January 1, 1900

by Henry T. Chou

In the summer of 2008, the New Jersey Department of Environmental Protection (NJDEP) adopted amendments to its regulations that compel counties and municipalities to reduce the availability of wastewater treatment service and increase the regulation of septic systems. The dramatic effects of these new rules will not be felt until they are fully implemented as early as mid-2009.

While NJDEP insists that the new rules serve to improve water quality and protect environmentally sensitive areas, it is clear that they represent an attempt by NJDEP to interfere with local planning processes for purposes of thwarting development. Many county and municipal officials are just as dismayed as the development community, as the new rules have taken away a large measure of local autonomy in the land use decision making process, and because they impose onerous obligations on county government.

The New Requirements Imposed by NJDEP

The new rules reassign wastewater management planning responsibility from municipalities and local agencies to the county governments. This regional approach reduces the number of sewer planning entities from 161 to 21. For the first time, NJDEP will require mandatory updates of all wastewater management plans (WMPs)—the plans that govern which properties may be served by public sewer. The compliance period under the new rules is very short. Counties must submit a revised WMP by early April 2009. If, for any reason, a county fails to submit a revised WMP by then, each municipality within the county will have an additional 90 days, until early July 2009, to prepare their own WMPs.

If there is no compliance within the additional 90-day period, then NJDEP reserves the right to withdraw the sewer service designation for the entire county, with the exception of the municipalities that prepared their own WMP within the 90-day period. Without a sewer service designation, developers cannot obtain sewer hook-ups for new development, resulting in a county-wide sewer moratorium. Sewer service area designations will only be restored when the county or municipalities adopt appropriate wastewater management plans. As of last year, nearly 450 municipalities had either outdated wastewater management plans or no plans at all.

The new rules require counties to consider a limitation on development based upon existing zoning ordinances and build-out under those ordinances. They also require downzoning in sewer service areas where treatment capacity would be limited without an expansion of facilities. Definitions are also being changed to reduce the availability of treatment capacity. For example, the new definition of an “equivalent dwelling unit” (EDU) assumes that a single family home with three bedrooms and three residents will use 500 gallons per day (gpd) of wastewater capacity. This assumption is not consistent with the actual average use of wastewater by a family of three in a single family home, which is closer to 250-300 gpd.

Additionally, “environmentally sensitive” land must be removed from sewer service areas. The NJDEP’s definition of “environmentally sensitive” land is broad and includes 25-acre contiguous areas of wetlands, steep slopes, buffers of “Category One” waterbodies, riparian zones, habitats of threatened and endangered species and natural heritage priority sites. These areas will have to be serviced by individual on-site septic systems. While NJDEP claims to support the objectives of the State Development and Redevelopment Plan (State Plan), the rule amendments actually authorize NJDEP to disregard the development designations of the State Plan which NJDEP deems to conflict with its environmental policies.

The new rules also change the regulation of septic systems in two significant ways. First, they require municipalities to adopt ordinances regulating septic maintenance of developments that will generate a cumulative total of more than 2,000 gpd of wastewater. Second, new septic systems must meet a standard of 2 mg/l of nitrates, whereas drinking water standards remain at a lower standard of 10 mg/l.

Impacts of the Rule Amendments

If a county does not adopt a WMP by April 2009 and municipalities within the county do not adopt their own plans by July 2009, NJDEP has the ability to declare a moratorium on all new sewer connections in that county. All lands within the WMP’s geographic boundaries not yet receiving sewer service could be automatically re-designated as septic areas with planning flows of 2,000 gpd or less. This would significantly impede the ability to develop property by requiring large average minimum lot sizes. Instead of objecting to such a moratorium, certain counties and municipalities that embrace non- growth policies may purposely choose to not comply with the new rules in order to trigger a moratorium.

While NJDEP states that the goal of its new septic requirements is to ensure that the density of septic systems will not degrade water quality, the practical effect of the rules is to create large lot developments that will promote sprawl and pose barriers to the extension of utilities, as well as imposing a significant expense upon homeowners with septic systems and upon municipalities that must create new regulatory bureaucracies. The increased use of septic systems also poses the risk of groundwater degradation in areas deprived of access to public sewer service by the rule amendments.

The new definition of the EDU has the effect of reducing the treatment capacity of sewer plants throughout the State. As noted above, instead of assuming that each 3-bedroom, single family home uses 250-300 gpd of sewer capacity, treatment facilities will now have to assume that each home uses the unrealistically high number of 500 gpd. The limitation on development based on existing zoning also has the effect of stopping all future development not currently contemplated in current zoning ordinances. Additionally, the removal of “environmentally sensitive” lands from sewer service areas, per the new rule definitions, could eliminate up to 40% of New Jersey’s vacant developable land.

Conflicts with Other State Policies

Ironically, NJDEP’s new rules directly conflict with several of the State’s important public policy directives. For example, when sewer service is made unavailable, municipalities will lose the ability to adopt new ordinances providing for higher density “inclusionary” developments, which the New Jersey Council on Affordable Housing (COAH) has promoted as an important mechanism for providing low and moderate income housing. The new rules also call for lower density zoning, i.e., downzoning, which conflicts with the provisions of COAH’s rules that direct municipalities to implement higher density zoning at presumptive minimum densities.

The courts may soon have to address the question of whether NJDEP has the power to compel a municipality to downzone the very same property that could otherwise be used by a municipality to satisfy its affordable housing obligations. In their current form, NJDEP’s rules could serve as a convenient tool for those municipalities that seek to evade their affordable housing obligations. The potential for conflict between the rules of two state agencies, NJDEP and COAH, will have to be resolved if the State is to have coherent growth policies.

Conclusion

Property owners and developers should monitor municipal, county and NJDEP actions closely to ascertain how properties of interest are characterized in new WMPs, and to determine whether NJDEP actually implements the draconian measures discussed above. As this article went to press, revised, proposed sewer service area maps are starting to appear, and they should be carefully analyzed to determine how they would affect properties of interest. The NJDEP, counties and municipalities should be placed on notice of all proposed arbitrary or otherwise unlawful sewer mapping decisions, especially where such decisions would impede municipalities’ ability to satisfy their COAH obligations.

Henry T. Chou is a partner of Hill Wallack LLP and a member of the firm’s Land Use Division. His practice is concentrated in the land development application and permitting process and the litigation of land use matters. He has significant experience in Mount Laurel affordable housing litigation and administrative matters before the New Jersey Council on Affordable Housing. He is also a Member of the Board of Directors of the Land Use Law Section of the New Jersey State Bar Association