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HomeMy WebLinkAbout20080721Kuna Hearing.pdfORIGINAL .BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION In the Matter of the Application ) of Mayfield Springs Water Company, Inc. )For a Certificate of Public )Convenience & Necessity. ) ) CASE NO. MSW-W-08-01 REPORTER'S TRANSCRIPT OF PROCEEDINGS July 1, 2008 7:00 P.M. BEFORE Commissioner Mack A. Redford Commissioner Jim D. Kempton.Kuna Middle School 1360 Boise Street Kuna, ID co -1 POST OFFICE BOX 578 BOISE. IDAHO 83701 20-336-920.HEDRICK COURT REPORTING ~tJ¥~.i.ft9 . . . 2 FOR FOR APPEARANCES IDAHO PUBLIC UTILITIES COMMISSION Donald L. Howell II OFFICE OF ATTORNEY GENERAL Contracts & Administrative Law Division 472 W. Washington P.O. Box 83720 Boise, Idaho 83720-0074 (208) 334-0312don. howeiiØpuc. idaho. gov IDAHO SPRINGS WATER COMPANY, INC. John R. Hammond, Jr. FI SHER PUSCH & ALDERMAN, LLP 101 S. Capitol Boulevard, Suite 500 Boise, ID 83702 (208) 331-1000j rhØfpa-law. com ****** . . . Witness: BOURGEAU, Guy. KOYLE, Neil. . DAVIDSON, Tony. . . REEDER, Cassie. . . WARD, Chris. . . . . KING, Jeff. . . . . ABERCROMBIE, Amber. JOHNSON, Greg. . GRABLE, Larry. CORVINO, Gerald. . I 3 WITNESSES Examina tion by:Page: 7 . . . 10 12 Commissioner Redford. . . . . 14 Mr. Howell. . . . . . . . . . 15Mr. Hammond. .... 16 20 Commissioner Kempton.. 22 . . . 23 Commissioner Redford.25 26 Mr. Howell. . . . . . . . . .29 30 Commissioner Redford.. . 39 . . 42 . 47 51 .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 4 KUNA, IDAHO Tuesday, July 1, 2008, 7:00 p.m. COMMISSIONER REDFORD:This is the proceeding before the Idaho Public Utilities Commission, and we are two of the commissioners. My name is Mack Redford. I'm the chairman of this proceeding. And seated to my right is Jim Kempton. He's also a commissioner. We have a third commissioner. She's out of town today. This is the hearing in the -- public hearing in the matter of the application of Mayfield Springs Water Company, Inc., for Certificate of Public Convenience and Necessity. The case number is MSW-W- 0 8 - 0 1. I'd like first to explain to you what the hearing is about. The hearing is for the purpose of allowing the public to give their views about the issuances of a c~rtificate of convenience and necessity to Mayfield Water to provide water and any other services to the people who they presently serve. It's not a hearing where we well, excuse me. Let me correct myself. We do have attorneys here. Our attorney -- the Public .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 5 Utili ties staff attorney is Mr. Don Howell. He's a deputy attorney general. And we do have representing the water company, Mayfield, John R. Hammond, Junior. And they may ask questions of you when you've concluded your testimony. As far as the testimony is concerned, you can testify as to anything you'd like to say. I would say it appears from the record that quite a bi t has gone on in this matter for a good long period of time.We've read the record pret ty carefully, and qui te frankly, this proceeding really doesn't have much to do wi th whatever has gone on in the past. It's simply for the purpose of exploring and hearing the matter to determine whether or not the water company should be enti tled to a Certificate of Public Convenience and Necessity, and once there is one, to establish the financial issues of the company as they relate to their subscribers. And we will ultimately be the ones that will be setting the rates in this matter, for the users and prospective users. So I'm going to proceed right ahead wi th the list that you've all signed, or some of you have signed, the list to testify. And when I .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 6 call your name, I'd like you to come forward, if you would, and we have a podium about two inches away from us here. And so Mr. Kempton will swear you, and you'll have to take the oath, and then you may proceed to tell us whatever you would like to have us hear. I would admonish you that this is on the record, and we have a court reporter here; she's taking everything down word for word. And wi thout any other -- unless there's something else to come up preliminarily, we'll go right ahead into Mr. Howell, do you have anything you'd like to raise? MR. HOWELL: Nothing from the staff. COMMISSIONER REDFORD: Mr. Hammond? MR. HAMMOND: No, sir. COMMISSIONER REDFORD: We'll call the first witness.His name is Larry Grable -- is it Grable? MR. GRABLE: Could I go at a later time, please? COMMISSIONER REDFORD: Excuse me? MR. GRABLE: Could I go at a la ter time, please? COMMISSIONER REDFORD:Sure you can.Guy -- .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 7 I'm sorry. MR. BOURGEAU: Guy Bourgeau. COMMISSIONER REDFORD: Okay.Thank you. GUY BOURGEAU, having been first duly sworn, testified as follows: MR. HOWELL: To start off, Could you state your name and spell your last name? MR. BOURGEAU: Very common name. MR. HOWELL: Absolutely. MR. BOURGEAU: The first name is spelled Guy, pronounced "Ghee." Last name is Bourgeau, B-o-u-r-g-e-a-u. MR. HOWELL: And, sir, do you have a res idence addres s? MR. BOURGEAU:It's 12094 West TustinI do. Lane. MR. HOWELL: And are you a customer of Mayfield? MR. BOURGEAU: MR. HOWELL: MR. BOURGEAU: I am. Please give us your statement. Thank you, sir. First and foremost, I'd like to say .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 8 we're very happy to see the PUC here, the commissioners, and your involvement in this matter. It's been ongoing for a substantial amount of time, as you're probably very well aware of. Unfortunately, to get us here was a difficult process involving the filing of a lawsui t wi th local courts to compel Mayfield Springs, or 11m not sure -- is it Mayfield Springs or Mayfield? Mayfield Springs? To get to this point to file for a certificate. And we're happy to see that the PUC has taken on this case and is going to follow up and establish what we hope will be a very fair rate system, which is something that obviously we haven i t seen in the last year, year and a half. Essentially, for the last two years -- I think I speak for myself and probably a lot of the residents -- we felt -- we feel that we've been held hostage by the developer, who also is the owner of Mayfield Springs. We did pay $2,500 in hookup fees. I think through that we -- our contention is that we essentially paid for this system to be installed, and when we purchased our lots out there, we were .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 9 led to believe that this was going to be a system owned by the homeowner's association. Essentially a year and a half later we find out that that's not the case; it's a privately owned system~ So at that point is when we pursued our civil remedies to compel this company to come in front of the PUC to set the rates. Those are some of the main points. We're really pleased to see the commissioners here, and we're really hoping for a fair rate system to come out of this hearing. So thanks for your time. COMMISS lONER REDFORD: Are there any questions by Mr. Howell, or MR. HOWELL: No questions. COMMISSIONER REDFORD: Mr. Hammond? MR. HAMMOND: No questions. COMMISSIONER REDFORD: Thank you very much for your testimony. We really do appreciate it. MR. BOURGEAU: Than k you, sir. COMMISSIONER REDFORD: Next person on the list is Jason or Cassie Reeder. MS. REEDER: Can we wait for Jason, because with him it's going to be -- COMMISSIONER REDFORD:Sure, you can. We're .