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COAH Comes After Unspent Affordable Trust Fund Money

Council letter offers simple choice: counter the state's claim or submit a check.

Municipalities have until August 13 to dispute New Jersey’s claim to $161 million in local affordable housing trust fund money or send the state a check, according to letters sent Tuesday by the acting executive director of the state Council on Affordable Housing.

The no-nonsense letters dated July 24 were mailed to municipalities with unspent money in their funds, according to officials with the New Jersey state League of Municipalities and Fair Share Housing Center. Both groups failed to win a court injunction to prevent the state from taking the local money. The Christie administration’s 2013 budget is counting on as much as $200 million coming from local housing funds, and has warned municipalities that unspent money will be transferred to the state’s general fund as early as this month.

But officials with the league contend that the letters do not meet the requirements of a recent court decision regarding the funds. They both pledged to continue to fight the state’s seizure of the funds in court and are encouraging local officials to do the same. “Other towns are likely to file their own litigation in the upcoming days and weeks,” said Michael Cerra, senior legislative analyst with the league. “The Appellate Court still has jurisdiction.”

While rejecting the injunction, an appeals court panel did rule two weeks ago that COAH had to give municipal officials the chance to dispute the council’s estimate of unspent funds subject to state seizure. The letters sent Tuesday appear to seek to fulfill that obligation.

But Fair Share Housing Center attorney Adam Gordon said the letters do not give local officials enough information to determine whether the state has properly calculated the amount they have to give to the state.

"It's the ultimate black box," Gordon said. "Governor Christie expects New Jersey's mayors to mail in checks for millions of dollars to the state government with no explanation of how the amounts were calculated.”

League officials agreed, saying in a statement that those letters “provide inadequate clarity and guidance for municipalities” and, as a result, do not meet the court’s ruling. Most importantly, there is no indication that the COAH board met to consider the fund balances and authorize the issuance of the letters, which the league contends was required.

There is no sign that the 12-member council has met at all in the past year, despite the appellate division’s overturning of Gov. Chris Christie’s June 2011 reorganization plan, which had abolished the council. In fact, according to the state appointments website, the council does not even have enough members to constitute a quorum to hold a meeting -- seven of its 12 seats are listed as vacant. Christie is appealing that ruling.

COAH officials neither released any information about the transmittal of the letters, nor put out a revised list of the amounts it says municipal officials need to send back to the state. Additionally, a spokeswoman did not return a request for comment.

“The statute and the court order contain no ambiguities: the COAH board must meet to authorize the actions of the agency,” league officials maintain. “The state has failed to provide municipalities any indication when such meetings will occur, but instead imposed an August 13 deadline to either contest the amounts determined by the agency, or forfeit their funds to the State. “

A 2008 law revising the procedure regarding the funds, which come from development fees, gave municipalities four years to spend any money collected or it would revert to the New Jersey Affordable Housing Trust Fund, which is supposed to use the money to create housing within the same region. But the state budget and officials with the Department of Community Affairs indicate the money will be transferred to the general fund to be used for “housing support.”

Legislators tried to stop the seizure with legislation and budget language, but Christie vetoed both.

COAH’s last accounting of the funds, dated June 5, showed 221 municipalities with unspent funds totaling $161 million. Cerra said the amounts listed on the June 5 spreadsheet were identical or almost the same as those quoted in the letters to municipal officials.

Despite winning its own temporary injunction against the state seizure of its $11.7 million in housing funds, the largest balance in the state, Marlboro officials also received a letter from COAH, informing it to remit its funds to the state, according to a report on Patch. A full Superior Court hearing on the township’s case is scheduled for Friday.

The letters, signed by COAH acting executive director Sean Thompson, inform municipalities of the amount of money they owe the state and telling them to send that amount to the state by August 13. Municipal officials who dispute the state’s figure must send a check for the amount they believe they owe, along with proof of a “legally enforceable agreement … or other documentation that demonstrates a firm and binding obligation” to spend any money not being sent to the state.

Gordon said the letters do not specify what will happen to municipalities that dispute the figures, or specify any public process or hearings in which mayors can question the amounts.

"Governor Christie is telling mayors: if you agree with me, send me the money. If you don't agree with me, there's a secret process that I can't tell you about," Gordon added. "These letters fail to meet basic standards of open government and due process."

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