Luv Condominium Ass'n v. Borough of Stanhope

• Decision Date: 07 November 1983
• Citation: 192 N.J.Super. 159,469 A.2d 502
• Parties: LUV CONDOMINIUM ASSOCIATION and Stonegate Village Condominium Association, Plaintiffs-Appellants, v. BOROUGH OF STANHOPE, Defendant-Respondent.
• Court: New Jersey Superior Court — Appellate Division

Page 159

192 N.J.Super. 159

469 A.2d 502

LUV CONDOMINIUM ASSOCIATION and Stonegate Village Condominium Association, Plaintiffs-Appellants, v. BOROUGH OF STANHOPE, Defendant-Respondent.

Superior Court of New Jersey Appellate Division.

Submitted Sept. 27, 1983.

Decided Nov. 7, 1983.

Purzycki & Gorney, Belle Mead, for plaintiffs-appellants (Edward W. Gorney, Belle Mead, of counsel and on brief).

Valentino, Dunne & Stein, Succasunna, for defendant-respondent (Richard A. Stein, Succasunna, of counsel and on brief).

Before Judges MICHELS, KING and EDWARD GAULKIN.

The opinion of the court was delivered by

MICHELS, P.J.A.D.

Plaintiffs Luv Condominium Association (Luv) and Stonegate Village Condominium Association (Stonegate) appeal from a judgment of the Law Division that dismissed their challenge to an ordinance of defendant Borough of Stanhope (Stanhope) that revised the sewer user charges for the municipal sewer system.

The facts giving rise to this appeal are as follows: In the early 1960's, a plan was developed for the construction of a public sewer system for the Lake Musconetcong basin. This sewer system, now completed, encompasses Stanhope, which is located in Sussex County, and the Borough of Netcong and parts of Roxbury Township and Mount Olive Township, all of which are located in Morris County. In 1965, Stanhope and Netcong created the Musconetcong Sewerage Authority (authority) pursuant to the Sewerage Authorities Law ( N.J.S.A. 40:14A-1, et seq.) to treat the effluent collected by the sewer systems of the four municipalities. The authority constructed the sewer plant and the interceptor lines. Each municipality remained responsible for construction and maintenance of trunk lines and collector lines. The authority bills each municipality quarterly based upon the number of gallons of effluent from the municipality that it treats. The municipal sewer system of Stanhope was constructed between 1967 and 1979. Phase I, consisting of 680 sewer connections, was completed in 1969. Phase II, consisting of 220 sewer connections, was completed in 1979. As the phases of the sewer system became operative, Stanhope enacted and subsequently revised an ordinance establishing the rates for use of the system. Charges for items such as inoperable meters, connection permit fees, connection fees and inspection fees were also set by ordinance.

The Luv complex is located on a 30 acre tract of land in the western section of Stanhope. Construction on the development began in 1973 and was completed in 1981. The complex contains 340 housing units which are grouped in 19 buildings. Luv's developer constructed 168 linear feet of pipe off the condominium site to connect with the existing municipal sewer system. It also constructed 10,872 linear feet of sewer line and 77 manholes on the site. These sewer lines were tied to the municipal sewer system in March 1972. None of the on-site improvements, including the sewer lines, have ever been dedicated to or accepted by Stanhope. Luv is required to maintain and repair the sewer lines within the complex. Pursuant to an agreement with the developer, Lenape Valley Regional High School also uses the sewer lines constructed by Luv in order to connect with the municipal sewer system.

The Stonegate complex is located in the northwestern section of Stanhope. Construction on this complex proceeded between 1973 and 1975. It consists of 103 units located within 11 buildings on a 21 acre site. As with the Luv complex, the Stonegate developer constructed 1420 linear feet of pipe off the condominium site to connect with the municipal sewer system. It also placed 5693 linear feet of sewer pipe and 29 manholes on the site. Three private residences located within the complex use the Stonegate sewer lines under an agreement with the developer to connect with the municipal sewer system. None of the on-site improvements, including the sewer lines, have ever been dedicated to or accepted by defendant, and Stonegate is required to repair and maintain the on-site sewer lines.

Since its creation, the Luv complex has been serviced by a single water meter and, prior to March 10, 1981, was treated as a single customer of the municipal sewer system. The same is true of the Stonegate complex.

