On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. ESX-L- 21672-73 P.W.
Before Judges Stern, A. A. Rodríguez and Fall.
The opinion of the court was delivered by: Fall, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
This is an appeal by the City of Newark, the members of its Council and certain of its fiscal officers from an order entered in the Law Division on October 5, 1999, directing them to undertake all steps necessary to complete and implement a municipal-wide revaluation, including entering into an approved revaluation contract on or before December 1, 1999; requiring the City and its tax assessor to provide the Division of Taxation (Division) with a corrected, revised and up-to-date tax map for approval pursuant to N.J.A.C. 18:12-4.7, on or before October 1, 1999; and upon their failure to perform these court-ordered actions, authorizing the Division to contract for revision of the City's tax map and for the revaluation and to fund the costs thereof through application of the City's entitlement to a share of taxes collected from banking corporations pursuant to N.J.S.A. 54:10A-33, from its share of replacement revenue from state-imposed Class II railroad taxes, pursuant to N.J.S.A. 54:29A-24.1 to -24.6, and from its entitlement to revenue-sharing funds pursuant to N.J.S.A. 54A:10-1 to -12.
The Essex County Board of Taxation (Tax Board) cross-appeals, seeking an amendment to the October 5, 1999 order, permitting the costs of completion of the tax map and revaluation to be funded by application of the City's entitlement to state aid from the Consolidated Municipal Property Tax Relief Aid (CMPTRA) fund. The procedural background leading to this appeal is lengthy, beginning with the entry of an order by the Tax Board on March 1, 1972, approved by the Division on March 20, 1972, directing the City to implement a municipal-wide tax revaluation, to be implemented and effective for the tax year 1973. The basis of that order was the use by the City of "reproduction cost statistics without change from 1960[,]" and "that the revaluation figures as reflected in the tax duplicates filed in 1961 have not been kept current and revised accordingly[.]" The last property revaluation to be implemented in the City was in 1961, now forty years ago.
On March 18, 1974, when the City failed to comply with its revaluation order, the Tax Board filed a complaint in lieu of prerogative writs in the Law Division, seeking an order compelling the City to up-date its tax map and complete the revaluation, to be effective for the tax year 1976.
On May 8, 1974, the Law Division entered an order directing the City to "comply immediately with [the Tax Board's] order of March 1, 1972." Specifically, the order directed the City to complete and effectuate the revaluation by October 1, 1975, to be effective for the tax year 1976. The trial court retained jurisdiction "for the purpose of obtaining compliance with this Order and . . . to entertain an application for an extension of time if it appears probable that such an extension would be necessary."
On September 11, 1974, an order was entered in the Law Division, directing the City and its tax assessor to show cause why sanctions should not be imposed for failure to comply with the May 8, 1974 order. After a hearing on the order to show cause, the trial court entered an order on October 25, 1974, directing the City and its tax assessor to "comply immediately with the Court's Order of May 8, 1974." The order further directed the Council and its individual members, to "provide, by the enactment of appropriate ordinances, sufficient appropriations pursuant to the pending bid to fund the revaluation program of the City of Newark ordered by the Court . . . by November 4, 1974." The order also directed the City, its Council and officials to enter into a revaluation contract by November 4, 1974 and authorized the Attorney General to seek sanctions in the event of continued non- compliance.
On application of the Attorney General, an order was executed on November 13, 1974, permitting amendment of the complaint to name the Mayor, members of the Municipal Council, the City's Finance Director and City Clerk as individual defendants.
When the City and its officials failed to move forward with the revaluation as ordered, the trial court entered an order on December 12, 1974, directing defendants to show cause why the court should not authorize the Tax Board to proceed with the revaluation and up-date of the tax map at the cost of the City. After a hearing on the order to show cause, the trial court entered an order on January 20, 1975, authorizing the Tax Board to contract for the revaluation and preparation of an up-dated tax map. The order extended the effective date of the revaluation to the 1977 tax year and directed that the contract costs be the sole responsibility of the City.
On application of the Attorney General seeking specific approval of the method to fund the cost of the revaluation program, the trial court entered an order on March 10, 1975, authorizing the Tax Board to receive, from the State Treasurer, the City's share of replacement revenues distributable to the City pursuant to N.J.S.A. 54:11D-1 to -9, and to use such funds as the source for payment of completion of the revaluation and up-dated tax map.
