Airwick Industries, Inc. v. Carlstadt Sewerage Authority

• Decision Date: 26 October 1970
• Citation: 57 N.J. 107,270 A.2d 18
• Parties: , 2 ERC 1049, 86 P.U.R.3d 297 AIRWICK INDUSTRIES, INC., et al., Plaintiffs-Appellants, Cross-Respondents, v. CARLSTADT SEWERAGE AUTHORITY et al., Defendants-Respondents, Cross-Appellants.
• Court: New Jersey Supreme Court

Page 107

57 N.J. 107

270 A.2d 18, 2 ERC 1049, 86 P.U.R.3d 297

AIRWICK INDUSTRIES, INC., et al., Plaintiffs-Appellants, Cross-Respondents, v. CARLSTADT SEWERAGE AUTHORITY et al., Defendants-Respondents,

Cross-Appellants.

Supreme Court of New Jersey.

Argued June 1 and 2, 1970.

Decided Oct. 26, 1970.

Allan H. Klinger, Hackensack, for plaintiffs-appellants, cross-respondents (Calissi, Gelman, Cuccio & Klinger, Hackensack, attorneys).

Alfred A. Porro, Jr., Lyndhurst, for defendants-respondents, cross-appellants (Alfred A. Porro, Jr., Lyndhurst, attorney for defendant-respondent, cross-appellant, Carlstadt Sewerage Authority, Gene N. Schiffman, Carlstadt, attorney for defendant-respondent, cross-appellant, The Borough of Carlstadt).

The opinion of the court was delivered by

HANEMAN, J.

This appeal concerns the extent of the area of the Borough of Carlstadt (Carlstadt) over which the Carlstadt Sewerage Authority (Authority), created under N.J.S.A. 40:14A--1 et seq., has jurisdiction and the legality of the sewerage rates set by said Authority.

In 1938 Carlstadt by contract with Rutherford and East Rutherford created a 'Joint Meeting,' 'for the purpose of collecting and treating the sewage from the western section of the three Boroughs.' See N.J.S.A. 40:63--68 et seq. The Joint Meeting constructed a sewage treatment plant between the years 1939 and 1941. The users of the sewer service are not directly charged for such service, the cost of operation, maintenance, etc., being distributed among the three municipalities. The proportionate share of Carlstadt is absorbed by revenues raised by general taxation.

The eastern section of Carlstadt is largely 'meadowland,' which for years remained undeveloped and unsewered. Due to recent rapid development, largely industrial and commercial, it became apparent that some general system of sewage disposal was required to avoid the imminent danger of water pollution. Accordingly, Carlstadt obtained field investigations and studies from a firm of consulting engineers. As a result, Carlstadt determined that the method of sewage disposal in that section was inadequate. It also concluded that sufficient addition to its present system or construction of a new system would create an almost insuperable municipal financial problem. The Borough, therefore, created the Carlstadt Sewerage Authority. See N.J.S.A. 40:14A--1 et seq. On July 1, 1967, Carlstadt entered into a service agreement with the Authority. In this contract the word 'district' is defined, using the language of N.J.S.A. 40:14A--3, as 'the area within the boundaries of the Borough.' However, the system which the Authority was to finance and construct was referred to in the contract as 'for the use of the residents and inhabitants of a Portion of the Borough and for the collection and disposal of certain sanitary sewage and other wastes arising within a Portion of said District.' (Emphasis supplied)

The planned system includes the construction of collection sewers, pumping stations and force mains to connect with the sewerage system of the Bergen County Sewer Authority which ultimately treats the sewage in its treatment plant in Little Ferry. The scheme for establishment of the sewage collection system by the Authority contemplates construction in two stages to serve approximately 650 acres of the Borough. Stage I is designed to serve approximately 200 acres, containing some 55 industries at its inception, but to ultimately serve 90 industries. Stage II will serve approximately 450 additional acres, with 63 industries to be served initially and 220 industries ultimately.

The system was constructed with funds obtained from the proceeds of a bond issue of the Authority in the amount of $5,800,000. The construction of the system was completed and allegedly available in Stage I on November 1, 1968.

On July 27, 1967, the Authority adopted a 'Schedule of Sewer Service Charges' which schedule was revised on April 11, 1968 to provide the following charges:

On November 1, 1968, the Authority rendered bills for sewer servicing in accordance with the above April 11, 1968 revised schedule to all plaintiffs located in the geographic area served by Stage I.

41 of the 160 commercial and industrial users brought the present declaratory judgment action, contesting the validity of their sewer bills. Judgment was entered favoring in part both plaintiffs and defendants.

