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Review for the Feb. 21 2007 finalization of Stoneridge Water Company charges
to HVR Water users.
The purpose of this review of events is to request a reversal of the costs incurred
to drill the 2nd well by Stoneridge while assuming responsibility for the HVR Water
System. HVR Board Members entered this agreement based on the declarations
of Stoneridge that they had 2 existing wells at the time of our negotiations.
It is our concern and request herewith, that the HVR Water users should not be
assessed charges incurred by Stoneridge to repair, drill or otherwise establish a
second well, based on the following documentation.
Please reference:
Memorandum from Eric Eldenberg P.E. dated Nov. 27, 2002, to HVR
Owners Assn. - Item 4 under advantages for merger.
Notes presented to HVR Water users - Dec. 12 , 2002 meeting (line 2)
Advantages of Merging w/Stoneridge Water System.
James A. Sewell Engineering Report of May 8, 2003 , for the Proposed
Combining of Stone ridge Utilities and Happy Valley Ranchos Water
System. Page 2, page 3, page 9:5, page 17, page 18. Appendix 1- well
logs and map showing location of 2 wells.
Applications for merger, Before IPUC - Order # 29320, 8/ 26/03, pg. 2.
HVR letter to IPUC transferring all responsibility for HVR Water System to
Stoneridge effective Aug 1 , 2004
Letter to IPUC (Mr. Lecke) Feb 9 2005 expressing our concerns of the 2nd
well issue at that time.
A five page overview from J. Olmstead on the status and
recommendations on Stoneridge well # 2. (Rec d. 3/2/05 from DEQ)
It appears that item #7 illustrates that the additional cost for the 2nd well was
$69 203.00. Actual estimated cost (page 3) was $68 000.00. We are requesting
that the actual cost to establish the 2nd well be removed from costs being
allocated to HVR Water users, along with accumulated interest for this amount.
Notice of Application to Increase Rates dated 1/12/07.
HVR percentage of increase would appear to be significantly understated. The
chart shows it as 93 %, when it appears to be 169 percent. Accordingly we
would further request that the overall actual costs being allocated to HVR be
reviewed per the costs and the differences in the percentage of increase as
illustrated on this chart (this also affects the bottom line percent of increase).
We would like to see the adjusted figures.
The last estimated cost per user we received from Stoneridge was in the
neighborhood of $32 to $34 per mo. per HVR user. The present Stoneridge
request for rate approval (with the .67 per 1000 gal) will put the cost minimally
around $42 to $44 per user. This is roughly a $10 per mo. increase, per user
over the life of the loan.
With a 20 year loan (or 240 months) w/86 HVR Users , this would equate to
roughly $206 400 (plus interest) more than the last estimate of $32 to $34 per
month. Just this overage amount is getting close to the $213 000 that was an
earlier estimate of the entire merger. It seems quite excessive.
We thank you for your consideration of our interest and concerns in this matter.
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January 12, 2007
Notice of Application to Increase Rates
This is to notify you that on November 20, 2006 StoneRidge Water Company filed an Application with the Idaho Public
Utilities Commission (lPUC) asking to allow tor the closing out of Phase I and Phase" loans for the Happy Valley Ranchos
(HVR) annexation and surcharge associated thereto, for an increase in the monthly user fees, an increase in the hook-up fees
an increase in the disconnectionlreconnection fees and for clarifications and changes to the Rules and Regulations.
In the Application StoneRidge Water Company is proposing a revenue increase of $153 529 , which represents an overall
increase in rates of 161 %, to be applied to all classes of customers. The proposed changes include: I) A monthly fee to
service the HVR loan will be imposed on all those current and future customers that were or will be added as a result of the
HVR annexation. 2) A monthly service fee to service the well repair loan will be imposed on all current and future
customers within the StoneRidge Water Company service Territory. 3) A monthly user fee increase will be imposed on all
current and future customers within the StoneRidge Water Company service territory. 4) A disconnect/reconnect fee increase
will be imposed on all customers choosing to have their water shut off and turned on at a later date. 5) A hook up fee
increase will be imposed on all customers requesting a new service connection. 6) And clarifications and changes to some of
the General Rules and Regulations.
The following table shows the proposed increase by customer class:
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Customer Class Revenue from tIf Revenue from the % increase
Existing Rates Proposed Rates In Revenue
Residential SR $30 260 T ~ 7 ':"'1 $58 221 92%
Residential HVR $26 968 I '-i 5,56 I $72 549 93%-
Residential - Timeshare 532 i "~1 '/83 $70 015 1882%0 fc/
Commercial - CDS 512 I 14 (P5 977 97%JIL
Commercial - Timeshare $885 I Q3.817 105%
Golf Course Irrigation $19,500 I //10ft:;$30 606 57%
Total $82 657 I t;3 Sl..~$236, 18g 16-1-'
The proposed increase is necessary so that StoneRidge Water Company will have an opportunity to earn a return on its
investments in water facilities which are providing service to customers. StoneRidge Water Company has invested nearly
$450 000 since the last rate increase, in addition to borrowing $439 000 in State Loan Revolving Funds to interconnect the
HVR water system and refurbish the backbone system that have not yet been allowed for recovery in the Company s rates.
