IN RE NEW JERSEY HIGHLANDS WATER PROTECTION COUNCIL'S APPROVAL OF RESOLUTION 2020-03, ETC. (NEW JERSEY HIGHLANDS WATER PROTECTION COUNCIL)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2605-19
IN RE NEW JERSEY
HIGHLANDS WATER
PROTECTION COUNCIL'S
APPROVAL OF RESOLUTION
2020-03 THE AMENDED
PETITION FOR PLAN
CONFORMANCE.
___________________________
Submitted March 2, 2021 – Decided May 13, 2021
Before Judges Gilson, Moynihan, and Gummer.
On appeal from the New Jersey Highlands Water
Protection Council.
Wisniewski & Associates, LLC, attorneys for appellant
DPF Chester, LLC (John S. Wisniewski and Jennifer
M. Kurtz, on the brief).
Gurbir S. Grewal, Attorney General, attorney for
respondent New Jersey Department of Environmental
Protection (Sookie Bae, Assistant Attorney General, of
counsel; Jason Brandon Kane, Deputy Attorney
General, on the brief).
Mason Thompson, LLC, attorneys for respondent
Borough of Chester (Brian W. Mason, on the brief).
PER CURIAM
On January 16, 2020, the New Jersey Highlands Water Protection and
Planning Council (Council) adopted Resolution 2020-03, approving a petition
from the Borough of Chester (Chester) to designate Chester as a Highlands
Center. "A Highlands Center is an area where development and redevelopment
[are] planned and encouraged . . . to support balance . . . by providing for
sustainable economic growth while protecting critical natural and cultural
resources." Highlands Center Designation, N.J. Highlands Council,
www.nj.gov/njhighlands/planconformance/guidelines/centers.html (last visited
Apr. 22, 2021).
Appellant DPF Chester, LLC (DPF), which owns land in Chester, appeals
from the Council's final agency action adopting Resolution 2020-03 (Resolution
2020-03 or the Resolution). DPF seeks to have us either vacate the Resolution
or remand the matter for further proceedings. Discerning no abuse of discretion
by the Council, we reject DPF's objections and affirm the Council's adoption of
Resolution 2020-03.
I.
In 2004, the Legislature enacted the Highlands Water Protection and
Planning Act (the Act), N.J.S.A. 13:20-1 to -35, which designated an area
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encompassing approximately 1,250 miles, spanning eighty-eight municipalities
in seven counties, as the Highlands Region. N.J.S.A. 13:20-2. The Act
recognizes the Highlands Region as an "essential source of drinking water . . .
for one-half of the State's population" that "contains other exceptional natural
resources such as clean air, contiguous forest lands, wetlands, pristine
watersheds, and habitat for fauna and flora," as well as "many sites of historic
significance, and . . . abundant recreational opportunities." Ibid.
The Act created the Council and designated it a regional planning and
protection entity, charged with protecting and enhancing the significant
resources of the Highlands Region. The Council was authorized to develop,
adopt, and periodically revise a Regional Master Plan (Master Plan). N.J.S.A.
13:20-4, -6 and -10.
The Act established two distinct areas within the Highlands Region: the
"preservation area," which is of "exceptional natural resource value" and subject
to stringent natural resource protection standards and regulations, N.J.S.A.
13:20-2; and the "planning area," which is an area subject to a comprehensive
planning approach that protects water and other significant resources while
accommodating appropriate development and economic growth, N.J.S.A. 13:20-
10(b) to (c). Municipalities and counties in the preservation area are required
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to conform their land use and development to the Master Plan. N.J.S.A. 13:20 -
14. Municipalities and counties in the planning area can voluntarily adhere to
the Master Plan by submitting "plan conformance" petitions. N.J.S.A. 13:20-
15.
Chester is entirely in the planning area of the Highlands Region. N.J.S.A.
13:20-7(a)(3) and (c). Accordingly, it had the option to submit a petition to the
Council advising of its intent to conform to the Master Plan. N.J.S.A. 13:20-
15(a)(1). In November 2008, Chester submitted a petition for plan conformance,
which was administratively completed in April 2016 (2016 Petition or Petition).
