In October 2011 in a blog post I referred to the Appeals Court decision in Denver Street, LLC v. Town of Saugus, 78 MassAppCt 526 (2011) wherein the Court found a sewer connection fee was an illegal tax. The SJC has now reversed the decision. The town was under an Administrative Consent Order (“ACO”) from DEP to repair leaks in the sewer system. The ACO allowed the town to add one gallon of new flow for every 10 gallons of inflow and infiltration (“I/O”) corrected. The town required new developers, who did not wish to wait unit the I/O was corrected and the sewer connection moratorium to be lifted, to pay a charge multiplied by a factor of 10 for each gallon of new sewerage proposed to be added to the system. The SJC found the requirement to be reasonable because the fee required was directly related to the requirements of the ACO. There is interesting commentary regarding the case in the September 12th edition of Massachusetts Lawyers Weekly. Attorney Donald Pinto (who was not involved in the case) commented that he sees the decision as “good news for municipalities that are operating deficient sewer systems under ACOs with DEP, and bad news for developers.” Counsel for the Town of Saugus, Ira H. Zaleznik, disagreed and is quoted as saying “There is a difference between a community trying to renovate or rehabilitate a sewer system on the backs of new users from this kind of case.” The decision contains more guidance regarding the acceptable standards for connection fees.
PAUL F. ALPHEN, ESQUIRE
BALAS, ALPHEN & SANTOS, P.C.