Water bill \ Water meter question

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Question for the experts. I recently closed on a deal which carried a huge water bill because there was a leak from a pipe burst that happened during the winter. I had the cost of the bill adjusted from the purchase price so it is not that I am losing money here. However, after demo, we discovered that breakage occurred before the meter. See photo attached.

The logic is how was the town able to measure the water if the breakpoint was before the meter. I tried working things out with the town's clerk but all I am being told is that it was read and I need to pay for it.  

Water bill \ Water meter question

Hello,

Appears the meter was located inside the building or beneath a porch: Most likely the is another meter in an easement and this meter was not read; Take a look at the bill see if the meter #'s match or at very least the read is somewhat relevant; Ask for a discount on the previous bill (regardless who paid it), typically the sewer portion of the bill will be dropped (lost water never entered the sewer system); The town-clerk is trained to "hedge" on answers, ask for the meter readers notes ( previous estimates ?) or ask for manager for the correct answer