20080205Application.pdf

FISHER PUSCH:&-ALDERMA LLP
A T T 0 R'N E Y 5 A N'-D C 0 U N 5 E LOR 5 A T LAW
JohnR. Hammond Jr e-maÙ: jrh(cýtpa-law.com
Februar -5; 2008
Via Hand Delivery
Jean Jewell, Commission Secretar
Idaho Public Utilties Commission -
472 W. Washington Street
P. O. Box 83720
Boise, Idaho 83720~0074
~C;"co..g
,\if'
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Re: In the Matter ofthe Application ofIdaho Spnngs Water Company, Inc. 's;
Application for a Certificate of Public Convenience ánd Necessity and Request to Process the
Application by Modified Procedure, Case No. ISW- W -08-01 #
Dear Ms. Jewell:"
Ençlosed are the onginal and seven (7) copies ofIdaho Spnngs 'Water Collpany,' Inc.'s,
Application for a-CertificattofPublic Convenience and Necessity and Request to Process the
Application by Modified Pròcedun~. Kindly retu a file stámped copy ofthis letter and
Application. In ad.dition, we are fiing an exhibit which is claimed by the Company as -
confidential under separate cover.
If you have any questions or need additional information, please do not hesitate to Contact- .
me. '
Sincerely,
FISHER PUSCH & ALDERMAN LLP
JR:
Enclosures
. T 208.331. 000 . F 208.331.400 . P.O.Bòx 1308 Boise, Id 83701 .' Suite 500, US Baf1k Plaza 101 S. Capitol Blvd. Boise, Id 83702
John R. Hamond, Jr., ISB No. 5470
Fisher Pusch & Alderman LLP
U.S. Ban Plaza, 5th Floor
i 01 S. Capitol Boulevard, Suite 500
Post Offce Box 1308
Boise, ID 83701
Telephone: [phone]
Facsimile: (208) 33 i -2400
H: 32
Attorneys for Applicant
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE
APPLICATION OF IDAHO SPRIGS
WATER COMPAN, INC., FORA
CERTIFICATE OF PUBLIC
CONVENIENCE AN NECESSITY
CASE NO. ISW-W-08-01
APPLICATION AND REQUEST TO
PROCESS BY MODIFIED
PROCEDURE
COMES NOW Idaho Spnngs Water Company, Inc., an Idaho corporation, (the
"Applicant" or the "Company") pursuant to Idaho Code § 61-526 and Idaho Commission
Rule of Procedure 111, IDAPA 31.01.01.111, and hereby respectfully files ths
Application requesting that the Idaho Public Utilties Commission (the "Commission")
grant it a Certificate of Public Convenience and Necessity ("CPCN") to provide water
service to the general public as a public utilty, authonze intenm rates for water service
and to begin the process of setting rates and charges for water service through
Commission order. The Company has expedited its filing of this Application and as such
it may need to supplemented as this matter is processed.
The Applicant also respectfully requests that its Application be processed by
Modified Procedure pursuant to Commission Rules of Procedure 201-204. IDAPA
31.01.01.201-.204.
APPLICATION AND REQUEST TO PROCESS MODIFIED PROCEDUR - 1 ORIGINAL
I.
Applicant is an Idaho corporation engaged in conducting a general water business
in and about the Arowrock Subdivision in Kuna, Idaho, Ada County, having its pnncipal
offce and place of business at 660 E. Franlin Road, Suite 240, Mendian, Idaho 83642
and a mailng address of P.O. Box 344, Mendian, Idaho 83642. The Company's contact
number is [phone] x104. The water system in the Arowrock Subdivision has
been completed and is operational.
II.
Communcations in reference to this Application should be addressed to:
Idaho Spnngs Water Company, Inc.
Attn. Trent Nieffenegger
P.O. Box 344
Mendian, Idaho 83642
trent(iwestparkco.com
John R. Hammond, Jr.
Fisher Pusch & Alderman LLP
101 South Capitol Blvd., Suite 500
Boise, Idaho 83701
irh(ifpa-law.com
III.
A certified copy of the Applicant's Articles of Incorporation is attached hereto as
Exhibit A. i Applicant entered into a purchase and sale agreement to purchase the water
system on Februar 4, 2008 which document has also been included in Exhibit A.
IV.
Applicant has one affiliate, the Westpark Company Inc., an Idaho corporation,
which is a development management company for the Applicant.
i Initially one entity, Intermountain Sewer and Water, was formed to be responsible for both water and
sewer service. Upon learnng that it was not possible to ru both operations together the water company
was developed and built under the name of Arbor Ridge, LLC, a general development organiation. The
assets of the water company, including real propert were transferred to Idaho Sprigs Water, Inc. due to
the fact that Arbor Ridge LLC historically has been a real estate development firm and does not want to be
in the water servce business.
APPLICATION AND REQUEST TO PROCESS MODIFIED PROCEDURE - 2
V.
The Applicant has attached hereto as Exhibit B a generalized map of the area
which it proposes to serve that the Company wil provide a legal descnption for as soon
as it can be obtained. At this time all water service is being provided within the legal
descnption which is also attached to Exhibit B. The area which the Applicant proposes
to provide water service for is not withn the authonzed terrtory of any other public
utilty water corporation under the junsdiction of the Commission and the provision of
service to this area wil not interfere with the operations of any other water utilty
corporation under the junsdiction of the Commission.
VI.
Attached hereto as Exhibit C is documentation on the water system submitted to
the Idaho Deparment of Environmental Quality which includes technical drawings and
maps.
