20040819Elsea Direct.pdf

ORIGINAL
Idaho Public Utilities Commission
Office of the SecretaryRECEIVED
AUG 1 3 2004
Boise. Idaho
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
CaseNo.5Et" ~/tI~ IItfb/
DIRECT TESTIMONY OF TIM ELSEA
FOR RESORT WATER COMPANY
Q. Please state your name.
A. My name is Tim Elsea
Q. What is your occupation?
A. I am a professional engineer licensed in the State of Idaho, and the Director of the Resort
Water Company
Q. Please describe your education and employment history.
A. I have a B.S. in Civil Engineering from Clemson University, and have worked the past
years in the field of Civil Engineering, the last 6 of which have been as the Public Works
Director for Bonner County, Idaho. Prior to that, I have worked in various Civil
Engineering disciplines including geotechnical engineering, water, wastewater and
irrigation system design and general civil engineering design.
Q. Please describe Resort Water s service area and the number of customers it serves.
A. In general, Resort Water provides domestic water service to residential and commercial
customers within the Schweitzer Basin Ski area in Bonner County, Idaho. The area is
depicted on the map accompanying our Application as Exhibit C. Most of our residential
customers reside in apartment-type condominiums and are not separately metered.
Resort Water currently serves 287 residential units, or equivalent residential units (ERU),
which include 11 condominium associations billed as a single customer. Six commercial
customers are currently served by the water system representing approximately
ERUs. Thus a total of378 ERUs are served by the Company s system.
Q. Please describe Resort Water s history and its relation to affiliated companies.
Resort Water is a wholly owned subsidiary of Harbor Mountain Utility
Company LLC. Harbor Mountain Utility Company, in turn, is part of a larger
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family of companies known as Harbor Mountain LLC. In 1999 Harbor
Properties Inc, and Mission Group purchased the Schweitzer Mountain Resort
including the domestic water system, from the Trustee in a federal bankruptcy
proceeding. The Articles of Incorporation for the Resort Water Company accompany our
Application as Exhibit A.
Q. What are Resort Water s current rates for water service?
A. $33.00 per Inonth per customer. A flat per month charge is the only feasible rate
structure for Resort Water because of the transient nature of the mountain residents, and
the inherent difficulties of maintaining a metering system in the winter. The meters are
very difficult (at best) to access in the winter and the cost of either switching to remote
meters or hiring someone to access and read the existing meters is prohibitive.
Q. Are Resort Water s current rates for water service sufficient to produce a reasonable
return on the company s investment?
A. No. As denlonstrated by the testimony of Jane Doe, the company is operating at a loss.
Q. What rate structure and rates is the company requesting be approved in this case?
A. As noted above, at this time, the only feasible rate structure for Resort Water is a flat
monthly charge. Resort Water is proposing to increase the flat monthly charge from
$33.00 to $61.96 per residential equivalent unit.
Q. How were these rates developed?
A. As demonstrated by the accompanying testimony of Jane Doe, the annual revenue
requirement necessary to meet the expense of operation and produce a reasonable return
is $131 291.00. Rates were calculated by dividing the revenue requirement by the 378
ERUs and then by twelve to produce the flat monthly charge.
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Resort Water
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Q. Are you proposing that the Commission approve Rules and Regulations?
A. Yes. Exhibit F, attached to our Application and consisting of21 pages, is Resort Water
proposed Rate Schedule and Rules and Regulations Governing the Rendering of Water
Service and Water Main Extensions.
Q. Please describe how these rules were developed.
A. I developed these rules using my experience, company history, and also utilizing United
Water Idaho s approved rules as a template. Certainly these rules are not as extensive as
United Water , but at this time, they do not need to be. We tried to keep the rules as
simple as possible while minimizing ambiguity.
Q. Does Reson Water have the bona fide intent and financial ability to provide water service
as a regulated utility?
A. Yes. As noted above, Resort Water is a part of a larger family of companies that has
access to the necessary capital to enable it to operate the water system in a safe and
reliable manner, assuming the company is allowed earn revenues sufficient to cover
operational expense and produce a reasonable return on its investments.
Q. Based on your experience in the water industry, does Resort Water face operational
challenges not faced by other utilities?
A. Yes. The Schweitzer Resort is a stand-alone property located in a remote part of Bonner
County. Winters are harsh in the area, creating additional maintenance and operation
effort. Many of the dwelling units are occupied only in the winter months; accordingly
water consumption varies dramatically throughout the year. In addition, the resort nature
of our customers dictates that very small units may house many more individuals than a
normal residence would support. This dictates the need to have adequate volume
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pressure and storage capacity for the wildly varying peak hour needs of our population
not to mention the varying needs of the Resort itself that is very dependent on snow and
weather conditions as well as the holiday schedule.