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 10 running out of names here pretty quick. MS. REEDER: Well, he'll be here soon. COMMISSIONER REDFORD: Neil Kayle, K-o-y-l-e? NEIL KOYLE, having been first duly sworn, testified as follows: MR. HOWELL: Sir, could you please state your name and spell your last name for the record, please? MR. KOYLE: Yes. My name's Neil Kayle, K-o-y-l-e. MR. HOWELL:And do you have an address? I do. 11687 West Tustin Lane.MR. KOYLE: MR. HOWELL: Mayfield? MR. KOYLE: I am. And are you a customer of MR. HOWELL: Please give us your statement. MR. KOYLE: I too am very apprecia ti ve of the fact that you guys are here. I was one of the first residents in, and so I've been through the whole year-and-a-half to two year's process wi th the water company. .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 11 Again, a lot of us were led to believe that it was a private system. A lot of us were led to believe that it was covered in our homeowner's association dues, fees.And so wi th that said, there was a lot of vagueness early on in the company as concerned as to how much was being charged. For the most part we all went along with what was going on to try and figure out whether that was going to change, because we were told as customers came on line that those rates would reduce, and so we went along with whatever was there. But, again, we've fought civilly to resolve and make sure this company's regulated by the PUC, and we appreciate you guys being here to take this matter in hand. That's all I have. COMMISSIONER REDFORD:Thank you.Are there any questions, Mr. Howell? MR. HOWELL: No questions. COMMISSIONER REDFORD: Mr. Hammond? MR. HAMMOND: No, no questions, Commissioner Redford. COMMISS lONER REDFORD:Thank you very much. .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 12 We appreciate your testimony, sir. person is Tony Davidson. The next TONY DAVI DSON, having been first duly sworn, testified as follows: MR. HOWELL:Sir, could you state your name and spell your last for the record, please? MR. DAVIDSON: My name is Tony Davidson, D-a-v-i-d-s-o-n. MR. HOWELL: And could you give us a residence address? Yes. My address is 11778MR. DAVIDSON: West Tustin Lane. MR. HOWELL: And are you a customer of Mayfield Springs? MR. DAVIDSON: I am. MR. HOWELL: Thank you. MR. DAVIDSON: I'd like to reiterate what Bourgeau said. We're very pleased that the PUC is involved in this matter. A couple years ago when we were looking for a sizable lot in Ada County, my wife and I found this location, and we contacted the I .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 13 representing real tor, and went to him directly so we could get the best information. And considering the size of the lot, the size of the lawn we knew we'd have if we purchased there, we asked many pointed questions about what was the situation with the water. We asked about pressurized irrigation, where the water was coming from, because we knew that piece of ground was not irrigated prior to the subdivision.It wasn't farm ground. We were told that it would have its own well and own septic system that would provide both potable and irrigation water. And we asked a lot of questions to avoid this exact situation, because of the amount of ground we'd need to irrigate. And we were reassured and told that the well would be owned by the homeowner's association.And in light of the $100-a-month fee for the homeowner's association, that's the only way we could make sense of that cost. In the first eight months that we lived in this house, we never received a water bill, so things were working as we were told.We had no idea until the bills started showing up in the mail. So we didn't feel like we were getting a .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 14 fair shake.We were told one thing, and then suddenly the well's owned by a private person, and we're having to pay a water bill, along with $100 HOA fee.We were under the impression that the portion of the $100 HOA fee was going to pay for water. So, again, we're very happy to see the PUC' s involved, and we'd li ke to get a reasonable solution to this.Thank you. EXAMINATION BY COMMISSIONER REDFORD: Q. Who made the representations to you that it would -- A. Doug Ferguson wi th RE/MAX was the representing realtor for the whole subdivision, so we went directly to him to get the most accurate information available. Q. So he made the representation that it was a homeowner-owned system? A. Yes, sir, he did. He told my wife and I that directly, that the system, both the septic and the well, would be owned by the homeowner's association, and that that was the explanation he gave for the HOA fees being so high, $100 a month. . . . . 15 1 2 Because at that point we were ready to walk out when he said it was $100 a month, until he told us 3 that included our sewer and water fees for both 4 irrigation and potable water. 5 6 7 8 9 Q.Did you pay a hook-up fee? A.Yes,I did. Q.How much was that? A.It was $2,500 at closing. Q.Did the owner of the system ever make 10 any of those representations to you? 11 A.No, I worked with the realtor.Like I 12 said, we wanted to get the most accurate 13 14 information that pertained to the lot for the purchase.He was the representing real tor for the 15 entire subdivision, so we went directly to him to 16 get the most accurate information, and this is 17 what we were told, and we bought on that premise. 18 COMMISSIONER REDFORD: Okay. Mr. Howell, 19 any questions? 20 21 22 23 EXAMINATION BY MR. HOWELL: Q.Mr. Davidson, when did you get your 24 first bill? 25 A.I'd have to look at the bill.I think .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 16 we were in the house seven or eight months before we recei ved a bill. Q. Can you give us an approximate time? Was it early in 2007? A. I wouldn't know unless I saw the bill in hand.I don't know.I i m so frustrated I don't even know. I put them in a file, and as far as I'm concerned, I am paying my water fees through my HOA, in a portion of that $100 a month that's going for my wa ter. MR. HOWELL: Okay. Thank you very much. COMMI SS lONER REDFORD: Mr. Hammond? EXAMINATION BY MR. HAMMOND: Q.Yes.You said that -- is it correct that you said that Mr. Ferguson was the one that made the representation to you? A. Yes. When my wife and I were looking for information regarding the lots in the subdivision, before we made the purchase, we wanted to get the most accurate information possible. He was the representing realtor, so that's where we went. Q. Is that a disputed fact in your .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 17 litigation currently? A. I don't know if it's disputed or not, but I've put it in wri ting numerous times during the course of this sui t. Q. Do you know if Mr. Ferguson is employed by the water company or the developer? A. I don't believe that he is. I just know him to be the representing real tor at the time we bought. Q. As far as -- you stated that you've been receiving invoices at some point in time; you're not exactly sure when you received the first one. Have you paid any of those invoices? A. I've paid my water through my HOA, like I was told when I purchased the lot. Q. But did you receive separate water bills from the water company, solely for water service? Did you pay those? A. In the beginning we received the compiled bill with sewer and water charges. And then later on it was spli t off to Mayfield Springs, and we received separate invoices. And no, I have not paid those. MR. HAMMON D : questions. Thank you.I have no further :,".,,' .