VII.
Applicant will submit under Exhibit D the cost for the construction of the water
system and the anticipated anual maintenance costs as soon as it is compiled. The
Applicant proposes to finance any new utility constrction to provide service through all
economically prudent means.
VIII.
Subject to modification the Applicant curently provides water service to 38
residential customers, 17 other connections which are taking service dunng constrction
of residential dwellngs and 1 customer taking service to water common areas in the
Arowrock Subdivision dunng the summer months (Apnl 1 to October 1). In the event
APPLICATION AND REQUEST TO PROCESS MODIFIED PROCEDURE - 3
the Arowrock Subdivision is fully built out the Company could have an estimated 100
residential customer connections and an additional 100 residential customer connections
more if the larger proposed service tertory is fully built out. The Company is
submitting its curent customer list as Exhibit E under separate cover and is asserting
that ths information constitutes a trade secret, is confidential or otherwise exempt from
public disclosure, inspection, examination or copying pursuant to Idaho Code § 9-340D.
ix.
Applicant intends to file details regarding consumptive use as Exhibit F as
quickly as that information can be assembled.
x.
Attached as Exhibit G is a descnption of the rates and charges which the
Applicant is curently charging for water service. The' Company respectfully requests
that pending a final order being issued in this case establishing rates that it be allowed to
charge its customers the rates contained in Exhibit G as intenm rates. At this time the
Company is stil finalizing its analysis on what it believes wil be just and reasonable
charges for water service. Currently the Company believes that it wil be proposing a rate
for residential customers that contains a set monthly customer charge and a additional
amount, or varable charge, to be determined by monthly consumption. The Applicant
believes that this wil result in residential charges for water service to be between $50.00
and $100.00 per customer.
XI.
Attached as Exhibit H is the form of the notice being mailed to the Applicant's
customers which bnefly describes the Company's proposed service area, the request to
APPLICATION AND REQUEST TO PROCESS MODIFIED PROCEDURE - 4
approve the use of an intenm rate and information concerning the possible rate strctue
which could result from a Commission final order. This notice also contains contact
information for the Commission. In addition, Exhibit H also contains a sample bil
statement2, reminder notice - termination of service, final notice - termnation of service
and a rules summar. In the event the Commission grants the Applicant a CPCN, it
agrees to be bound by the Commission's rules and applicable authonties and proposes to
adopt the "General Rules and Regulations for Small Water Companes", a copy of which
is also contained in Exhibit H.
XII.
The Applicant only has one year of fiancial data and is currently assembling a
financial statement which wil be submitted to the Commission as soon as it is complete
under Exhibit I.
XIII.
The Applicant submits that it is in the public interest to authonze the Applicant to
provide water service to customers in the proposed area as a public utilty and as such
respectfully requests that it be granted a CPCN.
xiv.
Applicant does not believe that the public interest requires a heanng on the issues
presented hereby and requests that this Application be processed by Modified Procedure
under the Commission's Rules of Procedure 201-204. IDAPA 31.01.01.201-.204.
2 The formt is correct but the name of the Company on the invoice will obviously be changed to Idaho
Sprigs Water Company, Inc. A corrected sample invoice wil be submitted once it is prepared by the
Company.
APPLICATION AND REQUEST TO PROCESS MODIFIED PROCEDURE - 5
PRAYER FOR RELIEF
WHEREFORE, Applicant respectfully requests of the Commission:
1. That the Commission find that a hearng is not required herein and process
the Application by Modified Procedure;
2. That the Commission grant the Applicant's request for a CPCN;
3. That the Commission authonze the Applicant to continue to charge its
customers the rates set forth in Exhibit G as an intenm rate immediately and until such
time as rates and charges for water service as set by Commission final order;
4. That the Commission grant such other and fuher relief as the
Commission may determine proper herein.
DATED THIS S.Jday of Februar, 2008.
IDAHO SPRIGS WATER COMPAN, INC.
By:
. Hamond, Jr.
ey for Applicant
APPLICATION AND REQUEST TO PROCESS MODIFIED PROCEDURE - 6
.
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this G~y of Februar, 2008, a tre and
correct copy of the foregoing document was served on the following individuals by the
method indicated below:
Jean Jewell
IDAHO PUBLIC UTILITIES COMMISSION
472 W. Washington St.
POBox 83720
Boise ID 83720-5983
Scott Woodbur
IDAHO PUBLIC UTILITIES COMMISSION
472 W. Washington St.
POBox 83720
Boise ID 83720-5983
( ) U.S. Mail
( ) Facsimile
( ) Overnght Delivery
f: Messenger Delivery
( ) Email
( ) U.S. Mail
( ) Facsimile [phone]
( J Overnight Delivery
P\J Messenger Delivery
( ) Email
APPLICATION AND REQUEST TO PROCESS MODIFIED PROCEDURE - 7
State of JdatirJ
I
~iri 1\ : 32
Office of the Secretary of State
I w, ,'YO °URUC
LVríÊs èCMi;,ISSI0
I, BEN YSURSA, Secretary of State of the State of Idaho, hereby certify
that I am the custodian of the corporation records of this State.
I FURTHER CERTIFY That the annexed is a full, true and complete
duplicate of articles of incorporation of IDAHO SPRINGS WATER COMPANY,
INC., an Idaho corporation, received and filed in this office on April 2, 2007,
under file number C 172311 , including all amendments filed thereto, as appears
of record in this office as of this date.
Dated: February 1,
~.~
SECRETARY OF STATE
By
EXHIBIT
A
-#.J .
