20050218Comments.pdf

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Edwin R. Haglund
O. Box 3762
Coeur d'Alene , Idaho 83816
[phone]
dboriessan(g)Jmbris.com
Schweitzer Condo: Highland Village # 401
To: Idaho Public Utilities Commission
O Box 83720
Boise, Idaho 83720-0074
Phone: [phone]
Fax: [phone]
Mail: secretary~puc.idaho.gov
To: Dean J. Miller
McDevitt & Miller, LLP
420 W. Bannock Street
O. Box 2564-83701
Boise, ID 83702
Phone: [phone]
Fax: [phone]
Mail: ioe~mcdevitt-miller.com
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION Case No. RES-O4-
IN THE MATTER OF THE APPLICATION OF RESORT WATER CO9., INC. FOR
THE ISSUANCE OF A CERTIFICATE OF PUBLIC CONVENIENCE AND
NECESSITY, FOR APPROVAL OF RATES AND CHARGES FOR WATER
SERVICE, FOR APPROVAL OF RULES AND REGULATIONS GOVERING THE
RENDERING OF WATER SERVICE
APPLICATION FOR THE ISSUANCE OF A CERTIFICATE OF PUBLIC
CONVENIENCE AND NECESSITY AND TO ESTABLISH RATES AND
CHARGES FOR WATER SERVICE AND REQUEST FOR MOMDIFIED
PROCEDURE
I wish to thank the LP.C. Commissioners and staff for the opportunity to comment on the
above referenced case. My comments are as follows:
The water usage determined by Resort Water for its residential units seems to be flawed.
Water leaks combined with high pressure can be a factor in this high water usage calculation.
A similar water system in the area with more residential customers has significantly less usage
for the same time periods. Resort Water has calculated it uses over 4 000 gal/month per
equivalent residential units (ERUs) in an average month and a peak usage of over 8 000
gal/month per ERU. The other mountain water system has an average usage of less than a
1000 gal/month in an average month and less than 2000 in a peak usage period.
The operating expenses appear to be unusually high for a company sharing office space
and personnel with Resorts Utilities other operations: sewer, cable TV and snow removal.
Given the limited season of intense operation and the labor pool within Resort Utilities and
Schweitzer the operating cost should be less. We should be given a break down of the cost.
it one full time employee, 20% of book keeping and billing, cost of operating equipment
electric, chemicals etc , overhead, management cost, floor space, etc, etc, etc? As an example
the cost for billing should be shared with the other utilities currently billed to all home owners
at Schweitzer. The billing cost for water is only to owners within the area served by Resort
Water. If divided by the billing statements sent, the water billing should be a small percentage
of the total cost (20% or less).
Personnel cost should be shared with other Resort Utilities and Schweitzer Operations.
The number of personnel should be efficient for the operation or the operation should be
contracted out or sold. The rate payers at Schweitzer cannot be responsible nor expected to
pay for a poorly managed and operated utility.
Utility personnel (3 people?) appear to work on all mountain utilities; the cost for
personnel should be shared by all the utilities with the water utility only requiring one (1) or
less. The operating expenses may be much better understood if the time spent working on
each utility was better documented. It may be determined that the time spent on water is much
less than anticipated and a full time employee may not be needed.
Water Connection fees for the White Pine Lodge should have been in excess of $150 000.
(Figuring 50 condo units ~$3 000. per hook up per unit.) These fees should have been used to
improve and increase capacity for the water system. It is my understanding no water
connection fee for any of the 50 units was transferred to the water utility. The cost of
increasing capacity should not be the responsibility of the current customers. These same
customers should not pay to increase capacity nor improve fire protection to major resort
buildings. Simply, it is a developer cost and responsibility.
If the cost of building the White Pine Lodge infrastructure is identified as part of the
509K, it should have been paid for by the developer, not identified as a cost to improve the
system for the current customers. A check should be made to understand the exact nature of
the 509K cost basis being added to the value of the system. The increase in the systems
reservoir and the addition of a new well were for the most part needed to increase the
capability of the system for new connections. The cost associated with expansion should be
borne by new customers , not current customers.
One of the fundamental problems is that the Resort owns all the property that will be
developed in the future. As improvements are added for capacity, the Resort as the primary
developer will benefit at the expense of the current customers. Hookup fees are a key part of
retaining a balance by having new hookups pay for expanded capacity and new water sources.
