20250428Comments_1.pdf

From: [e-mail]
Sent: Saturday, April 26, 2025 9:09 AM
To: secretary
Subject: Case No. VID-W-25-02, Public Comment
Greetings,
Attached is my public comment package on the Subject Case. Can you please enter this
into the record as a Public Comment?
Case: VID-W-25-02
Title: IN THE MATER OF THE APPLICATION OF TIC UTILIITES, LLC FOR AUTHORITY TO
INCREASE ITS RATES AND CHARGES FOR WATER SERVICE IN THE STATE OF IDAHO
Thank you for your cooperation and work on this matter. I will remain available to clarify
any related issues and assist where possible.
Sincerely,
David Frohnen
545 Green Monarch Lane, Sandpoint, Idaho
Mailing: 105 Vermeer Drive, Suite 2-302
Ponderay, Idaho 83852
[e-mail]
[phone]
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David Frohnen
545 Green Monarch Lane,Sandpoint, Idaho
Mailing Address: 105 Vermeer Drive, Ste 2-302, Ponderay, ID 83852
[e-mail]
April 26, 2025
RE: Idaho Public Utilities Commission Case No. VID-W-25-02
Valiant Idaho/TIC Utilities, LLC's—General Rate Case
Comments from affected property owner and customer. Public Comments.
Revised Calculation for Rates that are"Just and Reasonable".
CONTENTS Page
1. Introduction 1
2. Major Rate Case Issues and Themes 2
3. Detailed Analysis 5
a. Corporate Organization and Financial Structure 5
b. The Idaho Club Development., Growth and Financing 6
4. Operational and Customer Service Issues 12
5. Rate Case—Work Papers and Requested Adjustments 14
6. Adjusted Rates and Comments on Miscellaneous Tariffs 17
7. Summary 18
EXHIBITS 20
1. INTRODUCTION
My name is David Frohnen. Together with my spouse,Christine Frohnen,we own a single-family
residence within The Idaho Club and within the CPCN area of TIC Utilities. We are year-round and full-
time residents and consider North Idaho our best and final home. Also, I am a former water and land
development engineer,certified operator, and private utility company manager with rate case
experience appearing before four different State Regulatory Commissions in the western United States.
I believe that my expanded comments in this brief will assist the parties to find an equitable solution to
the question of"just and reasonable" rates and other issues related to water utility operations in the
community. Additionally, I have addressed most of the major issues that are controversial and proposed
solutions that will expedite progress in our community and minimize the possibilities of collateral
litigation.
We have reviewed the subject application and have major concerns about the requested change in
rates. We are asking the Staff,Commission,and Consumer Advocate to give in-depth consideration to
our regulatory comments below and our requests for specific actions by the IPUC. Consumers of a
monopoly private utility are at the mercy of IPUC to adjudicate "just and reasonable" rates and charges.
We request the IPUC hold public input meetings in the Sandpoint area and please hold meetings
during the summer(seasonal)months at a convenient time and place to assure access to the affected
customers. We also respectfully request that the final administrative hearings be held in Bonner
County,Idaho. A request to increase rates of this magnitude(300 to 400 percent)demands access for
the consumers.
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The Applicant referenced, but did not attach,a Rate Proof calculation in the application to indicate that
the proposed rates will equal the requested Revenue Requirement. Also,Applicant appears to have
erred in completing Exhibit 4"Revenue Requirement" in the Application. Line 12—Revenues at Existing
Rates is$0.00. It should be in the range of the test year revenue of approximately$128,000 and then
adjusted for a full 4 quarters of billing to$170,566.50(not the 3 quarters indicated on Exhibit No 2,
Schedule A.) This impacts line 13 "Total Revenue Requirement"which the Applicant reports as
$251,012. When, upon further review, $251,000 is the requested "INCREASE in Revenue". With
$251,000 as the Applicant's requested Rate Increase and when it is combined with the correct Test Year
Revenue of$170,566.50;the "Total Revenue" requested becomes$422,000.
An analysis of customers and revenue was performed in the Attached Exhibit B11 using data from the
information given in the record, review of Bonner County land records,and applying the Applicant's
request for a commodity(water usage)charge of$.01 per gallon of water. Exhibit B-11 shows that the
average annual monthly bill for an "Active" customer will be$210.00 per month (more in summer and
less in winter). This is a 367%increase. Should the IPUC disallow billing to"Inactive"customers
(vacant lots with service but not taking water),then the Applicant's requested rate for"Active"
customers will be$293 per month or nearly$3600 per year per customer. This is 650%more than the
current rate of$45 per month. The Applicant appears to have erred in the required press release by
citing only an increase of$105 per month (333%).
Please consider the additional unreasonableness of the combined effects on customers for both water
and wastewater monthly services. Should the Applicant's request be approved,and the wastewater
utility continues to be unregulated,customers could expect to pay approximately$600 per month
($7200 per year) combined for water and wastewater services. And this is for a system that requires the
customer to install and pay for a septic tank and pumping system up-front with costs ranging from
$15,000 to$25,000 to the homeowner. Also,The Idaho Club uses a water reuse system giving water to
the golf course for no charge. Such rates for water/wastewater services are unheard of and drastically
would put customers in financial peril. Furthermore,this scenario would destroy the housing resale
market once the utility rates are disclosed to prospective buyers. It's cases like this that makes the
Idaho Public Utility Law essential to regulate all monopoly type utilities for essential services.
Please compare the Applicant's requested increase and monthly rate with the recent IPUC Decision;
CASE NO.VPI-W-24-01, ORDER NO. 36313 in which the original water purveyor for The Idaho Club (V.P.
Inc.) had a flat rate of$75.43 per month approved by The Commission. Surely,there are serious issues
with this Subject Application that IPUC needs to investigate and adjust. Below are specific points,
calculations and requests to assist the IPUC in reaching a more "just and reasonable"set of rates and
charges.
2. MAJOR RATE CASE ISSUES AND THEMES
a. Infrastructure Financing,Contributed Capital and Rate Base
As explained in more detail in the"Detailed Analysis" section of this brief,the Applicant is a "Developer
Water Company". As such,the development program and financing are required to follow a sequence
of steps: 1)Any private water company seeking to serve public customers needs authority from the IPUC
to grant a monopoly for utility services in a designated area. The water company,along with the
developer, submit an application to the IPUC for a Certificate of Public Convenience and Necessity
(CPCN). It is typical that the application also includes a proposed facility plan,financing plan for the
capital requirements,and initial rates for services. 2) Developer and water company design, construct
and operate a water system that complies with all IDEA Fire District, IPUC, and related requirements as
a condition of recording land plats,selling lots and building/selling completed homes. Related, if the
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water purveyor is not an independent"not-for-profit"entity, it is required to be registered and
regulated by the IPUC(Title 50). 3) Financing for the infrastructure is vested in the Developer/Applicant
and the Water Utility accounts for that capital as"Contributed Capital" which is outside of Rate Base. 4)
Developer uses funding sources such as lot sales, home sales, related entities profits(Golf Course,Social
Club, Marina,Cell Towers etc.), loans, or equity investments to the Development Affiliate Company to
finance the infrastructure and attract residents to the community. 5) Property Owners(customers of
the water company)are obligated to pay monthly bills to cover reasonable operating costs(with rates
being in a range comparable to rates in the geographic region),as reviewed and approved by the IPUC.
This program is codified in Idaho Law in Title 50 and Title 61; it was also the arrangement advertised by
the Developer/Applicant and represented as the situation in public reports,sales agreements, and
verbal presentations. However,the developers and water purveyors never applied for a CPCN for the
service area, nor did IPUC ever approve capital investment plans or initial rates. Now The Applicant
"COMES NOW"with an application to seek additional(double) reimbursement for infrastructure costs
and assess inflated operating costs unjustly to the customers of the water company.
IPUC must stop Applicant in its fifth attempt to be unjustly enriched by recovering the cost of mandatory
infrastructure in an additional (double) manner from water utility customers. IPUC also, must set rates
that are "just and reasonable".
Two pertinent excerpts of Idaho Code follow:
Title 50 Chapter 13—Plats and Vacations
50-1334. REVIEW OF WATER SYSTEMS ENCOMPASSED BY PLATS.Whenever any plat is subject to the
terms and requirements of sections 50-1326 through 50-1329, Idaho Code, no person shall offer for
recording,or cause to be recorded,a plat unless he or she shall have certified that at least one (1)
of the following is the case:
(1)The individual lots described in the plat will not be served by any water system common to one (1)or
more of the lots but will be served by individual wells.
(2)All of the lots in the plat will be eligible to receive water service from an existing water system, be
the water system municipal, a water district,a public utility subject to the regulation of the Idaho public
utilities commission,or a mutual or nonprofit water company,and the existing water distribution
system has agreed in writing to serve all of the lots in the subdivision.
(3) If a new water system will come into being to serve the subdivision, it has or will have sufficient
contributed capital to allow the water system's wells,spring boxes, reservoirs and mains to be
constructed to provide service without further connection charges or fees to the landowners
of the lots,except for connection of laterals, meters or other plant exclusively for the lot owner's own
use.
Failure to comply with this section is a misdemeanor subject to the provisions of section 50-1329, Idaho
Code.The certification must be filed or recorded as part of the plat document preserved for public
inspection. Property owners in the area encompassed by the plat will be entitled to the benefits of the
third provision of this section when that option is chosen.
[50-1334,added 1990,ch. 178, sec. 1, p. 377.]
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Idaho Title 61—Public Utility Regulation(as linked to Related Idaho Code)
Section 31.36.01 Policies and Presumptions for Small Water Companies of the IDAPA 31 of the Idaho
Public Utilities Commission which states"102. PRESUMPTION OF CONTRIBUTED CAPITAL(RULE 103).
(3-31-22) In issuing certificates for a small water company or in setting rates for a small water company,
it will be presumed that.the capital investment in plant associated with the system is contributed
capital, i.e.,that this capital investment will be excluded from rate base."
Further,the IPUC already ruled on the treatment of developer infrastructure costs in a recent Decision,
of which the Applicant was a Party.
IPUC Order No.35971,Case No.GSW-W-23-01-See bottom of Page 6.
"For example,the evidence in the record does not show that the Selling Parties [Valiant] or any other
entity involved in the construction of the water system have not recovered the cost of this endeavor
through the sale of lots in the area that it serves. Consequently,all current plant-in-service of the Selling
Parties'water system shall be excluded from rate base."
b. Books and Records,Expenses Audit,Customer Accounts
As an initial rate case for the"developer water utility", IPUC should take special steps to ensure the
Applicant has proper procedures and controls in place to properly account for monies. Developer utility
companies conduct many complex intercompany transactions for monies and proper accounting is
mandatory to ensure compliance with Title 61 for"just and reasonable" rates.occurs. An audit of the
test year needs to be conducted. Many entries could be mis-classified as expenses when they more
properly should be accounted for as capital replacements and/or"contributions in aid of construction."
Also,the separation of vendor accounts between the land development/club affiliates and the regulated
water utility are a must. This could apply to electric meter accounts, common expenses,common
suppliers and service providers working for both the water affiliate and the development affiliate.
Separate and non-comingled funds are essential for proper accounting for a regulated public utility.
Similarly,we are aware of several customers having complaints on proper and timely accounting for
payments on their accounts and billing practices not in compliance with IPUC rules.
c. Rate of Return Allowance and Tax Treatment
The Applicant is seeking a 12% Rate of Return and a 100%equity financial structure. From review of the
Applicant's organizing documents(contained in public reports and records), it appears that there has
never been ANY equity investment into the business. The organizing documents indicate that all the
initial capital was structured as loans to the Managing Members of the LLC. Such financial structures
should be treated as debt financing by the IPUC. Further,the allowed cost of debt must reflect public
utility debt financing rates(approximately 5%)and not the rate paid for risky land development venture
capital loans. Additionally,Applicant has applied irrelevant gross-up factors to cover income taxes as a
C-corporation would pay when the Applicant is organized as a Limited Liability Company. LLC's typically
have no income taxes paid at the company level and all earnings are "passed through"to investors. In
comparison,the recent rate case for the local electric and gas utility(Avista),settled by WUTA,was for
an overall Rate of Return of 7.32 percent. Additionally, IPUC has policies and precedents for lowering
the allowed ROR based on company performance and management behavior. IPUC should adjust the
ROR and gross-up factors considerably downward.
d. Facility Capacity,Condition and Compliance with IDEQ Standards
From discussions with IDEA, customers,and others;the Applicant(developer/water company) appears
to be struggling with system capacity and overall infrastructure completion to meet minimum water
system standards as promulgated by IDEA and related agencies. Key concerns of deficiency remain for
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water well pumping capacity,fire flow storage, minimum system pressures, reliability in power outages
and related technical concerns. From review of Plats, IDEQ facility plans,operating records,and water
quality compliance reports—the developer/water company will need further infrastructure work just to
bring the system to the standards required for initial operation. Customers should not be required to
pay for capital investments just to meet the original—initially required infrastructure requirements(see
discussion on Rate Base and Contributed Capital) nor should existing customers contribute capital or
return on capital used by the developer/water company for extending service to new growth areas.
e. Need for future Audits, Monitoring and Enforcement
The unique nature of this case along with the history of the development operating outside the required
compliance of the Public Utilities Act and other Statutes, calls for ongoing monitoring, audits and
enforcement.Additionally,the changing financial conditions expected due to significant rapid rates of
new customer connections as well as on-going compliance issues and expansion plans with IDEA require
close monitoring of operations and finances to protect the public interest.Customers living in the
development have no other option for water supply and are at the mercy of the IPUC to ensure the
monopoly water company is operating by IPUC rules and that rates are "just and reasonable."
3. DETAILED ANALYSIS
a. Corporate Organization and Financial Structure
The Applicant is a "Developer Owned" water company. It is not an independently owned and operated
utility company. TIC Utilities is established as an LLC and enjoys the benefits of Partnership tax status(a
'pass-through'entity) and is not subject to corporate taxation rules. Further,Applicant is privately
owned and part of a group of affiliated companies whose main business is the purchase,development,
and sale of real property in Bonner County, Idaho along with ownership and operation of a private Golf
and Country Club as well as ownership and operation of a prospective Marina on Lake Pend Oreille.
Additionally, past affiliates appear to include a property management company and a real estate sales
company. As with most"developer owned"water companies,the owners' main business is NOT
operating a water utility but focusing on the land development and related lot sales and club/resort
businesses. As in the case of The Idaho Club—the need for a public water system and company.is
merely a means to support the affiliated and more major business purposes of the developer.A typical
scenario for many successful master planned communities relying on a "developer owned"water
purveyor is to contribute capital to the water utility,operate the water utility with subsidized rates until
a majority of homes/lots are sold at which time the developer exits the water business for no gain (nor
recovery of sunk initial start-up costs), and a new entity is able to operate and maintain the water
system at reasonable rates.
"Developer water companies" require more investigation, research, disclosure and regulation than
independent stand-alone water companies. The IPUC most recently expressed problems and concerns
with a similar"developer water company" in Case SW-W-24-01—CDS Stoneridge Utilities(see
Referenced Exhibit A4).
Common issues and concerns for the IPUC to audit and investigate include:
- Establishment of initial books and records and ongoing maintenance of said books in
accordance with NARUC standards.
- Systems of financial controls and internal audit procedures to ensure revenue and expenses,
as well as contributions and capital accounting, are appropriately controlled, reviewed and
entered into the records with no co-mingling of funds between the affiliates.
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Independence of the water utility from the other affiliates and full accounting for any and all
intercompany financial arrangements. Particular attention should be focused on accounting
and apportionment of utility,supplier and contractor/vendor invoices used in common by
both TIC Utilities:and the other Valiant development affiliates.
- Disclosure and avoidance of any conflicts of interest and transactions that are or may be