Defendants appealed the March 10, 1975 order. In a reported decision issued on February 4, 1976, we reversed, holding that the order impermissibly resulted in the disbursement of municipal funds without a requisite prior appropriation by the City's governing body. Essex Cty. Bd. of Taxation v. Newark, 139 N.J. Super. 264, 274 (App. Div. 1976). However, we noted that,
[S]ince this appeal does not challenge the court's order of January 20, 1975 authorizing the county board to contract for a revaluation and the preparation of a tax map, we need not resolve the validity of that order. We suggest, however, that it is more appropriate that the contracts for revaluation and preparation of a tax map be entered into by the city itself after the municipal council adopts the required appropriation ordinance and resolutions authorizing the execution of the contracts. [Id. at 275.]
We commented further that members of the governing body refusing to take the necessary steps to appropriate funds for the revaluation, "will subject themselves to further charges of criminal contempt as well as to commitment under R. 1:10-5 [now, R. 1:10-3] until the orders have been complied with." Id. at 275-76.
On April 1, 1976, the trial court entered an order directing the Council to enact an appropriation ordinance to fund the revaluation program. The Council failed to do so. Thereafter, the Attorney General moved for enforcement of the April 1, 1976 order. On June 7, 1976, the court entered an order committing the recalcitrant members of the City's Municipal Council to the Essex County Jail until such time as they complied with the April 1, 1976 order.*fn2 Defendants appealed from the June 7, 1976 order, which was reviewed by the Supreme Court on direct certification. The order of commitment was stayed pending that review.
The Court issued its opinion on March 31, 1977, stating, in pertinent part:
Such periodic revaluations are an absolute essential, particularly in times of continuous fluctuation of realty values, to accomplish the constitutional and statutory imperative of uniform and non-discriminatory taxation.
In granting certification herein, we stayed the order of commitment and invited argument by the parties on the appropriateness of a declaratory judgment by this court (a) declaring the validity of the remedy ordered by the Law Division in March 1975 or (b) adjudging that the expense of a revaluation to be ordered by the Board constitute[s] an obligation of the city equivalent to a judgment against it such that enforcement thereof might be had in the manner provided by N.J.S.A. 2A:17-72 and N.J.S.A. 54:4-43 and 44.
All parties now before us agree that it is preferable that the court adjudicate a means of executing the revaluation and providing for its payment without insisting upon incarceration of the councilmen as the sole means of achieving that result. While we do not condone the refusal of the defendant councilmen to comply with the law mandating periodic revaluations, we are in agreement with the Attorney General that the public interest in this matter urgently dictates resort to any valid recourse which will expeditiously accomplish the revaluation so long overdue and so essential to the proper assessment for taxation of all taxable property in the city. It is obvious that protraction of a contest of wills between the councilmen and the court is not the best way to achieve the desired result. Upon careful consideration of the matter, we are satisfied that the remedy invoked by Judge Margolis in March 1975 is legally correct and capable of achieving the desired objective.
In effect, the trial court in 1975 ordered a diversion to the Board, for financing of the revaluation, of tax revenues distributable by the State Treasurer to the city for its general purposes under N.J.S.A. 54:11D-1 et seq. The Appellate Division thought that the statutory prohibition of expenditure by municipalities of unappropriated funds stood in the way of that recourse. N.J.S.A. 40A:4-1 et seq.; N.J.S.A. 40A:4-57. 139 N.J. Super. at 274-295. We think otherwise.
This is not a case of a municipality undertaking an expenditure not undergirded by an appropriation but rather a municipality refusing to make an expenditure which the law renders mandatory. [Essex Cty. Bd. of Taxation v. Newark, 73 N.J. 69, 72-74 (1977) (citations and footnote omitted; emphasis added).]
Upon application for reconsideration, the Court entered the following order:
ORDERED that the funding of the contract of revaluation and ancillary work thereto is to be provided from funds distributable to the City of Newark under N.J.S.A. 54:29A-24.1 to 24.6, N.J.S.A. 54:10-1 et seq., and N.J.S.A. 54:10A-33. [Id. at 76.]
On July 28, 1977, the trial court entered an order authorizing the Tax Board "to enter into a contract of revaluation and any work necessarily ancillary thereto for the City of Newark[,]" and to act "as the agent of the City of Newark." The order further directed, in pertinent part:
9. That the funding of the contract of revaluation and ancillary work thereto is to be provided to the Essex County Board of Taxation from funds distributable to the City of Newark under N.J.S.A. 54:29A-24.1 to 24.6, N.J.S.A. 54:10-1 et seq., and N.J.S.A. 54:10A- 33 by the State Treasurer;
15. That this Court retain[s] jurisdiction of this matter for purposes of insuring compliance ...