If Harbor receives the increase in fees, the additional income should be used to improve
the current water system and the expansion of new systems. (Where are the water hook-up
fees which have already been collected? are they improving the system?)
Depreciation is used by Resort Utilities for their basis of value for a return on investment.
The value they use is not based on a price they paid for the utility but by an appraisal of its
value (it was part of a Bankruptcy for the whole resort). An appraisal is only an estimate of
value
, "
not a fact" and can be challenged. The systems value should be appraised at a much
lower value due the fact that the real value is only what you can sell something for. With the
level of return that Resort Utility states for the water system, the value of this asset is much
less, if anything at all.
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To:
To:
To:
Mel Bailey and Marsha Bell
110 Crystal Court
Sandpoint, Idaho 83864
(208) 263-711 7
mbat1ake~televar .com
Home owner Crystal Springs , Schweitzer
Idaho Public Utilities Commission
O Box 83720
Boise, Idaho 83720-0074
Phone: [phone]
Fax: [phone]
Mail: secretary~puc.idaho.gov
Dean J. Miller
McDevitt & Miller, LLP
420 W. Bannock Street
O. Box 2564-83701
Boise, ID 83702
Phone: [phone]
Fax: [phone]
Mail: ioe~mcdevitt-miller.com
Time Elsea, P .E. Director
Resort Water Co., Inc.
Discovery Center - Selkirk Lodge-Schweitzer Village
Sandpoint, ID 83864
Mail: telsea~schweitzer.com
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
Case No. RES-O4-
IN THE MATTER OF THE APPLICATION OF RESORT WATER
CO9., INC. FOR THE ISSUANCE OF A CERTIFICATE OF PUBLIC
CONVENIENCE AND NECESSITY, FOR APPROVAL OF RATES
AND CHARGES FOR WATER SERVICE, FOR APPROVAL OF
RULES AND REGULATIONS GOVERING THE RENDERING OF
WATER SERVICE
APPLICATION FOR THE ISSUANCE OF A CERTIFICATE OF
PUBLIC CONVENIENCE AND NECESSITY AND TO ESTABLISH
RATES AND CHARGES FOR WATER SERVICE AND REQUEST
FOR MOMDIFIED PROCEDURE
I wish to thank the LP.C. Commissioners and staff for the opportunity to
comment on the above referenced case. My comments are as follows:
Case No. RES- W -04-
Idaho Public Utilities Commission
www.puc.state.id.
Please review the following concerns about the basis
for the rate increase for Resort Water. We feel that
when a rate increase is warranted, the increase should
be granted in the best interest of both the customer and
the water company. We do not want a water company
to be working at a loss, for it only increases the chance
of problems which could affect the health and safety of
their customers. When a company wants an increase
that is not justified it is your job to protect their
customers. We thank you for your efforts in this case.
The water usage determined by Resort Water for its
residential units seems to be flawed. Leaks combined
with high pressure can be a factor in this high water
usage calculation. A similar system in the area with
more residential customers has significantly less usage
for the same periods. Resort Water has calculated that it
uses over 4 000 gal/month (48 000 gal/yr) per
equivalent residential units (ERU s) in an average
month. The peak usage is over 8 000 gal/month. The
similar system has an average usage of less than a 1000
gal/month in an average month and less than 2000
gal/month in a peak usage period (average of 10 000
gal/yr). As an example , yearly water usage, as
determined by meters on a 20 unit building in Resort
Water s District for the past 23 years, has averaged a
little over 10 400 gallons/year. Even if the 10 400
gallons/year is increased by 50%, to 15 600
gallons/year, the usage rate is less than what Resort
Water predicts. Snow making and other activities
operated by the parent company may not be factored
correctly and could affect this vital calculation.
Snow making, even though limited, is a major water
user. The current snow making at Schweitzer uses all
the water that the wells can produce when it is running
(150 to 200 gpm). Most resorts have a raw water
source for snow making. Using domestic water is not a
consideration, due to the amount of water and the
demand on system components (high pressure and high
flow rates).
The 12 ERU s for snow making seems to be low.
