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Developers Win Lawsuit Over New Connection Fees – City Council Approves Charlotte Water’s Request to Raise Rates Slightly

In 2017, the North Carolina General Assembly passed legislation that granted authority to cities to charge capacity fees. In 2018, a group of developers sued Charlotte Water in a class-action lawsuit for system development fees/capacity fees charged prior to 2017, before the legislation was passed. The group also sued over the methodology Charlotte Water used in charging the newly legal capacity fees. After losing the first lawsuit and settling on a second one, Charlotte Water was left to payout $106M. Note: these capacity fees are charged when an individual, commercial homebuilder and/or developer applies for a new connection.

On Monday, January 23, Charlotte City Council voted unanimously to approve amendments to the ordinance associated with the matter (specifically to redefine Charlotte Water rates, charges, and fees) as requested by Charlotte Water. Last year, Charlotte Water increased its rates by 3.54%, which is covering the first $80M of costs connected to the lawsuits. City Council’s approval on Monday evening will result in Charlotte Water’s ability to further increase fees and rate changes to its customers to help cover the costs of the lawsuits.

There are many other municipal water utilities around the state that are in similar class action lawsuits, so this won’t just impact Charlotte.