Increase allowed before new facilities operational

Abstract

Municipalities have the power to establish rates to pay for the construction of new, unused water and sewer facilities, according to a North Carolina appellate court. The town of Spring Hope increased its water and sewer rates to cover the cost of a new facility and other improvements necessitated by state and federal requirements. The town sued a customer who protested the increases and lost. The appellate court overturned the decision, though, because there was no evidence of arbitrary action in establishing the rate increase.