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July 3, 2013

Re: Affordable Housing, Municipal Housing Trust Funds

Dear Mayor:

As detailed in the League Dear Mayor letters of June 11 and June 7, an Appellate Division order of June 7 vacated the May 1 letters from the Council on Affordable Housing (COAH) seeking the transfer of “uncommitted” municipal affordable housing trust funds.  In doing so, the Court indicated that "COAH has failed to function in a consistent manner with respect to these issues," and the Court is establishing, "...a process that at least comports to the rudimentary notions of due process."   

On or about June 25, municipalities with affordable housing trust funds received another letter from COAH on this matter.     That letter does not direct municipalities to provide payment to COAH of “uncommitted” trust fund dollars, but instead gives you and “all affected parties on your service list” until August 2 to confirm or challenge the figures provided by COAH.

We would like to make the following comments and observations regarding your August 2 reply.   One, as we have stated before, there is no advantage in submitting any documentation early.    As there is pending, and quite possibly additional, litigation on this matter there may be developments between now and then that could impact your response.    

Two, under no circumstances should any municipality send any funds to COAH.   The June 25 letter does not request it and the Courts require that the COAH board must meet and authorize any transfer of funds.

Three, it is imperative that as you prepare a response to COAH, you create a record to demonstrate what dollars you believe are “committed” and why.     You may want to request a meeting with COAH staff to discuss any errors in the documentation that was provided to you, a reasonable opportunity to cure any deficiencies and further request the opportunity to be heard before the COAH board if you disagree with the COAH Executive Director’s determination. 

Four, we note that any municipality has the right to challenge any unfavorable determination by COAH to the Appellate Division. 

The League has vigorously opposed the State’s efforts to take the trust funds, including the filing of a legal challenge a year ago.  This litigation results from a provision in a 2008 law requiring municipalities expend or “commit to expend” trust fund dollars four years from the date of collection. The conflict arose when COAH failed to adopt regulations and to define “commit to expend.” There is no question that the state agency had this responsibility, as it publicly acknowledged in 2008 and as recently as 2012.   We await the scheduling of oral argument before the Appellate Division in that litigation.

The result has left hundreds of municipalities in a Catch-22, at risk of being penalized for failing to comply with regulations that were never adopted. Municipalities were without the statutorily mandated guidance and without a definition of “committed to expend” 

Additionally, with COAH’s “3rd round” regulations invalided by the Courts in a separate action and that appeal pending before the State Supreme Court, municipalities were also without a viable plan in place detailing what obligations the state would impose on municipalities and no approved means of compliance.

The League is considering all possible options and will advise you of any developments.  Questions can be directed to Mike Cerra at mcerra@njslom.com or at 609-695-3481 x120.

Very truly yours,

Janice S. Mironov, President,
New Jersey State League of Municipalities,
Mayor, East Windsor Township
William G. Dressel, Jr.
Executive Director

 

 

 

 

 

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