20080528Comments.pdf

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rBefore the Idaho Public Utities Commission May25th, 2008 "'''
28U8MAY 2 8 AriS: 08
MSW-w-os-oi"MAYFIELD SPRIGS WATER COMPAN, it..'rtl~~~~~J~SION
In the Matter of Application of Mayfeld Sprigs Water Compay for a Ceca of
Public Necessity and Convenience.
Comments of a customer:
As a customer of Mayfeld Spris Water Compay, I have seem conc regag
the behavior and requests to the PUC by the owner opetor of th compay, Mr. Gr
Johnson.
1) The company ha asked for a base rate of $81.60 for the fi 10,00 gaons and a
varable chage over 10,000. I fid tht ths rate is excessive on it fa an th the
minimum bas rate of 10,000 is far too high. I have taen mete reng in th month
before irgation season and have found tht my famly of four us fa les th 10,000 in
a month and my family averages approximately 8000 gallons a month Thus I would not
be gettg the benefit of payig tht priceaidwouldbeforcto pay for Sometg th I
do not use.
2) I fid it odd and distubing tht Mayfeld Sprigs is aski for peion to chage
$2500 for a hook up fee when they have ben doing tht since Ocbe of2005. I was
forced to pay ths fee to the owner or I would not be allowed to puha the lot and I was
forbidden by covenats to provide my own well. I th th th PUC should not allow
ths as the developer who is the owner of the company should be th cost as he
recoups them in the sae price of the lot. The develope is by law and ca law to bear
these costs of infastrctue hiself in the price of the lot an cat pa them along to
the purha. The fac tht Mayfeld Sprigs has ben doin th for seem yea outside
the puriew of the PUC is also distubing.
3) The owner of the company, Mr. Grg Johnson is curntly in litigaon with sever
homeowners in the subdivision over water issues. Mr. Johnn should not be alowed in
any way shape of form to pass any of the costs of ths litigaton onto the homeowners for
his ilegally operated company. A judgment ha been retued in cour deg tht
the company ha been opeted ilegally for the past the yea du to th fac tht Mr.
Johnson never bothered to apply for a CPNC. The judge dete th it wa nessa
to have ths certificate prior to beging constrction. Ignora of the law is not a
defense and homeowners should not have to pay for ths.
4) Puntive actions. Mayfeld Sprigs presented to its cusomer th it wa in contat
with the PUC and workig actively with them for a CPNC for a long peod of tie when
ths was in fact not tre at alL. The PUC is in a position to punsh Mayfeld Spris
e e
though a system of fies. I propose tht the PUC do exactly th. I have be livig under
the constat theat by ths compay tht my water wil be shut off as well as other
fabrications presented by the company. I have long awaited to involvement of the PUC
and hope they will address these issues as only they ca.
5) HOA water fees. I do not see the point in biling the HOA for wa as the co is only
passed onto the homeowner anyway. The owner operator of Mayfeld Spr is also the
President of the Homeowner assoiation. As inormation shows ther ar seen sepate
meters for the common area eah to be treated as a sine cusmer so the ba rate
model is ineffective as we would be payig more for less. Plea ad th an come
up with a different model at the least.
6) Sing Fund. Do not allow ths cost. As the compay ha ope ilegy for the
past thee yeas and amsed a substatial amount of capita ditl or in by
chaging ilegal $2500 hook up fees, there is no need for another avenue for th company
to collect more money.
7) It was also mae known to us tht the well was recently sold to Mayfeld Sprgs by
Intermounta sewer and Water. The owner of both companes is one an the sae, Mr.
Greg Johnson. Mr. Johnn is attemptig to pass on the loan inte to the cusmers
when in fact he mae the loan to hiself. It is highy unethca an queonale at best
that he be allowed to do ths. The PUC should be able to see thug th thy veiled
attmpt to extort more money from customers.
