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In Re Rockaway Township, Morris County

A-1771-07T2 (N.J. Super. App. Div. 2009) (Unpublished)

COAH — A municipality is not acting in good faith in complying with its COAH obligations when it fails to take reasonable steps to secure a water supply to a proposed affordable housing development.

A municipality petitioned the Council on Affordable Housing (COAH) for third round substantive certification. The COAH required the provision of an adequate water supply to a development that was a part of the municipality’s compliance plans. The development claimed that the municipality would not allow the proposed on-site wells to be approved or utilized and would not permit the adjoining municipality to supply water to the site unless the development paid the municipality an additional sum of money for the privilege of doing so. The development brought an action to force the municipality to comply with its COAH obligations with respect to permitting water supply to be available to the development. In response to the lawsuit, the COAH issued a resolution holding that the municipality no longer had a plan that met the criteria of its substantive certification. It also directed the municipality to show cause why it should not dismiss the municipality’s third round petition for certification. The municipality responded by alleging that the utilization of any on-site water system created the risk of a contamination plume from an adjacent Superfund site which could ultimately contaminate the municipality’s entire water system. The COAH dismissed the third round substantive certification. It also held that the municipality had failed to provide water supply data evidencing the actual water available to the municipality. It also held that such a refusal to submit requested data was not the proper approach for the municipality to take with respect to its concern about the contamination of its water supply. It noted that if the municipality’s concerns about contamination had merit, the facts supporting such claims should be presented to the Department of Environmental Protection (DEP). It ruled that where the Legislature has empowered the DEP to issue or deny permits for development and its effects on water, the proper regulatory procedures must be followed. The municipality appealed.

In a prior Appellate Division ruling, the Court had required the COAH to adopt amended rules that would satisfy constitutional and statutory requirements. It also held that pending applications for substantive certifications must be stayed pending the amendment process. The municipality argued that these stays barred the COAH from dismissing its petition. The Court rejected this argument, noting that it recently upheld a similar determination by the COAH based on a municipality’s persistent failure to comply with the terms of its second round certification. Here, the Court reached the same conclusion. It found that the municipality did not comply, in good faith, with its COAH obligations since it did not provide a realistic opportunity for the construction of affordable housing when it failed to take reasonable steps to secure a water supply for the site. Moreover, despite an unequivocal order by the COAH to submit the on-site well pilot tests to the DEP for review, the municipality failed to do so. Thus, the Court noted that the record provided an adequate foundation to conclude that the municipality had not provided information to show that its third round petition provided a realistic opportunity for the discharge of its affordable housing obligations and COAH’s dismissal of the municipality’s petition was not arbitrary or capricious. Further, it held that the COAH’s order to the municipality to transmit the results of its pilot tests to the DEP was designed to enforce the municipality’s voluntarily undertaken contractual commitment to the site and was not a directive by COAH to compel the municipality to apply to the DEP for a water allocation permit. It also stated that the COAH orders did not direct the municipality to provide water to the site by means of on-site wells. Rather, it found that the COAH simply required the municipality to show that there was a realistic prospect of available water for the site from some source. Thus, it concluded that the COAH’s dismissal of the petition was not based solely on the municipality’s failure to submit the on-site tests, but also because of its failure to show that water for the site was available from any alternative source.

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