WHEATFIELD – TAM Ceramics may lose its property tax break from the Niagara County Industrial Development Agency because of more than $600,000 in unpaid sewer bills and special district taxes.

IDA attorney Mark J. Gabriele said he mailed the Town of Niagara company a warning letter Friday, giving it 30 days to pay up before the IDA cancels the tax abatement.

The IDA gave TAM a 15-year tax break in 2010, after the company was acquired by three local businessmen: Jerome P. Williams, George H. Bilkey and Alfonse Muto.

TAM was required to pay all back taxes and water and sewer charges by Oct. 1, 2011, as a condition of its payment-in-lieu-of-taxes, or PILOT, arrangement.

Gabriele said he thought TAM had made the payments and had no inkling otherwise until he was contacted by The Buffalo News last week. The IDA had received letters from the taxing entities, saying that the amounts owed by TAM were paid in full.

However, the County Treasurer’s Office said last week that TAM owes the county $627,072.25.

Most of that amount – $414,933.81 – consists of unpaid Town of Niagara sewer charges for 2009, 2010 and 2011, which were added to TAM’s tax bills of the ensuing year. The remainder consists of taxes levied by the county Water District and the town Fire, Water and Sewer districts. Such taxes are not covered by the PILOT.

Bilkey, who is TAM’s president, and the firm’s attorney, Robert L. Benecini, did not respond to requests for comment Friday.

The case has even more twists. Gabriele said the county, following state law, paid the town the amounts of the sewer bills and then took on the task of trying to collect from TAM.

So the town’s letter that it had been paid in full wasn’t completely inaccurate, Gabriele said; it just didn’t mention that the town had been paid by the county, not TAM.

Now the county and the town are arguing over how much of the money the county paid to cover TAM’s bills really were town charges. It appears that a substantial amount of the unpaid bills actually were sent to TAM not by the town, but by the Niagara Falls Water Board. That agency had a service contract with TAM, whose plant is near the city-town boundary.

John J. Ottaviano, a Lockport attorney who normally represents the Water Board, was hired by the Town of Niagara for its TAM-related matters.

Ottaviano said the county wants about $200,000 back from the town, because the county isn’t required to cover unpaid charges from a city water and sewer service, only one run by a town.

County Attorney Claude A. Joerg said one of his assistant attorneys, R. Joseph Foltz, recently met with Ottaviano to try to hash this out.

Ottaviano said he believes that TAM owes the Water Board about $500,000 over and above the amounts the county covered. David P. Flynn, of Buffalo’s Phillips Lytle law firm, representing the Water Board on the issue, declined to release details.

There’s another angle to the dispute: For four consecutive years, TAM has sued the town to try to have its $1.5 million property assessment reduced.

The 2009 lawsuit sought to set the valuation at $300,000. The demand for 2010 was $120,000. And in 2011 and 2012, TAM sought to have its assessment cut to $1.