Goldmann, Freund and Haneman.
[61 NJSuper Page 397] Defendant, Bellmawr Sewerage Authority, of the Borough of Bellmawr, Camden County, appeals from
a judgment of the Chancery Division declaring that the sewer rates established by it are not fair, just, uniform and equitable in accordance with N.J.S.A. 40:14 A -8, and ordering it to proceed forthwith to reschedule rates in conformity with the statute.
The stipulated facts are reported in the opinion of the trial judge, Kline v. Bellmawr Sewerage Authority , 55 N.J. Super. 153 (Ch. Div. 1959), and we shall not repeat them here. Briefly stated, the controversy arises over the fact that one section of the municipality, District One, was connected to a primary treatment plant by existing sewer lines, the cost of which had been in large part borne, directly or indirectly, by the purchasers of homes in that section. The remaining area of the municipality, District Two, was unsewered, but since the soil was unsuitable for cesspools, the governing body decided to extend sewer lines into the section and to convert the treatment plant into a secondary treatment plant. The cost of changing the plant was $340,000 and of extending the sewer lines $1,360,000. It was decided that the work should be done through, and the entire system operated by, the defendant sewerage authority, which was then created pursuant to N.J.S.A. 40:14 A -4.
Defendant obtained the money for the project through a bond issue. The bonds are payable in full at the end of 40 years, and the funds must be raised from the rates and service charges authorized in the statute. The authority is required to be a self-liquidating entity under the Sewerage Authorities Law, N.J.S.A. 40:14 A -1 et seq.
On the theory that "one man should not be required to pay for another's benefit," the authority proposed a service charge of $40 in the sewered area and $66 in the previously-unsewered area. Plaintiff, a taxpayer of the borough residing in District Two, challenged the proposed schedule as not possessed of uniformity and, for that reason, improper under section 8(b) of the statute. The question is whether the defendant correctly exercised its discretion in applying to the relatively new Sewerage Authorities Law the philosophy
of local assessments or whether all users of the system, the old as well as the new, must pay for the new improvements regardless of individual benefit. In that regard, it should preliminarily be noted that the theory of local assessments remains perfectly valid in municipalities that have not formed a sewerage authority. N.J.S.A. 40:56-1, subd. i; R.S. 40:56-27 and 52. See also R.S. 40:63-7 and 38.
In contrast with the statutes just cited, the power of the defendant to fix rates and service charges is set forth in section 8 of the Sewerage Authorities Law and particularly in subsection (b) thereof, providing as follows:
"Such rents, rates, fees and charges, 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 sewage 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." (Emphasis supplied)
We are in agreement with the holding of the Chancery Division that rate classification according to the user's location in the community, although perhaps equitable in view of previous contributions to the system and of benefits actually received from its extension, was beyond the statutory power of the authority to prescribe. We are also in substantial accord with the reasoning expressed in Judge Schalick's opinion. The clear import of the statute is that the rates and fees are "in the nature of use or service charges." The determination of rates is to be made with
relation to the factors expressly stated in the statute, all of which pertain to the amount or characteristics of the sewage treated and disposed of in the system. And the rates "for the same type, class and amount of use or service" shall be uniform "as ...