20190717Gem State to Staff 15 Supplemental.pdf

Preston N. Carter (ISB No. 8462)
Givens Pursley LLP
601 W. Bannock St.
Boise, ID 83702
Telephone: [phone]
Facsimile: (208) 388-l 300
prestoncarter@ givenspursley. com
14738161_l.docx [3988-3]
Attorneys for Gem State Water Company, LLC
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPROVAL
OF ACQUISITION OF THE ASSETS OF
DIAMOND BAR ESTATES, L.L.C.
AND BAR CIRCLE "S" WATER, INC.;
FOR TRANSFER OF CERTIFICATES
OF PUBLIC CONVENIENCE AND
NECESSITY OF DIAMOND BAR
ESTATES, L.L.C. (NO. 413) AND BAR
CIRCLE "S" WATER, INC. (NO. 296);
AND REQUEST FOR MODIFIED
PROCEDURE
Case No. BCS-W-1 9-01/DIA-W-l 9-0 I
GEM STATE WATER COMPANY'S
FIRST SUPPLEMENTAL RESPONSE
TO SECOND PRODUCTION
REQUESTS OF THE COMMISSION
STAFF
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ORIGINAL
Gem State Water Company, LLC ("Gem State Water") submits this supplemental
response to the Second Production Request of the Commission Staff to Gem State Water
Company, dated June 17, 2019.
DATED: July 17,2019.
Preston N. Carter
Givens Pursley LLP
Attorneys for Gem State Water Company, LLC
Geu STaTE WATER CoMPANY,S FIRST SUPPLEMENTAL RESPoNSE To SECoND PRoDUCTIoN RpQuEsT oT THE
CoMMISSIoN Srarr - I
GIVENS PURSLEY LLP
CERTIFICATE OF SERVICE
I certify that on July 17,2019, a true and correct copy of Gem State Water Company's
First Supplemental Response to Second Production Request of the Commission Staff was
served upon all parties of record in this proceeding via the manner indicated below:
Commission Staff
Diane Hanian, Commission Secretary
Idaho Public Utilities Commission
472 W . Washington Street
Boise, ID 83702
[e-mail]. gov
Edward Jewell
Deputy Attorney General
Idaho Public Utilities Commission
472W. Washington Street (83702)
P.O. Box 83720
Boise, lD 83720-0074
Edward. Jewell @nuc. idaho. gov
Hand Delivery
(Original and 3 copies)
Preston N. Carter
GTU STeTp WATER CoMPANy,S FRST SUppIEMENTAL RESPoNSE To SECoND PRoDUCTION REQUEST oF THE
CouurssroN Srlrp - 2
+Gem Stoten"
BCS-W-1 9-01 and DIA-W-1 9-01
Bar Circle "S" and Diamond Bar Acquisition
Data Request Response
DR Request: June 17,2019
Date of Response: July 8, 2019
Responder: Eric Nelsen
Telephone: [phone]Email: [e-mail]
Witness: Justin Palfreyman
Request No.: BCS-DIA-W-19-01 IPUC DR 15
REQUEST NO. 15: The following is DEQ's Ground Water Source Redundancy
requirement:
IDAPA 58.01.08.501.17. Ground Water Source Redundancy. New community water
systems served by ground water shall have a minimum of two (2) sources if they are
intended to serve more than twenty-five (25) connections or equivalent dwelling units
(EDUs). Under normal operating conditions, with any source out of service, the
remaining source(s) shall be capable of providing either the peak hour demand of the
system or a minimum of the maximum day demand plus equalization storage. See
Subsection 501.18 for general design and redundancy requirements concerning fire
flow capacity.
Please provide a detailed explanation of Gem State's long-term plan to satisfy the
requirement which includes the following:
a. Purchasing the existing backup well and serving the customer from the system if
needed.
b. A timeline and cost estimates for each of the plan's elements.
c. lf the Company has considered construction of a new back-up well, please provide
information about siting, and any easements for the well or the pipeline from the well to
the Diamond Bar Water System.
d. lf the Company has considered construction of an interconnect from another water
system (such as Bar Circle S), please provide information about the location of the
interconnect and any easements that may be necessary.
BCS-DIA-W.19-01 IPUC DR 15
Gem State Response
Page 1 of 3
Response:
Without commenting on the applicability of IDAPA 58.01.08.501 .17 to this particular
situation, Gem State provides the following response:
Please see Attachment 1 to this response, which is a letter agreement signed by Gem
State Water on June 12,2019, and accepted and agreed to by Mr. Robert N.
