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Water billing error undercharged food vendor $1 million

Pierre Foods filed for Chapter 11 bankruptcy this week

By Josh Sweigart

Staff Writer

Saturday, July 19, 2008

WEST CHESTER TWP. — Pierre Foods, the West Chester Twp.-based food vendor that filed for Chapter 11 bankruptcy this week, still owes Butler County nearly $1 million for a billing error that was found last year.

The company is Butler County Environmental Services' largest sewer customer, and went three years without paying peak use charges due to a billing error discovered in August 2006.

Along with the error, the county also discovered that 207 other customers weren't paying peaking charges. But they were small consumers and the impact of that was minimal, officials said.

The county's policy allows them to charge Pierre only 12 months back for any billing error. This amounts to roughly $194,497. The county is charging the company another $833,000 for sewer credits to bring its bill in line with their monthly usage.

Billing started in February. The company has until August 2012 to pay it off. This is the first time the mistake has been reported publicly.

County officials say it's unclear when or why the county exempted them from peaking charges in 2003. The best guess, they said, is that the account was changed when a meter was installed at roughly that time.

"Nobody really knows the answer and there are no notes in the billing system," said Environmental Services Director Sue Vance. "All I could surmise is it was a billing error, and we did back bill them per our policy."

Vance said the total cost of the billing error was roughly $856,510. Only the $194,497 will be recouped.

Though the mistake was made in August 2003, it wasn't found until August 2006. The back-billing stretches back 12 months from February 2007. The time lapse was needed for the county to confer with the company, said Environmental Services Deputy Director Bob Leventry.

He said no one was disciplined for the mistake or not finding the error for three years because they can't find anyone who still works there who's at fault.

"Based on that, we've put in controls to make sure this stuff cannot happen again," he said. "And to our knowledge, it has not happened again."

Pierre Foods Vice President of Engineering Gary Sluss did not return calls for comment Friday, July 18.

Contact this reporter at (513) 820-2175 jsweigart@coxohio.com.

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