NJ HIGHLANDS COALITION v. NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3180-14T1
N.J. HIGHLANDS COALITION
and SIERRA CLUB N.J.,

Petitioners-Appellants,
APPROVED FOR PUBLICATION
v.
DECEMBER 13, 2018
NEW JERSEY DEPARTMENT OF
ENVIRONMENTAL PROTECTION and APPELLATE DIVISION
BI-COUNTY DEVELOPMENT CORP.,

Respondents-Respondents.
______________________________

Argued February 15, 2017 – Decided August 4, 2017

Before Judges Fuentes, Simonelli and Carroll.

On appeal from the New Jersey Department of
Environmental Protection.

Susan J. Kraham argued the cause for
appellants (Columbia Environmental Law
Clinic, attorneys; Ms. Kraham and Edward
Lloyd, on the briefs).

Timothy P. Malone, Deputy Attorney General,
argued the cause for respondent New Jersey
Department of Environmental Protection
(Christopher S. Porrino, Attorney General,
attorney; Melissa H. Raksa, Assistant
Attorney General, of counsel; Mr. Malone, on
the brief).

David R. Oberlander argued the cause for
respondent Bi-County Development Corp.
(Bisgaier Hoff, LLC, attorneys; Mr.
Oberlander, on the brief).
 The opinion of the court was delivered by

SIMONELLI, P.J.A.D.

Appellants N.J. Highlands Coalition and Sierra Club, N.J.

challenge a settlement agreement between respondents New Jersey

Department of Environmental Protection (DEP) and Bi-County

Development Corp. (Bi-County) relating to Bi-County's development

of a 204-unit inclusionary housing project in the Borough of

Oakland (Oakland). Appellants also appeal from DEP's approval of

two freshwater wetlands general permits and a transition area

waiver. We affirm.

I.

Bi-County owns approximately eighty-five acres of land in

Oakland (the property). Because the property is located in the

Highlands Region, see N.J.S.A. 13:20-7(a)(1), it is subject to the

restrictions of the Highlands Water Protection and Planning Act

(Highlands Act), N.J.S.A. 13:20-1 to -35. The property serves as

habitat for the threatened species Barred Owl, see N.J.A.C. 7:25-

4.17 (classifying Barred Owl as a threatened species), and the DEP

designated the wetlands on the property as being of exceptional

resource value.

In 1987, Bi-County filed a lawsuit against Oakland and the

Oakland Planning Board (Planning Board) under the Mt. Laurel

2 A-3180-14T1
doctrine1 seeking a builder's remedy authorizing construction of

700 residential units on the property, which would include

affordable housing. In January 1991, the parties executed a

settlement agreement, which required Oakland to re-zone the

property to permit construction of an inclusionary housing

development of up to 370 residential units, with some designated

for affordable to low or moderate-income households (the Mt. Laurel

settlement). The Mt. Laurel settlement also required Oakland to

cooperate and expeditiously resolve any issues regarding sewer

service, and acknowledged that Oakland had already submitted a

wastewater management plan to DEP to authorize sanitary sewer

service for the project through a connection to the municipal

sewer system operated by the adjacent Township of Wayne (Wayne).

As a result of the settlement, the parties filed a stipulation of

dismissal, dismissing the litigation.

In February 1991, the property was placed in an approved

sewer service area by virtue of DEP's inclusion of the Oakland

wastewater management plan as an amendment to the Northeast Water

Quality Management Plan (the 1991 WQMP amendment). The 1991 WQMP

1
See S. Burlington Cty. NAACP v. Twp. of Mt. Laurel, 67 N.J.
151, cert. denied, 423 U.S. 808, 96 S. Ct. 18, 46 L.Ed.2d 28
(1975).

3 A-3180-14T1
amendment allowed for treatment of wastewater from the property

at the Mountain View Sewage Treatment Plant located in Wayne.

In 1998, Bi-County contracted to sell the property to Pinnacle

Communities, LTD (Pinnacle). In March 1999, Pinnacle applied to

the Planning Board for site plan approval for development of a

313-unit inclusionary housing project. The project proposed a

fifty-foot transition area surrounding the freshwater wetlands on

the property, as then required by a freshwater wetlands letter of

interpretation (LOI)2 the DEP issued in 1989 and reissued in 1997,

which classified the wetlands on the property as being of

intermediate resource value.

Pinnacle and Bi-County filed a lawsuit against Oakland and

Wayne for issues related to the property. In 2001, the trial

court ordered Wayne to accept wastewater from the property, and

ordered Oakland and Wayne to execute a municipal services agreement

to provide for such wastewater service.

In 2003, Pinnacle applied to DEP for a new LOI because the

two prior LOIs had expired. During DEP's review of the

application, it informed Pinnacle that the wetlands on the property

2
An LOI delineated the extent of regulated freshwater wetlands
and transition areas on a site. See N.J.S.A. 13:9B-8. Transition
areas are regulated areas adjacent to freshwater wetlands that
serve as a buffer between wetlands and uplands. See N.J.S.A.
13:9B-16. The width of a transition area depends on the resource
value classification of the adjacent wetland. See ibid.

4 A-3180-14T1
were habitat for the Barred Owl, and thus, the project required a

150-foot transition area surrounding the freshwater wetlands on

the property instead of the proposed fifty-foot transition area.

