Proposed DLGS Rule Defines “Managerial Executive Employees” Under Local Government Ethics Law

The Local Government Ethics Law requires “local government officers” to annually file financial disclosure statements. In addition to covering elected officials, the law also applies to anyone who is a managerial executive employee of a local government agency. Proposed DLGS Rule Defines “Managerial Executive Employees” Under Local Government Ethics Law

Last month, the Local Finance Board of the Division of Local Government Services (DLGS) proposed N.J.A.C. 5:35-2.1, which aims to clarify who falls under the definition of “managerial executive employee.” As noted in the rule proposal, the Local Government Ethics Law was recently amended to authorize DLGS to define by regulation who qualifies as a “managerial executive” for purposes of the definition of “local government officer.”

Previously, the law mandated that any person defined as a managerial executive or confidential employee of a local government agency pursuant to Section 3 of the New Jersey Employer-Employee Relations Act file an annual disclosure statement. Accordingly, the Public Employment Relations Commission (PERC) was tasked with interpreting the definition, which “has caused substantial confusion among local governments.” As highlighted by DLGS in its proposed rule:

Such determinations have proven to be fact sensitive, subject to determinations made on a case-by-case basis by each local government in consultation with legal counsel. In applying the PERC standard, an official in one local unit may be required to file, while another official in a different local unit with the same title would not be.

To provide clarity, the proposed new rule sets forth titles, or responsibilities equivalent to such titles, that would be defined as “managerial executive employee” and, thus, be required to file an annual financial disclosure statement. They include:

  • Business administrator;
  • Municipal or county manager;
  • Chief financial officer;
  • Treasurer;
  • Municipal clerk or clerk of governing body;
  • Department heads, including executive directors, division directors, deputy directors, and assistant directors; Chief or acting chief of police and paid fire departments, or “officer in charge” in lieu of a chief or acting chief title;
  • Deputy chiefs and assistant chiefs of police and paid fire departments;
  • Chief or acting chief of a beach patrol;
  • Municipal and county engineer;
  • Health officer;
  • Municipal attorney and county counsel;
  • Planning board or zoning board of adjustment attorney;
  • Independent local government agency attorney;
  • Municipal and county emergency management coordinators;
  • Trustees on a library board of trustees;
  • Municipal prosecutor;
  • Municipal public defender;
  • County prosecutors;
  • County agriculture board members;
  • County college board of trustees;
  • Board of recreation commissioners;
  • Local ethics board members;
  • Rent leveling board members;
  • Special improvement district executive director/director and its members;
  • Special taxing district executive director/director and its commissioners;
  • Joint insurance fund executive director/director and its commissioners;
  • Local pension board commissioners;
  • Tax collector;
  • Qualified purchasing agent;
  • Construction official; and
  • Tax assessor.

To provide clarity, the proposed new rule sets forth titles, or responsibilities equivalent to such titles, that would be defined as “managerial executive employee” and, thus, be required to file an annual financial disclosure statement. They include:

According to DLGS, the above local government positions should be required to file disclosure statements because they bear a “high level of authority and independent judgment directly affecting the policy and purposes of the local government agency.” The rule is currently subject to public comment.

For more information about the proposed DLGS rule or the legal issues involved, we encourage you to contact a member of Scarinci Hollenbeck’s Government Law Group.

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