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HomeMy WebLinkAboutCOBOTT.docx 1 (The following proceedings were 2 had in open hearing.) 3 COMMISSIONER KJELLANDER: And 4 typically at this point what we do would be to 5 subject you now to cross-examination, but in light 6 of the fact that I know you have some general 7 statements and comments that you would like to make, 8 why don't we begin with those and we'll include that 9 then as part of the official record, and then move 10 forward into the cross-examination. So, Mr. Cobott, 11 if you would like to provide an additional statement 12 and comments? 13 THE WITNESS: In regards to rates, the 14 residential rates and part-time rates, the way that 15 I have to look at this is who is putting the most 16 strain on the water system as far as electricity, 17 use of the pumps, chlorination, so on and so forth. 18 That's why I -- that's why I think that the resident 19 owners and any owner that has a live-in structure -- 20 which I call a live-in is something that they can 21 drive up to, get out of their car, open the door, 22 walk in, and be at home -- I think those particular 23 people and the full-time residents should pay the 24 majority of the expense of the water system because 25 those are the ones that -- that are putting the 163 HEDRICK COURT REPORTING COBOTT P.O. BOX 578, BOISE, ID Ponderosa 1 strain on the system. And I also have no control as 2 far as when these nonresident people come up and use 3 their facilities. I don't know if they're there 4 once a month, once a year. I have no way of 5 knowing. So that's my comments on that particular 6 item. 7 If some of the other rate classes -- 8 five, six, seven, or whatever Michael Fuss has come 9 up with -- are implemented with a lot of different 10 situations, it's going to cause a lot of problems 11 with bookkeeping as far as having to make sure that 12 someone is charged for four months and -- I mean, 13 it's just a big -- it would be a lot more work to 14 try to control that. And the problem that I've had 15 in the past is a lot of these customers or 16 landowners -- I shouldn't say a lot of them -- 17 there's a few landowners that are residents that 18 will call me up and tell me that they're going on a 19 nonresident status. Well they might be going on a 20 vacation or whatever, I don't know, but they want to 21 be charged nonresident. 22 Well in the past, nonresident was $30 23 or it was 10.85 prior to that. What they do is they 24 leave for a few weeks or maybe a month, and then 25 they come back and they neglect to tell anybody that 164 HEDRICK COURT REPORTING COBOTT P.O. BOX 578, BOISE, ID Ponderosa 1 they're back. So, consequently, I'm billing them 2 for the nonresident rate because I have no idea that 3 they're back. And I eventually catch it within a 4 few months, I catch it, but this is some of the 5 things that happens. You can't watch everybody, you 6 can't be there 24/7 and watch everybody, and a lot 7 of times when people come back you can't even tell 8 they're back. Their houses are back in the woods; 9 you can't even see. 10 It's been stated that -- by 11 Bob Smith -- that every water system, even though 12 it's a water system servicing landowners, they're 13 all different. We're not -- we don't all come out 14 of a mold. We all have our own set of circumstances 15 and conditions pertaining to our -- that particular 16 water system. So I don't see how you can judge one 17 against the other, because every one has 18 different -- different problems. 19 I brought this up to Michael Fuss and 20 Lisa, and now I want to bring it up and put it on 21 record: 22 I want to know what is going to happen 23 as far as the moneys owed to me from the landowners 24 from before PUC got involved. Some of these 25 landowners owe me a lot of money. Granted, some of 165 HEDRICK COURT REPORTING COBOTT P.O. BOX 578, BOISE, ID Ponderosa 1 it's my fault. I've tried to be firm but when 2 somebody has three or four kids and it's in the 3 middle of the winter, I just can't bring myself to 4 turn them off, and they have abused me. I want to 5 know what I can do to collect this back revenue. 6 Now, I was told by Michael Fuss that 7 whenever the Commission makes their ruling, it 8 starts from that date, nothing previous, it's just 9 like starting a new company. I can agree with that, 10 but I want to know -- this is money owed to the 11 customer, to me, from these landowners. It's not 12 fair from the other landowners' aspect that they 13 have paid all this time but these other landowners 14 haven't. That's not right. I don't want to get 15 myself in jeopardy because Joe Brown will come to me 16 and say: Hey, I've paid you all along and now you 17 just wrote off Bill Casey's water bill. How come I 18 didn't get the same treatment? I want the same 19 amount of credit. I want the same amount of free 20 water. Plus, I want my money. 21 I still haven't got answered to my 22 satisfaction a reasonable return on my investment or 23 a monthly profit. Bob Smith has indicated $3,000 a 24 year for this, and that includes the loan that I had 25 to take out to get to pay for the water, the second 166 HEDRICK COURT REPORTING COBOTT P.O. BOX 578, BOISE, ID Ponderosa 1 well. $3,000 a year is nothing. $3,000 a year 2 should be the minimal amount of profit alone. 3 Originally I asked for $300 a month is what I asked 4 for for profit. I think I'm entitled to profit. 5 This business is no different than any other 6 business. It's entitled to make a profit. 7 In regards to my testimony, I was told 8 to give a honest testimony. I have not tried to in 9 any of my conversations with Bob Smith or 10 Michael Fuss or when I've talked to Lisa, I've not 11 tried to hide anything. They asked me to make a 12 testimony. Michael Fuss sent me the paperwork to 13 follow, which I appreciated, and I followed it. I 14 tried to be as honest as I could for what I do. I 15 tried to be as honest as I could as far as coming up 16 with the amount of time it takes to do certain 17 functions during the course of a month. Let's say 18 just for an example that we take -- even if you took 19 30 hours away, you disallowed 30 hours of the 76, 20 you'd be real close to the $1,000, even if you 21 adjusted that much, which is almost probably 40 22 percent. Again, I was trying to be reasonable here, 23 the word "reasonable." I show $1,520 and I said I 24 would settle for $1,000. 25 Bob Smith has indicated that he has 167 HEDRICK COURT REPORTING COBOTT P.O. BOX 578, BOISE, ID Ponderosa 1 allowed me 12 percent. Well, the interest on my 2 mortgage alone is 11.74, so where does my capital 3 investment come in, where does my profits come in? 4 He says all of this is combined into one thing. I 5 requested 15 percent. I wasn't trying to be 6 unreasonable; I was trying to be reasonable. 7 Says here the statement is Should 8 Ponderosa receive more labor-related compensation or 9 a higher rate of return than other regulated small 10 water companies. 