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August 3, 2012

Re: Affordable Housing Trust Funds-Update

Dear Mayor,

I would like to update on developments related to the housing trust fund issues.

Yesterday, COAH posted its report detailing how much of the housing trust funds are subject to seizure.   The State now estimates that a total of $142 million is subject to seizure.   The report is posted at: http://www.nj.gov/dca/services/lps/hss/ahtfinfo/tableforjuly24letter.pdf

Also yesterday it was announced that the Assembly Housing and Local Government Committee will convene a hearing on the issue next Wednesday, August 8, in Trenton.   We thank the Committee Chair, Assemblyman Jerry Green, for his continued oversight on this issue. The League will testify before the Committee.

As you know, there is an ongoing challenge to the State’s action pending before the Appellate Division.  On August 2, the Fair Share Housing Center (FSHC) filed a motion to enforce litigants rights. They argue that the July 24 letter from the Acting Executive Director of COAH does not comport with the Appellate Division order that requires COAH to inform municipalities how they calculated the amount owed.   FSHC also argues that only the COAH board, and not a staff person, has the authority to calculate the amounts owed and demand towns to send funds.

The League sent a letter to the Court indicating support for this motion.  Further, the League is seeking to change its status in the case from amicus to a party and will be filing its motion and brief immediately.    Both the League and FSHC made clear to the Court that this is time sensitive and requested a hearing before the August 13 deadline set forth in the form letters sent out by Sean Thompson, the Acting Executive Director of COAH.

The League’s advice remains essentially the same as outlined in our Dear Mayor letter of July 30. We recommend that you respond to Mr. Thompson’s July 24, 2012 letter by the August 13, 2012 deadline.  However, unless you have a low or a zero balance in question, there is no advantage to filing your response before the State’s imposed deadline of August 13, particularly since there is a distinct possibility that the Court may intervene.

In your response, set forth your reasons as to why you feel you have satisfied the “commit to expend” requirement of P.L. 2008, c 46.

If COAH does not agree with your interpretation, and attempts to take what you feel are committed funds, we urge you to utilize your right to contest the transfer before the COAH board and include that language in your response.

We have also learned that Mr. Thompson is now demanding that the certification be signed by the Mayor of the municipality.  Since, in many cases, the Mayor has no first hand knowledge of the workings of the trust fund, and monitoring and input into the COAH computer system is done by others, we urge you to seek advice of your counsel regarding this request and, indeed, whether the demand is appropriate before sending the certification or supplementing the one that you may have already sent.

In the July 14, 2012 order, the Appellate Division gave a definition of what “commit to expend” means.  If the municipality disputes the interpretation of “commit to expend” keep in mind that the Court’s decision was merely an interim decision, not a final one, and the case remains ongoing.

Finally, we believe that there is no ambiguity in either the statute or the Appellate Division’s July 13 order, and that the COAH board must meet to authorize the agency’s actions. COAH has not indicated when or if its board will meet in the near future.

Additionally, please be aware that the current controversy regards funds that were in the bank as of July 18, 2008, and the agency’s failure to adopt the regulations required by PL 2008, c. 46. Before the respective budget committees in the spring, DCA Commissioner Constable indicated that an additional $53 million may be subject to seizure during the course of the fiscal year, which ends on June 30, 2013.  Therefore, we urge you to verify the status of any fees collected by your municipality between July 18, 2008 and June 30, 2009.  

If you have any questions on these issues, please do not hesitate to contact Senior Legislative Analyst Michael Cerra at ext. 120 or at mcerra@njslom.org, or Staff Attorney Matthew Weng at ext. 137 or at mweng@njslom.org.

 

Very truly yours,

 

William G. Dressel, Jr.
Executive Director

 

 

 

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