FILED EFFECTIVE
ARTICLES OF INCORPRATION
01 APR -2 PH 3: 59
SECRETNW OF STAlE
IDAHO SPRINGS WATER COMPANY, INC. STATE OF IDAO
OF
1. ~. The name of the corporation is Idaho Sprgs Water Company, In. (the
"Corpation").
2. Authorze shares. The agggate number of shaes the Corpion is authorized
to issue shall be One Thousand (1.00), all of which shall be common voting stock.
3. Re&ister offce and agent. The registered offce of the Corpration is 66 E.
Franin Road, Suite 240, Merdian, Idaho 83642, and its registered agent at th addrs is
Gregory B. Johnon.
4. hicoorator. The nae of the incorprator is Michael T. Spin, and the
incorporator's address is 2S1 E.Front Str, Suite 200, Boise, Ido 83702.
S.
pertual.
Term of Existence. The te of existece of the Corraton is and shall be
6.Votine Enitlement of Shares.
(1) Except as provided in setions (2) and (4) of th Arcle, each outstag
share, regardless of class, is entitled to one (1) vote on each mattr vote on at a sheholders'
metig. Ony shes are entitled to vote. .
(2) The Corpation is not entitled to vote trur shaes. The shares of the
Corportion are not entitled to vote if they ar owned, diretly or. indirecty, by a second
corpration, domestic or foreign and the Corporation own, direcly or iniry, a majority of
the shars entitled to vote for dirors of the secnd corporation. .
(3) Secon (2) of this Arcle does not limt th power of the Corporation to
vote any shae, including its own shars, held by it in a fiduciar caacity. .
(4) Redeeable shares are not entitled to vote afr notice of redption is
mailed to the holdes and a sum suffcient to redee the shares has been depsite with a ban,
trst company, or other ficial institution under an irvocable obligation to pay the holdes the
redemption price on surende of the shares.
ID SEMY CF STTEe4/82/28.7 es .e.
cx. lI CT. 39 Ih 114347
i .laU. .11.. al 12
1 I a.. ea18 EXJTE C . 3
ARTICL OF INCORPRATION. i
S:\Ds\Johnn. Grg\da Springs Wat Company. Inc\ORPicles of Incoraon (4-2-0.do d/1is//
'"..
7. Corprate Puse. The purse for which the Coration is organ is the
tranaction of any and all lawfl business for which corpration may be incorpraed under the
Idao Business Corpration Act.
8. Boar of Dirors. All corprate powers shan be exerised by or unde the
authority of, and the business and afair of the Corpration maged un the diron of, its
board of diecors, subjec to any limtation set fort in a sharholder agremet authorized under
Idaho Code § 30-1-732. The number of dirors constituti the initial board of diecor shal
be one (1), and the naes an addrses of the persons to sere as direcrs unti the first anua
meeting of sharolders, or until their succsors ar electe and quaifed. ar:~Addess
Grgory B. Johnon 660 E. Frain Road, Suite 24
Meridia 10 83642.
9. Votin&. Each outstag she entitled to vote shal be entitled to one (1) vote on
eah matt submitted to a vote at a meetig of sharholders. . Shaeholders do not have the right
to cuulate their votes for dirctors.
10. . Terms of Classes or Series of Shares Deennined by Boar. The boar of
diecors may determine, in whole or in par, the prference. limitations and relative rights,
within the limts of Idaho Code § 30-1-601, of (a) any class of shares before the issua of any
shares of that class or (b) one (1) nr more seres within a class before the issuace of any shaes
of tht seres. Each series must have preference, limitations and relative rights identica with
those of other shaes of the same series and, except to the extent otlerise provided in the .
descrption of the series, with those of other seés of the saie class. Before issuig any shares
of a class or series created under ths, section, the Corporation shall deliver to the Idao Sectar
of State for fiing arcles of amendnent, which are effective without shareholder action, that set
fort the inormon requied by Idaho Code § 30- i -602.
11. Preetive Rights. The Corpration elects to have preemptive rights.
12. hidemnifcation. The Corpration shall indemny the dirrs and officers of the
Corpration to the fuest extet petted by the Idaho Business Corpration Act, as the same
exists or may herer by amended (but, in the case of ~y such amendment, only to the extent
th such amendment permits the Corpration to provide broaer indemncation rights th the
Idaho Business Corpration Act peitt the Corporation to provide prior to suc amendmnt).
13. Liitation of Liabilty. No director shal be liable to the Corpration or its
stocolders for moneta damges for breac of fiduciar duty eXcept liabilty for: (i) the
amount of a fmancial beneft reived by a dirctor to which he is not enttled; (ii) an intentional
inicton of har on the Corporation or the shareholders; (üi) a violation of Ido Code § 30- i.
833; or (iv) an intetiona violaton of crl law.
ARTICL OF INCORPRATION - 2
S:\Ds\Jobnso, Org\daho Springs Watr Compy.lnc\CRPices of Incorpraion (4-2-).do
...
IN WINES WHREF. I have subscrbed these Aricles of Incoration ths 2nd day .
of April. 2007. .
~-
ARTICL OF INCORPRATION. 3
S:\Ds\ohn Qr¡\I Spri Wat CompY, In\CRPcles of Inrpon (4-2.(.doc
PURCHAE AGREEMENT
Februar 1, 2008
BUYER: Idaho Spnngs Water Company Inc. (ISWCI)
SELLER: Arbor Ridge LLC
Property legal descnption: Lot 2 Block 1 Arowrock Ranch Subdivision No. 1
Puchase Price:
Land: $100,000
Wells: 225,000
Pups: 50,000
Water Rights: 50,000
Building: 75,000
Tota Purchase Price: $500,000
All distribution lines, meter boxes, etc. - No Charge
Terms of Sale:
Buyer shall pay $50,000 at closing. The balance of $450,000 shall be a note at 8%
interest for twenty years and shall be paid at $3,764 per month fully amortizing in twenty
years.
