LOUISVILLE, Ky. (WDRB) – The Louisville Water Company failed to read one of the meters at the KFC Yum! Center for four years, letting about $100,000 in water and sewer charges go uncollected, arena officials said.

The city-owned utility eventually recouped a fraction of that amount – $38,438 – after negotiating with the Louisville Arena Authority and following a policy that doesn’t allow pursuing unpaid bills that are more than two years old, a water company spokeswoman said.

The settlement was disclosed at Monday’s arena authority meeting.

Water company spokeswoman Kelley Dearing Smith said arena officials applied to have the meter placed under the utility’s watch when the building opened in fall 2010, but “for whatever reason, they made the application and it wasn’t entered into the system correctly.”

Smith said the water company discovered the unread meter -- one of five in the building -- as part of a review of billing operations and began working with arena leaders last December to resolve the back payments, Smith said. She called the incident “extremely rare.”

The amount paid by the arena was chosen after negotiations that started at $67,059, which represented water and sewer charges from that meter for the prior two years, Smith said. The water company handles billing for the Metropolitan Sewer District.

Arena and water company officials said Steve Rowland, who resigned in January as Metro government’s chief financial officer after an alcohol-related arrest, helped broker the settlement. Rowland was Mayor Greg Fischer’s representative on the water company board and still serves as one of Fischer’s appointees to the arena authority.

Rowland said in a brief interview Monday that he helped negotiate the reduced charge to the arena after he left his city position – and affiliation with the water company.

But Smith said, “I think he was acting on behalf of both entities. Obviously he was representing the city and the mayor and the arena board and he is the mayor’s liaison to our board, so, yes, he was involved.”

Metro government pays the arena authority $9.8 million a year to help pay off construction debt. The amount, which has increased in recent years, is the maximum amount allowed as part of the arena’s financing deal.

Smith dismissed any concern that Rowland’s role could be a potential conflict of interest. She noted that, besides following its own policy, the water company was trying to be fair in light of the “surprise” charges.

Asked if the water company would allow a homeowner in a similar situation to negotiate a lower payment, she said: “We have the exact same policy. We would do the same type of adjustment if needed.”

The settlement was approved without being voted on by the two agencies’ boards, officials said. Dennis Petrullo, the Yum! Center’s general manager, said the arena authority’s finance committee agreed to the reduced charge.

“It was a mistake (the water company) made,” he said. “They absorbed over half of the expense of the cost, so it was fine.”

Louisville Metro Council President David Tandy, who serves as a nonvoting arena board member, said the arrangement is reasonable because the water company got some of the money it was entitled to, while the arena wasn’t forced to pay a bill it didn’t expect.

“I do think it’s fair for all parties,” he said. “Nobody was twisting somebody else’s arm over it.”

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