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Brewing up Cash 

10 Barrel finishes it's 50-barrel project in northeast Bend.

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The 10 Barrel Brewing Company has just put the finishing touches on its new 50-barrel brewhouse in northeast Bend. It's a big facility with gleaming, polished steel tanks and just the latest in a series of recent expansions of the booming industry. Next on deck is a new Boneyard Beer brewhouse up the street from 10 Barrel and within the year, at least two more brewhouses are slated to open not far away.

But just as the industry prepares to cement Bend's standing as a darling in the microbrewing world, city staff are eyeing the goods, too, and preparing to expand an heretofore obscure and sporadically administered sewer fee to breweries across the city. Breweries aren't the only industry likely to be hit with the charge, which could generate $2 to $3 million a year for the city and is based on the concentration of waste dumped into the sewer system by commercial businesses. But of the potentially affected businesses, breweries will take some of the biggest hits.


City officials said the charge, which was initiated in 1982, but is currently only applied to about 15 businesses in the city, is about requiring businesses to pay their fair share for using the sewer system. In the past 30 years, the fee hasn't been applied systematically or fairly and its expansion has nothing to do with dinging a successful industry.

"The city was not treating everybody the same," said Kelly Graham, the city's pre-industrial treatment coordinator. "We need to right a wrong that was done years ago."

The fee is coming up, though, as the city struggles to fund large infrastructure projects, such as a major wastewater treatment upgrade. And the expansion of the fee program is being met with skepticism by business leaders and business owners, who say there are major questions about how city staff have proposed to roll out the fee and whether certain industries are being targeted.

"It's like, 'Let's get after these guys," said Garrett Wales, co-owner of 10 Barrel Brewing Company. "They can pay. We can make a lot of money off of them."

The charge, which could be hundreds of dollars a month for breweries, is based on the concentration of waste dumped into the sewage system. The premise is that businesses that release wastewater loaded with chemicals and or nutrients should pay more. For instance, some breweries release water filled with sugar and sediments that is more time and cost intensive to treat at the wastewater facility in north Bend. Some restaurants dump grease.

Brewers say they have no problem paying their fair share, but, so far, some brewers don't think the city has offered a good plan for making the fee truly equitable. The city is currently looking at charging only a handful of industries,and hasn't collected data on how much it costs to treat their waste. The steps individual businesses take to pre-treat wastewater won't initially be taken into account when fees are assessed.

Add to these concerns that the city recently made significant errors in administering the current fee, resulting in hundreds of thousands of dollars in refunds to some of the businesses currently being charged, including Deschutes Brewery, and business owners say they are right to be nervous about the expanded charges.

"We produce more liquid and a harder-to-treat product than a household. Absolutely," said Ty Barnett, co-owner of GoodLife Brewing. "Should we pay more? Absolutely. We just want to make sure its fair."

THE CONCERNS

1. For starters, the city has not yet proposed to charge every business that dumps extra strength waste, as other cities in the region, including Redmond, do. There are dozens of businesses in Bend that dump a higher concentration of waste than a standard household (see textbox), according to a presentation Bend Public Works Director Paul Rheault gave to the Bend Chamber of Commerce last week. But the city has only sampled the waste of breweries, restaurants, grocery stores, nursing and retirement homes, schools and auto shops in preparation for assessing the charge, according to the Rheault's presentation.

The city may expand the industries considered for the fee after two February infrastructure advisory committee meetings and a March city council work session, said Bend Finance Director Sonia Andrews.

2. The city also hasn't provided data showing how much it actually costs to treat high-strength waste and whether there is a financial issue with treating waste at the wastewater treatment facility.

"That question hasn't been explained," said Jon Skidmore, who is a liaison between the city and the business community in his role as the city's manager of the Bend Economic Development Advisory Board, a board chartered by the Bend City Council to provide council members with information about the business community's perspective on issues. "Public works needs to explain."

3. The way the fee is likely to assessed will not actually be based on the concentration of waste being dumped by each individual business within an industry. A low, medium, high and extra-high category system is being considered for each industry and each business within that industry will initially be placed within that category, said Rheault.

This categorizing process doesn't take into account that some breweries in town have invested heavily in equipment that filters brewery waste before it's released into the sewer system. For example, when 10 Barrel Brewing Company owners built their new brewery in north Bend, they invested "tens of thousands of dollars" in wastewater filtration and treatment equipment, said Wales.

10 Barrel's heaviest wastewater goes to a massive tank that filters out the toughest solids, which are then collected by area farmers for building soils and composting. Then water goes to a settling tank where sludges and other solids are again removed. The remaining water is PH balanced by the brewery and finally released into the wastewater system.

"That's just something we did because we think we should," said Wales. "Yet we are still going to get charged the same amount as a funeral home dumping embalming fluid down the drain."

Several other breweries in town including Deschutes Brewing, Boneyard Beer and GoodLife Brewing have all made similar investments, though there are other breweries in town releasing very high levels of nutrient-rich waste straight into the sewer system, said two sources privately.

The city is sensitive to the problem of businesses being placed in the wrong category, said Rheault, and business owners can "appeal" by paying for a test of the business' waste. The city will reclassify the business if it is in the wrong category, he said.

Some businesses that are initially assessed the fee may also be able to prove that their discharge is essentially no different than a household's. In that case, the fee may be dropped entirely, said Rheault.

City staff said they are not looking to ding businesses in an effort to raise revenues. And if the antiquated fee structure had been reworked when it was first identified as a problem a decade ago, this issue would appear to have nothing to do with breweries, said staff.

"I don't think we kept up with the growth at that time," said Graham. "It finally got down into where we need to fix this now."

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