Transfer of Title: By Deed and by Bil of Sale
Closing: Lawyers Title - Kim Blasius (389-6936)
Date:
Date:d-/~GI
Water Servicably Map
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STATE OF IDAHO
DEPARTMENT OF
ENVIRONMENTAL QUALITY
E:
,¡....,," '--B rm,l', ,..Li -"'Lou\! I L v II: 32
1410 North Hilton · Boise, Idaho 83706 · [phone] IUA,tlCJ r_ur.;.~!e " , ... ,,,,on ¡'r, ,r.: ,-' CO.j; h1rßisre:~ich Otter, Governor
U ¡ ¡..! i...,: 10" Toni Hardesty, Director
TSP&S- 163/2007
July 19, 2007
Greg Johnon
Westpark Company, Inc.
P. O. Box 344
Meridian, Idaho 83642
RE: Arowrock Rach Subdivision Drng Water System (PWS # 4010247, Ada County)
Approved Manuals and As-Built Drawigs
Dear Mr. Johnon:
The attched Demonstration of Financial, Technical and Managerial Capacity, Opertions Manual and as-built
drwings (inside Oprations Manual) for the above-referenced project appear to meet state of Idaho stadards for
such documents, and are hereby approved.
Please contact me with any questions at 373-0514, or via e-mail atpeter.bairtWdeg.idao.gov.
Sincerely,
1t/" ,,' Yl !/'r- "/.. '
'e er S. Bair, P.E.
Technical n Engineer
PSB:sjt
Attchments:Approved copy of Demonstrtion of Financial, Technical and Managerial Capacity, Opertions
Manual and as-built drwings inside Operations Manual
C:Todd Crutcher, E.LT., Boise Regional Offce
SPF Water Engineerng, LLC, 600 East River Park Lane, Suite 105, Boise, Idaho 83706 (approved copy of
Demonstration of Financial, Technical and Managerial Capacity, Operations Manual and as-built
drawings inside Operations Manual)
BRO Source File, Arowrock Rach Drnkng Water System (approved copy of Demonstration of
Financial, Technical and Managerial Capacity, Operations Manual and as-built drawings inside
Operations Manual)
TSP&S Reading File
~f7
(. .
EXHIBITì (!
New Water System Capacity Demonstration Submitta~~LEOWce(Q
System Name Arrowrock Ranch .
OCT 2 a 2005
This form serves as a checklist of the required elements and points to their locati0rtph~TMENT OFsubmittal package. ENVIRONMENTAL QUALITY
BOISE REGIONAL OFFICEElement 0 Location
#1 System Ownership & Management
Legal Owner 0 Pg. 1, Exhibit 1-1
Deeds, Plats, Easements 0.Pg. 1, Exhibits 1-2, 1-3
Responsible Person (Operator)0 Pg. 2, Exhibits 1-4, 1-5, 1-6
By-Laws, Covenants, etc.0 Pg.2
Consolidation 0 Pg.2
Organizational Function 0 Pg. 2, Exhibits 1-4, 1-5, 1-6
Change of Ownership 0 Pg.3
Employee Policies & Procedures 0 Pg.5
Attorney & Engineer 0 Pg.5
Fiscal Controls 0 Pg. 6, Exhibit 1-7
#2 Service Area & Facilties (Map)0 Pg. 6, Exhibits 1-2, 1-3
#3 Component Inventory & Capital Plan 0 Pg. 7, Exhibit 3-1
#4 Water Usage Projection 0 Pg.7
#5 Water Right & Initial Monitoring Results 0 Pg. 8, Exhibit 5-1
#6 Monitoring & Compliance Plans 0 Pg. 8, Exhibit 6-1
#7 Operation & Maintenance Manual 0 See Operations Manual
#8 Cross-Connection Control Program 0 See Operations Manual
#9 Emergency Response Plan 0 See Operations Manual
#10 Source Protection Plan 0 Pg.9
#11 Five-Year System Operating Budget ii Pg. 9, Exhbit 11-1
( .'" .
Demonstration of Financial, Technical, and
Managerial Capacity for a New Public
Water System
ARROWROCK RANCH
PWS No. 4010247
Ada County, Idaho
October 2005
Prepared By:
SPF Water Engineering, LLC
Timothy L. Farell, P.E.
600 East River Park Lane, Suite 105
Boise, Idaho 83706
[phone], Fax [phone]
e-mail: tfarell(Ðspfwater.com
Spink Butler, LLP
JoAn C. Butler, Esq.
