20070524Fassino direct.pdf

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May 24, 2007
Jean Jewell, Secretary
Idaho Public Utilities Commission
472 W. Washington Street
Boise, Idaho 83720
Re:Case No. UWI-06-
Dear Ms. Jewell:
Enclosed for filing, please find nine (9) copies ofthe direct testimony of Thomas Fassino.
A computer disc containing the testimony is also enclosed.
Our intent in submitting this testimony is to substitute it for the direct testimony of
Wayne Forrey. Wayne was recently involved in a very serious accident in the Idaho back
country and will not be able to attend the upcoming hearing. Rather than delay the
hearing on May 30, 2007, the direct testimony of Thomas Fassino is substituted. Mr.
Fassino has been involved with the Trailhead project from its inception and was the
project manager with direct responsibility for this project. Thomas and Wayne worked
on a daily basis with each other on this project. Thomas' testimony is almost identical to
that of Wayne. The only difference is that Thomas was not a direct participant in the
meeting with Vem Brewer in early February, 2006, and with Stan Bastian and Scott
Nordstrom on May 18, 2006. However, I do not believe there is any dispute as to what
was said by either side at those meetings. Should you have any questions about this
please contact me.
omas C. Morris
Kastera Development, LLC
TCMlbb
Enclosures
372 S. Eagle Road, Suite 375, Eagle, Idaho 83616 Tel: [phone] Fax: [phone] www.KASTERA.com
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Tom C. Morris, ISB No. 2974
Kastera LLC
15711 Highway 55
Boise, Idaho 83714
[phone]
tom morris~kastera.com
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF UNITED WATER IDAHO INC. TO
AMEND AND REVISE CERTIFICATE OF
CONVENIENCE AND NECESSITY NO. 143
CASE NO. UWI-O6-
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
DIRECT TESTIMONY OF THOMAS F AS SINO
May 24, 2007.
Fassino, DI - 1 -
Kastera Development, LLC
Please state your name and business address.
Thomas Fassino, 8850 Emerald St., Suite 164, Boise, Idaho, 83704.
Please describe your employment with Kastera LLc.
I am employed by Kastera Homes LLC, a subsidiary of Kastera LLC ("Kastera
as a land use planner. I have worked on the Trailhead development for almost two years
now. For much of that time, I was the project manager.
What is the purpose of your testimony?
I will generally describe the Trailhead development and Kastera s involvement
with the City of Eagle, Idaho ("City" or "City of Eagle ) and United Water Idaho, Inc.
United Water ) in seeking drinking water for the project and possible annexation into
the City of Eagle.
Please describe the Trailhead development.
Kastera is developing 660 acres of property owned by Legacy Investments LLC
in an un-incorporated area of Ada County within an area generally referred to a "north
Ada County", with access to Willow Creek Road. The property is sometimes referred to
as the Olsen property or the Olsen ranch. Approximately 140 acres in the southeast and
southern most part of the property is included in the City of Eagle Area ofImpact
Boundary. At this time, Kastera does not anticipate that any water service will be
necessary from United Water for this 140 acre area. Approximately 520 acres, which is
the balance of the property, is not within the City of Eagle s Area ofImpact.
Does the Trailhead property have any irrigation or drinking water rights
associated with it?
No.
Fassino, DI - 2 -
Kastera Development, LLC
How does Kastera intend to provide water to the Trailhead development?
Kastera approached the City of Eagle in early February of2006 to inquiry about
water service in the area of the Trailhead property. During this meeting Kastera
discovered that the Trailhead property was not included in the City of Eagle s water
master plan. Wayne Forrey, Kastera s Director of Planning and Development, spoke with
Vem Brewer of Holiday Engineering, who is the City Engineer for the City of Eagle.
They met at Eagle City Hall. Mr. Brewer told Wayne that it would take the City of Eagle
at least two to three years before the City would have a well, water right, and the
necessary storage, pumping and mainline infrastructure in place to provide water to the
Trailhead development. In addition, the City did not master plan to provide water to land
north of Beacon Light Road, which is where the Trailhead property is located. Kastera
was not willing to wait two or three years to develop the property so we approached
United Water to see if they could provide water to the project sooner than the City of
Eagle could.
What did United Water tell Kastera about its ability to provide water to the
Trailhead development?
