Possible Illegal apartment in a building

[Mike Sattem]

I recently purchased a 6 unit apartment building and have completely gutted and remodeled the entire building with all the proper permits and inspections. Upon final inspection from the city, they stated that, per their records, the basement was only one apartment, not two as it is now set up as. Each unit has its own entrance, and otherwise meets all new codes for egress, electric, plumbing, etc. Long story short after going back and forth, the building inspector has stated that if we use this 6th apartment, as an apartment, he will have the power company remove the power meter, which is a problem as this unit also powers the hot water for the building.  Unsure as to how I should proceed. I have no desire to go the lawsuit route, as we live in an extremely small town, and he is the only building inspector; I probably shouldn't make him mad :)

My final building permit is signed off on, so the city has no reason to inspect or gain entry to this building.

Any thoughts would be appreciated.