An increase in revenue is necessary to support these investments and to maintain a sound financial position. Additionally on
going costs of operations have increased since StoneRidge Water Company s last general rate case.
The proposed increase in rates is subject to review and a decision by the IPUC, which may accept, modify or reject in whole
or in part the proposed increase. A complete copy of the proposal is available at the StoneRidge Water Company s office at
Chatwold Road, Blanchard, Idaho and at the Idaho Public Utilities Commission s office at 472 W Washington, Boise, Idaho
83702-5983. It is also available on-line at the IPUC website:
http://www.puc.idaho.gov/internet/cases/summary.SWSW060 I.html
You can also file a comment on the Application via the IPUC web site at: !H!Q://www.puc.idaho v/forms/i uclipuc.html
Or mail comments to:Idaho Public Utilities Commission
O. Box 83720
Boise, Idaho 83720-0074
A public workshop will be held in the Blanchard Area by the IPUC staff to dispense information and receive comments.
Time and date to be set by the IPUc.
Sincerely,
StoneRidge Water Company
12.
13.
JAMES A. SEWELL & ASSOCIATES
MEMORANDUM
DATE:November 27, 2002
TO:Happy Valley Ranchos Owners Association
FROM:Eric J. Eldenburg, P.
SUBJECT:Advantages/Disadvantages of Connection w/Stoneridge Water System
The following list represents those advantages/disadvantages that J have briefly thought ofrelated to connection of the HVR water system to the Stoneridge water system:
ADVANTAGES:1. Excellent water quality with no treatment, other than minimal disinfection.2. The expensive and labor intensive HVR filtration system can be abandoned.3. Over 300 000 gallons of water storage available for emergency/fire flow use.4. Water supply provided by two wells, for redundancy.5. Fire flow available to lower pressure tier.6. Merging will allow the following:a. One set of operators instead of two.b. One set of water quality tests instead of two.c. One set of administrators instead of two.
The Happy Valley Ranchos Water, Inc board can be abandoned.
When the DEO loan is paid off water rates will be less expensive than before the merger.All o~eration and maintenance work accomplished by existing salaried Stoneridge
personnel , who are available 24/7.
Stoneridge Utilities Company owns a backhoe, which results in less cost for maintenancerequiring excavation.
As a result of the merger process , the HVR water system will be upgraded to includeadditional blowoffs, new fire hydrants , re-coating of existing steel tanks, and additionalstorage capacity at upper reservoir site.
Less work/stress/headaches for HVR residents who serve on the board.
Stoneridge personnel available during normal working hours for questions/comments.
10.
11.
DISADVANTAGES:I. Less local control over water system issues.
Higher water rates until the DEQ loan is paid off.
DEQ LOAN SPECIFICS:
The DEQ loan program will retroactively fUild engineering costs as long as the contract for
engineering services is approved by the DEQ before costs are incurred. The engineer would alsoIlave to meet the Errors and Omission Insurance requirements ($100 000 or 2 x engineeringcontract amount, whichever is greater). Prior approval by the DEQ is also required for any other
project-related costs incurred before the loan is approved.
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Advantages of StoneRidge Water System
- An abundance of excellent water from the aquifer. A proven system that is in place & operating
wi over 300 000 gallons water storage available, Operating on 2 wells for bac
- Regulated by IPU (ID Public Utilities) - any increases for repairs or operating expenses would
have to be approved by IPU prior to assessing an increase to users. Any resulting increase would
be spread over all users on the system, not by selected areas, thus keeping per user costs lower.
There are definite advantages in being with a regulated system, i.e., requires approval of any rate
increases, closer monitoring of the water quality to users, more clout for funding if required.
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If approved by the vote ofH.v. water users, we could most likely have the change-over to
StoneRidge completed by summer or early fall of2003.
StoneRidge can get a 2% interest loan from DEQ to finance the change-over, as opposed to our
getting a loan at going interest rates for needed improvements to our system.
(This allows more of the payment to go to repay the loan, rather than to interest).
- The StoneRidge bid is purposely a bit high for unplanned expense, but we will only be obligated
to pay actual costs to make the changeover - their bid is not a "for profit" bid.
- The cost of the currently needed improvements to our system could be incorporated into the 2%
loan or we can do them prior, to keep the loan amount lower, if we have the funds available. We
might be able to incorporate any balance of our existing loan into the new loan
(l9 2% interest.
Additional fire protection would be brought in to more H. V. home sites.
We would have a contract with StoneRidge that would define their responsibilities in providingour water and maintaining the system.
Ken Corning is presently on StoneRidge payroll as their back-up water system operator, thus his
knowledge of our system will be available to StoneRidge to facilitate a smooth change-over and
continued maintenance.
We have found StoneRidge Representatives to be open, straight forward and professional in
trying to reach an agreement in this matter. They are open to H. V. having a representative sit on
their water board if we so choose. Additionally, DEQ has recommended that it would be in our
best interest to go with StoneRidge, concerning water quality and the present status of our system
and expected future deterioation. (Letter attached).
