A New Jersey appeals court has ruled against Jersey City in its long-standing dispute with several Morris County towns over who should pay for regional sewer system costs.
The ruling, issued Tuesday, means Jersey City must keep paying for the sewer system, even though it no longer uses it for drinking water protection.
The case centered on a decades-old agreement that required Jersey City to help pay for the operation and maintenance of a regional sewage treatment plant run by the Rockaway Valley Regional Sewerage Authority.
Jersey City is paying millions each year to help operate and maintain a regional sewer system that primarily serves Morris County.
The towns covered by that sewerage authority include Dover, Boonton, Rockaway Borough, Rockaway Township, Denville, Randolph, Victory Gardens, and Wharton.
“(Jersey City), as well as their residents and taxpayers, may never be able to extricate themselves from the fiscal harm caused by this decades-old binding agreement,” Judge Morris Smith wrote for the court.
Smith acknowledged that the Jersey City residents and taxpayers are the ones adversely impacted by a 50-year-old sewer agreement.
Jersey City argued that the agreement was outdated and unfair, claiming it had paid over $100 million while receiving little benefit in return.
The Appellate Division disagreed, ruling that Jersey City is still bound by the agreement and must continue paying its share of costs as long as the plant remains in operation.
The decision is a win for the sewage authority and the Morris County towns, which rely on Jersey City’s payments to help fund the system.
The dispute dates back to the 1970s, when Jersey City and several Morris County towns settled a lawsuit by agreeing to form the sewerage authority and share costs for sewage treatment.
In 1984, the parties amended the agreement, locking in Jersey City’s payment obligations and including a $500,000 credit for the city.
The court opinion does not specify how much Jersey City currently pays the Rockaway Valley Regional Sewerage Authority each year.
However, it does note that payments rose from $350,000 in 1973 to over $1.2 million annually by 1982.
Jersey City later sued to get out of the deal, saying the plant had changed so much over time that the original agreement no longer applied.
Jersey City also claimed the sewage authority unfairly reclassified capital improvement costs as routine “operation and maintenance” expenses, which meant the city ended up paying more than its fair share.
Despite these arguments, the court found that the plant was still “maintained in operation” as defined in the agreement and that Jersey City remained obligated to contribute to its upkeep.
Smith acknowledged the inequities Jersey City faces, but said the court is bound to uphold the terms of the 1971 agreement and its 1984 amendment.
The court found that the plant is still operating and serving its original purpose, so the agreement remains valid.
Jersey City also claimed it was overcharged and that the Rockaway Valley Regional Sewerage Authority misused funds, but the court found no proof of damages.
The court also rejected Jersey City’s argument that the agreement violated federal environmental laws or public policy.
In a final blow to the city’s case, the court said Jersey City had waived its right to challenge the agreement when it signed the 1984 amendment.
The court acknowledged that the deal may now be financially burdensome for Jersey City, but said it could not rewrite the contract.
Andrew Brewer, the attorney who represented the Rockaway Valley Regional Sewerage Authority in the case, said the legal fight over who pays for the sewage system has been ongoing since 1968.
“The court agreed 3-0 that the agreement is still valid,” Brewer said. “I think the court did a good job.”
Officials from Jersey City, including its legal counsel, did not immediately return requests for comment.