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Dolan v. Borough of Tenafly

Decided: November 30, 1977.


For affirmance -- Justices Mountain, Sullivan, Pashman, Clifford and Schreiber and Judge Carton. For reversal -- Judge Conford. The opinion of the court was delivered by Mountain, J. Conford, P.J.A.D., Temporarily Assigned, dissenting.


Plaintiffs are taxpayers of the Borough of Tenafly. They brought this action to test the validity of an ordinance and supplemental resolution which authorized the borough's acquisition of a certain tract of land, to be funded in part by the issuance of bonds. Defendant municipality moved for summary judgment, and the motion was granted. Plaintiffs appealed to the Appellate Division, and we granted certification while the appeal was there pending unheard. 71 N.J. 517 (1976). Because of the desirability of an early announcement of our decision in this case, we entered an order of affirmance on October 8, 1976. We now indicate our reasons for this determination. Cf. Retz v. Mayor & Council of Saddle River, 69 N.J. 563, 565-66 (1976).

In November, 1972, the borough submitted an application to the Commissioner of Environmental Protection seeking a grant under the Green Acres Land Acquisition program to be used in the purchase of approximately 294 acres of open, undeveloped land located in the borough and known

as East Hill. The property in question consisted of three tracts in separate ownership. A ten-acre parcel owned by Mary Ellen Dunham and another parcel of approximately the same size owned by the New Early Christian Church were purchased for about $450,000. Condemnation proceedings were instituted in order to acquire a tract of about 274 acres owned by Centex Homes Corporation. The commissioners returned an initial award of $6,600,000.

Shortly thereafter, in the summer of 1975, the borough adopted Ordinance No. 1088, which appropriated the sum of $7,576,000 to be used for the acquisition of the property described above.*fn1 The total appropriation included a Green Acres grant of $2,806,000 which the borough had been assured it would receive. It also included $362,000 to be used as a down payment, this sum having been made available from other municipal sources set forth in detail in the ordinance. Finally, it included $4,408,000, the anticipated proceeds of bonds whose issuance was authorized by the ordinance.

Meanwhile Centex had taken an appeal from the award of $6,600,000. At a trial de novo the award was increased to $8,500,000, to which was added interest in an amount exceeding $1,100,000. Judgment embodying this determination was entered January 8, 1976.

It was of course apparent that the appropriation of $7,576,000 was quite insufficient to meet the increased purchase price. Negotiations and discussions ensued; the whole matter received very wide publicity. Finally an agreement was reached. Centex lowered the price to $9,350,000. The Palisades Interstate Park Commission agreed to purchase 14.5 acres of the tract which were contiguous to its park lands for the sum of $500,000. The Nature Conservancy, a well-known conservation organization, undertook to pay $355,000 for 11 acres, it being understood that this sum would be repaid to it as the pledges of private citizens were received. In the meantime this parcel was to be leased by the conservation society to the municipality for a consideration equal to whatever taxes might be assessed against the property. Upon payment from pledges of the whole $355,000, the tract would be conveyed by Nature Conservancy to the borough. This transfer was expected to occur within three years. Lastly, the Jewish Community Center of Englewood agreed to purchase approximately 29 acres for the sum of $1,000,000. All but three acres of this latter tract were to remain as open space. Three acres were to be used as a community center upon which appropriate buildings for recreational purposes were to be erected. An additional grant of $350,000 from the state would cover the increased cost to the borough of the acquisition. The balance of the purchase price, $7,495,000, was to be paid by defendant municipality. Thus, the borough would ultimately obtain title to 250.5 acres instead of 294; the Palisades Interstate Park would acquire 14.5 acres, and the Jewish Community Center would hold 29 acres.

On April 22, 1976 the Mayor and Council of the Borough of Tenafly adopted a resolution approving and adopting the foregoing arrangement. This resolution is the chief object of plaintiffs' attack.

In their brief filed with this Court, as well as at oral argument, plaintiffs have limited their attack upon the municipal action to two main contentions. First, it is argued

that Ordinance No. 1088, which provided for the appropriation and which authorized the bond issue, was susceptible of later amendment and change only by the passage of another ordinance; therefore, the resolution of April 22, 1976 was ineffective. Second, it is urged that the acquisition of this tract has removed the last substantial area of vacant land in the municipality from the reach of development, a result thought to be contrary to this Court's decision in Southern Burlington County N.A.A.C.P. v. Township of Mount Laurel, 67 N.J. 151 (1975) (hereafter " Mount Laurel "). We will consider these contentions in turn,

Plaintiffs' argument with respect to the first point rests very largely upon the proposition of municipal law that, generally speaking, an ordinance cannot be amended or modified by a mere resolution, but only by another ordinance. Recent recognition of this general rule by our Court, with supporting authorities, appears in Inganamort v. Borough of Fort Lee, 72 N.J. 412, 421 (1977). It must be borne in mind, however, that this familiar rule is entirely subject to the will of the Legislature. If the Legislature so wishes, it may alter the rule in any particular case, as we believe it has done here.

The required contents of a bond ordinance are set forth in N.J.S.A. 40A:2-12.*fn2 The relevant portion of this provision reads as follows:

A bond ordinance shall contain in substance the following:

a. an authorization for the issuance of obligations, stating in brief and general terms sufficient for reasonable identification the purpose or purposes for which the obligations are to be issued, a statement of the estimated maximum amount of bonds or notes to be issued, and the estimated cost of such purpose or purposes, but related improvements or properties may be treated as 1 improvement or property * * *.

[ N.J.S.A. 40A:2-12]*fn3

The Local Bond Law further provides:

All matters not required to be contained in the bond ordinance may be determined by subsequent resolutions passed by the recorded affirmative votes of a majority of the full membership of the governing body. [ N.J.S.A. 40A:2-16; emphasis supplied]

Thus, in a proceeding for the authorization of a bond issue certain required items of information must first be set forth "in brief and general terms" in the bond ordinance. N.J.S.A. 40A:2-12. No other matters are required to be set forth therein. All matters not required to appear in the ordinance may thereafter be dealt with by resolution in accordance with N.J.S.A. 40A:2-16, supra. Further, N.J.S.A. 40A:2-17 contains a similar provision concerning procedures for amendment of a bond ordinance during passage. If at the time of second reading an amendment is adopted which substantially alters matter required to be contained in the ordinance, then final adoption must await further publication and another hearing. Otherwise, the ordinance, as so amended, may be adopted ...

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