The reality was tht ths compay and its owner should have knwn be and rerds
indicate tht they knew tht they had to come before the PUC for apval to operate ths
company. But they knew tht if they did, they would not be able to chae whver they
wante and would have to anwer to the PUC. So for th yea they contiue to
operate ilegally and theaten and intimdate customers with wa shutoff and may other
avenues outside of the PUC purew. For over a yea now I have be livi wati for
the PUC to get involved and meawhile the constat that of ths compay putin me
into collections or shutting off my water ha ben a constat conce Not to mention the
instat where the water was contated with coli form bac and the compay failed
to notify anyone until t was too late which resulte in my newbrn int get sick and
going to the doctors offce. There are seous concern about the etcs an prces of
ths company and I sincerely hope the PUC will addrss the conc of th cusomer at
Arowrock Rach in their review of rates.
Than you for your tie and considertion.
Guy and Lori Bourgeau
Guyandlori(8cableone.net
12094 W. Tusti Ln.
Kuna il 83634
IL~./~I~ Gii-~)e ,/10 l1JI ,/~~
Jean Jewell
From:
Sent:
To:
Subject:
abercrombiefamiIY(9gmail.com
Tuesday, May 27, 20084:50 PM
Tonya Clark; Jean Jewell; Beverly Barker; Gene Fadness; Ed Howell
PUC Comment Form
A Comment from Mark Abercrombie follows:
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Case Number: MSW-W-08-01 - MAYFIELD SPRINGS WATER COMPANY, INC. -- CPCN
Name: Mark Abercrombie
Address: 11980 W Dynamite Ln
City: Kuna
State: ID
Zip: 83634
Daytime Telephone: [phone]
Contact E-Mail: abercrombiefamil~gmail.com Name of Utility Company: Mayfield Springs Add toMailing List: ~
Please describe your comment briefly:
When my wife and I signed our Purchase Agreement to begin building our home in Arrowrock
Ranch, we did so after being given false information by the developer's realtor, Doug
Ferguson, that water, sewer and HOA fees combined would total $100 a month. We moved into our
home in March 2006. In October of that same year we had a knock on our door from a potential
buyer of a home down the street from us. They were curious to know if the rumor they heard
about water, sewer and HOA being $300 a month was true. We assured them that we had lived
there over 7 months and had only been paying the $100 we were told it would cost.
Uneasy about that conversation, my wife contacted Greg Johnson. He told her that the rates
would in fact be $300 a month. She freaked out and told him that he would see for sale signs
go up so fast it would make his head spin. He assured her that before a bill was ever sent
out, there would be a meeting with all of the homeowners to go over the cost breakdown. It
was an EXTREMELY expensive well, he said, to the tune of nearly $800,000.
That promised meeting never occurred and after occupying our home for almost 10 months, we
were shocked to receive our first separate bill for water of $100.
Curious to see how the $100 monthly fee (which was absurdly high to us) compared to other
similar subdivisions, my wife began making phone calls. She contacted property management
companies or homeowners in 6 subdivisions of similar size that had a community well. All of
their rates came no where close to $100 a month, even in the dead heat of summer (the average
base rate of the subs she spoke to was $25 , with an additional charge for exceeded gallons).
Next she contacted 20 companies that either service or drill wells locally. Many of them went
over the cost breakdown to run a well the size of Arrowrock i s and even gave breakdowns of the
maintenance and service costs involved. Of the 20 companies she contacted 13 said they had
never seen rates that high for a well that size, 5 flat out said we were getting ripped off
and 2 said they were unfamiliar with well costs for a well that size.
She hung up the phone armed with the knowledge that the i cost breakdown i Johnson had included
with his bill was fact-less. She again tried to contact Johnson several times to no avail.
Feeling there was no other option, we called a meeting of the homeowners and hired a lawyer.
Although we were lied to in regards to the amount water would cost us, we have paid the bills
sent to us and our account with Mayfield Springs is current. However, we feel the amount
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requested by Johnson, aka Ma~eld Springs, is not only ridicu~S and unfounded, but would
also cause a financial hardship to us and to many other families in Arrowrock who moved in
under the assumption that the cost would be much less.
