Arbitrator SettlesTax Dispute Between City and Shipyard Brewery


By Carol McCracken  (Post # 1,315)

An arbitrator with the State of Maine has awarded the City of Portland $298,764.05 in the matter concerning unbilled sewer fees with Shipyard Brewing Company that totals $1.5 million.  The decision concludes a four-month long process during which the city and the brewing company worked with the arbitrator to resolve payment of water fees associated with a water line that was erroneously established as a “water no sewer” line in 1966.  As a result of the human error, the Brewery was not properly billed for water from the line that was discharged into the sewer system according to a press released by the City of Portland.  The arbitrator was David King of Bangor.

“I am hopeful that today’s decsion provides some measure of closure for all the parties involved including the cityh’s rate players.  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 aken 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,” stated City Manager Mark Rees in a press release from the city today.

Sometime late in 2011, city workers discovered that Shipyard Brewing had not been properly billed for its sewer useage from 1996 – 2011.  Since the billing error was discovered, Shipyard had been paying the correct amount for the water that is treated.

In February 2012, the city council retained attorney Bryan Dench, Skelton, Taintor and Abbott to conduct an out-of-house investigation. In a report Dench filed with the city in April, he stated the investigation was seriously hampered by a lack of records and by the fact that David Peterson, the Portland Water District person who did city billing, had died in in 2008.  Dench did report at that time, however, that he found no wrongdoing  with any of the parties involved; including the Cityof Portland, the Portland Water District and Shipyard Brewing Company.  He was paid $22,000 for his services in the matter by the City of Portland.

Following months of negotiations between the City and Shipyard Brewery, last fall the matter went to arbitration at described above in the first paragragh.  The city was tryng recover as much of the $1.5 million dollars as it could from the failure to bill the brewing company properly.

Ship Brewery is on Newbury Street on the East End of Portland.

For additional background information, please visit Post # 1,018, dated 4/10/12 and Post # 1,094, dated 3/2/12 herein.