Customers to pay for $7.5M settlement; charities get windfall.

ASHEVILLE – A $7.5 million annual loss resulting from a water lawsuit will likely be made up by water ratepayers in and outside the city.

Two charities working on racial justice initiatives, meanwhile, are set April 13 to receive a nearly $1 million windfall from a portion of the settlement, Asheville officials have said.

The changes to rates for Asheville city water customers are being considered as a City Council committee readies to review likely increases. A final vote on rates is expected May 11.

Asheville’s water system took the multimillion dollar hit initially estimated at $7.4 million this fiscal year following a 2016 North Carolina Supreme Court ruling that certain municipal and utility impact fees paid by developers were illegal. That set off legal actions across the state against cities, including a 2018 class-action lawsuit against Asheville for a capital fee it charged water customers based on meter size.

At the lowest end of the fee were most residential customers who paid $4.26 bi-monthly for their 5/8-inch meters. At the high end were those with 10-inch meters who paid $1,741.59 every two weeks.

The city did not admit that the capital fees amounted to the illegal impact fees but agreed in a settlement to pay $1.9 million and eliminate the fee, which it used for water construction projects and is estimated to raise $7.5 million annually.