(COLDWATER) - A judge has dismissed a class-action lawsuit challenging how the City of Coldwater and the Coldwater Board of Public Utilities collect a voter-approved utility fee.
The Coldwater Daily Reporter reports specially assigned Calhoun County Circuit Judge John Hallacy ruled in favor of the city and CBPU, rejecting claims that the 6.5% Payment in Lieu of Taxes fee had been improperly calculated.
The lawsuit was filed by Jason Mate on behalf of roughly 7,000 utility customers.
Attorneys for the plaintiffs argued that calculating the fee based on gross revenue rather than gross income resulted in more than $12 million being improperly directed to the city's general fund between 2020 and 2024.
Hallacy ruled that Michigan law presumes municipal utility rates are reasonable unless a challenger can show fraud, bad faith or arbitrary and capricious conduct. The judge determined the plaintiffs had not met that standard.
The city had maintained that the lawsuit was without merit.
The dismissal leaves the city's current utility fee structure in place. The ruling could still be appealed.