Pemberton Tp. Mun. Utilities Authority, Matter of

• Decision Date: 16 October 1985
• Citation: 500 A.2d 18,205 N.J.Super. 31
• Parties: In the Matter of the PEMBERTON TOWNSHIP MUNICIPAL UTILITIES AUTHORITY.
• Court: New Jersey Superior Court — Appellate Division

Page 31

205 N.J.Super. 31

500 A.2d 18

In the Matter of the PEMBERTON TOWNSHIP MUNICIPAL UTILITIES AUTHORITY.

Superior Court of New Jersey Appellate Division.

Submitted Sept. 24, 1985.

Decided Oct. 16, 1985.

David M. Serlin, Burlington, for appellant.

Irwin I. Kimmelman, Atty. Gen., for respondent (James J. Ciancia, Asst. Atty. Gen., of counsel; Lewis A. Scheindlin, Deputy Atty. Gen., on brief).

Before Judges ANTELL, SHEBELL and MATTHEWS.

The opinion of the court was delivered by

MATTHEWS, J.A.D. (retired temporarily assigned on recall)

This is an appeal from the order of the Department of Civil Service which affirmed the determination of the director that the Pemberton Township Municipal Utilities Authority was subject to the civil service laws.

The issues to be resolved in this case involve primarily questions of law. The factual record is scant. The facts recited in this section are taken from the Pemberton Township Municipal Utilities Authority's brief and the respondent's decision.

On July 11, 1969 the Township of Pemberton by ordinance established the Authority pursuant to N.J.S.A. 40:14B-1 et seq., the municipal and county utilities authorities law. Prior to that action, in 1959 Pemberton Township adopted the State's civil service statutes in a referendum procedure provided for in N.J.S.A. 11:20-1 et seq. Construction of sewerage collection and treatment facilities began in 1973 and in 1975 these facilities became operative. The facility was designed to be regional to service Pemberton Township, Pemberton Borough and adjacent municipalities. The Authority has during its existence provided only sewerage treatment and collection services.

The initial determination made by the Director of County and Municipal Government Services that the civil service statutes applied to Authority employees not excepted under N.J.S.A. 40:14B-18 relied on the fact that Pemberton Township voluntarily subjected itself to those statutes and subsequently established the Authority. The determination cited as dispositive the Civil Service Commission's decision In the Matter of Southeast Morris County Municipal Utilities Authority (1980) ("Southeast"), which in turn relied upon the reasoning of the Appellate Division in an unpublished opinion in Lindenwold Borough Municipal Utilities Authority v. Civil Service Commission, No. A-2008-71, (App.Div. Jan. 16, 1973) ("Lindenwold"). The Southeast and Lindenwold decisions are fully set forth in the appellant's appendix.

The Commission's decision emphasized two points. First, the Commission stressed that the Authority was "established by and servicing a Civil Service jurisdiction, [and therefore] is subject to the provisions of Title 11, Civil Service." The Commission stated "the critical question is not whether a utilities authority is an agency of a township that is under Civil Service law, but instead whether the Legislature intended Title 11, Civil Service to be applicable to a utilities authority." The Commission concluded that N.J.S.A. 40:14B-18's exemption from Title 11 of certain positions indicated the Legislature's intent to include under civil service law coverage other authority employees not specifically exempted. Second, the Commission noted that the Authority, as a creature of the State, could not challenge statutory classifications made by the Legislature.

The Authority argues that application of the civil service statutes to some of its employees cannot be justified by a theory that the Authority has an agency relationship with Pemberton Township. The Authority asserts that the statutory scheme providing for its establishment indicates that it is designed to be an "independent entity." The agency theory was not significantly relied on by the Commission in its decision. This court, however, relied exclusively on that theory in its unpublished 1973 Lindenwold decision. The Commission relies on the recent opinion of this court in Matter of Sussex County Mun. Utilities Authority, 198 N.J. Super. 214, 486 A.2d 932 (App.Div.1985), certif. den. 101 N.J. 267, 501 A.2d 934 (1985), for the proposition that the agency issue need not be reached where legislative intent is clear from a reading of the enabling statute.