Pinnacle contested DEP's determination and submitted a report

from its consultant, who concluded Barred Owls were not present

on the property. In response, Wayne submitted a report from its

consultant, who concluded the site contained Barred Owls and had

a documented record of serving as Barred Owl habitat. The

consultant also concluded that the wetlands on the property should

be classified as exceptional resource value, which Pinnacle's

consultant disputed.

DEP determined that the property served as Barred Owl habitat

and re-classified the wetlands on the property as being of

exceptional resource value. Exceptional resource value wetlands

require a 150-foot transition area adjacent to the wetlands. See

N.J.A.C. 7:7A-2.5(d).3 Because of this 150-foot transition area

requirement, the development of 313 units was no longer possible.

However, DEP determined that if the project was redesigned to

3
The regulations governing the implementation of the Freshwater
Wetlands Protection Act, N.J.S.A. 13:9B-1 to -30, and the New
Jersey Water Pollution Act, N.J.S.A. 58:10A-1 to -73, were
recodified as N.J.A.C. 7:7A-1.1 to 22.20 and amended by R. 2017,
d. 243, effective December 18, 2017. We shall refer herein, in
text, to the regulations in effect on March 12, 2015, the date
this appeal was filed.

5 A-3180-14T1
incorporate a larger transition area and preserve approximately

sixteen acres of uplands pursuant to a comprehensive conservation

plan (CCP), this would preserve the property's Barred Owl habitat

function and allow Pinnacle or Bi-County to obtain the required

approvals and waivers under the Freshwater Wetlands Protection Act

(FWPA), N.J.S.A. 13:9B-1 to -30, and the Flood Hazard Area Control

Act, N.J.S.A. 58:16A-50 to -103.

In 2004, DEP issued an LOI, which re-classified the wetlands

on the property as being of exceptional resource value, requiring

a 150-foot transition area (the 2004 LOI). Pinnacle submitted a

CCP to DEP that proposed reducing the project from 313 units to

209 units and preserving sixteen acres of forested uplands as a

corridor for the Barred Owl to travel between larger forested

areas to the north and south. Pinnacle also submitted redesign

plans to the Planning Board to reflect the increased transition

area required by the 2004 LOI and CCP, and reduction in the size

of the project from 313 units to 209 units.

The Legislature passed the Highlands Act in 2004. The

Legislature found the Highlands to be critically important to New

Jersey because they provide drinking water for approximately one-

half of the State's population. Thus, the Legislature declared

that preservation of the Highlands "cannot be left to the

uncoordinated land use decisions of [eighty-eight] municipalities,

6 A-3180-14T1
seven counties, and a myriad of private landowners[.]" N.J.S.A.

13:20-2. Instead of permitting decentralized protection, the

Legislature established the Highlands Water Protection and

Planning Council (Highlands Council) to oversee New Jersey's

portion of the national Highlands Region. N.J.S.A. 13:20-4. The

Highlands Council is responsible for developing a regional master

plan and overseeing development in the Highlands Region. N.J.S.A.

13:20-6 and -8.

The Highlands Act exempts certain development activities from

its restrictions, including:

a major Highlands development . . . that on
or before March 29, 2004 has been the subject
of a settlement agreement and stipulation of
dismissal filed in the Superior Court . . .
to satisfy the constitutional requirement to
provide for the fulfillment of the fair share
obligation of the municipality in which the
development is located.

[N.J.S.A. 13:20-28(a)(17) (emphasis added).]

The exemption "expire[s] if construction beyond site preparation

does not commence within three years after receiving all final

approvals required pursuant to the 'Municipal Land Use Law,'

[(MLUL), N.J.S.A. 40:55D-1 to -22]." Ibid. (emphasis added).

Pinnacle sought a Highlands applicability determination from

DEP that the project was exempt from the Highlands Act under

N.J.S.A. 13:20-28(a)(17). Pinnacle also sought a WQMP consistency

7 A-3180-14T1
determination, and applied to the Planning Board for approval of

a 209-unit development plan.

In June 2005, DEP determined that Bi-County was entitled to

the exemption under N.J.S.A. 13:20-28(a)(17) based on the Mt.

Laurel settlement and stipulation of dismissal. However, DEP

found, incorrectly, that the proposal was inconsistent with the

Northeast WQMP. Both DEP and Pinnacle had overlooked the 1991

WQMP amendment, which already provided for treatment of wastewater

from the property, and mistakenly believed the property was located

outside of a sewer service area. As a result, Pinnacle applied

for a WQMP amendment to extend Wayne's Mountain View Wastewater

Treatment Facility's sewer service area to include the property.

DEP rejected the application and expressed concern about the

project's impacts on the Barred Owl, among other things. Pinnacle

contested DEP's determination, and the matter was transferred to

the Office of Administrative Law (OAL) for a hearing.

Meanwhile, in July 2007, the Planning Board granted

preliminary and final major site plan approval and all variances

and waivers for the construction of 209 units on the property,

with sixteen units set aside for affordable housing and twelve

units set aside for senior housing (the 2007 approval). The

Planning Board conditioned the 2007 approval on Pinnacle obtaining

all necessary approvals from DEP and the Bergen County Planning

8 A-3180-14T1
Board (County Planning Board), and satisfying more than fifty

additional conditions. The 2007 approval also required Pinnacle

to return to the Planning Board for amended site plan approval if

DEP required additional transition areas or placed any further

restrictions on the proposed development.