HV Water is known to be of poor quality. Our changing to StoneRidge water should have a
positive effect on property re-sale in H.V., i.e., better value & less time to sell.
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All things considered, the Water Board strongly recommends that we go with the StoneRidge
proposal to supply Happy Valley with water.,,0
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Newport
600 4th Street West
Newport, Washington 99156
[phone]
[phone]
[phone] Fax
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JAMESA. SEWELL & ASSOCJ.A TES
Consulting Engineers & Land Surveyors
Spokane
Hutton Building
9 South Washington, Suite 708
Spokane, Washington 99201
[phone]
[phone] Fax
Sandpoint
Pend Oreille Professional Center
30336 Highway 200, Suite C
Ponderay, Idaho 83852
[phone]
Fax [phone]
*Civil Engineering *Electrical Engineering *Land Surveying *Building Inspection
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May 9, 2003
State of Idaho
Division of Environmental Quality
2110 Ironwood parkway
Coeur d' Alene, Idaho 83814
Attn: John Tindall P.
RE:Stoneridge Utilities and Happy Valley Ranchos Water Systems
Engineering Report
Dear John
Enclosed is the Engineering Report for the Proposed Combining of the Stoneridge Utilities and
Happy Valley Ranchos Water Systems. Thank you for your assistance during the preparation of
this document.
Construction of the improvements discussed in the report are scheduled for this fall.
Sincerely,
JAMES A. SEWELL AND ASSOCIATES
Consulting Engineers
Joe M. Olmstead P., Partner
Stoneridge Utilities, Keith Rusho, Mary Estes, Wayne Benner
Bridge Partners, Dean Allara
Happy Valley Ranchos Water System, Steve Hites
Newport Office
File
Licensed in Washington, Idaho, & Montana
CDS STONERIDGE UTILITIES LLC
HAPPY VALLEY RANCHOS
WATER SYSTEM' CONNECTION 2003
. 18
ENGINEERING REPORT
May 8, 2003
JAMES A. SEWELL AND ASSOCIATES
Consulting Engineers
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CDS Stoneridge Utilities LLC
Happy Valley Ranchos Water System Connection
Engineering Report
extends from one end of the valley to the other and occupies most of the
width of the valley. The aquifer underlying the Hoodoo Valley
feeds intothe Rathdrum Prairie Aquifer that runs from Sagle southerly to the
Spokane Valley.
L~ ells that supply the SU water system draw their water from this
underground lake of water. The wells that supply the HVR water
systemare located in the Blanchard Creek valley that contributes to the Hoodoo
Valley.
The area included in both developments was extensively cultivated prior
to being broken up into their current development state. There is little
chance that historic artifacts would be found in the developments and no
survey has been undertaken.
The areas within the developments are primarily used for residential
purposes along with the commercial and recreational aspects of the golf
course. HVR is developed with all single family residences set on lots ofseveral acres and larger. Stoneridge includes homes on lotscondominiums and time share condominiums.
There are no known historic cultural resources located within either of the
developments.
HVR is served by water, telephone, and electric utilities. Stoneridge isserved by water, telephone, and electric utilities. Parts of the moreintensely developed Stoneridge development are served by a sewer
system. The lots around Lake Sans Souci are connected to a communitydrainfield located away from the lake, in the golf course fairways. TheStoneridge condominiums and single family homes along the main
entrance road are served by a package wastewater treatment plant that
provides for secondary treatment. See the attached drawing for the shaded
areas that are served by the different wastewater systems. The HVR
homes are sewered with individual on site septic systems.
The flood plain of Blanchard Creek crosses portions of both
developments. HVR is outside the flood plain except for
the well site.Blanchard Creek through Stoneridge is diked, and all the development isbehind the dikes or above the flood plain.
There are no rivers in the area that have been designated "
Wild/Scenic
JAMES A. SEWELL AND ASSOCIATES
Page 2 of20 5/8/2003
CDS Stoneridge Utilities LLC
Happy Valley Ranchos Water System Connection
Engineering Report
Both HVR and Stoneridge developments have their own drinking water
systems serving all the developments.
There are no known public health problems within either of the
developments.
There is no "Prime Agricultural Lands" needing protection.
The aquifer under the Hoodoo Valley has been recently classified as part
of the Rathdrum Prairie Aquifer, which is a sole source aquifer supplyingdrinking water for Spokane and communities in North Idaho.
All the land associated with HVR has been broken into smaller lots
, not allof which have been built on. Stoneridge is continuing to develop. Most ofthe residential lots that have been developed in Stoneridge have not been
built upon. The time-share condominiums are constructed, as is the golfcourse.
Existing Drinking Water Sources, Distribution System, and TreatmentFacilities.
