IN RE FLOOD HAZARD AREA VERIFICATION

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

 

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

A-6364-11T1

IN RE FLOOD HAZARD AREA VERIFICATION

APPROVAL & FRESHWATER WETLANDS

LETTER OF INTERPRETATION

_____________________________________

IN RE AUTHORIZATION FOR

FRESHWATER WETLANDS STATEWIDE

GENERAL PERMIT NO. 6 &

TRANSITION AREA WAIVER

AVERAGING PLAN

_____________________________________

Argued May 6, 2014 Decided June 20, 2014

 

Before Judges Messano and Sabatino.

 

On appeal from the New Jersey Department of Environmental Protection, Agency Docket No. 1103-07-0006.1.

 

Michael L. Pisauro, Jr., argued the cause for appellant Save Hamilton Open Space (Law Office of Michael L. Pisauro, Jr., LLC, attorneys; Mr. Pisauro, Jr., on the briefs).

 

Frank J. Petrino argued the cause for respondent Sharbell Building Company, LLC (Eckert Seamans Cherin & Mellott, LLC, attorneys; Mr. Petrino, of counsel; Mr. Petrino and Jennifer L. Cordes, on the briefs).

 

Sean D. Moriarty, Deputy Attorney General, argued the cause for respondent New Jersey Department of Environmental Protection (John J. Hoffman, Acting Attorney General, attorney; Lewis A. Scheindlin, Assistant Attorney General, of counsel; Mr. Moriarty, on the briefs).

 

Avolio & Hanlon, P.C., attorneys for amicus curiae Italian American Sportsmen's Club, Inc. (Robert P. Avolio, on the briefs).

PER CURIAM

These two related appeals1 involve a local citizens group's challenges to approvals issued by the Department of Environmental Protection ("the Department" or "the DEP") for a proposed residential development in Hamilton Township, Mercer County. In A-6364-11 ("the wetlands appeal"), appellant contests the DEP's issuance of a General Permit No. 6 ("GP6") and a corresponding Transition Area Waiver Averaging Plan ("TAW"), for the property under the Freshwater Wetlands Protection Act ("FWPA"), N.J.S.A. 13:9B-1 to -30, and its implementing regulations. In A-5541-11 ("the flood hazard appeal"), appellant seeks to reverse a Flood Hazard Area Verification Approval ("FHVA") issued pursuant to the Flood Hazard Area Control Act ("FHACA"), N.J.S.A. 58:16A-50 to -101, and that statute's own implementing regulations, and also to overturn the DEP's issuance of a Letter of Interpretation ("LOI") as to the wetlands. Without these various DEP approvals, construction of the development cannot proceed.

Appellant fundamentally argues in both appeals that the approvals should be set aside because they do not comply with the applicable statutes and regulations. Appellant also argues that the approvals, in several respects, lack sufficient evidential support in the administrative record.

Apart from these contentions, appellant specifically argues in the wetlands appeal that the GP6 and TAW should be invalidated as a matter of law. This legal argument arises from the fact that the property owner failed to record, as required, a deed restriction with a conservation easement covering a previously-designated wetlands transition area. Recording such a deed restriction was an express condition of a prior TAW that the Department had issued to the owner in 2001 in connection with an earlier development project.

Appellant further argues that the DEP improperly issued the new TAW in 2012 without holding a public hearing as required by N.J.S.A. 13:8B-5 to eliminate or change portions of the conservation easements mandated by the 2001 TAW. Appellant also contends that the Department entered into a procedurally improper settlement of the owner's clear violation of the 2001 TAW approval, in contravention of principles set forth in Dragon v. N.J. Department of Environmental Protection, 405 N.J. Super. 478 (App. Div.), certif. denied, 199 N.J. 517 (2009). Appellant also asserts that this court's recent published opinion in In re Authorization for Freshwater Wetlands Statewide General Permit 6, 433 N.J. Super. 385 (App. Div. 2013) ("In re Authorization"), disallowing the DEP's use of an unpromulgated "NSPS" point system to evaluate stormwater management plans, requires the permits issued in this case to be vacated.

For the reasons set forth in this opinion, we affirm the Department's decisions in part and vacate them in part. In A-6364-11, we vacate the GP6 and TAW, and remand for further proceedings. If the developer wishes to proceed with the project in its current proposed form, the remand shall include a public hearing, which we agree is required in that circumstance by N.J.S.A. 13:8B-5, to address the requested alteration of the conservation restrictions that had been mandated by the 2001 TAW. The remand also shall require the Department's further consideration of: (1) whether a portion of the claimed wetlands area is, in fact, "isolated," and (2) whether the stormwater component of the wetlands approvals in this case is affected by our recent published opinion.

In A-5541-11, we affirm the Department's final agency decisions concerning the FHVA, as we are satisfied that the agency's disposition of the disputed flood hazard issues has sufficient evidential support in the record and is consistent with the law. However, we vacate the issuance of the LOI for the wetlands because of the problems and open issues we have discerned in the related GP6 and TAW.

I.

A.

The property in question is Block 2575, Lot 47.01 in Hamilton Township. The property consists of 38.3 acres, and is bordered to the north by Kuser Road, and to the south by Interstate 195.

The property is currently owned by the Italian American Sportsmen's Club, Inc. (the "IASC").2 Originally, the IASC owned a larger parcel, then known as Block 2575, Lot 47. In or about 2001 the IASC obtained the Township's approval to subdivide the property into eleven lots, nine of which were designated for single-family dwellings, along with a tenth municipal lot that contained a detention basin. The remaining subdivided lot was retained by the IASC as new Lot 47.01 in Block 2575. The IASC sold the other subdivided lots to a developer, R.P. Hamilton, LLC, more commonly known as "Crestwood." In connection with that development, Crestwood and the IASC obtained various environmental approvals from the DEP. The approvals included a wetlands transition area waiver ("the 2001 TAW") which, for the reasons we explain infra, becomes legally significant in the present appeals. Crestwood thereafter built homes on the subdivided lots and sold them.

The current proposed development arises out of an April 2010 contract between the IASC and respondent Sharbell Building Company, LLC ("Sharbell").3 The project contemplates that Sharbell would obtain approval to subdivide the 37.7 acres in Lot 47.01 as follows. The IASC would retain a 4.85-acre subdivided portion of that parcel, which currently contains the IASC's clubhouse. The remaining subdivided 32.85-acre portion would be developed into what is described in the record as "a residential community consisting of a minimum of 48 lots for market-rate single family residential dwelling units." Appellant, Save Hamilton Open Space ("SHOS") is a local citizens group that objects to the proposed development.

Sharbell, in its capacity as developer, sought and obtained various approvals from the DEP to enable the project to go forward. Those approvals are the subject of SHOS's challenge, and the present appeals.

Although the respective procedural histories of the flood hazard and wetlands disputes substantially overlap, we begin with a separate preliminary discussion of each of those disputes, as well as the applicable statutory and regulatory framework.

B.

A-6364-11 (the Wetlands Appeal)4

The FWPA, N.J.S.A. 13:9B-1 to -30, was enacted by the Legislature "as a mean of protecting and regulating New Jersey's sensitive freshwater wetlands." N.J. Dep't of Envtl. Prot. v. Huber, 213 N.J. 338, 341 (2013). Specifically, the Legislature determined, among other things, that New Jersey's freshwater wetlands are environmentally significant because they (1) protect and preserve the State's drinking water supplies; (2) provide natural flood and storm damage protection; (3) slow the process of soil erosion by serving as a buffer between dry land and water courses; (4) provide breeding, nesting, and wintering habitats for the State's wildlife; and (5) provide a gradual release of stored groundwater and flood waters during drought periods. N.J.S.A. 13:9B-2.

