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Wanaque Borough Sewerage Authority v. Township of West Milford6/26/1996
(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).
Wanaque Borough Sewerage Authority v. Township of West Milford, et al. (A-82-95)
Argued January 30, 1996 -- Decided June 26, 1996
O'HERN, J., writing for a unanimous Court.
In 1966, the Boroughs of Wanaque, Ringwood, Pompton Lakes and the Township of West Milford joined to form the Wanaque Valley Regional Sewerage Authority Study Committee (Study Committee) to analyze whether treated sewerage could be collected in the Wanaque watershed basin. West Milford was represented in that study by the West Milford Municipal Utilities Authority (WMMUA), a separate legal entity created pursuant to a provision of the Municipal and County Utilities Authorities Law that authorized West Milford to create a municipal authority with sole jurisdiction over the collection, treatment and disposal of the town's sewage.
In 1968, the Study Committee issued a report proposing the development of a regional interim plan. Based on that plan, Pompton Lakes withdrew from the Study Committee. In August 1969, the three remaining towns adopted parallel joint resolutions authorizing the Study Committee to apply for a $457,000 loan from the State Department of Health. The parties agreed to contribute their proportionate share of the repayment of the loan, if necessary, to the extent that each municipality had benefited. The application was approved, and the State loaned the funds to the Study Committee. The money funded environmental and engineering studies in West Milford, Ringwood and Wanaque, as well as preliminary engineering plans and specifications for a regional sewer system that would serve all three municipalities.
On January 6, 1971, the Township of West Milford adopted an ordinance in conjunction with Ringwood and Wanaque consenting to the formation of the Wanaque Valley Regional Sewerage Authority (WVRSA). Because the WMMUA had sole jurisdiction over sewage collection and disposal within the Township of West Milford, it was also necessary for the WMMUA to consent to the formation of the regional sewerage authority. As part of its formation, the WVRSA agreed to assume the debts of the Study Committee.
Once created, the WVRSA became a distinct and independent public entity. Under the Sewerage Authorities Law (the Law), the WVRSA was: financially independent; authorized to agree to accept a loan or donation from a municipality or municipal utilities authority; and authorized to enter into "service agreements" between it and a municipality or municipal utilities authority.
West Milford appointed representatives to serve on the WVRSA but never agreed to loan or donate funds to the WVRSA. West Milford also did not enter into a service agreement with the WVRSA because it did not have the authority to do so, having delegated sole jurisdiction over sewage collection to the WMMUA. In 1976, the WMMUA advised the WVRSA that it would not execute a service agreement or use the regional facility for the treatment of its sewage. In 1981, Ringwood Borough also decided not to enter into a service agreement with the WVRSA.
In 1986, the Wanaque Borough Sewerage Authority (WBSA) instituted suit against, among others, the WVRSA, the Township of West Milford, the Borough of Ringwood and its sewerage authority, and the Borough of Wanaque. The WBSA sought reimbursement for certain of the WVRSA's costs because, as the sole customer of the WVRS
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