After a recent review of invoices charged to San Benito Foods
for the company’s use of the industrial wastewater plant during its
tomato canning season, City Manager Dale Shaddox said on Wednesday
that Hollister
”
remains firm
”
that the cannery owes the city nearly $1.6 million.
After a recent review of invoices charged to San Benito Foods for the company’s use of the industrial wastewater plant during its tomato canning season, City Manager Dale Shaddox said on Wednesday that Hollister “remains firm” that the cannery owes the city nearly $1.6 million.
The company has used the sewage plant each year from July to October since 1972. For the past three years, San Benito Foods has paid only portions of bills, officials said.
The company, however, has claimed it was over-charged during that time as Hollister billed $600,000 to San Benito Foods, but the company paid only $200,000.
Shaddox held two meetings during the past week – one with Hollister officials that also included former City Manager George Lewis, and another with San Benito Foods executives.
Lewis was present because “he was heavily involved” with the disagreement between the cannery and Hollister, and the company should have received material regarding the bill Wednesday, Shaddox said.
San Benito Foods General Manager Larry Pitts did not return phone calls on Wednesday.
“We will allow them to make any and all arguments in dispute, and we’re going to be good listeners,” Shaddox said.
During the meeting that involved officials from Hollister and San Benito Foods, no progress was made, though the two sides agreed on a “procedure to move forward,” Shaddox said. They plan to meet again within the next two weeks.
“There was no new surprises out of any of those two meetings,” Shaddox said. “At present, I don’t expect much difference in the number ($1.6 million) or outcome.”
Shaddox said he did, however, expect an agreement on the amount within three weeks.
“I don’t intend to sit on this and let it linger,” he said.
Lewis has agreed to take part in future meetings between Hollister and San Benito Foods, a gesture Shaddox called “gracious.”
“He pledged to sit down at the table as a city representative and help us get to the bottom line,” Shaddox said.
San Benito Foods has been in Hollister since 1915. The city built the industrial wastewater plant to accommodate the area’s two canneries – the other being Tri-Valley Growers. The two businesses historically split operating costs, but Tri-Valley Growers closed in 1991 and San Benito Foods has since paid all costs.
San Benito Foods contends it was wrongfully over-charged for upgrades Hollister performed since 2000 on the industrial wastewater plant.
Pitts has also pointed out Hollister has been using the plant for city operations since a 15-million gallon sewer spill in May 2002.
Shaddox said San Benito Foods is responsible for repairs and upgrades at the plant to comply with state and federal regulations. And that’s what the bills reflect, he said.
“They’re disputing they should not be responsible for those capital outlays,” Shaddox said. “We’re not of that mind.”
The San Benito Foods debt indirectly affects the General Fund reserve, which has decreased by 38 percent in three years. Projects normally financed from the sewer industrial enterprise fund have been funded out of the General Fund.
“I just hope it irons out and I hope we get that thing corrected,” said City Councilman Robert Scattini. “It should have never happened. Somebody dropped the ball. Let’s pick up the ball and get it squared away.”