HVR currently is supplied water from a well located near Blanchard
Creek. The water is then filtered to remove the iron, disinfected withchlorine and pumped into the distribution system. From the filter plant
the water is pumped through the linear distribution system serving homes
along the way, until it reaches the lower reservoir. From the lower
reservoir, a booster pump pumps the water through a higher elevation
pressure zone to another reservoir. At 10 000 gallons, these reservoirs arelittle more than holding tanks. A 6 inch diameter ASTM class 160
transmission line connects the lower pressure portion of the system from
the pump at the clear well to the mid elevation tanks. A 3 inch diameter
ASTM class 160 transmission line connects the higher pressure portion of
the system from the booster pumps at the mid elevation tanks to the upper
tank. The lateral lines are made up of 2 and 3 inch diameter pipes.
Stoneridge pumps water from two wells sunk to a depth of 140 feet into
the aquifer located beneath the Hoodoo Valley. Well number
1 is rated at800 gpm and well number 2 is rated at 600 gpm. The water is disinfected
with liquid chlorine before it enters a system of looped pipes that vary
from 1 0 inches down to 4 inches in diameter that distributes the water to
users, and stores water in a 315 000 gallon ground level tank located on a
JAMES A. SEWELL AND ASSOCIATES
5/8/2003Page 3 of20
III
III
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II1II
CDS Stoneridge Utilities LLC
Happy Valley Ranchos Water System Connection
Engineering Report
5 /' When the HVR and SU water systems are combined, the plan is to abandon the
HVR well and filter system, and instead have the combined water system rely on
the two SU wells. These wells are rated at 800 gpm for well No.1 and 600 gpm, for well No.2. As development of the properties continues, additional water
sources may need to be developed. These additional sources could be developed
by increasing the capacity of the existing wells, construction of additional wells
or by a combination of the foregoing possibilities.
Without combining the two water systems, HVR would need to develop another
source of water and continue to deal with filtering the iron out of the well water.
At expected growth rates, the Stoneridge water system would not need the
addition of more water sources in the next twenty years.
CDS purchased the Stoneridge property in March of2001. In February of 2002applications for a Zone Change, Conditional Use Pennit (CUP), Planned Unit
Development (PUD), and a preliminary plat application were submitted the
Bonner County Planning Dept. The applications were reviewed and conditionally
approved by the Bonner County Planning and Zoning Commission and the Board
of County Commissioners.
The approved preliminary plat consists of 112 lots for single family dwellings and
12 lots for condominium development (a total of 45 units) for a total of 157 living
units. The proposed density at total build-out for the new portion of the POD
includes 466 single family dwelling and 123 condominium units.
The POD master plan approved by Bonner County for the Stoneridge
development indicates there are three additional significant pods available for
future development of single family dwellings, excluding the area covered by the
approved preliminary plat. The western portion of the project west of Lake Sans
Soud is designated as the largest area for single family development with an
approved maximwn density of 250 units. The second area is located in the south
central portion of the development and has an approved maximwn density of 60
dwelling units. The third area is located in the eastern portion of the project and
has an approved maximum density of 44 dwelling units.
There are twelve areas approved for the development of multi-family dwelling
units. These locations are scattered throughout the development. The largest
approved condo development is comprised of a maximum of three buildings with
a total of 32 units. The smallest multi-family development is a duplex
development.
JAMES A. SEWELL AND ASSOCIATES 5/8/2003
Page 9 of 20
CDS Stoneridge Utilities LLC
Happy Valley Ranchos Water System Connection
Engineering Report
Th fi e 0 OWIng e summarIzes e new water system
Item SO Portion HVR portion total
Sources of drinking water wells Booster station
---.;,
Number of pumps
Source capacity 800 & 600 gpm 2 x 150 gpm
Disinfection Gas Chlorinator
Number of pressure tiers
Storage reservoirs
Storage capacity 315 000 gal 000 gal &347 000 gal
000 gal
Pipe lengths
12"100 100
1 0"355 355
850 500 350
7 ,950 870 820
7900 900
1 ,400 13,760 100
400 650 050
The cost of the improvements will be paid for with the proceeds of a loan
from the Idaho DEQ Drinking Water State Revolving Loan Fund. A
separate $7 500 grant was obtained by SO from DEQ to prepare this
engineering report and environmental review document. The principal
amount ofthe loan will be the total estimated project cost of $213,450.
The interest rate will be 2% for a period of 20 years for 86 customers
requiring monthly payments of$12.65 for debt service only. The IPUC
will review the information and make the final detennination of the rates.
SELECTED PLAN DESCRIPTION AND IMPLEMENT A TION ARRANGEMENTS
The following advantages will be realized by the HVR customers;
Excellent drinking water quality with no treatment, other than minimal
disinfection.
The expensive and labor intensive HVR filtration system can be
abandoned.
Over 300 000 gallons of water storage available for emergency/fire flow
use.
JAMES A. SEWELL AND ASSOCIATES 5/8/2003
Page 17 of 20
III
CDS Stoneridge Utilities LLC
Happy Valley Ranchos Water System Connection
Engineering Report
Water supply provided by two wells, for redundancy.
Merging will allow the following:(1) One set of operators instead of two.(2) One set of water quality tests instead of two.(3) One set of administrators instead of two.
The Happy Valley Ranchos Water, Inc. board can be dissolved.