Plaintiffs appealed and defendants cross-appealed from portions of the judgment. Plaintiffs' motion for certification to this Court before argument in the Appellate Division was granted. See R. 2:12--2(a).

So much of the judgment as is here involved concerns the adjudication that: (1) It was within the power of the municipality to set up the Carlstadt Sewerage Authority within an area constituting only a part of the Borough. (2) A charge based on 'capacity of improvement,' I.e area of building, was improper due to the fact that it was not proportional. (3) The connection fees were valid only to the extent of one charge of $1,500 and annually increasing connection charges were invalid. (4) The plaintiffs were not estopped or barred by laches.

We shall consider the issues in the order above set forth.

I.

Does the division of the municipality into two sewer districts violate the terms of N.J.S.A. 40:14A--1 et seq., and the Fourteenth Amendment of the United States Constitution?

N.J.S.A. 40:14A--3(6) provides in connection with the definition of 18 separate words and phrases:

'As used in this act, unless a different meaning clearly appears from the context:

'(6) Subject to the exceptions provided in section four of this act, 'district' shall mean the area within the territorial boundaries of the county, or of the municipality or municipalities, which created or joined in the creation of a sewerage authority;'

Plaintiffs argue that this statutory definition connotes that the jurisdiction of a Sewerage Authority encompass the entire area of a municipality creating such an Authority, and that such an Authority has the sole right and duty to provide for sewage disposal within the municipality. From this premise they spring to the conclusion that the Joint Meeting no longer has the right or power to function in the western section of Carlstadt and that the sewer service in that portion of Carlstadt must be furnished by the Authority. They also conclude that Carlstadt may no longer constitutionally pay for such service out of general taxation but that the individual users of the system must pay the Authority. They do not suggest how or by what statutory authority the Joint Meeting can function under its tripartite contract absent any service to or financial participation by Carlstadt, nor what portion of the Joint Meeting debt, if any, is to be assumed by the Authority, nor how and for what consideration Joint Meeting and Carlstadt are to transfer the existing sewer plant, lines and equipment.

They cite as a decisional support for the above, Santoro v. So. Plainfield, 57 N.J.Super. 307, 154 A.2d 664 (Law Div.1959) aff'd 57 N.J.Super. 498, 155 A.2d 23 (App.Div.1959). It must be remembered that what the court there said was articulated in connection with the facts there present. Involved, was not the question, as here, whether a municipality may, after creating its own sewer authority, continue to participate in the operation and maintenance of an existing sewer system in part of its territory. Rather, the inquiry was whether a municipality, having created a sewer authority, could subsequently construct a sewer system of its own without the consent of the authority. The court held, quite properly, that the municipality could not undertake this latter action in the light of N.J.S.A. 40:14A--29 which reads:

No sewage disposal plant or other facilities for the collection, treatment or disposal of sewage arising within a district shall be constructed unless the sewerage authority shall give its consent thereto and approve the plans and specifications therefor.

It is seen that the cited case is no authority for plaintiffs' proposition.

Kline v. Bellmawr Sewerage Authority, 55 N.J.Super. 153, 150 A.2d 88 (Ch.Div.1959) aff'd sub nom. Landy v. Bellmawr Sewerage Authority, 61 N.J.Super. 396, 161 A.2d 111 (App.Div.1960), also cited by plaintiffs, is no authority for their argument. In Kline, the municipality created a Sewerage Authority to which it 'donated the (existing municipal) plant, mains, laterals, rights of way, and pumping stations and equipment,' as it had the power to do under N.J.S.A. 40:14A--22, intending that the sole agency for sewage disposal should be the Sewerage Authority. The question of exclusive jurisdiction was not an issue.

That N.J.S.A. 40:14A--1 et seq. did not intend that the Authority must supersede and succeed to an existing municipal sewer system is borne out by the various sections which (1) make it Permissive for the municipality to 'sell, lease, lend, grant or convey * * * all or any part of any system of main, lateral or other sewers or other sewerage facilities' to a Sewerage Authority (N.J.S.A. 40:14A--22); (2) authorize a municipality to enter into a contract with a Sewerage Authority for 'the treatment and disposal of sewage originating in the District or in such municipality by means of the sewerage system or any sewerage Facilities of such municipality or both' (N.J.S.A. 40:14A--23) (Emphasis supplied); (3) authorize the Sewerage Authority 'to enter upon and use * * * any existing public drains, sewers, conduits, pipe lines, pumping and ventilating stations and treatment plants or works or any other public property of a similar nature within the district' with the restriction that 'No sewerage authority shall, however, take permanent possession or make permanent use of any such treatment plant or works unless it acquires the same.' (N.J.S.A. 40:14A--25). Implicit in the foregoing is an intention to permit the continuance of an...