Accordingly, the Legislature determined in the FWPA that "it is in the public interest to establish a program for the systematic review of activities in and around freshwater wetland areas . . . to preserve the purity and integrity of freshwater wetlands from random, unnecessary or undesirable alteration or disturbance[.]" Ibid. With these purposes in mind, the FWPA:

established a permitting process to which a property owner must submit before engaging in an activity that risks disturbing freshwater wetlands or protected transition areas near wetlands. The permit review and approval scheme balances a property owner's ability to make use of land on or near freshwater wetlands and the public's interest in preserving these natural resources from impairment that would impede the wetlands' ability to fulfill their integral environmental role.

 

[Huber, supra, 213 N.J. at 341.]

That permitting process is at the heart of the wetlands appeal in this case.

The FWPA defines "freshwater wetlands" as areas that are "inundated or saturated by surface water or groundwater at a frequency or duration sufficient to support . . . a prevalence of vegetation typically adapted for life in saturated soil conditions." N.J.S.A. 13:9B-3. Such freshwater wetlands are divided into three distinct categories. The first category, which is the most highly protected one, concerns wetlands of "exceptional resource value." As the Supreme Court has explained:

These wetlands [in the first category] are defined by their discharge points and by whether they are present habitats for threatened or endangered species or whether they have been established as suitable for breeding, resting or feeding by threatened or endangered species during the normal period those species would use the habitat. N.J.S.A. 13:9B-7(a)(2).

 

[Huber, supra, 213 N.J. at 345 (quoting In re Freshwater Wetlands Prot. Act Rules, 238 N.J. Super. 516, 518-19 (App. Div. 1989)).]

There are two "lesser protected" categories. These are: freshwater wetlands of "ordinary value," defined as those wetlands "which do not exhibit the characteristics" of freshwater wetlands of exceptional resource value and "which are certain isolated wetlands, man-made drainage ditches, swales or detention facilities," see N.J.S.A. 13:9B-7(2)(b); and freshwater wetlands of "intermediate resource value," which are "all freshwater wetlands not included" within the other two categories, see N.J.S.A. 13:9B-7(2)(c).

The FWPA also regulates and protects adjacent "transition areas." Such transition areas are defined as:

areas of land adjacent to freshwater wetlands which minimize adverse impacts on the wetlands or which serve as an integral component of the wetlands ecosystem. N.J.S.A. 13:9B-3. They are more specifically defined in terms of distance and type in N.J.S.A. 13:9B-16. The type of activities limited in transition areas, as well as the circumstances under which a waiver of the requirements may be obtained, are described in N.J.S.A. 13:9B-17 and N.J.S.A. 13:9B-18.

 

[Huber, supra, 213 N.J. at 345 (quoting In re Freshwater Wetlands Prot. Act Rules, supra, 238 N.J. Super. at 522).]

 

The wetlands dispute here arises from Sharbell's applications to the DEP for a GP6 and TAW. A GP6 "authorizes regulated activities in freshwater wetlands . . . if the freshwater wetlands . . . are not part of a surface water tributary system discharging into an inland lake or pond, or a river or stream." N.J.A.C. 7:7A-5.6(a) (emphasis added). Once a GP6 has been issued, the activities in the affected wetlands area "shall disturb no more than one acre of a freshwater wetland." N.J.A.C. 7:7A-5.6(b)(1) (emphasis added).

A TAW, meanwhile, is a means of altering what otherwise would be the required transition area adjacent to the designated wetlands. A TAW "modifies the overall shape of a transition area without reducing its total square footage." N.J.A.C. 7:7A-6.2(a) (emphasis added). "The Department may approve a [TAW] for activities adjacent to an intermediate or exceptional resource value freshwater wetlands." Ibid.

On June 18, 2001, the DEP issued an authorization for a freshwater wetlands LOI and a TAW in connection with the Crestwood project relating to the property then known as Block 2575, Lot 47. Of pertinence to the instant appeal, the section of the DEP's letter detailing the terms of the 2001 TAW stated:

The Land Use Regulation Program has determined that the freshwater wetlands present on or adjacent to the above referenced property are of [i]ntermediate resource value. Pursuant to N.J.A.C. 7:7A-6, a standard transition area of 50 feet is required adjacent to intermediate wetlands. The submitted plan shows a modification to this standard transition area through the means of a transition area averaging plan.

 

Section 7:7A-7 of the Freshwater Wetlands Protection Act Rules discusses the conditions under which the standard transition area may be modified if the Department determines that the modification will result in minimal environmental impact and that the modified transition area will continue to feature the purposes and functions set forth in N.J.A.C. 7:7A-6.1(a) and (b). Based upon a review of the submitted information, the Department has determined that the proposed modified transition area boundary line as shown on the plan map referenced above will continue to meet the purposes and functions of a transition area as detailed in the Act and implementing rules providing the following conditions are met.

 

[(Emphasis added).]

The DEP's letter approving the 2001 TAW specified three waiver conditions that had to be met, in addition to the standard conditions set forth in N.J.A.C. 7: gy7A-7. The first waiver condition mandated that "the transition area shall be reduced by 12,916 square feet of surface area and compensated by an[] equal or greater surface area." (Emphasis added). The second condition5 required that:

The applicant shall sign a Department approved deed restriction for the subject parcel(s). The restriction shall be included on the deed, and recorded in the office of the County Clerk (the REGISTRAR OF DEEDS AND MORTGAGES), in the county wherein the lands included in the permit or waiver are located. The restriction shall state that no regulated activities shall occur in the modified transition area without the prior approval of the Department. The restriction shall run with the land and be binding upon all successive owners. All individual lot surveys shall show the approved wetlands and transition area boundaries. Any regulated activities undertaken on the site before a copy of the recorded restriction is submitted to the Department will be considered in violation of the [FWPA].

 

[(Emphasis added).]

 

For reasons that are not clear from the record before us, the deed restriction mandated by the 2001 TAW was never filed. Nevertheless, Block 2575, Lot 47 was subdivided in the manner we have already described. The Crestwood project was built and the homes were sold to private residents, despite the absence of a recorded deed restriction.

Almost a decade later, Sharbell entered into its 2010 contract with the IASC to develop most of the remaining land in former Lot 47. Sharbell filed an application with the DEP for a GP6 and TAW relating to the IASC's previously-retained portion of former Lot 47, Lot 47.01, in October 2010. As part of its application, Sharbell sought to modify the boundaries of the transition area that had been previously specified by the DEP in the 2001 TAW. More specifically, Sharbell proposed to encroach upon a portion of the transition area and, instead, create a larger transition area in other locations on the site.

When initially responding to Sharbell's application for the GP6 and TAW, the Department expressed concerns because the proposed new TAW would change the dimensions of the transition area that had been approved in the 2001 TAW. These concerns were expressed in a December 14, 2010 letter from the supervisor of the DEP's Bureau of Inland Regulation to Sharbell's environmental consultant, Dynamic Engineering Consultants, P.C. ("Dynamic"). The supervisor's letter advised Dynamic that the property's wetlands and transition areas "can not be modified further, since a condition of a previous approval [i.e., the 2001 TAW] required the wetlands and transition areas to be deed restricted from additional disturbances."

