845 S.E.2d 797
N.C. Ct. App.2020Background
- Greenville Utilities Commission (GUC) was created by a 1991 local act and its charter authorizes supervision, operation, and to "fix uniform rates for all services rendered" for electric, gas, water, and sewer services.
- Beginning in 2008 GUC required developers to pay connection fees composed of a tapping fee and a capacity (impact) fee as a condition of receiving water/sewer service and development approval.
- In 2016 the NC Supreme Court in Quality Built Homes I held municipalities lacked statutory authority to impose impact fees for future services where enabling language did not include "to be furnished" or similar prospective language.
- The General Assembly enacted the Public Water and Sewer System Development Fee Act in 2017 authorizing system development fees prospectively and expressly declined to grant retroactive authority for fees collected before Oct. 1, 2017.
- Plaintiffs (local builders) sued in 2018 seeking refunds of impact fees paid within the three-year limitations period; the trial court granted summary judgment to GUC, and Plaintiffs appealed.
- The Court of Appeals reversed, holding GUC’s charter did not authorize charging impact (capacity) fees for future services and that such charges were ultra vires pre-Act.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether GUC's charter authorizes charging impact/capacity fees for future water/sewer services | Charter authorizes only "uniform rates for services rendered" (present tense); lacks prospective "to be" language; fees for future services are ultra vires | Charter authorizes collection of "rentals and charges" and to use receipts for "planning for future improvements," so it authorizes fees for future capacity | Reversed: Charter does not authorize impact fees for future services; charging them pre-Act was ultra vires |
| Whether reading charter sections together (Secs. 5–7) supplies prospective authority | Other sections refer to "customers receiving service" and receipts depend on contemporaneous charges; no prospective grant | Combined reading yields authority to collect monies for future expansion and thus support impact fees | Rejected: present‑tense language limits charging to contemporaneous services; combined reading does not create prospective authority |
Key Cases Cited
- Quality Built Homes v. Town of Carthage, 369 N.C. 15, 789 S.E.2d 454 (2016) (municipal enabling language lacking "to be furnished" does not permit impact fees for future services)
- Quality Built Homes v. Town of Carthage, 371 N.C. 60, 813 S.E.2d 218 (2018) (limitation-period analysis for unlawful impact-fee refunds)
- Forbis v. Neal, 361 N.C. 519, 649 S.E.2d 382 (2007) (summary judgment and de novo review standards)
- Burgess v. Your House of Raleigh, Inc., 326 N.C. 205, 388 S.E.2d 134 (1990) (principles of statutory construction)
- Coastal Ready-Mix Concrete Co. v. Bd. of Comm'rs, 299 N.C. 620, 265 S.E.2d 379 (1980) (legislative intent and statutory interpretation)