200404092nd Response to Staff.pdf

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E-mail: adminCWhansonind,com
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April 7, 2004 dTILiTiE;3 CCJt"1I"1ISSIOH
John R. Hammond
Deputy Attorney General
Idaho Public Utilities Commission
P. O. Box 83720
Boise ID 83720-0074
RE: Case No. SPL-04-
Dear Mr. Hammond:
Enclosed is our Response to the Second Production Request in the
above referenced matter.
Weare proceeding ahead with our Application but we want to advise
of the following issues:
(1) Contractors: we are in the process of interviewing a new contractor
to install our hook ups. This may affect the costs paid for each
installation;
(2) Cost Plus Rate: we have proposed a hook up rate based on the
actual costs of the contractor and an administrative fee for our
office and technical support for the hook ups. This simplifies the
whole issue of setting a rate.
Please forward this letter onto Staff with our Responses.
Thank you.
Sincerely,~~9~
Vice President
TO THE IDAHO PUBLIC UTILITIES COMMISSION:
In the Matter of the Application of Spirit Lake East Water Company
To Increase its Connection Fee
Case No. SPL-O4-
Responses to Second Production Request of the Commission Staff
To Spirit Lake East Water Company
To: John R. Hammond, Deputy Attorney General
We have answered the Commission s requests following the numerical order
of the Requests. Employees of Hanson Industries, Inc., the 75% owner of
the Applicant and manager of the water company prepared these answers.
These employees are the Respondents and are identified as follows: Robert
J. Boyle, Vice President ("RJB"); Roxann Middleton, Controller ("RM"
Jim Kruger, maintenance supervisor and certified water technician ("JK"
The Applicant and the Respondents are located at Hanson Industries, Inc.
15807 E. Indiana Avenue, Spokane Valley, W A 99216 [phone];
[phone] Fax; e-mail admin~hansonind.com
Request No. 18
Response: there are Ninety (90) lots left to hook up to the water system. The
number of remaining lots was confirmed on March 31 , 2004 by field
inspection. We were unable to perform a field survey at the time of the
Application or the First Production Request due to the presence of 3-4 feet
of snow on the ground. The list of lots left to hook up is attached hereto as
Exhibit "
Respondents: RJB, RM, JK
Request No. 19
Response: please see Exhibit 1. In summary, there are eleven (11) lots
needing a meter installation and seventy nine (79) lots left for a complete
hook up (service line installed from main line; set meter box; set meter; hook
up line; recompact roadway).
Respondents: RJB, RM, JK
Request No. 20
Response: enclosed as Exhibit "
Respondents: RM
Request No. 2la.
Response: No, Mr. Davis did not work for Spirit Lake East Water Company
or any related companies prior to his engagement for our installations. Mr.
Davis was an associate of our prior contactor, Kevin Stephens (who dropped
our work to run his family s business, KC Construction in Hayden Lake),
and that is how Mr. Davis was introduced to us.
Request No. 2lb.
Response: please see Response 22 below.
Respondents: RJB , RM
Request No. 22
Response: enclosed as Exhibit "
Respondents: RJB, RM, JK
Request No. 23
Response: Mr. Kruger does the following work for a hook up: (1) receives
contact from Ms. Middleton re: the location of a hook up; (2) travels from
Spokane, W A to Spirit Lake, ID to perform locate marking and then back to
Spokane on same day; (3) once installation is complete, he travels back to
Spirit Lake, ID from Spokane, W A to inspect work; (4) upon notification, he
travels from Spokane, W A to Sprit Lake, ID to meet with the property owner
re: service to the future house. Also, Mr. Kruger inspects the roadway to
insure that the contractor has properly compacted the earth! gravel to avoid a
sinking trench where the water service pipe is buried to the lot. The
condition of the roadway is a "hot button" with the Homeowners
Association and it demands that the water company s work does not cause
deterioration of the existing roads.
Respondents: JK, RM
Request No. 24
Response: Mr. Kruger keeps time cards for his entire work responsibilities
on behalf of Hanson Industries (and its affiliates) and Spirit Lake East Water
Company. There are not separate time cards for Spirit Lake East Water.
Respondents: RJB , RM, JK
Request No. 25
Response: the reason for a higher allocation was more difficult coordination
of the work responsibilities in Response 23 above. Mr. Kruger is dependent
on the efficiency of the contractor and property owners/home builders with
his site visits.
Respondents: RJB, RM, JK
Request No. 26
Response: we have attached Exhibit "3" which details the hourly rate for
our administrative and technical employees. The hourly rate is determined
by each employee s salary with a 30% fringe benefit surcharge (at cost). We
are proposing an administrative fee of$135.07 per hook up in addition to the
actual cost as billed by the contractor. This "Cost Plus" proposal negates the
need to supply past costs for maintenance , supervisor and accounting
services and makes a more linear connection between the actual costs to
install and the indirect administrative costs of each hook up. Due to the
burdensome nature of the request, we are dropping our request for vehicle
compensation.
Respondents: RJB, RM
Request No. 27
Response: please see Response 26 above.
Respondents: RJB , RM
Request No. 28
Response: please see Exhibit 3
Respondents: RJB , RM
Request No. 29
Response to 29 a., b., c.: we are in the process of soliciting new contractors
to bid on the installation work. The actual costs of using Kevin Stephens
and Frank Davis have been supplied with our Application and the Response
to the First Production Request. Mr. Stephens and Mr. Davis have no
connection with this company or any of its affiliates, except as independent
contractors. This company does not have familial or social or business
relationships with Mr. Stephens or Mr. Davis. In summary, this company
has used licensed, responsible contractors and paid their costs to hook up our
customers and these costs have exceeded revenue.
Respondents: RJB, RM
Dated in Spokane Valley, W A on April 7 , 2004.
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Vice President: Hanson Industries, Inc.
SPIRIT LAKE EAST WATER COMPANY
15807 E.lndlana Ave.
Spokane, WA 99216
PWS # 1280176
tiff-!'
b i+ .1:
Meter Set Hot TapFuture Hook Ups
TreaDor! Division
SDlrlt Lake East Division
1 4
1 2
1 3
1 4
2 3
2 4
2 9
212
224
103
105
106
114
117
125
142
152
155
157
158
161
167
168
178
183
184
189
190
191
193
202
203
204
205
210
212
217
219
222
225
227
229
235
236
239
244
245
246
247
250
251
255
257
263
266
270
274
278
281
282
284
287
288
289
291
295
303
306
307
308
310
311
E'/.-tJ. IE l z, w
Frank Davis, Owner
o. Box 220
Rathdrum, m 838S8-
0220
Davis
Ex c:ava"l::
Ceo: [phone]
Phone: (~08) 68'7-9.7.
Fax: (~08) 68'7-4494
Customer
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Maintenance Personnel
Direct Labor Cost
Fringe ~30%
Total
Administrative Personnel
Direct Labor Cost
Fringe ~30%
Total
Total per Hook Up
--.
f~Al1SIT II 311
SPIRIT LAKE EAST WATER COMPANY
15807 E. Indiana Ave.
Spokane, WA 99216
PWS # 1280176
I Per Hour Cost I Estimated Time I Total Cost
12.
16.
24.
31.
56.
78.
135.