Consider:
Snow making uses between 150 and 200
Gallons/minute (72 000 to 144 000 gal per 8 to 12 hour
day)
Snow making is done for 7 to 14 days per year
(504 000 to 2 016 000 gallons/year)
If water usage per ERU is 10 400 to 15 600
gal/year, the minimum ERU for snow making is 32
ERUs, and the maximum is 194 ERU.
The operating expenses appear to be unusually high for
a company that should be sharing both office space and
personnel with Resorts Utilities other operations
(sewer, cable TV and snow removal). Given the
limited season of intense operation and the labor pool
within Resort Utilities and Schweitzer, the cost for this
should be less. Please give us an explanation of the
break down of the cost: is it one full time employee
20% of book keeping and billing, cost of operating
equipment electric, chemicals etc, overhead
management cost, floor space, etc.
As an example, the cost for billing should be shared
with these utilities. Sewer, TV and snow removal are
billed to all home owners at Schweitzer while water is
only billed to the owners within the area served by
Resort Water (approximately 1/3 of the total). The
billing cost for water, if divided by the bills sent, should
only be a small percentage of the total cost of billing
(20% or less).
Personnel cost should be shared with other Resort
Utilities and Schweitzer Operations. The number of
personnel should be efficient for the operation or the
operation should be contracted out or sold. The rate
payers at Schweitzer cannot be responsible nor
expected to pay for a poorly managed and operatedutility.
Utility personnel (3 people?) appear to work on all
utilities. The cost for personnel should be shared by all
utilities, with the water utility only requiring one (1) or
less. It may be determined that the time spent on water
is much less than thought and that a full time employee
may not be needed.
Water Connection fees including White Pine Lodge
should have been in excess of $200 000. These fees
should have been used to improve the water system i.
increase capacity to meet the needs of the new
connections. The cost of increasing capacity should not
be the responsibility of the current customers. The
current customers should not pay to increase capacity
nor improve fire protection to major resort buildings;
this should be the building owner s responsibility.
When the White Pine Lodge was being built, I had
several conversations with the Construction Manager
Jay Lukins. He stated that he was concerned that the
utility infrastructure was significantly overrunning the
budget, but that the utilities would be able to support
future development in the Village area. If the cost of
this infrastructure improvement is identified as part
the $509K, it should have been paid for by the builder
not identified as a cost to improve the current customers
system. A check should be made to understand who
benefits from the $509K that is being added to the
systems value. The increase in the systems reservoir
and the addition of a new well were, for the most part
needed to increase the capability of the system for new
connections. The cost associated with this expansion
should be borne by new customers through hookup
fees , not current customers through monthly billing.
One of the fundamental problems that need to be faced
is that the Resort owns all the property that will be
developed in the future. If the current customers are
paying for the new improvements (added capacity, new
well), the Resort will benefit at the expense of the
current customers. Hookup fees are a key part of
retaining a balance , by having new hookups pay for
expanded capacity and new water sources.
Depreciation is used by Resort Utilities for their basis
of value for a return on investment. The value they use
is not based on a price that they paid for the utility but
by an appraisal of its value (it was part of a Bankruptcy
for the whole resort). An appraisal is only an estimate
of value
, "
not a fact", and can be challenged. The
systems value should be appraised at a much lower
value due the fact that the real value is only what you
can sell something for. With the level of return that
Resort Utility states for the water system, the value of
this asset is much less then stated.
Thank you for the opportunity to provide comments.