construed as"self-dealing".
Customers are at the mercy of regulatory agencies to establish "just and reasonable" rates
for services and protect water utility customers from undue risks associated with high risk
and high profit business interests related to land speculation,golf course operation, real
estate sales, and marina construction and operation.
Specific Requests of IPUC:
1. Conduct audits(consider on-site),data requests or similar methods to ensure quality of books
and records,and accurate data.
2. Require full disclosure of all affiliate companies,their business activities in general,and all
investors, managing members,officers,or debt holders of the Applicant and all Affiliates.
3., Adjust capital structure (debt/equity ratios)to mirror those of optimized water utilities and in-
line with the total capital structure of the group of Affiliates.
4. Adjust balance sheet to reflect the treatment of costs for initial facilities to serve the
development as provided by the developer as contributed capital(Contribution in Aid of
Construction). This is as planned,as required on plats and will serve letters,and as promised in
sales literature and sales agreements with customers.
b. The Idaho:Club Development, Growth and Financing
General Water Requirements for Subdivision Developments in Bonner County Idaho:
Various State and County codes and rules of procedure govern the approval and development of
Planned Unit Developments with the primary goal of ensuring safe, consistent and quality land
development for future property owners and to ensure developments conform to County General Plans
as appropriate. The Idaho Club has an established PUD approved via Bonner County.
For plating of individual parcels of land (lots), Idaho Title 50 contains many requirements for the
developer and water supplier to comply with. Idaho Title 50, Chapter 13 Plats and Vacation is
referenced as Exhibit A2 and available in the public domain. Three aspects of this process are
paramount to impacting water system customers. Copies of these typical documents for The Idaho Club
are attached as Exhibit 132) Bonner County—Minor Land Division Application, Exhibit 133)Will Serve
Letter for Water and Sewer Service and Exhibit 134) Final Plat of Golden Tee Estates—91h Addition.
1) Preliminary Plat Application:The County requires assurances that a safe and reliable water
supply will be provided for the subdivision. Exhibit B2 Page 4 of 4 shows Valiant indicates that
the plat in The Idaho"Club will be served by an existing community water system via a private
water company. However,the private water company was never properly registered and
authorized by the IPUC per Title 61 and Title 50. Nor was the community water system
complete and ready to serve the lots with adequate flow and pressure.
2) Will Serve Letter: The County requires a "Will Server Letter"to ensure the utility has adequate
capacity,desire and ability to serve the project.Valiant indicated as such.
3) Sanitary Restrictions on the Final Plat. Panhandle Health District indicates that there are
certain restrictions on water and sewer infrastructure affecting the sale of the platted lots.
More specifically,Title 50,Section 50-1334.REVIEW OF WATER SYSTEMS ENCOMPASSED BY PLATS,
requires a private water system to be under IPUC registration. AND,Title 50 requires review and proof
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that there is sufficient capital available for the project such that it will be :`Contributed Capital"for the
purpose of establishing and/or expanding the water system facilities. All these conditions apply to the
Applicant and its Affiliates.
IPUC Policy on Contributed Capital:
To address the development of land serviced by a private water company, IPUC has a policy that
recognizes the need for significant"contributed capital"to establish an adequate water system meeting
IDEA and related standards. Please see referenced Exhibit A3,IDAPA 31—IDAHO PUBLIC UTILITES
Commission 31.36.01—Policies and Presumptions for Small Water Companies. This policy simply
confirms and documents the normal developer financing approach for establishing a water system. That
is,the developer provides the funds and/or constructed facilities for supplying water to the
development and incorporates these costs into the overall land development business model. That is,
include the costs for water service infrastructure into the lot sales price. Also,the water company must
book the funding from the developer as either advances or contributions in aid of construction. The
Subject Application appears to show confusion as to the proper and just accounting for these
development costs.
In addition to the IPUC policy on contributed capital,there are other, practical, reasons why the initial
capital outlay for water system infrastructure cannot be treated as rate base with full recovery via
depreciation, return on investment, and coverage of expenses. One reason is because, in the early years
of a new development,such costs would be exorbitant and "unjust and unreasonable" severely
impacting both the customer's ability to pay and the developer's ability to attract home buyers.
Although beyond the scope of this brief, new developments with water service areas of a municipality,
special district, or"not-for-profit" water purveyor have similar challenges to finance initial infrastructure
costs. There are also similarities and differences as to how these financial challenges are met depending
on if the purveyor is privately owned or not. I am prepared to assist Staff and Commission in comparing
the two models(private versus public)and proving the absurdity of the Applicant's request to seek
reimbursement for initial system capital costs from monthly water service ratepayers.
Following the Applicant's logic on recovery of"start-up" costs, if after the initial year of starting a large
development leads to 3 homes sold, 3 homes could end up having to cover the multi-million dollar cost
for the initial water system infrastructure costs. Certainly,this is an absurd proposal and should be out
right rejected by the IPUC.
Brief History of The Idaho Club Development and Water System:
The Idaho Club has been a golf course and housing sub-division under development for more than 20
years. Valiant Idaho(Applicant's Affiliate)obtained rights to land and development through a
foreclosure process in 2014. Among other documents of interest to this case,are the CCR's(Covenants,
Conditions, Restrictions)for The Idaho Club—attached as Exhibit 131 (abridged to focus on key Case
issues). Specific sections that directly impact this case include:
Section 2.5 Classes of Membership:Voting Requirements This section preserves Super Majority Voting
Rights Retained by the Declarant(Valiant).
Section 5.1 Use of Individual Lots: Prohibition of individual water wells or septic systems.
Section 5.1 makes a physical water service connection and regular payment to a private water and
wastewater system purveyor mandatory as there is no alternative than to connect to the developer's
central system. Matter of fact,the developer advertised these centralized systems as.advantages and
reasons for prospective land buyers to buy in The Idaho Club as opposed to other regional locations.
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This condition of a single alternative for essential water and wastewater service is the very definition of
a monopoly and the paramount reason and mission of the IPUC to regulate the water system per Title
61 "The Public Utilities Act".
Additionally,the foreclosure process and the adjudication Order of the Utilities Ownership and
Operations for The Idaho Club(Case Number CV-2009-0001810, Idaho First Judicial District, Bonner
County,April 17, 2017)required Valiant to comply with State Statutes related to water and sewer
utilities. There was no exemption or waiver of Title 61 or Title 50 compliance. Thus,we understand that
the new Developer,Valiant,was obligated to comply with existing sanitary(water supply) restrictions as
well as comply with new restrictions on sanitary conditions issued by the State of Idaho as a
requirement of Sub-division and resale of sub-divided lots. Such requirements are documented on Plat
Maps of the development,applications and permits with IDEA Panhandle Health District and Bonner
County. It is typical in these land development cases with a new"developer water company"that the
development affiliate is financially responsible for financing the infrastructure and that the water
company records a Contribution in Aid of Construction entry on their balance sheet. More specifically,
information and belief, as well as constructive representations by the Applicant,state that the Water
Company is IPUC regulated and that the operations meet all governmental requirements.
Two of many references,supporting the above financial status of the water purveyor are from the Public
Report- Referenced Exhibit A8, ILS Report 40014 for Sud-division "The Idaho Club" by Office of
Interstate Land Sales Registration. First, page 15 bottom "The Operation of the Water System and
rates are regulated by the Idaho Public Utilities Commission(IPUC):
And second,the Public Report reference-Page 189, (reproduced as attached exhibit B15),section
1010.211 Utilities."a)Water, 1)The water system is complete.At the time of the Public Report(2020),
IDEA and many customers will attest that the water system was not"complete". Water pressure was
inadequate to service many lots that were sold and some inhabited,fire.flow and fire hydrants did not
meet standards, main lines lacked sufficient isolation,and flushing valves and other issues were
deficient as discussed later in this brief.
The fact that a "water corporation" meeting that definition, according to Idaho Title 61 (See Exhibit B16
attached),for a regulated water corporation operated in excess of 20 years with no attempt to obtain
proper CPCN's or other regulatory requirements could be considered reprehensible and the Applicant
should not be rewarded by any undue increase in rates. Even with the transfer of control of the water
system in 2018 to Valiant—six years passed until 2024,when the IPUC conducted an investigation to
regulate the water company, did Valiant submit documents to become properly licensed and regulated.
Customers were told both verbally and, in some cases, in writing,that the facilities were all set for long-
term service and rates would be$45/month. This has been far from reality and customers should not
have to pay twice for the required and promised infrastructure plus exorbitant monthly rates for what
appear to be shenanigans.
Water Quality Issues—Water Capacity Issues-New Water Meters:
At some point under the Applicant's ownership, it was discovered that the water quality was insufficient
due to iron and manganese levels in the water. Applicant is required to meet these water quality
standards. This did happen in conjunction with IDEA oversight and evidence is that water quality
generally is now meeting requirements. However,applicant's request to include these development
infrastructure costs into the water utility rate base is inappropriate and should be classified as CIAC.
Again,these infrastructure costs are the bare bones requirements to meet minimum IDEA requirements
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for a water system and thus come close to the representation to property buyers that a water system is
complete and adequate,as disclosed and represented as"complete" in writing by the Applicant.
Also,the capacity of the water system,conformance to IDEA minimum standards AND the capacity of
the wastewater system has come into controversy in recent months. We understand that IDEA is
requiring updated Facility Plans and Schedules for the development to ensure adequate water and
wastewater capacity. One part of the solution for capacity concerns is the plan by the Applicant to
meter all water usage and charge a commodity rate of$0.01 per gallon or in more common units to the
water utility industry-$10.00 per unit of 1000 gallons. We also understand that the Applicant has
procured and started the process of installing these meters. We have no categorical objection to
metered water. However, it appears a major reason for metering water is the conservation of water
and re-allocation of that water to"free-up"capacity so that the Applicant or Applicant's Affiliate can
extend and expand service to more lots and thus sell more building lots.
As such, again,the initial outlay of capital to construct a water system such that lots are sold at a
premium with a "centralized" water system should be"contributed capital". Customers, after paying a
premium for a lot with centralized water systems that are"complete and ready to serve",should not be
required to pay again to finance a capacity-extending water meter so that the developer can
reapportion water to new development. IPUC has a longstanding policy and numerous case precedents
that such development costs are-NOT part of Rate Base and are treated as Contributed Capital.
Applicant Recent Business Practices:
1) Attempted Sale to Gem State Water:Applicant attempted to sell the water utility to Gem State
Water in 2023.There was a signed Purchase Sale Agreement, however, Gem State Water
requested IPUC approval. This sale would have allowed the developer to recoup the
development costs and put the financing costs onto the customers. While IPUC approved the
sale to Gem State, it did not allow the initial infrastructure (start-up) costs to be recognized in
Rate Base. Please see Referenced Exhibit A5-Case GSW-W-23-01 (Order No 35971)for details.
Shortly after this finding and decision by the IPUC the deal was cancelled (presumably due to the
non-economical aspects of Gem State paying the Applicant's asking price). Shortly thereafter,
IPUC opened case GNR-W-24-01(Order No.36363)to investigate the regulation of.Valiant
Idaho/TIC Utilities and found that TIC Utilities was under the regulation of the IPUC. Reference
Exhibit A6.
2) Attempted Sale to non-independent HOA:Subsequent to the termination of the acquisition of
The Idaho Club water system by Gem State Water in the fall of 2023,Applicant approached the
HOA and attempted to sell the Water System to the HOA in early 2024. Again,this would have
allowed the developer to recoup the development costs (CIAC) and put the risk and cost of
financing on homeowners (customers).Among other problematic aspects of this proposal is a
clause in the CC&R's of the development in which case the developer retains"super voting"
rights and controls all final decisions of the HOA until the developer exits the project (20-30
years later). As you can see—this would hardly allow the HOA to act independently and in the
best interest of the homeowners. The Applicant clearly had a conflict of interest with this
proposal and clearly this transaction could be construed as self-dealing, unjust enrichment,or
manipulative. After a sub-committee of the HOA began to study the proposal and pursue some
"due diligence efforts",Applicant retracted the offer to sell the system to the HOA. Please
reference the attached Exhibit B7-Email notification of withdrawal of sale offer and disbanding
of the HOA water committee.
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3) Attempted Sale to Proposed Developer Controlled County Water District:Also in 2024,the
Applicant attempted to establish a County Water District and sell the water utility assets to the
District without any adjustment for contributed capital. Additionally,the proposed slate of
Directors for the Water District was chosen by the Applicant and 4 of the 5 proposed Directors
all had direct business ties and dealings with the Applicant that created conflicts of interest.
Please reference the attached Exhibit B8—PETITION FOR THE CREATION AND ORGANIZATION
OF THE IDAHO CLUB WATER AND SEWER DISTRICT.Also,the attached Exhibit B9—Idaho Club
HOA Notice of Annual Meeting et al contains the Agenda Item for a presentation on the
formation of a water district.
Essentially,the Applicant proposed to establish a Water District with a Board of Directors
controlled by the Applicant. Then the plan was in place to force the Water District to pay a
premium to the Applicant for water system assets and saddle the customers with debt and high
water bills outside the jurisdiction of the IPUC. This would mean that customers would be
paying twice for water system infrastructure,once via the price in land sales prices to the
Applicant and again via a monthly charge to pay off the indebtedness of the Water District for
funds the District paid the Applicant. Certainly,this scenario is contrary to Title 61,Title 50 and
various civil contract law provisions.
4) Actions of Retribution:The IPUC should be aware of retribution activity by the Applicant and
conduct an appropriate investigation or reduction in the allowed rate of return. The general
theme on this issue is that many customers fear retribution for speaking out or complaining
about utility operations or rates in fear that golf course, social or other Idaho Club privileges
could be revoked by the Applicant. There have been two such known cases in recent years.
IPUC did discuss this issue in the 2024 Regulation Investigation Case(GNR-W-24-01). There may
be other incidents of retribution type behavior contrary to IPUC policy.
5) Unilateral Increase to Monthly Rates—Meter Installations: In September 2024,shortly after
the IPUC Oder to regulate the Applicant and grant a CPCN,Applicant sent Notice to Customers
of a rate increase from$45/month to$100.00 per month and that water meters would be
installed soon and water would be charged at a rate of$0.01 per gallon. (See Attached Exhibit
B10). This action was taken without approval nor consultation from the IPUC—in direct
violation of Title 61 AND the recently issued IPUC Final Decision. Such action might show
contempt. IPUC required the Applicant to retract the rate increase,which they did. However,
another salient issue needs addressing. It appears that the Applicant feels empowered to spend
funds on water meters and installation and meter reading and presumes it will automatically
obtain a rate base adjustment for these investments and recovery of costs in rates. Such major
changes are not automatic and need careful consideration and input from the IPUC, customers
and financial advisors. The regulatory principals of"used and useful', prudent management
decisions,and reasonable costs all need scrutiny and approval by the IPUC prior to inclusion in
customer rates. Such actions should make IPUC question this and other management decisions
and operational expenses as prudent and recoverable in rates. As addressed earlier in this brief,
at the least,the cost for meter installation to extend capacity to future development begs for
treatment as"contributed capital'.
6) Sale of Wastewater Utility Outside any Regulatory Review:Applicant formerly owned and
operated the wastewater system assets servicing The Idaho Club and provided irrigation water
to the Applicant owned golf course at no charge. Applicant sold these wastewater system
assets to Gem State Water in approximately 2023 for a significant amount of money.
10

