COUNCIL AGENDA: 6/16/2026
FILE: 26-733
ITEM: 2.7
T-48572/2316492
TO: HONORABLE MAYOR
AND CITY COUNCIL
FROM: SUSANA ALCALA WOOD,
City Attorney
SUBJECT: SETTLEMENT OF
GOVERNMENT CLAIM BY
GORDON BIERSCH BREWING
COMPANY
DATE:
June 1, 2026
RECOMMENDATI
ON
Approve the settlement of a government claim filed by Gordon Biersch Brewing Company in the total amount of
$400,000 and authorize the City Attorney to execute a
Settlement Agreement.
OUTCOME
Settlement of a government claim filed by Gordon Biersch Brewing Company in the total amount of $400,000. Each side will bear its own costs and attorneys’ fees.
BACKGROUND
The City of San Jose’s sanitary sewer billing program is the system used to recover the costs of operating and maintaining the City’s sanitary sewer collection system. It is a
cost-recovery program that establishes costs in the budget for both operating and capital costs in accordance with Proposition 218 requirements.
Gordon Biersch Brewing Company, a brewery located in San Jose, is a monitored industrial customer for purposes of its sanitary sewer rate billing. Monitored industrial users are non-residential users of the sanitary sewer collection system that discharge more than 25,000 gallons per day and/or have a discharge with excessive or highly variable strength.
On October 17, 2025, Gordon Biersch filed a government claim with City alleging it was owed certain sums of money for alleged sanitary sewer rate overbilling since 1997.
The City disputes all allegations relating to sanitary sewer rate methodology and rates including that Gordon Biersch’s sanitary sewer bills are inaccurate or excessive or that they have been overbilled for any of its sanitary sewer rates.
HONORABLE MAYOR AND CITY COUNCIL
June 16, 2026
Subject: Settlement of Government Claim by Gordon Biersch Brewing Company
T-48572/2316492
ANALYSIS
The proposed settlement would avoid the cost of litigation and extinguish on a final basis all claims of any and every kind, nature, and character, arising from or related to wastewater service provided by the City to Gordon Biersch including but not limited to the City’s charges for said service. The parties will bear their own respective attorneys’ fees and costs.
PUBLIC OUTREACH/INTEREST
This memorandum and the Settlement Agreement have been posted on the City’s website for the June 16, 2026 open session agenda.
COST SUMMARY/IMPLICATIONS
The settlement will be paid from the City’s claims reserve fund.
BUDGET REFERENCE
The table below identifies the fund and appropriations to fund the actions recommended in this memorandum.
Fund
#
Appn
#
Appropriation Name Total
Appropriation
Recommended
Budget Action
2025-2026
Adopted
Operating
Budget Page
Last
Budget
Action
(Date, Ord.
No,)
001 0018 General Liabilit y Claims $16,563,000 $400,000 909 31296
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HONORABLE MAYOR AND CITY COUNCIL
June 16, 2026
Subject: Settlement of Government Claim by Gordon Biersch Brewing Company
T-48572/2316492
CEQA
Not a Project; File No. PP17-003, Agreements/Contracts (New or Amended) resulting in no physical changes to the environment.
cc: Jennifer Maguire, City Manager
For questions, please contact SUSANA ALCALA WOOD, City Attorney, at (408) 535-1900.