Q. In what way are these considerations relevant to this Application?
A. They explain, in part, Resort Water s comparatively high revenue requirement and justify
our requested return on equity.
Q. Are you aware of any significant investments Resort Water will be required to make in
the near future?
A. Yes. The Fire Chief of the Schweitzer Fire District has determined that the Company
systems lack sufficient storage to meet the fire flow requirements of the 2000
International Fire Code. Our consulting engineers have determined that construction of
an additional 500 000 gallon reservoir is necessary to meet these requirements. Attached
to my testimony as Exhibit 4 is correspondence between the Fire Chief, our consulting
engineers and Resort Water documenting this requirement.
Q. When does Resort Water intend to commence construction of the required reservoir?
A. We intend to commence construction soon so that the reservoir will be on-line by the fall
of 2005.
Q. Does Reson Water know the estimated cost of the reservoir?
A. We have engineering estimates indicating the cost will be approximately $380 160.00.
Q. What rate making treatment are your requesting from the Commission regarding the
storage reservoir?
A. Weare requesting the Commission provide Resort Water an assurance that when the
reservoir goes into service and is used and useful in providing water service Resort Water
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may adjust its rates to begin recovery of its investment in the reservoir. When final
construction costs are known, Resort Water will provide to the Staff all documentation
regarding costs for review and audit by Staff to insure reasonableness.
Q. Has Resort Water provided notice of this rate case filing to its customers?
A. Yes. Accompanying the Application is the form of notice that was mailed to each of our
customers at the time the Application was filed.
Q. Does that conclude your testimony?
A. Yes it does.
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Resort Water
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EXHIBIT No.
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Newport
600 4th Street West
Newport, Washington 99156
[phone]
[phone]
[phone] Fax
JAMES A. SEWELL & ASSOCIATES
Consulting Engineers & Land Surveyors
Ponderay
Pend Orcil1e Professional Center
30336 Highway 200 Suite C
Ponderay, Idaho 83852
[phone]
[phone] Fax
Spokane
Hutton Building
9 South Washington, Suite 708
Spokam:, Washjngton 99201
[phone]
Fax: [phone]
.Civil Engineering 'Electrical Engineering "'Lund Surveying "'Building Inspection "Land Use Planning
September 15 , 2003
Spencer Newton
Fire Chief
Schweitzer Fire District
900 Schweitzer Mtn. Rd.
Sandpoint, ID. 83864
RE: Resort Water Company, Proposed Reservoir Capacity
Dear Mr. Newton
As per your direction in our phone conversation on September 8tJ" and your letter dated
September 4th, 2003 , I will be recommending to Resort Water Company the construction ofan
additiona1500 00O.gallon reservoir. This new storage capacity, combined with the existing
1 05 OOO-gallon reservoir, has the ability to provide 3000 gallons per minute for a 3-hour duration
fire event, water system operational storage, and equalization storage. I am also recommending
that a new hydrant, with associated main extension, be installed by Resort Water Company to
serve the Copper Ridge Condominiums. Either Jim Lackey or Tim Elsea will be contacting you
for direction as to the best location for the new hydrant.
I will keep you up to date on project progress and as to when the storage capacity upgrade will
come on line. Please call me in our Ponderay office if you have questions or comments.
Sincerely,
JAMES A. SEWELL & ASSOCIATES
~ ' - ;;;/,/
Tim C. Blankenship--;-~/ .
c....- - .
cc:Resort Water Company, Tim Elsea, Director of Utilities
Tootrunan-Orton Engineering, Scott McNee PE
Licensed in Washington, Idaho, & Montana Elsea, OJ
Exhibit 4
Page 1 of 5
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NewPort
600 4th Street West
Newport, Washington 99156
[phone]
[phone]
[phone] Fax
JAMES A. SEWELL & ASSOCIATES
Consulting Engineers & Land Surveyors
Ponderay
Pend Oreille Professional Center
30336 Highway 200, Suite C
Ponderay, Idaho 83852
[phone]
[phone] Fax
Spokane
Hutton Building
9 South Washington, Suite 708
Spokane, Washington 99201
[phone]
Fax [phone]
--Civil Engineering .ElectricaJ Engineering .Land Surveying .Building Inspection .Land Use Planning
September 15 , 2003
Resort Water Company
Tim Elsea, Director of Utilities
000 Schweitzer Mtn. Rd.
Sandpomt, TID. 83864
RE: Water System Improvements
Dear Mr. Elsea
The Water System Analysis for the Resort Water Company was completed and submitted July
, 2003. This report analyzes the ability of the distribution components of the existing system
to meet the current water demand needs, and reconunends improvements for future expansion of
the distribution component of the water system.