251 E. Front Street, Suite 200
Boise, Idaho 83702
[phone], Fax [phone]
e-mail: jbutler(Ðsb-attomeys.com
Demonstration of Financial, Technical, and Managerial Capacity
for a New Public Water System
New Water System Capacity Demonstration Submittal Form
ARBOR RIGE, LLC
Element
TABLE OF CONTENTS
Page
ELEMENT # 1 - System Ownership & Management. ...... ..... ........ .......... ......... ... ........ .... .... ....... ..1
ELEMENT #2 - Service Area & Facilities Map...........................................................................6
ELEMENT #3 - Component Inventory & Capital Replacement Plan............. ........ ........... ...... .... 7
ELEMENT #4 - Water Usage Projection .....................................................................................7
ELEMENT #5 - Water Right & Initial Monitoring......................................................................8
ELEMENT #6 - Monitoring & Compliance Plans .. ....... ...... .......... ... .... ... .............................. ...... 8
ELEMENT #7 - Operation & Maintenance ........ ... ...... ......... .......... ..... ........................... .............. 8
ELEMENT #8 - Cross-Connection Control Program...................................................................8
ELEMENT #9 - Emergency Response Plan... ................................. ... ....... ..... ........... ................... 9
ELEMENT # I 0 - Source Protection Plan. ............. ..... ..... ................ ... ........ ............... ............. .... .... 9
ELEMENT # 11 - Five-Year System Operating Budget. ... ..... ......... ..... ..... ..... ....................... ........ 9
EXHIBIT 1.1
EXHIBIT 1-2
EXHIBIT 1-3
EXHIBIT 1-4
EXHIBIT 1-5
EXHIBIT 1-6
EXHIBIT 1-7
EXHIBIT 3-1
EXHIBIT 5-1
EXHIBIT 6-1
EXHIBIT 11- I
LIST OF EXHIBITS
Aricles of Organization of Arbor Ridge, LLC
Deeds of Ownership
Final Plat for Arowrock Ranch Subdivision
Declaration of Covenants, Conditions and
Restrictions for Arowrock Ranch Subdivision
Aricles of Incorporation of Arrowrock Ranch Association, Inc.
Bylaws of Arowrock Ranch Association, Inc.
Development Cost Breakdown for Arrowrock Ranch Subdivision
Component Inventory and Replacement Plan
Water Rights
List of Regulated Contaminants
Annual Operating Budget
Arowrock Ranch
SPF Water Engineering, LLC
October 2005
1 Demonstration of Financial, Technical, and
Managerial Capacity for
a New Public Water System
ELEMENT # 1 - System Ownership & Management
The Arrowrock Ranch water system will ultimately supply domestic water and fire protection to
100 residential homes and the wastewater treatment plant in Ada County, Idaho. The proposed
subdivision is generally located at the southeast comer of the intersection of Cloverdale and
Kuna Mora roads. The legal description of the subject property generally is the NWl/4, Section
3, TIN, RIE.
The water system will be composed oftwo new water supply wells. Well NO.1 is being
constructed with 12-inch casing and 12-inch well screens. Well NO.2 is constructed with 18-
inch casing and 10-inch well screens. Both wells wil be developed to produce water from the
same water bearing zone, approximately 275 - 400 feet below ground level ("bgl"). Well No. i
will serve as the primary source of supply, and Well NO.2 is equipped with two well pumps
capable of supplying both domestic demands and fire protection capacity.
The distribution system will be supplied from a common well facility through a 12-inch water
main. An 8-inch looped system will provide adequate hydraulic capacity to assure 1,000 gpm
wil be supplied to all fire hydrants at a minimum pressure of 20 psi. All homes will be metered
to enforce water conservation measures. Service lines will be single i -inch polyethylene with
single meter boxes. All homes will be provided with a minimum pressure of 40 psi at the meter
box.
A sequencing batch reactor ("SBR") will treat all wastewater collected within the proposed
subdivision. Effuent from the treatment facility will then be land applied at an approved site.
1. Legal Owner
The legal owner of the Domestic Water System for Arowrock Ranch Subdivision
(which Domestic Water System includes applicable water rights) is Arbor Ridge, LLC,
an Idaho limited liabilty company (the "Developer"), whose principal address is 660
East Franlin, Suite 240, Meridian, Idaho 83642, and whose telephone number is (208)
888-9946. The Aricles of Organization for Arbor Ridge, LLC, attached as Exhibit 1-1,
were fied with the Idaho Secretary of State on December 6, 2000, as document number
365038.
2. Deeds, Plats, Easements
As descnbed in the deeds attached as Exhibit 1-2, the property that is planed for
development as Arowrock Ranch Subdivision is presently owned in part by the
Developer, Arbor Ridge, LLC, and in par by, collectively, LaVar K. and Wilma M.
Thornton and Layne and Lon Thornton ("Thornton"). The Developer has an option to
purchase the propert presently owned by Thornton.
,,\ .
Arowrock Ranch
SPF Water Engineering, LLC
October 2005
1 Demonstration ofFinanciàl, Technical, and
Managerial Capacity for
a New Public Water System
The final plat for Arrowrock Ranch Subdivision, attached as Exhibit 1-3, has been
approved by Ada County.
3. Responsible Person
The responsible person for the Domestic Water System, also known as the "Certified
Operator", is:
Valley Hydro, Inc.
Tom Mehiel
Distribution Operator Class III
Cert. No. DWD3-11130
1904 E. Beech St.
Caldwell, ID 83605
Home [phone], Mobile [phone], Fax [phone]
e-mail: bshpiggØ)cableone.net
The Certified Operator periodically will prepare technical and managenal reports in
connection with the Domestic Water System.
4. Articles, Bylaws, Covenants, etc.
Arbor Ridge, LLC has created the Declaration of Covenants, Conditions and Restrictions
for Arrowrock Ranch Subdivision (the "Declaration"), which Declaration is attached as
Exhibit 1-4. The Declaration, the Aricles of Incorporation, attached as Exhibit 1-5, and
the Bylaws, attached as Exhibit 1-6, for Arowrock Ranch Association, Inc. (the
"Association") are the constituent documents for Arowrock Ranch Subdivision and the
Association.
