Petaluma Creamery Pays $844k Towards City Wastewater Bill

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Petaluma Creamery California Daedalus Howell
The Petaluma Creamery owes Petaluma $1.4 million in fees and permit violation fines, according to the city. Photo: Daedalus Howell

Larry Peter may have bought his beloved Petaluma Creamery a little more time.

In a last-minute twist, a representative of the historic business delivered a cashier’s check for $844,328.17 to Petaluma City Hall on Monday afternoon, a substantial payment which covers more than half of the company’s debt to the city of Petaluma for unpaid water fines and fees accrued since Peter purchased the Creamery in 2004.

Jordan Green, an assistant city attorney, told the Bohemian that the Creamery’s Monday-afternoon payment will cover the business’s unpaid wastewater discharge bills. The company has yet to pay additional sewer capacity rental fees ($426,096.20) and permit violation fines ($552,248.30).

Green did not immediately respond to a request to clarify how the city calculated its total bill of $1.425 million, since the three separate categories total $1.822 million.

The latest chapter in a long-running battle between the City and the Creamery began on Dec. 21, when City Manager Peggy Flynn sent a letter to Peter threatening to effectively shut down the Creamery, at least temporarily, if Peter did not complete a long list of tasks by March 1. The threat letter, which came after the city had worked with Peter to comply with safety and environmental requirements for years, caused a rush of work at the Creamery.

In a Friday, Feb. 26, letter to Peter, Flynn acknowledged the Creamery’s efforts over the past two months to comply with city regulations. However, due to uncompleted work and an unpaid debt, Flynn said the city would revoke the business’s wastewater discharge permit on Saturday, March 13, if the business missed the March 1 deadline.

So far, it is unclear whether the Creamery’s 11th-hour payment will change the city’s plans laid out in Flynn’s Feb. 26 letter. In a statement on Monday, March 1, Green said only that city officials “will meet this week to further discuss next steps.”

But, in her Feb. 26 letter, Flynn stated that the Creamery would have to pay its total outstanding wastewater debts and fines by March 1, rejecting Peter’s request of the city to allow him to follow a payment plan.

The city’s decision not to accept a payment plan may be explained by Peter’s earlier failures to pay fines and fees in a timely fashion.

As the Bohemian has previously reported, the Creamery, which Peter purchased in 2004, owed the city $604,720 by September 2010. In November 2018, a judge ordered Peter to pay the city $624,046 in 24 installments. Peter did not pay the installments, according to the city.

In addition to paying the fees, the Creamery will need to prove it has cleaned up the water it is pumping into the city’s treatment plant.

According to Flynn’s Feb. 26 letter, the city believes the Creamery’s wastewater pollution levels may still test higher than the levels delineated by the company’s wastewater discharge permit. The discharge permit allows the Creamery to send wastewater to the city’s Ellis Creek Water Recycling Facility for further treatment, provided the wastewater is not too dirty. The city is currently reviewing recent water-quality data provided by the Creamery, according to Flynn’s letter.

Peter did not respond to a request for comment.

Unfinished Work

Flynn’s letter, and other documents obtained by the Bohemian, indicate a flurry of work at the Creamery as the city’s March 1 deadline loomed. 

On the morning of Feb. 10, a neighbor filmed a mysterious column of white smoke or steam approximately 150 feet tall emanating from the Creamery. Green said the city is still looking into the event.

A week later, on Feb. 18, city officials posted a “stop work” notice at the business after inspectors discovered crews had carried out unpermitted demolition work on the premises.

Green said on March 1 that the workers obeyed the stop work notice and that the city is currently reviewing several work permit applications.

In another step forward, workers finished removing the ammonia used in the cheese-making process from the Creamery on March 1, according to Green. The Creamery’s decision to remove the ammonia, rather than get approval to run the ammonia storage system safely, takes one item off of the Creamery’s to-do list, formally known as a Process Hazard Analysis (PHA). 

State regulations require some businesses, including the Creamery, to complete a PHA once every five years based on industry best practices to ensure safety and regulatory compliance. 

“Petaluma Creamery had a PHA in 2015, but never submitted proof to the City of completion of all the recommendations from the 2015 PHA,” Green told the Bohemian. Green says the Creamery hired a contractor to oversee the completion of the 2015 PHA and a subsequent 2019 PHA, but has yet to prove it has completed all of the items.

According to Flynn’s Feb. 26 letter, the Creamery claims to have completed all of the highest-priority items on its PHA. City officials are reviewing the Creamery’s work to determine whether it was done properly.

Lastly, the Creamery is required to install a new fire alarm monitoring system, using a licensed contractor, before April 1. Although the Creamery has started that work, the company it hired to install a new alarm system does not have the proper license to complete the work, according to Flynn’s letter.

Last Chance

If the Creamery’s wastewater permit is revoked, Peter may submit an application for a new one. However, the city’s review process generally takes three months, which would mean that the Creamery wouldn’t be able to operate as it currently does.

Peter could possibly continue operating without a discharge permit while Petaluma processes a new permit application, albeit using a more complicated water-disposal method. For instance, Flynn’s letter suggests that the Creamery might be able to haul wastewater to Santa Rosa’s Laguna Treatment Plant.

If the Creamery loses its wastewater permit, even temporarily, this chapter of Peter’s long-running feud with the city will likely have bad consequences for his employees.

In a sign of the city’s concern about this outcome, Flynn’s Feb. 26 letter includes information about how the Creamery’s employees can sign up for unemployment benefits.

Whatever does happen, Monday’s cashier check raises the question: If Peter had access to this kind of money all along, why didn’t he pay up earlier?

Click here to read our previous coverage of the Petaluma Creamery and Larry Peter.