Turnipseed, the seller of the Diamond Bar assets to Gem State Water, on June 26,
2019 (hereinafter, the "Letter Agreement"). The backup well (termed the "Emergency
Well" in the Letter Agreement) is owned by Mr. Turnipseed in his personal capacity (and
is not owned by either Diamond Bar or Bar Circle "S"), and Mr. Turnipseed has rejected
Gem State Water's request to sellthe backup well to Gem State Water.
Because Mr. Turnipseed has rejected Gem State Water's request to sell the backup
well that he personally owns, Gem State Water and Mr. Turnipseed have executed the
Letter Agreement. By the Letter Agreement, Mr. Turnipseed grants Gem State Water
the use of the backup well and access to the parcel of land upon which the backup well
is located, for a period of one year from the Closing of the transaction (as defined in the
Asset Purchase Agreement), to meet the water supply needs of the Diamond Bar
system if for any reason the system cannot othenuise meet demand safely and reliably.
Further, in connection with the Closing, Mr. Turnipseed agrees to execute an easement
or other agreement granting use of the backup well and setting forth the terms of Gem
State Water's rights to use the backup well for the one-year period. Upon closing, Gem
State Water wi!! file a fully executed copy of such easement or other agreement in Case
No. DIA-W-19-01 .
Gem State Water's longer-term plans will depend upon the results of a water system
master plan that it will have a third-party develop soon after Closing. The water system
master plan will analyze options such as those identified in this production request, and
will include a timeline and cost estimates for each of the plan's elements. Gem State
Water will share the results of that water system master plan with Staff and will file it if
directed.
BCS-DIA-W-19-01 IPUC DR 15
Gem State Response
Page 2 of 3
DR Request: June 17,2019
Date of Supplemental Response: July 16,2019
Responder: Eric Nelsen
Telephone: [phone]
Email: [e-mail]
Witness: Justin Palfreyman
Supplemental Response:
Please see the attached Emergency Well Easement Agreement, executed on July 12,
2019.
BCS-D|A-W-19-01 IPUC DR 15
Gem State Response
Page 3 of 3
After recording. please rctum to:
Givens Purslcy LLP
601 Wcst Bannock Street
Boise. lD 83702
Attn: Preston N, Cancr
SPACE ABovE THIS LINE FoR REcoRDER.s UsE ONLY
EMERGENCY WELL EASEMENT AGREEMENT
THIS EMERGENCY
and made effective this 5l
N. Turnipseed and Clara B.
AGREEMENT ("Asreeme4') is entered into
2019 (he "Effective Date"). by Robert
husband and wife (collectively. "GIau!eI"). and Gem
State Water Company. LLC. an Idaho limited liability company (the "Grantee"). Grantor and
Grantee may be referred to herein individually as a "Parfy" or collectively as the "Parties."
RECITALS:
A. Grantee has agreed to purchase substantially all of the assets of a water utility
system (the "Svstem") owned and operated by Diamond Bar Estates. L.L.C.. an ldaho limited
liability company ("Dig&ond Bar"). of which Crantor is the sole member. Diamond Bar has
agreed to sell the System to Grantee.
B. The System currently utilizes an emergency well (the "Emersency Well") located
on a certain parcel of land owned by Grantor and located in the County of Kootenai. ldaho. as
more particularly described on Exhibit A attached hereto and incorporated herein (the
"Emersency Well Pad'n): however. neither the Emergency Well nor the Emergency Well
Parcel are included in the purchase and sale ofthe System to Grantee.
C. Grantee desires an easement over the Emergency Well Parcel for the use and
access of the Emergency Well on the terms and conditions set forth in this Agreement. and
Granlor desires to gxant such easement on the terms and conditions set forth in this Agreement.