In July 2007, Pinnacle applied to DEP for freshwater wetlands

general permit 6, which authorizes certain activities in non-

tributary wetlands, see N.J.A.C. 7:7A-5.6, and freshwater wetlands

general permit 11, which authorizes activities necessary to

construct stormwater outfall and intake structures. See N.J.A.C.

7:7A-5.11. Pinnacle also applied for a transition area waiver.

DEP determined that in lieu of general permit 6, Pinnacle had to

obtain general permit 10B, which authorizes the building of minor

road crossings in wetlands and transition areas. See N.J.A.C.

7:7A-5.10B.

Pinnacle terminated the purchase contract and returned the

property to Bi-County. In February 2009, Bi-County applied to DEP

for an extension of the 2004 LOI. DEP granted an extension in

November 2009, but again determined the property contained

exceptional resource value wetlands that served as habitat for

threatened and endangered (T&E) species. Bi-County contested

DEP's determination, and the matter was transferred to the OAL and

consolidated with the other OAL matter.

9 A-3180-14T1
 While the OAL matters were pending, the Highlands Council

reviewed Bi-County's project plan and compared it with the Regional

Master Plan (RMP). The Highlands Council recommended that DEP not

approve Bi-County's application to extend the 2004 LOI unless it

was modified to address three inconsistences: (1) the project

encroaches into the 300-foot buffers/riparian areas, and this was

inconsistent with the objectives of the final draft RMP; (2) the

project disturbs the Barred Owl and any disturbance to the mapped

habitat for Barred Owls will result in forest fragmentation;4 and

(3) the project's proposed water use was inconsistent with the RMP

both because it exceeds the 27,600 gallons per day in conditionally

available water for the three subwatersheds and did not provide

the 125% mitigation of the depletive water uses. See N.J.S.A.

13:20-10 (stating goals of the RMP).

DEP and Bi-County discussed settlement of the OAL matters.

During their discussions, Bi-County informed DEP of the 1991 WQMP

amendment. DEP determined that the 1991 WQMP amendment was still

in effect as it pertained to the property, and conceded it had

4
The Convention on Biological Diversity, a convention of the
United Nations that includes the United States, defines "forest
fragmentation" as "any process that results in the conversion of
formerly continuous forest into patches of forest separated by
non-forested lands." Convention on Biological Diversity, Forest
Biodiversity Definitions,
https://www.cbd.int/forest/definitions.shtml
[http://archive.is/xgLLN] (last visited July 24, 2017).

10 A-3180-14T1
erred in 2005 when it found Bi-County's proposal was inconsistent

with the Northeast WQMP. DEP also determined that the Highlands

Act exemption under N.J.S.A. 13:20-28(a)(17) had not expired

because Bi-County had not yet obtained all final approvals required

under the MLUL. After resolving these issues, only one issue

remained: whether DEP should grant Bi-County's freshwater general

permit application and issue general freshwater wetland permits

10B and 11, and a transition area waiver.

In October 2012, Bi-County submitted to DEP a permitting

plan, which revised the project in the area subject to the

requirements of general freshwater wetlands permit 10B. The

revision would change the site plan by reducing the project from

209 units to 204 units.

On January 28, 2014, DEP and Bi-County executed a settlement

agreement that provided for issuance of the two general permits

and transition area waiver (the DEP settlement). Under the DEP

settlement, Bi-County agreed to withdraw the OAL matters, revise

its plans to satisfy all regulatory requirements for issuance of

the general permits, and obtain any other approvals required by

local, state, or federal law. Bi-County also agreed to revise its

freshwater wetlands permit application so that the application

satisfied FWPA regulations, reduce the number of units from 209

to 204, and revise its CCP to conform to the permitting plan.

11 A-3180-14T1
 DEP agreed to amend its records to reflect the property's

inclusion in Wayne's sewer service area, and refrain from adopting

any WQMP amendments changing this designation so long as Bi-

County's development proposal remained exempt under the Highlands

Act. DEP determined that the presence of documented Barred Owl

habitat and exceptional resource value wetlands on the property

would be adequately protected and thereby not preclude approval

of the freshwater wetlands permit application. DEP also determined

that Bi-County was entitled to the Highlands Act exemption under

N.J.S.A. 13:20-28(a)(17) because the property was developed in

accordance with the Mt. Laurel settlement, and the Planning Board's

July 2007 approval was not a final approval within the meaning of

N.J.S.A. 40:55D-4 until Bi-County satisfied the conditions of the

approval, including issuance of the general permits. DEP found

that the 2007 approval was not a final approval because Bi-County

had to amend its site plan to reflect the terms and conditions of

the required DEP approvals.

