On appeal from the New Jersey Council on Affordable Housing, Docket No. 06-1817.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Skillman, Graves and Grall.
Rockaway Township appeals from a final decision of the Council on Affordable Housing (COAH), which dismissed its petition for third round substantive certification on the ground that Rockaway had failed to comply with COAH's directives regarding the provision of water to the affordable housing development site owned by respondent Pondview Estates.
The Pondview site has been a component of Rockaway's affordable housing compliance plans since the mid-1980s and was one of the main components of the compliance plan for which Rockaway received second round substantive certification on April 2, 1997. Pondview's revised development plan was granted final major subdivision and site plan approval by the Rockaway Planning Board on July 17, 2000. Pondview has constructed all of the on-site sewer collection and water distribution system and some of the other infrastructure required for its development.
However, the provision of adequate water supply for the development has been an ongoing problem that has not yet been resolved. When Pondview was granted subdivision and site plan approval, it had a developers' agreement with Rockaway under which Pondview agreed to construct an on-site water supply, treatment and distribution system and Rockaway agreed to submit an application to the Department of Environmental Protection (DEP) for the water allocation permit required for construction of this system. The DEP indicated that it would grant the required water allocation permit, conditioned upon the installation of a hydraulic barrier system to protect the on-site wells from groundwater contamination from the Picatinny Arsenal Superfund site. However, Rockaway indicated that it would not support the hydraulic barrier system without first running a pilot test of the proposed on-site wells. Thereafter, the parties devised such a pilot test in cooperation with the DEP.
In addition to the hydraulic barrier system, the DEP also required Pondview to provide an alternative water supply source by contracting with another municipality or private supplier. To fulfill this requirement, Pondview entered into a preliminary agreement with the Borough of Wharton under which Wharton agreed to provide 284,000 gallons per day (gpd) of water for the Pondview development.
On December 9, 2005, Rockaway petitioned COAH for third round substantive certification. The Pondview development site continued to be part of Rockaway's compliance plan submitted in support of this petition.
Pondview alleges that it became clear by the middle of 2006 that Rockaway would not allow the proposed on-site wells to be approved or utilized and would only allow Wharton to provide water to Pondview if Pondview agreed to a $6 million contribution to Rockaway, in addition to the $4.3 million Pondview would be required to pay to Wharton. As a result of this alleged failure by Rockaway to comply with its obligations under the agreement with Pondview, Pondview filed a motion with COAH on December 16, 2006 for various relief, including that Rockaway be ordered to take all necessary steps to pursue its application for a water allocation permit for the on-site wells for the Pondview development, to consent to Pondview's use of any water available from Wharton Borough, without requiring any payment by Pondview to Rockaway, and to reserve any new water supply capacity available to Rockaway for the Pondview development.
In response to this motion and a cross-motion filed by Rockaway, COAH issued a resolution on June 13, 2007, which found that "it is questionable whether there is sufficient water capacity available to the Pondview Estates affordable housing development or other elements of Rockaway's affordable housing plan," and "if there is not available water capacity for the elements of Rockaway's affordable housing plan, Rockaway no longer has a plan that meets the criteria of its substantive certification as granted by COAH." Based on these findings, COAH issued a "scarce resource restraint," which prohibited Rockaway "from issuing any approval or taking any action that would lead to the provision of public water for any project not included in [its affordable housing plan]." This resolution also directed Rockaway to show cause why COAH should not dismiss Rockaway's third round petition "unless Rockaway could demonstrate that there is sufficient water capacity to service Pondview[,]" and satisfy the other elements of its affordable housing compliance plan.
On the return date of this order to show cause, September 12, 2007, COAH issued another resolution, which concluded that "as a result of the failure of Rockaway to provide definite data concerning the available water supply to Rockaway, it is necessary to continue to maintain the scarce resource restraint upon Rockaway's water supply[.]" In addition, this resolution ordered Rockaway to immediately take the necessary steps to 1) provide COAH with accurate data from the MCMUA and SEMCMUA evidencing the total amount of water supply available to Rockaway, and the sites where any water supply has been committed, as well the volume committed; 2) immediately submit the on-site well pilot tests for the Pondview site to DEP for its review and decision regarding their viability; and 3) immediately take any and all steps necessary to secure a sufficient water supply for the Pondview site pursuant to the wheeling agreements with Wharton Borough, as well as any other actions necessary to meet this requirement[.]
On October 4, 2007, Rockaway's counsel sent a letter to COAH, which stated in part:
At the October 2, 2007 meeting, the Township of Rockaway declined to authorize the submission of the pilot test results and report to the NJDEP and requests that COAH reconsider its direction that the Township do so. . . .
The Township Council unanimously declined (with one absentee member) to submit the same to the NJDEP primarily for two reasons. First, it has been acknowledged by all parties that the utilization of any on-site water system on the Pondview Site creates the distinct risk of the contamination plume from the adjacent Superfund site of Picatinny Arsenal being drawn into these wells and ultimately contaminating the entire water system of the Township of Rockaway since this system will eventually be interconnected with the Township's water system. Second, and equally persuasive, is the fact that before any on-site system with an approved hydraulic barrier system can be utilized on the Pondview Site, the NJDEP has required that there be a back-up system immediately available in the event of a failure of the hydraulic barrier system. . . .
In its simplest terms, there is no reason for the Township to risk the contamination of the water system when an alternate system that does not create that risk is required to be established as a condition of the utilization of the on-site system. The Township should not be compelled to endorse a water system for this COAH project that creates a real ...