The Ewing-Lawrence Sewerage Authority (ELSA) is a public agency organized pursuant to the Sewerage Authority Law (N.J.S.A. 40:14A-1 et seq.). It was created by joint resolutions of Ewing and Lawrence Townships in 1947; there are six members, three appointed from each municipality. ELSA is reorganized annually in February. At the reorganization meeting, among other business, resolutions are usually offered to engage the services of an attorney, auditor-accountant, engineer, bond counsel and investment advisor, until the next reorganization meeting.
In 1986 and an indeterminate number of prior years, these professionals were hired for one-year terms; the resolutions always said they were retained for "a period of one year." On February 3, 1987, the annual reorganization meeting was convened. Charles F. Harris was appointed attorney; Groendyke
and Company was appointed auditor-accountant;*fn1 Buck, Siefert & Jost was appointed engineer; Hawkins, Delafield & Wood was appointed bond counsel, and Kidder, Peabody & Co. was appointed investment broker.
In each instance, the professional was appointed by a resolution which specified the term as "a period of one year or until a successor is appointed." There was no discussion at the meeting concerning the new language, and plaintiffs, Rosenblum and Dyer, testified that the form of resolution presented to them before the meeting set the term as only "for a period of one year."
The change was authored by ELSA Chairman, S. Leonard DiDonato, who testified that revised forms of resolution were physically before the ELSA members at the meeting. Draft minutes of that meeting were sent to all members for the next meeting on February 17, 1987, and these minutes contained the complete language of the resolutions, including the phrase "or until a successor is appointed." The minutes were approved at that later meeting, and even plaintiffs, Rosenblum and Dyer, voted for approval. Thus, the resolutions, certified by the executive director of ELSA, state that the professionals were appointed "for a period of one year or until a successor is appointed."
Similar resolutions were offered at the 1988 reorganizational meeting, but the members voting were deadlocked. No action was ever taken to further retain professionals for fiscal year 1988 or 1989. The issue to be decided herein is whether those professionals retained in 1987 were to continue providing services in subsequent fiscal years when their contracts were not renewed. Regardless of which form of resolution was before the ELSA members on February 3, 1987, the Local Public Contracts Law prohibits an agreement for professional services from exceeding 12 consecutive months. See N.J.S.A. 40A:11-15.
The language used by ELSA to extend the term of its professionals beyond 12 months is surplusage and ultra vires. ELSA cannot continue to use the services and pay for them without new contracts.*fn2
In order to decide the current issue concerning the status of the professionals, it is not necessary to determine whether the hiring resolutions of 1987 were passed in one form or the other. At that time, each professional made a proposal to ELSA seeking to be retained for the following year. In a letter dated January 28, 1987, Harris offered to serve as attorney "for the year 1987 at the same hourly rate charged for 1986" and he sought an increase in "the annual retainer" which had been in effect for the past three years. Under date of January 20, 1987, Buck, Seifert & Jost sought to furnish "engineering services on an annual retainer basis for the year beginning February 1, 1987." Groendyke and Company proposed on January 7, 1987, that it be hired as ELSA's accountant and auditor "for the year 1987" with specific reference to the audit of 1987 and the 1987-1988 budget. In each case, the hiring resolution adopted by ELSA referred to the Local Public Contracts Law, recognizing that public advertising and a specification of reasons were required in order to make an agreement for professional services without competitive bidding.*fn3
The proposals from these three professionals*fn4 demonstrate that each of them sought to be retained for the ensuing fiscal year, a period of 12 months. Defendants argue that Harris is an employee of ELSA because he is required to contribute to ...