I met with Mr. John Lee of United Water in February of2006. Mr. Lee explained
that United Water had the current capacity and the ability to provide all of the water
service necessary for the Trailhead development that we were proposing at that time. We
then sent a letter to Mr. Lee on February 21 2006, formally requesting water service for
the Trailhead property via United Water. United Water then filed its Application with the
Commission in April of 2006.
Fassino, Dl - 3 -
Kastera Development, LLC
Did you at some point explore the possibility of annexation with the City of
Eagle?
Yes. At about the same time that United Water was filing the Application, Kastera
sent a letter to the City of Eagle Mayor Nancy Merrill, dated April 18, 2006, requesting a
meeting to discuss possible annexation of the Trailhead property and our Shadow Valley
property. We were aware that United Water served other areas within the City of Eagle
and believed that annexation and water service were two separate issues. On May 18
2006, Var Reeve, President of Kastera, and Wayne Forrey met with two City of Eagle
council members and one staff member to discuss development issues. The issue of water
came up at that time and Councilman Stan Bastian and Councilman Scott Nordstrom
confirmed that, while the City was taking steps to work faster on the process, their City
engineer believed that it could be at least two to three years before the City could provide
water to the Trailhead property area. Kastera informed the City Council members and
staff member that it was working with United Water to provide water for the project
because United Water had immediate capacity and facilities in place to serve Trailhead.
Did you have any further contact with the City as a result of the May 18, 2006
meeting?
Yes. When the City found out that we had requested that United Water provide
water service to the Trailhead property and that United Water had filed the Application
with the Commission, we were contacted by City Councilman Stan Bastian who claimed
that Vern Brewer had been mistaken in his previous assessments of the water situation
and that in fact the City could provide water service to Trailhead within one year. We
were also informed that annexation into the City of Eagle would not be possible unless
Fassino, DI - 4 -
Kastera Development, LLC
we committed to obtain water from the City. Because our goal was to develop our
Trailhead property and be annexed into the City of Eagle, but only if the City could
assure us of certain development issues, and provided the City could in fact provide water
within our time schedule for development, we decided to further pursue the issue with the
City and discussed entering into a Memorandum of Understanding concerning these
development issues.
Did you believe that the City of Eagle could provide you with water as
represented?
No. We had very serious reservations about the City s ability to perform as
represented. We sent a letter to the Commission on July 24, 2006, hoping to get some
feedback and help in determining if the City could provide water in 6 months. We did not
want to agree to annexation and then be without water for two or three years. At a
meeting on August 10 2006 with the Commission staff, United Water, Mayor Merrill
Councilman Bastian, and City of Eagle attorneys, the City again confirmed that it would
not allow annexation if United Water provided water service to the property. At that time
the City further informed all parties that the City would pursue legal action to prevent
Trailhead from receiving water from United Water even if Kastera did not seek
annexation. I felt like the City had put a gun to our head! Wanting to avoid litigation
Kastera determined that it would be prudent to further pursue annexation with the City.
What was going to be the path of annexation for Trailhead?
Kastera was told on multiple occasions by City Council members, staff members
and their attorneys, including in the meeting on August 10, 2006, and in a letter dated
August 25 2006, from Bruce Smith to me, that the City had, or was in the process of
Fassino, DI - 5 -
Kastera Development, LLC
finalizing, contracts and agreements to provide the annexation path for Trailhead. Kastera
was never privy to the exact path of annexation but was told by City attorneys Bruce
Smith and Susan Buxton, and staff member Nicole Baird Spencer that it would go
through the Triple Ridge subdivision to the south of the Trailhead property. Based upon
these representations by City staff and their attorneys, Kastera continued to pursue
annexation into the City and eventually filed an application with the City for annexation
and rezone in December of 2006.
Did the promised annexation path ever materialize?
No. Kastera subsequently determined that the Triple Ridge subdivision had no
agreement with the City for annexation and in fact did not want to be annexed. This was
confirmed with Nicole Baird Spencer, Eagle City staff member and Susan Buxton, Eagle
City attorney. Based on the City of Eagle s inability to identify any existing or planned
annexation path or contractual agreements to support such a path (See CITY OF
EAGLE'S RESPONSES TO THE FIRST PRODUCTION REQUEST OF KASTERA
LLC TO THE CITY OF EAGLE, IDAHO, Response to Request No., a copy of which
is attached hereto), it appears that no annexation path was ever secured. As a result of a
lack of an annexation path and the City's inability to provide water service plus inability
to commit to certain development requests that Kastera deemed critically necessary,
Kastera notified the City by letter dated February 15 2007, that it was withdrawing its
application for annexation and rezone. Kastera also requested a refund of its application
fees.