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 18 COMMISSIONER REDFORD: Thank you, sir. Just for the commission's understanding, what is the status of the lawsuit? MR. HAMMOND:I am not counsel for that. I -- if -- Lauren Reynoldson is here -- COMMISSIONER REDFORD:I think you probably know MR. HAMMOND:It's still ongoing at this point.It's still ongoing. COMMISSIONER REDFORD: There was a summary judgment? MR. HAMMOND: Yes. COMMISSIONER REDFORD: And so some of the other issues are still pending? MR. HAMMON D :There's a summary judgment, and the plaintiffs have a motion currently, I believe, to -- and I could be -- I could get this wrong, correct me if I'm wrong, but for damages on the count which the court awarded summary judgment for, and they're also requesting the penal ty. There are numerous other counts. I don't know where those are at. COMMISSIONER REDFORD: Okay.That's fine. Mr. Kempton, do you have any questions? MR. HAMMOND: Oh, and I'm sorry, and I .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 19 should say -- I apologize. The client has requested reconsideration of the court's decision. COMMISSIONER REDFORD: Does that mean the client is disputing that the PUC has authority to regulate this company? MR. HAMMOND: Absolutely not. They're disputing -- the question is -- the question is whether the court in the first instance has the ability to rule on that issue, and rather the issue should have come to the commission first. That's all they're saying. The court obviously has jurisdiction because of the statute. COMMISSIONER REDFORD: Why wasn't it brought to the commission first? MR. HAMMOND: Why wasn't it? I can't tell you. COMMISSIONER REDFORD: Well, if you know, if you know. MR. HAMMOND: I don't know. I was hired in January. We brought the application within, I think, probably seven days of being hired. So COMMISSIONER REDFORD: Okay. Well, we'll call the next wi tness, unless anyone has any other questions. How about Jason Reeder or Cassie, are you -- would you like to come now, or do you still .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 20 want to wai t? MS. REEDER: Yeah, sure. My-- COMMISSIONER REDFORD: You can pass if you want. MS. REEDER: You know, I mean, I don't have much to say, but I can say what I have. COMMISSIONER REDFORD: Okay, great.Can the baby say something too? MS. REEDER: Yes, and he can do eensie-weensie spider. COMMISSIONER REDFORD:Okay. CASSIE REEDER, having been first duly sworn, testified as follows: MR. HOWELL: Could you please state your name and spell your last for the record, please? Sure.It's Cassie Reeder,MS. REEDER: R-e-e-d-e-r. MR. HOWELL: And an addre s s? MS. REEDER: 11734 West Tustin Lane. MR. HOWELL: And I assume you're a Mayfield customer? MS. REEDER: Yes. .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 21 MR. HOWELL: Please give us your statement. MS. REEDER: When me and my husband first were looking for a home, we me and a friend drove out to the neighborhood, and had just been -- the road had just been put in. So we got the number off of the signs for the realtor, Doug Ferguson, and we called him, and he -- and just asked him a few questions about the neighborhood, because there were no homes at that time. Asked him about the HOA fee.He said it was $100, and we just -- my friend and I were shocked. So we said wow, that's a lot to pay, $1,200 a year. And he did say it was part of the water and sewer. That's the last time I've ever talked to Doug Ferguson, and have only met him in person one time about six months after our home had sold, after we had closed on our home. So everything else that we have that we had knowledge of came through our builder, Doug Lasher. And we asked him numerous, numerous times if our water and sewer was part of the $100. He said yes. So that's -- COMMISSIONER REDFORD:Your builder said that? . . . 1 22 MS. REEDER: Our builder did say tha t. We 2 never spoke again, like I said, with 3 Doug Ferguson. Never had a relationship with him. 4 5 6 7 8 9 10 11 12 13 14 He was not at closing.So that -- I mean, our story is really short and simple.That's where we got our information.So -- COMMISSIONER REDFORD:Any questions, Mr.Howell? MR.HOWELL:No,sir. COMMISSIONER REDFORD:Mr.Kempton? EXAMINATION BY COMMISS IONER KEMPTON: Q.The file on this is pretty big. And 15 the one thing that seems to be missing in the 16 information, although I think I heard it in the 17 testimony here just a while ago, is that there was 18 never anything in wri ting, other than the hearsay 19 information that was passed on by the realtor or 20 the builder, there was never anything that you 21 actually saw in any kind of formal paper that was 22 presented at any time until essentially you got 23 24 25 the first bill.Is that about the way it worked? A.Yeah, not -- yeah. We -- to my knowledge -- and when my husband gets here, he .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 23 may, if there's time, he may want to testify, because he -- he's the thorough person in our family who looks through all that, those things. And not to my knowledge. That was -- there was nothing that I know of in writing in our closing to say ei ther way. COMMISSIONER KEMPTON: Okay. COMMISSIONER REDFORD: Mr. Hammond, do you have any que s t ions? MR. HAMMOND: I don't have any questions. COMMISSIONER REDFORD: Thank you very much for your testimony. MS. REEDER: Thank you. COMMISSIONER REDFORD: The next person is Chris Ward. CHRIS WARD, having been first duly sworn, testified as follows: MR. HOWELL: Sir, could you state your name and spell your last for the record? Sure. My name is Chris Ward,MR. WARD: W-a-r-d. MR. HOWELL: And an address, please. .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 24 MR. WARD: 11550 Dynamite Lane. MR. HOWELL: And are you a Mayfield Springs customer? MR. WARD:I am. There's really only a couple things that I wanted to touch base on, and one of them is the connection fee. I was actually the builder and owner of my property, and I paid a $2,500 connection fee. And I've noticed through the different stuff on the PUC's websi te that the recommendation currently is that the connection fee be $750. Had the developer came before the PUC before I even started, you know, looking at this land, I would have only paid $750, given the current recommendations. I'm here to urge the commission to consider anybody that did pay that amount to be refunded the difference, since the developer did not follow proper procedures and get PUC approval first. The second comment that I have relates to the water system in general and what a lot of the people here have been told. The MLS listings for the property show it as a communi ty water system. Any other time I've seen a house being .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 25 sold, if it's to a corporation, it says exactly who the water company is that's serving it. And it is being shown as a communi ty water system, or at least it was at the time that the land went for sale. I guess I also believe that the system should have been a homeowner's owned -- homeowner-association-owned system. And I urge you guys to take that into consideration when you do set the rates. EXAMINATION BY COMMISSIONER REDFORD: Q. Mr. Ward, did the developer ever offer to give you or sell you the water system? A. No, not that I'm aware of. COMMISSIONER REDFORD: Okay, thanks. Any questions, Mr. Howell? MR. HOWELL: No, sir. COMMISSIONER REDFORD: Mr. Hammond? MR. HAMMOND: No questions. COMMISSIONER REDFORD: Thank you very much, Appreciate your testimony. Next one is Jeff King. sir. .