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Michael D. Pitman reports about Butler County, Ohio, politics, county government, countywide issues and Butler County people just like you for Cox Ohio Publishing (including the Hamilton JournalNews, Middletown Journal and several weekly papers in Butler County). He wants your suggestions and questions for more news stories. Leave a comment for him here or e-mail Michael at Home > Blogs > Butler County News and Issues > Archives > 2008 > July > 21 > Entry
More on Pierre Foods
A story ran Saturday outlining the mistake that led Butler County Environmental Services to underbill Pierre Foods in West Chester Twp. hundreds of thousands of dollars for sewer service.
Questions still remain as to when Environmental Services staff found out about the error. E-mail correspondence says they discovered it in August 2006. But they didn’t fix the problem until February 2007.
And additional information is surfacing that hints that agency administrators had wind of the problem in late 2005, plus that they money lost due to the problem is potentially much higher than Vance estimates.
Read more below delving into Sue Vance’s claim that they knew nothing about it, though she said in an e-mail that former agency heads had known about it. It also gets into the other 207 businesses that were potentially undercharged. And stay tune, dear reader.
HAMILTON — As far as county officials can figure, it started in 1988 with a rule that changed how Butler County Environmental Services charges companies for sewer service.
A mistake, it seems, was made then that opened the door for 208 companies to be undercharged for sewer service. Though there’s evidence county officials knew about the error, the county didn’t recoup one cent until February.
In the meantime, the problem grew, resulting in the county’s largest sewer customer being undercharged roughly $856,510 for sewer service.
The 1988 rule change required new businesses to purchase additional equivalent residential unites (ERUs) for every 12,000 gallons of sewer water they use over the initial ERU they get. If they don’t purchase these units and go above their allotted amount, they are charged a “peaking” penalty.
The resolution didn’t apply to 208 existing customers due to a “short-sightedness,” said Environmental Services Director Sue Vance, so they were never levied a peaking fee.
No one did anything about it for 19 years until it was noticed in August 2006, officials said.
In a February 2007 e-mail from Vance to then-county administrator Derek Conklin, she said, “it is obvious that previous administrations were aware of this no-peaking problem.”
“We found evidence that both (former utility directors) Graham Rich and Tony Parrott stumbled upon the fact that some of the people were not subject to peaking, but they never researched it and brought it to resolution.”
At some point, Pierre Foods was taken off the no-peaking list. But in 2003, it was put back on.
Vance and other officials say the mistake likely occurred when a new meter was installed and someone changed the setting in the billing system. But in her e-mail to Conklin, Vance theorizes that someone thought Pierre was being treated unfairly because it was paying peaking and other companies — namely Shepherd Color Company in West Chester Twp. — weren’t due to the mistake.
When the county learned of the problem in 2006, Vance said it was like detective work assembling all the bills and finding which ones weren’t paying peaking. They then interviewed former employees and sorted through records, but the cause of the Pierre mistake was never found.
“I don’t think it was anything intentional, or malice or forethought,” said Commissioner Gregory Jolivette. “I think it was just a mistake that happened and that was unfortunate and we did our best to let Pierre Foods know what the problem was, how it occurred and how to move forward.”
The county decided not to bill 207 of the companies for the mistake. They never determined how much this would’ve amounted to, officials said, but it would’ve been minor because most of the companies never went over their allotted amount.
“It’s not fair to back-bill them to 1988 because it’s not their fault,” Vance said.
They did back-bill Pierre foods $194,497 for the period from March 2006 to February 2007, as their policy allows them only to collect 12 months back for a billing error. The company also bought 700 more ERU’s for $833,000 to prevent future peeking.
The total price tag of just more than $1 million was placed on the company’s tax roll, and will be paid off in August 2012.
Pierre now has 1,428 ERUs. It’s the utility’s largest sewer customer by far, using about 16.7 million gallons of water in 2007 — 5.5 times that of Amylin Pharmaceutical, the county’s third largest user.
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