In July 2016, the Council approved Chester's 2016 Petition with conditions.
In October 2018, Chester entered into a settlement agreement with two
borough property owners concerning Chester's efforts to comply with its
affordable housing obligations. Chester had filed a declaratory-judgment action
seeking approval of its Housing Element and Fair Share Plan to comply with In
re Adoption of N.J.A.C. 5:96 & 5:97, 221 N.J. 1 (2015). Larison's Corner, LLC
and Turkey Farms Acquisitions, LLC intervened in the declaratory-judgment
action. Under the settlement agreement thirty-six affordable housing units, as
well as other commercial facilities, are to be built on the Turkey Farms property.
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The settlement agreement also contemplates the development of the Larison's
Corner property.
In October 2019, Chester requested an amendment to the 2016 Petition to
designate the entire borough as a Highlands Center. Chester sought that
designation to "support Center-based planning for development, redevelopment
and infrastructure development that is appropriately scaled to address existing
infrastructure needs and maintain Chester Borough's small-town quality of life
and historic character." Chester also sought Center designation to "expand
wastewater treatment capacity and extend wastewater collection lines to
eliminate an existing long-standing, undesirable and unsustainable condition of
individual on-site septic systems" by constructing "a new centralized sewage
treatment facility."
Chester supported its request with a Highlands Center Designation
Feasibility Report (Feasibility Report) and implementation plan. The Feasibility
Report discussed the proposed designation's consistency with the Master Plan
and its objectives of smart growth and sustainable economic development. The
Feasibility Report discussed some of the settlement agreement's terms but did
not include a copy of the agreement.
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In October and November 2019, Council staff communicated with Chester
and sought additional information related to its request to amend the 2016
Petition. During those communications, Council staff asked Chester to
designate Highlands Environmental Resource Zones (Resource Zones) and
demonstrate that Chester had available water infrastructure to support future
growth. A Resource Zone "is a land area within a designated center that contains
environmentally sensitive resources" and will "be afforded appropriate planning
and management as part of the comprehensive center planning." N.J. Highlands
Council, Consistency Review and Recommendations Report: Petition for
Highlands Center Designation Borough of Chester, Morris County 3 (2020), ht
tps://www.nj.gov/njhighlands/morris_county/chester_borough/center_amendm
ent/1406_center_dcrrr.pdf. Chester proposed to designate certain areas as
Resource Zones, with two exceptions for areas where development is anticipated
for affordable housing units and a wastewater treatment plant.
The Council invited public comment on Chester's request to amend its
2016 Petition for thirty days, from November 15, 2019, to December 16, 2019.
No comments were submitted during that period. While the period for public
comment was open, Chester requested, and Council staff agreed, to revise the
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implementation plan to include funding for a study regarding the removal of
invasive species and regrowth of critical habitat.
On January 16, 2020, the Council considered Chester's amended Petition
at an open public meeting. Prior to the meeting, a copy of the Council staff's
recommendation report, which appended Chester's Feasibility Report, was made
available to the public on the Council's website.
At the beginning of the meeting, Council member Kurt Alstede announced
that a company he owned had real estate in Chester. Alstede stated that he had
conferred with the Council's ethics liaison officer and had been advised that his
company's ownership of property in Chester was not a conflict of interest.
Accordingly, Alstede stated that he would participate in considering Chester's
amended Petition.
Council staff then presented the amended Petition and their
recommendation for approval. During the meeting, DPF's counsel spoke and
submitted written comments, arguing that the amended Petition was inconsistent
with the Act. DPF's counsel also contended that the Council should consider
the anticipated development called for in the settlement agreement.
Furthermore, counsel for DPF contended that designating all of Chester as a
Highlands Center would violate the Master Plan because it would be inconsistent
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with the Plan's goals of surface-water and ground-water protection and
preservation of historic sites. Accordingly, DPF requested that the amended
Petition be rejected or that the Council adjourn consideration so that additional
information could be submitted.
After hearing from staff and the public, the Council voted to pass
Resolution 2020-03 and adopt the recommendation report and implementation
plan. Eight Council members voted in favor of approving the Resolution and
three voted against.