11 Again, I don't care -- I put "yes" as 12 the answer. Again, I don't care what other 13 companies do. All I'm really concerned with is that 14 I receive enough revenue to make my company 15 functional. That's all I care about. Not a dollar 16 more, not a dollar less. I don't care what another 17 company does. 18 I agree with Michael Fuss's 19 recommendations for the $2,500 hookup. I agree with 20 the 37 hookups at present. The thing I don't agree 21 is when I have to write letters to tell people that 22 they have to have their -- they're going to have 23 their water shut off, and then I have to write 24 another letter and get it to them within 24 hours, 25 and then I have to physically go out there and knock 168 HEDRICK COURT REPORTING COBOTT P.O. BOX 578, BOISE, ID Ponderosa 1 on their door and tell them I'm turning their water 2 off and ask if they got the letters and why they're 3 not paying their bill, and so on and so forth, I 4 can't see that I can't -- I don't understand why I 5 can't charge a turnoff fee as well as a turnon fee. 6 Somebody physically has to go out there to turn the 7 water back on again after they pay. I think that 8 turnon and turnoff fee should be $50 each way. I 9 found in my experience over the years the higher the 10 price you put on situations like this, whether it's 11 turn on or turn off water or abusement of the system 12 or whatever, the likelihood is that they're not 13 going to let it get turned off because they don't 14 want to have to pay the $100 extra, and that's what 15 I've experienced. 16 The other thing that I've experienced 17 in water systems and I've had a lot of landowners 18 call me and write me and say, Why don't you bill us 19 quarterly? Why don't you bill us every two months? 20 The reason I don't do that and can't 21 do that is for one reason: If you bill them every 22 two months, you won't get paid. The amount becomes 23 too high. They don't save the money. All of a 24 sudden, they've got to pay $100 for water and they 25 don't have it. So I'm forced to make out statements 169 HEDRICK COURT REPORTING COBOTT P.O. BOX 578, BOISE, ID Ponderosa 1 every month; there's no getting around that. 2 Another thing here is we have a great 3 amount of problem with people -- landowners, excuse 4 me -- leaving the area beginning of winter or during 5 the winter or whenever and forgetting to turn their 6 water off at the underground spigot or at the 7 underground valve. Consequently, when spring comes, 8 we have water everywhere. 9 I'm requesting a $10 charge to have 10 the water turned on or turned off, and it has to be 11 turned on by a Water Company personnel. Those 12 valves are down between four and five feet and if 13 they break -- we've had this happen with landowners 14 that have tried to put in their own water systems to 15 their homes. They get and they turn them on and 16 they break, and we've got water everywhere. This 17 has happened numerous times. 18 Q. This last part of my testimony, I'll 19 just read the paragraph. This is my feelings: 20 I want to work with PUC to make the 21 Water Company work. I've got close to $200,000 22 invested in this company and I want a decent wage 23 and return on my money. If a person does not feel 24 good about the situation he's put in, then it's 25 going to reflect on the work he does. These 170 HEDRICK COURT REPORTING COBOTT P.O. BOX 578, BOISE, ID Ponderosa 1 landowners want water but most don't think they 2 should have to pay much for it. The realization is 3 with all the controls on water these days, water is 4 not cheap anymore. 5 That's all I have to say at this 6 moment. 7 COMMISSIONER KJELLANDER: Thank you, 8 Mr. Cobott. And at this point then, we will open up 9 for cross-examination from the deputy attorney 10 general. 11 MS. NORDSTROM: Thank you. 12 13 CROSS-EXAMINATION 14 15 BY MS. NORDSTROM: 16 Q. Just as a couple preliminary 17 questions, although the water system is located in 18 the subdivision, your principal place of business is 19 in Sandpoint. Is that correct? 20 A. It's outside of Sandpoint. 21 Q. Okay. Is that the address 2626 Wrenco 22 Loop Road in Sandpoint? 23 A. Yes. 24 Q. Okay. And the name on your -- the 25 documents you sent us is PTE Water System, Inc. I 171 HEDRICK COURT REPORTING COBOTT (X) P.O. BOX 578, BOISE, ID Ponderosa 1 take it from the "Inc." that you're incorporated? 2 A. Yes. 3 Q. So you filed something with the 4 Secretary of State? 5 A. Every year. 6 Q. Okay. I've gathered thus far that 7 there are only two employees of the Company: 8 Yourself and Mr. Fairfax. Is that correct? 9 A. Yes. 10 Q. Okay. Staff's testimony has indicated 11 that, you know, depending on -- well, Mr. Smith's 12 direct testimony talked about labor costs totaling 13 about $9,000, and then he gave a different option in 14 his rebuttal testimony which was about $10,000. 15 If I understand you correctly, you 16 would like $12,000. That's $1,000 a month for 17 twelve months. Is that correct? 18 A. Yes. 19 Q. Okay. So we're not too far apart if 20 I'm understanding this correctly. 21 In your testimony, you listed all the 22 tasks that were required to operate and manage the 23 Company. Now, was that just the things that you 24 do? Does that include Larry or the stuff that he 25 does, or is that not accounted for in your list? 172 HEDRICK COURT REPORTING COBOTT (X) P.O. BOX 578, BOISE, ID Ponderosa 1 A. That's not accounted -- Larry's is not 2 accounted for. 3 And getting back to your previous 4 question, maybe I misunderstood that. What are you 5 talking about eight or 10,000 and going to 12,000, 6 what do you mean by that? 7 Q. Well, when I initially read your 8 testimony I thought that these were all your 9 expenses, and since Larry -- or, Mr. Fairfax -- had 10 quit and wasn't working for you anymore, that you 11 were going to do everything, and if so, what you 12 were asking for was $1,000 a month. Is that right 13 or am I misunderstanding something? 14 A. No, that's not right. 15 Q. Okay. 16 A. You're coming up with a total yearly 17 expenses of 12,000. Was that what you said just a 18 moment ago? 19 Q. For labor, yes. 20 A. How can it be 12,000 if you've got 21 eight or 10,000 in other related expenses, labor 22 expenses, and you haven't even figured in my wages 23 yet? 24 Q. Well that's what I was trying to 25 determine, because I didn't know -- because 173 HEDRICK COURT REPORTING COBOTT (X) P.O. BOX 578, BOISE, ID Ponderosa 1 that's -- when I understood that you filed your 2 testimony, I thought that Mr. Fairfax wasn't working 3 for you. Is he working for you now? 4 A. The only thing he's doing and only 5 because the electric is still hooked up, we haven't 6 got it changed yet, he's taking the daily testing is 7 the only thing he's doing. There's no water repairs 8 being done which need to be done, and that's all 9 he's doing at this time, and compensation for -- his 10 compensation for doing that is his electric bill. 11 Q. Okay. So what is the total labor 12 expense that you're recommending that the Commission 13 adopt -- 14 A. It -- 15 Q. -- for both of you? 16 A. -- appears that my wages are showing 17 $320 a month: $80 a week times four. I'm saying 18 1,000. So you're talking about $680 difference per 19 month over a year, 12 months. 20 Q. Well, I was wondering if we focused on 21 the total labor costs and not just the salaries of 22 individual people but the overall labor costs. It 23 might be the differences would help resolve 24 themselves, because as there's been previous 25 testimony, the costs don't have to be allocated 174 HEDRICK COURT REPORTING COBOTT (X) P.O. BOX 578, BOISE, ID Ponderosa 1 specifically for the various experiences so long as 2 they're expended on behalf of the Company. 3 So what is the total amount of labor 4 costs that Ponderosa is recommending for the 5 services that you provide and Mr. Fairfax provide to 6 the Company? 