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 26 JEFF KING, having been first duly sworn, testified as follows: MR. HOWELL: Mr. King, could you state your name and spell your last for the record, please? MR. KING: My name is Jeff King, and my last name is K-i-n-g. MR. HOWELL: residence address? And, sir, do you have a MR. KING: MR. HOWELL: 11589 West Tustin. And are you a Mayfield Springs customer? MR. KING: Yes. MR. HOWELL: Please give us your statement. MR. KING: Okay. So just like many other people that have testified in front of you guys today, I'm in a very similar situation. But mine's a little unique, in that we actually bought our land, our property, from my wife's aunt and uncle. And but just like everybody else I mean, before we bought it, I moved from a subdivision called Spyglass, which is in Eagle, and I had a 1. i acre lot there. And, you know, we .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 27 were on irrigation there, and it was covered in our homeowner's and stuff like that. So when I moved out to build a house on this lot, I was equally concerned about the fees. And so I did, like everybody else, talk to Doug Ferguson and, you know, got the skinny on the $ 10 O. And he basically said that included the water and the sewer and the mowing and those sort of things. Because when I came from Spyglass too, I mean, we had a fair amount of common area to mow over there.And, you know, we had fees that were roughly about $ 650 a year, which I thought was high for everything over there. And then moving to this subdivision, it was $1,200. But he assured me that, you know, it was basically the $1,200. And the funny thing is, I didn't buy the lot from him. Or -- you know, he was just representing to me that that included everything. So then we actually bought the lot from Jamie's aunt and uncle, and that's how we got it. And then, just like other people, it was probably, you know -- we bought the lot in the fall, I believe, of 2005. And then in the .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 28 early -- then we buil t our house through the next year and moved in in October of 2006. And then it wasn't until January when we started getting the bills for, you know, the additional water and sewer fees, right. And the other thing that is just a little bit concerning is that the bills that we get for that, there just was a lot of dishonesty, right. Because it went from, you know, one water company and sewer company, to, oh, now they're all of a sudden separate. So the water company's separate from the sewer company. And it was just really hard to keep track of what was going on. And now we end up at Mayfield, which is yet, you know, something different, right. And then there was the trying a transaction to sell the water stuff, basically, for Greg Johnson to himself. So the whole thing is, you know, kind of concerning. My main point is that I want to make sure that we get fair -- get charged a fair rate for water, including the common areas, because I can see how that can get kind of expensive over time. But just the misrepresentation, and .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 29 then back to what Chris was saying, too, about the $2,500 hookup fee.I mean, we, in essence, paid the hookup fee indirectly through Jamie's aunt and uncle, but we still paid it, right, because that was paid when you purchased the lot for th~ water and for the sewer. So that's about it. COMMISSIONER REDFORD:Mr. Howell? EXAMINATION BY MR. HOWELL: Q. Mr. King, have you paid any water bills at all? A. No. Q. Okay. A. So I'm actually an advocate for, you know, using the civil process to try to get this figured out. Because in the first meeting we had, there was a lot of people that were concerned about it. And part of our response was, you know, we're not going to pay those fees until we work it out. MR. HOWELL: Okay. No further questions. COMMISSIONER REDFORD: Mr. Hammond? MR. HAMMOND: I have no questions. COMMISSIONER REDFORD: Thank you very much, .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 30 sir, for your testimony. MR. KING: Thank you. COMMISSIONER REDFORD: The next person would be Amber Abercrombie. AMBER ABERCROMBIE, having been first duly sworn, testified as follows: MR. HOWELL: Ma' am, could you state your name and spell your last for the record, please? MS. ABERCROMBIE:It'sI can. Amber Abercrombie, and the last name's A-b-e-r-c-r-o-m-b-i-e. MR. HOWELL: And could you give us an address, please? MS. ABERCROMBIE: 11980 West Dynamite Lane. MR. HOWELL: And are you a customer of Mayfield Springs? MS. ABERCROMBIE: I am. MR. HOWELL: Please give us your statement. MS. ABERCROMBIE: Okay. We are in a similar si tuation as a lot of people that you have heard from. We purchased our lot and brought our own builder. We talked to Doug Ferguson about the .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 31 fees.We were told that it was $100 for water, sewer, and HOA.We do not have that in writing. Because, like a lot of things we were told, we didn't assume that we needed to have it in writing. I guess that we were a little bit naive. Just like they said there would be bike paths and mailboxes. I mean, you don't think that you need to get those type of things in wri ting, I guess. You just believe it when it i s told to you by the person representing the developer. So we were, in fact, told the $100 -- we moved in. We were actually the first house to move in. We moved in in March 2006. We moved our stuff in.And then we left on vacation, and I believe the Stivers moved in right after we did. And February of -- it was ten months, I want to say -- yes, because the first bill was for January. We received it in February. But before that, we received a knock on our door in October of 2006.And it was from a couple that was thinking of purchasing a house right down the street from us. And they had heard a rumor that it was $300 for water, sewer, and HOA, which I laughed at, because that was the first I'd heard of that. And I assured them that . . 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25. 32 1 2 3 4 we've lived in our house this long, we've only been paying $100, and it was -- that $300 was ridiculous. But it left me a little bit uneasy, so I called the property management company that manages Arrowrock, hired by our developer, Greg Johnson, and I spoke to the girl that was in charge of Arrowrock. And I was told by her that it was $100 for water, sewer, and HOA combined, it was not $300, and she had never heard anything like that. So I dropped it. Well, then rumors kept swirling. Realtors were talking. And again, I was uneasy, because one of the reasons why we built was because -- I mean, we did a lot of research before we built, and $100 was very steep for us. But because it did cover water, sewer,i HOA, we felt that that was okay. Anyway, so when I kept hearing'this $300 figure, it kept making us very uneasy, so I contacted the developer. I want to say that that was the -- it was ei ther the very end of October or it was the beginning of November. I got in touch with Greg Johnson and at that point, he told me that, in fact, was $300: $100 for water, $100 .