We also feel that the cost of the meter installation should be looked at as a capital
expense. In the original permits, the agreement was that Johnson and his water company would
apply for a CPCN. If that was his intent, the meters would have been an integral part of that
application. We believe Johnson never intended to file a CPCN and therefore never installed
meters. Because the initial plat was approved with the condition that he would apply with the
PUC, the meters should be looked at as a capital expense even though they were purchased a
few months after the well was completed. The customers should not be responsible for paying
for Johnson' s attempt to cut corners and avoid regulation.
Finally, we ask that the requested "sinking fund" be denied. Many of the well companies my
wife spoke to also explained that most wells and well parts for a well of our subdivision's
size come with warranties, but that even if they didn't, foreseen maintenance would be years
away.
The form submi ted on http://www . puc. idaho. gov Iforms/ipuc1/ipuc. html
IP address is 71.215.27.124- ----------- - -------- ---- - - - --- - ----
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Jean Jewell
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~ Hi
From:
Sent:
To:
Subject:
slenderoak(§verizon. net
Wednesday, May 28,200812:17 AM
Tonya Clark; Jean Jewell; Beverly Barker; Gene Fadness; Ed Howell
PUC Comment Form
A Comment from Larry R. Corson follows:
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Case Number: CASE NO. MSW-W-08-1
Name: Larry R. Corson
Address: 11614 West Dynamite Ln
City: Kuna
State: ID
Zip: 83634
Daytime Telephone: [phone]Contact E-Mail: slenderoa~verizon.net .~
Name of Utility Company: Idaho Springs and others Add to Mailing List ~
Please describe your comment briefly:
All shares and membership interest in Arbor Ridge, LLC, Intermountain Sewer and Water, Inc.,
Idaho Springs Water, Inc. and Mayfield Springs Water Company are owned by Greg Johnson. That
company proposes that it provide water service to the Arrowrock Subdivision exclusively. That
limits the customers of the water service to lots and homes within the subdivision, the
Arrowrock Ranch Home Owners Association ("HOA") and Intermountain Sewer and Water
CCtintermountain"), collectively the "rate payers". The HOA maintains the common area, and
under the Company's proposal, would pay for water service. Intermountain provides sewer
service exclusively within the subdivision and is also identified as a rate payer by the
company based on water meter reading provided in discovery. Since the HOA and Intermountain
derive revenue only from the homeowners and lot owners within the subdivision, there is no
added value in passing the water expense through the HOA and Intermountain. In fact, that
"pass through" would increase the cost to both the HOA and Intermountain which, being
unregulated, would add administrative costs and then pass those increased costs on to the
rate payers. Therefore, I recommend that the HOA and Intermountain be excluded from charges
for water service. The Company has requested and previously collected a "hook up" fee of
$2,500. I believe this fee is an attempt by the Company to circumvent Rule 103 of the
Commission's Policies and Presumptions for Small Water Companies, IDAPA, 31.36. 31.103 with
respect to the presumption of contributed capital. This "hook up" fee is an attempt to
recover the capital costs of building the system which should be excluded from the rate base.
I recommend the Commission disallow this fee totally. In terms of the actual rates, I
recommend that the Commission adopt a rate structure based on two types of residential
customers, active and inactive. Inactive customers are defined as the owners of lots within
the subdivision not currently connected to the water system and not currently receiving water
from the Company. Active customers are those lots connected to the system with water
available regardless of the status of home construction on the lot. There are fifty-four (54)
acti ve and forty- six (46) inactive lots within the subdivision. The active count includes all
lots with houses including two of which are under construction. Eight of the houses appear
to be complete including, for the most part, landscaping and have never been occupied.
Inactive customers should be required to pay for the system since they directly benefit from
the availability of the water system. None of the lots have water rights and are precluded by
. the HOA Covenants, Conditions and Restrictions (CC&Rs) Section 9.1 from providing their own
water. This subdivision is essentially a desert and lots without access to water are
valueless. In addition, inactive customers benefit in the water provided to the HOA for use
in irrigating the common area as the value of the property is enhanced by maintenance of the
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e ecommon area. Therefore, I recommend the Commission direct its staff to construct a rate based
on these two customer classes.