5. Feasibilty of obtaining service from an existing water system
The public water supply closest to Arowrock Ranch Subdivision is the water system that
serves Kuna, Idaho. The Kuna City water supply is located approximately 2 1/2 miles
from Arowrock Ranch Subdivision. Due to the distance involved, it is not feasible to
interconnect the Kuna City water system with Arowrock Ranch Subdivision.
6. Water system management
The Developer, owner of the Domestic Water System, will continue to work closely with
the Certified Operator in connection with the Domestic Water System management. The
professional Certified Operator will supply the Developer with the information necessary
to make decisions in connection with the Domestic Water System. Contact between the
Developer and the Certified Operator will occur through regular face-to-face meetings
supplemented with the constant ability for contact through telephone, e-mail and
facsimile. Such contact helps ensure that issues such as equipment problems,
performance shortfalls, and pendig needs for repair and replacement are addressed
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October 2005
2 Demo-nstratión of Financial, Technical, and
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a New Public Water System
timely. The Developer, with input from the Certified Operator, will develop an orderly
record-keeping system to ensure legal, financial and regulatory records of the Domestic
Water System are maintained in good order.
Customers of the Domestic Water System, which customers are also members of the
Association, will be provided with an overview of the continuing operation of the
Domestic Water System and wil be notified of any issues and events in connection with
the Domestic Water System at the regularly scheduled and special meetings of the
Association. Schedules and notice requirements in connection with such meetings are
provided further in the constituent documents of the Association (Exhibits 1-4 through
1-6), At such meetings, members of the Association are given the opportnity to obtain
information on the Domestic Water System and to supply information and comments to
the Developer as well as the Certified Operator. Outside of the regularly scheduled and
special meetings of the Association, both the Developer and the Certified Operator also
will maintain close contact with the board of directors of the Association, which board, in
tu, has close contact with the Association members and Domestic Water Service
customers.
7. Change of ownership
It is anticipated that the ownership ofthe Domestic Water System may change. As
provided in Article 9 of the Declaration, the Developer may transfer the Domestic Water
System to the Association or another public or private entity. Aricle 9 addresses the
relevant issues and procedures in connection with such transfer. Specifically, the
Declaration provides:
9.12 Transfer of Water System. During the development phase of the project,
the Water System shall be owned by Grantor; provided, however, Grantor, in its sole
discretion, shall convey fee simple title to the Water System to the Association or other
public or private entity ("other Water Provider") following Grantor's receipt of written
authorization for such transfer from the Idaho Departent ofEnvIronmental Quality.
Modifications to Water System facilities for the puroses of providing water service to
nearby developments shall be made at the sole expense of the Grantor. If the Water
System will be transferred to an entity other than the Association, documentation of the
other Water Provider's techncal, financial, and managenal capacity to operate the Water
System must be provided to DEQ pnor to the transfer. The Grantor may transfer
ownership of the Water System after 90 percent (90%) of lots within the subdivision
have requested water service.
In the event the Water System is transferred to the Association or other Water
Provider, as the case may be, Grantor shall notify the Association or other Water
Provider, as the case may be, in wnting of the transfer and the Association or other Water
Provider, as the case may be, shall be responsible for the ownership, operation and
maintenance of the Water System. When Grantor transfers the Water System to the
Association or other Water Provider, as the case may be, such transfer shall be free and
clear of all encumbrances and liens, except curent real propert taxes that shall be
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October 2005
3 DemonstratiOn of Financial, Technìcal, and
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a New Public Water System
prorated to the date of such transfer, reservations, covenants, conditions and restrictions
then of record including those set forth in this Declaration.
When Grantor transfers the Water System to the Association or other Water
Provider, as the case may be, the Association or other Water Provider, as applicable,
shall contact the Idaho Deparment of Water Resources, Western Regional Office, to
arange for any and all water rights appurenant to the Water System to be assigned to the
Association or other Water Provider, as applicable. If any water nghts appurenant to the
Water System have not been licensed, the Grantor shall contact the Idaho Department of
Water Resources, Western Regional Office, to arange for any and all permits
appurenant to the Water System to be assigned to the Association or other Water
Provider, as applicable.
If the transfer of the Water System to the Association or other Water Provider, as
the case may be, occurs prior to corrosion control treatment evaluation, Grantor shall be
responsible for all corrosion control testing and treatment costs.
If Grantor has transferred the Water System to the Association, the Association
shall have the right to transfer, sell or convey the Water System to a public or pnvate
entity, conditioned only upon reasonable assurances that the Water System shall be
owned, operated and maintained in a maner that shall provide service from the Water
System to Owners on a continuing basis with quality of service equal to the Community-
Wide Standard, and service that meets all applicable governental laws, ordinances and
regulations. For purposes of this Aricle IX, Grantor is hereby appointed and made
attorney-in-fact for the Association, with full power of attorney to consummate any such
transfer ofthe Water System.
If the Water System is transferred to the Association, and if the Association is
contemplating dissolution during any time that the Association owns and operates the
Water System, the Association shall contact the Idaho Departent of Environmental
Quality. The Association shall contract with an entity approved in writing by the Idaho
Deparent of Environmental Quality to own and operate the Water System, pnor to the
Association's dissolution. Dunng any time that the Association owns and operates the
Water System, the Association shall not dissolve without wntten approval ofthe Idaho
Deparent of Environmental Quality.
