| June 4, 1992
Barry Skokowski, Sr.
Deputy Commissioner
Department of Community Affairs
CN 800
Trenton, New Jersey 08625
Re: 92-0069:
Members of a Municipal Rent Leveling
Board as "Local Government Officers."
Dear Deputy Commissioner
Skokowski:
You have requested
advice as to whether the members of a
municipal rent leveling board are "local government officers"
pursuant to the Local Government Ethics Law, N.J.S.A. 40A:9-22.1
et
seq. It is impossible in this opinion to address every municipal
rent leveling board created by municipal ordi-nance. However, we
have broadly examined the question and for the reasons stated below
you are advised that generally the members of a municipal rent
leveling board would be considered as "local government officers"
pursuant to the Local Government Ethics Law.
The purpose of
the Law is to provide a State-wide ethical
code applicable to persons who serve in local govern-ment and to
require "local government officers" to file annual financial
disclosure statements. N.J.S.A. 40A:9-22.1. Gener-ally, all local
government agencies, except purely advisory bodies and school
boards, are within the scope of the Law. N.J.S.A. 40A:9-22.3(e).
In the absence of action by the county or municipal governing body
to establish a local ethics board, the Code of Ethics is enforced
by the Local Finance Board in the Department of Community Affairs.
N.J.S.A. 40A:9-22.4.
A rent leveling
board is not created by statute. Rather,
a municipality has authority to establish rent control pursuant
to
its police power. Helmsley v. Boro. of Fort Lee, supra. Many
municipalities which have adopted rent control ordinances have also
established, by ordinance, rent control boards to make
determinations as to rent increase applications. As noted
previously, it is impossible in this opinion to exam-ine each
municipal ordinance creating a rent leveling board. However, a
review of relevant case law and legal treatises revealed certain
general principles relating to rent leveling boards. (These
principles may or may not apply in a particular municipality. It
would be appropriate for the municipal attor-ney to examine the
ordinance in question and to render a deter-mination based upon
the
guidance provided by this opinion).
A rent control
board once established by ordinance
exercises quasi-judicial decision making authority. Danmark, Inc.
v. So. Brunswick Tp. Rent Leveling Bd., 184 N.J. Super. 478, 490
(Law Div. 1982). It is practically necessary that the board will
understand the complexity of rent regulations and real estate
finances. cf. Helmsley v. Boro. of Fort Lee, supra, 78 N.J. at
233. The rent leveling board is required to make detailed findings
of fact and conclusions. Danmark, Inc. v. So. Brunswick Tp. Rent
Leveling Bd., supra, 184 N.J. Super. at 490. A decision of a rent
leveling board may be appealed de novo to the governing body. Reid
v. Tp. of Hazlet, 198 N.J. Super. 229, 234-235 (App. Div. 1985).
The members of the board generally serve without compensation.
Meiser, Tenant-Landlord Law in New Jersey, p. 150 (1978). Each
municipal ordinance determines the number of board members and the
qualification, if any, for the board members.
A "local
government agency" includes
[A]ny agency,
board, governing body, including
the chief executive officer, bureau, division,
office, commission or other instrumentality
within a county or municipality, and any
independent local authority, including any
entity created by more than one county or
municipality, which performs functions other
than of purely advisory nature, but shall not
include a school board. [N.J.S.A. 40A:9-22.3(e)]
The term "local government agency" encompasses a myriad
of local
government bodies. The definition is very broad and specifically
excludes only purely advisory bodies and school boards. A rent
leveling board is a "board" created by a municipality.
Further a
rent leveling board exercises independent and significant
discretion in the specialized area of rent regulations. It
performs more than a purely advisory function and absent an
appeal
to the governing body, its decisions are binding. Accordingly,
a
municipal rent leveling board would be a "local government
agency"
within the meaning of the Local Government Ethics Law. N.J.S.A.
40A:9-22.4(e).
Having concluded
that a municipal rent leveling board is
generally a "local government agency" subject to the Local
Government Ethics Law, the next inquiry is whether the members are
"local government officers." Included as "local government
officers" are 1) elected officials; 2) members of local bodies
that
have authority to enact ordinances, approve development
applications, or grant zoning variances; 3) members of inde-pendent
local authorities; and 4) persons who are "managerial executives"
or "confidential employees." N.J.S.A. 40A:9-22.3(g).
The fourth and
last category of "local government
officer" is a person "who is a managerial executive or
con-fidential employee of a local government agency, as defined
in
section 3 of the 'New Jersey Employer-Employee Relations Act.' ...,
but shall not mean any employee of a school district or member of
a school board." N.J.S.A. 40A:9-22.3(g)(4). As the Local
Government Ethics Law makes specific reference to the definitions
contained in the Employer-Employee Relations Act, it is necessary
to examine the latter Act. The Employer-Employee Relations Act,
N.J.S.A. 34:13A-1 et seq., provides a mechanism for the resolution
of labor disputes in the private and public sectors. N.J.S.A.
