NEWARK, NJ - Newark received a $5.6 million settlement from East Orange, ending a seven-year legal battle over wastewater that runs through pipes of the state’s largest municipality.
The wastewater produced by East Orange residents has a natural, gravitational flow into Newark's Wastewater Collection System. Under a 1919 Sewer Agreement between the two municipalities, East Orange had to pay Newark a certain percentage based on its flow of wastewater to a treatment facility at the Passaic Valley Sewage Commission.
However, Brick City realized it was being underpaid about seven years ago, going against the 1919 agreement between the two municipalities, Newark claimed. The case was so complex that the Superior Court appointed a special master to help navigate the issue.
The settlement is for "outstanding sewage payments" to Newark, the city said in a press release. Newark Mayor Ras Baraka called the $5.6 million agreement a "great victory" for the city's taxpayers.
“I am glad that the legal teams of both great municipalities have been able to resolve this matter after so long," Baraka said in a statement.
Newark never charged East Orange for the wear and tear of its pipes that its flow of water created. East Orange was only billed for its treatment of wastewater at the facility in Newark.
Both cities have reached a new agreement that will allow Newark to bill East Orange a "Wheeling Fee."
East Orange Mayor Ted Green said in a statement that he appreciated Newark’s cooperation in striking a “fair” agreement for both cities.
“The East Orange Board of Water Commissioners has closed yet another chapter in its efforts to rebuild our valuable water department and to restore the faith of our customers,” Green said in a statement. “We’ve had to make some tough choices to correct past wrongs, however, the settlement and agreement we recently made with the City of Newark was in the best interest of our utility and constituents.”
The $5.6 million settlement will be paid to Newark in installments. By the end of this year, the East Orange Board of Water Commissioners will pay the first installment of $1 million, a Newark resolution said.