I recommend that the Commission deny any Company expenses in the following areas:
· Any and all expenses related to the lawsuit brought by fourteen rate payers against
Arbor Ridge, LLC (District Court of the 4th Judicial District Case No. CVOC0708918, Guy and
Lori Bourgeau et al, Plaintiffs versus Greg Johnson et al, Defendants). (See discussion
below. )
· Any and all expenses related to the sale of assets from Arbor Ridge, LLC to Mayfield
Springs Water Company as this transaction was essential a tttransfer" from one company owned
one hundred percent (100%) by Greg Johnson to another.
· Any and all expense related to a sinking fund. The entire water system is less than
three years old and the owner of the system and the subdivision (being one and the same) has
sufficient assets to deal with any maintenance related issues for the foreseeable future.
I recommend the Commission reject the Company's request to recover some of the contributed
capital and the entire initial cost of the system be excluded from the rate base. The
Company's argument is, essentially, they spent the money, recovered some of it in the hook up
fee and therefore should get the remainder. I believe the Commission should enforce the
Commission's Policies and Presumptions for Small Water Companies, IDAPA, 31.36.31.103 as
written.
The Commission staff recommended and the Commission decided to incorporate complaints filed
with Commission against Arbor Ridge, LLC acting as an unregulated water company. That Company
operated illegally as a for profit water company from at least September 29, 2005 through
February 3, 2008. The Company built a water system, established and modified water rates and
charges, billed and collected connection and service fees without Idaho Public Utility
Commission (PUC) approval as required by Title 61 and IPUC Rules (IDAPA 31.21.01.000 et seq.)
The Company is not exempt from this requirement, as they are not a homeowner's association,
formal water district, municipality or other mutual non-profit organization.
During the time the Company operated illegally , it represented that it was working with the
PUC on an application for completion in summer 2007. The Company also asserted through
affidavits filed in the court case described below that PUC officials knew and approved their
operation without a CPCN. PUC staff knew no later than February 27, 2007 that the Company was
operating illegally. In May, 2007, fourteen customers filed suit against the company in part
because the Company had not filed for a CPCN and there was no indication at that time that
the Commission would force the Company to apply or, based the Company's actions to date that
it would ever apply.
On July 14, 2005, the Company certified in a letter to Ada County Development Services that
Intermountain Sewer and Water, Inc would operate the water system.
On September 13th, 2005, the Ada County Board of Supervisors approved the plat for the
Arrowrock Ranch Subdivision Number 1. A required condition of that approval was approval by
the ttpublic Utilities Commission regarding the establishment of a non-contiguous service
area." Clearly, this condition was never met and Ada County Development Services have been
unable to find any document in their files used to certify the completion of this
requirement.
On September 29, 2005, the Developer, entered into an agreement with Mark and Amber
Abercrombie which required the Abercrombie's to pay a $2,500 ttwater hook up fee." This is
likely the earliest date the Company operated as an unregulated water company.
In June of 2006, the Abercrombie family occupied the first home in the subdivision. I
occupied my home in early November, 2006 ONLY AFTER the company assured my Realtor Mike
Mogensen of Peterson and Associates Real tors that the $1200, /year homeowners association
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covered Sewer and water. On ~ about January 30th 2ee7, the co!!ny operating as Arbor Ridge
Water Account began billing residents of the subdivision at $lee per month for sewer and $lee
per month water! This certainly constitutes fraud.
On February 27, 2ee7, a meeting was held between the Company and members of the PUC Staff.
Michael Darrington, then a utility analyst with the PUC, told the Company they were required
to file a CPCN.
On March 8th, 2ee7, Greg Johnson stated in a letter to water service customers that "We,
Arbor Ridge Water Account, LLC, have met the PUC, Public Utility Commission, and will be
working with them over the next 12e days on setting prices on the water service at Arrowrock
Ranch Subdivision."