AGREEMENT:
NOW. THEREFORE. in consideration of the above recitals. which are hereby
incorporated below. the mutual covenants contained herein and other good and valuable
consideration. the receipt and sufficiency of which are hereby acknowledged. the Parties agree as
follows:
l. GRANT OF EASEMENT. Grantor hereby establishes. declares and grants a
non-exclusive easement during the Term (as hereinafter defined) for the use of and access to the
Emergency Well and related facilities over. on. under and across the Emergency Well Parcel for
the benefit of Grantee. its licensees. successors and assigns (the "Easemen!"). The Easement is
EMERGENCT. WELL EASEMENT AGREEMENT _ 1
1471 91 98
BCS-D|A-W-19-01 |PUC DR 15
Gem State First Supplemental Response
Page 1 of6
WELL
day of
granted for the purpose of (i) pumping water from the Emergency Well and distributing such water
to meet the domestic residential water supply needs of the System if for any reason the System
cannot. in the reasonable determination of Grantee. otherwise meet the water use demands of the
users and customers of the System; and (ii) the construction. maintenance. repair. and
replacement of the Emergency Well and related facilities as Grantee determines is reasonably
necessary for the reliable operation of the System. In the event that Grantee reasonably
determines that it is necessary to pump and distribute water from the Emergency Well. Grantee
shall give notice by e-mail or telephone to Grantor (to the e-mail address or phone number listed
on the sigaature page hereto), or to any representative designated by Grantor by written notice to
Grantee (to the e-mail address or physical address listed on the signature page hereto). Grantor
agrees to tum the Emergency Well on and off witbin two (2) hours of any such request from
Grantee (or otherwise to cause Grantor's representative to do the same). Grantee agrees to
purchase all water pumped from the Emergency Well at rates consistent with Diamond Bar's Idaho
Public Utilities Commission approved tariff All Idaho State water rights. licenses or permits
associated with the well and the Emergency Well Parcel shall remain with Grantor.
2. SCOPE OF EASEMENT: NON-INTERFERENCE. The scope of the
Easement shall be limited to the use and purpose described above in Section I unless expanded
or modified with the prior written consent of Grantor. Grantor may Lrse the Emergency Well and
the Emergency Well Parcel in any manner which does not unreasonably interfere with Grantee's
rights hereunder.
3. GRANTEE'S EXERCISE OF RIGHTS. Except in an emergency. Grantee
shall give Grantor reasonable notice (not less than twenfv-four (24) hours) before commencing
anv work on the Emergency Well. In addition. Grantee shall provide Grantor with proposed
plans and specifications at least five (5) days prior to any significant repair or replacement of the
Emergency Well or related facilities. and Grantee shall use its commercially reasonable efforts to
minimize any interference with or disturbance to Grantor and its use and enjol.rnent of the
Emergency Well Parcei. Any repairs or replacements to the Emergency Well during the Term
shall be at Grantee's sole cost and expense.
4. TERM. The term of this Agreement ("Term") shall commence on the Effective
Date and expire upon the one (l) year anniversary of the Effective Date. On the expiration of the
Term. this Agreement and the easement granted herein shall automatically terminate. and the
Parties shall execute a recordable acknowledgment of termination of this Agreement upon
written request from either Party.
5. HEADINGS. The headings of the several sections contained herein are for
convenience only and do not explain. define, limit, amplify. or aid in the interpretation.
construction or meaning of the provisions of this Agreement.
6. EXHIBITS AND RECITALS. All exhibits attached hereto and the recitals
contained herein are incorporated herein as if set forth in full herein. However. in the event of
any conflict between such exhibits and/or recitals and the text of this Agreement. the text of this
Agreement shall control.
EMERGENCY WELL EASEMENT AGRXEMENT -2
BCS-DIA-W-19-01 IPUC DR 15
Gem State First Supplemental Response
Page 2 of 6
14719198
7. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Idaho and shallbe performed in the State of Idaho.
8. BINDING EFFECT. All of the easements. covenants. conditions and
declarations contained herein shall run with the land. shall be a burden on the Emergency Well
Parcel. and shall be for the benefit ofthe Grantee. its licensees. successors and assigns.
9. REMEDIES. In the event of a breach hereunder, the non-breaching party shall
have all remedies available at larv or in equity. including injunctive or other equitable relief. In
any suit. action or appeal therefrom to enforce or interpret this Agreemenl the prevailing party
shall be entitled to recover its costs incurred therein, including reasonable afiorneys' fues and
disbursements. and also including reasonable attomeys' fees and costs associated with any
appeal of a judgment.
10. RECORDATION. This Easement Agreement shall be recorded in the office of
the recorder of Kootenai Countv.
11. MODIFICATION. This Agreement constitutes the entire agreement between
the Parties relative to the subject matter hereof and may only be amended by a writing
specifically referencing this Agreement and signed by the Parties or their successors. Iegal
representati ves. assignees or transferees-
[S ignature pages follow]
EMERGENCY WELL EASEMENT AGREEMENT _ 3
BCS-DIA-W-19-01 IPUC DR 15
Gem State First Supplemental Response
Page 3 of 6
1471 91 98
IN WITNESS WHEREOF. the undersigned have caused this Agreement to be executed
effective the day and year first above rvritten.