On March 10, 1981 Stanhope adopted an ordinance establishing the following sewerage user charges:

Single-family and multifamily residences [Fee]

and all other buildings, unless

otherwise exempt:

                  For each single-family residence        [$] 150.00
                  and each unit of a multifamily
                  residence in which the sewer use
                  is measured by a water meter
                  annually
                  In addition thereto, for actual use,           .88
                  as measured by the water meter
                  per thousand gallons.
                  Nonfunctioning and unreadable                  .65
                  meters, per day, per unit, from
                  the date of the last reading.
                  For all unmetered single-family             216.00
                  residences, unmetered multifamily
                  and all other unmetered buildings,
                  per unit, annually.
                  Service to unimproved lot, annually.        102.00
                For all other buildings, actual usage as
                measured by the water meter, per
                thousand gallons.                            $  3.15
                

For the purposes of this section, all individual multifamily units serviced only by a water meter for the building or group of buildings in which the unit is located shall each be considered a metered unit.

All of the above sewer charges for single-family residences, multifamily residences and all other buildings may be billed on an annual, semiannual or quarterly billing; the flat rate charge and the corresponding gallonages shall be prorated accordingly.

Under this ordinance the single-family residence fee of $150 per year plus usage charge is applicable to condominium units. Thus, although the Luv complex is still serviced by a single water meter, each unit owner is now billed as if his condominium has a separate water meter. The same is true of Stonegate unit owners. There are approximately 150 other multi-family units in Stanhope also being charged the $150 rate plus usage charges under this ordinance.

I

Luv and Stonegate challenge the 1981 amendatory ordinance on the grounds that it is arbitrary, unreasonable and discriminatory. They claim it requires condominium unit owners to bear more than their fair share of the original costs of the municipal water system and that the sewerage charges established therein fail to meet the standards set forth in N.J.S.A. 40:14A-8 that such "[r]ents, rates, fees and charges ... shall as nearly as ... practicable and equitable be uniform throughout the district for the same type, class and amount of use or service of the sewerage system." ¹ See also N.J.S.A. 40:14B-22. Specifically, they claim that a lack of uniformity exists since each condominium association was previously billed as a single customer and now under the 1981 ordinance each condominium unit is billed as a separate customer.

N.J.S.A. 40:14A-8(b), in part, provides:

(b) Rents, rates, fees and charges, which may be payable periodically, being in the nature of use or service charges, shall as nearly as the sewerage authority shall deem practicable and equitable be uniform throughout the district for the same type, class and amount of use or service of the sewerage system, and may be based or computed either on the consumption of water on or in connection with the real property, making due allowance for commercial use of water, or on the number and kind of water outlets on or in connection with the real property, or on the number and kind of plumbing or sewerage fixtures or facilities on or in connection with the real property, or on the number of persons residing or working on or otherwise connected or identified with the real property, or on the capacity of the improvements on or connected with the real property, or on any other factors determining the type, class and amount of use or service of the sewerage system, or on any combination of any such factors, and may give weight to the characteristics of the sewerage and other wastes and any other special matter affecting the cost of treatment and disposal thereof, including chlorine demand, biochemical oxygen demand, concentration of solids and chemical composition.

This provision of the Sewerage Authorities Law mandates that sewer rates, "being in the nature of use or service charges, ... shall as nearly as the sewerage authority shall deem practical and equitable be uniform throughout the district for the same type, class and amount of use or service of the sewerage system." The 1981 amendment to Stanhope's sewerage ordinance corrected an inequity. Before the enactment of the ordinance, residential dwelling units were not treated uniformly. Owners of condominium units in the Luv and Stonegate complexes were not paying their fair share of the installation, construction, maintenance and operating costs of the sewer system. To the contrary, they were receiving a preferred rate prohibited by the letter and spirit of the Sewerage Authority Law. Neither the fact that condominiums represent a different type of land ownership than single family homes or apartments nor the fact that they are part of a development rationally supports a difference in treatment. Cf. S.S. & O. Corp. v. Bernards Tp. Sewerage Auth., 62 N.J. 369, 383-385, 301 A.2d 738 (1973).

In Piscataway Apt. Assoc. v. Piscataway Tp., 66 N.J. 106, 301 A.2d 608 (1974), the Supreme Court considered and rejected a similar charge of discrimination where apartment houses were being charged the same sewer rate per dwelling unit as smaller multiple-family dwellings and single-family dwellings, stating:

Preliminarily, it is our view that a municipally owned sewer utility may reasonably fix the same dwelling unit sewerage use charge for all single-family occupancy units, whether in large apartment houses, smaller multiple rental buildings or single-family residences. We see no compulsion for...