7 A. You're showing -- you're showing, what 8 was it, 8,000 or 10,000 before we are talking about. 9 Q. In that range, nine to $10,000. 10 But then there was -- we also 11 identified a couple of line items, line item 10 and 12 line item 33 that were about another $5,000 for 13 major repairs and emergencies? 14 A. So you're probably looking at 15 somewhere around 20,000? That's a ballpark, but I'm 16 not sure about all these little figures you're 17 talking about. 18 Q. Well -- 19 A. I stated I wanted $1,000 a month. 20 Right now it's $320 a month based on four weeks. 21 Q. Okay. So the 17 items that are listed 22 on pages 1 and 2 of your testimony include all the 23 management, operation, and maintenance activities 24 except for those that Mr. Fairfax does. Correct? 25 A. Well, there's no maintenance on there. 175 HEDRICK COURT REPORTING COBOTT (X) P.O. BOX 578, BOISE, ID Ponderosa 1 I don't have anything listed that I'm going out and 2 digging up pipe or any of that type of thing, or 3 working on the chlorinator or anything like that, or 4 taking water tests. I did not state any of that in 5 this. 6 Q. Okay. 7 A. I stated in there that I wanted -- 8 that I keep records of the flow meter, of the 9 different things that I need to keep records of the 10 free chlorine tests daily, the flow meter records 11 daily, this type of thing. 12 Q. So what dollar amount of labor 13 expenses for things like water testing and things 14 that Larry used to do are not accounted for? What 15 dollar amount should the Commission pay for? 16 A. Well the thing there is if I have to 17 physically go out there every day, drive from my 18 home and go out there and take the water tests and 19 do these things every day, it's going to be pretty 20 costly. I don't want that to happen. It's about an 21 hour's drive each way from my house. 22 That's why Larry sent me a application 23 permit -- application for a permit -- to get his 24 electric separated from Ponderosa. That has not 25 been done yet for the simple reason Larry doesn't 176 HEDRICK COURT REPORTING COBOTT (X) P.O. BOX 578, BOISE, ID Ponderosa 1 have the money to get it done and I don't have the 2 money to get it done. What's involved is we have to 3 have another meter installed and we have to call the 4 power company out to switch. It's still going to be 5 under Ponderosa's name, but it's going to be 6 Ponderosa well site and -- what did I put down, 7 Ponderosa house or something like that -- Ponderosa 8 house. That's the way we're going to get two 9 different bills from the power, and that's the way 10 it was going to be broke down. That has not been 11 done yet. 12 The water system has not received 13 revenue to keep up with all the bills and expenses, 14 it just hasn't. 100 to -- to 180 a month doesn't do 15 it, not even close. And I did pay two months of the 16 electric bill. I owe another month. There's 17 probably another month coming due now. But -- and I 18 paid the testing company, Acura Testing in 19 Coeur d'Alene. Outside of that, everything else has 20 just been kind of carrying forward. 21 Q. Do you anticipate that you will be 22 able to contract with Mr. Fairfax or some other 23 individual to help do your on-site daily testing of 24 water? 25 A. That's why Fairfax -- Mr. Fairfax -- 177 HEDRICK COURT REPORTING COBOTT (X) P.O. BOX 578, BOISE, ID Ponderosa 1 is here today. He wants this to work and I want it 2 to work. Mr. Fairfax has been doing the work on 3 this system for many years now. He knows where 4 every pipe is, where every valve is. 5 He's personally gone up to the -- went 6 up to the tanks, drained the tanks. He actually got 7 inside the tanks and cleaned them all with chlorine, 8 resurfaced. What they do is they have a tank and 9 another tank sits on top and there's a seal. He 10 redid the seals, cleaned them all up. He knows 11 everything about the system, where everything goes. 12 He's experienced as far as all of a 13 sudden you see water. He knows where to dig to find 14 that leak. 15 I was told that from I think it was 16 Randy Low (sic) is it or something that you will -- 17 Lodd (sic) or something like that -- that most water 18 systems have about a 30-year life as far as pipes 19 and stuff go. Well, these pipes have been in the 20 ground now for 32 years. There's going to be 21 repairs and there has been repairs, but overall I 22 think the system is sound. 23 A lot of people have accused the 24 system of having water leaks, that's why we run out 25 of water. Well that's why we take the flow meter 178 HEDRICK COURT REPORTING COBOTT (X) P.O. BOX 578, BOISE, ID Ponderosa 1 readings. If we have serious leaks, then the 2 serious leaks should be there 12 months a year. My 3 question is how come I can use 30,000 gallons a day 4 in the summertime and eight or 9,000 in the winter, 5 and it's the same amount of resident use. Something 6 is -- somebody here is -- well, I'm going to use the 7 word -- "abusing" the system. 8 Q. Okay. 9 A. That's where meters come in. You put 10 a meter on a system, you can tell instantly if that 11 house has a leak. You make sure all the water 12 inside the house is turned off and you look at the 13 meter. If that meter is running, then there's an 14 underground leak on the property. I can't go on the 15 property and fix underground problems, but I can 16 sure inform the landowner that they better fix that 17 leak or you're going to get your water turned off. 18 Q. Speaking of equipment and meters and 19 such, I had a question. On your page 3 the question 20 is do you own any equipment that is used by the 21 Water Company, and I took that to mean construction 22 equipment as opposed to -- 23 A. Well, I have an excavator. 24 Q. Right, construction equipment like 25 excavators, as opposed to pumps and pipes and other 179 HEDRICK COURT REPORTING COBOTT (X) P.O. BOX 578, BOISE, ID Ponderosa 1 things that are part of the company? 2 A. You're correct. 3 Q. Is that correct? 4 A. That's correct. 5 Q. Other than the incident you mentioned 6 and back in the late '90s when your address was 7 being changed on Wrenco Loop Road, have you had any 8 trouble receiving your mail recently, like within 9 the last six months or a year? 10 A. No, as long as the address is 11 correct. The problem there was when I had the 1600 12 Wrenco Loop, there was another address the same 13 vicinity just up the road a ways called Wrenco 14 Heights 1600. They were getting a lot of my mail. 15 When the County came out and changed the addresses 16 for emergency vehicles, there's still 1600 away from 17 me now. I'm 2626, which means I'm 2.6 miles in. 18 And so that's where some of the confusion comes. 19 And a lot of these people were 20 reluctant to accept their new addresses. In fact, 21 the Post Office told me when I went in and told them 22 I wanted to change the address and the guy said, 23 Well, I wouldn't do that. I'd keep them both. 24 Just shows you how people -- I don't 25 know. 180 HEDRICK COURT REPORTING COBOTT (X) P.O. BOX 578, BOISE, ID Ponderosa 1 Q. Okay. Well, I just wanted to make 2 sure that you were receiving correspondence from the 3 Commission. 4 A. Yes, as far as I know. 5 Q. Did you receive a big packet of Orders 6 and Rules and things? 7 A. Yes. 8 Q. Okay. That's good. 9 A. Michael Fuss had already given me a 10 packet of Rules too when he met with me. 11 Q. We just want to make sure you have 12 those. 