GRAI,iTOR:
N
GRANTEE:
B. Turnipseed
Addrcss for Notice Pumoses:
P.O. Box 1870
Hayden, Idaho 83885
Phone:liaY- Le;1 9tca
Email: I A,rn..'l op aL rt Q?4c,-fr-- . C az--
GEM S'I),TE WATER COMPANY. LLC. an
ldaho limited liability company
Addrcss I'or Notice Purposes:
By:
N
Tirl
220 NW Second Avcnue
Portland. Oreson 97209
Phone: t \oZ'ZJlv )41f,ra vr:g-n@ fiNnAlufctl to'nEmail:v
Inotary acknowlcdgrnents fol low]
EM ERG E^.CY WELL EASEIVI ENT AG REEME.T*T - 4
147191 98
BCS-DIA-W-19-01 IPUC DR 15
Gem State First Supplemental Response
Page 4 of 6
STATE OF IDA}IO )
County of ,(oo\.-r-
On this lLday of 9*D*. 2019. before me. a notary public in and for
said state. person'ally appeared Roffirt N. Turnipseed and Clara B. Turnipseid. known to me to
be the persons whose names are subscribed to the within instrument. and acknorvledged to me
that they executed the same.
IN WITNESS WHEREOF. I have hereunto set my hand and affixed my official seal the
day and year first above written.
for ldaho
Residing ut' .4t-r'i^iJ c-n H
My comm.rssron exDrrcs: Y -z-L4
-
ss
srArE oFc regnn ]
county orIt')rf l*nnrnah i
on this | &*Laay of'2019. before me. a Notary Public in and for said
known or idcntificd to me to be
thc t<of GEM STATE wA COMPANY. LLC. an Idaho limited
Iiability company. who subscribed said company's name to the foregoin-s instrument. and
acknowledged to me that h( executed the same in said company's name.
lN WITNESS WHEREOF. I have hereunto set my hand and affixed my official seal the
day and year first above written.
ss.
@
0FFlClAt STA^rP
PA}TELA LYNXE VILIJLOBOZ
ilOTANY PUSLIC .OREGON
coflnrs3roN rl0. e77508
ily corxrssroN EXP|RES JULY 26. 2022
EMERcENcy wELL EAsEM Er''t' A(iREliM ENT - 5
14719198
{,u
Notary Publ
Residing at:
My commi expires:
BCS-DIA-W-19-01 IPUC DR 15
Gem State First Supplemental Response
Page 5 of 6
(
I
EXHIBIT A
EMERGENCY WELL PARCEL
A tract o{ land in the Northurert Ouarter oJ Sectlon 3, T51N, R4tlB,M-, Kootenal Countyr Idaho fcrrther descrlbed as follows;
ComnenqJng at !-he Northwogt Corner of sald Sectlcn 5 which bearE
SB9o51 '3o'td a di*taneo of 2643-7P {eet from thc l{orth Qr-r-rrterCorncr of gaLd.sectl,on Sl thence S44o55'46"E a dlstanco ol 43.36lect tc r polnt on the South Rlqht-of-kl.ry llne o{ tha CoLrnty Ro.!d(Boekel Road)and on 'rhe East Right-of:l,tay o{ the Coun--y Roa6{Atlas Road} rnd tho TRUE PBINT OF tsEGINNING for thj,s desc:-ip-tlon; Thenca NB?o91'SO'E,, along the Right-of-tlay ltne of BoekelRoad a distance of 598.46-feet; Thenee SOO?OS'3O,,4, a distance cf7+&.6L ,coti Thence SE+o57'59.E, r dlstanea of 39o:79 feet;Thenca NOIoOS'44'Er s dlstance ol 747.97, feet to Lhe lnter=ectlcnwtth the South llno of Boel<el Read i Thence NB9oS1'SO"E, alongrald RlEht-of-ttay a dlBtanEe of 9?l.O3 foet i Th€nce SO3o12'50'tl,a.distinsa o7 7?4.99 {ect to tho lntergeet,Ion wl.th the NorthHeBt-erly Rlght-of-r^rry o{ tho Unlon Prrc,lflc RrLlroad.; ThonceS33ooo'14'ul, rlong ratd Rlght-o{-Nay, r dlstance of 2395.9O reet
to -the lotorrcction wlth the East Rlght-ot-}Jay of Atlas Road;
Thcneo NoootT'4B"E; r dlitanca o7 2L62194 feet to the TRUE POINT
OF BEGINNING,
EMERGENCY WELL EASE,MENT AGREEMENT - 6
BCS-D|A-W-19-01 IPUC DR 15
Gem State First Supplemental Response
Page 6 of 6
1471 gl 98