In October 2014, Bi-County submitted a revised compliance

statement for its freshwater permit application. DEP reviewed the

application, paying particular attention to the potential impacts

on Barred Owl habitat. Christina Albizati, an Environmental

Specialist with a decade of experience in DEP's T&E Species Unit,

led this review and documented her findings. She found that the

12 A-3180-14T1
permits would only disturb less than a quarter acre of wetlands,

while the transition area waiver would reduce 1.718 acres of

transition area in order to facilitate the construction of several

single-family dwellings and a detention basin. She determined

that the loss of less than a quarter acre of wetland habitat did

not destroy, jeopardize, or adversely modify the documented Barred

Owl habitat when the habitat consisted of 400 acres.

Further, as compensation for the lost 1.718 acres, Bi-County

agreed to expand the wetland transition area in other locations

on-site by 1.363 acres and preserve 16.81 acres of additional

forested uplands that were suitable for Barred Owl habitat. These

forested uplands would not otherwise receive protection under the

FWPA.

DEP concluded that the project was consistent with FWPA

regulations. DEP determined that the preserved 16.81 acres of

upland forest areas would not only substantially offset the

relatively small loss of Barred Owl habitat in regulated areas,

but would also provide an added level of habitat protection by

serving as a buffer from forthcoming development.

The U.S. Fish and Wildlife Service (USFWS) reviewed the

settlement agreement and submitted comments to DEP. USFWS noted

that the property lies within the summer migratory range for the

13 A-3180-14T1
Indiana Bat5 and the Northern Long-Eared Bat,6 and may serve as

habitat for the Small-Whorled Pogonia.7

5
New Jersey lists the Indiana Bat as endangered. N.J.A.C. 7:25-
4.13. The Indiana Bat is a small bat with dark-brown or black
fur. The bats became endangered in 1967 because "people
disturb[ed] hibernating bats in caves during winter, resulting in
the death of large numbers of bats." U.S. Fish & Wildlife Service,
Indiana Bat (Myotis sodalis),
https://www.fws.gov/midwest/endangered/mammals/inba/index.html
[http://archive.is/imkIz] (last updated July 19, 2016). The "bats
are vulnerable to disturbance because they hibernate in large
numbers in only a few caves[.]" Ibid. "Other threats that have
contributed to the Indiana [B]at's decline include
commercialization of caves, loss of summer habitat, pesticides and
other contaminants, and most recently, the disease white-nose
syndrome." Ibid.
6
The Northern Long-Eared Bat "is a medium-sized [brown] bat"
that "is distinguished by its long ears[.]" White-nose syndrome
is also responsible for its threatened status. U.S. Fish &
Wildlife Service, Northern Long-Eared Bat (Myotis septentrionalis)
(Apr. 2015),
https://www.fws.gov/Midwest/endangered/mammals/nleb/pdf/NLEBFact
Sheet01April2015.pdf . It "was listed as threatened under the
Endangered Species Act on April 2, 2015." U.S. Fish & Wildlife
Service, Northern Long-Eared Bat (Myotis septentrionalis),
https://www.fws.gov/midwest/endangered/mammals/nleb/index.html
[http://archive.is/7EK0n] (last updated Sept. 2, 2016).

7
The Small Whorled Pogonia is "a threatened species" and "a
member of the orchid family." The agency states that "[t]he
primary threat to the small whorled pogonia is the past and
continuing loss of populations when their habitat is developed for
urban expansion." U.S. Fish & Wildlife Service, Small Whorled
Pogonia (Isotria medeoloides) (Feb. 2016),
https://www.fws.gov/midwest/endangered/plants/pdf/smallwhorledpo
goniafctsht.pdf.

14 A-3180-14T1
 On February 14, 2015, DEP issued general permits 10B and 11

and a transition area waiver, which incorporated the conditions

that USFWS requested. The general permits imposed bat and plant

pre-construction survey requirements; required the surveys to be

submitted to and approved by USFWS; and placed timing limits on

tree-clearing to protect migrating and foraging bat species.

II.

On appeal, appellants contend that DEP erred as a matter of

law in determining that the 2007 approval was not a final approval

within the meaning of N.J.S.A. 40:55D-4. Appellants posit that

the 2007 approval was a final approval because the Planning Board

took official action preliminarily approving a site plan; although

the official action was conditional, it conferred on Bi-County all

rights attendant to a final approval; and those rights vested on

the date of the final approval regardless of whether there were

conditions of approval.8 Accordingly, appellants conclude that

because the 2007 approval was a final approval and Bi-County failed

to begin construction, Bi-County was not entitled to the exemption.

8
Appellants rely on an unpublished opinion from this court to
support this argument; however, unpublished opinions do not
constitute precedent and are not binding on us. R. 1:36-3; Trinity
Cemetery Ass'n v. Twp. of Wall, 170 N.J. 39, 48 (2001). Appellants
also rely on a published trial court opinion; however, trial court
opinions are not binding on us. S & R Assocs. v. Lynn Realty
Corp., 338 N.J. Super. 350, 355 (App. Div. 2001).

15 A-3180-14T1
 Our role in reviewing an administrative agency's decision is

limited. Pub. Serv. Elec. & Gas Co. v. N.J. Dep't of Envtl. Prot.,

101 N.J. 95, 103 (1985). We will not reverse the agency's decision

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 Envtl. Prot., 191 N.J. 38, 48 (2007).

