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Warren County Community College v. Warren County Board of Chosen Freeholders

February 14, 2002


On appeal from Superior Court of New Jersey, Law Division, Warren County, WRN-L-377-99.

Before Judges Petrella, Steinberg and Alley.

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


Submitted January 28, 2002

The Warren County Board of Chosen Freeholders (the Board) appeals from orders of the Law Division directing the Board to appropriate funds for a Warren County Community College *fn1 (College) capital project and a separate order of contempt and sanctions against two Freeholders, personally. These appeals, which we consolidated for purposes of this opinion, raise issues of the power of the Legislature to delegate its taxing authority to non-elected boards, and the use of a court's contempt powers against individual public officials (here Freeholders) who are members of the Board in order to compel them to cast a vote to either authorize a bond issue or raise the necessary funds for the College's capital project, to construct what is generally described as a community center.

The effect of compelling an affirmative vote on the College's proposal is to require the Board on behalf of the County to request funds by applying to the County Tax Board to have the municipalities in the county raise the funds through the property tax assessment route.

For the reasons hereinafter stated, we reverse the order of the Law Division that erroneously found applicable and mandatory in this case the provisions of N.J.S.A. 18A:64-15. We also hold that the judge erred on both procedural and substantive grounds in sanctioning two of the three individual Freeholders personally for declining to vote to appropriate funds or issue bonds. We reverse the contempt order and sanctions.

On November 19, 1998, the College Board of Trustees (Trustees) adopted a resolution, by a vote of seven to four, proposing the construction of a community center as proposed in a facilities master plan with an estimated revised cost of $4,143,278. The Trustees adopted this resolution after a non- binding referendum of the county's voters had disapproved of the capital funding project. The Trustees' resolution referred to New Jersey's Chapter 12 *fn2 program, N.J.S.A. 18A:64A-22.1 et seq., that provides matching State funds for construction projects for county colleges *fn3 on a first come, first served basis.

In accordance with N.J.S.A. 18A:64A-17, the Trustees forwarded the resolution to the College's board of school estimate established under N.J.S.A. 18A:64A-15 for each county college and consisting of "the chairman of the board of chosen freeholders, two members of the board of chosen freeholders appointed by that board and two members of the board of trustees appointed by that board." In Warren County there are only three Freeholders. Consequently, all of its Freeholders sit on the College's board of school estimate.

On February 10, 1999, the board of school estimate, by a three to two vote, certified the amount requested by the College as $4,140,720. This figure included anticipated 50% matching funds from the State under Chapter 12. The certificate was signed by three board of school estimate members, consisting of one Freeholder and two trustees. The two other members of the Board disapproved.

A certificate was then sent to the Board pursuant to N.J.S.A. 18A:64A-19(1). The Board rejected a resolution to hire counsel to prepare a bond ordinance by a vote of two to one. The two Freeholders who voted against the project also voted against hiring counsel to draft the ordinance. The College then sought an order to show cause in the Law Division why the Board should not be directed to appropriate the $4,140,720 necessary for the capital project pursuant to N.J.S.A. 18A:64A-19(2). *fn4 At a May 5, 1999 court hearing the Board took the position that because the Trustees' resolution called for Chapter 12 funding it was necessary to raise the money through a bond issue. In addition, they argued that despite the language of N.J.S.A. 18A:64A-19(2), that a county "shall" raise revenue through taxation or bonds upon receiving a certificate from the board of school estimate, the County cannot be compelled to issue bonds. Because only bonding would qualify the County for Chapter 12 matching funds, the Board would have had to proceed under the local bonding laws which recognize the inherent discretion reposed in a public entity. The Board thus argued it could not be compelled to make an appropriation.

The judge ordered the Board to proceed with the process of issuing bonds, although he did not order the Freeholders to approve a bonding ordinance.

The Board also argued that even if the statute requiring appropriation upon receipt of a board of school estimate's certificate is facially constitutional, it yields an unconstitutional result in its application in Warren County due to the unique nature of its Board. We agree, but also conclude that the self-generated transmogrification of the Community College Agency into a county college and acquisition of eminent domain powers also raised an issue of whether the College is entitled to college status insofar as such status gave more authority than to merely make budget recommendations under N.J.S.A. 18A:64A-36, as would be the case for a community college agency (see N.J.S.A. 18A:64A-30 et seq.) *fn5 and then generally following the procedures in N.J.S.A. 18A:64A-17. The statutory sections applicable to county colleges appear to confer greater budget power to a board of school estimate where a county college is established under N.J.S.A. 18A:64A-2 *fn6 by specific action of the Board. In effect what occurred is that the College raised itself to a superior position than that conferred by the public entity that created it.