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 33 for sewer, and $100 for HOA. And I almost passed out, and then I got extremely angry. And I told him that he would see for sale signs go up so fast it would make his head spin, which probably wasn't the nicest thing to say. But he said that he understood the frustration, and he apologized for any miscommunication or any false information that we had been told, but he assured me that we would have a meeting before any bill was sent out, and he would try to get the meeting together around the 1st of the year. Never had a meeting. I only got a bill. So the first bill, I was again furious, and attempted to contact him multiple times. I never received a call back. At the -- the ini tial phone call that I had wi th him, he did tell me that we were dealing with a very expensive well.The well cost upwards of $800,000 to install, which I don't know why that would be my problem, because I'm not the developer. I just live there. That should not be my cost.So why that was even important, I'm not very sure. So I understand the PUC's concern, .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 34 because a lot of the residents are not paying their water bills. However, they are paying what they believe to be accurate, what they were told. We have -- our account with Mayfield Springs is current, although I was furious about it. It makes me uneasy to not pay a bill, so I've been paying, al though my husband, if he had his way, we would not be paying. But I kind of won that argument. So anyways, we're paying. But I guess I feel that it should not be looked upon negatively to those that are not paying. And I also don't feel, although it has been said numerous times by Mayfield Springs, that because the homeowners that are currently in the lawsuit are not paying, which some of them are not, that the company is in a dire financial situation. I think that that's ridiculous.And the reason for that is at $50 a month, what the PUC's initial recommendation was was half that amount. So even if you had only half of your customers paying, he should be able to pay his bills. Obviously, the final numbers have not been set, but I don't believe for one second that that company is in financial dire situation.And if .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 35 they are, it has nothing do with the fact that ten homeowners are not paying their bills. As a water company, you have to expect that some customers will not pay their bills and not pay them on time. And if you can't account for that, it's just bad business practices on your part.. I also don't feel that we should be responsible for paying for the attorney fees. There is a court ruling that -- in district court that essentially said he was operating a water company illegally.So for us to have to pay his attorney fees is ridiculous. Another thing is the the HOA, the common areas being watered. Right now, the way it's proposed, it would basically be the rate, whatever times eight. And at this point, because Johnson does own all of the lots -- not all of them -- a good majority of the lots in the second phase, and because he also is the owner of Mayfield Springs water company, he is currently not paying money to wa ter the common area, because he is not paying HOA dues, al though he should be. He is not paying HOA dues for the lots that he owns. .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 36 So he is essentially getting free water. So he is just as guilty of not paying water as all the people he's accusing of not paying water, because his lots are benefitting from the beautiful common area. That's why people will buy lots. The only way that that common area can be kept green is from water. Currently, the HOA fees would pay for that water, and currently he is not paying HOA dues. Essentially he's getting a free ride also. Oops. COMMISSIONER REDFORD:Put that on your bill. MS. ABERCROMBIE: I'll pay it. Okay. So then, just one other thing really fast, and then I'm done. It's kind of been allover the map, and I apologize. But -- let me see what I wrote down here. Okay. We have been lied to on a number of occasions. The first time was when I was told that we would have a meeting before a bill would ever be sent out by Johnson himself, and that did not happen. The next time was when a cost breakdown was sent out to us that basically said that it was $100 a month for water, and this is why. It had . . . 37 1 it all broken out.And I got on the phone and 2 called 20 different companies that drill and 3 service wells, and -- because I wanted to see how 4 accurate that $100 figure was. 5 13 of those companies said that we were 6 getting ripped off.Five -- no, 13 said that they 7 had never seen rates that high for a well that 8 size.Five flat out said we were getting ripped 9 off, and two said they were unfamiliar with well 10 costs for a well that size. 11 I couldn't find anybody -- I mean, I 12 called every single number I could find in the 13 phone book, and I couldn't find anybody that would 14 quote me rates anywhere near that.And they said 15 they would obviously have to take a look at the 16 actual system itself, but $100 a month was 17 laughable, which is also what we thought. 18 So we kind of felt that that cost 19 breakdown was a bunch of junk, which is another ,20 reason why a lot of the homeowners refuse to pay, 21 because they're -- and we asked repeated times to 22 actually see not just an eight-line breakdown, but 23 to actually see what expenses weren't being paid, 24 and we were shut down. 25 And then the third was at our first HOA . . 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25. 38 1 2 3 meeting, a lot of the homeowners were obviously upset, because we'd been told the $100 for water, sewer, and HOA. And so -- I believe a sign-up 4 sheet was sent around, and the people that were told that it was $100 for water, sewer, and HOA were supposed to write down all of their information. And we agreed -- Johnson told us that there would be a meeting to discuss those concerns. That meeting never occurred. The day that meeting was supposed to occur, I contacted the property management company. And they said, oh, we apologize. You haven't gotten anything in the mail ? And I said no. Is there not going to be a meeting? They said, no, there's not. You should be getting a letter in the mail that explains why. The letter basically said we apologize that there's been a misunderstanding. We have dropped the rate to $50. We are applying with the PUC, and we're sorry. So the promised meeting never occurred, and that was essentially the third time that we were lied to. That is all.We are -- my husband and I are very grateful that the PUC is involved. .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 39 That's what we've wanted from the beginning. Oh, wait. One last thing. Sorry. And then I promise I'll shut up. I'm kind of long-winded. I apologize. It's just how I am. The issue of the meter installation being looked at as a capi tal expense. In the original permits, the agreement was that Johnson and his water company would apply for a CPCN. If that was his intent, the meters would have been an integral part of that application. We believe Johnson never intended to file a CPCN, and therefore never installed the meters.Because the ini tial plat was approved with the condition that he would apply with the PUC, the meters should be looked at as a capital expense, even though they were purchased a few months after the well was completed. The customers should not be responsible for paying for Johnson's attempt to cut corners and avoid regulations.And that's it. Any questions? EXAMINATION BY COMMISSIONER REDFORD: Q. You have a homeowner's association? .