All operation and maintenance work on the HVR and SU drinking water
systems will be performed by existing salaried SU Company personnel
who are available 2417. This eliminates the need for the HVR Board to
function as an employer.
As a result of the merger process, the HVR water system will be upgraded
to include additional blowoffs, a new fire hydrant, re-coating of existing
steel tanks, and additional storage capacity at the upper reservoir site.
This work is made possible as a result of the IDEQ loan.
Less worklstresslheadaches for the HVR residents who served on the
Board.
SU Utility Company personnel are available during normal working hours
for questions/comments.
Disadvantages to the HVR customers:
Less local control over water system issues.
Complaints about poor service that are not adequately handled by SU will
need to be brought to the attention of the IPUC.
Higher water rates until the DEQ loan are paid off.
As a regulated utility, SU submits proposed rates and backup data to the IPUC for
review and approval. The IPUC is the final arbitrator of rates that the customers
can go to for rate relief or other changes in service policy. Based on the expected
filings of SU, the following table summarizes the existing and proposed rates to
the customers of the two systems:
Happy Valley Ranchos-Stoneridge-Happy Valley
Existing Existing & New Ranchos-New
Base rates $24.00 base or $20.00 vacation $14.00 base $14.00 base
$5.00 loan payment surcharge $12.65 loan surcharge
Overage 0 - 20 000 gal $ none 30 $/1000 gal 0.30 $11000 gal
rate 20-000 gal $2.5011000 gal
30-000 gal $5.2511000 gal
over 40 000 gal $8.50/1000 gal
JAMES A. SEWELL AND ASSOCIATES 5/8/2003
Page 18 of 20
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Office of the Secretary
Service Date
August 26, 2003
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
CDS STONERIDGE UTILITIES, LLC FOR
APPROVAL OF AN AMENDMENT TO ITS
CERTIFICATE OF PUBLIC CONVENIENCE
AND NECESSITY TO INTERCONNECT WITH
AND ACQUIRE THE SERVICE TERRITORY
OF HAPPY VALLEY RANCHOS, INC. AND
TO IMPLEMENT A SURCHARGE.
CASE NO. SWS-O3-
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ORDERNO.29320 f'" 4'1
On March 17 , 2003, CDS Stoneridge Utilities, LLC (Stoneridge; Company; SU) filed
an Application seeking Commission authorization to interconnect its water system to the
adjoining Happy Valley Ranchos, Inc. (HVR) water system, to borrow funds from the Idaho
Department of Environmental Quality (DEQ) to complete the construction of the project, to
amend its Certificate of Public Convenience and Necessity (CPCN) to include the HVR
customers within the Stoneridge service territory, and to implement a surcharge on the rates for
connecting HVR customers to service the debt and finance charges that will be incurred to
complete the interconnection project
The Commission suspended Stoneridge s Application and ordered the Company to
continue to charge only its current customers the Commission-approved rates and charges until a
Commission Order was issued accepting, rejecting or modifying the Company s Application and
HVR cu..~tomers are provided water service by Stoneridge.Order No. 29254 at 1. The
Commission. also issued Notice of Application, Notice of Public Workshop, Notice of Modified
Procedure, and Notice of Written Comment Deadlines. ld. The Commission Staff submitted its
written comments on July 7, 2003. Fifteen HVR customers filed written comments.
After reviewing the record the Commission grants Stoneridge s Application for the
reasons discussed in our findings.
THE APPLICATION
As stated previously Stoneridge requested Commission authorization to interconnect
its water system with the neighboring water system, HVR. Sometime in 2002, HVR initiated
I HVR is currently a homeowner s association water system.
ORDER NO. 29320
discussions with Stoneridge regarding the possible interconnection of the two systems.
January 11 , 2003, HVR sent correspondence to Stoneridge contending that 82% of its water
users in attendance at a homeowner s association meeting voted in favor of the interconnection
project.2 Exhibit B to the Application. HVR desired to interconnect with the Stoneridge system
to obtain better quality water. The parties contend that the HVR system supply is of limited
quantity and has experienced water quality problems . in the fonn of high iron concentration that
requires fairly expensive filtration.(In comparison, Stoneridge has two wells with large
quantities of good quality water (600 and 800 gallons per minute), an existing chlorination
system and a substantial amount of storage. After comprehensive negotiations between the two
companies Stoneridge agreed to connect its system to the HVR system, subject to Commission
approval and receipt of DEQ financing from the State Drinking Water Revolving Fund. Exhibit
A. On May?, 2003 , Stoneridge and HVR finalized this agreement in the "Water System
Transfer and Acceptance Agreement" that was filed with the Commission on May 14 2003.
The Company has obtained the services of James A. Sewell and Associates
consulting engineers to assist with project engineering and agency review. The Company
engineering consultant filed a report with the Commission entitled "CDS Stoneridge Utilities
LL.c. & Happy Valley Ranchos Water System Connection 2003 Engineering Report" on May
2003. The engineering report provides detailed engineering calculations for the design of the
interconnection project and some minor HVR system upgrades. It also includes a detailed cost
estimate for the project as well as a recommended recovery method for the construction costs.