The DEP's December 14, 2010 letter further instructed Dynamic that the prior conservation restrictions could not be changed, unless they were released in accordance with the procedures set forth in the New Jersey Conservation Restriction and Historic Preservation Restriction Act, N.J.S.A. 13:8B-1 to -9.6 According to the DEP's letter, under the applicable statutes and regulations, "regulated activities cannot be authorized within a conservation deed restricted area and shall remain permanently preserved in a natural state." The supervisor therefore suggested to Sharbell that it revise its development plan and omit any encroachment on the transition areas covered by the 2001 TAW, rather than have to undertake "the lengthy and onerous procedures" prescribed in N.J.S.A. 13:8B-5 for modifying pre-existing conservation restrictions.

Sharbell nevertheless persisted in attempting to have the Department approve a new TAW with revised boundaries. To enhance its application, Sharbell modified the proposed TAW so as to increase the total transition area and decrease the amount of encroachment on the previously-designated buffer.

In January 2011, SHOS's attorney wrote a letter to the Department objecting to Sharbell's attempt to change the transition areas that had been specified under the 2001 TAW. SHOS's counsel also noted that the deed restrictions required under the 2001 TAW had never been recorded. Based on that failure, SHOS urged the DEP to deny the IASC or Sharbell any relief that would alter the 2001 TAW.

SHOS retained its own environmental consultant, Princeton Hydro, which reviewed Sharbell's application materials. Princeton Hydro disagreed with several aspects of the developer's application, including Sharbell's contention that a portion of the identified wetlands were "isolated" and therefore not subject to the stringent wetlands regulations. According to Princeton Hydro, the disputed area was not, in fact, isolated because "it is connected through a combination of concentrated surface flow and flow through a drainage stormwater pipe to down gradient wetlands." SHOS supplied Princeton Hydro's expert analysis to the DEP.

Sharbell submitted a revised version of its TAW and GP6 application to the DEP in March 2011. The revised application materials included historical aerial photographs of the area from 1940, 1963, 1979, and 2007. Based on those photos, Sharbell asserted that "the proposed isolated wetlands area to be filled does not appear to be historically contiguous with other wetlands areas."

Meanwhile, the Department began to address the IASC's failure to record the conservation restrictions that had been mandated by the 2001 TAW. The DEP issued a Notice of Violation ("NOV") to the IASC on June 9, 2011. The NOV charged the IASC with failing to comply with waiver condition number two of the 2001 TAW, which had specifically required the IASC to record a deed restriction with the Mercer County Clerk's Office. The IASC was given thirty days from the date of the NOV to comply with that recording condition.

In response to the NOV, Sharbell sent a letter to the DEP on July 11, 2011. The letter advised that Sharbell:

has worked with the Land Use Division of the NJDEP to resolve this issue [the unrecorded 2001 deed restriction and subsequent NOV]. Accordingly, we have worked with [the] Department to develop the enclosed Transition Area Waiver Plan that takes into consideration the previously approved Wetlands Transition Area Expansion on Lot 47.01, Section 2575 and provides additional transition area waiver compensation at over a 2:1 compensation ratio.7 Per our conversations with the NJDEP, the applicant [Sharbell] intends to sign and record the appropriate deed restrictions with the County for the Wetlands and Wetlands Transition Area Waiver on Lot 47.01, Section 2575 as shown on the enclosed Transition Area Waiver and General Permit Plan. This will resolve the violation in relation to Lot 47.01.

 

[(Emphasis in original).]

 

Around the same time as these events occurred concerning the TAW and other wetlands issues, SHOS requested an administrative hearing to contest the DEP approval of Sharbell's FHVA application.8 The DEP Commissioner denied SHOS's hearing request as untimely. However, the Commissioner nonetheless remanded the matter within the Department for further fact-finding, and for detailed written findings.

SHOS also filed an appeal in A-5444-109 with this court challenging the issuance of the FHVA and the LOI to Sharbell. In March 2012, we remanded that appeal to the DEP for further fact-finding.

On remand, the DEP issued a determination entitled "Department Response to Comments" on June 7, 2012. Among other things, the Response to Comments acknowledged the objectors' contention that the DEP should not have granted any approvals to Sharbell until the conservation deed restriction required by the 2001 TAW had been appropriately recorded. The DEP also acknowledged the objectors' concerns about allowing Sharbell to encroach upon areas that had been intended to be protected by the 2001 TAW.

Nevertheless, the DEP rejected these concerns, despite the earlier December 14, 2010 letter from its supervisor of the Bureau of Land Regulation that had advised Sharbell to leave intact the entire transition area delineated in the 2001 TAW. The DEP also took the position that IASC's violation of the deed recording requirement was a separate problem that would not stand in the way of Sharbell's permit requests. As the Response to Comments noted:

Neither the [FHVA] nor the LOI authorize Sharbell to conduct activities in the area to be restricted by the TAW. In addition, no statutory or regulatory requirement prevents the Department from issuing either the [FHVA] or the LOI in the face of this separate and distinct permit violation.

 

Nevertheless, the Department has moved to enforce the terms of the [2001] TAW. On December 14, 2010, the Department issued a deficiency letter to Sharbell identifying the wetlands and wetland transition areas that were covered by the original deed restriction. In a January 31, 2011 Guidance Letter, the Department requested that Sharbell record a conservation restriction but determined it would allow for de minimis modifications to the area to be deed restricted by the TAW to reflect Sharbell's amended development design. Finally, on June 9, 2011, the Department issued a Notice of Violation to Sharbell[10] for failure to record the required deed restriction. Before issuing the pending FWPA permit to Sharbell, the Department will require Sharbell to record an approved deed restriction that complies fully with the applicable provisions of the FWPA and ensures protection of the resources before any development activities occur on the Property. The specifics of the deed restriction will be discussed in connection with the pending FWPA permit.

 

Concerning a separate issue, the Response to Comments also noted that an objector had contested "the identification of isolated wetlands on the northern portion of the Property near Kuser Road." The DEP disagreed with that objection, stating in the Response to Comments that its own inspections had correctly identified as isolated two wetlands in the northern portion of the site (i.e., wetland areas A and B). According to the DEP, "[t]hese wetlands had no surface water connection and therefore are 'part of the surface water tributary system' and classified as isolated under N.J.A.C. 7:7A-1.4."

Having rejected the various objections, the Department issued the GP6 and TAW to Sharbell on July 10, 2012. As calculated by Sharbell and its expert, the TAW "reduce[d] the transition area [previously designated by the 2001 TAW] by 15,503 square feet (0.356 acres) and provide[d] 35,954 square feet (0.825 acres) of additional area as compensation."

The DEP thereafter issued an Addendum to its Response to Comments on August 20, 2012. That Addendum addressed several other comments that the agency had received pertaining to the TAW and GP6. Regarding the TAW issues, the Addendum specifically expressed approval of Sharbell's proposal to revise the boundaries of the 2001 TAW and to create a larger buffer in a new TAW. The Addendum stated in this regard:

The 2001 TAW allowed for the reduction of the wetland transition area by 12,916 square feet with an equal amount to be deed restricted from future development, as compensation under N.J.A.C. 7:7A-6.2. The reductions were associated with Crestwood's now-completed extension of the Dark Leaf Drive development located on the western side of the Wetlands Area C. In total, the 2001 TAW required Crestwood to deed restrict an area of 8.892 acres (387,352 square feet).

