In their years of service to West Windsor, Councilman Charles Morgan and Township Attorney Michael Herbert have clashed time and again over a myriad of legal issues. On September 29, it was over a draft of an ordinance governing the bid process for issuing liquor licenses to hotels.
With a new state law in effect that allows towns to establish a minimum bid of $25,000 on smaller hotels looking to obtain liquor licenses, the debate was over whether the township can require hotels to pay the township more if they expand their dining facilities in the future.
Herbert believes the council should approve an ordinance based solely on state statute. Morgan counters that the township would be losing money by approving Herbert’s version and has already shelled out money from his own pocket to hire a lawyer to prove him wrong.
Herbert explained that for many years, the state statute allowed hotels and motels with 100 sleeping rooms to be issued a liquor consumption license without regard to population.
However, a decision out of Cape May allowed municipalities — instead of just issuing a license — to actually have a bidding process and set a minimum price, Herbert said.
Historically, those liquor licenses have been available at very low price — nowhere near the value of these liquor licenses if given to restaurants, said Morgan. “From a hotel’s perspective, the hotel may feel that paying a full price that any restaurant would pay is too much because they don’t get the kind of traffic a normal restaurant would get,” said Morgan.
As is the case with typical consumption licenses at restaurants and hotels, the municipality puts the license out to bid. Usually, the minimum bid for a consumption license in West Windsor for a regular restaurant is more than $600,000. But putting up for bid a liquor license for a single hotel, since no other party is going to bid on it, was trickier.
In a case in Wildwood, the town put up the single hotel license for bid, and the practice was accepted by state officials. The decision allowed municipalities — instead of just issuing a license — to actually have a bidding process and set a minimum price, Herbert said.
In 2005, the township adopted an ordinance allowing a public bidding process, Herbert said. After that, the issue was addressed at the legislature, where a new state statute, signed by Governor Corzine in July, was adopted that reinforces the idea that municipalities can publicly bid the licenses. However, the new statute states that the minimum bid can not be more than $25,000, with an additional $50 for each room, Herbert said.
The new state statute gives smaller hotels a more equitable chance in obtaining licenses at lower prices, said Morgan. Some hotels have very limited restaurant facilities, in which they will offer breakfast as part of a room package. And in the evening, they will offer a happy hour. Because it is limited, “charging the full amount that normally would go for a liquor license is a lot,” Morgan explained.
Under the new law, however, municipalities are able to set a minimum bid as long as it does not exceed $25,000 plus $50 per sleeping room. “For 100 rooms, at $50 per room, that’s $5,000, so $25,000 plus the $5,000, that’s a $30,000 minimum,” Morgan said. “That’s a lot different than $600,000. That’s a lot of lost revenue for West Windsor.”
While Morgan does not dispute the statute — he says he believes it is equitable — he disagrees with Herbert’s draft of an ordinance, based on the state statute, that would put the practice into place in West Windsor.
At the heart of the disagreement is Morgan’s belief that it would be legal for the ordinance to include a provision that would require the license owners to pay the excess of the minimum bid that would have been required — usually around $600,000 — if “the dining facilities of the hotel or motel are no longer regularly and principally used to provide only meals for catered events and breakfast for guests of the hotel or motel.”
“What happens if we let this license go for $30,000, and six months or a year later, the hotel is sold and it is no longer a limited hotel?” asks Morgan. “What happens if it changes hands, and the dining facility is used for more than that, and it’s used for luncheons, dinners, and other events? We should protect ourselves from that.”
Herbert’s draft ordinance does not include the provision, and instead, cites state statute.
During the September 29 meeting, however, Herbert responded to Morgan’s proposal by saying he felt the ordinance he drafted, which is based solely on the requirements of the state statute, is fine the way it is. Altering it, or adding to it, he said, could leave the township vulnerable to litigation.
“I prepared an ordinance to conform with the new state statute,” Herbert explained after the meeting. “Mr. Morgan wants to add a number of conditions. My advice is that we’d be better off just citing state law.”