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 40 A. We do. Q. Do you have officers? A. We just barely -- we have wanted control of our HOA since day one. And we just barely -- we don't have control, because Johnson owns all of the lots in the second phase. And so our vote is basically null and void. But we did elect officers -- directors, three directors at our most recent HOA meeting.Yes, which those directors will essentially have no say, because they will be outvoted. So it's great that we're on the board now, but -- Q. Did the developer turn over the common areas? A.I don't think so.No common areas? Q. Are you familiar with what we call CC&Rs? And qui te frankly, in a senior moment I can't remember what that means, but it -- maybe you can he lp me. MR. HOWELL: Covenants and restrictions. Q. BY COMMISSIONER REDFORD: Yes. Did you ever see any covenants and restrictions? A. Yes. We actually signed our purchase agreement before we got a copy. We got the first copy of the CCRs, and in there, there was a water .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 41 section that was maybe a paragraph, maybe a sentence. And we never received another copy. After that, I guess they were amended, and there was a whole water section put in. But we had already purchased our lot and we had, I think, begun building our house before we ever even knew that. Q. SO the developer amended the CC&Rs -- A. Multiple times, yes. Q. after you purchased the property? A. It was actually amended days after we signed our purchase agreement. They were amended -- okay. So we signed our purchase agreement. We got a copy of the CC&Rs. It was the wrong copy of the CC&Rs at that point. And we never received another copy. Q. Do you recall what that one sentence or two sentences said about water? A. them here. We have them.I don't believe we have Do we have the original? Q. Well, I'm sure that -- I'm sure Mr. Hammond has ei ther made those available to us or he will. A. It basically said, I think, that there's a -- it doesn't say anything about the .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 42 cost of water in the initial one.It just says that there is a well, and that it services the whole subdivision. Q. Okay. A. Like a li ttle blip. COMMISSIONER REDFORD: Well, if you have nothing else, let me ask Mr. Howell if he has any questions. MR. HOWELL:ThankI have no quest ions. you. COMMISSIONER REDFORD: Mr. Hammond? MR. HAMMOND: I have no questions. COMMISSIONER REDFORD: Well, thank you very much. We appreciate you attending. MS. ABERCROMBIE: You're welcome. setting this right here. COMMISSIONER REDFORD: Okay. We won't I'm just charge you for the damage. MS. ABERCROMBIE: I appreciate that. COMMISSIONER REDFORD: Okay. Greg Johnson? Step forward. GREG JOHNSON, having been first duly sworn, testified as follows: .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 43 COMMISSIONER REDFORD: Mr. Howell? Don? MR. HOWELL: We were having a conversation whether Mr. Johnson, who's represented -- who's a party in this case, can appear as a public witness. But MR. JOHNSON: And I just wanted to COMMISSIONER REDFORD: I think I'm going to rule that he is. MR. HOWELL: Okay. Mr. Johnson, I need you to state your name and spell your last for the record, please. MR. JOHNSON: Okay. It i S Greg Johnson, and it's -- I live at 2037 East Terza, T-e-r-z-a, Meridian, Idaho. MR. HOWELL: And are you a Mayfield Springs customer? MR. JOHNSON: MR. HOWELL: MR. JOHNSON: Yes. All right. I had to think about that. But yes, I am. COMMISSIONER REDFORD: Go ahead. MR. JOHNSON: I don't have a lot to add, other than I'll answer questions if you have questions that have been raised, if .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 44 COMMISSIONER REDFORD: Well, as you know, we've asked some questions, but usually those questions have been asked as a matter of -- because the witnesses have made some sort of a statement. So no, we don't have any questions. This is being handled on what's called a modified procedure. MR. JOHNSON: Okay. COMMISSIONER REDFORD:Which, in effect, means that it's being handled on the document. However, the law does provide, and we encourage public hearings to make sure that everyone gets an opportuni ty to have their say about practically anything they want to talk about. So we don't have any questions. Now, that doesn't say that Mr. Howell or Mr. Hammond -- Mr. Hammond is your attorney? MR. JOHNSON: Yes. COMMISSIONER REDFORD: Okay. MR. JOHNSON: I have a couple things I'll just talk about. COMMISS IONER REDFORD: Go ahead. MR. JOHNSON: I guess first of all, I have done many subdivisions, but this is the first water system I have ever built and operated. I .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 45 have not done it perfectly, as is probably obvious from my not having applied to the PUC a couple years ago. I took the advice of professional engineers and others that had developed water systems. We got our DEQ approvals. They told me that was all that was necessary at that time. COMMISSIONER REDFORD: Who told you that? Who's "they"? MR. JOHNSON: SPF Water -- COMMISSIONER REDFORD: Okay. MR. JOHNSON: was my water consultant and construction engineer. We did get approvals from DEQ, and we have all of those. And we built a quality system and operated as we were instructed. COMMISSIONER REDFORD: By who? MR. JOHNSON: By them, as far as the operation manuals and et cetera. We have provided quality water to the residents. We have done it as fairly and as -- as they said they have claimed that we have been dishonest in some things.We may have made some mistakes, but I've never intended to mislead anybody or be dishonest in anything. The questions wi th wha t the real tor represented are being handled in the court system. .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . He was instructed what I knew. 46 What he told these people, I don't know. I wasn't there when they were told. That will be settled at another time. The conversations referred to as me promising to have meetings, I probably did say that we would have a meeting. I fel t that -- once we knew what the issues were, and that we were going to the PUC, I agreed to lower the rates to $50. And I fel t that that's what the discussion was that we were going to have at that meeting. And so we continued to proceed wi th that and get our application in to the PUC. COMMISSIONER REDFORD:Have you ever had any problems with the service, any complaints, or with the quali ty of the water? Are you okay wi th DEQ and MR. JOHNSON:We had one incidentWe are. of bacteria in the system when we hooked the second phase on, and we had to go back through and re-chlorinate and flush. That's the only incident I'm aware of.Is that correct? Yeah.I think we've been able to provide quality water in the volume necessary for fire protection and other things in this area. COMMISSIONER REDFORD:Mr. Howell? .1 2 3 4 5 6 7 8 9 10 II 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 47 MR. HOWELL: No questions. COMMISSIONER REDFORD: Do you have anything you'd like to add, Mr. Hammond? MR. HAMMOND: I don't have any questions. MR. JOHNSON: Thank you. COMMISSIONER REDFORD: We appreciate your coming. Thank you very much, MR. JOHNSON: You bet. COMMISSIONER REDFORD: that wants to testify? Okay. sir. Is there anyone else Step forward, sir. MR. GRABLE: My name's Larry Grable. LARRY GRABLE, having been first duly sworn, testified as follows: MR. HOWELL: Sir, could you state your full name and spell your last for the record, please? MR. GRABLE: Larry Grable, G-r-a-b- 1 -e. MR. HOWELL: And your addre s s? MR. GRABLE: 12070 West Dynamite. MR. HOWELL: And are you a customer of Mayfield Springs? MR. GRABLE: Yes, I am. MR. HOWELL: All right.Please give us your .