(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).
Argued September 8, 1997 -- Decided September 29, 1997
PER CURIAM
[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 with other public entities for the
mutual provision of such services. (p.2)
The judgment of the Appellate Division is AFFIRMED.
CHIEF JUSTICE PORITZ and JUSTICES HANDLER, O'HERN, GARIBALDI, STEIN, and
COLEMAN join in the Court's opinion. JUSTICE POLLOCK did not participate.
SUPREME COURT OF NEW JERSEY
A-
42 September Term 1997
UNITED WATER RESOURCES, INC. and
HUGH J. ROARTY,
Plaintiffs-Respondents,
v.
NORTH JERSEY DISTRICT WATER SUPPLY
COMMISSION and THE CITY OF BAYONNE,
Defendants-Appellants.
Argued September 8, 1997 -- Decided September 29, 1997
On certification to the Superior Court,
Appellate Division, whose opinion is reported
at
295 N.J. Super. 305 (1996).
H. Curtis Meanor argued the cause for
appellant North Jersey District Water Supply
Commission (Podvey, Sachs, Meanor, Catenacci,
Hildner & Cocoziello and Brach, Eichler,
Rosenberg and Silver, attorneys; Mr. Meanor
and Ralph J. Salerno, of counsel; Mr. Meanor
and William C. Sandelands, on the briefs).
Joseph G. Nichols, Law Director, argued the
cause for appellant The City of Bayonne.
Michael R. Cole argued the cause for
respondent United Water Resources, Inc.
(Riker, Danzig, Scherer, Hyland & Perretti,
attorneys; Mr. Cole, Edward K. DeHope, and
Deborah J. Sokol, on the briefs).
Rinaldo M. D'Argenio argued the cause for
respondent Hugh J. Roarty (Alampi, Arturi &
D'Argenio, attorneys).
Ezra D. Rosenberg submitted a brief on behalf
of amicus curiae New Jersey-American Water
Company, Inc. (Dechert Price & Rhoads,
attorneys; Mr. Rosenberg, Gil C. Tily, and
Sean Quinn, of counsel; Mr. Rosenberg and
Bruce W. Clark, on the brief).
Benjamin Clarke submitted a brief on behalf
of amicus curiae Passaic County Utilities
Authority (Raymond P. Vivino, Special
Counsel, attorney; Mr. Clarke and J.S. Lee
Cohen of DeCotiis, Fitzpatrick & Gluck, on
the brief).
PER CURIAM
This appeal concerns the authority and power of the North
Jersey District Water Supply Commission (Commission) under its
enabling legislation, N.J.S.A. 58:5-1 to -58, or the Interlocal
Services Act, N.J.S.A. 40:8A-1 to -11 (ILSA), to contract with
the City of Bayonne to manage, operate and maintain Bayonne's
local water distribution system and to issue $30 million in
revenue bonds to pay to Bayonne a $25 million project fee, retire
a portion of Bayonne's debt relating to its water system and to
make certain capital improvements to the system during the
twenty-year term of the contract. The specifics of the proposed
arrangement are more fully set forth in the Appellate Division
opinion,
295 N.J. Super. 305 (1996).
We agree with the Appellate Division that the nature and
scope of the undertaking proposed by the Commission is not fairly
within its enabling authority even if that be augmented by ILSA.
Important goals of efficiency and economies of scale in the
provision of local governmental services are advanced by both the
New Jersey Water Supply Public-Private Contracting Act, N.J.S.A.
58:26-19 to -27 (Public-Private Act) and ILSA. We acknowledge
that under the authority granted by the Public-Private Act,
Bayonne could have entered a substantially similar transaction
with a private water supplier. Bayonne believes that this
transaction entered into with the Commission benefits its
citizens more than a public-private partnership and that the
goals of governmental economy and efficiency are equally served
by allowing other public bodies, such as the Commission, to
compete with public entities in contracting for the provision of
such services.
The Court, however, cannot through statutory construction
validate a contractual arrangement that confers or expands the
governmental powers of public entities not otherwise delegated by
the Legislature in accordance with statutory standards governing
the exercise of such delegated powers. We commend to legislative
resolution 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 with other public
entities for the mutual provision of such services.
The judgment of the Appellate Division is affirmed.
CHIEF JUSTICE PORITZ and JUSTICES HANDLER, O'HERN, GARIBALDI, STEIN, and COLEMAN join in the Court's opinion. JUSTICE POLLOCK did not participate.
NO. A-42 SEPTEMBER TERM 1997
ON APPEAL FROM
ON CERTIFICATION TO Appellate Division, Superior Court
UNITED WATER RESOURCES, INC. and HUGH J. ROARTY,
Plaintiffs-Respondents,
v.
NORTH JERSEY DISTRICT WATER SUPPLY COMMISSION and THE
CITY OF BAYONNE,
Defendants-Appellants.
DECIDED September 29, 1997
Chief Justice Poritz PRESIDING
OPINION BY Per Curiam
CONCURRING OPINION BY
DISSENTING OPINION BY