Standby Fee Ruled an Illegal Tax

In 1969, Lakewood Village Development Company began developing a subdivision and constructed a water and sewer system to service the lots in two of the subdivision's three phases. Each lot in the two phases had a water meter box and sewer connection tap. In 1977, the City of Lakewood Village was incorporated. In 1988, the city voted to purchase the water and sewer system. In 1989, the city adopted an ordinance setting the sum of $25 per month as a minimum fee for water service and established a “standby fee” of $25 per month for all vacant lots that had water and sewer services immediately available. Owners of approximately 58 vacant lots sued, seeking to have the ordinance declared unconstitutional. The trial court ruled for the city, but that decision was reversed on appeal.