In March 2020, DPF filed this appeal. Around the same time, DPF moved
before the Council for a stay of Resolution 2020-03 pending the appeal. In July
2020, the Council denied the request for a stay.
II.
On appeal, DPF makes four arguments, contending that the Resolution
approving Chester's amended Petition should be vacated because (1) it was
adopted after the Council learned Chester had omitted material information
concerning the settlement agreement; (2) it was arbitrary and capricious; (3) it
violates the legislative policies the Council was created to implement; and (4)
there was insufficient time for public comment and a "possible" conflict of
interest in Council member Alstede voting on the amended Petition.
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A.
An appellate court's review of an administrative agency's final decision is
limited. Commc'ns Workers of Am., AFL-CIO v. N.J. Civ. Serv. Comm'n, 234
N.J. 483, 515 (2018). An agency's decision will not be reversed unless "(1) it
was arbitrary, capricious, or unreasonable; (2) it violated express or implied
legislative policies; (3) it offended the State or Federal Constitution; or (4) the
findings on which it was based were not supported by substantial, credible
evidence in the record." Univ. Cottage Club of Princeton N.J. Corp. v. N.J.
Dep't of Env't Prot., 191 N.J. 38, 48 (2007) (citing In re Taylor, 158 N.J. 644,
656 (1999)). Moreover, courts generally "afford substantial deference to an
agency's interpretation of a statute that it is charged with enforcing." Ibid.(citing R & R Mktg., L.L.C., v. Brown-Forman Corp., 158 N.J. 170, 175 (1999)).
An appellate court, however, is not "bound by the agency's interpretation of a
statute or its determination of a strictly legal issue." Ibid. (quoting In re Taylor,
158 N.J. at 658).
"'[A] strong presumption of reasonableness' attends an agency's exercise
of its statutorily delegated duties, which 'is even stronger when the agency has
delegated discretion to determine the technical and special procedures to
accomplish its task.'" Caporusso v. N.J. Dep't of Health & Senior Servs., 434
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N.J. Super. 88, 103 (App. Div. 2014) (alteration in original) (quoting In re Holy
Name Hosp., 301 N.J. Super. 282, 295 (App. Div. 1997)). "As long as the
agency decision is contemplated under its enabling legislation, the action must
be accorded a presumption of validity and regularity." A.M.S. ex rel. A.D.S. v.
Bd. of Educ., 409 N.J. Super. 149, 159 (App. Div. 2009) (citation omitted).
B.
DPF argues that Chester omitted material information concerning the
2018 settlement agreement. DPF asserts the settlement agreement contemplates
future development exceeding that disclosed by Chester in its submission and
that the development will frustrate the Act. We reject this argument for several
reasons.
First, in approving the amended Petition, the Council did not approve
developments contemplated in the settlement agreement. Instead, the Council
examined whether Chester should be designated as a Highlands Center and
whether that designation was consistent with the Master Plan.
Second, the record establishes that the Council and its staff were aware of
Chester's settlement agreement. Although DPF asserts that the Council should
have been given a full copy of the settlement agreement, DPF did not make that
objection during the thirty-day comment period, nor did it move before us to
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supplement the Council's record under Rule 2:5-5(b). See, e.g., In re Highlands
Act, 401 N.J. Super. 587, 595 (App. Div. 2008).
C.
Next, DPF argues that the amended Petition did not meet the applicable
designation requirements for a Highlands Center. In that regard, DPF contends
that Chester's application "serves the sole purpose of facilitating development
in an area currently designated a Highlands Center Protection Zone," violating
the requirement that a Highlands Center be an "area[] of existing development,"
which is "appropriate for additional growth and economic development." N.J.
Highlands Council, RMP Addendum 2019-2 Plan Conformance Procedures 16
(2019), https://www.nj.gov/njhighlands/master/amendments/pc/pcprocedures.p
df.
In the Highlands Region, protection zones consist of high resource value
lands integral to maintaining water infrastructure and sensitive ecological
resources. N.J. Highlands Council, Land Use Capability Zone Map 2 (2008),
https://www.nj.gov/njhighlands/master/tr_land_use_capability_zone_map.pdf.