Two cases discuss the agency theory in the context of whether certain governmental entities are subject to the civil service statutes. In State v. Parking Authority of the City of Trenton, 29 N.J. Super. 335, 336, 102 A.2d 669 (App.Div.1954) the court considered the question whether employees of the Trenton Parking Authority were subject to civil service statutes. This court reviewed the structure and powers of the Parking Authority. 29 N.J. Super. at 336-338, 102 A.2d 669, noted that a statutory provision describing the Authority as an agency was not controlling and concluded:

The Parking Authority Law, supra, authorizes the authority to conduct its own fiscal affairs and produce its own revenue. The authority cannot depend upon moneys raised by taxation. It may undertake projects independent of financial aid from the municipality. The municipality is not liable for any obligations incurred by the authority. The municipality can in no manner circumscribe the activities of the authority which are performed in accordance with the statute. All this makes it plain that the parking authority, although created by and in a municipality, is an independent public corporate entity, distinct and separate from the municipality. [29 N.J. Super. at 338-339, 102 A.2d 669].

For these and other reasons to be discussed this court concluded that the Parking Authority employees "do not have civil service status." 29 N.J. Super. at 339-340, 102 A.2d 669.

In Atlantic Community college v. Civil Service Commission, 59 N.J. 102, 279 A.2d 820 (1971) the Supreme Court considered the analogous question whether "nonprofessional and noninstructional employees of county community colleges in counties which have adopted Civil Service are subject to Civil Service Law, N.J.S.A. 11:1-1 et seq." 59 N.J. at 104, 279 A.2d 820. The court reviewed the structure and powers of community colleges and their various boards and concluded that "the legislative intent as manifested in N.J.S.A. 18A:64A-1 et seq., and the operative effect of that act is that county colleges exist apart from, and independent in their internal affairs of the local county government." 59 N.J. at 109, 279 A.2d 820.

Both of these cases in resolving the agency issue, place emphasis upon the operating independence of the government entities involved. The unpublished decision in Lindenwold relies contrastingly on the statutory designation of utilities authorities as agencies in determining that civil service law applies to them. It should be noted that the Lindenwold analysis appears to be exactly the type of analysis that was rejected in the Parking Authority case. 29 N.J. Super. at 338, 279 A.2d 820.

In the recent case of Matter of Sussex County Mun. Utilities Authority, 198 N.J. Super. 214, 216, 486 A.2d 932 (App.Div.1985), certif. den. 101 N.J. 267, 501 A.2d 934 (1985), we considered "the narrow question as to whether a county municipal utilities authority is subject to the statutory provisions governing civil service." In addressing the agency theory, we made the following comments:

Our review of the cases cited by the Authority and by the Attorney General on behalf of the Civil Service Commission, such as Atlantic Community College v. Civil Service Commission, 59 N.J. 102 (1971) and State v. Parking Authority of the City of Trenton, 29 N.J. Super. 335 (App.Div.1954), persuades us only that these cases turn on the statutes involving the particular agency concerned. While general principles appear, none of these is final authority respecting statutes not there concerned. Only review of the enabling legislation is sufficient to lead to an understanding of that which the Legislature intended for that agency. Accordingly, we are also satisfied that the mere political association between a municipal or county agency and the parent municipality is insufficient to impose on the agency the civil service obligation of the parent, in the face of legislation structuring the agency which appears to be to the contrary. [198 N.J. Super. at 218, 486 A.2d 932].

A review of the statutory provisions governing municipal and county utilities authorities, N.J.S.A. 40:14B-1 et seq., discloses that the authorities are afforded enough operative independence to support a conclusion that they should not be subject to civil service law under an agency theory. Cf. Jordan v. Zidel, 40 N.J. 244, 247-248, 191 A.2d 178 (1963) (comparing utilities authorities with sewerage and parking authorities and concluding they all are independent entities and, at the same time, agencies and instrumentalities of their creator municipalities). We find that the agency theory is a very superficial one that bears little, if any, relation to the real question of whether either the Legislature or the Authority's underlying constituency intended civil service law to apply.

The Authority next argues that the legislative intent that civil service laws not be applied to utilities authorities is evinced by N.J.S.A. 40:14B-18's granting to those authorities the power to "appoint and employ such other agents and employees as it may require and determine their duties and compensation." This argument appears to be based primarily on the following language contained in the Trenton Parking Authority opinion:

The above provisions are not compatible with the terms of Title 11 relating to municipal employees. For example, the Civil Service Law ( R.S. 11:22-12) provides that no person shall be "appointed or employed under any title not appropriate to the duties to be performed nor assigned to perform the duties other than those properly pertaining to the position which he legally holds." Under the terms of the Parking Authority Law italicized above, the authority may...