13 I know we've talked about different 14 turnoff and turnon fees for water. In your 15 testimony you mentioned $50 apiece, but then you 16 discussed a few minutes ago, you mentioned $10 17 apiece? 18 A. No, that was -- 19 Q. Are we referring to different fees? 20 A. That was -- let's say that you are a 21 landowner and you're current, everything is fine, 22 but you're going to leave for two, three months, 23 maybe the wintertime, so then you want your water to 24 protect anything breaking in your house and causing 25 havoc, then you want your water turned on at -- 181 HEDRICK COURT REPORTING COBOTT (X) P.O. BOX 578, BOISE, ID Ponderosa 1 turned off at the road. Then either Larry -- in the 2 past it's been Larry -- would go out and he would 3 turn the water off for you. And then when you come 4 back, you contact him and he would turn it on for 5 you. 6 Q. So the $10 fee is more to protect the 7 resident while they're gone, rather than to protect 8 the system once someone stops paying their bills? 9 A. It's nothing to do with stop paying 10 the bill. 11 Q. That's what the $50 fee -- 12 A. Just like Mr. Peterson over here. He 13 was coming up and he called. Larry just happened to 14 be -- I was with Larry. This was a couple weeks ago 15 or week and a half, something like that, and he 16 stopped by and he turned his water on because he 17 knew he was coming up. That's a very smart way for 18 these landowners to do it, but not everybody does 19 it. 20 Q. I see. Thank you for clarifying 21 that. I think that's all the questions I have. 22 Thank you. 23 COMMISSIONER KJELLANDER: Are there 24 questions from the Commission? 25 182 HEDRICK COURT REPORTING COBOTT (X) P.O. BOX 578, BOISE, ID Ponderosa 1 EXAMINATION 2 3 BY COMMISSIONER KJELLANDER: 4 Q. I think I do have one for you and I 5 think it's along the same lines, but I might be just 6 a bit confused and I was hoping you might be able to 7 clarify it. Item No. 10 that you sort of referenced 8 in your opening comments that you made stated that 9 you wanted a $10 charge to have the water valves 10 turned on and off, and I was wondering if the $25 11 reconnect fee that Michael Fuss has recommended 12 might actually be $5 more than what you're looking 13 at in terms of that total $20 charge there which you 14 would then be able to collect upon reconnection? 15 A. There are two different things. The 16 $25 charge that Michael Fuss has talked about is 17 when somebody does not pay their bill and we have to 18 write the letters and we have to physically go out 19 and turn their water off. The water remains off 20 until they paid their bill in full, plus the 21 reconnection fee, and then the water will be turned 22 back on. 23 The $10 is referenced to a landowner 24 that is current in their water bill but they are 25 leaving. They are leaving during let's say during 183 HEDRICK COURT REPORTING COBOTT (Com) P.O. BOX 578, BOISE, ID Ponderosa 1 the winter, like the Petersons over here, they leave 2 during the winter. If they didn't turn that water 3 off, chances are they might flood their house if 4 something broke in their house. 5 So what we require is we don't want 6 landowners to go out and physically try to turn this 7 valve off themselves. They turn it the wrong way, 8 they turn it too hard, they break it, and then we 9 have to go out and dig it up and fix it. 10 Now, along the road on every lot we 11 have a six-inch stand-up pipe. It's a PVC pipe that 12 stands up out of the ground. Down in that pipe 13 approximately four, four and a half feet, is a 14 shut-off valve going to every house. That's the 15 valve that we're talking about that we turn on and 16 off for the landowners. 17 What the $10 charge is is for Larry to 18 have to go out there, or myself, physically go out 19 there with a key, drop it down in the hole, and turn 20 on or off. 21 Q. Thank you for that clarification. I 22 appreciate that. 23 And one other question; it was Item 24 No. 2 during the same testimony that you provided. 25 You were saying that you have trouble with the 184 HEDRICK COURT REPORTING COBOTT (Com) P.O. BOX 578, BOISE, ID Ponderosa 1 full-time versus part time residents when the 2 part-time residents just show up and they were on a 3 certain rate schedule and then they have been off 4 for a while and it's hard for you to know that 5 they're even back yet? 6 A. That's correct. 7 Q. Okay. Would one of the options or 8 recommendations that makes the full-time and the 9 part-time rate equivalent, would that help resolve 10 that issue? 11 A. Yes. Yes. Because the way that 12 Michael Fuss and I looked at that was if I was a 13 landowner and I had a house or a trailer or 14 something that was livable and all I had to do was 15 drive up and drive onto my lot, get out of the car 16 and go into the structure and turn on the lights, 17 turn on the power, I mean, the water, everything, is 18 there, ready to go. 19 Q. Thank you. That is all the questions 20 I have. 21 COMMISSIONER KJELLANDER: Do any of 22 the other Commissioners have questions? 23 Commissioner Smith. 24 COMMISSIONER SMITH: Thanks. 25 185 HEDRICK COURT REPORTING COBOTT (Com) P.O. BOX 578, BOISE, ID Ponderosa 1 EXAMINATION 2 3 BY COMMISSIONER SMITH: 4 Q. Just on this $10 charge to turn on and 5 off, is the $10 amount an estimate of your costs for 6 doing that? 7 A. Yes, it's just a labor fee. 8 Q. And how long does it take to put that 9 down there and twist it? 10 A. It depends. Larry lives approximately 11 anywhere from half a dozen blocks to maybe a half a 12 mile or something away, maybe a little bit more. He 13 has to go out and get the key, put it in his truck 14 and go out to the -- drive out to the lot and turn 15 it on or turn it off, whichever the case may be. 16 And in the wintertime, there might be snow on the 17 ground that he has to dig away from the stand-up to 18 get the pipe down inside of it. Sometimes he has 19 problems because kids will be kids and they'll drop 20 rocks down in the hole because it is a six-inch hole 21 that sticks up out of the ground, and he has to 22 remove that before he can get the water turned off. 23 The main thing is I don't want 24 customers doing it themselves, because I've had I 25 would say close to a dozen now that have actually 186 HEDRICK COURT REPORTING COBOTT (Com) P.O. BOX 578, BOISE, ID Ponderosa 1 wrecked the valves, and then you get into bringing a 2 backhoe, digging it up, replace it, and it's very 3 costly. 4 Q. Well I'd like your -- I guess your 5 reaction to this idea: 6 It occurs to me that instead of 7 charging them on both ends, you ought to pick either 8 the shutoff point or the turnon point and just 9 charge them one fee. So, for example, somebody 10 says, I'm leaving for the winter, I want it shut 11 off. You say, That's going to be X dollars, whether 12 it's 10 or 15 or something else. And then they know 13 that when they come back in the spring they just 14 call and say, I want it turned on. And you just go 15 do it for the one fee instead of the two charges. 16 A. Well, we can increase the fee, that's 17 fine, but it takes the same amount of time to do 18 both, so -- 19 Q. Well I was trying to think of a way to 20 encourage people to call, like maybe your shutoff is 21 free and then you pay to get turned on in the spring 22 or -- I just don't -- I think people -- everybody 23 likes to be self-sufficient and think they can do it 24 themselves. They know where the thing is, they've 25 got this key, they just turn it. 187 HEDRICK COURT REPORTING COBOTT (Com) P.O. BOX 578, BOISE, ID Ponderosa 1 A. It's a big key. It's a big piece of 2 metal. 