Court Opinion

ID: 7318112
Source: CourtListenerOpinion
Date Created: 2022-07-25 21:09:33.332033+00
Date Added: 2024-06-11T16:19:43.167322
License: Public Domain

ANTELL, J. A. D.
(dissenting).
The question before us is whether Ocean Township may raise revenue by auctioning off the exclusive right of first call to tow wrecked and abandoned cars and charge the owners therefor. I would answer that it may not.
Its contract with defendant Fahoury obliges the township, in exchange for $13,751, to use only Fahoury to tow and store automobiles at a fixed scale of charges to be paid by the automobile owners. Towing falls within the township’s obligation to maintain the public way for the safe and free passage of vehicular traffic. I do not dispute the township’s right to enter into such contracts, but it may not receive any financial benefit therefrom beyond what is required to meet necessarily related administrative expenses.
It is categorically settled that a “New Jersey municipality has no revenue-raising power except as granted by the Legislature.” Moyant v. Paramus, 30 N.J. 528, 543 (1959). Although license and permit fees may be imposed to meet regulatory expenses, we are not dealing here with such an exaction. Whatever regulatory responsibilities are retained by the township, their costs have not been shown and it is not pretended that they are even colorably related to the amount of the successful bid. The latter is governed exclusively by the bidder’s expectation of profit and this has nothing to do with the township’s administrative duties. All that the township must do is call the successful bidder without expense to itself whenever towing services are needed. Regardless of whether the bidder’s payment is characterized as a license fee, a tax, or a franchise fee, in every realistic sense its primary purpose is to nourish the municipal treasury.
*158Cases cited by the majority, Kotter v. East Brunswick Tp., 160 N.J.Super. 462 (App.Div.1978); Pied Piper Ice Cream v. Essex Cty. Park Comm’n, 132 N.J.Super. 480 (App.Div.1975); Schnell v. Millburn Tp., 127 N.J.Super. 155 (App.Div.1974), aff’d 66 N.J. 137 (1974), and Kurman v. Newark, 124 N.J.Super. 89 (App.Div. 1973), certif. den. 63 N.J. 562 (1973), are tangential to the issue before us. They considered only whether the manner in which the contracts were awarded in each of those cases violated the requirement of free, open and competitive bidding and not whether the arrangement itself was basically an unauthorized revenue-raising measure.
In Kurman v. Newark, supra, the towing contractor argued only that the contract was not subject to the bidding requirement of the Local Public Contracts Law, N.J.S.A. 40A:11-1 et seq. It reasoned that because the contractor was to be paid by the motorist, not the city, the condition expressed in N.J.S.A. 40A:ll-4 that the services “be paid with or out of public funds" was not met. The court rejected this argument, responding that “because Newark by virtue of the proposed contract is passing the charge on to the owner, does not alter the basic fact that the work is being performed for Newark by the contractor,” and public bidding was therefore required. Kurman, supra at 93. That is all this case decided. The significance of “passing the charge on to the owner” as part of a revenue-raising measure is skirted entirely. It does not even appear to have been questioned by the parties.
Although the Kurman court failed to volunteer its disapproval of this kind of arrangement, that should not deter us from dealing with the issue squarely presented herein and from examining the unusual circumstances of this case. There is little doubt here that absent this contractual arrangement the towing contractor would probably charge the owner nothing for the towing service. The contractor’s incentive apparently lies not in the towing fee to be earned but in the profits anticipated from the repair work likely to result and from the auctioning off of abandoned vehicles. We see this in the fact that under the *159previous year’s system of bidding, which was based upon the charge which the bidder would make for each individual tow, the cost of tows under the contracts awarded ranged only between $.99 and $2, depending on the distance towed. Under the present system the fixed specified charges lie between $25 and $50 plus $4 a mile, depending on the kind and size of the vehicle towed. Obviously, the contract price of $13,751 realized by the township is structured into the system’s greatly increased scheduled rates which the motorist must now pay.
The township is doing more than just passing on the charge to the motorist; it is enriching itself through the inflation of that charge by an amount equal to the contractor’s bid. Although this method is profitable to the contractor and the municipality it is legally flawed by the fact that there is no statutory authority for the municipality to raise revenue in this manner. This is all that is involved. As to this, the majority’s only comment is to characterize the bidder’s $13,751 payment as a “negative charge” and therefore not in violation of the revenue-raising proscription. I do not share their view.
I would affirm the opinion below.