 

Upon investigation, the Department discovered that Crestwood had completed its development and encroached on the transition area in the amount of 12,916 square feet without recording [the] deed restriction required by the 2001 TAW. The Department sought to require Sharbell, the current developer, to record the required deed restriction. Despite not becoming involved with the Property until after the issuance of the 2001 TAW, Sharbell agreed to execute a deed restriction with minor modifications to what was required under the 2001 TAW that would account for its current development plans. The Department agreed on the condition that Sharbell provide compensation for any transition area encroachments at a greater than 1:1 ratio and issued the GP6 and 2012 TAW subject to Sharbell recording an approved deed restriction.

 

The 2012 TAW allows for a cumulative reduction of 1.287 acres (56,066 square feet) in the transition area while requiring a total of 3.680 acres (160,284 square feet) of compensation. The total reduction includes both Crestwood's previous 12,916 square feet as well as an additional 43,150 square feet of proposed reduction by Sharbell. Similarly, the total compensation includes the 12,916 square feet from the 2001 TAW as well as an additional 147,368 square feet from Sharbell. Accordingly, the Department will receive and the public will realize a net increase of preservation/compensation area at more than 2:1. The 2012 TAW will restrict a total of 491,284 square feet as compared to the 2001 TAW's total restriction of 387,352 square feet.

 

The Department has determined that the 2012 TAW is as much, if not more, protective of wetland resources as the 2001 TAW.

 

[(Emphasis added).]

The Addendum also reaffirmed the propriety of the GP6 the DEP had issued to Sharbell, noting that:

Sharbell's application for a GP 6 to fill less than one acre of freshwater wetlands that are not part of a water of the United States complies with the Freshwater Wetlands Protection Act Rules. N.J.A.C. 7:7A-5.6 authorizes activities that disturb no more than one acre of freshwater wetlands and/or State open waters that are not waters of the United States as defined by N.J.A.C. 7:7A-1.4. In accordance with the previously-issued LOI for the Property, the onsite wetlands are intermediate resource value wetlands that do not fall within any of the enumerated categories and are therefore not waters of the United States as defined by N.J.A.C. 7:7A-1.4. As such, the activities proposed are eligible for a GP 6 and no mitigation is required.

 

SHOS thereafter filed this post-remand appeal (A-6364-11), challenging the Department's issuance of both the GP6 and TAW.

C.

A-5541-11 (The Flood Hazard Appeal)

At issue in this particular appeal are Sharbell's applications for an FHVA and the LOI.11 As we have already noted, the FWPA requires that certain permits be obtained before regulated activities are conducted in freshwater wetland areas. N.J.S.A. 13:9B-9. With respect to an LOI, under N.J.S.A. 13:9B-8(a):

A person proposing to engage in a regulated activity in a freshwater wetland or in an activity which requires a transition area waiver may, prior to applying for a freshwater wetlands permit or transition area waiver, request from the department a letter of interpretation to establish that the site of the proposed activity is located in a freshwater wetland or transition area.

An FHVA is similar to an LOI, but is instead governed by the FHACA, the flood hazard statute. The FHACA "empower[s] the Department . . . to delineate and mark flood hazard areas, . . . [and] to adopt land use regulations for the flood hazard area." N.J.S.A. 58:16A-50(b). To carry out that mission, the DEP is authorized under the FHACA "to adopt, amend, and repeal rules and regulations and to issue orders concerning the development and use of land in any delineated floodway which shall be designed to preserve its flood carrying capacity and to minimize the threat to the public safety, health and general welfare." N.J.S.A. 58:16A-55(a).

A flood hazard area permit is required from the DEP in order to conduct certain activities in flood areas regulated by the FHACA. N.J.A.C. 7:13-2.1(a). Prior to seeking such a permit, a party may apply for an FHVA. N.J.A.C. 7:13-6.1(a) explains that an FHVA is

a document containing the Department's approval of the flood hazard area design flood elevation on a site, includes either a flood hazard area limit or an indication that the entire site is in a flood hazard area, and may also include a floodway limit and/or a riparian zone limit, if applicable.

 

In instances where, as here, the DEP or the Federal Emergency Management Agency have not previously delineated the regulated waters on a particular site, the applicant is responsible for performing that delineation. N.J.A.C. 7:13-6.1(c).

The LOI

Sharbell initially applied to the DEP for an LOI in June 2010. After correcting a deficiency, Sharbell resubmitted the LOI application in July 2010. The following month, the DEP issued public notice of its receipt of the LOI application.

The DEP approved the LOI on April 7, 2011, determining that Sharbell and its expert had accurately mapped the wetlands and waters located on the parcel. The DEP agreed with Sharbell that the wetlands were in the less-protected "intermediate resource value" category, and thus required a standard fifty-foot transition area. In addition, the DEP identified two isolated wetlands on the property.

In September 2011, SHOS appealed the issuance of the LOI, as part of its appeal in the flood hazard matter, A-5541-11. That appeal was then remanded by this court to the agency, and has now been resumed following completion of that remand.12

The FHVA

Sharbell submitted its FHVA application to the DEP in August 2010. After receiving that application, the DEP conducted field visits to the site in the latter part of 2010. In a December 1, 2010 letter, the DEP expressed concern that "[d]uring a field visit to the project site, it became apparent that the State Open Waters ([a] tributary of Back Creek) in the southwestern portion of the site extend [to the] northern upstream property boundary on your plan." Further, the DEP advised Sharbell that "[t]he riparian zone extends 150 feet from the top of [the] bank along both sides of any regulated water. . . . Your plans must accurately show the limits of flood hazard area and riparian zone for each regulated water located onsite."

After a December 22, 2010 meeting attended by Sharbell, Dynamic, and DEP representatives, Dynamic sent a letter to the DEP responding to the concerns the DEP had expressed about the FHVA. Among other things, Dynamic disputed the DEP's initial determination that the tributary located on the southwestern portion of the property was a "regulated water" under the FWPA. Dynamic pointed out that the area in question did not have a tributary drainage area of fifty or more acres, and thus did not have a flood hazard area associated with it. See N.J.A.C. 7:13-2.2(a)(3). Dynamic further contended that each of the following conditions under N.J.A.C. 7:13-2.2(a)(3) apply to the disputed area, making that area ineligible to be considered a "regulated water" under the FWPA:

i. The water has no discernible channel;

ii. The water is confined within a lawfully existing, manmade conveyance structure or drainage feature, such as a pipe, culvert, ditch, channel or basin (not including any water that historically possessed a naturally-occurring, discernible channel, which has been piped, culverted, ditched or similarly modified); and/or

 

iii. The water is not connected to a regulated water by a channel or pipe, such as an isolated pond or depression that has no outlet.

 

[N.J.A.C. 7:13-2.2(a)(3)(i) to (iii).]

 

In support of these contentions, Dynamic's letter referred to observations made during a December 10, 2010 site visit. With respect to the area of the site located between Wetlands Flags WC-15/WC-16 and WC-9/WC-23, Dynamic stated:

According to our site investigation, the wetlands area located approximately between Wetlands Flags WC-15/WC-16 and Wetlands Flags WC-9/WC-23 consists of several impoundments. Within this area we found no defined bed and banks or discernible channels. Furthermore, the topography on the original ALTA/ACSM Land Title Survey for the site was provided by aerial photography on July 16, 2010. Due to the heavy vegetation within the subject area in question at the time, the aerial topography may have been somewhat inaccurate. Therefore, the surveyors went back to the site to take ground shots in order to provide more detailed topography within this wetlands area. . . . According to our review of the updated topographical information, no defined bed and banks or discernible channels were depicted within the wetlands area located approximately between Wetlands Flags WC-15/WC-16 and Wetlands Flags WC-9/WC-23. Therefore, due to the fact that this area has a tributary drainage area of less than 50 acres and no discernible channel, this area should not be considered a regulated water per [N.J.A.C.] 7:13-2.2(a)(3).