The report estimates the total project cost to be $213 500. Stoneridge has requested an
equivalent loan amount from the State Drinking Water Revolving Fund that is administered by
DEQ. The Company proposes to recover the debt and financing costs of this project by
implementing a surcharge of $12.65 per month on the bills of each customer benefiting from the
interconnection. Presently that includes only the existing HVR water customers. However, the
Company also proposes to apply the surcharge to any new customers connecting to the system
downstream of the booster pump station serving the HVR system. The addition of new
customers in this location could lead to the retirement of the costs of this project more quickly.
2 On August 1, 2003, HVR filed information showing that of the 60 CUITent HVR customers attending the meeting
on December 12 2002 43 voted for the interconnection project and 9 voted against it.
ORDER NO. 29320 .
'"'---.....""
Dec. 7 , 2004
-::IF
Idaho Public Utilities Commission
P. O. Box 83720
Boise, Idaho 83720-0074
Re: Happy Valley Ranchos Water, Inc.
Gentlemen
Please be informed that effective Aug. 1 2004 , Happy Valley Ranchos Water
Inc. Board of Directors transferred full responsibility for the operation , Main-tenance, customer billing, water tests, and bill paying to CDS Stoneridge
Utilities , LLC.
Easements and assets on hand that are useful in operating the system have
been transferred to CDA Stoneridge Utilities, LLD per our agreement dated May
, 2003.
Effective August 1 , 2004, the water system of Happy Valley Ranchos Water, Inc.is no longer in operation.
Thank you for your assistance in our merger with CDA Stone ridge Utilities, LLD.
Sincerely
Happy Valley Ranchos Water, Inc.
Helen Campilli
Secretary.
C: CDA Stoneridge Utilities, LLD.
Panhandle Health
Mr. Joe Lecke
Idaho Public Utilities Commission
P. O. Box 83720
Boise, Idaho 83720-0074
2/9/05
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Dear Mr. Lecke:
It has recently come to our attention that in the merger of Happy ValleyRanchos Water , Blanchard , Idaho, into Stoneridge Utilities, that it is
necessary for Stoneridge to drill another well. Our concern in this matter, to the best of our understanding, that the HVR users will be assessed
roughly an additional $2.00 per month for the 20 year life of the loan to
Stoneridge, to pay for the well.
In all negotiations and correspondence going into this merger, and in our
justification to HVR water users, it was established that one of the major
benefits that made this merger attractive to HVR was the fact thatStoneridge presented having 2 wells. These would provide adequate capacity
to supply the HVR users and backup to insure uninterrupted service. This
was a primary factor in our decision making process to merge withStoneridge. HVR had only one well and we were facing the need of another
well to have backup capacity.
Our understanding is , that Stoneridge attempted to re-establish the use of
a second existing well and was unable to do so, thus requiring them to drill
another well.
A fter numerous upward adjustments on the proposed expenses of themerger, all to be charged to HVR users, we feel that this is excessive andnot a fair cost to be assessed. We had gone from an original estimate of$27.00 per mo. charge to $32.00 per mo. (incl's $14.00 per mo. base) Now
with this additional $2.00 per mo. we would be at $34.00 per mo. With 87
HVR users, this would be an additional $41 760.00 for the 240 mo. payout.
We do understand that existing Stoneridge customers would be assessed
for this 2nd well since Stoneridge was already their supplier.
Our request is that you review the attached documents that clearly indicate
that we were negotiating in good faith on the established fact that
Stoneridge had 2 wells at the time of our agreement.
Also , that the performance of those wells would be Stoneridge
responsibility through this time of merging our systems and into the future
at least for a reasonable period of time.
There was considerable discussion among HVR users because we were not
asking for any concessions for the value of the existing HVR water system.
We had not asked based on the fact that we were faced with the expense of
putting in another well and the quality of our water was not as good as the
wQter that Stoneridge would be able to provide. Again, as stated , ourunderstanding throughout this entire matter was that Stoneridge had 2
existing wells. Thus, we are requesting that this additional assessment to
HVR users to establish a second operating well, be deni~d.
We thank you for your consideration of our concerns in this matter. Please
advise at your earliest convenience.
Happy Valley Ranchos Water , Inc.
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President
EnclosuresCc: John Tindall , DEQ
HVR Board Members
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CDS Stoneridge Utilities is proposing that the loan from DEQ for interconnecting the drinking water
systems of Happy Valley Ranchos (HVR) and Stoneridge be increased to
COver additional costs for improving the reliability of the combined system. The previous loan amonnt (approved
6/23104) was$359 297 and the estimated revised cost for completing the same scope of work previously approved is
now $428 500. The majority of the cost increase is for constructing a new well to replace Well #2. the June 2004 budget, the plan was to rehabilitate the existiug well so that it could coutiuue providing
600 gpm. After investigating this alternative thoroughly, it was found that the well could not
rehabilitated to provide an adequate supply. The new plan is to drill a new well that wilI
provideenough flow to match what previously was provided by Well #2 (600 gpm).