On March 26th, 2ee7, Chris Hecht, Utility Compliance Investigator, Idaho Public Utilities
Commission stated in an email to Gerald J. Corvino (homeowner, Arrowrock Ranch Subdivision. J
"Arbor Ridge has not applied to IPUC even though we have requested that they do so."
On May 2, 2ee7, Greg Johnson sent another letter to customers stating: f~ater will be reduced
to $Se per month (Retroactive from January 2ee7) and continue at the $se per month rate until
such time that we become certified with the PUC. At that time, it will become a metered
service."
On June 14, 2ee7, Chris Hecht stated in an email to Gerald J. Corvino (homeowner, Arrowrock
Ranch Subdivision. J "I checked with the other staff members and the IPUC has been in contact
with the accountant who is working on the financial part of the application. Progress is
being made toward completing the application."
In July 2ee7, Mr. Corvino made a public records request of the PUC with respect to all
records related to the application of the Company as a water company. The Commission
Secretary, Jean D. Jewel responded on July 19, 2ee7: "A search of our records has not
revealed any records relating to an application by Arbor Ridge or Intermountain Sewer and
Water to operate as a water company."
On January 31, 2ee8, Mr. Corvino filed a formal complaint with the PUC as defined in Rule 54
of the PUC Rules of Procedure.
On the morning of February 5, 2ee8, the Company, doing business as Idaho Springs Water
Company filed for a CPCN.
On the afternoon of February 5, the Company's attorney (Spink Butler, LLP) in Case No
CVOCe7e8918, Guy and Lori Bourgeau et aI, Plaintiffs versus Greg Johnson et aI, Defendants
argued before the 4th Judicial Court "that the PUC is aware of the Defendants' water service
charges and that the PUC has condoned such charges during times when certificate applications
are in the process of being completed and approved."
On March ieth 2ee8, the District Court in the case described above ruled in a summary
judgment related to the claim that the company operated illegally:
"From the statute and regulations, a certificate of necessity and convenience was required
before the construction of the water system at all. The Defendants have gone further than
merely commencing construction-construction has been completed. The Defendants have gone even
further and have begun to charge customers for its services."
Clearly from the above events, the Company:
· Built and operated a for profit water company in violation of Title 61 and PUC rules.
· Misrepresented its progress in the CPCN application process to Ada County Development
Services.
· Misrepresented its timeframe to file for a CPCN to its customers.
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· Argued in 4th Distric1ludiciai Court that the commissio~taff was complici t in its
actions as described above.
· Violated Title 61 and IPUC Rules (IDAPA 31.21.91.999 et seq.)
· Is subject to Title 61-796 and Title 61-797 for the violations described above.
I believe the Legislature intended to prevent this kind of behavior by establishing the
Commission and setting penalties for violation of Commission rules. I respectfully request
the Commission order the Company to repay to all parties served any and all monies collected
including connection and service fees, late charges and any other charges illegally collected
during the period of operation prior to the application for the CPCN (February 4th, 2998.).
In addition, I request the Commission impose a penalty of $1,716,999 on the Company which
represents $2,999 per day from September 29, 299S through February 3, 2998 (a period of 8S8
days) as allowed per Idaho Title 61-796 and Title 61-797. The Commission should note that the
water service provider and the development company are essentially one and the same. As
described above, Greg Johnson is the only beneficial owner of the development companies and
the various water companies based on the Company response to discovery request. I further
believe the company expects to collect revenues in excess of seven million dollars from the
sale of lots in the two phases of the Arrowrock Ranch subdivision. Clearly the ctreward" for
acting illegally justifies a signi ficant penalty as allowed by Idaho statute.
The Company may also argue that Commission staff was ctaware" of their operation. However, the
Company has presented no evidence that the Commission staff was aware when the system was
built or when the Company told Ada County Development Services that Intermountain Water and
Sewer would operate the system or when the Company charged the first customer a hook up fee
in September 299S or when the Company first delivered water for domestic consumption in June
of 2996 or when the Company delivered the first bills for service in January 2997.
