COLDWATER, MI (WTVB) – A class action lawsuit seeking refunds for thousands of Coldwater Board of Public Utilities customers is unlikely to reach a resolution anytime soon, as the legal battle over “payment-in-lieu-of-taxes” (PILOT) fees faces a lengthy court process.
The lawsuit, filed in December of last on behalf of resident Jason Mate, alleges the city has been overcharging approximately 7,000 customers by calculating a 6.5% PILOT fee based on gross revenues rather than gross income.
Attorneys for the plaintiff claim this method resulted in over $12.9 million in “unjust enrichment” for the city’s general fund between 2020 and 2024. However, the City of Coldwater has labeled the claims “baseless,” asserting that these transfers are legally required by the city charter approved by voters in 1960.
Coldwater residents should not expect immediate bill reductions or refunds as the case is projected to extend into 2027 or later due to potential appeals.
A hearing for the city’s motion to dismiss the case is currently scheduled for June 11, 2026. While the legal proceedings continue, CBPU continues to collect the 6.5% fee, and the city has maintained that municipal utility rates are “presumptively reasonable” under Michigan law unless fraud or bad faith can be proven.
In the meantime, the utility recently implemented separate electric rate adjustments effective September 1, 2025, following a five-year capital plan aimed at maintaining operational cash reserves and funding infrastructure needs.
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