In this appeal, plaintiffs, Seaview Harbor Alignment Committee and certain residents of Seaview Harbor, challenge Egg Harbor Township's denial of their deannexation petition, which would have permitted Seaview Harbor to secede from the Township and annex with neighboring Borough of Longport. The trial court correctly affirmed the Township's decision. In doing so, the court considered and applied the three-part test enumerated in N.J.S.A. 40A:7-12.1, and concluded that although plaintiffs established that the Township's refusal to consent to deannexation was detrimental to a majority of Seaview Harbor residents, the Township's decision was neither arbitrary nor unreasonable, and plaintiffs failed to establish that deannexation would not cause significant harm to the well-being of the Township.
The court holds that a petition under N.J.S.A. 40:7-12.1 may be appropriately denied where a municipality establishes that deannexation would be detrimental to the majority of residents despite the undisputed fact that deannexation would produce considerable property tax savings for the petitioning homeowners, who seek to become part of a lower tax municipality. That detriment can include the loss of significant services to the community at large, removal of a diverse citizenship, and likely erosion of valuable civic participation caused by the absence of those homeowners who seek to deannex from the community
Here, the harm to the residents of Egg Harbor included not only the potential loss of revenue and attendant services, but the removal of a critical municipal resource – the diverse Seaview residents. That unique loss was not limited to its current and future economic impact, but also encompassed the transfer of a portion of Egg Harbor's population that historically participated in all phases of local government, and brought significant and substantive value to the deliberative decision-making process necessary for a healthy and robust community and government.