LIVERMORE FALLS — An independent arbitrator concluded that the Livermore Falls Wastewater Treatment Plant owes $31,643 to the town of Jay for overbilling related to employee insurances and benefits.

The arbitrator denied all other claims. Jay had claimed it was owed $283,316.

Livermore Falls owns the plant, and Jay and Livermore Falls share the cost of operation and maintenance of it based on treatment of sewage flow. The plant is a separate entity from the town of Livermore Falls and the Sewer Department, which are also separate entities.

The towns maintain separate sewer pipes and related equipment.

The dispute centered on different interpretations of an agreement for treatment of wastewater flows dated Dec. 1, 1997. The latter agreement was based on one that was established on March 27, 1972.

Arbitrator Durward Parkinson wrote that while both sides have acted in good faith over the years and throughout the arbitration process, this might be the appropriate time to re-evaluate and redraft the agreement.

“The towns are encouraged to negotiate a new or amended agreement which more clearly defines responsibility and billing protocol for operating and maintenance expenses of the plant,” he wrote.

Arbitration occurred in July at a Portland law firm.

Jay is billed monthly for its share of the operating and maintenance costs.

The agreement is formal but was adhered to informally in the past. New practices were put in place in October 2012 to more precisely monitor records showing time the Livermore Falls treasurer and sewer clerk spent on plant related matters, according to the report.

“We had some difference of opinions on revenues and what account they should be placed in and what they are used for,” Jay Town Manager Ruth Cushman said.

Jay claimed it was owed $283,316 from the Livermore Falls Treatment Plant in regards to the reserve fund and treatment plant employee time spent doing treatment plant work versus doing work for the Livermore Falls Sewer Department over six years, Jay Sewer Superintendent Mark Holt said Monday.

Jay claimed the agreement was violated because it was not based upon a concise accounting of time and expenses for the employees working at the plant or directly related to plant operations. Instead employee billing is based upon percentages which was never formally agreed upon, the report states. Jay also claimed it should have received compensation for revenues associated with disposal of septage and sludge-related waste.

Livermore Falls’ biggest counterclaim was that the agreement was kind of vague as it was written and does not have the specifics on the cost the two sewer departments would share in regards to treatment plant employees and the sewer clerk, Livermore Falls Town Manager Kristal Flagg said.

“We felt they were taking us to arbitration on items that were never written or identified in the agreement,” she said.

A lot of items that were specified in the claim had always been worked out by verbal agreements with no issues until 2012, she said. Livermore Falls also provides office space for the sewer Treatment Plant/Livermore Falls Sewer Department clerk.

Witnesses testified consistently that until 2012, the towns sought to avoid an overly detailed and precise accounting for operating and maintenance of the plant, Parkinson wrote.

A system was devised to allocate these costs based upon various percentages in an effort to “keep it simple,” he wrote.

“While this is understandable, the end result was that the allocations were not so simple and often confusing,” he wrote.

Jay had good reason to question the informal allocations and seek more precise billing but there is no evidence that Livermore Falls intentionally held back information or misrepresented operation and maintenance costs, he wrote.

While detailed records were kept and distributed upon request, the agreement is lacking specifics about how the information is shared and then used for billing purposes, Parkinson wrote.

There is sufficient evidence to conclude that Jay was inappropriately overbilled for employee and sewer clerk health insurance costs, not including the superintendent, in the amount of $25,548 and the sewer clerk’s benefits in the amount of $6,095.

He denied an award to Jay in regards to revenues for septic and sludge related waste disposal.

“Because the Town of Jay has no ownership interest in the plant, and the agreement intended to provide it sewer capacity only, its claim for any portion of these revenues must fail,” Parkinson wrote.

dperry@sunjournal.com