3 Q. And everybody wants to save a buck. 4 So I was trying to think of some way to structure it 5 so that they have an incentive to call you, but I 6 haven't thought of it yet. 7 A. Well, this stand-up pipe with the 8 valve is the property of Ponderosa Terrace Estates. 9 It's nothing to do with the landowners. What they 10 do is the pipe, like I said, is four and a half feet 11 down, the valve is down there. Now when they want 12 to bring water to their home, they have to get a 13 backhoe or some people have done it by hand and they 14 dig down to that valve, and the valve has a female 15 connection on it and they just screw a piece of pipe 16 into there and run it to their home. Some people 17 have elected just to come out of that female 18 connection and come up with a frost free. Some of 19 them have elected to come out of that female 20 connection and just come out with a galvanized pipe 21 with a faucet on it. Well if that water is not 22 turned off in the winter, what happens to that 23 faucet and that galvanized pipe? Same problem 24 again. 25 Q. Does the Company have any regulations 188 HEDRICK COURT REPORTING COBOTT (Com) P.O. BOX 578, BOISE, ID Ponderosa 1 or requirements about what you can put on that? 2 A. I would like -- I would like if 3 they're going to put a galvanized pipe with a 4 faucet, then they have to -- it's their 5 responsibility to make sure that when they leave, 6 that that faucet is turned off. A lot of the 7 landowners don't want to go to the expense of 8 putting underground pipe to their facility where 9 there's a trailer or whatever. 10 Q. But it seems to me to say -- it's 11 inconsistent to say on the one hand you are not to 12 touch our Company-owned valve to turn off your 13 water, and on the other hand say it's the property 14 owner's responsibility to make sure that there's not 15 water going to that galvanized pipe, because isn't 16 the only way to prevent that to actually turn the 17 water off at the Company valve? 18 A. Absolutely. That's why I said it's 19 their responsibility to tell us to turn it off. 20 Q. I missed that part. I thought you 21 were saying it was their responsibility to turn it 22 off? 23 A. No. It's their responsibility, 24 because we don't know when they're going to leave. 25 We don't know when they're going to come. It's 189 HEDRICK COURT REPORTING COBOTT (Com) P.O. BOX 578, BOISE, ID Ponderosa 1 their responsibility to let us know this 2 information. 3 Q. Is there any way practical and not too 4 costly way of securing the Company's valves so that 5 people can't tamper with it? 6 MR. FAIRFAX: Can I answer? 7 COMMISSIONER SMITH: No. Your turn's 8 next, so if Mr. Cobott doesn't know, he can answer. 9 THE WITNESS: Not that I'm aware of, 10 no. The only way that is any way secured is if they 11 put in a frost-free. That way when the frost-free 12 is turned off, the system is drained and they don't 13 have a problem. And then they wouldn't have to pay 14 for the $10 on or off because the frost-free would 15 take care of the situation. 16 Q. BY COMMISSIONER SMITH: So it would be 17 their choice to make the investment or pay the 18 Company to do the turnoff? 19 A. Right. And I think Larry puts in 20 those frost-frees for, I'm not exactly sure, but 21 probably between somewhere between 60 and $100 22 apiece. I'm not really sure. I shouldn't say that, 23 because I'm not sure. 24 Q. Okay. I can appreciate that it was 25 probably a great shock to you to find out that you 190 HEDRICK COURT REPORTING COBOTT (Com) P.O. BOX 578, BOISE, ID Ponderosa 1 were actually operating an investor-owned, 2 State-regulated, public utility? 3 A. Yeah, like I said, I never -- never in 4 all my years, and I've had this system since '86, 5 had never heard of the PUC. 6 Q. Well, I can just advise you that you 7 are not alone in having this experience. So I guess 8 in that spirit, when you mentioned your turnoff fee 9 of $50 each way because if you price it high, that 10 will provide an incentive for people to comply, they 11 won't -- 12 A. Absolutely. 13 Q. The function of the Commission when we 14 look at what rates we should set is not to act as a 15 deterrent to certain behavior or as a punishment, 16 but as a means for achieving what I think you said 17 earlier you wanted, and that is the Company being 18 allowed to recover its legitimate and reasonable 19 costs of operation plus a reasonable return. So, as 20 far as setting a rate for the purpose of deterring 21 behavior, that's probably not what the Commission is 22 about; and the costs we -- the rates we set need to 23 be related in some way to the costs that are 24 incurred by the Company. 25 A. This $50 on and off would not be part 191 HEDRICK COURT REPORTING COBOTT (Com) P.O. BOX 578, BOISE, ID Ponderosa 1 of the rates. For the customers that don't get 2 themselves in that situation, there would be no cost 3 to them. 4 Q. Well, there's one other key piece of 5 the public utilities law and that is that a 6 regulated company may only charge what the 7 Commission has approved in your tariffs. So if it's 8 not in your tariff, it can't be legally charged, so 9 that's the other intention of the rule we need to 10 get with you. 11 Thank you very much. 12 COMMISSIONER KJELLANDER: Commissioner 13 Hansen. 14 15 EXAMINATION 16 17 BY COMMISSIONER HANSEN: 18 Q. I just had one question: 19 You, I believe in -- and I don't 20 recall which person's testimony it was, but stated 21 that you were gone a couple months in the winter -- 22 January, February -- and I'm sure at that time if 23 that's true, that Larry probably handled any 24 complaints. And I guess just to clarify in my mind 25 today, I thought I heard you say that now he wasn't 192 HEDRICK COURT REPORTING COBOTT (Com) P.O. BOX 578, BOISE, ID Ponderosa 1 going to be on call seven 24s anymore. And I guess 2 my question would be if you're out of town or you're 3 gone and if I did understand that correctly that 4 Larry isn't the person that's going to handle 5 complaints 24 hours a day, who would handle a 6 complaint when you're not there? 7 A. The -- there has been times that I've 8 been out of town, and when I leave town I call Larry 9 and tell him I'm going and give him my phone 10 numbers. And if he has a problem and he has to have 11 money for parts or whatever, he'll call me, and I 12 will get the money to him. 13 If Larry elects not to continue with 14 the water system, you're correct that I'd have to 15 get somebody else to help me with the system. I'm 16 not sure what will happen there yet. That's why 17 he's here today. He's trying to get this resolved 18 just as much as I am. It's very convenient for him 19 to work with the water system. He lives on the 20 property. He lives on a -- an acreage parcel 21 adjacent to the Ponderosa. He's not part of the 22 Ponderosa, but he lives just a few hundred feet 23 away. And it would be in the best interest to have 24 him work for the Company. 25 I've talked to other people that -- 193 HEDRICK COURT REPORTING COBOTT (Com) P.O. BOX 578, BOISE, ID Ponderosa 1 electricians and plumbers, and, see, he does all of 2 this, but I've talked to these other people and they 3 charge you a service charge to come out, so much an 4 hour, they charge you retail price on all the 5 fixtures or whatever they use. 6 The way we do it is if Larry needs 7 parts and it's an emergency type thing, he'll either 8 go get the parts himself or send his wife into town 9 to get them. A lot of times he will foot the money 10 himself. For example, if I'm not readily available, 11 he will call me up and say, Hey, I need 90 bucks or 12 I need $200 or whatever the case may be to get these 13 parts to fix this problem, and then he goes and gets 14 it, and then I wire him the money or whatever the 15 situation I'm put in. And that's what happens. 