Wastewater customers in The Idaho Club have received notice that their monthly wastewater
bill is going up by 50%.
Exhibit B16 is attached and includes definitions for"Water System", "Water Corporation"and
"Public Utility"from The Public Utilities Act, Idaho Title 61. The wastewater system uses pipes,
flumes,dams,structures, appliances and other features and provides a beneficial use for hire.
The wastewater systems are owned by a private company and are operated for compensation
within the state of Idaho. Furthermore,section 61-124 makes no qualifying distinction of the
term "water". Historically, it has applied to "drinking water", "irrigation water" and certain
other beneficial uses. Section 61-124 goes on to include "water for power, irrigation,
reclamation or,manufacturing, or for municipal,domestic or other beneficial use for hire."
We contend that the wastewater systems at The Idaho Club meet the definition of a "water
system" and are providing a beneficial use for hire within the state of Idaho. Furthermore,the
reclamation of this wastewater is used for irrigation of the golf course. Thus, it follows,that the
wastewater system and thus the sale of such system should be under the jurisdiction of the
IPUC.
Further, in direct correlation to the scenario for the need to regulate natural monopolies for
essential public services such as the public water system;the public wastewater system needs
regulation in accordance with the Public Utilities Act. IPUC should consider opening a separate
docket item for an investigation into regulation of The Idaho Club wastewater system as a
public utility.
Meanwhile,the Applicant received significant cash funds from the sale of essential public utility
assets with NO regulatory review of its impact and appropriateness to the customers tied to the
monopoly enterprise. This certainly is of concern for the public welfare,yet Applicant
proceeded with no attempt to seek input or review of any outside party nor community
members. The wastewater system was owned by the Applicant-TIC Utilities,thus the
accounting for its operation and eventual sale would be accounted for on the Applicant's books.
IPUC should review the accounting treatment of this transaction (gain on sale?) and ensure that
any offsets or related financial impacts to the "drinking water system" are in compliance with
IPUC rules and policies.
Specific Requests of IPUC:
It is within the IPUC's purview to reduce the level of rate of return for the water company as a
disincentive to the Applicant to attempt further disposal of the assets without thorough vetting and
approval from the IPUC. Further, I believe that the IPUC has other powers and rights to seek
appropriate sanctions relative to the Application and protect the public interest. This was done at
Stoneridge Water in Referenced Exhibit A4—Case SW-W-24.01. ..
We respectfully request the IPUC take the following actions related to these aspects of the case:
1) Enforce the IPUC's policy on "contributed capital"to the fullest extent possible.
2) Recognize and apply,to the fullest extent possible,the requirements for contributed capital to
support water systems per Idaho Code 50 and related statutes. This should be extended to
require the cost of completion of"initial infrastructure"to properly serve the entire sub-division
area with proper water quality, quantity, pressure,and fire protection to be treated as initial
developer contributed capital. Additionally,the addition of water meters is considered essential
11

for controlling the use of water to allow capacity to serve the entire subdivision and the use of
meters is paramount to the developer's plans to limit the amount of wastewater and extend its
capacity. As such,any capital to procure and install water meters should be treated as
contributed capital. Essentially, Plant-In-Service should be reduced on Applicant's Exhibit No 1,
Schedule B to very limited cases where Applicant can prove that TIC Utilities paid for capital
replacements of used and useful equipment and there should be no prospective adjustment up
in Plant-In-Service as it is not"used and useful"and likely should be contributed capital for the
reasons above in the brief.
3) Reduce the allowed Rate of Return for the Application in light of the multiple questionable
business practices, including failure and delay of registering with the IPUC,multiple attempts to
sell the system outside the review/approval of the IPUC, unauthorized attempts to increase
rates and business practices that include the persecution of certain customers to seek
retribution. Past IPUC practices indicate that each occurrence of these unallowed practices is
worthy of a 1.0 percent decline or more for each infraction in the allowed rate of return.
4) Investigate the accounting treatment of the Applicant's sale of the wastewater system and
ensure proper treatment of cash proceeds to the operations and finances of the "drinking water
system".
5) Issue a final order mandating that any sale of the system or assets thereof requires IPUC
approval and actions taken by the Applicant shall, at all times, require full disclosure of any
conflicts of interests, self-dealing,or non-independent operations. And,any such transfer to
non-independent persons or entities be disallowed or restricted to protect customers as"just
and reasonable".
4. Operational and Customer Service Issues
The following list is a sampling of system design/construction,operational and customer service issues
that we ask the IPUC to assist with incentivizing the Applicant to rectify to the satisfaction of the IDEA,
Fire District, customers,and others.
Minimum water pressures. Attached,as Exhibit B12, is IDEA Standard IDAPA 58.01.08, Section 542,
Item 13—Minimum Water Pressure. Until Applicant completed the upper booster pump station, in
February 2025, many lots and some finished houses did not comply with the IDEA standard for 40 psi
minimum of water pressure. The current condition of water pressures in upper zones of The Idaho Club
still have areas of non-compliance. This needs to be rectified and the cost for doing so must be treated
as"contributed capital".
Dead end water mains. Exhibit B12 also includes IDEA standard IDAPA 58.01.08, Section 542, Item 09—
Dead End Mains. Due to the accumulation of sediment and biofilm, dead end mains require periodic
flushing. This standard requires a small flushing valve(blow-off)and pipe to facilitate this flushing.
There are several locations within the project that these valves have not been installed. In particular,the
main line that dead ends between Forrest Highlands and Green Monarch Lane requires a blow off valve
to be installed and periodic flushing of the main line.
Fire flow and storage capacities.There have been several concerns with the spacing of fire hydrants,
maintenance and testing of fire hydrants,adequate fire flow and adequate water storage to fight a fire
in the project. In one instance,there are no fire hydrants along North Star Lane. IPUC should confirm
that any deficiencies in these areas are rectified to the appropriate standards by IDEA,the local Fire
District and appropriate Fire Codes and insurance underwriting standards. IPUC should consider deferral
of an effective date of any rate increase until these infrastructure issues are rectified.
12

Reclamation of iron filter backwash water. The Idaho Club water system requires oxidation and
filtration treatment to meet acceptable levels for iron and manganese in the water(EPA water quality
standards). Currently,the backwash water from the filtration process is discharged to a holding tank
where the sediment is settled and liquid is discharged to the wastewater(sewer)system. This amounts
to approximately 5%of the total well water pumped being wasted to the sewer system. Best practices
indicate that the Applicant should pursue a management practice of: 1)formalize an arrangement with
the wastewater utility provider to formalize the connection with a sewer service agreement and 2)
pursue a program (with IDEA review)of decanting the backwash water and recycle the liquid portion to
the front end of the filtration process. Such practices are common in many iron/manganese removal
treatment plants. If the water system can implement such a best-practice, it will improve system
efficiency substantially and free up system capacities.
Water conservation audits. In addition to the installation of water meters to help conserve water,the
Applicant should consider offering water conservation audits. Specifically, it is believed that many
customers are wasting water by automatic backflushing of home installed iron removal filters and
possibly basement sump pumps pumping to the sewer system. Conducting audits could lead to more
efficient use of the water resources and manage the capacities of both water and wastewater systems
more effectively.
Complete IDEA Facilities Plan. The Applicant should be required to complete an appropriate facilities
plan to the satisfaction of the IDEA standards. Current customers should not be assessed fees for either
meeting the initial requirements of an IDEA water system nor the cost to expand the system to future
lots. Nor should existing customers pay the burden for correcting facility plans when the system was
represented (and required by Statute)to be "complete" and such costs are considered "start-up" or
initial developer costs and treated as contributed capital and not Rate Base.
Customer Service and Billing Issues.The following are deficiencies in accounting/customer service and
operations known to me and many other customers.
- Failure to properly and promptly update customer accounts and give notice of payments—
required by PUC code.
- Billing statements not compliant with IPUC standards for format and information.
- Instances of management collecting revenue and not applying the revenue to a specific
account without undue efforts and complaints by the customer.
Specific Requests of IPUC:
We respectfully request the IPUC take the following actions related to these aspects of the case:
1) Include requirements in the IPUC Final Order, in this subject Case,for Applicant to correct and
comply with the above system operational and customer/accounting deficiencies.
2) Include in the Final Order—A provision that Applicant comply with IDEQ requirements for an
updated and adequate Facilities Plan.
3) Include, in the Final Order,a directive to Applicant to pursue water audits to conserve water and
an effort to communicate more proactively with customers and consider establishing a
customer advisory group.
13

5. Rate Case —Work Papers and Requested Adjustments
The following are specific comments and requested adjustments to the Applicant's submittal of work
papers to support the rate increase.
a. Books and Records—Audit Required.
b. PLANT IN SERVICE—Exhibit No 1,Schedule A. Prove that the Plant in service listed is
actually titled in the name of the Utility Company. If any water system assets are not
properly titled, IPUC should include a provision in the final order for the Applicant to
perfect title and ownership rights to the assets in TIC Utilities. Remove the prospective
entries for Services and Meters as such plant is not in service nor has it been shown to
be "used and useful". Adjust values to lower of"cost or market" per standard
accounting practices.
c. ACCUMULATED DEPRECIATION—Exhibit No. 1,Schedule B. Prove up Applicant's
entries from source documents or adjust as appropriate. Follow NARUC depreciation
schedules.
d. RATE BASE—Exhibit No. 1.Schedule C. Adjust for the following:
i. Remove"known changes"of$83,615.55 for meters and services as these
additions are incomplete;they are not"used and useful", and they are to be
considered contributed capital per discussion above on development
requirements to meet initial system construction,with contributed capital.
ii. Add an amount into Line 8 Contributions in Aid of Construction. This should
reflect all the original capital required for the developer to finish construction of
a water system in compliance with IDEA and related standards. As discussed
thoroughly in this brief—this adjustment should reflect all original costs for
plant in service. This is approximately$968,000 in this case.
iii. Add an amount for Line 9.Working Capital. The range of adjustment should be
approximately$20,000. Applicant and staff should agree on a reasonable
amount.
iv. To the extent that the Applicant can produce invoices and explanations for plant
in service investments that were for equipment replacements and/or upgrades
separate.and distinct from costs to provide the initial water system to service
the development,add an amount for plant in service unrelated to rules for
contributed capital. It is incumbent on the Applicant to request and provide
documentation of this amount. We believe that this amount will be less than
$50,000.
v. Require that the Applicant explain, in more detail,the adjustment in Exhibit No.
1,Schedule C for"Adjustment for Non-Developer Properties". As such IPUC
staff should investigate this adjustment for accuracy and recommend steps for
Applicant to not require such an estimated adjustment in the future. That is, it
appears there are joint or common assets shared with various Applicant
Affiliates. The assets for the regulated entity of the water company should be
separate and distinct and not shared or comingled with any other affiliate.
vi. In total—we believe that Rate Base will calculate as NIL with the adjustments
listed above.
14

e. REVENUES—Exhibit No.2,Schedule A. Adjust for the following:
i. Adjust line 1) Unmetered:from$127,583.50 to$170,111.33. This reflects a full
4 quarters for billing(done on a quarterly basis). Applicant changed from billing
in advance to billing in arrears in the test year. Regardless, any reasonable
revenue estimate needs to account for a full 4 quarters of billing.. The amount
of$170,111.33 is close to past reports from the Applicant on annual water
service revenue. Additionally,the attached exhibit 1311—Reconciliation of
Customer Counts, Water Demand and Revenue demonstrates that this revenue
number of$170,111 is correct. With this Adjustment-"Total Revenue is
$170,566.83.
f. EXPENSES—Exhibit No 2,Schedule B. The expenses listed are considerably higher than
those provided to the HOA when the HOA was considering buying the water system.
Additionally,the expenses to operate a water system with 120 customers actually taking
water are multiple times higher than benchmarks found in the IPUC records for similar
systems and General Rate Cases. Some possible explanations for this difference that the
IPUC staff should investigate and make appropriate adjustments to include, but are not
limited to:
i. Possibly shared or common expenses with other affiliates are not properly
apportioned among the affiliates. One possible example is a common electric
service account.
ii. Salaries of Officers and Directors are prospective and seem disproportionately
high for the size and complexity of daily operation of the water system.
Outsourcing of certain functions may provide certain "economies of scale" as
well.
iii. Materials,Supplies and Maintenance charges,when looked at in detail could be
more appropriately classified as capital expense for Plant in Service. Valve
installations,system rehabilitation,or equipment replacement costs are not
ongoing daily expenses of the water system.
iv. Contract Services—Professional. This needs further explanation. It could be
that engineering costs to update facility plans or similar work to expand the
system should not be assessed to current customers.
v. From previous expense schedules provided to.the HOA,and comparable
expenses of similar systems,we estimate that reasonable annual expenses are
no more than approximately$130,000.
g. INCOME STATEMENT—Exhibit No. 2.Schedule C. Adjust based on the above discussion
to the following:
i. Line 1—Revenue $170,567
ii. Line 2-Operating Expenses $130,000
iii. Line 3 Depreciation (subject to IPUC review) $ 46,783
iv. Line 16—Total Expenses from Operations $176,783
v. Line 19-Net Operating Income -$ 6216-
h. RATE OF RETURN—Exhibit No.3. The following adjustments should be made to the
Applicant's request of an overall ROR of 12%.
L As discussed in this brief, adjust for a more reasonable capital structure of debt
and equity. The organizing documents indicate that the Applicant has no true
equity invested in the company. The capital of the company is provided as loans
from Managing Members and thus should be treated as debt. Such cost of debt
15