"In reviewing an administrative agency's decision, we will

grant considerable deference to the agency's expertise, where such

expertise is a relevant factor." In re Petition of S. Jersey Gas

Co., 447 N.J. Super. 459, 480 (App. Div. 2016). "We may not

second-guess those judgments of an administrative agency which

fall squarely within the agency's expertise." In re Stream

Encroachment Permit No. 0200-04-0002.1 FHA, 402 N.J. Super. 587,

597 (App. Div. 2008).

"Ordinarily, DEP is given great deference when it applies its

considerable expertise and experience to the difficult balance

between development and conservation." Ibid. (quoting Crema v.

N.J. Dep't of Envtl. Prot., 192 N.J. Super. 505, 510 (App. Div.

1984)). "However, '[w]hile we must defer to the agency's

expertise, we need not surrender to it.'" Pinelands Pres. All.

16 A-3180-14T1
v. State, Dep't of Envtl. Prot., 436 N.J. Super. 510, 524 (App.

Div.) (alteration in original) (quoting 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. 1990)), certif. denied, 220 N.J.

40 (2014). "The party who challenges DEP's decision to permit

development of a certain location has the 'burden of demonstrating,

not that the agencies' action was merely erroneous, but that it

was arbitrary.'" Stream Encroachment Permit, supra, 402 N.J.

Super. at 597 (quoting Crema, 192 N.J. Super. at 510).

Furthermore, although we "must give deference to the agency's

findings of facts, and some deference to its 'interpretation of

statutes and regulations within its implementing and enforcing

responsibility,' we are 'in no way bound by the agency's

interpretation of a statute or its determination of a strictly

legal issue.'" Utley v. Bd. of Review, Dep't of Labor, 194 N.J.

534, 551 (2008) (citation omitted) (quoting In re Appeal by

Progressive Cas. Ins. Co., 307 N.J. Super. 93, 102 (App. Div.

1997); Mayflower Sec. Co. v. Bureau of Sec., 64 N.J. 85, 93

(1973)). Applying the above standards, we discern no reason to

disturb DEP's decisions.

The MLUL defines "final approval" as:

the official action of the planning board
taken on a preliminarily approved major
subdivision or site plan, after all

17 A-3180-14T1
 conditions, engineering plans and other
requirements have been completed or fulfilled
and the required improvements have been
installed or guarantees properly posted for
their completion, or approval conditioned upon
the posting of such guarantees.

[N.J.S.A. 40:55D-4 (emphasis added).]

See Field v. Mayor & Council of Franklin, 190 N.J. Super. 326, 332

(App. Div. 1983).

Here, the Planning Board approved the proposed development,

but conditioned its approval on Bi-County satisfying fifty-seven

conditions, several of which remained unsatisfied when DEP issued

the general permits and transition area waiver. Among these

outstanding conditions were the County Planning Board's approval

of the site plan and issuance of all necessary DEP approvals, both

of which the MLUL requires. See N.J.S.A. 40:55D-22(b); N.J.S.A.

40:55D-50(b).

Moreover, the 2007 approval was for the development of 209

units. DEP required Bi-County to revise the project area subject

to the requirements of freshwater wetlands permit 10B. The

revision changed the site plan by reducing the proposed development

from 209 units to 204 units. The 2007 approval required Bi-County

to return for amended site plan approval if DEP imposed additional

conditions or other restrictions on the proposed development,

which the DEP did here. Thus, the 2007 approval was not a "final

18 A-3180-14T1
approval" because Bi-County had not received "all final approvals

required pursuant to the [MLUL]," N.J.S.A. 13:20-28(a)(17), and

final site plan approval for 204 units. Accordingly, DEP correctly

concluded that Bi-County was entitled to the exemption under

N.J.S.A. 13:20-28(a)(17).

III.

Appellants challenge DEP's determination that Bi-County's

permitting plan adopted in the DEP settlement complied with the

FWPA's general wetlands permit provisions. They argue that DEP

acted arbitrarily and capriciously by determining that Bi-County's

permitting plan adequately protected threatened Barred Owl

habitat. Appellants posit that granting the general permits will

cause forest fragmentation and thus endanger the Barred Owl in

violation of N.J.A.C. 7:7A-4.3(b)(3). They note that the permits

allow for the removal of a small area of wetlands, and risk

rendering the remainder of the forest patch unusable as Barred Owl

habitat because the owls shun human activity by avoiding

residential, industrial, or commercial areas. Appellants also

note the Highlands Council found the project jeopardizes Barred

Owl habitat.

Appellants also argue that DEP acted arbitrarily and

capriciously by failing to make findings as to whether Bi-County's

permitting plan will jeopardize the continued existence of the

19 A-3180-14T1
Barred Owl. They point to the fact that DEP previously determined

that the property served as habitat for the threatened Barred Owl,

but then conveniently failed to make any finding as to whether the

project jeopardized the Barred Owl's continued existence.

Further, appellants maintain that because Bi-County was

already required to preserve uplands forest in order to meet the

requirements of general permit 10B, DEP erred when it conditioned

acceptance of Bi-County's permitting plan on Bi-County mitigating

harms to Barred Owl habitat. Even if proper, appellants posit

that the preservation would not prevent forest fragmentation.9

The "Legislature passed the [FWPA] in 1987 as a means 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) (citing N.J.S.A. 13:9B-1 to -30; In re Freshwater Wetlands

Prot. Act Rules, 180 N.J. 478, 482 (2004)). When it passed the

FWPA, the Legislature found, among other things, that "freshwater

wetlands [(1)] protect and preserve drinking water supplies by

[serving to purify surface water and groundwater resources;] [and

(2)] provide essential breeding, spawning, nesting, and wintering

habitats for a major portion of the State's fish and wildlife[.]"