He said that if there was ever an attempt by a hotel to expand its dining facilities, yet continue paying a lower price for a liquor license, “we can always pull the license,” Herbert said. “But if you put those kind of conditions in an ordinance, at least it would be my advice, you’re in effect putting into legislation what we have no administrative control over.”
He also said that Morgan’s proposal tries to prevent licenses from being transferred if a hotel is sold to a new owner. He said the township cannot do that. “If the Hyatt were to get a license and the Marriott came in and used the same space and same activities, they would be allowed to do it,” Herbert said. “What the Hyatt can’t do is take that license and move it to another property.”
When Morgan asked his council colleagues to solicit the opinion of other attorneys who work for the township, Herbert responded: “As long as I’m the township attorney, I’m going to exercise my duty to draft township ordinances,” he said. Herbert also said that other attorneys, like Planning Board Attorney Gerald Muller, would not get involved in matters like this one.
Contacted after the meeting, Morgan said he was taking a different route. “I’m personally paying for a second opinion because I think Mr. Herbert is totally mistaken.”
Other business. In other business during the September 29 meeting, Council discussed the timeline for distribution of agenda material prior to an upcoming meeting, as well as the documentation of minutes for each meeting.
Councilwoman Diane Ciccone said that in her five months on council she has become increasingly frustrated over arguments between council members over the minute details of meeting minutes when it comes time for them to be approved.
“The clerk has to sit there (after the meeting) and listen to hours of tapes,” said Ciccone, adding that she talked to the clerk’s office, and employees there “try their best to get the flavor of the discussion in the minutes.”
Ciccone said she did research and found that there is software that the township can purchase “that will allow us to get verbatim of the minutes right onto our laptops.”
“It’s not that expensive,” she added. “I’ve also been advised by the clerk that it’s something that can be done for free.” Ciccone suggested that if council members agree that the clerk’s reflection of the discussion as written in the minutes is sufficient, then council members should either purchase the software or implement a policy that if a council member finds a portion of the meeting to be inaccurate, “we then can go in and listen to the minutes ourselves. Then, there’s no argument about what someone said. It is what it is.”
Legally, Ciccone said, the minutes do not have to reflect any of the discussions, but the council’s long-standing policy is to include the discussion. Therefore, if council members have problems with a portion of the minutes, they can go back and listen to the discussion themselves.
Councilman Charles Morgan said he finds the discussions in the minutes to be helpful, especially if he wants to understand the reasons behind certain council decisions made in the past. “Each of us should be permitted to add our words to the tape that would accurately reflect what we said.” As a general principle, Morgan agreed that the software should be purchased.
Councilwoman Linda Geevers, however, said that corrections to the minutes should only be made if there is a factual error and that allowing council members to go back and add whole paragraphs or change the minutes causes problems.
Ciccone reiterated that she wants to eliminate the time being spent arguing over the minutes as well as the time the clerk’s office has to go back and re-listen to hours of tape.
Council President George Borek said that the clerk is going to look into purchasing the software — Deputy Township Clerk Gay Huber says she does not have a price for it yet — and “we’re going to see how it works.” He said the council will probably have a discussion about whether they want the minutes to reflect verbatim, or whether council members want to have an overview in the minutes of what was said.
Ciccone also said she was frustrated by last-minute additions to the agenda — sometimes sent to council members as late as the day of the meeting. She added that because of her commute, and her job, she does not get to fully review those materials before coming to the meetings.
She asked whether council could implement a policy that would require that all agenda materials be submitted to council members by the Friday before each meeting. Township Attorney Michael Herbert said that there will be some cases in which last-minute legal business is brought to the township’s attention, or that sometimes, there are add-on items that the business administrator needs to include on the agenda because they are timely.
Ciccone said she was more concerned with added materials from council members about items they want to add to the discussion that have circulated as late as Monday.
Council members ultimately said they would ask township professionals and try, themselves, to get all of the materials into the clerk’s office by Thursday preceding the meeting, so that packets can go out to council members by Friday, so that council members have the weekend to prepare for upcoming meetings.