should be set at"public utility" debt rates(approximately 4 to 5%)and not the
exorbitant rates found in risky land development venture capital agreements.
ii. IPUC should take under consideration the 2024 rate case for the regional
electrical utility Avista. Please see the Attached Exhibit B6—Avista Allowed Rate
of Return December 23,2024. This case approved a Return on Equity of 9.8%,a
Return on Debt of 5.0%, a 48.5% Equity ratio and an overall Rate of Return of
7.32%. -
iii. IPUC should also take consideration of its recent findings in Case SW-W-24-01
(Order No. 36407) related to Stoneridge Water Company. In this case, IPUC
approved a reduction of 1.0%on Return on Equity based on management
performance and issues with developer affiliates similar to the case at hand.
Also in this Case, IPUC found a cost of debt of 2%and an equity ratio of
approximately 75%.
iv. IPUC should also consider the overall reduction in interest rates since the end of
calendar year 2024. Interest rates on bonds, mortgages, and commercial loans
have all been reduced by approximately 1%in the past 9 months and forecasts
are for further reductions in overall interest rates.
v....We believe that Staff and IPUC should adjust the Applicant's overall ROR as
follows:
1. Starting ROE(based on current economic conditions): 10%
2. Reductions for.management and performance issues:
• Unlicensed Operations—no CPNC. (1.0%)
• Attempt to sell to HOA outside PUC review (1.0%)
• Attempt to Sell to District outside PUC Review (1.0%)
• Retributions actual and inciting fear (1.0%)
• Unilateral Rate Increase without IPUC Approval 1.0%
Total• fum
Add back 50%penalty as one-time good-faith 2.5%
Net Return on Equity—adjusted: 7.5%
3. Cost of Debt,considering AVISTA,Stoneridge and general utility
company debt markets—4.5%.
4. Capital Structure—50% Equity.
5. Overall ROR to be allowed (.5 x4.5%+.5x 7.5%) 6.00%
i. TAX TREATMENT AND ADJUSTMENTS FOR LLC'S. The Applicant is formed as a Limited
Liability Company and pays no income taxes. LLC's are commonly called "pass through
entities.." and.are taxed as a partnership. That is,the LLC pays no taxes directly but
passes the earnings directly to the individual owners/investors. This is considered a tax
optimal arrangement as it avoids the problem of double taxation found in regular C-
Corporation structures. With C-Corps—the Corporation pays taxes at the corporate
level and the investors pay their own tax(double)at the individual level. The referenced
Exhibit A7-IRS Publication on LLC Taxes explains this and is available in the public
domain.
Rate Setting bodies,and,apparently, IPUC have formulas to adjust for the taxes paid by
the utility company. We contend that the organizational structure and cited rate of
returns do not warrant ANY Gross-Up factor to account for corporate income taxes.
Again,there is,NO corporate income tax to account for and the LLC members will simply
pay just ONCE at the individual level for income taxes and are thus treated the same as
16

the C-Corp that has to pay income taxes first at the corporate level and then again at the
investor or stockholder level.
Additionally,the Applicant's work paper on State of Idaho tax rates needs updated.
Idaho House Bill 40 was signed into Law in February 2025,with an effective date of
January 1,2025, and sets the State income tax rate at 5.3%.
Finally,there is no way to determine an appropriate tax rate for an LLC member. It is an
individual case-by-case condition. The IPUC's attempt to use the standard 21%
Corporate rate may be reasonable for a C-corp structure, it is duplicative in the LLC case
and leads to higher ROR for LLC's than C-Corps.
j. REVENUE REQUIREMENT—Exhibit No.4. The following adjustments should be made to
the Applicant's request.
L Line 1 Rate Base $0.00
ii. Line 2 Rate of Return 6.00%
iii. Line 3 Income Required 0.00
iv. Line 4 Income Realized -6216
v. Line 5 Income Deficiency 6216
vi. Line 6 Revenue to Overcome Losses 6216
vii. Line 7 Regulatory Fee Gross Up 505
viii. Line 8 Revenue Needed to Overcome Loss 6721
ix. Line 9 Net Operating Income Required 0
x. Line 10 Gross Up Factor 1.0
A. Line 11 Revenue Requirement for Net Income 0
xii. Line 12 Revenue at Existing Rates 170,567
xiii. Line 13 Total Revenue Requirement 177,288
xiv. Line 14 Percent Increase Required - 3.94%
6. Adjusted Rates and Comments on Miscellaneous Tariffs
Based on the above adjusted revenue requirement of$177,288,the customer counts, and usage data
contained in Exhibit 1311, and the desire to begin metered water rates—we'd like the IPUC to consider
the below rate structure and rate proof as an initial ballpark rate structure.
Flat Rate Charge on ALL Lots—flowing water or not: $45.00 x 320 lots x 12 months $172,800
Commodity Charge on flowing lots,$2.00 per 1000 gallons above 10,000 gallons per month.
- Average usage: 13,500 gallons/month:3500/1000 x$2.00 x 120 flowing customers
x 12 months/year $10,080
Total: $182,880
This revenue proof is slightly greater than the revenue requirement. The IPUC can consider various
other permutations with rate design (that are "just and.reasonable")to achieve the overall revenue
requirement of$177,288.
Several other proposed Rates and Charges proposed by the Applicant should be removed or revised:
- Reconnection Charge—disproportionately high.
- Account Initiation Charge. Should be on.the order of$100.00 not$250.00.
- Meter Testing Charge—disproportionately high.
17

DEQ Charge—should not be direct pass through. Water Testing costs and/or DEQ fees
should be expenses and normalized over a cycle and included in base rates.
- Franchise Charge—NA.
7. SUMMARY
The Applicant is operating a monopoly service company providing essential public water utility services.
As such,Title 61 (Public Utilities Law)and other statutes and principles apply,and Applicant must
comply with them. Also, it should be understood that the CPCN granted the Applicant is revered as a
privilege and the Applicant's"Duty and Obligation to Serve"the public with essential human services is
held paramount at all times. Two, of many,citations detailing the Applicants obligations are found in
Title 61,61-302. MAINTENANCE OF ADEQUATE SERVICE and 61-315. DISCRIMINATION AND PREFERENCE
PROHIBITED.
The Applicant's managers should understand and follow all regulatory requirements to ensure safe and
reasonable services to the public. The Applicant should be held to a high standard of compliance.
A central theme in the Subject Application, and as demonstrated by the Applicant's recent efforts to
divest from the water utility company, is that the Applicant seeks recovery of development"start-up"
costs from ratepayers. Such approaches are patently not"just and reasonable." This brief cites many
working examples and statutes and policies as to why the initial capital to make a complete and wholly
functional system is required to be treated as"Contributed Capital". IPUC must continue with principle
and precedent to deny the Applicant's request in this regard of Rate Base treatment for"grassroots"
initial "start-up"capital. To paraphrase the 1989 Kevin Costner movie "Field of Dreams"—"Build it, and
they will come" has been the mantra and practice of land developers and stadium builders for decades.
The proposed approach from the Applicant appears to be more appropriately paraphrased as"Get them
to come,then we might build it-with additional funds from them:' The citizens of Idaho and the
customers of The Idaho Club deserve a "just and reasonable schedule of rates and schedules.
The water customers within The Idaho Club have suffered for years from unregulated water system
operations leading to issues with reliability of service,questionable customer service practices, unknown
and unadjudicated rates, and, at times, poor water quality and water pressure. We are hopeful that a
brighter light is now shining on the subject water system.
The Subject Application for adjusted Rates and Charges has serious oversights and errors that must be
adjusted. A Final Order should be issued documenting and memorializing the"just and reasonable
rates"for the subject water system.And,where appropriate,the order should address related facility,
operational and customer service issues. Notably,we request that the Commission find that:
1) Plant in Service is"contributed capital
2) Applicant is required to bring the system into compliance with IDEA Fire District and related
standards. Applicant is requested to pursue additional best practices for efficient operation and
develop some customer involvement/advisory program.
3) Test Year Revenue amounts have been understated due to changes in billing methods and are to
be adjusted to reflect a full year(4 quarters of billing).
4) Expenses are reported at levels significantly higher than recent past representations and higher
than similar utilities in the area. IPUC should audit; normalize and adjust expenses accordingly.
5) IPUC should adjust ROR to reflect the actual equity/debt structure and nature of the LLC tax
status as a "pass-through" entity. IPUC should also adjust allowed RO.R downward to reflect
business operations concerns and possible improprieties.
18

6) IPUC should put a program in place for ongoing monitoring to ensure customers pay a "just and
reasonable rate"yet do not pay twice for existing infrastructure nor make payments for the
developer's expansion of the system to serve new customers.
7) The rate structure proposed by the Applicant grossly exceeds the Required Revenue amounts
and needs adjustment to consider the pros and cons of flat rates versus metered rates,
customer counts, usage and future customers taking water at higher rates. The potential for a
utility to "over-earn" in future years due to growth is real and needs monitoring.
8) Address the Applicant's sale of wastewater systems and impacts to "drinking water" customers.
And, open a separate regulatory docket to investigate regulation of wastewater systems.
9) Applicant requires IPUC review and approval of all proposals to transfer,sale, merge or
otherwise materially change the ownership,financial structure,or operation ofthe water
system or TIC Utilities.
We look forward to receiving reliable water service to our lot and paying our fair share for utility service
as determined by the arrangement at the time of our lot purchase and subject to the approval of the
IPUC in setting"just and reasonable" rates.
END
19

EXHIBITS
Exhibits by Reference (available in the public domain):
Al Idaho Title 61—Public Utility Regulation
A2 Idaho Title 50,Chapter 13-Plats and Vacations
A3 IDAPA 31—IDAHO PUBLIC UTILITIES COMMISSION 31.36.01
Policies and Presumptions for Small Water Companies
A4 IPUC Case No.SW-W-24-01 (Order No. 36407)CDS Stoneridge Utilities, LLC—Rate Case
A5 IPUC Case No. GSW-W-23-01(Order No.35971) Gem State Water Company's Application for
Approval of Acquisition of the Assets of the Water Business of Valiant Idaho, LLC
A6 IPUC Case No.GNR-W-24-01 (Order No.36363) Investigation into Valiant Idaho etc.
A6 Idaho House Bill 40:State Income Tax rate reduced to 5.30%, Effective January 1,2025.
A7 IRS Publication 3402,Taxation of Limited Liability Companies
A8 ILS—Public Report 40014"The Idaho Club". Office of Interstate Land Sales Registration. Recent
hot link: https://www.dropbox.com/s/vgkpp8z9dxzuhx9/idahoC[ub-ILSA-ProDertyReport
2020.pdf?dl=0
Exhibits Attached:
B1 The Idaho Club CC&R's: Specifically,Section 2.5 Classes of Membership:Voting Requirements
and Section 5.1 Use of Individual Lots. No individual water wells or septic systems.
B2 Bonner County—Minor Land Division Application-Golden Tee Estates—9th Addition.
B3 Will Serve Letter—Golden Tee Estates 9`Addition "T-lots".
B4 Plat of GOLDEN TEE ESTATES—9T"ADDITION
B5 Welch-Comer Engineers/Surveyors Memorandum on Water System Capacity 3-6-24.
B6 Avista Reference on Allowed Rate of Return—Press Release of December 23, 2024
B7 TIC HOA Committee to Evaluate Purchase of Water/Sewer Systems. Notice of Committee
Disbanded in Email of 3-25-25. Note:The last set of HOA meeting minutes is a draft set from
September 23, 2023. The Draft Set from June 2024 has not been published.
B8 Water District: Idaho District Court—Bonner County. Case No. CV09-24-0269. PETITION FOR
THE CREATION AND ORGANIZATION OF THE IDAHO CLUB WATER AND SEWER DISTRICT
B9 The Idaho Club HOA—Notice of Annual Meeting and Proxy Statement—Agenda with item 3. "A
presentation by Valiant Idaho, LLC regarding forming a water district and other options related
to the transference of the water utility.
B10 September 2024 Notice of Rate Increase from Applicant to Water Customers
B11 Reconciliation of Customer Counts,Water Demand and Revenue. By David Frohnen 4-5-25.
B12 IDEA Standards Sections, IDAPA 58.01.08 Section 542, Item 13-Minimum Water Pressure, and
IDAPA 58.01.08,Section 542, Item 09. Dead end Mains.
B13 Idaho Fire Code Section C105 Hydrant Spacing
B14 The Idaho Club Sales information
B15 The Idaho Club- ILS Public Report—Page 189 et al
B16 Idaho Title 61,Section 124"Water System" definition et al
20

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DECLARATION OF COVEN TS, CONDITIONS,
RESTRICTIONS AND E SEMENTS FOR
THE IDAHO LUB
A Master Planned Unit evelopment
Bonner County,Idaho

t �
foregoing, the primary functions of the Association shall be the management and enforcement of
the Design Guidelines, and the maintenance, operation and insurance of the Common Areas and
Common Facilities.
2�.3 Membership. The Owner of a Lot shall automatically,upon becoming the Owner
of the Lot, be a Member of the Association, and shall remain a Member thereof until such time
as his ownership ceases for any reason, in accordance with the Bylaws of the Association.
2.4 Transfer of Membership. Membership in the Association shall not be transferred,
pledged, or alienated in any way, except upon the transfer of ownership of the Lot to which it is
appurtenant, and then only to the new Owner. Any attempt to make a prohibited transfer is void.
Each membership shall be transferred automatically to any subsequent purchaser by conveyance
of that Lot.
2.5 ' Classes of Membership; Voting Requirements Except as otherwise provided for
herein with respect to appointments to the DRB and establishment of the initial budgets, and
apportionment of assessments, for so long as the title to any part of the Project remains in the
Declarant, the Association shall have two (2) classes of voting membership. One class shill ,
consist of the Declarant, which shall be entitled to five(5) votes for each Lot owned. The other
class of voting membership shall consist of all Owners other than Declarant, who shall be
entitled to one (1) vote for each Lot owned. Planned as well as existing platted Lots shall be
counted. The Property shall be deemed to include 458 Lots (until final platting of all Lots), for
purposes of this section, appointments to the DRB, establishment of budgets and for overall
voting purposes.
2.6 Membership Meetings Regular and special meetings of the Members of the
Association shall be held with the frequency, at the time and place, and in accordance with the
provisions of the Bylaws of the Association.
2.7 Board of Directors. The affairs of the Association shall be managed by a Board
of Directors, which shall be established and which shall conduct regular and special meetings
according to the provisions of the Bylaws of the Association.
2.8 Use of Agent. The Board of Directors, on behalf of the Association,may contract
with a professional management agent for the performance of maintenance and repair and for
conducting other activities on behalf of the Association, as may be determined by the Board.
ARTICLE III
COMMON AREAS
3.1 Common Area. The Common Area shall include all real property and
Improvements within the Project designated as Common Area, excluding the Club Property and
Club Facilities and including open space, Private Roads (together with drainage facilities
associated therewith), sidewalks, common easements, drainage easements, storm water
collection and treatment areas and facilities, garbage collection areas, and any other land.which
may be conveyed to and accepted by the Association, all of which shall be dedicated to the
DECLARATION OF COVENANTS,CONDITIONS,
RESTRICTIONS AND EASEMENTS-6