The Company may further claim that the Commission staff ctaccepted" their unregulated
operation as a small water company. This clam is irrelevant as the Legislature never
authorized or intended to authorize the Commission staff to waive regulation of any public
utility as defined in Title 61.
Respectfully submitted,
Larry R. Corson, Homeowner, 11614 W. Dynamite Lane, Kuna, 10 83634
~q?
(Temporarily residing at-Z Yeagle Road, Montoursville PA 17754. J
The form submited on http://www.puc.idaho.gov/forms/ipuc1/ipuc.html
IP address is 71.245.55.292- -------- ---- --- ----- ---- - --- - ------
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/~~.Og ii Íi A.i.i//: ~.. ~ l-
Jean Jewell
From:
Sent:
To:
Subject:
kunawards~gmail.com
Tuesday, May 27, 2008 5:00 PM
Tonya Clark; Jean Jewell; Beverly Barker; Gene Fadness; Ed Howell
PUC Comment Form
A Comment from Christopher and Natasha Ward follows:
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Case Number: MSW-W-08-01
Name: Christopher and Natasha Ward
Address: 11550 W . Dynamite Ln
City: Kuna
State: Idaho
Zip: 83634
Daytime Telephone: [phone]
Contact E-Mail: kunawards~gmail.com
~of Utility Company: MAYFIELD SPRINGS WATER COMPANY,Q:INC. - - CPCN Add to Mailing List:
Please describe your comment briefly:
At the meeting with the PUC it was stated that once the rate was determined there could be
the possibility that Mayfield Water Company could bill the homeowners the base rate plus
usage charges for usage in the past. Mayfield Water Company, while it was still Intermountain
Water/Idaho Springs, sent customers an update stating that the rate would be $50 per month
until the time that the PUC had set rates. We believe we should not pay for a service that
occurred in the past without first being told the rate at which we would be charged.
Therefore, I urge the commission to set the rates from the determination date forward and not
allow Mayfield Water Company to collect the new rate retroactively.
We also feel that all 100 residential lots in the subdivision should be paying the base rate
based on the benefits of watering common areas for all lot owners. All lots, even the ones
without homes, are benefiting from the water system through the watering of the common areas.
By having a lush green landscape and common areas to welcome potential buyers into the
subdivision, those lots which are undeveloped gain more from the water system. Mayfield water
company's request to have a lower rate for homes under construction is flawed, homes that are
under construction are putting in their landscape which requires an enormous amount of water
to establish, whereas homes that are already completed require considerably less water to
maintain their landscape. We believe all 100 residential lots should pay the same base rate
and usage rates, regardless of who owns them and their current construction status.
We feel that the amount Mayfield Water Company is requesting for a sinking fund be denied.
The amount requested is for new meters, even though when we requested water service a meter
was installed. Since we requested water service, the developer/Mayfield Water Company has
changed out the original meter with a new meter that is electronic, even though the original
meter worked fine. We believe this change was made so the developer could change the intent
of the water system from a Homeowner Association owned system to a system run as a public
utili ty. Furthermore, we believe that until such time that the PUC grants the CPCN to
Mayfield Water Company, any money the developer and/or Mayfield Water Company has or will put
into the system should be considered as part of the initial cost of the system, therefore the
developer/ Mayfield Water Company should not be granted such money.
We would like to see the base rate be as low as possible, but also include the amount to
water the common areas, which is the monthly amount divided amongst the 100 residential lots.
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For example:
Base Rate for residential lots (includes l0,000 gallons)
area water charge from below
e -
N $25. 00/month + monthly common
Monthly common area water charge
N $900 (based on information stated by developer, at 2007 annual HOA meeting) divided by l00
residential lots = $9.00 * 7 months =) $63.00; $63/l2months = $5. 25/month averaged over a
year
Addi tional Gallons of residential usage
N billed in 5,000 gallons increments
The form submited on http://www.puc.idaho.gov/forms/ipuc1/ipuc.html
IP address is 71.221.129.141
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