If Grantor does not convey the Water System to the Association or other Water
Provider, Grantor shall have the nght to transfer, sell or convey the Water System to a
public or private entity, conditioned only upon approval in wnting by the Idaho
Deparment of Environmental Quality and reasonable assurances that the Water System
shall be owned, operated and maintained in a maner that shall provide service from the
Water System to Owners on a continuing basis with good quality of service that meets all
applicable governental laws, ordinances and regulations. No tranfer of the Water
System shall occur until the Idaho Deparment of Environmental Quality has certified
that the existing Water System is in substantial compliance with state laws, regulations
and/or rues.
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SPF Water Engineering, LLC
October 2005
4 Demonstràtion ofFinancial, Technical, and
Managerial Capacity for
a New Public Water System
If Grantor transfers ownership of the Water System to the Association, the
Association shall collect Regular Assessments, and may collect Limited Assessments, as
set forth in Section 9.2. The amount of such Assessments shall be reviewed annually by
the Association, and may be adjusted anually based on actual operation and
maintenance expenses and projected future capital expenditues. Such Assessments shall
include a reasonable reserve amount for future capital expenditures for facilities
maintenance and replacement. If Grantor transfers ownership of the Water System to the
Association, the Association shall maintain a separate bank account in connection with
the Water System and all charges and/or Assessments and reserve funds collected by the
Association relating to the Water System shall be deposited therein, and revenue in
excess of paid operation and maintenance costs shall be held in reserve for futue capital
expenditures.
If Grantor transfers ownership of the Water System to another Water Provider,
such other Water Provider may propose an alternative rate strcture, accounting
procedures, and/or auditing procedures, conditioned only upon approval in wnting by the
Idaho Deparment of Environmental Quality and reasonable assurances that the Water
System shall be owned, operated and maintained in a maner that shall provide service
from the Water System to Owners on a continuing basis with good quality of service that
meets all applicable governental laws, ordinances and regulations.
8. Policies for Management of Water System Employees
The Arowrock Ranch Subdivision Domestic Water System is not large enough to require
a ful time employee. The Developer intends to contract with the Certified Operator,
which Certified Operator will monitor the operation of the Domestic Water System and
perform the necessary water quality testing. Because the Developer intends to contract
with the Certified Operator, no policies or procedures are needed for the management of
employees.
9. Attorney & Engineer
Engineer:Attorney:
SPF Water Engineering, LLC
Timothy L. Farell, P.E.
600 East River Park Lane, Suite 105
Boise, Idaho 83706
[phone], Fax [phone]
e-mail: tfarell(ßspfwater.com
Spin Butler, LLP
JoAn C. Butler, Esq.
251 E. Front Street, Suite 200
Boise,ID 83702
[phone], Fax [phone]
email: ibutler(ßsb-attorneys.com
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October 2005
5 Demonstration of Financial, Technical, and
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a New Public Water System
10. Description of Fiscal Controls
Even before discussing fiscal controls in connection with the completed Domestic Water System,
it is important to demonstrate that the Developer has the financial ability to pay for the cost of
designing, permitting and constructing Arrowrock Ranch Subdivision, including the Domestic
Water System. The Developer has received a commitment for development financing from
Mountain West Ban (Loan No. 817300460). A cost breakdown of development components,
including the Domestic Water System, which breakdown describes payments to date, is provided
in Exhibit 1-7. The Domestic Water System is identified as line item number 3. Greg Johnson,
Managing Member of Arbor Ridge, LLC, wil be responsible for establishing a bank account,
signing checks and making payments, and preparing financial reports in connection with the
Domestic Water System.
Bookkeeping for the Domestic Water System will track monthly income and expenditues, and
will track the established reserve fud to be used exclusively in connection with the Domestic
Water System's operation, repair, monitoring, and replacement costs. If the Developer does
transfer the Domestic Water System to the Association, the Association will continue to account
for the Domestic Water System income, expenditures and reserves separately from other
Association activities. As provided in the Declaration, an anual operating statement and
balance sheet for all Association activities, including the Domestic Water System, would be
prepared for distrbution to the members of the Association and customers of the Domestic
Water System.
ELEMENT #2 - Service Area & Facilities Map
Arrowrock Ranch Subdivision is generally located at the southeast corner of the intersection of
Cloverdale and Kuna Mora Roads. The legal description of Arowrock Ranch Subdivision is
found in the deeds attached as Exhibit 1-2. The boundary ofthe service area for the Arrowrock
Ranch Domestic Water System is defined by the final plat of Arowrock Ranch Subdivision (see
Exhibit 1-3). The Arowrock Ranch Domestic Water System will ultimately supply domestic
water, irrgation water for building lots (not common area) and fire protection to 101 residential
homes in Ada County, Idaho.
An operating map of the Domestic Water System describes major components of the Domestic
Water System and is contained in the Arrowrock Ranch Water System "Operations and
Maintenance Manual", October 2005.
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October 2005
6 Demonstration of Financial, Technical, and
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a New Public Water System
ELEMENT #3 - Component Inventory & Capital Replacement Plan
The facility components inventory and annualized capital replacement plan is included in
Exhibit 3-1. The preliminary capital plan is based on initial construction costs only. Once the
Domestic Water System is constructed, actual system costs will be input into this cost model to
produce a reasonable estimate of annual capital reserve requirements. Due to the dynamic nature
of phased growth within Arowrock Ranch Subdivision, the cost model should be updated on a
yearly basis until full build out of the Subdivision. The annualized cost of replacement, along
with operational costs, must be paid by homeowners to guarantee future funds are available for
both operation and futue capital requirements. The cost model has been created assuming an
inflation factor of 3 % and an interest rate of 6%.
