Kikkoman calls for negotiations
November 17, 2010 | 09:00 AM
Walworth — Representatives from Kikkoman Foods have denied the company threatened to stop making a minimal payment to the sewage treatment plant.
Instead, Kikkoman Vice President of Administration Dan Miller said the company wants to renegotiate the payment arrangement.
Two weeks ago, the villages of Walworth and Fontana met in closed session to discuss possible litigation with Kikkoman Foods.
At that time, Larry Steen, who represents the treatment plant, said Kikkoman planned on backing out of a minimal billing agreement. He reiterated that point during a Nov. 9 meeting at the treatment plant.
"(Kikkoman attorney) Mick Neshek said 'it is going to stop, we are tired of paying for it,'" Steen said.
In 2007, Kikkoman Foods signed a contract that requires a monthly minimum payment. The minimum payment formula requires Kikkoman to pay percentages of its capacity for its total suspended solids and biological oxygen demand. Its last quarterly bill was more than $85,000.
Miller said the plant wants to return to an equitable payment system
"We feel the minimum billing should cease on January 1, 2011, but we are open to discussions," he said.
Miller also said the expectation was the minimum payment agreement would end after the treatment plant expanded — the plant has nearly completed a major expansion.
"It is our expectation that this agreement would remain in effect until such time as the FWWPCC treatment plant is expanded," Miller wrote in the June 6, 2007, letter to the commission.
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However, the actual agreement between the treatment plant and Kikkoman doesn't state the minimum billing agreement would end when the treatment plant expanded.
Instead, it states the agreement could be revisited after a plant expansion.
Although Steen told the commission he was informed Kikkoman would stop making the payments, the company denies it.
In a Nov. 4 letter to Steen, Neshek denies closing the door on negotiations.
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"You make the statement that I informed you that Kikkoman's decision to cease payments 'is not negotiable.' I regret that you left our meeting with this impression," Neshek wrote. "Please be advised that Kikkoman earnestly desires to work toward a satisfactory resolution of this matter since it values its relationship with the villages.
On Monday, Steen stood by his earlier statements that he was informed Kikkoman would stop making the minimum payment at the beginning of the year.
"During my face-to-face discussion with Attorney Neshek, I was informed Kikkoman's executive committee made the decision to stop making the minimal payment beyond Jan. 1, 2011 and that was a final decision," Steen said.
The two villages and the soy sauce manufacture have work together at the Fontana Walworth Water Pollution Control Commission since it opened in the 1980s. A Kikkoman representative serves as a non-voting member of the commission.
In a Nov. 9 letter to the Walworth and Fontana village boards, Kikkoman Foods President and Chief Operating Officer Kazuo Shimizu wrote the three entities should meet to discuss the minimum billing agreement."Ending minimum billing is an issue of basic equity. Since 1984, Kikkoman has been an active, equal partner with the villages of Fontana and Walworth in the effective, efficient treatment of our communities' wastewater," Shimizu wrote. "But during the past three years, Kikkoman has paid more than $300,000 over our actual wastewater treatment charges under the minimum billing. No partner should continue to pay more than others after the treatment plant expansion is complete."
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Tensions run high at meeting
During a Nov. 9 meeting at the treatment plant, at times tensions ran high when the minimal billing agreement was discussed.
Walworth Trustee David Rasmussen said Kikkoman only wants to rely on the treatment plant in case it needs extra capacity.
"We are only here to be available when you have a problem," Rasmussen said. "We are basically subsidizing the necessary plant capacity to deal with your problems."
Before wastewater is sent to the treatment plant, Kikkoman treats it, which reduces what is sent to the plant.
He also told Kikkoman representative John Raymond that by pretreating the wastewater Kikkoman is attempting to lower its bill, but could rely on the treatment plant when it needs to.
Rasmussen said both villages could save money by pretreating wastewater. However, the plant needs to rely on income to cover fixed costs.
Rasmussen said when Kikkoman pretreats its waste it pushes more costs onto the village.
"It's a free-rider situation, John (Raymond)," Rasmussen said.
Miller said Kikkoman has invested significant amounts of funds into the plant and also put money toward its expansion.
"We have been invested partners with Walworth and Fontana since the treatment plant was founded," Miller said.
Rasmussen also expressed concerns that the treatment plant doesn't have access to inspect the facility to make sure it is handling its wastewater correctly.
"Any time the sewer treatment plant staff have questions and want to see our wastewater pre-treatment facility they can call us and see it," Miller said.
Miller said lab technicians and Plant Superintendent Dean Donner have been to the Kikkoman facility.
What is further clouding the waters — or more accurately putting clumpy masses in it — is filamentous bacteria. Filamentous bacteria is a common bacteria in brewing processes that involving soy and wheat.
"It is inherent to the process," Raymond said.
In the past year, filamentous bacteria have been discovered in the treatment facility, which isn't present during normal conditions.
The treatment plant received a violation from the DNR because of the presence of the bacteria. Since that time, Kikkoman has worked on reducing the amount of filamentous bacteria that enters the plant.
Raymond said Nov. 9 filamentous bacteria hadn't been sent to the plant in the previous two weeks. Donner confirmed that.