thereof, or may have subsequently come to have enjoyed thereafter. The Project Documents do
not contain any provisions intended to protect any view or to guarantee that any views that an
Owner may have enjoyed or may come to enjoy will not be impaired or obstructed in the future
by changes to other property including,without limitation, the Club Property or Common Areas.
Each Owner further acknowledges that any rights acquired do not include the preservation of any
view and further consents to any future obstruction and/or impairment of the same. No
representations or warranties of any kind, express or implied, have been given by Declarant, the
Club or their respective officers, employees, partners, subsidiaries, affiliated companies, sales
agents, directors or other agents in connection with the preservation of views and each Owner
and/or the Associations agree to hold the Declarant, the Club, and all of such officers,
employees, partners, subsidiaries, affiliated companies, and directors and agents of any of them
free from liability or such damages, costs, expenses or charges incurred in connection therewith
such as, but not limited to attorneys' fees and court costs and costs arising from any changes,
obstruction or impairment of the view from such Owner's Lot or any part or unit thereof.
ARTICLE V
RESTRICTIONS ON USE
The use of the Property and each Lot and Dwelling thereon is subject to the following:
5.1 Use of Individual Lots. All Lots and Dwellings shall be used for residential
purposes only, and such uses as are customarily incidental thereto, except that no individual
wells or septic systems shall be allowed on any Lot. Those areas designated in the approved
paned unit development for the a Project (the "PUD") for the golf course and subordinate
"commercial" and recreational uses and facilities (including clubhouse, fitness area, spa, pool,
tennis and sport courts, children's center and recreation area, and the like, are intentionally
excluded from this Declaration.
5.2 Business Use Prohibited. With the exception of the business of Declarant in
developing and marketing the Project, no trade, craft, business, profession, commercial or
manufacturing enterprise or business or commercial activity of any kind shall be conducted"or
carried on upon any Lot, or within any Dwelling located on a Lot. Any "home occupation" that
may otherwise be permissible under Bonner County Code, shall be allowed only upon review
and approval of the DRB, and only to the extent that such use will not generate any traffic, the
need for additional parking, on-site sales, or otherwise create objectionable noise, vibration,
glare, fumes, odors, electrical interference or other conditions which might adversely impact
nearby neighbors or the Project.
5.3 Rentals. Notwithstanding anything contained herein which may be construed to
the contrary, any Owner may rent or lease a Dwelling, subject to reasonable rules and regulations
which may be imposed by the Board, and subject to the following: (1) the Cabins, the Lodge
Home.(adjacent to the Clubhouse), and the Presidents Homes (constructed or approved for
construction as of the date of this Declaration) may be rented on a daily basis; and (2) any other
Dwelling may rented for periods not less than seven(7)days at a time.
DECLARATION OF COVENANTS,CONDITIONS,
RESTRICTIONS AND EASEMENTS-10
� 4

E
BONNER COUNTY PLANNING DEPARTMENT
s
1500 Hlt-HWAY2,SIM208,SAN,DPOINT,ID 83864 j208 265-14�5$) (208)265-7 4b3 jFA.Y)
c`tr,ri![iirl.cra?-lemail) N,f<.r:b "r;c�rtxiuin l u�>r(ttaeb page)
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y NINON LAND DIVISION "PLICA TION
FOR OFFICE USE ONLY.
FILE`# RECEIVED: E C E N
PROJECT DESCRI�'I©IN,
Name of Minor Land Division,plat; Golden T Estates 9th Addition
APPLICANT INFORMATION:
Landowner's name: Valiant Idaho, LLC c f o Sewell 8v Associates
--- ---.--..
Mailing address: 1319 N. Division,Ave,
City: Sandpoint : State: ID i Zip code: 83864
Telephone: [phone] ! Fax: [phone]
E-mail: mtaylor a7jasewell,com
REPRESENTATIVE'S INFORMATION:
Representative's name: Martin E. Taylor, AICP,Project Planner
Company name: James A. Sewell&Associates, LLC
Mailing address: 1319 N. Division Ave.
_-- -----_- _ .
City. Sandpoint State: ID Zip code: 83864
.. ......
Telephone: [phone] Fax: [phone] `
-.._ ........__... ------_ __._...... _- ......._...
E-mail. [e-mail]
PARCEL INFORMATION:
Section # 6 Township: 57N Range: lE Parcel acreage: 106.89 (11.41 to be
platted into the four proposed MLD lots)
_..___.
Parcel# (s): RP57N0`1EO63604A (portion)
Legal description:
BEING A PORTION OF SECTION 6, TOWNSHIP 57 NORTH, RANGE: 1 EAST, BOISE MERIDIAN,
BONNER COUNTY, IDAHO MORE PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE 'WEST QUARTER CORNER OF SAID SECTION 6, FROM WHICH THE
NORTHWEST CORNER OF SAID SECTION BEARS N0028'54"E A DISTANCE OF 3739.Is FEET;
THENCE S69634"53"E-, 940:44 FEET TO THE NEST CORNER OF LOT 4, BLOCK 1 OF "'GOLDEN
TEE ESTATES - 7TH ADDITION" ACCORDING TO THE PLAT THEREOF RECORDED IN B60k 9 OF
PLATS, PAGE 13, SAID CORNER BEING THE TRUE POINT OF BEGINNING;
j THENCE N31024'08"W ALONG THE BOUNDARY OF SAID "GOLDEN TEE ESTATES - 7TH
j ADDITION" A DISTANCE OF 400.86 FEET TO THE SOUTHEAST CORNER OF LOT 5, BLOCK 2 OF
'"GOLDEN TEE ESTATES 5TH ADDITION" ACCORDING TO THE PLAT THEREOF RECORDED IN
BOOK 8 OF PLATS, PAGE 81;
Golden Tee Estates 9h Addition Minor Land Division application
1123/19
Page 1 of 4

THENCE ALONG THE BOUNDARY OF SAID "GOLDEN TEE ESTATES - 5TH ADDITION" THE
FOLLOWING THREE COURSES:
1. N20022'07"W, 173.12 FEET;
2. N42°00'47W, 280.90 FEET;
3. N44045'39"W, 143.47' FEET TO THE SOUTHEAST CORNER OF LOT 8, BLOCK 1 OF "GOLDEN
TEE ESTATES - 4TH ADDITION" ACCORDING TO THE PLAT THEREOF RECORDED IN BOOK 8 OF
PLATS, PAGE 80;
THENCE ALONG THE BOUNDARY OF SAID "GOLDEN TEE ESTATES - 4TH ADDITION" THE
FOLLOWING EIGHT COURSES:
1. N2°17'47"W, 170.00 FEET;
2. N290 10'44"E, 89.16 FEET;
3. S60049'16"E, 30.00 FEET;
4. N290 10'44"E, 19.52 FEET;
5. NORTHEASTERLY ALONG A TANGENT CURVE TO THE RIGHT AN ARC DISTANCE OF 34.25
FEET (RADIUS = 20.00 FEET, DELTA = 98-07-08", CHORD = N78°14'18"E 30.22 FEET);
6. SOUTHEASTERLY ALONG A COMPOUND CURVE TO THE RIGHT AN ARC DISTANCE"13.56
FEET (RADIUS = 150.00 FEET, DELTA = 5°10'46", CHORD = S50°06'45"E 13.56 FEET);
7. N42029'29"E, 40.00 FEET;
8. N0058'58"E, 6.61 FEET;
THENCE SOUTHEASTERLY ALONG A NON-TANGENT CURVE TO THE RIGHT AN ARC DISTANCE
OF 24.58 FEET (RADIUS = 195.00 FEET, DELTA = 7°13'21", CHORD = S45°11'09"E 24.56 FEET);
THENCE S41034'28"E, 340.09 FEET;
THENCE EASTERLY ALONG A TANGET CURVE TO THE LEFT AN ARC DISTANCE OF 90.55 FEET
(RADIUS = 60.00 FEET, DELTA = 86°28T7", CHORD = S84°48'37"E 82.20 FEET);
THENCE N51°57'14"E, 162.26 FEET;
THENCE EASTERLY ALONG A TANGENT CURVE TO THE RIGHT AN ARC DISTANCE OF 113.07
FEET (RADIUS = 70.00 FEET, DELTA = 92"3249", CHORD = S81°4621"E 101.17 FEET);
THENCE S35029'56"E, 133.70 FEET TO THE NORTHWEST CORNER OF LOT 9, BLOCK 2 OF SAID
"GOLDEN TEE ESTATES - 7TH ADDITION;"
THENCE ALONG THE BOUNDARY OF SAID "GOLDEN TEE ESTATES - 7TH ADDITION" THE
FOLLOWING FIVE COURSES:
1. SOUTHERLY ALONG A TANGENT CURVE TO THE RIGHT AN ARC DISTANCE OF 138.23 FEET
(RADIUS = 170.00
FEET, DELTA = 46°35'18", CHORD = S 12°12'17"E 134.45 FEET);
2. S56°14'38"E, 281.12 FEET;
3. S36°16'40"E, 114.06 FEET;
4. S42°28'07"W, 325.64 FEET; \
5. S62°15'02"W, 366.84 FEET TO THE POINT OF BEGINNING.
Current zoning: Recreation Current use: Vacant
What zoning districts border the project site?
North: Recreation I East: Recreation
South: Recreation West: Recreation
Comprehensive plan designation: Resort Community
Uses of the surrounding land (describe lot sizes, structures, uses):
North: Timberland and residential
South: Residential
East: Timberland
West: Residential
Nearest city: Kootenai Distance to the nearest city: f6 miles
Detailed Directions to Site: Hwy 200 to S. Idaho Club Dr. to Green Monarch Ln.
Golden Tee Estates 9rh Addition Minor Land Division application
1/23/19
Page 2 of 4

,• ADDITIONAL PROJECT DESCRIPTION:
Existing plat recording information: N/A (land is not platted).
This application is for: Four lot minor land division of a 106.89 acre parcel into four lots leaving
an unplatted 95.48 acre remainder parcel (BCRC, Section12-612[f)).
Proposed lots:
Lot #1 Proposed acreage: 4.92
Lot#2 Proposed acreage: 1.97
Lot #3 Proposed acreage: 2.58
Lot #4 Proposed acreage: 1.94
Describe the land division proposal and resulting acreage: The applicant is proposing to divide a
106.89 acre parcel into four lots leaving an unplatted 95.48 acre remnant.
SITE INFORMATION:
Please provide a detailed description of the following land features:
Topography (lay of the land), including estimated maximum slope, rock outcroppings, benches, etc:
Topography
area to be platted contains rolling hills with several building sites located on benched areas.
Water courses (lakes, streams, rivers & other bodies of water): None.
Springs &wells. None.
Existing structures (size & use): None.
Land cover (timber, pastures, etc.): The site is moderately forested.
Are wetlands present on site? ❑ Yes X No Source of information: NWI
Flood Hazard Zones located on site: ■ X ❑ D ❑A ❑AE DFIRM MAP: 0735E
Other pertinent information (attach additional pages if needed): The MLD has been designed
consistent with the terms and conditions of C832-05.
ACCESS INFORMATION:
Please check the appropriate boxes:
X Private Easement ❑ Existing X Proposed
Describe travel surface (e.g., gravel, dirt, paved, etc.), travel way width, road grade and
easement width. Include recorded instrument number for existing easements & name, if
existing: The lots will be accessed by Green Monarch Lane, a private roadway located within a
private 50'wide right of way.
❑ Public Road ❑ Existina ❑ Proposed
Describe travel surface (e.g., gravel, dirt, paved, etc.), travel way width, road grade right-of-way
width and name, if existing:
❑ Combination of Public Road/Private Easement ❑ Existing ❑ Proposed
Describe travel surface (e.g., gravel, dirt, paved, etc.), travel way width, road grade and right-
of-way/easement width and road name, if existing:
Is public road dedication proposed as part of this minor land division?
❑ Yes X No
List existing access and utility easements on the subject property.
Golden Tee Estates 9th Addition Minor Land Division application
1/23/19
Page 3 of 4

r SERVICES:
1 Sewage disposal will be provided by: _
X Existing Community System - List name of sewer district or provider and type of system:
TIC, LLC Utihties: (1/22/19 "wall serve" letter attached)
Q Proposed Community System- List type i proposed ownersh
Individual system-List type:
Explain the type of sewage system, capacity, maintenance plan, location of facilities, if applicable
and other details: The subdivision is served by a community wastewater treatment system
consisting of a lagoon and land application system.
Will the sanitary restriction be lifted by the Panhandle Health Districts
[�Yes X No
Water will be supplied by:
X Existing public or community system. -List name of provider:
TIC, LLC Utilities. (1/22 j 19 "will serve" letter attached)
Pro-Dosed Community System-List type &proposed owner"Ju
i
__.. --
t
Shared well
Please explain the water source, capacity, system maintenance plan, storage and delivery system
and other details: The. subdivision is served by a community water system consisting of wells,
distribution and storage systems.
_ _- _ -------_--------
Distance (in miles) to the nearest;
Public/Community Sewer System: The
project is served by a community sewer ; Solid Waste Collection Facility:t10 (Colburn)
system.
Public/Community 'Water System: The
project is served by a community water Fire Station: ±7 (Northsid+e-Ponderay station)
system.
Elementary School ±6 (Kootenai) Secondary Schools::±9 (Sandpoint) _
__.. _.. _-__.-__.___ _. _. __._ . .
County Road N/A (Hwy 200 is state..) 1 County Road Name State Hwy 200
Which fire district will serve the project site? Northaide
Which power company will serve the project site?Avista
I hereby certify that all the information, statements, attachments and exhibits submitted. herewith
are true to the best of my knowledge. I further grant permission to Bonner County employees and
representatives, elected or appointed officials to enter upon the subject land to.make examinations,
post the property or review the premises relative to the processing of this application.
Landowner's signature: �O�k. C;l Date: Z
Martin E. Taylor, Arolect Representative for
Valiant Idaho, LLC
Golden Tee Estates 91h Addition Minor Land Division application
r/23/19
Page 4 of 4

. ...........
y 4
THE MO
cxlu:B
r... S f}
January 22, 2019 ,l N � t� LJ�
Martin Taylor,AIGP PLP,N^� tac u� ����uz
J.A. Sewell&Associates
M�-�eaIDc.,-t9
1319 North Division Avenue
Sandpoint, ID.83864
a
Will Serve Water& Wastewater Service for The Idaho Club T Lots
With this letter, TIC Utilities, LLC, an affiliate of Valiant Idaho,. LLC, confirms it has
reserved capacity in our water and sewer systems for the lots to be created by a minor'land
division of the area referenced as the T-Lots ("Lots"), a copy of the plat for which is attached;
and hereby states that it will serve these Lots under the following conditions:
No more than one(1)single family residence:may be constructed on any of the Lots.
The sure of two thousand five hundred dollars ($2,500), for each of the Lots,will be paid
to TIC Utilities, LLC for a water hook-up fee upon connection to the water service owned and
operated by TIC Utilities, LLC.
Monthly service fees in the amount of forty-five dollars ($45) per month, for each of the
Lots, shall be paid beginning when each of the Lots are connected to the water.system.
The sum of ten thousand dollars ($10,000), for each of the Lots, will be paid to. TIC
Utilities, LLC for a sewer hook-up fee upon connection.to the wastewater service owned and`
operated by TIC Utilities, LLC.
Monthly service fees in the amount of ninety dollars ($90) per month, for each of the
Lots, shall be paid beginning when each of the Lots are connected to the wastewater system.