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 48 statement. MR. GRABLE: First of all, I'd like to thank you gentlemen for coming here today and helping us with this si t uation. And second of all, nice duck and cover, Greg. You know, when me and my wife left California, we came here for a little bit easier way of life. We left California to get away from a lot of this stuff. This is like the last thing we expected. This has been really tough on us. And I'm reiterating what everybody else has said. You just don't get this many people together in different walks of life that are going to come up and lie about something that we're talking about. This was promised to us. This was told to us. And all of a sudden now some of these people are paying money that they can't afford to pay. The $50 drop in the water bill that he was talking about, that was done because he had so much backlash and so much problems and so many complaints, that he thought that would, you know, mull us over, like giving a little piece of candy to kids. But that's not what we i re looking for. .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 49 We're looking for a future here. Most of these people here are going to stay here. They don't plan on buying somewhere else, don't plan on leaving. And that i s what we're doing this for. We want to make sure that our houses and our water and our sewer and everything else is in somebody' s hands that we can trust, five, six years from now we're not paying $400 a month for water. I don't think, like everybody else, I don't think we should be paying anything. I think $1,200 a year is what we were promised, and I think that's all we should pay. However, I don't think that's going to happen at this point. So, you know, I think all of us want something fair. We want to be fair with, you know, the PUC, and we want to pay our debt, and we're not trying to get a fair -- free ride out of this. We just -- now we just want it to where we're all comfortable; we can sleep at night knowing that somebody' s not going to raise our water every time they get a notion to. You've already been told that he owns property out there, and he owns lots out there, and just when we were getting control over the first phase, all of a sudden now the second phase .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . so is part of it, and that gives him voting power. The director meeting was just a joke. That was just another thing to maybe make us happy, but it doesn't do anything for us. He gives us no power, no rights, no nothing, because he owns -- he still owns all the voting. So we're just under thumb -- somebody' s thumb, and we just want out. Thatls all we're asking for. And these are good people here. I mean, you know, these are all hardworking people here.You know, there's we don't si t around all day and do nothing. We work hard. Our money means something to us. So that's why we're here today. And our time is very valuable. And we i ve been doing this for about a year. So we really appreciate you guys helping us, and thank you. COMMISSIONER REDFORD: Thank you. Mr. Howell? MR. HOWELL: No questions. COMMISSIONER REDFORD: Mr. Hammond? MR. HAMMOND: No questions. COMMISSIONER REDFORD: Thank you very much, sir. There are no -- excuse me, sir. Do you have something you'd Ii ke to add? MR. CORVINO:Mr. Howell has told me that I .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 51 can testify.I originally did not believe I could, because I'm a party. I'm the intervenor. COMMISSIONER REDFORD: Please step forward, sir. GERALD CORVINO, having been first duly sworn, testified as follows: MR. HOWELL:Could you s ta te your name and spell your last for the record? MR. CORVINO: Gerald Corvino, C-o-r-v-i-n-o. MR. HOWELL: And an address, Mr. Corvino? MR. CORVINO: 11865 West Tustin Lane. MR. HOWELL: And I ta ke it you are a Mayfield Springs customer? MR. CORVINO:Yes, I am. To make this totally clear, I'm also the intervenor in the case. I filed for intervenor status and was granted by the commission several months ago. Originally I was not going to speak, but since Mr. Johnson spoke, I felt it was appropriate for me to do that. And also, I think I can clear up some questions that the .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 52 commissioners had, because I have access to that knowledge. In addition, as of today, I am the president of the homeowner's association. Somebody earlier mentioned at the last HOA meeting held a week or so ago, we, for the first time, had directors elected to the HOA that were not either Mr. Johnson or Mr. Johnson's employees.So now we have three directors that actually own homes in Arrowrock Ranch. I was elected the president today. To clarify the issue around the voting in the HOA, the way the CC&Rs are set up, Mr. Johnson has ten votes for every lot that he owns. So essentially, since he still owns either 42 or 43, that gives him 420 or 430 votes. together. There are only 100 lots all So as you can see, there's only really one vote that matters in anything related to the HOA, and that's Mr. Johnson's, because he has 420 votes, and all of the other homeowners, lot owners, in total -- COMMISSIONER REDFORD:Can I stop you right there for a second and just ask a question? MR. CORVINO:Sure. .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 53 COMMISSIONER REDFORD:Do the directors block vote that? In other words, do you vote the number of shares you have, or MR. CORVINO:He did.I mean, that's what Greg did at the last meeting. COMMISSIONER REDFORD: Well, what about -- MR. CORVINO: The rest of us only have one vote per. COMMISSIONER REDFORD:Doesn't -- you know, clarify.I mean, if you're wrong, if you're a director, unless the CC&Rs provide for proportional voting for directors, everybody gets the same vote. MR. CORVINO:I was not clear.In terms of the homeowner's association votes, it's 420 or 430 to 57 or 58.In terms of the directors, each director has one vote.However, as you probably are aware, if you've ever read CC&Rs, the directors are somewhat limi ted in what they can do. The two things they can't do specifically, in this homeowner's association, is they cannot modify the CC&Rs without the vote of the homeowners, and they can't modify the bylaws without a vote of the members of the association. So while we can conduct the day-to-day .