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City Of Camden v. Kenny

December 22, 2000

CITY OF CAMDEN, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, APPELLANTS,
v.
JANE KENNY, COMMISSIONER OF THE NEW JERSEY DEPARTMENT OF COMMUNITY AFFAIRS OF THE STATE OF NEW JERSEY, THE LOCAL FINANCE BOARD, ULRICH STEINBERG, DIRECTOR OF THE DIVISION OF LOCAL GOVERNMENT SERVICES AND NORTON BONAPARTE, RESPONDENTS.



On appeal from the Superior Court of New Jersey, Law Division, Camden County, L-2750-00, and the Local Finance Board.

Before Judges King, Coburn and Landau.

The opinion of the court was delivered by: King, P.J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued: December 6, 2000

I.

This is an accelerated appeal by the City of Camden (City) from the action of the Local Finance Board (LFB). In a resolution of September 29, 2000 the LFB adopted an order issued on September 22 by the Director of the Division of Local Government Services of the Department of Community Affairs authorizing the appointment of Norton N. Bonaparte, Jr. as the City's business administrator.

The LFB authorized appointing Bonaparte through its authority under the "Local Government Supervision Act of 1947," N.J.S.A. 52:27BB-1 to -100 (Supervision Act). The City has been under supervision pursuant to the Supervision Act, N.J.S.A. 52:27BB-54, since May 10, 2000 because of its "unsound financial condition." According to the Attorney General, the Supervision Act has only been invoked a half-a-dozen times in its 52-year history and has never been challenged in court. The City does not claim that the Supervision Act is inapplicable in its current financial circumstances. Rather, the City contends the LFB and the Director have, in this instance, exceeded their powers under the Supervision Act and violated long-standing traditions of "home rule" and local autonomy. We disagree and affirm the LFB's power to appoint a new business administrator.

II.

On April 14, 2000 the LFB conducted a hearing and evaluated the financial condition of the City. After hearing testimony, the LFB adopted a resolution requesting that the Attorney General file an application to obtain a judicial determination that "gross failure[s]" by the City "substantially jeopardizes the fiscal integrity of the municipality." N.J.S.A. 52:27BB-55(6). Upon such a determination, the LFB could initiate action pursuant to N.J.S.A. 52:27BB-56 to determine whether the City should be placed under the Board's supervision pursuant to the Supervision Act.

The Attorney General filed such an action for a judicial determination on April 18, 2000. On May 5, Judge Orlando heard argument and issued a ruling in favor of the LFB, finding specifically that:

the undisputed facts show that defendant City of Camden has grossly failed to comply with the Local Fiscal Affairs Law and the Local Budget Law, and that this gross failure has substantially jeopardized the fiscal integrity of the City of Camden.

The LFB then promptly conducted a hearing on May 10 to consider whether the City should be placed under its supervision pursuant to Article 4 of the Supervision Act, N.J.S.A. 52:27BB-54 to -95.1. The LFB adopted a resolution on the same date placing the City under supervision. The elaborate resolution recited the judicial determination of "gross failure" and invoked the myriad powers under the Act, including the section dealing with personnel, N.J.S.A. 52:27BB-66.1, the appointment and dismissal power over municipal employees in an effort to rectify the City's financial problems.

Upon the adoption of the resolution, it was submitted to the State Treasurer, the Attorney General, and the Commissioner of the Department of Community Affairs for review and approval in accordance with N.J.S.A. 52:27BB-56. Immediately, on May 10, all three cabinet officers approved the LFB's action and the resolution became effective. The City took no appeal from this final decision. The LFB's supervision ensued.

On September 13, pursuant to N.J.S.A. 52:27BB-66.1, the LFB adopted a resolution directing that the procedures in this statute be implemented to provide for the appointment of a new business administrator. The City's present administrator, Preston Taylor, had decided to resign on October 31. The September 13 resolution firmly but politely recited the LFB's "expectation" and design, in pertinent part, as follows:

WHEREAS, in adopting the aforementioned resolution, the Local Finance Board specifically provided that the provisions of N.J.S.A. 52:27BB-66.1 were to be placed in effect in the City of Camden; and

WHEREAS, the provisions of N.J.S.A. 52:27BB-66.1 set forth procedures providing for the appointment of municipal employees within municipalities subject to the supervision of the Local Finance Board under Article 4 of the Local Government Supervision Act, N.J.S.A. 52:27BB-54 et seq., and

WHEREAS, the Local Finance Board has determined it to be both necessary and appropriate to authorize and direct that the procedures set forth at N.J.S.A. 52:27BB-66.1 be utilized for the purpose of making a permanent appointment to the position of business administrator in the City of Camden; and

WHEREAS, THE Local Finance Board's determination in this regard is premised upon its consideration of a variety of circumstances relating to the present fiscal condition of the City of Camden including, but not limited to, the decision of the present business administrator of the City of Camden to resign as of October 31, 2000; and

WHEREAS in light of these circumstances and in order to facilitate the rehabilitation of the financial affairs of the City of Camden, the Local Finance Board has determined to authorize and direct that the procedures set forth in N.J.S.A. 52:27BB-66.1 pertaining to the appointment of municipal employees in the City of Camden be utilized for the purpose of providing for the permanent appointment of a business administrator in the City; and

WHEREAS, the Local Finance Board has further determined that the actions required to be taken for the purpose of providing for the permanent appointment of a business administrator in the City of Camden be undertaken and completed by September 22, 2000; and

WHEREAS, in authorizing and directing that the procedures set forth in N.J.S.A. 52:27BB-66.1 be undertaken and completed by that date, it is the expectation of the Local Finance Board that the governing body of the City of Camden will work in a cooperative manner with the Director of the Division of Local Government Services for the purpose of providing for a permanent appointment to the position of business administrator in the City of Camden; and

WHEREAS, it is also the expectation of the Local Finance Board that the implementation of the procedures set forth in N.J.S.A. 52:27BB-66.1 will be undertaken to provide for the permanent appointment of Norton ...


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