 

[(Emphasis added).]

 

In addition, Dynamic asserted that another area of the site, located between Wetlands Flags WC-9/WC-23 and WC-5/WC-27, also was not "regulated water," even though a discernible channel of water had been observed there. Dynamic submitted that the channel was merely "a manmade drainage feature that is not naturally occurring." Dynamic reached this conclusion after examining historical aerial photographs from 1940, 1963, 1979, and 2007, and related videotapes.13 As Dynamic explained:

As shown on the enclosed Historical Aerials and the videos comparing the historical aerials to the 2007 aerial, the subject channel did not exist prior to 1979. Furthermore, according to our review of the Supplemental Topographic Map, the subject erosion ditch is located directly downstream of the concrete headwall that discharges runoff from the existing detention basis located at Lot 94, Block 2575. It is important to note that the subject detention basin was not constructed until after 1979 after which time the ditch feature appears as an apparent result of the basin discharge.

 

. . . .

 

According to our site visit, review of the historical aerials and review of the Supplemental Topographic Map, it appears that the discernible channel that exists approximately between Wetlands Flags WC-9/WC-23 to Wetlands Flags WC-5/WC-27 is an erosion ditch that extends from the detention basin's discharge point. Therefore, this erosion ditch is a manmade drainage feature that is not naturally occurring and therefore should not be regulated [under the FHACA].

 

[(Emphasis added).]

 

The DEP responded to Dynamic's submission in a letter to Sharbell on January 31, 2011. The DEP expressed disagreement in that letter with the developer's contention that the area in question was not regulated water. The response letter stated that the agency's staff engineer and environmental specialist had visited the site a second time on January 4, 2011. Based upon that second inspection, the DEP then remained of the opinion that the area contains a "defined" and "well established" watercourse, which was "in a natural position in the landscape for a watercourse, and is surrounded by wetlands."

Thereafter, however, the Department changed its position. The Department was ultimately persuaded by Sharbell and Dynamic that the disputed tributary in the southwestern portion of the site did not, in fact, extend further northward and hence it was not regulated water under the FHACA. The agency consequently issued the FHVA to Sharbell on May 23, 2011.

SHOS appealed the FHVA determination to this court within its appeal in A-5541-11. We then remanded those issues to the Department, as part of the proceedings we have already mentioned. On remand, the DEP rejected SHOS's request for a formal adjudicatory hearing,14 and instead considered the matter informally, including a review of SHOS's written objections.

As part of its challenge to the agency's FHVA approval, SHOS submitted to the DEP a report from its expert, Princeton Hydro. Princeton Hydro specifically disputed the propriety of the DEP's reliance upon the historical aerial photos and videos that had been submitted by Sharbell and its expert. According to Princeton Hydro, its own review of the topography showed that the area in dispute had a drainage area of more than fifty acres, thereby making it a "regulated water" under the pertinent regulations. SHOS and Princeton Hydro therefore urged that the DEP reinstate the conclusions it had originally reached after the two site visits. They asserted that the aerial photos had been misused as "secondary" resources, which should not overturn the DEP's original field assessments.

As a separate item, SHOS and Princeton Hydro also disputed whether a certain portion of the site, which has been described by the parties as the "thumb," should be treated as unregulated water. According to Princeton Hydro's analysis, an aerial photograph from the 1930's shows that a natural stream had once been within the "thumb" area, which at some later point changed. Hence, Princeton Hydro and SHOS contended that, at a minimum, the "thumb" portion of the property should be treated by the DEP as a "regulated water" and therefore should be excluded from the FHVA approval.

On remand, the DEP rejected all of SHOS's contentions relative to the FHVA and the flood hazard issues. In its June 7, 2012 Response to Comments, the DEP acknowledged that it had received several comments regarding the proper delineation of the southwestern tributary, but that it had ultimately concluded that Sharbell's position concerning the actual nature of those waters was correct.

In particular, the Response to Comments explained that at least one of the agency's prior site visits had been hindered by snow melting conditions. According to the DEP, that weather-related limitation on the field visits justified the agency's subsequent consideration of the historical aerial photos that had been provided by Sharbell. Upon considering those aerial photos, the DEP was persuaded that the waters in question had resulted from a damaged portion of a drainage system in a nearby development. As the Response to Comments explained:

On three occasions during its review of the Verification application, the Department expressed its initial position was that the limit of the SW tributary should extend into the Disputed Area and that Sharbell should include that area in its delineation. . . .

 

While it did express its initial position that the delineation should extend into the Disputed Area, the Department has reevaluated its earlier position based on additional information provided by Sharbell and the Department's further review of the issue. . . . During a subsequent meeting on February 3, 2011, the Department determined that the construction of a near-by detention basin, unrelated neighboring development, and a storm water drainage system had altered the flow of the SW Tributary and contributed to its hydrology. In addition, Dynamic Engineering's in a letter dated November 11, 2011 provided information that erosion stemmed from a damaged concrete level spreader initially constructed at the pipe discharge for the existing detention basin. The concrete spreader was damaged and thus creating a point discharge which resulted in the erosional feature. The Department's reexamination of aerial photos from 1940, 1963, and 1979 further showed the absence of a regulated watercourse in the Disputed Area.

 

The Department then determined that flow associated with a snow melting period gave a false impression of the area during its January 4, 2011 staff inspection and the Department's reassessment of the area at different times of the year indicated that under normal hydrologic conditions, the Disputed Area contained only an intermittent erosional feature and is not a regulated watercourse. The Department further found the portion of the SW Tributary within the Disputed Area inconsistent with a natural feature because one portion lacks a defined channel with bed and banks, and other portions consist of a braided network of erosional gullies.

 

. . . .

 

Based on this information provided, the Department has reevaluated its initial position and concluded that the feature in the Disputed Area had a drainage area of less than 50 acres and was a result of manmade activities without a defined channel with bed and banks. Consequently, the Department classified that portion as a non-regulated erosional feature under N.J.A.C. 7:13-2.2.

 

[(Emphasis added).]

 

The Response to Comments likewise rejected SHOS's arguments regarding the "thumb feature," which it described as being located "near the apron of an existing RCP storm structure with 150 feet riparian zone." The DEP indicated that an onsite inspection had shown that "the [thumb] area was filled and mounded over a drainage pipe. The inspection further revealed no evidence of water or hydrology flowing through this area." Accordingly, the Department concluded that the "thumb feature" is merely "an unregulated man-made erosional feature in accordance with N.J.A.C. 7:13-2.2."

SHOS thereafter appealed from the remand decision.

II.

Our scope of review in evaluating the many arguments presented by SHOS in these two appeals is a mixed one. With respect to the issues before us that purely involve the Department's expertise as an administrative agency, we review SHOS's challenges with considerable deference. In that context, an appellate court "will not reverse the ultimate determination of an agency unless the court concludes that it was 'arbitrary, capricious or unreasonable, or that it lacked fair support in the evidence, or that it violated legislative policies' expressed or implied in the act governing the agency." In re Freshwater Wetlands General Permit No. 16, 379 N.J. Super. 331, 341 (App. Div. 2005) (quoting Campbell v. Dep't of Civil Serv., 39 N.J. 556, 562 (1963)). "This deference is even stronger when the agency, like [the] DEP in regards to wetlands, 'has been delegated discretion to determine the specialized and technical procedures for its tasks.'" In re Freshwater Wetlands General Permits, 372 N.J. Super. 578, 593 (App. Div. 2004) (quoting Newark v. Natural Res. Council, Dep't of Envtl. Prot., 82 N.J. 530, 540, cert. denied, 449 U.S. 983, 101 S. Ct. 400, 66 L. Ed. 2d 245 (1980)).

