PORTLAND — City attorneys will negotiate with the Shipyard Brewing Co. in an attempt to reach a deal on making back payments for sewer bills the brewery never received, Portland city attorney Gary Wood said Monday after a closed-door meeting with the City Council.
It is unclear how many years worth of sewer bills the city could seek payment for. The state has a six-year statute of limitations, but Wood said it is unclear whether the statute applies in this case.
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“We will meet with them and see if we can hammer something out that is fair to everyone,” Wood said.
From 1996 to 2011, the city and the Portland Water District failed to bill the brewery for most of its sewer services, an error that cost the city as much as $1.5 million in lost revenue, according to an analysis by The Portland Press Herald.
The City Council on Monday met in executive session for half an hour to discuss the issue with Wood and Bryan Dench, an attorney the city hired to investigate the error.
Dench found no evidence of wrongdoing, but could not conclusively determine what caused the error. He said his investigation was hampered by poor record-keeping, missing documents and the fact that two city workers who should have known what took place are deceased.
“There are a lot of things I can’t figure out,” Dench told the council.
Before the council voted to go into executive session, Fred Forsley, co-owner of the Shipyard Brewing Co., made an emotional appeal, asking the council not to seek back payments, and saying the controversy has been hard on him and his staff.
“When you have people questioning your integrity, it becomes personal,” he said, his voice breaking. “This is not something I take lightly. It has weighed on me. It has taken a toll on our employees.”
Shipyard has been paying its entire sewer bill since city workers discovered the billing error a year ago. Forsley said his monthly water and sewer bill has jumped from $15,000 to more than $50,000.
He said that Portland’s sewer fees are substantially higher than those in neighboring communities, making it difficult for city brewers to be competitive.
“It’s a big issue,” he said. “I can’t afford to look back. I can’t go back and bill people for beer I sold three years ago or 10 years ago.”
The brewery was never billed for sewer services on water it received on a 6-inch water line installed in 1996.
It paid sewer fees only on a previously installed 4-inch line, which provided a small portion of its water. In 2010, for example, the 6-inch line supplied 91 percent of Shipyard’s water.
From 1996 to 2011, 201 million gallons flowed with the 6-inch line, but no sewer account had ever been set up. Brewery officials told Dench that the brewery used seven to eight times more water than it bottled.
Staff Writer Tom Bell can be contacted at 791-6369 or at: tbell@pressherald.com
Twitter: TomBellPortland
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