16 Q. So you're looking at continuing that 17 now? 18 A. I would like to continue this 19 relationship very much and I think Larry would too. 20 Q. Okay. 21 COMMISSIONER KJELLANDER: Thank you, 22 Commissioner Hansen. 23 Mr. Cobott, to accommodate your right 24 for redirect, is there any additional comments you'd 25 like to make at this point? 194 HEDRICK COURT REPORTING COBOTT (Com) P.O. BOX 578, BOISE, ID Ponderosa 1 THE WITNESS: I don't believe so. 2 COMMISSIONER KJELLANDER: Thank you. 3 We appreciate your testimony. 4 (The witness left the stand.) 5 COMMISSIONER KJELLANDER: I think at 6 this point we're -- is everybody fine as far as 7 break's concerned? 8 MR. PETERSON: Is there any chance of 9 me getting my two bits in before I have to go? 10 COMMISSIONER KJELLANDER: What time 11 did you have to leave? 12 MR. PETERSON: Well, soon. You've got 13 six o'clock coming up. 14 COMMISSIONER KJELLANDER: I'll tell 15 you what, this is an appropriate time to do that, so 16 we'll go off the record for purposes of the 17 technical hearing and we'll allow you to come up for 18 the public hearing piece of the puzzle today, and 19 why don't we just have you move on up and we can 20 have Ms. Nordstrom begin to ask you questions after 21 Commissioner Smith has sworn you in. 22 And, again, just a reminder that this 23 is an opportunity to provide a statement, not to 24 question either the Commission or any of the parties 25 to the case. 195 HEDRICK COURT REPORTING COBOTT (Com) P.O. BOX 578, BOISE, ID Ponderosa 1 MR. PETERSON: And I'll try not to be 2 repetitious. 3 COMMISSIONER KJELLANDER: Thank you. 4 MR. PETERSON: Do you want to swear me 5 in or not? 6 7 LYLE PETERSON, 8 appearing as a public witness, being first duly 9 sworn, was examined and testified as follows: 10 11 EXAMINATION 12 13 BY MS. NORDSTROM: 14 Q. Good afternoon. 15 A. Okay. 16 Q. Please state your name and spell your 17 last name for the record. 18 A. Lyle A. Peterson, P-E-T-E-R-S-O-N. 19 Q. And what is your mailing address? 20 A. Mailing address is 932 East Marine 21 View Drive in Everett, Washington, 98201. 22 Q. Are you a customer of the Ponderosa 23 Terrace Estates Water Company? 24 A. I'm a customer and a property owner up 25 there, Block 3, Lots 11 and 12. 196 HEDRICK COURT REPORTING PETERSON P.O. BOX 578, BOISE, ID Public 1 Q. Thank you. Please proceed with your 2 testimony. 3 A. Okay. 4 THE WITNESS: I -- I've listened to 5 the conversation here this afternoon and I realize 6 you have a rate dispute going on here, but I have 7 information that I think that might be interesting, 8 and that is when this system was started in '72, the 9 capital investment was, as I understand it, was paid 10 through the property sales, the lot sales, and at 11 that time each property owner was expected to pay a 12 certain fee to the Water Company. So I think right 13 now that your Staff has it backwards as to what 14 the -- how the fees should be set. 15 I think that the 87 lots that are 16 platted in this subdivision should bear the cost of 17 the basic the word is "improvements," the capital 18 improvements, and that the 30 -- and I see you've 19 added 10 part-timers, of which I would be one -- the 20 30 should pay the cost of the -- more of the cost of 21 the testing, the power, and the things that actually 22 apply to delivering them, delivering the water; that 23 the lot basis should be used for the basic like new 24 well, cost of the new well, for instance, and that 25 part of it. So that spreads your cost, your basic 197 HEDRICK COURT REPORTING PETERSON P.O. BOX 578, BOISE, ID Public 1 cost, over 87 lots; and then 30 would pay the, like 2 I said, the other, the electrical, power, and 3 testing, and that kind of stuff. 4 And I think one of the aspects of that 5 that makes it apparent that should be the case is 6 that currently in this subdivision, there are at 7 least 20 pieces of property there according to 8 Bonner County that the taxes are being paid by 9 Mr. Cobott or his family. That's 20 out of the 87, 10 which is approximately 25 percent. And if you 11 spread the basic costs into all those lots, then he 12 shares the burden with those that use the water. 13 And I also agree with Mr. Cobaer (sic) 14 that the water meters are appropriate. And probably 15 the national average for use of water per household 16 is about 200 gallons a day, 6,000 a month. Well, if 17 you kick that up to 75 for a basic amount in the 18 subdivision there and then you charge additional 19 money if it was used -- if more than 75 -- 7,500 per 20 month were used, and that money could go for -- go 21 in escrow for additional well capacity. 22 Let me think. Oh, okay. 23 Mr. Favor that testified here earlier, 24 he's says he's got 11 people on the system. If he's 25 average, he's going to use about 440 gallons a day. 198 HEDRICK COURT REPORTING PETERSON P.O. BOX 578, BOISE, ID Public 1 That's double what the average for a household is, 2 so, you know, it -- if you put a meter in there, 3 then he pays for the additional part. And it sounds 4 like he's being conservative, and 40 is on the low 5 end of what the national use per person would be in 6 a household, which was 40 gallons her day. 7 The plat I have that is with my 8 deeded -- with the two lots my wife and I have up 9 there deeded -- says that the water system shall 10 conform -- this is certified by Bonner County -- the 11 water system should conform to the laws of the State 12 of Idaho. It says that they are required to furnish 13 me water; unfortunately, it doesn't say how much I 14 have to pay for it. But there's no restrictions on 15 any of the -- on any of the information I have, my 16 title insurance and other things, indicating that my 17 three-quarters of an acre up there is well 18 restricted. 19 Mr. Cobaer (sic) wants an extra 680 20 bucks a month for his work or because he's the 21 owner/operator. Maybe that's -- you know, I don't 22 know what that means exactly except that when I 23 translate that into 87 customers, that means they're 24 going to pay $8 apiece for that extra $680 a month. 25 When I look at the water systems that 199 HEDRICK COURT REPORTING PETERSON P.O. BOX 578, BOISE, ID Public 1 your Staff looked at, it looks like -- and he says 2 he's not interested in other water systems; I'm not 3 either, but as far as what they're paying for about 4 7,500 gallons a month, it's somewhere in the 5 neighborhood of 15 to $20. Your rate has kicked it 6 up to 56.50. His rate originally was 60. 7 I did an analysis of the water rate 8 that was started that I have a copy of that he sent 9 to me in 1992 which is when we bought the property, 10 ten years ago, and the rate at that time was a 11 certain rate. I ran the numbers on that and if I 12 run -- if I run -- I was on a basic numbers up at 13 a -- at a inflation rate of six and a half percent. 14 I get a rate of about $20 a month for 87 lots, plus 15 another 13.50 or $14 for the other 30 full-time, 16 part-time IPUC definition. 