What are Kastera s current development plans for the Trailhead property?
Fassino, DI - 6 -
Kastera Development, LLC
Kastera is pursuing development of Trailhead within Ada County. Our application
in nearly ready for filing, and Kastera has had several pre-application meetings with Ada
County staff. It is still Kastera s desire that United Water provide water services to the
Trailhead development.
Are you confident United Water can provide immediate water service to
Trailhead?
Yes.
Is Kastera able to develop the Trailhead property in Ada County with water
service from United Water?
Yes.
Does that conclude your testimony?
Yes.
Fassino, DI - 7 -
Kastera Development, LLC
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 24th DAY OF MAY, 2007, CAUSED TO BE
SERVED BY THE MEHOD(S) INDICATED BELOW, A TRUE AND CORRECT COpy OF
THE FOREGOING DOCUMENT:
Dean J. Miller, Esq.
McDevitt & Miller LLP
420 West Bannock Street
PO Box 2564
Boise, ID 83701
ioe~mcdevitt -miller .com
(x) U.S. Mail, Postage Prepaid
() Hand Delivered
( ) Overnight Mail
( ) Facsimile
( ) Email
Gregory P. Wyatt
United Water Idaho, Inc.
PO box 190420
Boise, ID 83719
Greg. wYatt~unitedwater .com
(x) U.S. Mail, Postage Prepaid
( ) Hand Delivered
( ) Overnight Mail
( ) Facsimile
( ) Email
Bruce M. Smith
Moore, Smith, Buxton
& Turcke, Chartered
950 W. Bannock St.
Suite 520
Boise, ID 83702
bms~msbtlaw .com
( ) U.S. Mail, Postage Prepaid
(x) Hand Delivered
( ) Overnight Mail
() Facsimile
( ) Email
Jean Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
PO Box 83720
Boise, ID 83720-0074
( ) U.S. Mail, Postage Prepaid
(x) Hand Delivered
( ) Overnight Mail
( ) Facsimile
rJ1~ Tom C. Morris
Fassino, DI - I -
Kastera Development, LLC
REQUEST NO.1: Please provide a copy of all documentation in your
possession, including all letters, memoranda and emails, that in any way deals with the
Kastera annexation request for the Trailhead Community.
RESPONSE TO REQUEST NO.1: See Attachment No.
REQUEST NO.2: Please provide a copy of all documentation in your
possession, including all letters, memoranda and emails, that in any way deals with the
City of Eagle s plan to provide water service to the Trailhead Community.
RESPONSE TO REQUEST NO.2: See Attachment No.
REQUEST NO.3: Please provide a copy of all written or electronic
communications with any outside or third party consultants (not including legal counsel)
concerning the City of Eagle s ability to provide water service to the Trailhead
Community.
RESPONSE TO REQUEST NO.3: See Attachment No.
REQUEST NO.4: If the City of Eagle has, as of this date, an enforceable
annexation path for the Trailhead Community, please identify in detail such path of
annexation, including all parties involved and the agreements in place to establish such
path. If an annexation path does not currently exist, please provide a copy of all letters,
contracts, agreements, memoranda of understanding, development agreements or similar
documents that the City of Eagle has used in its attempt to establish an annexation path
for the Trailhead Community. Please include any map or maps that show the existing,
intended or anticipated path of annexation for the Trailhead Community.
RESPONSE TO REQUEST NO.4: See Attachment No.
CITY OF EAGLE'S RESPONSES TO THE FIRST PRODUCTION REQUEST OF KASTERA LLC TO THE
CITY OF EAGLE, IDAHO -Page 2 of4 EXH'!?:IT ;J~. 'So
CASe- NO. IAwr- tV-OlerOlf
ATTACHMENT 3
RESPONSE TO REQUEST NO.
CASE NO. UWI-O6-
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1. City Well No.1 (existing)
2. City Wett No.2 (not in operation)
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4. Million-gallon storage reservoir, construct 2007 (by City)
5. Floating Feather Well (existing)
6, Trunk line (Thompson Acres - in process)
7. Booster Pump Station(Kastera)
8. Trunk Line(Kastera)
9. Loop line (Kastera)
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Kastera-IPUC UWI-06-
Eagle (1019.42) 000101