The New Jersey Department of Environmental Protection has given Phillipsburg partial approval to sell or lease its problematic wastewater system, clearing two of four required hurdles under federal infrastructure protection laws.

State environmental officials determined that Phillipsburg’s wastewater system faces formal state enforcement action and has suffered from inadequate historical investment in repairs.

The determination allows the town to potentially transfer ownership of the system to a private or public entity without requiring a public referendum.

However, the department rejected Phillipsburg’s claims that the system poses a contamination threat under the Safe Drinking Water Act and dismissed assertions of insufficient managerial capacity within the town’s operations.

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