17 I'm not sure if I can remember 18 everything I had to say. Oh, I do want to say one 19 thing: 20 They've discussed this situation and 21 it's been my understanding since we bought the 22 property that we should turn -- have Larry turn the 23 valves off in the street, and we've done that and I 24 paid him a fee every year for turning it on and 25 turning it off. She mentioned a one-shot deal on on 200 HEDRICK COURT REPORTING PETERSON P.O. BOX 578, BOISE, ID Public 1 or off. I say go on and off, because I think 2 whoever does that will be more interested in turning 3 it on if he gets paid at that time or next spring or 4 whatever. So a fee on and off looks good to me. 5 And as far as my dealings with 6 Mr. Fairfax, I've tried to be straight with him and 7 I think he's been straight with me, and I've had 8 quite a few dealings with him; however, today is the 9 first time I met Mr. Cobott. I have not seen him 10 before and we've owned the property ten years, 11 although we are part-time. 12 Last year, we spent approximately 13 three weeks there on the property and if I -- it 14 seems outrageous to have to pay $60 a month for one 15 of those properties when you're there such a short 16 time. 17 But I'm interested in the water system 18 surviving and I don't think it's going to survive 19 the way it is now at 56.50 a month; I agree with 20 Mr. Favor on that. And I hope that you can come to 21 some agreement as to what's reasonable, but I think 22 the spread on the 87 lots is a basis that should be 23 adopted based on the history of that piece of 24 property, Ponderosa Terrace Estates. 25 I think that's it. 201 HEDRICK COURT REPORTING PETERSON P.O. BOX 578, BOISE, ID Public 1 COMMISSIONER KJELLANDER: Thank you, 2 Mr. Peterson. Why don't we see if we have some 3 questions on cross-examination. We'll begin -- 4 THE WITNESS: Sure. 5 COMMISSIONER KJELLANDER: -- with 6 Ms. Nordstrom. 7 MS. NORDSTROM: Thank you. 8 9 CROSS-EXAMINATION 10 11 BY MS. NORDSTROM: 12 Q. I was interested in your testimony 13 about having a flat fee for each of the lots, and 14 then an additional fee for part-time and full-time 15 customers who actually use the system. 16 A. Uh-huh. 17 Q. And I was wondering if you had an 18 opportunity to review Michael Fuss's testimony that 19 he filed in this case? 20 A. I've read it. 21 Q. Okay. Because -- 22 A. Probably don't remember it. 23 Q. That's okay. It was long. 24 But his Staff Option No. 2, which is 25 described further in Exhibit No. 112, I think kind 202 HEDRICK COURT REPORTING PETERSON (X) P.O. BOX 578, BOISE, ID Public 1 of adopts what you're suggesting. 2 A. I think you're right. 3 Q. Is what you had in mind like a flat 4 fee per lot of like $25 a month, and then for those 5 that actually are part-time or full-time customers, 6 an additional fee on top of that? 7 A. Right. Based on the numbers that I 8 ran on it, it looks like the flat ought to be about 9 20 bucks and then the other maybe up to 35. My 10 actual number was 33 and a half. 11 Q. Okay. Well -- 12 A. For the part-time and full-time. 13 Q. Yeah, Mr. Fuss's numbers -- 14 A. And I don't necessarily like that as a 15 part-timer because I don't use -- I don't use my 16 6,000 gallons a month over the year because it's -- 17 the pipes are shut down for at least six months and 18 maybe last month -- or, last year it was 11 months, 19 so, you know. 20 Q. Well, those numbers are in the 21 ballpark of what Mr. Fuss was recommending, so I'm 22 glad you brought it up. 23 A. Okay. I didn't -- I should have 24 mentioned it earlier and I didn't. I mentioned the 25 water meters and I agree that they ought to be 203 HEDRICK COURT REPORTING PETERSON (X) P.O. BOX 578, BOISE, ID Public 1 installed. I checked the water meter prices in the 2 Everett area. For a water meter that attaches to a 3 three-quarter-inch pipe, it's $50. For one that's 4 one inch, it's $120. Now, as I understand it, the 5 current code out there is for one-inch pipe, but I 6 know there's going to be a lot of places that don't 7 have one inch but I don't know if that means you 8 have to change it if you put in a water meter or 9 whatever. 10 The Everett City Water Department says 11 that the most they spend on an average meter 12 installation is three hours. They have a guy for 13 three hours and that's max, and lots of times it's 14 an hour, hour and a half. So if we -- if we hire 15 somebody that, you know, that's halfway close and 16 comes in for an hour and spends an hour, say two 17 hours, you've got three hours max on it; if you're 18 paying 60 bucks for three hours' work, that's 60 19 plus the max on the one-inch is 120. That's $180 a 20 meter. And I would recommend a one-shot cost to the 21 property owner for that installation. And, you 22 know, maybe that's -- maybe it's different here, but 23 that's what the info I get out of the City of 24 Everett and that area. 25 COMMISSIONER KJELLANDER: Are there 204 HEDRICK COURT REPORTING PETERSON (X) P.O. BOX 578, BOISE, ID Public 1 further questions? 2 Q. BY MS. NORDSTROM: When you got that 3 quote from the City of Everett regarding meters that 4 cost about $60 or -- 5 A. I didn't get the cost of the meters 6 from the City of Everett. I called a supply house 7 in Marysville, washington. 8 Q. Now, did that include the meter 9 setters and the meter boxes as well? 10 A. It included the meter box. They use a 11 plastic box of some kind and I'm not that familiar 12 with it, and some fittings, you know, but I'm sure 13 that it wouldn't include all of the miscellaneous 14 little whatever you need to, you know, to connect it 15 into the pipes, so I'm sure there would be a little 16 additional situation there. 17 I estimated that, like I said, I said 18 60 bucks for the labor and 120 for a one-inch meter, 19 that's 180. I said 300 bucks max, one-shot deal, 20 and everybody would be better off because that -- 21 there's not unlimited water there on Ponderosa. 22 And Mr. Cobott talks about abuse, and 23 I don't know whether it's abuse, use, or leakage, 24 and if we put meters in there, that will help tell 25 the tale there. But I do know that in that area 205 HEDRICK COURT REPORTING PETERSON (X) P.O. BOX 578, BOISE, ID Public 1 where we are there's a lot of sand and gravel and 2 you could run water on it forever and you will never 3 find it. It just percolates down, so -- 4 Q. Thank you. 5 A. -- I don't know. 6 MS. NORDSTROM: I have no further 7 questions. 8 COMMISSIONER KJELLANDER: Thank you. 9 Mr. Cobott. 10 11 CROSS-EXAMINATION 12 13 BY MR. COBOTT: 14 Q. Okay, first of all, the water system 15 started in 1969. 16 A. But the wells were drilled in '72. 17 Q. They started out with a -- with a 18 surface -- it wasn't a surface well but it was a -- 19 it wasn't the well that's there now. 20 A. I didn't know that. I just saw the 21 log on the well that was drilled in '72 and I assume 22 it's the one that's still there. 23 Q. They had a tank. 24 A. It was nice to know they did start it 25 in '69 when they sold the property. 206 HEDRICK COURT REPORTING PETERSON (X) P.O. BOX 578, BOISE, ID Public 1 Q. Yeah. Referring to 87 lots, there is 2 87 counting -- there's 82 lots and then there's some 3 parcels that make it up to 87, but there's a lot of 4 these lots that are what we call system removed 5 already, people that have never been on the water 6 system, don't want to be on the water system, and 7 there's lots of people that are living up there now 8 and have put in their own wells and are not on the 9 water system. 