By contrast, where the arguments before us involve questions of law such as those here concerning the legal effect of the IASC's failure to record the deed restriction mandated by the 2001 TAW we are not bound by, and owe no great deference to, the administrative agency's position on such legal matters. See In re Stream Encroachment Permit, 402 N.J. Super. 587, 597 (App. Div. 2008) (citing Greenwood v. State Police Training Ctr., 127 N.J. 500, 513 (1992)); see also Manalapan Realty, L.P. v. Manalapan Twp. Comm., 140 N.J. 366, 378 (1995). To be sure, where the legal issues on appeal concern the meaning of an administrative regulation, we normally accord the agency some degree of deference in interpreting that regulation. In re Freshwater Wetlands General Permit No. 16, supra, 379 N.J. Super. at 341-42; see also Essex Cnty. Bd. of Taxation v. Twp. of Caldwell, 21 N.J. Tax 188, 197 (App. Div. 2003). Even so, "[w]hile [a court] must defer to the agency's expertise, [the court] need not surrender to it." N.J. Chapter of Nat'l Ass'n of Indus. & Office Parks v. N.J. Dep't of Envtl. Prot., 241 N.J. Super. 145, 165 (App. Div.), certif. denied, 122 N.J. 374 (1990).

With these different standards of review in mind, we now turn to the substance of the two appeals.

A.

1.

We primarily focus our analysis of the wetlands appeal upon the thorny issues relating to the legal consequences of the failure of the IASC (and possibly of the prior developer, Crestwood),15 to record with the County Clerk the conservation easements mandated by the 2001 TAW. We reject the contentions of Sharbell and the DEP that this failure is inconsequential because Sharbell has since expanded the dimensions of the transition area, the DEP has approved that allegedly beneficial modification, and Sharbell has already recorded deed restrictions containing the terms of the 2012 TAW. We disagree with respondents' position that these more recent actions have somehow cured the deficiency.

In fact, there is a regulation squarely on point that specifically addresses the "no-recording" scenario now before us.16 That regulation is N.J.A.C. 7:7A-6.1(e), which provides, in pertinent part, as follows:

[A]ll transition area waivers shall be conditioned on the recording of a Department-approved conservation restriction or easement, as defined at N.J.A.C. 7:7A-1.4, and in accordance with the requirements at N.J.A.C. 7:7A-2.12, restricting future activities in the entire transition area and adjacent wetlands on the site.

 

1. If the permittee does not conduct regulated activities before the transition area waiver expires, the following apply with regard to the transition area:

i. If no activities have been conducted, regardless of whether or not the conservation restriction or easement was recorded, the permittee shall obtain a new transition area waiver to conduct regulated activities in the transition area; or

ii. If no activities have been conducted and the conservation restriction or easement was properly recorded, but the permittee wants to reconfigure the project to use portions of the property contained within the restriction or easement, the permittee shall apply for a new transition area waiver, together with a request for a modification of the conservation restriction or easement, in accordance with the procedures at N.J.A.C. 7:7A-2.12(i).

 

2. In the case of a subdivision for which a transition area waiver was approved, if one or more lots remain undeveloped when the transition area waiver expires, the following shall apply with regard to the transition area:

i. If no activities have been conducted on a lot which was part of a larger subdivision, regardless of whether or not the conservation restriction or easement was recorded, the permittee shall apply for a new transition area waiver for the lot, using the same plan that was used to obtain the transition area waiver for the subdivision as a whole. That is, if a transition area waiver averaging plan was obtained for the subdivision as a whole and that transition area waiver averaging plan expires, the individual lot owner shall apply for a transition area averaging plan for the individual lot using the original averaging plan for the subdivision as a whole. The Department shall consider proposed changes to the originally approved plan only if the conservation easement or restriction was recorded and the changes meet the standards for a de minimis modification at N.J.A.C. 7:7A-2.12(i).

 

3. If the permittee does not properly record the required conservation restriction or easement, he or she shall be in violation of the Freshwater Wetlands Protection Act and this chapter.

 

[(Emphasis added).]

Subsection (2)(i) of N.J.A.C. 7:7A-6.1(e) clearly fits the situation here. The case involves "a subdivision for which a transition area waiver was approved," specifically the 2001 TAW for the Crestwood project. In addition, "one or more lots" of that subdivision, i.e. Lot 47.01, "remain[ed] undeveloped when the [2001] transition area waiver expire[d]" five years after its issuance.17 If, as of that TAW expiration date, no activities have been conducted on the "lot which was part of a larger subdivision," then "regardless of whether or not the conservation restriction or easement was recorded," the permittee "shall apply" for a new TAW, "using the same plan that was used to obtain the [TAW] for the subdivision as a whole." (Emphasis added). The permittee must adhere to the "original averaging plan for the subdivision as a whole." Moreover, the regulation specifies that the DEP will consider changes to the originally approved TAW "only if the conservation easement or restriction was recorded and the changes meet the standards for a de minimis modification at N.J.A.C. 7:7A-2.12(i)." (Emphasis added).

Stated more simply, the property owner and developer are legally required to adhere to the boundaries of the TAW originally approved by the DEP. The regulation allows them to modify the boundaries to a de minimis degree18 "only if" the conservation easement had been duly recorded. Here, it was not recorded.

As the DEP's supervisor correctly indicated in his December 14, 2010 correspondence to Dynamic, the only statutory mechanism for a conservation restriction to be removed or altered is set forth in Title 13. Specifically, N.J.S.A. 13:8B-5 provides that:

A conservation restriction or an historic preservation restriction may be released in whole or in part, by the holder thereof, for such consideration, if any, as the holder may determine, in the same manner as the holder may dispose of other interests in land, subject to such conditions as may have been imposed at the time of creation of the restriction; provided, however, that prior to any release, a public hearing shall be held, after notice by publication thereof at least twice in each of the 3 weeks next preceding the date of such hearing in a newspaper of general circulation in the municipality or municipalities in which the land is situated. The hearing shall be held by the governmental body holding the restriction, or if held by a charitable conservancy, by the governing body of the municipality in which the land is situated.

 

[N.J.S.A. 13:8B-5 (emphasis added).]

 

No such public hearing has been held in this case.

The regulatory history in the New Jersey Register sheds further light on the importance of the deed-recording conditions contained within a TAW. Prior to the adoption of the present version of N.J.A.C. 7:7A-6.1(e)(2)(i), the Department explained the intent of that regulation:

N.J.A.C. 7:7A-6.1(e)2i describes the scenario where the conservation restriction or easement may or may not have been recorded. In this case, if an applicant desires to develop some or all of the transition area on one or more of the lots for which no activity has occurred, a new transition area waiver is required. However, the Department will require that the plan to be submitted for the waiver be the same plan that was originally approved for the entire project. The reason for this requirement is that most transition area waivers (especially averaging plans) are based upon the finding that the changes to the transition area taken as a whole on the site do not negatively affect the ability of the transition area to perform all values and functions necessary for the protection of the adjacent wetland. The Department may not be able to make such a finding if only examining small portions or individual lots that are part of a larger site. However, the Department may be able to approve minor changes as part of the new transition area waiver if the restriction was recorded and the changes meet the standards for a de minimis modification at N.J.A.C. 7:7A-2.12(i).

