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In re Shore Hills Water Co.

Decided: June 4, 1968.


Goldmann, Lewis and Carton. The opinion of the court was delivered by Goldmann, S.j.a.d.


[101 NJSuper Page 216] Shore Hills Water Company (Shore Hills) appeals from a decision of the Water Policy and Supply Council, in the Division of Water Policy and Supply, Department of Conservation and Economic Development, denying its application for approval of plans to divert a maximum average of 720,000 gallons of water daily during any month from a new rock well to be located on the west

side of Center Street, Roxbury Township, beyond the company's franchised area and some 3,000' from the terminal point of its main.


Shore Hills is a relatively small private water supplier. About 95% of its franchised area (approximately the same percentage as its 940 customers) is located in the northern section of Roxbury Township. The remainder lies in the adjoining Borough of Mount Arlington. Roxbury Township has its own water system; additionally, there are seven other private water suppliers, including Shore Hills, serving scattered areas of the township.

Shore Hills' present source of supply is two wells, one with a nominal rating of 50 gallons a minute (about 58,000 gallons a day) and the other with a nominal rating of 250 gallons a minute (about 288,000 gallons a day) -- a total just short of 350,000 gallons a day. The company also maintains two storage tanks with a total capacity of 315,000 gallons, designed to provide peak hour flows for general service and fire service. These wells and tanks are all located within the company's franchised area.

Roxbury Township's concern for the orderly and economical development of an overall water and sewer master plan for the entire municipality began to take definite form in 1960. The governing body made a policy determination that real estate developers would have to install sewers instead of septic tanks; and, further, the township would conduct negotiations with a view to acquiring the private water companies, so that Roxbury would have its own integrated municipal water system. The township engaged consulting engineers to prepare a master water plan, and test wells were drilled in the northern part of the township which revealed the presence of a good well field.

As a next step in developing a coordinated water supply distribution system, the township applied to the Water Policy and Supply Council in 1961 for diversion rights from a well

to be located south of Center Street in the previously discovered well field. The application was granted following a public hearing.

Shore Hills' present application is substantially the same as one made and denied in 1965 when the company sought permission to locate an additional well on a site west of Center Street (the same site as is here involved) located 3,500' outside the company's franchised area and within 1,700' of the township's present well. Roxbury Township voiced its objection at the hearing on that application. On May 11, 1965 the Council denied the application but allowed the company to increase its diversion rights from an average of 200,000 to an average of 325,000 gallons daily during any one month. There was no appeal from that determination.

Roxbury Township thereafter requested an extension of time on the diversion rights granted under its 1961 application. Shore Hills appeared and participated as an objector at the August 1966 hearing on the request. The Council granted the extension. In the meantime, Shore Hills had on July 5, 1966 filed the application here involved, to divert 720,000 gallons daily during any month from the proposed new rock well.

Roxbury Township filed a formal objection in advance of the hearing on that application. Among the reasons set out were that (1) the requested diversion would be from a well situated substantially outside the company's franchised area, and the township had not consented to Shore Hills extending its lines into the area from which the proposed water supply was to be drawn, nor did the governing body intend to grant such consent; (2) the Council had in 1961 granted the township the right to withdraw 500,000 gallons of water daily from its well (now in operation) situated in close proximity to the company's proposed well, and the township had installed water mains throughout the area; (3) the company's present application was identical to the one denied by the Council in May 1965, and there had been no material change in circumstances in the interim; (4) the company

had sufficient water sources from which it could adequately supply customers within its franchised area -- in fact, the Council had in May 1965 granted it permission to divert additional water not exceeding an average of 325,000 gallons daily during any one month from its existing wells; (5) the productive capacity of the township's well would be adversely affected by the company's proposed water diversion, and (6) the township's progress toward a municipally-owned system contemplated a water and sewer system servicing the entire community, and the company's proposed water diversion would interfere with the township's plans. The township also gave notice that it entered such further objections as were developed at the 1965 hearing on the company's prior application.

At the January 9, 1967 hearing on the application here in question Shore Hills presented two witnesses: its vice-president and its engineer, Borghard, who testified as an expert that the requested well was necessary to meet anticipated needs. Essentially, the company attempted to support its case by updating the exhibits it had presented at the 1965 hearing involving a similar application. In denying the latter the Council had directed the company to file a report "regarding further explorations for additional water supply within the presently franchised area, within one year from the date hereof." The company had made no attempt to comply with that requirement. Meanwhile, the township had, between the 1965 and 1967 hearings, installed 2,000' of water mains along Center Street. About half the length of the water main the company planned to install along Center Street to the proposed well site would parallel the entire 2,000' length of the township's main. (It would appear from the record that since the township proposed to extend its existing main and install new mains, to grant the company's application would involve a further paralleling of water mains in this area of the township.)

Roxbury Township's witnesses were its consulting sanitary engineer and the chairman of its sewer and water utility

committee, who was also a member of the township committee and township planning board. Their testimony was to the effect that the proposed well would seriously interfere with the integrated system the township was then in the process of establishing. That system called for the condemnation of all private water company property and the distribution of all water in the township by a municipally-owned utility. Their testimony also tended to contradict directly that of Shore Hills' engineer.

Following the hearing the attorneys for the company and the township submitted summations in letter form. The three members of the Council who had heard the testimony prepared a summary of the evidence and a recommended resolution which was incorporated in the resolution adopted by the Council on March 23, 1967 denying the company's application without prejudice.

The resolution here under review recited, among other things, that the Council had in its deliberations taken into consideration the records of the hearings on the respective applications of the township in 1961 and the water company in 1965; that the company's proposed well was located 3,500' outside its franchised area and within 1,700' of the township's existing well, which would involve construction of a transmission main paralleling throughout half its length the township's existing water main; that the company wanted the additional water as a standby supply in case one of its two wells failed or a water main broke; that a standby facility by way of interconnection with the township was available to supply the quantity of water the company was authorized to use; and, finally, since those being served by the company did not have proper or adequate sewage disposal facilities and were presently using septic systems which threatened to ...

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