10 I own 17 lots, not 20. I own a lot of 11 parcels around the area. 12 A. Well, Bonner County tax records for 13 last year showed that you or your family owned 20 14 lots. 15 Q. No, it's 17. I just paid it the other 16 day. 17 A. I'm not just saying you and your wife, 18 but Bernie Reynolds, there's some familiar kids, I 19 don't know, other people. 20 Q. Well, yeah, there's some nephews and 21 stuff up there. 22 A. They're related to you there. I just 23 stated your family. It's not a big deal anyway. 24 Q. Right. The 200 gallons per day, I've 25 heard that before from some landowners and -- but if 207 HEDRICK COURT REPORTING PETERSON (X) P.O. BOX 578, BOISE, ID Public 1 you calculate how much usage we're going through, 2 especially in the wintertime even at 8- or 9,000 for 3 20 people, you're talking a lot more than 200 4 gallons a day. 5 A. I want to talk -- I did remember that. 6 Q. Well you had it down here 200 gallons 7 per day. 8 A. Yeah, I have that down, but Mike over 9 there told me that you showed it at the pumphouse 10 you ran 50,000 gallons a day through there, through 11 your form. 12 Q. No, the most it's been is 36,000. 13 THE WITNESS: You didn't tell me you 14 had a day at 50,000? 15 MR. FUSS: Right. 16 THE WITNESS: You did tell me. 17 MR. FUSS: Yes. 18 Q. BY MR. COBOTT: We don't have record 19 of it. 20 A. Well, that 50,000 a day, that means he 21 had to have the two tanks full and pumping just 22 about everything he could pump with the well, with 23 the pump, so I don't know. 24 But anyway, what I was going to say 25 was 50,000 gallons a day should be enough. If I use 208 HEDRICK COURT REPORTING PETERSON (X) P.O. BOX 578, BOISE, ID Public 1 200 as a benchmark, that should be enough for 250 2 properties. If I use 250, that should be enough for 3 200 properties. If I use 10,000 -- I don't know. 4 It's -- 5 Q. I agree with you and that's been my 6 contention all along. Where's all this water going? 7 A. Well I can tell you where some of it 8 went: Two years ago when they built the Gramble 9 house down on Silver Reef, Avista Power or Avista -- 10 Q. I'm aware of that. 11 A. -- Avista, their contractors, came in, 12 ran power down there, and in the mean time they cut 13 your line, which means I had no -- had no water for 14 a couple of days. And Larry was out on another job 15 and I called down there. They -- Avista people had 16 to go down to Larry's house to get the key to turn 17 off the valve to keep the water from your reservoirs 18 going out, down Silver Reef, and if you got -- I 19 don't know what that line is. As I understand it, 20 that system has got four-, five-, and six-inch 21 lines. If that's a six-inch line, you can dump so 22 much water there so fast that your pumps can't keep 23 up with it coming out of the tanks so they'd be dry 24 in no time at all. But, however, they did shut it 25 off, so I don't know how much water went. 209 HEDRICK COURT REPORTING PETERSON (X) P.O. BOX 578, BOISE, ID Public 1 They told me that they have a 2 situation and with the utility companies, they have 3 an association that they pay so much and then they 4 mark out the lines where they are and if they hit 5 something, then they're responsible; but they said 6 with Ponderosa Terrace Estates Water System there is 7 no such thing, and the deal is that you are 8 responsible if they break any of your line, you're 9 responsible for the repair. That's what Avista told 10 me. 11 Q. That's pretty much the way it went. 12 They didn't send out a locator. They just went 13 ahead and started digging and they broke our line. 14 They would not pay for it. 15 A. That's what they said. They said by 16 law they didn't have to. And if you're going to 17 buck Avista, good luck. 18 Anyway, like I said, Larry -- I called 19 Larry and so they knew about it, and they turned the 20 water off so we had no water. And Larry came in 21 that night and he'd been working and needed some 22 parts. Well, he couldn't get the parts until the 23 next morning, so that means he had to run into town 24 the next morning. And he took care of the thing as 25 soon as he could, but if somebody is not there to 210 HEDRICK COURT REPORTING PETERSON (X) P.O. BOX 578, BOISE, ID Public 1 turn off those valves, you know, you can dump water 2 so fast it will make your head swim, and you can't 3 tell where it's going because it's -- that sand and 4 gravel eats it up. 5 HEARING OFFICER: Mr. Cobott, any 6 additional questions? 7 MR. COBOTT: Yes. 8 Q. BY MR. COBOTT: Getting -- getting to 9 the expenses of the water system over the past few 10 years, DEQ has made the Water Company come up to 11 Federal standards? 12 A. Uh-huh, I understand it. 13 Q. And that's where a lot of this expense 14 has come from. 15 A. Yeah. 16 Q. Isn't something that I wanted to do. 17 I didn't want to spend all this money. 18 A. Oh, I'm sure of that. 19 Q. Right. The meter case and meters that 20 we have been affiliated with run somewhere about 21 $100 for the meter and the meter case. 22 A. That's in the neighborhood. I said 23 120 for the one-inch. 24 Q. Okay. That's about all I have to say 25 in questions at this moment. 211 HEDRICK COURT REPORTING PETERSON (X) P.O. BOX 578, BOISE, ID Public 1 COMMISSIONER KJELLANDER: Thank you. 2 Are there questions from members of 3 the Commission? None. 4 Mr. Peterson, thank you for your 5 testimony today. 6 THE WITNESS: Thank you. I appreciate 7 that. 8 (The witness left the stand.) 9 COMMISSIONER KJELLANDER: And we will 10 move away now from the brief interlude we had with 11 public testimony and go back on the record now for 12 the technical hearing, and we're ready for 13 Mr. Cobott's last witness, and that would be 14 Mr. Fairfax. And if we could get the deputy 15 attorney general to get Mr. Fairfax on the record 16 and we can proceed in the same fashion after he has 17 been sworn in. 18 So, Mr. Fairfax, Commissioner Smith 19 will swear you in. 20 21 22 23 24 25 212 HEDRICK COURT REPORTING PETERSON (X) P.O. BOX 578, BOISE, ID Public 1 LARRY FAIRFAX, 2 produced as a witness at the instance of Ponderosa 3 Terrace Estates Water System, Inc., being first duly 4 sworn, was examined and testified as follows: 5 6 EXAMINATION 7 8 BY MS. NORDSTROM: 9 Q. Please state your name and spell your 10 last name for the record. 11 A. Larry Fairfax, F-A-I-R-F-A-X. 12 Q. By whom are you employed and in what 13 capacity? 14 A. I work for the Ponderosa Terrace 15 Estates Small Water System, and I'm a certified 16 operator. 17 Q. Are you the same Larry Fairfax that 18 prepared three pages of information for the 19 Commission on June 18th or thereabouts? 20 A. Yes, I am. 21 Q. Do you have any corrections or changes 22 to the information you have provided the Commission? 23 A. No. 24 Q. If I were to ask you if the 25 information or numbers contained on these three 213 HEDRICK COURT REPORTING FAIRFAX P.O. BOX 578, BOISE, ID Ponderosa 1 pages had changed since the time that you created 2 it, would your answers be the same today? 3 A. Correct. 4 MS. NORDSTROM: I would move that the 5 information filed by Larry Fairfax be spread upon 6 the record as if read, and that's all. 7 COMMISSIONER KJELLANDER: Thank you. 8 And without objection, we would spread the testimony 9 across the record as if read. 10 (The following prefiled testimony 11 of Mr. Fairfax is spread upon the record.) 12 13 14 15 16 17 18 19 20 21 22 23 24 25 214 HEDRICK COURT REPORTING FAIRFAX P.O. BOX 578, BOISE, ID Ponderosa