ELEMENT #4 - Water Usage Projection
Domestic Water System demands for Arrowrock Ranch Subdivision will be composed of three
components: domestic, irrgation and fire protection demands. Design demands have been
estimated using equations found in A Study of Residential Water Use as recommended by the
Idaho Deparent of Environmental Quality ("DEQ") staff for metered water systems.
Domestic water usage for each home within Arrowrock Ranch Subdivision would include
potable water plus 0.5 acres of irrgation water. In addition to domestic supply, 1,000 gpm of
fire protection capacity would be required for Arrowrock Ranch Subdivision.
For design and well constrction puroses, water demands have been calculated (see Table 4-1
below) using 101 residential customers and also include an irrigation component to avoid
underestimating peak instantaneous demands.
Table 4-1
Arrowrock Ranch Water System (Desi2n Demands)
Residential Customers 101 Totals
Average Lot Size 32,670 (ft)0.75 acre
Average Day Demand (peak season)1.4 gpm/Customer 140 gpm
Peak Day Demand 2.28 gpm/Customer 230 gpm
Peak Hour Demand .4.73 gpm/Customer 480 gpm
Once actual water demand data is measured for existing customers within Arowrock Ranch
Subdivision, futue water demand requirements will be calculated based on actual water usage.
Water Use Year
Projections i 2 3 4 5
Customers 15 40 65 90 101
Average Use/day/customer (gallons)2,000 2,000 2,000 2,000 2,000
Water Use/year (gallons)10,950,000 29,200,000 47,450,000 65,700,000 73,730,000
Note: Above projections assume 100% occupancy.
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October 2005
7 Demonstration 'of Financial, Technical, and
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a New Public Water System
ELEMENT #5 - Water Right & Initial Monitoring
An application to appropriate water in the State of Idaho was filed with the Idaho Deparent of
Water Resources ("DWR") in July 2003. The application requests 1.43 cfs of water for
domestic supply and 2.25 cfs of water for fire protection puroses. Please refer to Exhibit 5-1 to
review the complete application. Initial monitoring has been collected from Well NO.2 and the
results of lab reports are included in the companion document, Arrowrock Ranch Water System,
Operations Manual, October 2005. Additional monitoring will be collected as required by DEQ
when Well No. i is complete and will be provided to DEQ and the customers of the Domestic
Water System.
ELEMENT #6 - Monitoring & Compliance Plans
As required by the Idaho Rules for Public Drinking Water Systems, the Certified Operator of the
Domestic Water System must sample and test the System monthly for coliform bacteria (and
more frequently if contamination is found). Each well source must be sampled and tested
annually for nitrate. It is contemplated that DEQwil advise the Domestic Water System
operator of additional sampling required to meet the requirements of the Safe Dnnking Water
Act. All sampling wil be done by a certified operations company retained by the Developer and
analyzed by Analytical Laboratories, Inc., of Boise, Idaho.
All required chemical contaminant sampling wil be taken from a specific homeowner's tap to
guarantee consistency of sampling over time. Please refer to Exhibit 6-1, for a complete list of
regulated contaminants and corresponding maximum contaminant levels ("MeL") that will be
tested for on a schedule as determined by DEQ.
ELEMENT #7 - Operation & Maintenance
See Companion Document - Arrowrock Ranch Water System, Operations Manual, October
2005.
ELEMENT #8 - Cross-Connection Control Program
See Companon Document - Arrowrock Ranch Water System, Operations Manual, October
2005, Chapter 5.
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October 2005
8 Demonstration ofFinancial, Technical, and
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ELEMENT #9 - Emergency Response Plan
See Companion Document - Arowrock Ranch Water System, Operations Manual, October
2005, Chapter 4.
ELEMENT # 1 0 - Source Protection Plan
Each wellhead shall be protected with the following restrictions:
I. No parking of equipment or vehicles, storage of pesticides, herbicides, fertilizers,
petroleum products or other toxic or hazardous materials shall be permitted within
a 50-foot radius of each wellhead in accordance with the Idaho Rules for Public
Drinking Water Systems.
2. Petroleum products and other chemicals shall not be used on roads within 50 feet
of each wellhead.
3. No standing water or storm water ruoff shall be permitted within a 50-foot radius
of each wellhead.
4. Design and construction of all water facilities shall be in full compliance with all
DEQ and DWR standards established to minimize the potential for groundwater
contamination including:
a. IDAPA 37.03.09:
b. IDAP A 58.01.08-550:
"Well Construction Standards"
"Design Standards for Public Water
Systems"
ELEMENT # 11 - Five-Year System Operating Budget
The anual operation and capital budget projections for the Domestic Water System are found in
Exhibit 11-1. The operation and capital budget was calculated using an inflation factor of3%
and interest rate of 6%. An estimated user fee of $39.49 per month, or $473.93 per year is
required to meet the capital reserve and annual operating budget expenditues of the Domestic
Water System. At this time, all cost data has been estimated and will be updated after actual cost
data is available.
i,
Arrowrock Ranch
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October 2005
9 Demônstration ofFinanèial, Technical, and
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a New Public Water System
ISW-W-08-01
SEE FILE FOR 10 MAPS
WHICH ARE PART OF
ATTACHMENT C, WHICH
WERE TOO LARGE
TO BE SCANNED
ISW-W-08-01
ATTACHMENT E,
A LIST OF CUSTOMERS,
is CONFIDENTIAL AND
WAS FILED SEPARATELY