Livingston Reaches $2M Settlement With East Orange Water Commission Over Unpaid Taxes

The East Orange Water Commission has finally paid more than $2 million in back taxes it owes to Livingston Township. 

After years of lingering litigation, the EOWC reached a settlement with the township worth $2.014 million on delinquent property taxes dating back to 2009. The settlement is less than what Livingston officials said EOWC owed in June, which totaled $2,403,063. 

The prolonged negotiation "certainly strained both of our abilities to function," said East Orange City Administrator Jillian Barrick. "We wanted to take our time to make sure we got the best and fairest settlement .... I'm certainly glad that we finally came to a resolution and we can both move forward." 

The impact of the settlement will ultimately be borne by the water commission's customers, said Barrick. The EOWC, which is an independent utility owned by East Orange, will raise water rates for its customers to make up for the $2-million settlement. The water commission provides water to East Orange and South Orange, among other nearby communities. 

The payment unfortunately comes too late to help Livingston taxpayers this year. The township also cannot apply the $2 million retroactively to the budget. The delinquent tax bill was responsible for 72 percent of the township’s 5.7-percent tax increase this year, or about $102 of the $140 increase. 

The settlement will go toward Livingston’s surplus and help fund tax appeals, which is expected to be more than $3 million in 2013.

While the recouped funds will greatly increase the township's budget surplus, Mayor Rudy Fernandez said, "It's really too early to comment what the impact will be in 2014." 

The East Orange Water Commission stopped paying its property taxes on 40 properties and nearly 1,500 acres of Livingston land in 2009 after a reassessment increased its tax bill. 

The water commission continued to hold out after a January court order affirmed the township’s right to recoup those taxes and rejected East Orange's argument that the 2009 tax bill was miscalculated.