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 54 business of the association as directors, we really can't make any substantial changes to the CC&Rs or the bylaws. Is that -- did I clear that up for you? COMMISSIONER REDFORD: Yes, you did. But that doesn't seem odd. That doesn't seem odd to me. MR. CORVINO:That's normal.As INo. said, I've been a member of a number of HOAs, and everyone worked that way, where we took a vote of the majority. It's unusual, in my experience, to have the developer maintain control of the HOA beyond the point that the development gets 30 or 40 percent sold. I mean, typically developers just want to get out of it, at least based on my experience in other states. They just want to get out of it. They don't want to have anything to do with them. So I hope that clears up some questions we had earlier about the homeowner's association and whatnot. So I only have three points, and I will try to be brief. I think there are three maj or issues here.First one has to do wi th fairness. I contested, I recommended a different rate design .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 55 in my filing with the commission than what came what either the company recommended or what the staff recommended. I actually produced that rate design for one reason and one reason only:To make sure that everybody who benefi ts from the water pays for the water. Because as an earlier speaker brought up, Mr. Johnson does not pay homeowner's association dues. So the water that waters the common area around his 43 lots is paid by the other 57 owners of the -- of lots in the association, if we go with the rate design proposed by the staff or proposed by the company. The only way to insure that everybody who benefits from the water on the common area actually pays for water is to include the vacant lots in the rate design and charge what I've learned now is an availabili ty thing. I didn't come up with this. I found it on your website, actually, in another rate case. And I feel that that would end up wi th a fairer rate structure, so everybody who's benefitting from water on the common area is paying something towards the water, either directly, through the HOA -- ei ther directly through the company or .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 56 indirectly through the HOA. Second issue has to do wi th a windfall. Mr. Johnson was charging $2,500 for a hookup fee. The commission will eventually decide on a fee that will be roughly in the range of $750, based on what I've read so far. So if you take the number of lots, if he had been able to charge $100 for -- $2,500 for all 100 lots, he would have recovered $250,000 from his costs to build the water system. The longer he could delay filing for his CPCN and getting regulated by the commission and getting a different hookup fee, the more money he could recover towards the contributed capi tal for building the water system. I believe that that was the reason that the application got delayed. I actually filed a complaint with the commission in March of 2007 through the commi ssion website, and I had a number of communications with Mr. -- wi th Chris Hecht from the commission staff. So I'm the one that started the whole thing with the commission. That was the first complaint -- and it's all in my filing -- was in March of 2007. I actually paid water fees up until May .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 57 of 2007, when we filed the lawsuit~ Two things happened. We filed the lawsui t and Chris told me tha t the commis sian could not force Mr. Johnson to file for a CPCN. At that point, I quit paying. Finally, there's the whole issue that's been brought up before. I'm not going to talk about the issue wi th who knew what about what the water fees were actually going to be. You've had much better testimony from earlier speakers. There's the whole issue around trustworthiness. We were led to believe that the company was working wi th the CP -- working wi th the PUC to apply for a CPCN. I actually found a witness, and it i S documented in my -- in my filing wi th the commission, Michael Darrington, who worked for the commission at the time, who attended a meeting with Mr. Johnson. And he's told me on the phone that he told Mr. Johnson he had to apply. That was the end of February 2007. MR. HAMMOND: I'm going to obj ect here. I think that's hearsay. He's testifying to what somebody else said. COMMISSIONER REDFORD: Well, there's been plenty of hearsay today. MR. HAMMOND: I understand. .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 58 COMMISSIONER REDFORD:We'll just -- you're overruled. MR. HAMMON D : MR. CORVINO: Thank you. Okay, John. So there's been a series of communica tions wi th customers.You heard it from Amber earlier about what she was told by Mr. Johnson.There's just an issue around trustworthiness about communications between the company and the ratepayers, some of which were in wri ting. We were told that the application would be filed within four months in writing, and that never happened. That was in early 2007, and that never happened. I actually filed a request with the commission in July of 2007. I actually asked asked for public -- I filed a public records request. I asked for public documents. And the commission secretary sent me back a note, said there were no public documents regarding the Arrowrock Ranch Subdivision, Intermountain Sewer & Water, Arbor Ridge, which were the names that were currently being used at that time. So I actually tried to get this handled by the commission before we filed a lawsuit on numerous occasions, and I .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 59 was unable to do that. One final thing. I'd like to personally thank Chris Hecht, Don Howell, Kristine Sasser from the commission staff, for helping me through this process. I've never done it before. I am not an attorney. Actually, and John Hammond too, for keeping me out of trouble. I have never done this before. I am not a lawyer. And without their help, I would have made probably a big mess of this. You may decide I made a mess anyway; that's up to you. That's all I have to say. COMMISSIONER REDFORD: Mr. Howell? MR. HOWELL: No questions. COMMISSIONER REDFORD: Mr. Hammond? MR. HAMMOND: No questions. COMMISSIONER REDFORD: Well, thank you very much, sir. MR. CORVINO: Thank you. COMMISSIONER REDFORD: I appreciate your testimony. Is there anyone else that would like to testify? Well, I wanted to let you know how important these public meeting -- hearings are. Our commission staff -- there are several of them .1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 60 here. They're seated over here. If you have questions, any questions, they may be able to assist you and give you some answers or direct you in the right direction. Again, thank you very much for coming. This process is what it's all about in our country. Thank you very much. (The proceedings concluded at 8:03 p.m.) -00000- . 61.1 AUTHENTICATION 2 3 4 5 This is to certify that the attached proceedings 6 before the Idaho Public Utilities Commission, in 7 the matter of the application of Idaho Springs 8 Water Company, Inc. for a Certificate of Public 9 Convenience and Necessity, were held as herein 10 appears, and that this is the original transcript 11 thereof for the file of the Commission. 12 IN WITNESS WHEREOF, I have hereunto set.13 my hand July 9, 2008. 14 15 16 17 (~CLLU/(,L L, W~U+VI A Cl_ Laura L . Whiting, Court¡1 eporterCSR No. 688 \""18 23 ....11-..... .. .. v' W lIl~ ..... ~ ..... .KF.~". . . ... ~.. .. ~.. : "Il ~oi:AA:Y \ 1c ~.~. _.- . ..~. . . . ~. Dlro1t ~C . "" ... . cupV ..~.'.... .-~. ... ~.....~~.. "'", '" ~'tlE O~ '#.......... 19 20 21 22 24 . 25