Background
The preliminary investigation of methods to rehabilitate Well #2 has been completed and various
options studied. Originally, Well # 2 was capable of
pumping 600 gpm at a TDH of 420 feet.
The line shaft pwnp in Well #2 has not worked correctly for many years. The motor would heat up
quickly and could only be operated in the manual mode with a full time operator present.
Phase 2 ofthis StoneridgelHVR Project was to replace the pump, motor and starter panel.
When the contractortried to pull the pump with the derrick mounted on a pick frame
, the pump became lodged and couldnot be removed. A large crane was brought in and the pump was
successfully removed. A TV camerawas brought in to detennine why the pump became lodged in the well.
The camera showed the watertable at 91 feet down. At 108 feet down the remains of the original plastic screen were found wedgedin the well, within the 10 inch casing.
The original wen had been drilled to 144 feet with a plastic screen set between 144 and 124 feet
, andthe 10 inch casing had been pulled back to approximately 124 feet. Some time before the pump was
set last time, the screen had been hooked and pulled up in the well.
When the pump was last set in thewell, the screen became lodged at the 108 foot level. The well has probably collapsed below the
bottom of the casing at 124 feet.
The nonnal way to repair the well would be to advance a new 8-
inch casing inside the existing 10-inchcasing. In this manner, the well would be dug back to its original 144 feet depth. The well would bedug utilizing a new 8-inch casing inside the existing 10-inch casing. The casing would be advanced tothe bottom of the well at 144 feet. Then a 20 foot long telescoping stainless wen screen would be set
at the bottom of the well and the 8 inch casing withdrawn to an elevation of about 124 feet.
submersible pump and motor would be set inside the wen casing, with the pump intake just inside the
bottom of the casing. The 8-inch diameter ofthe wen casing limits the size of pump and motor thatcan be installed in the well. In the case
of the 8-inch casing, the motor would need to be less than 7inches in diameter. The maximum pump and
motor that would meet these criteria would be a 60 horsepower motor coupled to a pump that would
discharge 415 gpm at 420 feet of head.
Page 1 of 5
This first option was rejected because it reduced the dependable system capacity below what is
necessary to assure the customers of Stoneridge Utilities an uninterruptible supply of water. The May
, 2003 engineering report contains calculations pertaining to the required capacity of the sources of
supply to the water system. Appendix 7 of the report calculated that the Average Daily Demand(ADD) for the design of710 Equivalent Residential Users (ERU) was 527 gpm. At that time the sum
of all the pumping capacity of all sources less the capacity of the single largest source was 600 gpm.
(The two sources were 600 and 800 gpm).
This calculation shows that the system could easily continue to provide the nonnal (average) amounts
of water necessary to the residential customers with the largest well out of service. If the rated supplyof water to the system to serve the nonnal demands is less than 527 gpm, then additional sources are
going to need to be developed. This criteria is used because the ADD is the nonnal demand on the
system which can be expected at all times. The loss of the use of a pumping source is to be expected at
anytime, though hopefully it will not occur. The failure could be to any of the pumps, so to beconservative, it is assume to occur to the single largest pumping source. Such a failure is nonnal and
should be planned for to limit the disruption of service to the water system customers.
A second option would be to install the screen similar to the first option above, then the 8-inch casingwould be completely removed, and a packer (a device to seal between the 7.inch screen and 10-inchcasing) would be advanced on the end of the drill rod and then screwed onto the new screen at a depth
of 124 feet. Attaching the large packer to the screen is not guaranteed to work and could end updestroying the screen and not seal the well. If the method of developing the well were successful, thena larger pump and motor could be installed in the sell. With the larger well casing, the maximum size
pump and motor would be capable of discharging 600 gpm at a TDH of 420 feet. This pumping rate isnearly equal to the hydraulic capacity of the new screen, thus maximizing the yield of the well.
The third alternative is to drill a new well in the same well field. The new well would be sized to
produce as much as the other source well (800 gpm). This well would have a 16-inch casing, with a125 horsepower submersible motor driving a pump capable of discharging 825 gpm at a TDH of 420
feet. The existing 10-inch well would be turned over to the golf course and at some future date
Stoneridge could repair the well. The estimated 400 gpm from this rehabilitated well would meet
about 80% ofthe average irrigation demand. lEthe golf course did not want the well, it could beabandoned at a cost of about $5 000.
A fourth option is to use the existing Well No., utilize the rehabilitated Well No.2 (the 8-inch welloption) and drill a third 8-inch well. The total pumping capacity of the three wells in Option 4 would
be 1 630 gpm (Well No. 1= 800 gpm, Well No.2 = 415 gpm, and Well No.3 = 415 gpm) and thewater supply available to supply the system with the single largest well out of commission would be
830 gpm, more than the 527 gpm required to provide for the nonnal usage of all the residentialcustomers.
A fifth option is drilling a new 10" well to provide about 600 gpm. This would provide an adequatesecond source for most situations based on the recommendations in the May 2003 engineering report.
There is a cost savings of $ 27 000 over the cost of constructing a new 16-inch well and the supply
should be adequate for the 20-year design.