Mel Bailey and Marsha Bell
110 Crystal Court
Sandpoint ID 83864
208-263- 7117
Residents at Schweitzer within Resort Water District
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Jean Jewell
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From:
Sent:
To:
Subject:
Ed Howell
Thursday, February 17, 2005 4:54 PM
Jean Jewell; Ed Howell; Gene Fadness; Tonya Clark
Comment acknowledgement
WWW Form Submission:
Thursday, February 17 , 2005
4 : 54 : 0 8 PM
Case: RES-W-04-1
Name: WILLIAM S. ALEXANDER
Street Address: PO BOX 2501
City: SANDPOINT
State: IDAHO
ZIP: 83864
Home Telephone: [phone]
E-Mail: wsa1emaGaol. com
Company: RESORT WATER CO., INC.mailing list _yes _no: yes
Comment description: I AM AN OWNER IN THE HIGHLAND VILLAGE CONDOMINIUM(UNIT 302) AT
SCHWEITZER MOUNTAIN RESORT AND RECEIVE WATER SERVICES FROM THE UTILITY IN QUESTION. I
ALSO THE CURRENT PRESIDENT OF THE HIGHLAND CONDO ASSOCIATION. I AM APPALLED AT THE HUGE
INCREASE IN WATER RATES BEING REQUESTED BY RESORT WATER. THE RUMOR MILL AMONG THE MANY
PARTTIME RESIDENTS AT SCHWEITZER IS THAT THE OWNERS OF THE UTILITY AND SKI MOUNTAIN ARE
ATTEMPTING TO COST SHIFT TO THE RESIDENTS A PORTION OF THEIR REAL ESTATE DEVELOPMENT COSTS
FOR PAST CONSTRUCTION (WHITE PINES) AND FUTURE DEVELOPMENT OF CONDOS AND INDIVIDUAL HOMESITES. THE EXHORBITANT INCREASE IS PROBABLY THE BEST EVIDENCE OF THIS WHEN THE CURRENT
RATES ARE COMPARED TO THE OTHER WATER COMPANY ON THE MOUNTAIN AND TO OTHER NEARBY RESORTS
OF A SIMILAR SIZE , I. E. BIG MOUNTAIN RESORT IN MONTANA. FOR A ONE INCH MAIN BIG MOUNTAIN
CHARGES $20.00 PLUS 4.88 PER 1000 GALLONS OF USE. SINCE MOST CONDOS AT SCHWEITZER HAVE
VERY LOW USEAGE, THIS WOULD INDICATE THE CURRENT RATE OF $33.00 IS PROBABLY SIMMILAR TO
BIG MOUNTAIN AND THEIR IS THUS NO JUSTIFICATION FOR AN INCREASE.
THE RUMOR MILL (MANY INDIVIDUAL OWNERS) SAYS RESORT WATER, MOUNTAIN UTILITY CO., AND
SCHWEITZER/HARBOR ARE USING A VAREITY OF ACCOUNTING MECHANISMS TO SCREEN THEIR ATTEMPT TO
GAUGE THE CURRENT RESIDENTS. NOT ONLY ARE THEY SEEKING HUGE WATER RATE INCREASES BUT ARE
ALSO ATTEMPTING TO INCREASE SEWER RATES AND SNOW PLOW FEES. ALSO IN THE RUMOR MILL ARE
COMMENTS THAT FORMER EMPLOYEES OF THESE COMPANIES HAVE STATED THAT THEY PARTICIPATED
MEETINGS WHERE THIS PLAN TO COST SHIFT WAS SPECIFICALLY DISCUSSED AND APPROVED BY
MANAGEMENT.
AS A NEW FULLTIME RESIDENT AT SCHWEITZER (AS OF 10/1/04) I HAVE BEEN SHOCKED AT THIS
APPARENT EFFORT TO USE THE PARTTIME RESIDENT BASE AS A CASH COW FOR THE RESORT OWNERS. IT
IS A PUBLIC RELATIONS DISASTER FOR THE OWNERS WITH THEIR MOST IMPORTANT CUSTOMER AND VERY
SHORT SIGHTED.
I STRONGLY URGE THE IPUC TO REJECT THIS RATE INCREASE APPLICATION AND REQUIRE RESORT WATER
CO TO PRODUCE INDEPENDANTLY AUDITED FINANCIAL DATA TO JUSTIFY ANY FUTURE RATE INCREASE AND
THAT SUCH AUDIT INCLUDE THE MOUNTAIN UTLITY CO, ITS OTHER SUBSIDIARES AND ITS OWNERS TO
ENSURE THE ACCURACY OF THE ACCOUNTING AMONG THE NUMEROUS CORPORATE AND PARTNERSHIPENTITIES. CURRENT RESIDENTS AND THEIR ACCOUNTING REPRESENTATIVES SHOULD HAVE FULL ACCESS
TO THIS DATA AND SUPPORTING DOCUMENTATION. THANK YOU FOR YOUR ATTENTION.
WILLIAM S. ALEXANDER
Transaction ID: 2171654.Referred by: http: / /www. puc. state. id. us/scripts/polyform. dll/ipuc
User Address: 152.163.100.203
User Hostname: 152.163.100.203