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Rockaway Valley Regional Sewerage Authority v. New Jersey Department of Environmental Protection

Decided: April 5, 1984.

ROCKAWAY VALLEY REGIONAL SEWERAGE AUTHORITY, APPELLANT,
v.
NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION, RESPONDENT



On appeal from the Department of Environmental Protection.

Michels, King and Dreier. The opinion of the court was delivered by Michels, P.J.A.D.

Michels

Rockaway Valley Regional Sewerage Authority (Rockaway) appeals from a final administrative action of the New Jersey Department of Environmental Protection (DEP) that established the order in which federal and state funding would be awarded for the construction of water pollution control facilities. Rockaway challenges DEP's determination, as set forth in its 1982-1983 priority system and project list, to (1) reduce the federal funding level from 75% of eligible costs to 65% of eligible costs and (2) provide state assistance in the form of state loans rather than partial state matching grants. Rockaway essentially contends that the actions of DEP in reducing the level of federal funding for the second phase of its project and changing the state's contribution from a grant to a loan are arbitrary and capricious and not supported by law.

I.

DEP'S DETERMINATION TO REDUCE THE PERCENTAGE OF FEDERAL FUNDING.

Rockaway asserts that DEP "committed" itself to finance the second phase of its sewerage treatment project at the 75% level and therefore its action in reducing funding to 65% of the eligible costs of construction was arbitrary and capricious and contrary to its prior commitments. We disagree. We are entirely satisfied from our study of the record and the arguments presented that the determination of DEP to reduce the federal funding from 75% to 65% was not arbitrary or unreasonable, did not constitute a mistaken exercise of discretion and is amply supported by the record. Campbell v. Dept. of Civil Service, 39 N.J. 556, 562 (1963). See also In re Suspension of

Heller, 73 N.J. 292, 309 (1977); Bayshore Sew. Co. v. Dep't of Env., N.J., 122 N.J. Super. 184, 199-200 (Ch.Div.1973) aff'd o.b. 131 N.J. Super. 37 (App.Div.1974). Moreover, we find that all arguments raised with respect to this issue are clearly without merit. R. 2:11-3(e)(1)(E).

33 U.S.C. 1282(a)(1) expressly authorizes the states to reduce the federally funded percentage of construction costs below the 75% maximum therein established. This statute, in part, provides:

(a)(1) The amount of any grant for treatment works made under this chapter from funds authorized for any fiscal year beginning after June 30, 1971, and ending before October 1, 1984, shall be 75 per centum of the cost of construction thereof (as approved by the Administrator), and for any fiscal year beginning on or after October 1, 1984 shall be 55 per centum of the cost of construction thereof (as approved by the Administrator), unless modified to a lower percentage rate uniform throughout a State by the Governor of that State with the concurrence of the Administrator. [Emphasis added].

Governor Thomas Kean, by letter dated January 4, 1983, wrote to Jacqueline E. Schafer, the Regional Administrator of the EPA, and requested approval of this uniform reduction in the percentage rate from 75% to 65% of eligible project costs. The reduction in the percentage of funding received the approval of the EPA at the time the fiscal 1982-1983 priority list was approved. This reduction in the percentage of federal funding was authorized and accomplished pursuant to law.

Furthermore, the actions of the DEP in reducing the percentage of funding were not unreasonable, arbitrary or capricious. The reduction was necessitated by a tremendous decrease in the amount of available federal funding. New Jersey's share of the federal grant monies, which prior to the enactment of the Municipal Wastewater Treatment Construction Grant Amendments of 1981 had averaged $200 million per year, was reduced by these amendments to $85 million for fiscal 1982 and to $100 million per year for fiscal years 1982 through 1985. See 33 U.S.C. ยงยง 1285(c)(2), 1287. Thus, although ...


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