 

[ 39 N.J.R. 3587(a) (Sept. 4, 2007) (emphasis added).]

 

In response to a comment it thereafter received in 2008 concerning N.J.A.C. 7:7A-6.1(e), the DEP further explained that the provisions were:

intended to address circumstances that may occur when different owners are involved with one piece of property during different points in the construction of the project. The Department affords more flexibility in those cases where no activities have occurred, before the transition area waiver expires but the restriction was recorded, versus cases where construction has already begun. The provisions are intended to provide the greatest level of protection to a wetland transition area, while recognizing that changes in property ownership may necessitate minor changes to the overall project design.

 

[ 40 N.J.R. 5581(a) (Oct. 6, 2008) (emphasis added).]

 

These passages from the regulation's history reflect that it is intended to make the recording of the original restrictions a prerequisite to the DEP's approval of any proposed minor changes to the TAW.

We reject Sharbell's position that, in essence, the 2001 TAW can no longer be binding because it was never recorded. It would subvert the purposes of the regulatory scheme to reward a property owner or developer for its failure to record a deed restriction. The manifest purpose of the recording obligation is to place the public appropriately on notice of the conservation restrictions, so that future owners, occupants, neighbors, and other citizens can limit their activities accordingly.

We also reject the notion that the conservation restrictions from the 2001 TAW are of no legal effect because they were never recorded. N.J.A.C. 7:7A-2.12(e) clearly states that conservation restrictions or easements "shall run with the land and shall be binding upon the landowner, and all successors in interest in the land or any part of the land on which the restricted area is located." (Emphasis added). The 2001 TAW issued by the DEP here contained similar wording, unambiguously stating that "[t]he restriction shall run with the land and be binding upon all successive owners."

The DEP argues that it now would be impractical to enforce the strictures of N.J.A.C. 7:7A-6.1(e)(2)(i) here, because Crestwood sold the lots that were subdivided in 2001, apart from Lot 47.01, to innocent homeowners. We are unpersuaded by this contention. For one thing, as was actually pointed out to us by Sharbell's counsel at oral argument, the subdivision plans or plat for the Crestwood project apparently were recorded. Hence, the residents who purchased houses in that earlier Crestwood development or, perhaps at least their title insurers, may have been aware of the conservation limitations even though the deed restriction itself was never recorded. In addition, the record clearly shows that Sharbell itself, as the developer of Lot 47.01, was acutely aware of the 2001 TAW conservation restrictions when it embarked on this project.19

Moreover, the recording requirement presumably does not exist solely to guide only parties who may purchase or develop property containing wetlands or wetlands transition areas. The conservation restrictions are also intended to guide and protect the public at large, and to preserve freshwater wetlands as a valuable environmental resource for posterity. There is nothing in the text or history of the regulatory scheme to allow the recording obligation to be excused simply because compliance has become inconvenient due to the passage of time.

The appropriate forum to sort out the interests of all persons who are concerned about or affected by changes in the conservation restrictions, assuming that Sharbell still wishes to proceed with such changes, is the public hearing called for under N.J.S.A. 13:8B-5. At such a hearing, all points of view concerning whether a change in the original TAW should be approved can be aired in a transparent and thorough fashion. It is certainly conceivable that many of the residents in the community may favor the revised TAW proposed by Sharbell in 2012 because it allegedly doubles20 the size of the buffer area. However, it is also conceivable that some residents, such as those who are members of SHOS, will oppose a change. Others may favor an enlargement of the buffer area as a whole but object to the specific alteration of the boundary lines that might reduce the buffer adjacent to their own property. The remedy of a public hearing is an appropriate mechanism for all of these issues and points of view to be duly considered.

Sharbell argues that it is entitled to modify the 2001 TAW based upon a different regulation, N.J.A.C. 7:7A-14.3, which allows for the de minimis modification of permits in certain defined circumstances. We do not accept this argument for several reasons.

First, the modification regulation is a more general provision than the more specific regulation, N.J.A.C. 7:7A-6.1(e), which, as we have shown, clearly addresses the "no recording" situation before us. It is well-settled that courts should ordinarily apply the more specific provision over the more general one. See Wilson v. Unsatisfied Claim & Judgment Fund Bd., 109 N.J. 271, 278 (1988); In re Centex Homes, LLC, 411 N.J. Super. 244, 265 (App. Div. 2009). In fact, the text of N.J.A.C. 7:7A-6.1(e) explicitly states that de minimis modification of the restrictions previously set forth in a TAW can proceed "only if the conservation easement or restriction was recorded." N.J.A.C. 7:7A-6.1(e)(2)(i) (emphasis added); see also 39 N.J.R. 3587(a) (Sept. 4, 2007) (likewise stating that the DEP may approve "minor changes" as part of a new TAW "if the restriction was recorded") (emphasis added). Second, we are not persuaded on the existing record that all of the conditions at N.J.A.C. 7:7A-14.3 are met, and the DEP's decisions in this case do not cite that particular regulation.

For these compelling legal reasons, the TAW issued by the DEP must be vacated, without prejudice. The TAW matter is remanded on the following terms. If Sharbell wishes to proceed with the project in its current proposed form, it shall advise the DEP in writing within thirty days of this opinion, and the DEP shall then hold the public hearing prescribed by N.J.S.A. 13:8B-5 within ninety days of that notification. Alternatively, if Sharbell wishes to avoid the need for such a public hearing, it can choose to revise its project plans to adhere to the boundaries of the 2001 TAW, and the IASC can appropriately record, belatedly, the required deed restrictions, subject to any sanctions that the DEP may choose to impose for its violation.21 Depending upon which path is chosen, corrective action may need to be taken concerning the differing deed restrictions that were recorded by Sharbell while this administrative litigation was pending. The corresponding GP6 is also vacated, without prejudice, pending the outcome of the remand.

2.

We further conclude that a remand is warranted to address more fully the parties' factual dispute as to whether the two portions of wetlands on Lot 47.01 deemed by Sharbell and the DEP to be "isolated" are, in fact, non-natural conditions resulting from a ruptured drainage pipe, and that they have "no surface water connection." The record contains divergent contentions from, on the one hand, SHOS and its expert, Princeton Hydro, and, on the other hand, Sharbell and its own expert. The materials, including the somewhat cryptic maps and photographs provided in the parties' appendices, do not readily establish that the Department's determination as to this item is appropriately based on substantial credible evidence in the record.

We are not prepared to uphold the agency's conclusion where, as here, the appellate record is insufficient22 to evaluate the correctness of this particular decision. See N.J. Chapter of Nat'l Ass'n of Indus. & Office Parks, supra, 241 N.J. Super. at 165. The Department shall accordingly give further consideration to this discrete issue on remand, and shall substantiate its ultimate conclusion more clearly with supporting documentation. In the meantime, the GP6 and LOI are vacated, again without prejudice.

3.

After the merits briefing in this case was completed, this court issued in September 2013 its published decision in In re Authorization, supra, 433 N.J. Super. at 385. In that decision, we concluded that the Department's regular use of a points system known as the "NSPS" system violated principles of administrative law because the points system had not been appropriately promulgated through administrative rulemaking. Id. at 413-16. Consequently, we nullified the Department's practice of utilizing the points system in stormwater evaluations until such time as the formula was duly codified in a formal rule. Id. at 415-16. Notably, we also reversed the contested permits and related approvals that had been issued in that case by the DEP in reliance upon the points system. Id. at 416.

