20240319Comments_2.pdf

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-----Original Message-----
From: Diana <[e-mail]>
Sent: Monday, March 18, 2024 9:13 PM
To: secretary
Subject: Case No. SWS-W-24-01

IPUC
PO Box 83720
Boise, Idaho 83720
Case No. SWS-W-24-01

March 18, 2024

Hello,

I am wri�ng regarding a water rate increase proposed by CDS StoneRidge U�li�es (PO Box 298,
Blanchard, Idaho 83804). This is regarding Case number SWS-W-24-01. This u�lity has proposed water
rate increases of 261% to 543%. A�er reviewing the ra�onale for these increases, all of the reasons given
are completely unwarranted.
I ask that you decline the en�re rate request by CDS StoneRidge U�li�es.

1) CDS StoneRidge claims to have “invested” more than $900,000 since ownership transfer. This claim
was made in the official no�ce to users. There is no documenta�on about what types of investment the
u�lity has made. We suspect it is to try to recoup $980,000 the u�lity owner transferred from Esprit
Enterprises/JD’s Resort, as found in Case number SWS-W-23-03 where it was declared this was to be
treated as owner’s equity. PLEASE verify this claim by the u�lity. We suspect that the claimed investment
has not been in infrastructure or system improvements, such as the water system infrastructure….the
wells, pumps, transfer pipe system, etc. are the same as when purchased by the u�lity operator. I
suspect the owner has transferred his OWN money as capitaliza�on, which should be regarded as
owner’s equity and not an expense to be recouped from u�lity customers, as noted in SWS-W-23-03.
Addi�onally, this current rate increase request includes infrastructure expenditures, which we note are
ques�onable, and are detailed below.

2) I believe that when CDS StoneRidge purchased the u�lity, Chan Karupiah, the owner, claimed to have
enough cash and assets to fund improvements and capitaliza�on. He should live up to this agreement
without impac�ng users of the u�lity. Please refer to Case number SWS-W-18-01 when Karupiah
purchased the u�lity. That ac�on declared that “JD Resort (applicant) must demonstrate his financial
ability to operate on its own accord. The notarized personal guarantee of Chan Karupiah to use his
personal finances to support the financial needs of the company is of uncertain value. If Mr. Karupiah
were to file bankruptcy or otherwise being unable to meet all of his financial obliga�ons, a signed
personal guarantee to financially support a legally separate company is dubious value compared to more
standard cash capital or debt instruments likely held by other creditors. Therefore, we require
assurances that JD Resort has the financial ability to operate the system in the public service, not JD
Resort by and through Chan Karupiah. JD Resort must be able to make and pay for ongoing repairs and
have access to capital for major repairs, including pump or well failures…JD Resort must file balance
sheets and income statements with the commission quarterly…JD Resort must file its balance sheet and
income statement for the quarter ended 30 June, 2019, within 60 days of this Order. Subsequent
quarterly financial statements must be filed within 45 days of the quarter end. JD Resort must file
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monthly bank statements showing at least a $50,000 balance un�l JD Resort establishes a bank line of
credit of at least $250,000.

3) The opera�ng expenses absolutely do not jus�fy a rate increase. We believe this proposal is about
greed. The owner of CDS StoneRidge also owns a golf course….StoneRidge. The golf course used to get
its water from the u�lity, about 50,000,000 gallons annually…we have heard the golf course did NOT pay
its water bill at �mes, if at all. The golf course drilled its own water well recently and has separated from
the u�lity for water supply. The u�lity is trying to recapture that lost income from current users. This is
unconscionable.

4) The employee related expenses are minimal. One person to read meters for six months of the year,
who also takes chlorine readings every few days…a part �me employee at best. Another part �me
person to administer billings and receive payments. Chan Karupiah reportedly spends one day per week
at StoneRidge…where he oversees the u�lity, the sewer system, the golf course, and the bar/grill. We
suspect he has allocated too much overhead for expenses into the rate increase paperwork. A complete
forensic audit by IPUC would be appropriate in this instance to verify all financial documents and claims.

5) We understand that, at �mes, if not currently, CDS StoneRidge, the u�lity, has been chronically late
with filings and reports due to the IPUC since it was purchased by the current owner.

Now, let’s review Atachment W in the current CDS StoneRidge U�li�es rate increase applica�on.

