On appeal from Superior Court, Law Division, Monmouth County.
Plaintiffs sued to restrain the imposition of a lien on their property by the Marlboro Township Municipal Utilities Authority (MT-MUA) for unpaid minimum annual charges of $30 a quarter or $120 per year. Appellants' brief states that this charge entitles plaintiffs to 25,000 gallons of water. There is an additional charge of $1.20 per 1000 gallons of water used in excess of 25,000. Plaintiffs use no water supplied by the MT-MUA because they have their own wells on their property. They stated that they objected to paying the tie-in charge of $236, but they did so under protest. They have not connected their home with MT-MUA's water system.
On cross-motions for summary judgment, the trial judge entered judgment in favor of plaintiffs relieving them of the obligation to pay MT-MUA's minimum service charges. Defendants appeal this determination.
The trial judge held that the MT-MUA is engaged in "a private or proprietary function which in its exercise is subject to the rules applicable to private corporations," Reid Development Corp. v. Parsippany-Troy Hills Tp. , 10 N.J. 229, 233 (1952), and a property owner cannot be compelled to pay for water he does not use unless he enters into a service contract. Austin v. Union Beach , 10 N.J. Misc. 670, 671 (Sup. Ct. 1932). See Daniel v. Oakland , 124 N.J. Super. 69, 72 (App. Div. 1973); cf. Lehigh Valley R.R. Co. v. Jersey City , 103 N.J.L. 574, 576-577 (Sup. Ct. 1927), aff'd 104 N.J.L. 437 (E. & A. 1928). Accordingly, the trial judge found in favor of plaintiffs.
Appellants contend that the right to impose minimum charges on all properties benefited by the water facilities is "implicit" in the municipal and county utilities authority law, N.J.S.A. 40:14B-1 et seq. They also contend that public policy requires this result.
N.J.S.A. 40:14B-21 contains the authority given to a utilities authority to charge water service charges and connection or tapping fees. The statute was recently amended "to conform" to the decision of the Supreme Court in Airwick
Industries v. Carlstadt Sewerage Auth. , 57 N.J. 107 (1970), according to the Statement attached to Senate Bill No. 69, L. 1977, c. 441. The amendment clarifies the charges that may be made for a "connection fee or tapping fee" as distinguished from "water service charges." The connection fee may be "the actual cost of the physical connection plus an amount representing the fair contribution of the connecting party toward the debt service charges on the bonds issued for the installation and construction of the water system previously paid by users of the water system * * *." N.J.S.A. 40:14B-21, as amended.
Airwick Industries, supra , dealt with the "Sewerage Authorities Law," N.J.S.A. 40:14A-1 et seq. Referring to statutory provisions similar to those before us, the Supreme Court held that
We agree with the trial judge that nonusers of the system cannot be compelled to pay a minimum fee based on operating costs and expenses as well as debt service without contracting for the use of the system. See Austin v. Union Beach, supra; Smith v. Norton Tp. , 2 Mich. App. 17, 138 N.W. 2d 522 (Ct. App. 1965). But cf. Lake Stevens Sewer Dist. v. Village Homes , 18 Wash. App. 165, 566 P. 2d 1256 (Ct. App. 1977). As in Airwick Industries, supra , all properties, whether improved or not, "benefit from the mere availability of the system for service." 57 N.J. at 120-121. Even unimproved properties benefit by the "potential standby service." Id. at 121. Thus, the court held that future users may be required to pay an escalated fee "to absorb a fair proportion of the sum theretofore paid by
the actual users for principal and interest on the bonds." Id. at 122. By virtue of the connection fee users who come into the system late may be required to pay an increased tie-in charge to offset charges imposed on the first users of the system who ...