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In re Township of Cherry Hill

Decided: April 27, 1987.

IN THE MATTER OF THE TOWNSHIP OF CHERRY HILL, 820 MERCER STREET, CHERRY HILL, NEW JERSEY, APPELLANT


On appeal from New Jersey Department of Community Affairs.

Michels, Skillman and Landau. The opinion of the court was delivered by Skillman, J.A.D.

Skillman

The Department of Community Affairs issued a cease and desist order to the Township of Cherry Hill, which prohibited the Township from selecting a private inspection agency for electrical subcode services under the Uniform Construction Code Act, N.J.S.A. 52:27D-119 et seq., except in conformity with the Department's regulations, N.J.A.C. 5:23-4.5A. This order was based on a finding that the Township's request for proposals for electrical code services included an unauthorized selection criterion, namely, an invitation to private inspection agencies to offer the Township computer services beyond those required for electrical subcode services. The Township appeals from this order. It argues that the Department's regulations merely offer an "administrative alternative" to public bidding in accordance with the Local Public Contracts Law, N.J.S.A. 40A:11-1 et seq., for selection of a private inspection agency. We conclude that a municipality which elects to use a private inspection agency to carry out its responsibilities under the Uniform Construction Code Act must strictly adhere to the selection criteria set forth in N.J.A.C. 5:23-4.5A, and that those criteria prohibit a municipality from inviting private agencies to compete for a municipal contract by offering financial inducements. Therefore, we affirm.

The State Uniform Construction Code Act, enacted in 1975, is "a broad, remedial piece of legislation, the basic purpose of which is to establish and provide for uniform building and construction standards and uniform enforcement policies

and practices throughout the entire State." N.J. State Plumbing Inspectors Ass'n v. Sheehan, 163 N.J. Super. 398, 401 (App.Div.1978), certif. den. 79 N.J. 484 (1979). Accordingly, the Act preempts municipalities from providing for construction code enforcement in a manner inconsistent with the Act and its implementing regulations. Home Builders League of South Jersey v. Evesham Tp., 174 N.J. Super. 252, 260-261 (Law Div.1980).

Municipalities are permitted to administer the construction code in three different ways: (1) by employing qualified construction officials and subcode officials, N.J.S.A. 52:27D-126(a); (2) by using an approved private inspection agency, N.J.S.A. 52:27D-126(a); or (3) by asking the Department to assume this responsibility, N.J.S.A. 52:27D-128. This case involves the second of these alternatives, i.e., use of a private inspection agency.

The means by which municipalities may select private inspection agencies and the fees these agencies are allowed to charge became a matter of concern following enactment of the Uniform Construction Code Act. In 1980 the Assembly Municipal Government Committee issued a report on the administration of the construction code which included the following comments regarding private inspection agencies and inspection fees:

One of the charges leveled against the Uniform Construction Code Act in hearings before this Committee is that contrary to its basic intent, it has contributed directly to increased construction costs. Witnesses testified to the following: (a) certain municipalities have inflated fees to generate revenues far in excess of the local enforcing agency operating costs; (b) wide variations now exist in the fees which municipalities impose for providing identical services; (c) the regulation of electrical inspection by municipal enforcing agencies -- previously a function of the State Public Utilities Commission -- has burdened small electrical contractors with additional costs; (d) contracts between municipalities and private electrical inspection agencies, established through competitive bidding procedure, have contributed to substantial fee increases.

[Some] municipalities arbitrarily set fees and request that third party agencies bid a "percentage" of those fees with the municipality retaining the difference. This procedure results in unnecessarily high fees. Such fees should be "rolled

back" by the Department. If fee schedules remain excessively high, the Department should be granted the authority, as the Public Utilities Commission before it, to set a statewide fee structure for third party inspections.

The Legislature responded to these concerns by enactment of chapter 338 of the Laws of 1983, which confers pervasive power upon the Department to establish standards for the selection of private inspection agencies and to fix the fees which these agencies may charge. This amendment ...


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