Based on recommendations from Spencer Newton, Schweitzer Fire District Chief, and domestic
demands placed on the existing water system, we have calculated the storage and supply
requirements for the Resort Water system.
fire Suppression Storage
Fire suppression flow rate and duration requirements outlined in Mr. Newton s September 4
2003 letter are based on the 2000 International Fire Code. Fire suppression storage calculations
are based on 3000 gpm for 3 hours.
FSS = (3000 gpm) x (60 minIhr) x (3 hours) = 540 000 gallons
ES = (pHD - Qs) x (150 minutes)
where:
ADD = Average Daily Demand = 106 gpd per ERU based on past data
Ucensed in Washington, Idaho, & Montana Elsea, Oi
Exhibit 4
Page 2 of 5
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MDD = Maximum Daily Demand = 2xADD
==
212 gpm
PHD = ~D/1440)((C)(N) + F)+18 = 458gpm use 460gpm for design
C = 1.6, N = 1730, F = 225
Qs = Sum of all active source supplies (well #4 = 60gpm, well #5 = 125gpm, air test of well #6
indicates 200gp~ 160gpm was used for design) = 345 gpm
ES = 17 250 gallons
Stanqby Storage !.SID;.
The purpose of Standby Storage is to provide a measure of reliability should sources fail or when
unusual conditions impose higher demands than anticipated. Standby Storage and Fire
Suppression Storage volumes may be nested with ~h~ larger of the two being the minimum
available.
SB = (2 days)(ADD)(N) - tM (Qs - QL)
where:
QL = the pumping rate of the larges source supply, assumed to be well #6 at 160gpm
tM = 1440 minutes
SB = 100 360 gallons
Operational S ~orage (QS1
Operational Storage is the volume of water of the reservoir devoted to supplying the water system
while under normal operating conditions. The control system for the proposed reservoir has yet
to be designed. Typical Operational Storage is approximately 5000 gallons assuming a IS-foot
diameter tank having 6" drawdown.
Total Stora e TS
Total Storage represents the minimum storage required for proper water system operation. TS is
the sum orES and OS plus the greater of either the FSS or SB storage.
Total Storage (TS) = 540 000 + 17 250 + 5000 = 562 250 gallons
Existing Storage (ES) = 105 000 gallons
TS - ES == 457 250 gallons
We are recommending an additional500 000-gallon reservoir be built to meet the existing demand
and fire flow requirements. Probable cost for construction of the reservoir is $280 800 including
reservoir construction, excavation and backfill, concrete tank: pad section, and connection of water
mains to tank.
The proposed location of the new reservoir is at a higher elevation than the existing reservoir
system. Development of the previously drilled and approved well #6 is needed to supply the
proposed reservoir. Probable cost for well #6 development including survey, purchase and
installation of pump, pump controls, pump test, water main extension from well 6 to the reservoir
and water samples, is estimated at $47 900.
Total probable project cost including engineering, inspections, and 100/0 contingency is $411 570.
Ucensed in Washington, Idaho, & Montana Elsea, Oi
Exhibit 4
Page 3 of 5
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The above water system improvement recommendations will bring the existing water system up to the 2000
Uniform Fire Code requirements as required by state code. We recommend that future development within
the Resort Water Company water service area be restricted so as not to exceed the delivery and fire storage
capacity of the system after recommended improvements are completed.
If you have questions or require further information about the Water System Analysis or the
recommendations in this letter, please contact me in our Ponderay office.
Sincerely,
JM1ES A. SEWELL &ASSOCIATES
'By
:.----
Tim C. Blankenship, P'.E. /~
cc: Schweitzer Fire District, Spencer Newton, Fire Chief
Toothman-Orton Engineering, Scott McNee PE
licensed in Washington. Idaho, & Montana Elsea, OJ
Exhibit 4
Page 4 of 5
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Scfi,veitzer 1'ire District
900 Schweitzer M1n. Rei Sandpoin~ ID 83864
208-2654741
Sewell Engineering
30336 Hwy 200
Ponderay, ill 83852
. ,
The following fire flows are based upon the 2000 httemational Fire Code
Appendix B, Table BI05.
White Pine Lodge:
Type IT-A construction ~ 79 823 square feet
Required Fire Flow, 4 000 GPM for 4 hours.
750/0 Reduction for approved sprinkler system,
Adjusted Required Fire Flow, 1 500 GPM for 2 hours.
Copper Ridge Condominiums:
Type V-B construction ~ 16 660 square feet
Required Fire Flow, 3 500 GPM for 3 hours.
Extremely close exposures, No reductions.
Highland Vil1age:
Type V-B construction ~ 12 285 square feet
Required Fire Flow, 3 000 GPM for 3 hours.
Extremely close exposures, No reductions.
I apologize for the delay an appreciate your patience
Respectfull
neer ewton
Fire Chief
Schweitzer Fire District
,.... 0
Elsea, Oi
Exhibit 4
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