34:13A-2. The Act is adminis-tered by the State's Public
Employment Relations Commission (PERC). N.J.S.A. 34:13A-5.2.
The Act defines
"managerial executives" of a public
employer as
persons who
formulate management policies gnat
practices, and persons who are charged with
the responsibility of directing the
effectuation of such management policies and
practices .... [N.J.S.A. 34:13A-3(f)]
"Confidential employees" of a public employer are defined
as
employees whose functional responsibilities or
knowledge in connection with the issues
involved in the collective negotiations
process would make their membership in any
appropriate negotiating unit incompatible with
their official duties. [N.J.S.A. 34:13A-3(g)]
The significance of "managerial executives" and "confidential
employees" under the Employer-Employee Relations Act is
that these
individuals are excluded from membership in the local collective
bargaining unit comprising of local public employees. N.J.S.A.
34:13A-5.3.
PERC has established
guidelines for determining whether
a person formulates management policy and direct its effectuation
and is accordingly a "management executive."
A person
formulates policies when he develops
a particular set of objectives designed to
further the mission of the governmental unit
and when he selects a course of action from
among available alternatives. A person
directs the effectuation of policy when he is
charged with developing the methods, means,
and extent of reaching a policy objective and
thus oversees or coordinates policy
implementation by line supervisors. Simply
put, a managerial executive must possess and
exercise a level of authority and independent
judgment sufficient to affect broadly the
organization's purposes or its means of
effectuation of these purposes. Whether or
not an employee possesses this level of
authority may generally be determined by
focusing on the interplay of three factors:
(1) the relative position of that employee in
his employer's hierarchy; (2) his functions
and responsi-bilities; and (3) the extent of
discretion he exercises. [Boro. of Montvale,
6 NJPER 507, 508-09 (1980)]
Thus, the determination as to whether a person is a "managerial
executive" requires an examination of the person's position
in the
local agency's hierarchy, his job function and responsibil-ities,
and the amount of individual discretion exercised by the
individual. The analysis of these three factors is very often a
position-by-position determination.
The determination
as to whether a person is a "con-fidential
employee" also requires an individualized determina-tion.
PERC has narrowly construed the term "confidential employee."
County of Essex, 17 NJPER 256, 257 (1991). The "key" to
status as
a confidential employee "is an employee's access to, and knowledge
of, material used in labor relations processes including contract
negotiations, contract administra-tion, grievance handling and
preparation of these processes." Ibid. Specifically, PERC makes
this case-by-case analysis as follows:
We (PERC)
scrutinize the facts of each case to
find for whom each employee works, what he
does, and what he knows about collective
negotiations issues. Finally, we determine
whether the responsibilities or knowledge of
each employee would compromise the employer's
right to confidentiality concerning the
collective negotiations process if the
employee was included in a negotiating unit.
[State of New Jersey, 11 NJPER 507, 510
(1985)]
Thus, a "confidential employee" has access to confidential
information of the employer which is relevant to the labor
relations of the local government agency.
In Attorney General
Opinion No. 91-0093 (Septem-ber 20,
1991), we examined in detail the terms "managerial executives"
and
"confidential employees" in the context of the Local Government
Ethics Law. We noted in the Opinion that the Legislature in using
these terms to define "local government officer" was attempting
to
adopt an approach that would identify persons of a high level with
policy-making responsi-bilities. We determined in Opinion
No. 91-0093 and in other related Opinions that certain persons serving
in
government were necessarily "managerial executives" or
"confidential employee," and therefore "local government
officers,"
because their statutory duties mandated that they exercise
significant policy-making responsibilities. In examining the
duties of the members of a municipal rent leveling board discussed
above, the members exercise significant policy-making
responsibilities and independent judgment in the specialized area
of rent regu-lations and their quasi-judicial decisions have a
significant financial impact upon the local residents and property
owners. In general the members of a rent leveling board would be
con-sidered "managerial executives" and therefore "local
officers"
for purposes of that Local Government Ethics Law.
Accordingly,
the members of a municipal rent leveling
board would generally be considered "local government officers"
for
purposes of the Local Government Ethics Law, N.J.S.A. 40A:9-22.1
et
seq., and subject to the terms of the Law including the financial
disclosure requirements. As noted previously, this opinion
provides only general guidance and it is not intended to establish
per se that every municipal rent leveling board operates in the
manner discussed above. In these circumstances, the appropriate
municipal attorney should examine the municipal ordinance in
question with the guidance provided by this opinion and provide
his
or her legal advice to the municipality. This office is available
to consult with counsel in this regard.
Very truly yours,
ROBERT
J. DEL TUFO
ATTORNEY GENERAL
By:__________________________________
John J. Chernoski
Senior Deputy Attorney General
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