Page 2 of 5
The table below summarizes the various options and estimates the cost of each option:
Well # 2
Well # 1Rehab.Rehab.NewExistingExistingWell NewItemUnitswellWellWellCasing Diameter inchesScreen Le~gth feetScreen Diameter inchesScreen opening inches
0-4Screen Capacity ~0.
34.ips gpm/ft 26.26.42.Screen capacity gpm/20 ft 539 539 683 854Pump TDH 420 420 420 420 420Pump rating gpm 415 600 600 825 800Pump diameter inchesPump Power
125 125Cost of well drilling 000 000 $28 000 $ 50 000Cost of pump
$ 25 571 000 $30 000 $ 35 015Cost of structure
$10 000wmng000000 $ 10 000Contingency
Total Cost
571 000 $68 000 $ 95 015
The first option reduces the capacity of the smallest well supplying the Stoneridge system, effectively
reducing the system source fi-om 600 gpm to 400 gpm.
The second option preserves the current systemcapacity, but carries significant risks that it cannot be successfully completed and would incur
considerable expense as well as still requiring that a new well be drilled.
The third option wouldincrease the system source supply trom 600 gpm to 800 gpm. The fourth option would provide more
capacity than required to serve the 20-year design population and the cost will be comparable to thecost for the new 16-inch well (Option 4).
It is recommended that Stoneridge proceed with the fifth option
, the construction of a new 10" welland installation of an 600 gpm pump if the funds can be found to finance this cost. The next best
option is to proceed with the first option. This wonld reqnire the least money now
, bnt would requirethat a third well be developed in the near future. or the capacity of the water system wonld be reduced
by 33% and potentially causing the water system to restrict full delivery to all the
CUlTent customerswhen the largest pump was out of service.
Page 3 of 5
Revised Project Costs
The original HVR project as described in the May 8, 2003 report had an estimated budget cost of
$213 450. Construction is nearly completed on that project (Phase I) and the final budget is $275 000.The Phase I improvements are to serve the HVR customers only. These increases are due to extra
costs associated with Right of Way acquisition, exact location of the pipes, and increased lengths of
some of the parts of the system.
During construction of Phase I, DEQ instructed Stoneridge Utilities to increase the reliability of the
controls serving both the HVR portion of the system and the SU source pumps. The estimated cost
these changes is $153 500. The Phase II work will increase the combined budgets ofHVR and SU by
13%.
The Phase II work, as currently budgeted, includes repair of Well #2 and installation of automatic
controls for cycling the pumps and sending alanns to the operator. The construction of the automatic
controls has been completed and the exact cost is shown in the table below. The cost of completing the
construction of the new well and pumping facility is itemized in the table below, as is the engineering
and contingency allowance.
A comparison to the June 2004 budget is also provided.
June 2004 Costs October 2004 Costs
Phase I $268 097 $275 000
Phase II
Automatic Controls $38 000 $46 455
Well No.2 pump removal 840
New well construction $28 000New 600 gpm pump $30 000Pump house $10 000
Replacement of existing pump $26 000
Contingency 600 600
Engineering original $17 600 $17 600Engineering additional 000
Total cost of Phase II $91 200 $153 500
Total Cost for Ph. I & Ph. II $359,296 $428,500
Life of Loan 20 years 20 years
Interest rate
Phase I Annual Payment $16,400 $16 820
Phase II Annual Payment 580 390Total Annual Payment $21 980 $26 210
Page 4 of 5
The IPUC in Order No. 29507 dated May 28, 2004, has recommended that the costs of the Phase IIimprovements should be born by all the users in the combined
system. The cost of theseimprovements would be financed with an increase in the state loan that is financing the
construction ofthe Stoneridge/Happy Valley Ranchos Water System Interconnection. This loan is by the State
Revolving Fund (SRF) administered through the Idaho Department of Environmental Quality
(IDEQ).The tenDs of the loan are 2% for 20 years. The annual repayment for this portion of the loan would beabout $9 500 per year.
The updated user costs for a typical customer using 6
000 gallons of water per month are estimatedbelow. The rates are set by the IPUC and so it is not possible to say with assurance how the IPUC will
allocate the costs to the various users classes. For this estimate
, it is assumed that the Phase I costs areborn by the HVR customers only through a surcharge on the base rate and Phase II costs are to be born
by all the customers on the combined system. Assuming that the IPUC spreads the costs out unifonnlyamong all the customers, the increase will be the same percentage for all customers; i.
e. a Stoneridgehomeowner would see a $15.80 monthly charge increased to $17.81 and a commercial account wouldsee a $5 000 monthly charge increased to $5 636.
The original rates are ITom the May 8, 2003 report. The revised rates reflect the October 2004 budgetamounts.
Stoneridge Utility Happy Valley RanchosCustomersCustomersoriginal rate revised rate original rate revised rate
Base Charge 14.14.14.14.Phase I costs
12.16.33Phase II Costs 1.78
1.78Overage (iii $0.30/1 000 1.80 1.80 1.80 1.80Phase I Costs
Phase II Costs
Total $15.$17.$28.45 $34.
Page 5 of 5