On the eve of oral argument in these appeals, SHOS called the published decision in In re Authorization to our attention pursuant to Rule 2:6-11(d), and expressed concern that the DEP's approval of the LOI and GP6 in this matter may have been affected by the now-invalidated points system. In response, Sharbell contended that the points system was not used in this case and that, instead, a separate "checklist" pursuant to N.J.A.C. 7:8-5.3(b) had been utilized. The Deputy Attorney General's own response, however, did not confirm this, but simply argued that we should not reach the question since the agency's decision below had not addressed it.

Under the circumstances, the potential impact of the precedent in In re Authorization should be considered, in the first instance, by the DEP on remand. Although we appreciate respondents' disadvantage in having a new issue raised on the eve of appellate oral argument months after a potentially case-dispositive published opinion has been issued, we think it best that the merits of the issue be adjudicated first in the administrative forum.

The "points system" issue prompted by In re Authorization is therefore remanded to the Department. The agency shall have the authority to reopen the stormwater aspects of its prior wetlands approval, if such action appears to be warranted under the circumstances, and in light of the applicable case law.

B.

The separate issues raised in A-5541-11 concerning the FHVA do not require extensive comment. The thrust of SHOS's argument is that the DEP's decision-makers should not be allowed to change their mind regarding the appropriate boundaries of the southwest tributary on the site. We disagree.

Just as, by analogy, a judge appropriately can change his or her mind about a pending matter after reflecting further about it or considering additional evidence or arguments, see, e.g., Rule 4:49-2; Cummings v. Bahr, 295 N.J. Super. 374, 384-88 (App. Div. 1996), an administrative agency likewise can reconsider its initial assessment of a regulatory matter before it. The Response to Comments in this case clearly and justifiably details why the DEP ultimately agreed with Sharbell and its expert that the flood hazard area did not extend as far north as the DEP staff had initially perceived during their two field visits.

As the Response to Comments explained, snow melting conditions had impeded at least one of the field visits. The DEP did nothing wrong in choosing to consult the historical aerial photos and videos supplied to it by the developer. The flood area delineation ultimately adopted by the Department is supported by substantial credible evidence in the record. We affirm that decision, with due deference to the agency's considerable expertise in such technical subject matters.

Similarly, we affirm the DEP's rejection of SHOS's claims concerning the so-called "thumb" area on the site. There is substantial credible evidence to support the DEP's conclusion that the location was, as the agency concluded, a man-made erosional feature exempted by N.J.A.C. 7:13-2.2 from the requirements of the flood hazard area statutes and regulations.

III.

In conclusion, we affirm the Department's issuance of the FHVA, but vacate without prejudice its issuance of the LOI, GP6, and TAW, subject to the various discrete issues we have remanded for further attention.23 Any party aggrieved by any of the decisions that are reached on remand may thereafter file a timely new appeal with this court.

Affirmed in part, vacated in part, and remanded in part. We do not retain jurisdiction.

 

 

 

 

1 The appeals were argued back-to-back, and we consolidate them for purposes of this opinion.

2 The IASC is not a respondent in these appeals, but participated as an amicus curiae.

3 Sharbell is apparently unaffiliated with Crestwood.

4 Although the appeal in A-6364-11 was filed after the appeal in A-5541-11, we elect to discuss them here in reverse order, in light of the issues raised.

5 The third condition, relating to landscaping of the modified transition area, is not of concern to the present appeals.

6 A provision in that statute, N.J.S.A. 13:8B-5, requires a public hearing to make alterations in a conservation easement. See discussion, infra, at Part II(A)(1).

7 SHOS disputes Sharbell's claim of a 2:1 enhancement because it allegedly includes a 150-foot buffer separately mandated by N.J.A.C. 7:13-4.1(c). We do not resolve this dispute here, which should be addressed as part of the remand to the agency we have ordered, infra.

8 The FHVA is not at issue in the wetlands appeal, but instead is at issue in the flood hazard appeal, as we shall discuss, infra, in Part II(B).

9

The open issues previously raised on appeal in A-5444-10 have been subsumed within those presently before us in A-5541-11 and A-6364-11.

10 The NOV was actually issued to the IASC, not Sharbell.

11 Although SHOS chose in its appellate filings to place its challenge to the LOI within the context of its flood hazard appeal, A-5541-11, the validity of the LOI is actually more sensibly analyzed within the issues presented in the wetlands appeal, A-6364-11. See Part II(A), infra.

12 SHOS's briefs presented some confusion about whether SHOS was appealing the issuance of the LOI, but counsel for SHOS has since confirmed that SHOS does seek to have the LOI overturned by this court, along with the other relief that SHOS has requested relating to the GP6, TAW, and the FHVA.

13 We were not furnished by counsel on appeal with the videotapes, but that omission has not impeded our analysis of the flood hazard issues.

14 SHOS does not include in its present arguments on appeal any claim that the Department erred in denying its request as a third-party objector for a formal adjudicatory hearing. See In re Riverview Dev., LLC, Waterfront Dev. Permit No. 0908-05-0004. 3 WFD 060001, 411 N.J. Super. 409, 434 (App. Div. 2010).

15 The language of the DEP's letter approving the 2001 TAW imposes the obligation to record the deed restriction upon the "applicant." We do not foreclose the possibility that the prior developer, Crestwood, bears some responsibility for the failure to record, in addition to, or in lieu of, the IASC as the property owner. We need not resolve the appropriate allocation of responsibility in the present appeals.

16 We granted counsel permission to supplement their briefs relating to the pertinent regulations after oral argument, and have considered those additional submissions.

17 The Department's June 18, 2001 letter issuing the 2001 LOI and TAW expressly indicated that the approval could be relied upon "for a period of five years from the date of [the] letter," i.e., through June 18, 2006. See also N.J.A.C. 7:7A-3.6(a) (providing for a five-year duration). It is undisputed that Lot 47.01, which was retained by the IASC, remained undeveloped as of June 18, 2006. In fact, Sharbell aims to build such a development on that site, except for the small portion of it to be retained by the IASC.

18 We do not need to reach a determination as to whether the TAW modification made by Sharbell, which exceeds one acre, is or is not "de minimis."

19 We are unpersuaded by the DEP's argument that the Supreme Court's decision in Island Venture Associates v. N.J. Department of Environmental Protection, 179 N.J. 485 (2004), precludes judicial enforcement of the terms of N.J.A.C. 7:7A-6.1(e)(2)(i). Island Venture concerned a purchaser of unimproved lots who was unaware of the DEP's imposition of certain restrictive conditions in a Coastal Area Facility Review Act permit that had been issued to the property's prior owner. The Court indicated in Island Venture that the enforceability of these conditions required an equitable weighing of the interests involved, including those of the appellant, who had purchased the lots without notice. Id. at 493-97. The situation here is readily distinguishable because Sharbell, as the developer of Lot 47.01, was clearly aware of the pre-existing 2001 TAW, which it referenced in its own application materials for the GP6 and TAW.

20 As we noted, supra, the alleged 2:1 ratio of enhancement is an unresolved and disputed contention, and the papers and maps submitted on appeal do not readily enable our independent determination.

21 In light of our disposition to remand the case, we need not reach the "improper settlement" issues raised by SHOS and Dragon, supra, 405 N.J. Super. at 496-98.

22 The record citations supplied in the DEP's appellate brief do not substantiate the agency's contentions on this issue.

23 Although the IASC has participated in these appeals as an amicus, it may participate in the remand as an interested party. We do not prescribe a deadline for the completion of the remand, other than what we have already noted, supra, concerning a public hearing if Sharbell elects to pursue the project in its current proposed form.