-5, on which plaintiffs rely, provides:
"If within ten days after the final passage of an ordinance, except ordinances authorizing an improvement or the incurring of an indebtedness, other than for current expenses, where other requirements are made by law, a petition signed by electors of the municipality equal in number to at least fifteen per cent of the entire vote cast at the last preceding general ...