Pitman Farms owes $1 million in unpaid water, sewer fees to Fresno County city. Here’s why

The city of Sanger has allowed its largest private employer, Pitman Family Farms, a years-long delay in settling $1 million in payments after the city failed for years to collect money tied to the company’s increased water use.

Pitman Family Farms poultry processor, known for its line of high-end chickens sold under the brand Mary’s Chicken, has steadily grown in recent years. The family-owned company established its plant in Sanger in 2002 and is today the second largest employer in the city behind the public school district.

As the company has grown its business – including several plant expansions over the years from a one-story to a four-story processing plant – its use of city water has increased. This growth has had an impact on the city’s infrastructure, but the city wasn’t properly charging the company for its water use, city records show.

Despite the still-unpaid bills, the city planning commission approved a new Pitman-owned poultry hatchery last month near its processing plant.

A February Fresno Bee investigation found that dangerous workplace conditions at the Pitman poultry plant have resulted in a high rate of injuries compared to similarly-size poultry plants. There have been two workplace deaths at the Sanger plant in less than a year, which are under investigation by state workplace safety authorities.

City staff first identified the water usage oversight in 2017, according to its settlement agreement with the company. But it took until 2020 for the city to reach an agreement with Pitman Farms about the uncharged water use, city staff said, and it will take another year before the city collects the unpaid water and sewage money.

On Oct. 1, 2020, Sanger City Council approved a $999,999.99 settlement agreement with the company to make up for impact fees that also should have been charged as a result of Pitman Farms’ higher water usage from 2016 to 2020, city staff said during the meeting. In 2023, the city also raised its water rates after realizing industrial users, in general, weren’t paying their fair share.

“This one is a long time coming,” Tim Chapa, former Sanger city manager, told city council in the Oct. 2020 meeting. (Chapa did not respond to multiple requests from The Bee for comment.)

But a key condition for Pitman Family Farms was to delay payment until Oct. 1, 2025 – which raised questions among some council members who said the city needed the money sooner to address its water capacity and wastewater treatment needs. Chapa told the city council that the company asked for the delayed payment date due to uncertain economic factors, such as competition, the coronavirus pandemic and changes in market demand.

“I will say that my impression is that five-year deferment is critical and would be a deal breaker,” Chapa said at the time.

David Pitman, owner of Pitman Farms, did not respond to The Bee’s requests for comment on the settlement agreement.

Sanger City Manager Nathan Olson said in an email to The Bee that no payment has been received to date, but payment is expected next October.

“The City and Pitman Family Farms continue to work together to address the opportunities in front of us,” Olson said, adding that they talk on a weekly basis.

Once the city is paid, money will be deposited into the Water and Wastewater Impact Fee account and will go towards future growth projects within the city, he said.

Sanger city records indicate that the city’s capacity to process industrial wastewater from companies like Pitman Farms is a challenge. In recent years, residents and city elected officials alike have complained about the smell emanating from the wastewater treatment plant. The unpaid water funds are a needed source of funding for deferred maintenance projects such as upgrades to the city’s wastewater treatment plant.

Why does Pitman Farms owe Sanger money?

Pitman Farm’s 2017 expansion resulted in wastewater production of 1.2 million gallons of water per day at peak times of the year, a city report states, an increase “beyond what was approved in the 2014 conditional use permit.”

A former 2014 operational statement submitted to the city indicated the average water consumption was 700,000 gallons per day.

“The difference in water usage has triggered an increase in the amount of impact fees,” the agreement states.

It’s not immediately clear why the city didn’t account for the company’s increased water usage when it approved the plant’s expansion in 2017.

Based on the settlement agreement, it appears Pitman Farms reported its increased water usage to the city in 2017. Later in 2017, city staff “recognized issues with the capacity of the existing industrial waste line,” the agreement says. These “concerns” prompted discussions with the company, which led to 12-18 months of “good faith” negotiations to reach the agreement.

But when asked by city council why the company wasn’t properly charged for the impact fees, Chapa explained that the company didn’t initially anticipate any increased water usage until later during construction on the plant’s expansion. City staff, he said, “didn’t quite have an opportunity to really be able to discuss with (Pitman Family Farms).”

“It became evident once they were in operation,” Chapa said.

In response to further questions by the council about who’s responsible for the uncollected fees, Chapa said the settlement wasn’t assigning blame, but said the city “could have asked more questions” during the plant’s expansion.

Another condition of the settlement is that Pitman Farms must comply with wastewater pretreatment requirements from a 2012 permit. Pretreatment is the process of removing pollutants from industrial waste waters before they are sent to a municipal sewage treatment system, according to the California Water Board. Olson said this is in process and design is underway.

Pitman Farms’ water use has garnered attention from city officials and community members in recent years.

After the city’s work to correct the Pitman water rate errors, the city conducted further studies that in 2023 resulted in increased water rates for all users for the first time in 15 years.

An April 2023 water and sewer rate study prepared for the city found that Sanger businesses, schools and residents were “subsidizing” water use for industrial water users like Pitman Family Farms.

The increased rates, which were approved in a June 15 council meeting, included a 172% increase on industrial users like Pitman Farms, according to a meeting presentation.

With two wells down and high temperatures, Sanger residents face low water pressure

Pitman expands footprint in Sanger with hatchery

Last month, the Sanger Planning Commission voted to approve the operations of a Pitman-owned poultry hatchery.

Bel’s Poultry, which lists David Pitman as its manager in Secretary of State business filings, will build a poultry hatchery and cold storage facility. The hatchery will be located across the street from the processing plant at the corners of North and Academy Avenues, which is the site of the former Del Monte Fresh Produce packing house.

The hatchery is estimated to produce 3.6 million eggs per week, according to a study prepared for the city. The chicks will then be shipped to ranches from the hatchery, resulting in an estimated 40 delivery trucks per week. The hatchery is expected to bring about 50 jobs to the community.

Commissioners asked questions about how the hatchery would impact odors, traffic and water issues. But Pitman assured commissioners that the hatchery would be an enclosed space and wouldn’t cause too much waste or smell. “These chicks are kept in chick baskets inside of hatcher machines,” the report says. “Chicks are not allowed outdoors until they reach the ranch that they will be raised at for biosecurity reasons.”

Concerns about the hatchery’s water use were also raised. If the project doesn’t comply with its allowed water allotment, the city could rescind its occupancy permits.

Olson said the city will monitor the plant and hatchery’s water usage with water meters. He said that Public Works is also requesting a compliance officer for the water and wastewater treatment systems to ensure compliance.

The Sanger hatchery is expected to be operational in the fall.