CHARLOTTE, N.C. — Charlotte Water customers can expect a slight increase in their bills soon to help pay a six-figure settlement, but the city government says it still disagrees with the summary judgment made in the case.
The utility provider confirmed on Friday it had reached a $106 million settlement with a group of real estate developers regarding one of two lawsuits. The first suit was filed in 2018, and the second in 2021.
The suits challenged Charlotte Water's ability to charge development fees prior to 2017 and the methodology used to determine how much developers would pay in order to comply with state law. The developers said Charlotte Water's charges were ultra vires, or beyond its powers.
Charlotte Water acknowledged it lost the first suit in an online blog post, but opted to settle the second one "to minimize the financial impact to customers". The settlement payment is handled in two installments: $90 million has already been paid for mainly using reserves moved to take the financial hit, while the remaining $16 million will be paid overtime.
The utility notes customers will see a six-cent increase in their bills starting July 1, 2023, meaning households will spend an extra 72 cents annually. However, the bill rates aren't the only way Charlotte Water will pay the remaining balance; cash flow to current major projects, reserve funds, and short-term project delays are also part of the solution.
WCNC Charlotte reached out to Charlotte Water for further comment, and a spokesperson emphasized that paying the settlement didn't mean the city agreed with it. However, the spokesperson said the court fight is over, saying "All legal avenues have been exhausted and the two lawsuits are settled."
Charlotte Water also said a state law enacted in 2017 granted cities more explicit authority to charge system development fees. However, the utility said the law firm used by the real estate developers in both suits "targeted" Charlotte and other cities in North Carolina. Charlotte Water said nearly 30 cities and counties have settled claims for refunds of the system development fees.
The utility also disputes the claim it overcharged developers, and that not charging such fees would mean customers bear the costs associated with adding new developments to Charlotte's water and sewer systems.
The Charlotte City Council is expected to approve the settlement on Monday, Jan. 23, 2023.
WCNC Charlotte has reached out to the three law firms listed in the case for comment. Milberg Coleman Bryson Phillips & Grossman said it couldn't comment due to pending litigation.