f
The applicable requirements of TIC Utilities, LLC for-the improvements necessary on
each of the Lots for the connection to its water and wastewater treatment systems shall be
completed prior to the provision of service.
If you have any questions, please contact our Managing Member at the email or
telephone number provided below.
Regards,
TIC UTILITIES, LLC
William Haberman
Managing Member
[phone]
wi lliam.haberman @ me.com
4
1
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Memorandum a'
_ �10
2y
TO: WILLAM HABERMAN(VALIANT IDAHO, LLC) n3%a?/
� p,
FROM: NATHAN WRIGHT, P.E.AND STEVE CORDES P.E. '1.gTyQF 1OA` •
PRJ.#: 44026 A W.
SUBJECT: VALIANT IDAHO, LLC; PUBLIC WATER SYSTEM FOR IDAHO CLUB
DATE: MARCH 6,2024
Background
Valiant Idaho, LLC(Valiant) intends to amend the projected buildout water connections for the
system This decision required an amendment to Valiant's current water facility plan to address
new storage deficiencies,future buildout scenarios, and a recommended improvement plan.
This memo serves as an amendment to Valiant Idaho's original water system plan,detailed in
the Memorandum sent to DEQ on February 81h,2017 and amended on March 3rd,2021.
General Description of Existing Water System:
The existing Valiant system is served by two groundwater wells. Well#1 and#2 are located on
Golden Tee Block 14a, Lot 1 and were drilled in 2018. The well pumps were flow tested in
August 2020 to determine pumping capacity.The results of these tests yielded that Wells#1 and
#2 have a pumping capacity of 378 and 279 gpm,respectively.
There are 2 booster stations on the south side of the highway that operate in series to convey
water from the north Highway 200 pressure datum to a 225,000-gallon tank on the south side of
the highway.Additionally,a 19,000 gallon water reservoir was constructed to supply booster
station 1.A third booster station is located at the 225,000-gallon reservoir to directly pressurize
the highest water services on the system.
Modified Service and Capacity Requirements:
The Idaho Club service area includes just over 81 active connections. The entire Idaho Club
water service area currently includes an estimated 382 lots with water service stubs.Thus,
Valiant Idaho, LLC intends to develop source capacity for approximately 382 lots.Additionally,
Valient Idaho has been recording flow data for their system which can be seen in attachment A.
This data shows that max day data exceeds the previous projection of 1,255 gpd/EDU and is
closer to 1,700 gpd/EDU.This report will evaluate both 1,255 and 1,700 gpd/EDU as the owner
is considering metering each connection which has been shown to reduce water use,with the
goal of reducing water use back to the projected 1,255 gpd/EDU.
Following is an analysis provided to reflect current Idaho Rules for Public Drinking Water
Systems and the anticipated growth within the service area.
1. Demand:
a. ADD:429 gpd/EDU
b. MDD11:.1,255 gpd/EDU'
c. PHDa:2,807 gpd/EDU (1.95 gpm/EDU)'
' Based on Original facility plan from T.O.Engineering from 2006
\\wc2024\projects\B44k44026.00.0 Valiant Id Idaho Club\2D240305 Water System Plan Update\20240306 DEQ Memo Re Public Water System.docx

Valiant Idaho,LLC;Public Water System for Idaho Club
Page 2
d. MDDb 1,700 gpd/EDU2
e. PHDb 3,684 gpd/EDU(2.67 gpm/EDU)3
Based on the above demand,the following table provides the estimated current active, buildout
of all existing "stubbed in"parcels.
Table 1: Demand Summary
Current Active Buildout of all Existing Buildout� •
Parcels .. _ .... In")Parcels
_..._ .n _._. _
Total EDU's 81 30D 3,82
MDDa(gPm) 71 261 333
2. Source:
Current standards require sufficient source capacity to provide MDD with largest well
out of service. These results indicate that the Valiant system sources will need to be
upsized to meet the revised buildout projections.Table 2 below summarizes these
findings.
Table 2: Source Summary
Source Excess/Deficiency
_ Buildout of all Existing
11++
•• • n
")Parcels
Total EDU's 300 38
MDDa(gpm) 18 -54
Source capacity will need to be increased in order to meet projected max day demand.
The actual required capacity of the new future well will be dependent on the final
number of parcels developed along with actual demand. Current demands are currently
well above the original projections, but implementation of a new rate structure together
with individual metering would likely significantly reduce the demand per EDU.
However, based on the current demand data along with a projection of 382 EDU's at
buildout,a new well should be planned to provide a minimum of 172 gpm.
Currently,the existing water right is for a diversion rate of 1 cfs or 448 gpm which is
slightly less than the 451 gpm projected at buildout.As buildout approaches,the water
rights may need to be reevaluated to assure the system stays incompliance with the
approved water right limits.
2 Based on flow data(See attachment A)
3 Calculated using Washington DOH June 2020 revision of the Water System Design Manual Equation 3-1
with 382 EDU and MDD of 1700 gpd/EDU
\\wc2024\projects\B44\44026.00.0 Valiant Id Idaho Club\20240305 Water System Plan Update\20240306 DEQ Memo Re Public Water System.docx

Valiant Idaho,LLC;Public Water System for Idaho Club
Page 3
3. Storage:
a. Current standard requires system to supply Operating Storage, Equalization
Storage,Standby Storage and Fire Suppression Storage. Following is a summary of
assumptions for determination of the
i. Operating Storage=2 feet(storage between pump on and off)
ii. Equalization Storage=(150 mins X(Source Capacity—Peak hour Demand)=0
gallons
iii. Standby Storage=(8 hours X Average Day Demand)
iv. Fire Suppression Storage=180,000 gallons(1,500 gpm for 2 hours)
The following table provides an analysis of the anticipated storage needs for the water system
based on current rules,anticipated growth and the planned source capacity.
Based on current DEQ requirements,this result indicates that the existing Valiant water system
has an approximate deficit of 111,000-gallons at the full buildout scenario if no other
improvements are made.
Table 2:Storage Capacity
•• • •• • •• • •• of
Current Active 300 Ebu @ 300 EDU @ 382 EDU @ 382 EDU r
Parcels 1,255 11 1,255 1,700
••• EDU ••• ••• ••• 0
Operating Storage(gallons)' 1555
8 15,558 15,55g 15,558 15,558
w. Btu"
Standby Storage(gallons) 11,583 42,900 42900 54,62& 54,626
w
Total Storage Required(gallons) 207,141 284358 317100 320,OFi0 354,9fi3
Total Storage Deficit{gallons) 36,859. (40,358) (73,1QU) (71%060) (110,963)
Total Storage Deficit with Standby 48 442 28 792 (3,949) 4,816 (30,087)
Power and new We ll(gallons)
1. Assumes a 279 gpm effective source with largest source(378 gpm)offline per DEQ requirements.
2. Assumes use of the existing 225,000-gallon and 19,000 gallon reservoirs.
3. The standby storage requirement may be eliminated by adding standby power to the well sources and
booster pump facilities.
4. The above assumes about 15,000 gallons of operating storage,which could be potentially reduced with
additional set point and tank dimension information.
Improvements:
As was noted above both source and storage capacity will need to be added to meet standards
at buildout.To meet these deficiencies it is proposed that standby power be added to negate
the need for standby power increasing reservoir capacity by roughly 55,000 gallons. In addition
to standby power a new well is required to meet source capacity at buildout which would further
reduce storage capacity by roughly 26,250 gallons.
The following table summarizes the number of EDU's that the system can handle based on the
current scenario along with increased capacity for each improvement.
\\wc2024\projects\B44\44026.00.0 Valiant Id Idaho Club\20240305 Water System Plan Update\20240306 DEQ Memo Re Public Water System.docx
� 4

1 \ 4
Valiant Idaho,LLC;Public Water System for Idaho Club
Page 4
Storage Storage Capacity
Storage Capacity with with St
y 1
Existing Existing Capacity with =&nL
Source ..
Storage i: St .. gpm well and
Capacity .. •• .. rirt ..
MOD EQU; EDU ED,U EDU EDU
- r _
1700 gpd/EDU. 236 150 210 288 414
Depending on what the long-term demand per EDU is the timing of the improvements may need
to be adjusted, but based on the two scenarios presented herein the timing for these -
improvements can be based on the number of connections as follows:
Standby Power shall be installed as connections approach 150-208
A new 175 gpm well shall be installed as connections approach 210-309
A new 40,000 gallon reservoir shall be installed as connections approach 288-399
Summary:
Valiant Idaho, LLC plans increase the number of connections to the water system from 300 to
382 connections at buildout. In addition to increasing the number of connections the system has
seen demands increase from an original projected flow of 1,255 gpd/EDU to 1,700 gpd/EDU on
a max day. In order to meet the buildout demands,Valiant Idaho, LLC intends to implement
standby power, a new well and potentially a new reservoir to meet the projected flows.
\ \
\\wc2024\projects\B44\44026.00.0 Valiant Id Idaho Club\20240305 Water System Plan Update\20240306 DEQ Memo Re Public Water System.docx

ATTACHMENT A :
WATER SYSTEM FLOW
DATA ,
WELCH-COMER�

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."
ary
Avista Receives Commission Decision in Washington General Rate Cases
December 23, 2024
Company pleased with the fair and balanced decision for the Company and its customers
SPOKANE,Wash., Dec.23,2024(GLOBE NEWSWIRE)--Avista's(NYSE:AVA)electric and natural gas general rate cases filed in January 2024
have concluded,with an order from the Washington Utilities and Transportation Commission(Commission)approving a two-year rate plan that will
change electric and natural gas rates,beginning Jan.1,2025,and Jan. 1,2026.
For electric operations,the Commission approved rates designed to provide a 0.1 percent,or$0.8 million increase in base revenue for Rate Year 1,
and a 11.6 percent,or$68.9 million increase in base revenue for Rate Year 2.For natural gas operations,the Commission approved rates designed to
provide a 11.2 percent,or$14.2 million increase in base revenue for Rate Year 1,and a 2.8 percent,or$4.0 million increase in base revenue for Rate
Year 2.
r
For electric Rate Year 1, it is our belief that there is a calculation error with respect to the level of power supply expenses removed from the final
revenue requirement,that,if corrected,would move the revenue approved from$0.8 million to approximately$12 million.We have brought this issue
to the attention of the Commission.When this correction is made,the base percentage increase will be 2.0 percent.
The Commission approved a rate of return(ROR)on rate base of 7.32 percent,with a common equity ratio of 48.5 percent and a 9.8 percent return on
equity(ROE), noting that an upward adjustment is needed to address the challenges the Company faces.The Commission did not, at this time,
support a change to the mechanics of the Energy Recovery Mechanism(ERM),but did continue its support for important mechanisms such as Wildfire
and Insurance balancing accounts,and decoupling.
While the Commission did not approve a modification to the existing ERM,the forecasted power supply costs that were removed from Electric Rate
Year 1, which makes up the majority of the reduction in revenue from the Company's filed case, to the final order,would flow through the ERM
deadband and sharing bands.
"We are pleased with the Commission's constructive decision,which provides a positive outcome for both our customers and our shareholders.Our
Washington electric customers will receive the benefit of Avista's reduced power supply cost in Rate Year 1,mitigating the impact to their bills.At the
same time,our shareholders will benefit from the increase in margin,improving the return for our shareholders.The decision reflects the Commission's
recognition of Avista's investment in utility infrastructure to benefit our customers,and that our operating expenses are increasing at a faster pace than
revenues.The outcome provides for necessary recovery of the costs to serve our customers and continued investment in our systems,"said Dennis
Vermillion,chief executive officer of Avista Corp.
Avista anticipates issuing 2025 earnings guidance during the fourth quarter 2024 earnings call in February 2025.
Customer Resources
When customers need help with their energy use and billing,Avista has ways to assist.Billing options,such as Comfort Level Billing,preferred due
date,and payment arrangements,give customers more control over how their energy costs are spread out. In Washington,Avista recently launched
My Energy Discount, a personalized monthly bill discount program to help eligible customers lower their energy bills. The program offers more
inclusive eligibility guidelines, quick and easy enrollment, and a two-year discount term. For help with managing energy usage, Avista's Energy
Manager and home energy audit tools,as well as energy-saving tips,videos and money-saving rebates for energy-efficient upgrades,are available.In
addition,Avista provides local community action agencies with funding for eligible customers who need emergency grants,home weatherization and
heating system improvements.Customers with special health or financial circumstances can also work directly with our Customer Assistance Referral
and Evaluation Services team to be connected with resources for help with housing, other utilities, medical assistance, and more. For more
information on assistance options,customers can visit www_myavista.romlassictan.P.
About Avista Corp.
Avista Corp. is an energy company involved in the production, transmission and distribution of energy as well as other energy-related
businesses. Avista Utilities is the operating division that provides electric service to 418,000 customers and natural gas to 382,000 customers. Its
service territory covers 30,000 square miles in eastern Washington,northern Idaho and parts of southern and eastern Oregon,with a population of 1.7
million. Alaska Energy and Resources Company is an Avista subsidiary that provides retail electric service to 18,000 customers in the city and
borough of Juneau,Alaska,through its subsidiary Alaska Electric Light and Power Comoanv.Avista stock is traded under the ticker symbol"AVA."For
more information about Avista,please visit www.avistacoro.com.
This news release contains forward-looking statements regarding the company's current expectations.Forward-looking statements are all statements
other than historical facts.Such statements speak only as of the date of the news release and are subject to a variety of risks and uncertainties,many
of which are beyond the company's control,which could cause actual results to differ materially from expectations.These risks and uncertainties
include,in addition to those discussed herein,all of the factors discussed in the company's Annual Report on Form 10-K for the year ended Dec.31,
2023 and the Quarterly Report on Form 10-Q for the quarter ended Sept.30,2024.
Avista Corp.and the Avista Corp.logo are trademarks of Avista Corporation.
SOURCE:Avista Corporation
Contact:
Media:Lena Funston(509)495-8090 lena.funston0avistarnr .nm

Investors:Stacey Wenz(509)495-2046 stacev.wenzOavistacoro com
Avista 24/7 Media Access(509)495-4174
To unsubscribe from Avista's news release distribution,send a reply message to dalila sheehan onavi to oro Qom
i
Source:Avista Corporation

[e-mail]
From: [e-mail]
Sent: Wednesday, March 27, 2024 4:47 PM 4
To:
Subject: FW:Offer to Sell Water System
To All:
Below is an email the Board of Directors received from Mr. Haberman regarding the water system. I want to thank all of
you for your time, effort and commitment to serve and help The Idaho Club HOA.
Sincerely,
Chris
-----Original Message-----
From: William Haberman<wi,[e-mail]>
Sent: Monday, March 25, 2024 5:23 PM
To:Tom Curtiss<[e-mail]>; David Reed<[e-mail]>; Marty Quill<[e-mail]>;
Read Tuddenham<[e-mail]>;Chris Norton<[e-mail]>
Subject: Offer to Sell Water System
Board —Valiant is hereby revoking its offer to sell the water system to the HOA. We may or may not decide to revisit
this at a later date. But,for now,there is no longer a need for a water and sewer committee. Thanks. Bill
� 4
1

Electronically Filed
2/26/202411:16 AM
First Judicial District,Bonner County
Michael W.Rosedale,Clerk of the Court
By:LeeAnn Kopsa,Deputy Clerk
I
Stephanie J.Bonney,Esq.
ISB No. 6037
MSBT LAW,CHTD.
7699'West Riverside Drive
Boise,Idaho 83714
Office: [phone]
Fax:[phone]
[e-mail]
www.msbtlaw.com
Attorney for Petitioner, Valiant Idaho,LLC
IN THE DISTRICT COURT OF THE FIRST JUDICIAL DISTRICT
OF THE STATE OF IDAHO,INAND FOR THE' COUNTY OF BONNER
' I
IN RE:THE CREATION AND Case No.: CV09-24-0269
ORGANIZATION OF THE IDAHO CLUB
WATER AND SEWER DISTRICT PETITION FOR THE CREATION
AND ORGANIZATION OF THE
IDAHO CLUB WATE RAND
SEWER DISTRICT
: I
Valiant Idaho, LLC ("Petitioner") by and through Stephanie J. Bonney of the firm of I
MSBT Law LLP, hereby petitions to the Court to create, organize and establish The Idaho Club
Water and Sewer District (the "District") in Bonner County, Idaho, pursuant to the procedures
and authority set forth in Chapter 32,Title 42,Idaho Code(the"Act").In support of this petition,
Petitioner states and alleges as follows:
I.
PETITION FOR THE CREATION AND ORGANIZATION OF THE IDAHO CLUB WATER
AND SEWER DISTRICT-1
Berecz, Lamont C.

