Shipyard Brewing to pay $300,000 to settle sewer fee dispute with Portland

Fred Forsley, president and co-owner of Shipyard Brewing Co., stands in the brewery's tasting room on Feb. 28, 2013. Shipyard has grown into the 16th-largest craft brewery in the country.
Fred Forsley, president and co-owner of Shipyard Brewing Co., stands in the brewery's tasting room on Feb. 28, 2013. Shipyard has grown into the 16th-largest craft brewery in the country. Buy Photo
Posted March 15, 2013, at 1:47 p.m.

PORTLAND, Maine — Shipyard Brewing Co. will pay the city of Portland nearly $300,000 to settle outstanding sewer fees, according to an arbitrator’s decision announced Friday.

The city and the brewing company have been working for four months with the arbitrator — David King, an attorney at Rudman Winchell in Bangor — to come to an agreement over the payment of outstanding sewer fees associated with a water line that Shipyard installed in 1996 but erroneously was not billed for until 2011. The error, which an investigation last year determined was caused by miscommunication and not wrongdoing, cost the city of Portland nearly $1.5 million over the 15-year period.

“I’m glad it’s behind us,” Shipyard President Fred Forsley told the Bangor Daily News on Friday. “We’re happy with the result and we’ll move forward. It’s a large amount of money, but we’ll be able to push forward. Our hope is it won’t have that substantial of an impact given our growth and we’re hoping we won’t have to raise prices more.”

Shipyard has grown substantially over the years, and is the 16th largest craft brewery in the country. It employs nearly 90 people at its Portland brewery and expects to produce 150,000 barrels of beer this year, Forsley recently told the BDN.

“I am hopeful that today’s decision provides some measure of closure for all the parties involved, including the city’s rate payers,” City Manager Mark Rees said in a statement. “The city has and continues to take this matter very seriously as it is important that we honor and maintain the public’s trust in our sewer and billing system. We have taken positive action not only in an effort to resolve outstanding payment in the matter with Shipyard but also to ensure that a mistake like this cannot happen again.”

While Forsley said he’s ready to move on from the debate over the outstanding sewer bill, he still believes sewer rates in Portland are too high.

At a City Council meeting last spring, Forsley said the brewery’s monthly sewer bill went from $15,000 to $55,000 after the error was discovered, a significant enough increase that he worried about the viability of his business.

The new bill caused him to look at what his competitors in the craft beer industry pay in sewer fees in their communities. While Portland charges $8.11 per cubic yard of discharge into the sewer system, Forsley said two major competitors — the Brooklyn Brewery in New York City and Magic Hat Brewing Co. in South Burlington, Vt. — pay around $5.

Regardless of whether Portland’s sewer fees could be reduced, Forsley said Friday that the brewery will look for ways to conserve water.

“We’re going to continue to try to lower our water usage to lower our sewer fees and look for ways to conserve water so we can handle it in the future,” he said. “We’re hoping sewer rates don’t increase a great deal in Portland because they’re already high.”

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