On appeal from Superior Court of New Jersey, Law Division, Union County, Docket No. L-2732-09.
The opinion of the court was delivered by: Skillman, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued September 19, 2011
Before Judges Parrillo, Grall and Skillman.
The opinion of the court was delivered by SKILLMAN, J.A.D. (retired and temporarily assigned on recall).
A municipal governing body has the option of funding sanitary sewer services either from general municipal revenues obtained by real estate taxes or from fees imposed upon property owners who use the sewer system. If a governing body chooses to fund its sewer system through user fees, it must comply with the mandate of N.J.S.A. 40A:26A-10 that such "fees . . . shall be . . . uniform and equitable for the same types and classes of use and service of the facilities."
The Borough of New Providence had historically funded its sanitary sewer services solely from general municipal revenues obtained by real estate taxes. However, its governing body determined in 2009 that, under this system of funding, owners of single-family homes were paying a disproportionate share of the costs of the sewer system compared to owners of apartment buildings. Specifically, the borough administrator determined that the owner of an average single-family home pays approximately $2400 in municipal taxes, approximately $240 of which is allocated to sewer service, while the average owner of a garden apartment pays approximately $350 in municipal taxes per unit, approximately $35 of which is allocated to sewer service. To reduce this disparity, the governing body adopted an ordinance under which owners of apartments are required to pay an annual sewer user fee of $100 for every apartment unit in excess of two.
This appeal requires us to decide whether the ordinance establishing this new hybrid system of funding, under which the costs of the New Providence sewer system are paid partly from general municipal revenues obtained by real estate taxes and partly from user fees, violates either N.J.S.A. 40A:26A-10 or the equal protection guarantees of the United States and New Jersey Constitutions. We conclude that the challenged New Providence ordinance is consistent with N.J.S.A. 40A:26A-10 and is constitutional.
Plaintiffs are the owners of apartments in New Providence that use the municipal sewer system. New Providence Apartments Co. and New Providence Gardens Co. own a 232-unit apartment complex known as New Providence Gardens; Murray Hill Apartments Co. owns a 172-unit apartment complex known as Murray Hill Apartments; and New Providence Mews owns a twenty-two unit apartment complex. These three apartment complexes contain more than half of the apartment units in New Providence. Pursuant to New Providence's new hybrid system of funding sewer service, enacted as Ordinance 2009-6, under which a $100 sewer user fee is imposed upon each unit of residential housing in excess of two,*fn1 New Providence Gardens will incur annual fees of $23,000; Murray Hill Apartments will incur annual fees of $17,000; and New Providence Mews will incur annual fees of $2,000.
Shortly after the adoption of Ordinance 2009-6 and a companion ordinance establishing the mechanism for collection of the sewer user fee, plaintiffs filed this action challenging its validity on both statutory and constitutional grounds. Plaintiffs' complaint included counts asserting claims under the Federal Civil Rights Act, 42 U.S.C.A. § 1983, and the New Jersey Civil Rights Act, N.J.S.A. 10:6-1 to -2. New Providence filed a pretrial motion to dismiss those counts, which the trial court granted.
The court conducted a two-day trial on the remaining counts. To the extent relevant to the issues presented by this appeal, the testimony presented at that trial is discussed in sections II and III of this opinion.
Following the trial, the trial court issued an oral opinion upholding the validity of the $100 per apartment sewer user fee. In rejecting plaintiffs' statutory and ...