4-t/- ILJ
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
TO: , All Members of The Idaho Club Homeowners Association, Inc.
The annual meeting A The Idaho Club Homeowners Association, Inc. will be held on
Thursday, June 20th, 2024 commencing at 4:00 p.m., at the Idaho Club (Pavilion Tent
Area), Sandpoint, Idaho, for the purpose of:
1. Reviewing the financial condition of the Association.
2. Review HOA operations and functions.
a. Committee Reports
�+lF F3. Apresentation by Valiant Idaho, LLC regarding forming a water district and
ther options related to the transference of the water utility.
Consideration of any other matters which may properly come before the
meeting.
5. An Election of Directors.
You are encouraged to attend the annual meeting. If you are unable to attend, you
may participate by proxy. If you would like someone other than the Board of Directors
to vote your proxy, fill in the blank section with the name of the person designated to
cast your vote and mail back to the Association at P.O. Box 1544, Sandpoint, Idaho.
You can email Tom Curtiss at tcurtiss(a,sandpoint.net. The minutes from last year's
meeting along with our current financial statements will be available for review on the
owner's portal at the following link: https://www.theidahoclub.com/members-portal/
(User name is "Guest" and Password is "Idahodub").
If your Lot is owned by two or more people, then all Owners must designate in writing
one Owner, the Board of Directors or a third party as their proxy to cast their vote and
represent that Lot. If your Lot is owned by a corporation, trust or other non-natural
person who is the Member, then it shall designate in writing a natural person or the
Board of Directors of the Association as its proxy to cast its vote and represent that
Lot. The designated proxy must be present at the annual meeting to vote on your
behalf. Even if you return the proxy at this time, you can revoke it simply by coming
to the meeting. Return of your proxy will help us to get the quorum required by the
Bylaws and save the Association the cost of re-noticing the meeting for a later date.
By Order of the Board of Directors
May 20'h, 2024
o1�e A�1, t

The Idaho Club Homeowners Association Inc.
P.O.Box 1544 —
Sandpoint,ID 83864
Phone: [phone]
Fax., M.255.1658
PROXY
(Any Alteration of This Proxy Shall Render It Void.)
TO: Board of Directors
The Idaho Club Homeowner's Association, Inc. (ICHOA)
The undersigned hereby appoints: Please indicate your choice
The Idaho Club Homeowners Association, Inc.
Board of Directors
Or
Other
(please fill in name)
as proxy to vote all votes of the undersigned at the annual meeting of The Idaho Club Homeowners
Association, Inc. to be held at the Idaho Club Pavilion Tent in Sandpoint; Idaho, Thursday, June
201, 2024, at 4:00 p.m., and at any and all adjournments thereof. The undersigned further
understands that this Proxy may be revoked by attendance at the annual meeting. All proxies must
be submitted no later than June 15th,2024.
Signature(s)*
Name(s) (Please Print)
Address of The Idaho Club HOA Property
Date
* If a Lot is owned by two or more people, all Owners must sign in order for this Proxy to be valid

z�
IDAHO
CLLTS
TIC Utilities, LLC
The Idaho Club Water System
Management&Billing Update
Ex h, 15 to
September 9, 2024
The Idaho Club Property Owners:
Please be advised that TIC Utilities, LLC, the owner of The Idaho Club water system, is
changing its billing agent and updating its monthly rates, effective immediately. All previous
payments sent to Gem State Infrastructure, LLC have been or will be credited to your account. ,
TIC Utilities, LLC has recently established itself as a regulated water system under Idaho
Public Utility Commission ("IPUC) jurisdiction. Based on preliminary conversations with IPUC
representatives, a rate structure that includes higher rates for homes than those paid for
undeveloped lots, along with metering for excess water usage, is the billing structure preferred
by IPUC.
As a result of IPUC guidance and historical operating losses, monthly rates for improved
lots — i.e. those with homes completed or under construction — will be one hundred dollars
($100.00) per month beginning in October of 2024. Monthly rates for unimproved lots will
remain at forty-five dollars ($45.00) per month. Further changes may be required upon the
establishment of our rate base by IPUC.
The amounts for 3rd Quarter 2024 will be the last period under the previous rates and
will be due and payable, in arrears on September 30, 2024, in the total amount of forty-five
dollars ($45.00) per month. Thereafter, owners will be billed on a quarterly basis at the new
rates described above. _
Further, TIC Utilities, LLC are purchasing water meters to be installed in all completed
homes. Homes under construction,and all future homes,will be required to install water meters
specified by TIC Utilities, LLC. We plan to have these installed before the end of 2024 and put
into service beginning January 1, 2025. The fixed monthly water rates will cover up to seven
thousand five hundred (7,500) gallons of water usage per month, and water usage above that
volume will be billed at an additional one cent($0.01) per gallon.
Our engineers have identified tw:: potential sources of abnormally high water usage,
during periods when owners are not using their homes, that are causing increased operating
costs and contributing to excess wastewater to the sewer pond:

(1) Home Filtration Systems: Given that most home water filtration systems are
designed to backwash on a timer, each backwash cycle requires water. The central water
filtration system installed by TIC Utilities, LLC is performing well. If you would like to minimize
your water usage and monthly fees, please consider turning these systems off and leaving
them as a back-up in the event of any future water issues. At a minimum, if you are going to be
away from home for an extended period or season, please turn off the automatic flushing cycle.
During periods of occupancy, please refer to the owners manual and set the backwash cycles to
the least number required. If you only have a water softener,those do not require the volume of
water that the filtration systems require, because they do not require daily backwashing.
(2) Home Winterization: Our engineers have also theorized that some homeowners
are letting their water run during the Winter months to prevent their water pipes from freezing. If
you are going to be away during Winter, please properly winterize your home and refrain from
leaving your water running,to minimize your water usage.
Given that we plan to have meters installed before the end of 2024, either or both of
these actions will likely cause a significant increase to your monthly water bills in Winter of
2025.
Finally, for new hookups, a hookup fee of two thousand five hundred dollars ($2,500)
shall be due, along with an executed Water Service Agreement, before connecting to the water
system. If you have a prior agreement with TIC Utilities, LLC, or its parent, Valiant Idaho, LLC,
for a prepaid hookup and you remain current on your monthly fees, these agreements will be
honored. If you are not current with your monthly fees, or bring them current before the end of
2024,these prior agreements will considered in breach and will be null and void.
All payments going forward should be made in the name of TIC Utilities, LLC, and sent
to Panhandle Management at P.O. Box 1544, Sandpoint, ID 83864. Billing questions should be
sent to Dianne by email at [e-mail] or phone at(208)255-1645.
Service related questions should be directed to Jason Wereley of E3 Consulting, either
by email at iasondwereleyL@gmail com, or by phone at(206) 659-5471.
Thank you in advance for your patience as we make these changes and transition over
to a IPUC regulated private water system over the next several months.
Regards,
TIC UTILITIES, LLC
William Haberman
Manager

IPUC Rate Case: VID-W-25-02 Exhibit: DJF-B-11
Reconciliation of Customer Counts,Water Demand and Revenue
DJF 4-22-25(Normalize Revenue and Customer Counts)
A: Reconcile Customer Types and Counts: Value Units
Applicants Total Customer Count: (Revised-Match County Lot Records) 321 each
Total"Active Customers"from County Land Records(Connected Houses) 120 each
Applicant's 2024 Test Year Service Revenue(Appears to be 3 quarters only:) 127,584 $/Year
Adjusted Revenue for 4 quarters of Billing Not 3. 170,111 $/Year
Flat Rate in affect for Test Year: 45.00 $/Month
540.00 $/Year
Total Number of Customers in Billing-CALCULATED(Revenue/yearly bill) 315
Less Customers Active and using water 120
Customers In Billing Not Active 195
B: Average Water Use
Using Applicant's Data on Well Pumping Data. Filter BW
Wasted to Total
Well 1 Well 2 Sewer System Net
(1000 Gal) (1000 Gal) (Gallons) (Gallons)
Ending Meter Read(10-22-24) 21457 30494 1,285,149
Beginning Meter Read(10-24-23) 12531 19032 445,700
Net Use: 8926 11462 839,449 19,548,551
Note: Waste from Treatment Plant to Sewer System is approximately 5%of demand.Losses in Distribution??
Ave.Day Use per Active Customer:(19,548,551/120 customers/363 days) 449 gpd
(This Compares to the Welch-Comer Estimate of 590 gpd)
Average Daily Demand of 450 gpd per active connection is equivalent to 13,500 gallons per month.
Published Literature shows regional comparisons of:
-Coeur d'Alene 20,000 to 30,000 gallons per month
-Spokane 18,000 gallons per month
C: Revenue Projection from Applicants Proposed Rates: Annual
(Application Corrected Revenue Request is$422,000) Revenue
Number Monthly$ ($'s)
Billed but Not Active Connections 195 $45.00 $105,300.70
Active Customers-Base Rate 120 $150.00 $216,000.00
Usage Charge(13,500 gallons less 7500 gal base allowance) ti
Average of 6,000 to be charged at$0.01). 120 $60.00 $86,400.00
Total Revenue: $407,700.00
Total Average Monthly Bill for Active Customers: $210.00
Change for Current Active Customers $165.00 367%
If no Revenue from Non Flowing Customers,Average Bill from Flowing customers would be:
(Revenue Request/number of flowing customers/12) $422,000/120/12: $293.06 Per Month
$3,516.67 Per Year

4
IDAHO ADMINISTRATIVE CODE IDAPA 58.01.08
Department of Environmental Quality Idaho Rules for Public Drinking Water Systems
t
13. Minimum Pressure at Building Sites.Any.PWS constructed or undergoing material modification
topographical relief may affect water pressure at the customers' remises must provide the Department with an
P P P
analysis which demonstrates that the pressure at each designated building site will be at least forty(40)psi,based on
dynamic pressure in the main,as set forth in Subsections 552.01.b.i.and 552.01.b.v.,plus a static compensation from
the elevation of the main to the elevation of each building site. (7-1-24)
a. If forty (40)psi cannot be provided at each designated building site,the Department may require
that reasonable effort be made to provide notification to existing and potential customers of the expected pressure.
(7-1-24)
b. The Department will not authorize a service connection at any designated building site where
analysis indicates that pressure will be less than twenty(20)psi dynamic pressure(or twenty-six point five(26.5)psi
for two(2)story buildings). (7-1-24)
14. Isolation Valves. A sufficient number of valves must be 'provided on water mains to minimize
inconvenience and sanitary hazards during repairs. (7-1-24)
15. Air Valves.At high points in water mains where air can accumulate,provisions must be made to%
remove the air by means of air release and vacuum relief valves or combination air release/vacuum relief valves.Air
release valves,vacuum relief valves,or combination air release/vacuum relief valves may not be required if vacuum
relief and air release functions in the pipeline can be adequately handled by approved appurtenances such as fire
hydrants. (7-1-24)
a. The open end of an air valve must be extended to at least one (1)foot above grade and provided
with a twenty-four(24)mesh or similar non-corrodible screened, downward-facing elbow.When the air vent on an
air relief valve cannot be practically installed above ground, the vent may be below grade provided the air vent is
extended to the top of the valve vault and provided with a twenty-four(24)mesh or similar non-corrodible screened,
downward-.facing elbow. In addition, for below ground vents, the valve vault must be rated for appropriate traffic
loading in traffic areas and the vault drained to daylight or provided with adequate drainage to prevent flooding of the
vault. (7-1-24)
b. Discharge piping from air valves or combination air release/vacuum relief valves may not connect
directly to any storm drain,storm sewer,or sanitary sewer. (7-1-24)
16. Backflow Protection. Automatic air relief valves must be equipped with a means of backflow
protection. (7-1-24)
17. Surface Water Crossings. For the purposes of Subsection 542.17, surface water is defined as all
surface accumulations of water,natural or artificial, public or private,or parts thereof which are wholly or partially
within, which flow through or border upon the state. This includes, but is not limited to, rivers, streams, canals,
ditches,lakes,and ponds. Surface water crossings,whether over or under water,must be constructed as follows:
(7-1-24)
a. Pipe used in above water crossings must be adequately supported and anchored, protected from
damage and freezing,and be accessible for repair or replacement. (7-1-24)
� 4
b. Pipe used in under water crossings must have a minimum cover of two(2) feet. When crossing a
water course that is greater than fifteen(15)feet in width,the following must be provided: (7-1-24)
i. The pipe will be of special construction, having flexible, restrained, or welded water-tight joints;
and 7 1 24
ii. Valves are to be provided at both ends of water crossings so that the section can be isolated for
testing or repair;the valves will be easily accessible and not subject to flooding;and (7-1-24)
iii. Permanent taps or other provisions to allow insertion of a small meter to determine leakage and
Section 542 Page 109

