On certification to the Superior Court, Appellate Division, whose opinion is reported at 295 N.J. Super. 305 (1996).
Chief Justice Poritz and Justices Handler, O'hern, Garibaldi, Stein, and Coleman join in the Court's opinion. Justice Pollock did not participate.
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).
United Water Resources, Inc., et al. v. North Jersey District Water Supply Commission, et al. (A-42)
Argued September 8, 1997 -- Decided September 29, 1997
[N.B., The factual and procedural history of the case is derived from the opinion of the Appellate Division, a copy of which is attached to the Court's opinion.]
This appeal concerns the authority and power of the North Jersey District Water Supply Commission (Commission) to contract with the City of Bayonne to manage, operate, and maintain Bayonne's local water distribution system and to issue revenue bonds to effectuate that purpose. Bayonne owns and operates a water system for its residents. The water for the system is supplied by the Commission under a contract dated January 25, 1982. The water is transmitted through a facility known as Wanaque South. Bayonne and six other municipalities paid for the development and operation of Wanaque South.
In 1995, Bayonne issued a request for proposals (RFP) to obtain long-term services from a private firm to operate, maintain, and manage all or part of its water system. In response, United Water Resources, Inc., submitted a proposal on November 20, 1995. On the same date, the Commission submitted its own proposal, seeking to operate and maintain Bayonne's system under the Interlocal Services Act, N.J.S.A. 40:8A-1 to -11.
Bayonne rejected the proposal of United Water Resources and approved the Commission's proposal. The contract was executed on April 9, 1996. It was for twenty years, with two optional ten-year extensions.
On May 31, 1996, United Water Resources and Hugh A. Roarty, a Bayonne resident, filed suit contending that the Commission and Bayonne did not have the authority to enter into the contract. The trial court found for the Commission and Bayonne. On appeal, the Appellate Division reversed.
The Supreme Court granted the joint petition for certification of the Commission and Bayonne.
HELD : The nature and scope of the Bayonne water system proposal is not fairly within the enabling authority of the North Jersey District Water Supply Commission even if that is augmented by the Interlocal Services Act.
1. The Court cannot, through statutory construction, validate a contractual agreement that confers or expands governmental powers of public entities not otherwise delegated by the Legislature in accordance with statutory standards governing the exercise of such delegated powers. (p.2)
2. The Court commends to the Legislature the question of whether and to what extent beyond current statutory authorization a public entity authorized to contract with private companies for the provision of local governmental services should be permitted to enter into comparable contracts ...