1) The owner claims to have financial harm from the reduc�on in water sales to the golf course. The golf
course drilled its own well to avoid water charges from the u�lity. The same individual, Chan Karupiah
owns the golf course and the u�lity. In essence, he was paying himself…the u�lity he owns was billing
the golf course he owns for water. Now…as a result of the new golf course well, the golf course has a
significantly lower cost for water, a huge savings to Karupiah. BUT…now he wants u�lity users to pay for
what HE used to pay. That is simply unconscionable. This proposal actually doubles his gain…reduced
water fees for the golf course AND replace that lost income at the expense of the u�lity users…nearly
50,000,000 gallons of water cost annually! This should not be allowed.

2) The u�lity wants to replace 3 pump motors. To my knowledge, there are currently two working wells
for the u�lity. The applica�on document cites atachment W-1, but it is not included in the available
download paperwork. This expenditure is a responsibility of the u�lity, not the users. The owner should
fund this and absorb the expense, per the agreements made when Karupiah purchased the u�lity (noted
above).

3) The u�lity wants to install (replace?) “backup electrical generators” at water pump sites. The
applica�on document cites atachment W-2, but it is not included in the available download paperwork.
This expenditure is the responsibility of the u�lity, not the users. The owner should fund this and absorb
the expense, per the agreements made when Karupiah purchased the u�lity (noted above).

4) The u�lity wants to purchase a pickup and a 4 wheeler. The applica�on document cites atachment W-
3, but it is not included in the available download paperwork. The use of these vehicles would likely be
shared by other en��es owned by Karupiah, and the expense should be accurately allocated. The owner
should fund these purchases and absorb the expense, per the agreements made when Kaupiah
purchased the u�lity (noted above). HOWEVER, in the “Related En�ty Narra�ve, Asset ownership and
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Exis�ng Leases” document in the current request, it states that Esprit leases to the water company the
following: vehicles and other light truck equipment. How can you have it both ways?

5) The u�lity wants the users to fund the connec�on costs for 20 vacant ploted lots. What Karupiah fails
to men�on in the applica�on is that he owns the 20 lots. The cost for this is detailed in atachment W-4,
which is not included in the available document download. This clearly is an expense of the u�lity and
the lot owner(s)…not the u�lity users.

6) The u�lity wants to install approximately 360 meters to remotely read water usage. The applica�on
cites atachment W-5, but is is not included in the available document download. What is not noted or
projected is the effec�ve savings to the u�lity by not manually reading the meters. This should be an
expense of the u�lity and certainly not the users.

Now let’s take a look at some other concerns.

In Exhibit 1, schedule B, Accumulated Deprecia�on, there is a line item for “structures and
improvements.” Also included are things like supply mains, power pumping equipment, purifica�on
systems, meters, hydrants, etc. But the largest line item is “Structures and Improvements” at
$774,820…by far the largest amount on this schedule. What could this u�lity possibly have at more than
3/4 of a million dollars in this line item? In the documenta�on, it is reported that the u�lity leases
facili�es from other en��es owned by Karupiah. In the “Related Narra�ve, Asset Ownership and Exis�ng
Leases” it states “There is no land included nor, water rights, or miscellaneous equipment included in the
balance sheet for CDS StoneRidge U�li�es”
and “Esprit owns all buildings, and miscellaneous equipment not on the StoneRidge Water Company
balance sheet as well as the remainder land parcels, and ROW rights.” Esprit leases to the water
company the following: office and shop space, vehicles and other light truck equipment, office
equipment, and water rights and use of ROW. What is included in this “structures and improvements”
line item that totals $774,820? Also in this lis�ng is a line item for “Services” at $30,101. What services
are depreciated?

Regarding Atachment L, Exhibit #2 Schedule B Expenses: Labor and Salaries total a whopping $223,267. I
would encourage the IPUC to review, forensically audit and validate this level of expense for a rela�vely
small, simple water u�lity. Meters aren’t read half the year. Chlorine levels are only sampled 2-3 �mes
per week. Billing and payments are processed at a part �me level at best. This number is highly
suspicious.
Regarding Atachment N Exhibit 3 Cost of Capital: Long term debt is listed at $104,005. Water u�lity
users should not be repaying a loan for the owners capital/equity.

The applica�on for a rate increase should not be considered or approved un�l an accurate, complete and
evidence based applica�on is submited.

Please deny this rate increase in its en�rety.

Thank you,

Diana & Terry Walton
80b Columbia Blvd.
Blanchard, ID 83804
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714-323-9571
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