9
Appellants erroneously assert that the presence of a threatened
or endangered species triggers the stringent requirements of
N.J.A.C. 7:7A-4.3(d); however, this regulation is inapplicable
because it governs timing requirements on fisheries.

20 A-3180-14T1
Id. at 343 (quoting In re Freshwater Wetlands Prot. Act Rules, 238

N.J. Super. 516, 519 (App. Div. 1989)).

Because of the wetlands' great importance, the Legislature

announced "it shall be the policy of the State to preserve the

purity and integrity of freshwater wetlands from random,

unnecessary or undesirable alteration or disturbance[.]" N.J.S.A.

13:9B-2. At the same time, the Legislature cautioned that "the

rights of persons who own or possess real property affected by

this [A]ct must be fairly recognized and balanced with

environmental interests[.]" Ibid. (emphasis added).

Following the FWPA's enactment, DEP promulgated regulations

interpreting the statute. Most relevant to this case, DEP

promulgated N.J.A.C. 7:7A-4.3, which governs all general permit

authorizations. The regulation declares that "[t]he activities

[authorized by a general permit] shall not destroy, jeopardize,

or adversely modify a present or documented habitat for threatened

or endangered species; and shall not jeopardize the continued

existence of any local population of a threatened or endangered

species[.]" N.J.A.C. 7:7A-4.3(b)(3).

An applicant must also meet additional requirements depending

on the permit sought. General permits 10B and 11 specifically

require that "[m]itigation . . . be performed for all permanent

loss and/or disturbance of 0.1 acres or greater of freshwater

21 A-3180-14T1
wetlands or State open waters." N.J.A.C. 7:7A-5.10B(e); N.J.A.C.

7:7A-5.11(i). N.J.A.C. 7:7A-15.5 establishes the degree of

mitigation required for disturbances of less than 1.5 acres.

These regulations required Bi-County to preserve at least

five acres of uplands because the project disturbed less than 1.5

acres of exceptional resource value freshwater wetlands and upland

preservation was practicable and feasible. N.J.A.C. 7:7A-15.9;

N.J.A.C. 7:7A-15.5. Bi-County complied with the regulations by

allocating five acres of the 16.81 acres of preserved forested

uplands as mitigation.

In the DEP settlement, DEP determined that the revised project

would satisfy regulatory requirements for issuance of the required

general permits and that due to Bi-County's CCP, the presence of

documented Barred Owl habitat and exceptional resource value

wetlands on the property would not preclude approval of the general

permit application. The CCP reengineered the entire project to

increase wetlands transition areas, conserve sixteen acres of

uplands, and reduce the project's size by approximately one-third.

The CCP also proposed a monitoring program for the Barred Owl and

species of special concern to determine the patterns of use of the

subject property.

DEP's T&E Unit also thoroughly reviewed Bi-County's general

permit application to determine the project's potential impact on

22 A-3180-14T1
Barred Owl habitat. The T&E Unit recognized that the general

permits would authorize a disturbance of .1984 acres of wetland

and the waiver would result in a net loss of .335 acres of habitat,

but found that

this relative[ly] small loss of habitat is
more than offset by the supplemental
preservation of 16.81 acres of suitable upland
forest habitat proximate to the wetlands
. . . . [T]he preservation of the forested
steep slope areas on [the] site[,] through
[the] creation of conservation areas, not only
preserves habitat for [B]arred [O]wl[s], but
also provides an additional level of habitat
protection by serving as a screen from the
forthcoming development.

Based on its findings, the T&E Unit concluded:

[T]he proposed plan is consistent with the
standards of subchapters 5 and 6 of the [FWPA]
Rules. . . . [T]he amount of wetland and
transition area habitat being lost to
development is minor in comparison to the
amount of wetland and transition areas that
remain and that will be preserved. In
combination with the additional upland
conservation areas onsite, the forested
wetlands on [the] site will still retain the
same structure and function they did prior to
development and will still be able to provide
[B]arred [O]wl[s] with necessary habitat
components without threatening the existence
of the population in the area.

Further, when DEP responded to the public's comments, it

expressly incorporated by reference the T&E Unit's report, and

addressed the public's concerns for the Barred Owl and forest

fragmentation. DEP stated:

23 A-3180-14T1
 After a thorough review of all relevant
documentation, the T&E Unit finds the proposed
plan is consistent with the standards of
[N.J.A.C. 7:7A-4.3(b)], as the proposed plan
would not appreciably result in increases in
sediment, nutrient or pollutant loading and/or
degrade water quality in the wetland that
would result in an alteration of the wetlands'
ability to provide suitable habitat for the
[B]arred [O]wl. In regard to impacts to the
wetland habitat of the [B]arred [O]wl, the
plan will result in a net loss of 0.355 acre[s]
of habitat within the transition area of the
largest wetlands onsite. However, the T&E
Unit has determined that this relatively small
loss of habitat is more than offset by the
supplemental preservation of 16.81 acres of
suitable upland forest habitat, which is
proximate to wetlands and within the same
Barred [O]wl habitat. . . . The T&E Unit has
determined that the preservation of forested
steep slope areas on site through [the]
creation of conservation areas not only
preserves habitat for [B]arred [O]wl, but also
provides an additional level of habitat
protection by serving as a screen from the
forthcoming development. While the proposed
development project will segment the forested
habitat on-site, the amount and quality of
remaining forest, both upland and wetland,
will continue to provide suitable habitat for
the [B]arred [O]wl. As a result, the [B]arred
[O]wl can still use the remaining wetlands and
the preserved forested areas for resting and
foraging, and the remaining on-site habitat
will also serve as a corridor to habitat south
and north of the parcel.

[(Emphasis added).]

The record confirms that DEP carefully considered the

project's impacts on the Barred Owl and reasonably approved the

general permits. Unlike DEP, appellants may believe that the land

24 A-3180-14T1
lost to Bi-County's development is too great. Appellants' mere

disagreement, however, does not make DEP's determination

arbitrary, capricious, or unreasonable. The Legislature tasked

DEP with balancing environmental and real property interests.

N.J.S.A. 13:9B-2. The DEP settlement and general permits represent

DEP's reasonable attempt to strike this balance. The record amply

supports DEP's decision to approve the general permits; the DEP's

decision comports with the requirements of the FWPA and

corresponding regulations; and the decision was not arbitrary,

capricious, or unreasonable.

IV.

Appellants contend that DEP unreasonably ignored evidence

that the property serves as habitat for the federally-endangered

Indiana Bat and Northern Long-Eared Bat, and federally-threatened

Small-Whorled Pogonia. Appellants argue that DEP failed to

consider that USFWS identified the exceptional resource value

wetlands on the property as habitat for these species, and the DEP

settlement never mentioned them. Appellants also argue that

USFWS's comments raised concerns that the project occurs within

the summer migratory range of the endangered Northern Long-Eared

Bat, and lies within a maternity colony buffer. Finally,

appellants note that USFWS requested surveys for the Northern

Long-Eared Bat and Small-Whorled Pogonia.

25 A-3180-14T1
 Bi-County's CCP, which the DEP settlement expressly

incorporated by reference, acknowledged there were other T&E

species on the property. The CCP states that the "Barred Owl

should be the main focus of the monitoring program[,] but not the

exclusive purpose" because "[s]pecies of special concern

identified or potential . . . should also be a focus of a baseline

monitoring program."

Second, although the DEP settlement does not expressly

reference the Indiana Bat, DEP considered the project's impact on

T&E species other than the Barred Owl, including the Indiana Bat,

Northern Long-Eared Bat, and Small-Whorled Pogonia. In its

response to public comments, DEP acknowledged that these three

species might live on the property and informed the public how

they would be protected:

The site has been identified as potential
habitat for Indiana [B]at, [N]orthern [L]ong-
[E]ared [B]at, and [S]mall-[W]horled
[P]ogonia by the [USFWS], and the USFWS is
requesting that the site be surveyed for these
species. [DEP] has informed Bi-County of the
USFWS requirement to survey for these species.
Bi-County will be required to complete these
surveys and adhere to any subsequent USFWS
recommendations as a condition of any
Freshwater Wetlands permits for the [P]roject
and prior to any site disturbance or
construction.

[(Emphasis added).]

26 A-3180-14T1
 Lastly, in the general permits, DEP expressly prohibited Bi-

County from removing trees before finishing the surveys; required

Bi-County to seek approval from USFWS before clearing any trees;

and barred Bi-County from clearing trees during the Indiana Bat's

foraging and pre-hibernation period. The record contains ample

evidence that DEP considered T&E species in issuing the general

permits and imposed reasonable permit conditions to protect them.

V.

Appellants contend that DEP acted arbitrarily and

capriciously in granting a transition area waiver. They argue

that the project will result in a net loss of 0.355 acres of

transition area around the exceptional resources value wetlands

on the property, which is inconsistent with N.J.A.C. 7:7A-

6.1(a)(1)-(6). They argue that the record contains no evidence

to substantiate DEP's determination because Bi-County failed to

offer scientific documentation showing the proposed activity will

have no substantial impact on the adjacent wetlands, as required

by N.J.A.C. 7:7A-6.1(d).

Appellants also argue that rather than provide the

documentation necessary to secure a transition area waiver, the

DEP settlement proposed to compensate for the loss of requisite

150-foot transition area by preserving 11.61 acres of forested

uplands on the property. They posit that DEP erred in issuing the

27 A-3180-14T1
transition area waiver because such an exchange does not obviate

the requirements of N.J.A.C. 7:7A-6.1(d), and does not satisfy the

legislative purpose of protecting freshwater wetlands species.

A transition area is "an area of land adjacent to a freshwater

wetland which minimizes adverse impacts on the wetland or serves

as an integral component of the wetlands ecosystem." N.J.S.A.

13:9B-3. DEP regulations require that "[t]he standard width of a

transition area adjacent to a freshwater wetland of exceptional

resource value shall be 150 feet . . . [and] shall only be modified

through the issuance of a transition area waiver." N.J.A.C. 7:7A-

2.5(d).

