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Tom, Jr. Property, Inc. v. The Township of Readington

A-6788-00T1 (N.J. Super. App. Div. 2002) (Unpublished)

SEWERS— Sewer connection regulations inconsistent with an approved sewer management plan may not be used to exclude a property owner from connecting to a sewer line.

A developer of a six house project wanted to connect to an active sewer line located 860 feet from its property. Although there was general concern about the capacity of the sewer system, the system had adequate capacity to accept waste from the six homes that the developer planned to build. Further, the municipality’s zoning ordinance required that developments, such as the one in question, be serviced by a public sanitary sewer system. In addition, the property was unsuited for on-site sewerage treatment. When the developer appeared before the local sewer advisory committee to request an allocation, it was told that there was a municipal rule requiring the committee “to reject sewer services for properties located more than 100 feet from the nearest active sewer line.” The developer then wrote to the municipality’s governing committee requesting a sewer allocation but, unbeknownst to the developer, the committee denied the request for the same reason. It did not advise the developer of its vote. Even before the developer wrote to the municipality’s governing committee, it repeatedly attempted to “obtain a copy of the rule or ordinance relied upon the municipal bodies to deny its sewer request.” No such copy was ever provided. What happened was that the municipality’s governing committee met in executive session and when it returned from this closed session, it adopted a resolution (with no substantial discussion on the record) ratifying and confirming “the previous informal policy.” The resolution was then sent by facsimile to the developer whereupon the developer filed an action in lieu of prerogative writs. The lower court held for the developer, finding “that the resolution attempting to ... confirm or ratify some policy [was] of no validity ... and [was] void and [had] no effect and that [the developer was] certainly free to make application to the Authority.”

On appeal, the municipality and the sewerage authority made three arguments. First, they claimed that the developer failed to exhaust available administrative remedies. Second, they argued “that the resolution and the underlying informal policy [were] valid.” Third, they suggested that the lower court lacked jurisdiction to order the sewerage authority to provide sewer capacity. The Appellate Division quickly disposed of the third issue, pointing out that the lower court merely concluded that the developer could apply directly to the sewerage authority to seek connection to the system. It also rejected the contention that the developer failed to exhaust its remedies, finding that requiring the developer to return to the municipality would have been futile.

The developer argued that the resolution on its face created two categories of property owners eligible to connect. One category consisted of those who had timely responded to a particular request from the municipality for letters of intent with respect to sewer connections. The second category included those property owners that were within 100 feet of an active sewer line. The developer had, in fact responded to the municipality’s solicitation for sewer connection requests. The Appellate Division looked at the resolution, preamble and the text of its enacting clauses. “A resolution’s ‘preamble cannot restrict the enacting causes except where their language is ambiguous or uncertain.’” Here, the Court concluded that the resolution was unambiguous and examination of the preamble required it to interpret the resolution as requiring that eligible property owners meet both tests, and not that there were two separate categories.

Even thought the Court believed that the resolution could be “invalidated because it was not passed in accordance with the Open Public Meetings Act,” it did not decide the matter on that basis. Instead, looked at the gravamen of the matter. It first took note that a sewerage authority is empowered “to make and enforce its own regulations for the ‘use, maintenance and operation of the sewerage system.’” This particular sewerage authority had entered into a service agreement with two municipalities, allocating virtually all of its treatment plant’s capacity to those municipalities. By the terms of the agreement between the sewerage authority and the municipalities, a certain capacity was reserved for each municipality. A sewerage authority may not utilize any part of the capacity reserved to a municipality “without the express consent of” that municipality. Further, a sewerage authority may not extend an existing system without consent of the municipality. Based on those contractual provisions, the municipality in which the developer’s property was located asserted that it had the right to decide who should be permitted to connect to the existing system. When the Court reviewed the record from below, it could not resolve certain conflicts in the contractual rights between the sewerage authority and the municipalities to control distributions of reserved capacity. To make matters worse, the sewerage authority was not a party to the case. In addition, the Court was uncertain as to the current allocation and reserve of sewerage capacity. Consequently, the Court was “unable to discern whether the contract by which the authority appears to have ceded control over a significant portion of sewerage capacity to [the municipality] was a proper delegation of powers under the Sewerage Authority Law.” Fortunately for all concerned, the Court did not need to resolve those questions because it found that the municipality’s refusal to allow the developer to connect to the system violated its own wastewater management plan.

Despite the fact that the property was within the area designated to be served under a local wastewater management plan, the connection was denied based solely on the property’s distance from an active sewer line. “Wastewater management plans are required to spell out in detail how sanitary sewerage will be dealt with in the relevant geographic area, ... .” Once a plan is adopted by the New Jersey Department of Environmental Protection, it becomes binding “upon everyone within the area assigned to the local entity.” Consequently, in a service area of the sewerage authority, it was the Authority that had “exclusive power to formulate wastewater management plans, and through [those] plans to establish policy as to who shall have access to its sewerage system.” Therefore, under both the municipality’s zoning ordinance and the wastewater management plan, the property in question “was to be serviced by the existing Sewerage Authority. By requiring only properties within 100 feet of active sewer lines to be serviced, [the defendant had] in essence redrafted the sewerage service area it adopted in the wastewater management plan.” According to the Court, this could not be done without an amendment to the area wide water quality management plan. Consequently, the municipality and the sewerage authority were in violation of the Water Quality Planning Act and the implementing regulations. Essentially, the connection could not be denied solely because the property was greater than 100 feet from the closest active sewer line, whether that position was “based on unwritten policy or adopted by resolution or ordinance.”

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