The Trustees then adopted another resolution on May 28, 1999, this time by a vote of six to five, and sent its request to a "board of school estimate" for $4,140,720 without specifically mentioning the Chapter 12 matching funds program. The board of school estimate voted to approve the expenditure on June 16, 1999, by the same three to two vote that had been cast on February 10, 1999. A certificate for $4,140,720 was signed by the two trustees and only one of the three Freeholders. It was forwarded to the Board on June 25, 1999, but the Board took no action on the issue at its meetings of July 14, July 28, August 11, and August 25, 1999. The College then filed another complaint on September 2, 1999, and moved for summary judgment to compel action.

At the arguments on the College's motion the Board took the position that there were factual issues in dispute, specifically, whether the Trustees and members of the board of school estimate who approved the new resolution intended the funds to be raised through tax increases. Despite lack of reference in the new resolution to Chapter 12, the Board contended that the project was always intended to be financed in part under that law, and thus bonding was the only way to raise the funds. In the alternative, the Board claimed that if a tax increase was needed, it would have to be done as an emergency appropriation, also a discretionary action, and the Board could not be compelled to exercise that discretion. As a third alternative, the Board claimed that the statute requiring appropriation by the Board upon the certificate of a non-elected body violated the State constitution's "no taxation without representation" principles. The motion judge found no material fact issues in dispute and ordered the Board on October 14, 1999 to appropriate the necessary funds by November 13, 1999. The judge did not address the constitutional issues that had been raised.

The parties apparently agreed to extend the deadline to January 31, 2000, because an election for the office of freeholder had taken place and a new Freeholder would assume office on January 1, 2000 with an apparent change in party control. It was anticipated that the new majority of the Board of Chosen Freeholders would approve moving ahead with the bonding and Chapter 12 application. On January 26, 2000, Ann Stone, the new Freeholder Director, sent a letter of intent to the State Treasurer concerning a request for Chapter 12 funding for the College's construction project from the State and expressing an intention to sell bonds by August 30, 2001, contingent on State approval and the timetable adopted by the State Treasurer. The State approved the Chapter 12 request on May 2, 2000 with a requirement that the bonds be sold by August 30, 2002.

However, the Board elected not to take any action at that time. On March 6, 2001, the College moved under R. 1:10-3 to compel the Board to comply with the October 14, 1999 order.

At argument on the motion on March 30, 2001, the Board took the position that because the State set a deadline of August 30, 2002 to issue the bonds, the Board was under no obligation to act until then. The Board also argued on May 25, July 2, and August 16, 2001, that the College had not properly achieved county college status (compare N.J.S.A. 18A:64A-2 and N.J.S.A. 18A:64A-30) and hence could not rely on the certificate by the College's board of school estimate as the judge did not rule on this issue, but seemed of the view that there was a college in existence and this might be an attempt to dissolve it. The practical effect would be at most that de jure the college was still a county "community college agency" and not entitled to the full benefit of board of estimate statutes and procedures for budgetary purposes. It would still de facto be an educational institution, and presumably able to use the term college in its name, unless changed or prohibited.

The College pressed its argument that because the October 14, 1999 order had not been complied with, and had never been modified by the Court, it should be enforced. The College also asserted that the Board had no intention of adopting a bond ordinance. The judge agreed that his prior order had not been formally amended and, notwithstanding the time line established by the State Treasurer, ordered the Board to appropriate the funds within ninety days. He said that failure to comply could result in individual sanctions against any non-complying Freeholders. An April 12, 2001 order gave the Board until June 28, 2001 to adopt some plan for funding the College's project.

The Board moved for reconsideration of this order on May 4, 2001, asserting that either the statute compelling appropriation is unconstitutional *fn7 or the College was equitably estopped from requiring appropriation within the period specified in the April 12, 2001 order. The Board again noted the question of the college status of the ...

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