N.J.S.A. 13:9B-18(a) empowers DEP to issue a transition area

waiver when: "(1) the proposed activity would have no substantial

impact on the adjacent freshwater wetland or (2) the waiver is

necessary to avoid a substantial hardship to the applicant caused

by circumstances peculiar to the property." Corresponding DEP

regulations provide that an applicant may satisfy the first prong

and "obtain a transition area waiver through scientifically

documenting that a proposed activity will have no substantial

impact on the adjacent wetlands." N.J.A.C. 7:7A-6.1(d). The

documentation "may include, but is not limited to, nutrient or

sediment transport models, buffer models, or wildlife habitat

suitability studies." Ibid. (emphasis added). However, the

28 A-3180-14T1
documentation must address sediment, nutrient, and pollutant

transport and removal; impacts on sensitive species; and surface

water quality impacts. Ibid.

DEP granted a transition area waiver to Bi-County under

N.J.A.C. 7:7A-6.1(d). Bi-County's compliance statement, which it

revised in October 2014, demonstrates that DEP acted properly

under N.J.S.A. 13:9B-18 and N.J.A.C. 7:7A-6.1(d) in granting the

transition area waiver. In its compliance statement, Bi-County

cited N.J.A.C. 7:7A-6.1(d) in its entirety and described the

project's impact on sediments, nutrients, and pollutants,

sensitive species, and water quality in the transition area. Bi-

County addressed the sediment and pollutant issue by recognizing

that "wetlands protect water quality by trapping sediments and

retaining excess nutrients and other pollutants." Bi-County then

stated that its plan preserves those wetlands by using "non-

structural measures . . . such as grass swales and interrupted

impervious surfaces, as well as structural features . . . including

five maintained detention basins" to "reduce stormwater

pollutants."

Bi-County also addressed the project's impact on T&E species,

and listed the dominant species presently occurring in both the

reduction and expansion areas. Bi-County also explained that its

plan reduced impacts on sensitive species by preserving, in

29 A-3180-14T1
addition to the compensation areas, four additional forested

upland conservation areas that total 16.81 acres. Further, Bi-

County acknowledged that while Barred Owls may not use the site

for habitat purposes due to the relatively small size of the

wetlands area, the site may function as a corridor for them.

Regarding water quality, Bi-County stated that Wayne will

handle its wastewater, while Bi-County will protect riparian

corridors and freshwater wetlands with an average 100-foot upland

buffer around wetlands and stream corridors in which there are no

major encroachments, and conserve four open spaces totaling over

16.81 acres of forested habitat. Bi-County also represented that

it will preserve a portion of the isolated wetland to reduce

surface water quality impacts.

Second, Bi-County explained it needed a transition area

waiver to effectuate the proposed residential development because

the transition area must be reduced to allow for the construction

of single-family dwellings and an above-ground detention basin.

Specifically, to build the dwellings and basin, Bi-County had to

construct roadways, stormwater management facilities, and

residential lots.

DEP's responses to the public's comments also demonstrate

that DEP acted properly under N.J.S.A. 13:9B-18 and N.J.A.C. 7:7A-

30 A-3180-14T1
6.1(d) in granting the transition area waiver. DEP explained its

decision as follows:

Bi-County . . . applied for a
[t]ransition [a]rea [w]aiver reduction . . .
to reduce the 150 [foot] transition area
adjacent to the exceptional resource value
wetlands by 1.718 acres (74,874 sq. ft.). The
proposed transition area waiver reduction
. . . would enable the construction of several
single-family dwellings and a detention basin.
To compensate for the transition area
reduction, the wetland transition area will
be expanded by 1.363 acres. In addition,
16.81 acres of additional forested uplands
that provide suitable [B]arred [O]wl habitat
on the subject parcel will also be preserved.

. . . .

[DEP] holds the authority to protect
freshwater wetlands and transition areas.
. . . However, the rules allow wetlands and
transition areas to be permanently impacted
in certain circumstances. Contrary to the
commenter's claim, none of the proposed houses
are located within freshwater wetlands,
although some of the houses are located within
the adjoining freshwater wetlands transition
areas. [Bi-County] has applied for a
[t]ransition [a]rea [w]aiver [r]eduction
pursuant to [N.J.A.C.] 7:7A-6.1(d). As part
of [Bi-County's] compliance with [N.J.A.C.]
7:7A-6.1(d), [Bi-County] proposes to
permanently conserve 16.81 acres of forested
areas on-site to offset the proposed
encroachments into transition areas.

[DEP] has reviewed the project for
compliance with the standards at [N.J.A.C.]
7:7A-6.1(d). The project does meet these
standards and as such, [DEP] will issue a
[t]ransition [a]rea [w]aiver in accordance
with the [FWPA] rules.

31 A-3180-14T1
 Bi-County satisfied the requirements of N.J.A.C. 7:7A-6.1(d),

and DEP complied with all regulatory requirements in issuing a

transition area waiver. The record supports DEP's decision to

issue a transition area waiver, and the decision is not arbitrary,

capricious, or unreasonable.

Affirmed.

32 A-3180-14T1