On appeal from Superior Court of New Jersey, Law Division, Atlantic County, Docket No. L-6154-10.
The opinion of the court was delivered by: Skillman, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Parrillo, Grall and Skillman.
The opinion of the court was delivered by SKILLMAN, J.A.D. (retired and temporarily assigned on recall).
The issue presented by this appeal is whether the provision of the Home Rule Act, N.J.S.A. 40:49-27, which establishes the right to a public referendum regarding any ordinance authorizing the incurring of an indebtedness, applies to a municipality organized under the Walsh Act, N.J.S.A. 40:70-1 to N.J.S.A. 40:76-27. The trial court concluded that a 1937 revision to the Walsh Act excludes municipalities organized under that Act from the Home Rule Act referendum provision. We conclude that the trial court misinterpreted this 1937 revision and that the residents of a municipality organized under the Walsh Act enjoy the same right as the residents of any other municipality to petition for a referendum regarding an ordinance authorizing the incurring of an indebtedness.
In September 2010, the governing body of Margate City adopted an ordinance authorizing renovations, additions and improvements to a municipal fire station. The estimated cost of this project is $2,300,000. The ordinance provided that the project would be funded by a $115,000 down payment from the City's capital improvement fund and that the balance would be paid from a bond issue in an aggregate amount not to exceed $2,185,000.
Shortly after adoption of this ordinance, a group of Margate City residents, including plaintiffs, filed a petition for a referendum on the proposed bond issue. The petition was based on a section of the Home Rule Act, N.J.S.A. 40:49-27, which establishes a right to a public referendum regarding any ordinance authorizing the incurring of an indebtedness. The Clerk of Margate City determined that the petition contained a sufficient number of valid signatures by registered voters to require a referendum under this section. However, the City Solicitor advised the Clerk that the referendum provision of N.J.S.A. 40:49-27 does not apply to Margate City because it is incorporated under the Walsh Act. The Walsh Act contains a separate referendum provision, N.J.S.A. 40:74-5, which excludes "ordinances authorizing an improvement or the incurring of an indebtedness" from the voter referendum provisions of that Act. Based on this legal advice, the City Clerk rejected the petition.
Plaintiffs brought this action in lieu of prerogative writs challenging the rejection of their petition. The parties agreed that the case presents purely a question of law, which was brought before the trial court for decision by cross-motions for summary judgment.
The trial court concluded in a written decision that the case was controlled by N.J.S.A. 40:74-5, and that this provision exempts municipalities organized under the Walsh Act from the section of the Home Rule Act, N.J.S.A. 40:49-27, which establishes the right of residents to petition for a referendum regarding any ordinance authorizing the incurring of an indebtedness. Plaintiffs appeal from the final judgment memorializing this decision.
N.J.S.A. 40:74-5 was part of the original Walsh Act, which was enacted in 1911. L. 1911, c. 221, § 17. This section then provided that an ordinance would be suspended from going into effect if a petition protesting the ordinance signed by fifteen percent of the number of voters at the last general election was presented within ten days of its passage, and if the commissioners did not repeal the ordinance, it had to be submitted to a referendum. Although this section of the original Walsh Act included limited exceptions to the kind of ordinance that could be subject to a referendum, none of those ...