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THE CITY REBORN FROM THE ASHES OF AMERICA'S MOST DISASTROUS FOREST FIRE
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Legal Counsel & Mayor Respond to BPM Invoice

Issue Date: September 23, 2021

The City of Peshtigo through their attorney Christoper J. Jaekels from the law firm Davis Kuelthau of Milwaukee, Wi., responded to the article that was is last week's Peshtigo Times about BPM. billing the City of Peshtigo $434,100 for lease of the property for the sewer line crossing. It was written to BPM's attorney David I. Cisar of the law firm von Briesen & Roper, s.c., also of Milwaukee. The letter stated:

Dear Mr. Cisar:

We are in receipt of BPM's September 9, 2021 letter to our client, City of Peshtigo, and must go on record with regard to the following facts:

1. The City responded to the March 16 letter in multiple contacts via telephone, email, and in person. The City submitted document requests (which were denied) and shared relevant documents with BPM.

2. The investigation as to the sanitary sewer line that crosses the BPM property is ongoing, The City's exact property interest has not been determined. By no means has the City's property interest been ruled out.

3. The City will work with BPM with regard to the placement of its discharge effluent line.

4. BPM's purported invoice lacks any basis in law or fact. The City will enforce all of its rights in this regard.

It is the City's goal to resolve this matter without litigation. BPM's recent correspondence makes that goal challenging. Nonetheless, the City remains determined to resolve this matter in a way that is fair to the interest of all concerned and looks forward to working with BPM to that end.

Very truly yours,

Davis & Kuelthau, S.C.

Christopher J. Jaekels

Counsel for City of Peshtigo.

Sept. 21, 2021

James S. Koronkiewicz

General Manager, BPM, Inc.

200 West Front Street

Peshtigo, WI 54157

Dear Mr. Koronkiewicz:

Although a formal response to your letter of September 9, 2021 has already been sent by the City's attorneys, I wanted to respond on behalf of the City and the citizens we represent.

The public is aware that there have been considerable negotiations with respect to sewer rates charged to the citizens of Peshtigo and to BPM. You will recall that you published your position in the Peshtigo Times and sent flyers to all city residents in an attempt to gain public opinion over the rate structure What you neglected to inform the public was that rates had not increased for many years and that Peshtigo's sewer rates remain one of the lowest as compared to the surrounding comparable communities. The rate assigned to BPM was the rate determined by the City's outside engineering firm based on the mill's discharge rate and other relevant factors. Although BPM disputed the rate, BPM has never provided any proof or support to dispute the assigned rate despite repeated requests by the City to do so. Ultimately, BPM threatened to build its own plant if the City would not reduce its rate.

I believe the history of the relationship between BPM and the City of Peshtigo is relevant to explain how we ended up where we are today, The City and BPM have a long history of cooperation. However, the relationship at some point became one-sided, in my opinion, The City believed that BPM was acting in good faith when it took over the operations of the wastewater treatment plant which was built, in part, to meet the needs of BPM (given that approximately one-half of all discharge comes from BPM). The contractual relationship that BPM enjoyed in running the plant for many years was quite beneficial to BPM.

In hindsight, it might have been unwise to allow BPM to operate the plant and have potential influence over the rate BPM paid. When the City decided to take back operation of the plant, it discovered that BPM had failed to meet its contractual obligation for significant maintenance of the plant. At that time, BPM could have been sued for breach of the contract. However, given the long standing relationship between BPM and considering BPM's anticipated continued relationship with the City, the City has not pursued this claim.

In addition, the City determined that BPM had not been paying its fair share for sewer discharge for some time. Rates for private citizens also had not been increased for many years, despite the utility running in the red, in an attempt to keep costs to City citizens in check. However, the rate review illustrated that rates to both private citizens and BPM should have gone up gradually to cover the increased costs. That brings us to the situation where we are today.

As you know, the City's sewer river crossing was installed on property owned by BPM, Inc. prior to BPM purchasing the property and dates back to the early 1900s. The fact that BPM is now contesting the City's right to use the sewer appears to be in direct retaliation for the City's refusal to grand a specific utility break to the company.

BPM apparently is not concerned about the community in which it operates. In seeking a reduction of sewer rates, it effectively was asking to pass a corporate responsibility to pay its fair share of its sewer bill to the taxpayers of Peshtigo. Had the request of BPM been granted for a reduction in rates, the utility rate for the citizens of Peshtigo would have gone up. In addition, there would have been a precedent set for anyone or any organization to request a reduction in sewer rates in the future. There would also be no guarantee that BPM would not request additional reductions with the threat of building its own plant always lurking in the background

Having been denied the rate reduction, BPM decided to spend $4.4 million on building a new plant when the cost reduction sought was $60,000 a year. Now, in another direct threat to the citizens of Peshtigo to raise their rates, BPM is making outrageous and unsubstantiated demands for compensation from the City to use its own sewer line, which the City intends to aggressively fight

Sincerely,

Cathy Malke

Mayor


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PO Box 187
Peshtigo, WI 54157
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