COLDWATER, MI (WTVB) – The City of Coldwater is scheduled to face a class-action lawsuit challenging its municipal utility fees during a pivotal motion-to-dismiss hearing on Thursday.
The legal battle, which impacts nearly 7,000 residents, centers on allegations that the Coldwater Board of Public Utilities (CBPU) has been overcharging electric customers by roughly $3 million annually.
Legal representation for the plaintiff, Coldwater resident Jason Mate, argues that the city miscalculated a 6.5% charter fee by basing it on gross revenue rather than gross income, resulting in over $12 million in “unjust enrichment” for Coldwater’s general fund.
In response, the city has labeled the claims “baseless” and insists that the payment-in-lieu-of-taxes (PILOT) transfers are legally required by the voter-approved 1960 city charter.
The high-stakes hearing will be conducted entirely via Zoom by a specially assigned judge. Judge Patrick R. Hallacy from Calhoun County was appointed to take over the proceedings following a series of judicial shifts, which included the recusal of newly appointed Branch County Circuit Judge Zach Stempien due to potential conflicts of interest with city officials.
Judge Hallacy’s primary task during the virtual court session will be evaluating the city’s motion to dismiss.
His ruling could either end the dispute immediately or pave the way for a lengthy legal process that attorneys predict could extend well into 2027 or beyond through anticipated appeals.
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