By John Burton
Michael Gianforte, executive director of the Two Rivers Water Reclamation Authority (TRWA), believes the legal battle between the authority and about half of its municipal customers can be settled amicably.
The customers, however, have moved forward and are looking to take the authority to court, alleging overbilling.
“Once in a while you have disagreements, you might have to get a third party to say who’s right and who’s wrong and then you get back to having a great relationship,” Gianforte said this week in response to the lawsuit filed by the towns.
But attorney John Giunco Jr., representing the plaintiff towns, said his clients had sought to settle through negotiation. “Rather than respond to us, they chose to file a complaint,” Giunco said.
Rumson, Red Bank, Sea Bright, Tinton Falls, Shrewsbury Township and Eatontown and the Eatontown Sewerage Authority filed suit in December against the authority, located in Monmouth Beach. The suit alleges that since 2006 the authority has overcharged them more than $1.1 million for treatment costs, double billed them $434,000 for unwarranted construction costs, and billed them for services they did not get and were not supposed to receive, according to the complaint filed in the Superior Court’s Chancery Division in Freehold.
“There are a number of millions [of dollars] that are in question here,” Giunco contended. He said the crux of the suit “is about the proper allocation of those costs and revenues.”
The sewerage authority was established in 1967, creating a two-tier level of service for its members. There are the participant municipalities of Fair Haven, Little Silver, Monmouth Beach, Oceanport, Shrewsbury Borough and West Long Branch and there are the customer municipalities that are the plaintiffs in the suit.
Under the more than 40-year-old agreement, the authority provides wastewater collection services for the participating municipalities. The customer towns “are responsible for owning, constructing, operating and maintaining their own wastewater collections facilities” and then having it move on to the Monmouth Beach authority site for treatment, according to the court documents.
Because the two types of customers receive differing levels of service, the intent of the agreement with the authority is “to apportion both the cost of construction, acquisition and financing of the project and the cost of operation of the System on a fair an equitable basis,” the complaint contends.
“The Authority is continuing to overcharge Customer Municipalities in this manner, and Customer Municipalities are injured thereby,” the complaint said.
The towns in the suit are seeking to “have the economics equalized,” Giunco said. They are looking to have the charges made to their accounts corrected and credits be given where entitled. The attorney said the towns want that “going forward the rates charged will be accurate.”
The Two Rivers Water Reclamation Authority had won a substantial lawsuit against the design engineer of a pumping station, claiming a defect in the design. The award was approximately $11 million, Giunco recalled. “The municipalities are entitled to it. That money should be redistributed and not held in the authority’s account,” he said.
The authority has responded by filing a separate suit against Rumson for nonpayment of repairs to a sewer main. The authority’s participating towns have responded too, filing their own brief, arguing that the existing four-decade-old arrangement is an equitable and fair one.
“We are an open book,” Gianforte said, insisting billing has always been documented, “calculated and distributed over the last 45 years in accordance with that contract.
“It is very early in the process, very early,” Gianforte said, adding that he remained hopeful “and looks forward to resolving the issues.”
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