IDAHO ADMINISTRATIVE CODE 1DAPA 58.01.08
Department of Environmental Quality Idaho Rules for Public Drinking Water Systems
(7-1-24)
ii. If there is eighteen(18)inches or more vertical separation with the potable water pipeline below the
non potable pipeline,then the potable pipeline joints must be as far as possible from the non-potable pipeline,and the
non-potable pipeline must be supported through the crossing to prevent settling. (7-1-24)
Less than eighteen(18)inches vertical separation: (7-1-24)
(1) Potable pipeline joint must be as far as possible from the non-potable pipeline;and either: (7-1-24)
(a) Non-potable pipeline must be constructed with potable water class pipe for a minimum of ten(10)
feet either side of potable pipeline with a single twenty(20)foot section of potable water class pipe centered on the
crossing;or (7-1,24)
(b) The non-potable or potable pipeline must be sleeved with potable water class pipe for ten(10)feet
either side of crossing.Use of hydraulic cementitious materials such as concrete,controlled density fill,and concrete
slurry encasement is not allowed as a substitute for sleeving. (7-1-24)
(2) If potable pipeline is below non potable pipeline,the non potable pipeline must also be supported
through the crossing to prevent settling. (7-1-24)
d. Non-potable pressure pipelines must not be: .(7-L 24)
i. Closer horizontally than ten(10)feet from potable mains. (7-1-24)
ii. Closer vertically than eighteen(18)inches from potable pipelines. (7-1-24)
08. Separation from Subsurface Wastewater Systems and Other Sources of Contamination. A
minimum horizontal distance of twenty-five (25) feet must be maintained between any potable water pipe and a
septic tank or subsurface wastewater disposal system. Guidance on separation from other potential sources of
contamination,such as stormwater facilities,may be found on the Department website http://www.deq.idaho.gov.
(7-i-24)
Eany
. Dead End Mains.All dead end water mains must be equipped with a means of flushing at a water
two and one-half(2.5)feet per second. (7-1-24)
Dead ends must be minimized by looping whenever practical in order to provide increased
f service and reduce head loss. (7-1a24)
Flushing must be designed in such a way as to minimize any erosion of unprotected areas and,if
be coordinated with the owner of the receiving system.No water main flushing device may be directly g
o any sewer. (7-1-24)Stub outs for future main connections must meet all requirements for dead end mains listed in
542.09 as determined by the Department.Flushing devices may be temporary in nature. (7-1-24)
10. Repair of Leaks. Leaking water mains must be repaired or replaced upon discovery and
disinfected in accordance with American Water Works Association(AWWA) Standards,incorporated by reference
into these rules at Subsection 002.01. (7-1-24)
11. Separation from Structures. Water mains must.be separated by at least five (5) feet from
buildings,industrial facilities,and other permanent structures. (7-1-24)
12. Shut-Off Valve Required.All new PWSs, and portions of existing systems undergoing material
modification of distribution or transmission lines, must include an accessible and lockable shut-off valve at each
service connection in the section of distribution or transmission line that is being constructed or modified within the
project.Shut-off valves may be installed in a meter vault. (7-1-24)
Section 542 Page 108

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•

ti
THE
I1DAH0
CL,VB
FREQUENTLY ASKED QUESTIONS
OFFERING SUMMARY
Homesites range in size from .15 acres to 5 acres
Prices range from$85,000 to$1,000,000 with most between$125,000 and$300,000
Estate lots on Moose Mountain are mostly 1 acre+
Range of views included golf,forested,territorial mountain,Schweitzer Mountain&lake
Premium view lots include panoramic views of the territorial mountains and Lake Pend Oreille
Developer inventory includes a range of options and pricing for all budgets and tastes
BUILDING& CONSTRUCTION
Minimum square feet for estate homes is 2,000 SF with no minimum for lodge homes
List of preferred builders is available upon request,but no specific builders are required
No time limit to complete construction
Price per square foot to build ranges from$250 to$350 depending upon the site and level of finishes
GOLF MEMBERSHIP
Initiation fee=$12,500 for family golf memberships which include three generations
Monthly dues=$600 per month, 12 months per year
Annual clubhouse minimum=$1,000
Corporate memberships are also available upon request
SOCIAL MEMBERSHIP
Initiation fee=$3,000 for family social memberships which include three generations
Monthly dues=$150 per month, 12 months per year
Annual clubhouse minimum=$1,000
HOMEOWNERS ASSOCIATION FEES
General HOA fees=$100 per month
HOA fees cover common area maintenance including the roads,gate houses&snow removal
Lodge home sub-association fees=additional$200 per month
Lodge home fees also cover exterior home maintenance,driveway snow removal&landscaping
Garbage collection is included for lodge homes and available by separate agreement for,estate homes
WATER&SEWER 4
Wastewater sewer treatment is provided by TIC Utilities,an affiliate of the developer
Solid waste is collected on each homesite by a septic tank
Sewer fees include a hook-up fee=$10,000 and monthly sewer charges=$90 per month
Water is provided by VP,Inc.
Water fees include a hook-up fee=actual cost to hook-up and monthly sewer charges=$45 per month
RENTAL RULES ,
All homes may be rented for a minimum of one week
Homes in the designated lodge home sections may be rented on a daily basis

41010.211 UTILITIES
a) WATER
1) The water system is complete.
2) Water is currently being supplied to the Subdivision through a central system by VP,
INC. Attached hereto as Exhibit G is an order granting injunction dated April 28, 2017,
ordering VP,INC.to provide the required water to the Subdivision.
3) Not applicable.
4) Not applicable.
5) Not applicable.
6) Not applicable.
7) There.is no agreement that requires purchasers of Lots to use the central water system;
however,the.Declaration prohibits owners from using individual wells.
b) SEWER
1) The sewer system is complete.
2) Not applicable.
3) The central sewage system will be supplied for the Subdivision through a central system
by TIC Utilities,LLC.Attached hereto as Exhibit G is an order granting injunction dated
April 28, 2017, ordering TIC Utilities, LLC to provide the required sewage to the
Subdivision.
4) Not applicable.
5) Not applicable.
6) There is no agreement that requires purchasers of Lots to use the central sewer system;
however,the Declaration prohibits owners fiom using individual septic systems.
c) ELECTRICITY
Electrical services to the Subdivision are available and will be provided by Northern
Lights,Inc. for lots north of State Highway 200, and by Avista Utilities for lots south of
State Highway 200.
d) TELEPHONE
Underground telephone lines have been installed in front of or adjacent to each lot. The
Subdivision is within the service area of Verizon. Verizon is responsible for service to all
lot in this offering and will extend service to homes upon request.
4816-8593-0826.4
12 a
I8�

READ THIS
PROPERTY
REPORT
S1
BEFORE S C�iiNING
ANYTHING
This Report is prepared and issued by the developer of this subdivision. It is not
prepared or issued by the Federal Government.
Federal law requires that you receive this Report prior to your signing a contract or
agreement to buy or lease a lot in this subdivision. However, NO FEDERAL AGENCY HAS
JUDGED THE MERITS OR VALUE, IF ANY, OF THIS PROPERTY.
If you received this Report prior to signing a contract or agreement, you may cancel your
contract or agreement by giving notice to the Developer at any time before midnight of the
seventh day following the signing of the contract or agreement (if you are a resident of
California, you have until midnight of the 14t" day following the signing of the contract or`
agreement to cancel).
If you did not receive this Report before you signed a contract or agreement, you may
cancel the contract or agreement any time within two years from the date of signing.
Name of Subdivision The Idaho Club
Name of Developer VALIANT IDAHO, LLC
Date of This Report September 242020
4813-0514-9254.10

TABLE OF CONTENTS
RISKSOF BUYING LAND .......................................................................................................... 1
GENERALINFORMATION.........................................................................................................2
TITLE TO THE PROPERTY AND LAND USE...........................................................................4
METHODOF SALE..........................................................................................................4
OIL, GAS AND MINERAL RIGHTS................................................................................4
ENCUMBRANCES, MORTGAGES AND LIENS........................................................... 5
RECORDING THE CONTRACT AND DEED................................................................. 5
PAYMENTS....................................................................................................................... 6
RESTRICTIONS ON THE USE OF YOUR LOT............................................................. 7
PLATS, ZONING, SURVEYING, PERMITS AND ENVIRONMENT......................... 10
ROADS........................................................................................................................................ 13
ACCESS TO THE SUBDIVISION.................................................................................. 13
ACCESS WITHIN THE SUBDIVISION........................................................................ 13
UTILITIES.................................................................................................................................... 15
WATER............................................................................................................................ 15
SEWER............................................................................................................................. 16
ELECTRICITY................................................................................................................. 17
TELEPHONE................................................................................................................... 18
FUEL OR OTHER ENERGY SOURCE.......................................................................... 18
FINANCIALINFORMATION.................................................................................................... 19
LOCALSERVICES ....................................................................................................................It 20,
FIREPROTECTION........................................................................................................20
POLICEPROTECTION...................................................................................................20
SCHOOLS ........................................................................................................................20
HOSPITAL.......................................................................................................................20
PHYSICIANS AND DENTISTS .....................................................................................20
SHOPPINGFACILITIES.................................................................................................20
MAILSERVICE............................................................................................................:.20
PUBLIC TRANSPORTATION........................................................................................21
RECREATIONAL FACILITIES..................................................................................................22
SUBDIVISION CHARACTERISTICS AND CLIMATE...........................................................25
GENERALTOPOGRAPHY............................................................................................25
WATERCOVERAGE...................................................................................................... 25
DRAINAGEAND FILL...................................................................................................25
FLOODPLAIN................................................................................................................26
FLOODING AND SOIL EROSION................................................................................26
NUISANCES....................................................................................................................26
HAZARDS........................................................................................................................27
-i-
4813-0514-9254.9 +

CLIMATE.........................................................................................................................27
OCCUPANCY..................................................................................................................27
ADDITIONAL INFORMATION................................................................................................28
THE PROPERTY OWNERS' ASSOCIATION ..............................................................28
TAXES..............................................................................................................................29
RESALE OR EXCHANGE PROGRAM.........................................................................29
BANKRUPTCY/LITIGATION .......................................................................................29
EQUAL OPPORTUNITY IN LOT SALES.....................................................................29
LISTING`OF LOTS..........................................................................................................30
COST SHEET, SIGNATURE OF SENIOR EXECUTIVE OFFICER........................................32
RECEIPT,AGENT CERTIFICATION AND CANCELLATION PAGE.......:........................... 33
RECEIPT, AGENT CERTIFICATION AND CANCELLATION PAGE................................... 34
b
In this Property Report, the words "you" and "your" refer to the buyer. The words "we," "us"
and"our" refer to the Developer.
-I1-
4813-0514-9254.9

RECEIPT, AGENT CERTIFICATION AND CANCELLATION PAGE
PURCHASER RECEIPT
Important: Read Carefully
Name of subdivision: The Idaho Club
ILS Number: 40014 Date of report: September 21, 2020
We must give you a copy of this Property Report and give you an opportunity to read it before
you sign any contract or agreement. By signing this receipt, you acknowledge that you have
received a copy of our Property Report.
Received by: Received by:
Print Name: Print Name:
Date: Date: w
Street address:
City: State: Zip:
If any representations are made to you which are contrary to those in this Report,please notify the:
Office of Interstate Land Sales Registration
Bureau of Consumer Financial Protection
1500 Pennsylvania Avenue NW. (Attn: 1801 L Street)
Washington, DC 20220
AGENT CERTIFICATION
I certify that I have made no representations to the person(s) receiving this Property
Report which are contrary to the information contained in this Property Report.
Lot: Block: Section:
Name of salesperson:
Signature: Date:
PURCHASE CANCELLATION
t
If you are entitled to cancel your purchase contract, and wish to do so, you may cancel by
personal notice, or in writing. If you cancel in person or by telephone, it is recommended that
you immediately confirm the cancellation by certified mail. You may use the form below.
Name of subdivision: The Idaho Club
Date of contract:
This will confirm that Me wish to cancel our purchase contract.
Buyer(s) signature: Date:
Buyer(s) signature: Date:
Page 34
4813-0514-9254.10

� S
Exhibit B-16
TITLE 61
PUBLIC UTILITY REGULATION
CHAPTER 1
PUBLIC UTILITIES LAW--APPLICATION AND DEFINITIONS
61-124.WATER SYSTEM.The term "water system"when used in this act includes all
reservoirs,tunnels, shafts, dams, dikes, headgates, pipes, flumes, canals, structures and
appliances, and all other real estate, fixtures and personal property, owned, controlled,
operated or managed in connection with or to facilitate the diversion, development,
storage, supply, distribution,sale,furnishing, carriage, apportionment or measurement
of water for power, irrigation, reclamation or manufacturing, or for municipal, domestic or
other beneficial use for hire.
A water system which consists of a canal system, or irrigation project constructed
pursuant to the act of congress known as the Carey act and the statutes of this state ti
relating thereto, shall not be considered a public utility under the terms of this act,'and
neither such water system nor the corporation, company or association owning or
managing the same shall be under the jurisdiction, control or regulation of the
commission.
[(61-124) 1913, ch. 61, sec. 2w, p. 248; reen. 1915, ch. 62, sec. 1w, p. 154; reen,
1917, ch. 128, subd.w, p. 430; compiled and reen. C.L. 106:24; C.S., sec. 2391; I.C.A., sec.
59-124.]
61-125.WATER CORPORATION. The term "water corporation"when used in this act
includes every corporation or person,their lessees,trustees, receivers or trustees,
appointed by any court whatsoever, owning, controlling, operating or managing any water
system for compensation within this state.
[(61-125) 1913, ch. 61, sec. 2x, p. 248; reen. 1915, ch. 62, sec. 1x, p. 154; reen. 1917,
ch. 128, subd.x, p. 430; reen. C.L. 106:25; C.S., sec. 2392; I.C.A., sec. 59-125.]
61-129. PUBLIC UTILITY.The term "public utility"when used in this act includes
every common carrier, pipeline corporation, gas corporation, electrical corporation,
telephone corporation and water corporation, as those terms are defined in this chapter
and each thereof is hereby declared to be a public utility and to be subject to the
jurisdiction, control and regulation of the commission and to the provisions of this act. The
term "public utility"as used in this act shall cover cases:
(1)Where the service is performed and the commodity delivered directly to the
public or some portion thereof, and where the service is performed or the commodity
delivered to any corporation or corporations, or any person or persons,who in turn, either

directly or indirectly or mediately or immediately, performs the services or delivers such
commodity to or for the public or some portion thereof; and
(2)Where a pipeline corporation delivers the commodity to any corporation, person,
their lessees, receivers or trustees regardless of whether it offers the pipeline service or
commodity to the public or some portion thereof.Such pipeline shall be subject to the
safety supervision and regulation of the commission only, unless and until such pipeline
corporation makes application to the commission to be regulated generally as a public
utility. 4
[(61-129) 1913, ch. 61, sec. 2bb, p. 248; am. 1915, ch. 62, sec. 1 bb, p. 555; am. 1917, ch.
128, subd. bb, p. 430; reen. C.L. 106.29; C.S., sec. 2396; I.C.A., sec. 59-129; am. 1967, ch.
6, sec. 1, p. 9; am. 1982, ch. 5, sec. 2, p. 8; am. 2010, ch. 167, sec. 3, p. 344; am. 2012, ch.
72, sec. 2, p. 208; am. 2014, ch. 108, sec. 2, p. 315.]