The N.C. Supreme Court on Thursday upheld a lower court's ruling that Cary overstepped its authority by requiring companies to pay fees to fund schools before building residences.

The town had argued that the lower-court judgments infringed on the power of municipalities to accept specific land-use conditions from developers before rezoning property. As a result of the ruling, Cary may have to return $600,000 and attorneys' fees to 11 companies involved in the Cameron Pond development.

"We're hoping that we'll get our refund soon," said Bill Brian, an attorney for the builders.

Glenn Futrell, a Cameron Pond developer, said that the Cary Town Council required fees of up to $1,000 per bedroom as a condition of project approval, according to the Court of Appeals ruling.

The fees were meant to boost the capacity of local schools, but the town didn't have legal authority to fund schools, the ruling stated. The agreement "illegally shifted the burden of paying for public education to the subdivision builder-plaintiffs," the ruling stated.

Cary has kept more than $4 million of the school impact fees in limbo pending the lawsuit, said Town Attorney Chris Simpson. The town repealed its school-fee policy in 2004. Cary has paid about $758,000, including insurance money, to argue the case over the last four years.