Development is "extremely limited" in protection zones and "subject to stringent
limitations" meant to preserve environmentally sensitive lands. Ibid. In
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conditionally permitting Chester to be a Highlands Center, the Council found
that the implementation and designation of Resource Zones would allow smart
growth while protecting critical natural resources. Significantly, the Council
also found that most of Chester was developed and thus not part of a protection
zone. The Council's actions reflect a balancing of smart growth with
comprehensive planning. Accordingly, its approval was consistent with the
applicable standards and was not arbitrary, capricious, or unreasonable. See
N.J. Highlands Coal. v. N.J. Dep't of Env't Prot., 456 N.J. Super. 590, 603 (App.
Div. 2017), aff'd as modified, 236 N.J. 208 (2018) (citation omitted)
(recognizing appellate courts should not second-guess judgments falling
squarely within an agency's expertise).
D.
DPF also argues that Chester's amended Petition violates the Act's
legislative policies. Under the Act, the Council has a duty to "protect, restore,
and enhance the quality and quantity of surface and ground waters." N.J.S.A.
13:20-10(b)(1). Accordingly, the Council's Master Plan limits septic system
density and requires adequate and appropriate infrastructure for wastewater.
N.J. Highlands Council, Highlands Regional Master Plan 39, 89, 173 (2008),
https://www.nj.gov/njhighlands/njhighlands/master/rmp/final/highlands_rmp_
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112008.pdf; see also N.J.S.A. 13:20-32. DPF argues that this policy will be
violated because Chester's wastewater system is overburdened, and the
settlement agreement contemplates the construction of a septic system.
Chester's plans, however, call for an upgrade of its wastewater treatment plant
that is expected to remedy its wastewater issues and improve water quality.
Consequently, the new septic system in the settlement agreement is propos ed to
be a temporary system and will be replaced when the wastewater system is
upgraded. Moreover, as already noted, the Council did not approve specific
developments. Instead, it conditionally allowed Chester to be designated as a
Highlands Center. That designation was not inconsistent with or in violation of
the policies embodied in the Act.
E.
Finally, DPF argues that there are two procedural flaws in the Council's
approval of Resolution 2020-03. First, DPF argues that the Council provided an
insufficient public comment period. Specifically, DPF asserts that the Council
should have afforded more than thirty days of public comment because Chester's
implementation plan was amended to include additional funding for a study of
the borough's lands during the comment period.
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The Council is required to afford a thirty-day comment period before
considering a petition for Highlands Center designation. RMP Addendum 2019-
2 Plan Conformance Procedures, at 18. The Council held a public comment
period from November 15, 2019, to December 16, 2019, on Chester's application
to amend its 2016 Petition. The revision did not change the fundamental aspects
of the request to designate Chester a Highland Center, and it did not require
additional time for public comment.
Second, DPF alleges that Council member Alstede "may" have had a
"potential conflict" because his company owned property in Chester. The
Council and its staff are subject to the New Jersey Conflicts of Interest Law,
N.J.S.A. 52:13D-12 to -28. N.J.S.A. 13:20-5(h). Under State Ethics
Commission regulations, State officials are required to recuse themselves from
matters in which they have a financial or personal interest, "direct or indirect,
that is incompatible with the discharge of the State official's public duties."
N.J.A.C. 19:61-7.4(d).
Council member Alstede disclosed that the Council's ethics liaison officer
had found no conflict arising from his company's ownership of real estate in
Chester. DPF points to no law establishing a conflict for a business owner to
consider a municipality's Highlands Center designation. See N.J.A.C. 19:61-
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7.4(e) and (f) (explaining when an "incompatible financial or personal interest"
may exist). Alstede's business owning property in Chester did not create a
fiduciary relationship between him and the borough. Furthermore , the
designation of a Highlands Center does not confer a direct financial benefit to
any property or individual within the Center. Consequently, DPF's conflict of
interest argument has no factual support.
In summary, the record establishes that the Council considered Chester's
request to designate a Highlands Center in a manner consistent with the Act and
the Master Plan. We discern nothing arbitrary, capricious, or unreasonable in
the Council's actions in passing Resolution 2020-03.
Affirmed.
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