20070315Vol I Spirit Lake.pdf

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER .OF THE
APPLICATION OF SPIRIT
LAKE EAST WAT~R COMPANY
FOR AUTHORITY , TO INCREASE )
ITS RATES AND ' CHARGES
FOR WATER SERVICE IN THESTATE OF IDAHO '
) ,
CASE NQ. SPL~W~Q6~Ol
HEARING BEFORE
COMMISSIONER PAUL KJELLANDER (Presiding)
COMMISSIONER MARSHA H. SMITH
COMMISSIONER MACK REDFORD
PLACE:
DATE:
TIME:
Spirit L~ke Elementa~y School
;--:'
32605 North Fifth Street
Spirit Lake; Id~ho
February 28~ 2007
7:00
VOLUME I ~. Pages -'- 78
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1-800-879.1700
.COEUR O'ALENE, 10
208~ 765" 1700
SOUTHERN
1-800-234-9611Court
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Since 1970
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. SPOKANE,
509.455.4515
For the Staff:WELDON B. STUTZMAN
Deputy Attorney General
472 West Washington
o. Box 83720
Boise, Idaho 83720
For Spirit Lake
East Water Company:
JOHN R. HAMMOND, JR.
Bat t & Fisher, LLP
101 South Capitol Boulevard
Suite 500
O. Box 1308
Boise, Idaho 83701
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M , M Court Reporting Service, Inc,aOO-a?9-I?OO PUBLIC HEARING FOR THE IDAHO PUBLIC UTILITIES COMMISSION
TESTIMONY OF RON BART
Examination by Mr. Stutzman
Statement
Cross-Examination by Mr. Stutzman
Examination by Commissioner Kj ellander
Examination by Commissioner Smith
PAGE
TESTIMONY OF CARLA STRANE
Examination by Mr. Stutzman
Statement
Examination by Commissioner Kj ellander
TESTIMONY OF ANTHONY TARNOWSKI
Examination by Mr. Stutzman
Statement
TESTIMONY OF DICK HERNANDEZ
Examination by Mr. Stutzman
Sta tement
TESTIMONY OF ANGELO MARTINEZ
Examination by Mr. Stutzman
Statement
TESTIMONY OF WAYNE NOWACKI
Examination by Mr. Stutzman
Statement
TESTIMONY OF JOYCE NOWACKI
Examination by Mr. Stutzman
Statement
TESTIMONY OF DEE EDGINTON
Examination by Mr. Stutzman
Statement
TESTIMONY OF STEVE GRAY
Examination by Mr. Stutzman
Statement
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(continued)
TESTIMONY OF ARNOLD PEARSON
Examination by Mr. Stutzman
Statement
PAGE
TESTIMONY OF JAMES BARKER
Examination by Mr. Stutzman
Statement
Cross-Examination by Mr. Stutzman
Examination by Mr. Hammond
TESTIMONY OF CARMEN SINCERBEAUX
Examination by Mr. Stutzman
Statement
Examination by Commissioner Kj ellander
Examination by Commissioner Redford
TESTIMONY OF KRIS KRAMER
Examination by Mr. Stutzman
Statement
TESTIMONY OF JACOB LEISLE
Examination by Mr. Stutzman
Statement
TESTIMONY OF JOHN BALBI
Examination by Mr. Stutzman
Statement
TESTIMONY OF VELORIE CRIST
Examination by Mr. Stutzman
Statement
TESTIMONY OF BILL MUELLER
Examination by Mr. Stutzman
Statement
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M , M Court Reporting SerV1ce, Inc,aOo-a?9-1700 PUBLIC HEARING FOR THE IDAHO PUBLIC UTILITIES COMMISSION
SPIRIT LAKE, IDAHO, WEDNESDAY , FEBRUARY 28, 2007
7:00 P.
COMMISSIONER KJELLANDER:Well, this is the
time and place for a public hearing in case No.
SPL-W-06-01.It's also referred to as "In the Matter of
the Application of Spirit Lake East Water Company for
Authori ty to Increase its Rates and Charges for Water
Service in the State of Idaho.
My name is Paul Kj ellander.I I m the chairman
of this evening s proceedings.To my right is
Commissioner Mack Redford and to my left is Commissioner
Marsha Smith.After the proceedings and any additional
comments that we may receive, we will be the three who
actually sit down and do the deliberation on the
comments and the case and make a final rendering on the
issue related to the increase and will issue an order
accordingly.
At this time, our intent is -- this evening
to take your public testimony.We have a court reporter
who will be transcribing your comments this evening.
have a list of people who have already signed up this
evening to provide testimony.If at any time you decide
that you would like to get on the list, we have another
list , I believe, over by the door.And you can
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certainly slgn up at any time.
It's our intent to call the individuals who
choose to testify one by one to come to the microphone
You will be asked a couple of introductoryhere.
questions by Mr. Stutzman , who is an attorney
representing the Idaho Attorney General's office.And
they re very straightforward, simple questions, name,
address and I believe that's about the extent of it.
At that point then you ll be asked to provide
your statement or comments.This is not an opportunity
to make inquiries of the commissioners themselves.
serve as judges in this case.And it's no different
than if you were in a district court.So what we
here to do is be finders of fact, to get your comments
on the record and then to use that as part of the
official deliberative process as we move forward.
And, again, there will also be an opportunity
after the hearing if you would like to submit written
comments.We can even take those tonight.And I
believe we also have access through our websi te to
provide written comments in direct relationship to the
case.
So I believe at this point then we re ready to
call the first witness.And that is Ron Bart.
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RON BART
appearing as a public witness, being first duly sworn,
was examined and testified as follows:
EXAMINATION
QUESTIONS BY MR. STUTZMAN:
Good evening.Would you please state your
name for the record.
Ron Bart.
And spell your last name, please.
r-t.
And are you a customer of Spirit Lake East
Water Company?
I am.
And for how long have you been a customer?
Two years and one month.
Okay.This is your opportunity toThank you.
provide a statement to the Commission, if you would like
to do that at this time.
remarks.
the end.
I would like to read from some prepared
I have one page.ll give copies to you at
Good evening.My name is Ron Bart.m the
president of the board of directors of the Spirit Water
Association , an Idaho nonprofit corporation, formed by
five of the homeowners in Spirit Lake East and one in
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the Treeport Housing Association.
Spiri t Water Association was formed to provide
a legal entity for the Spirit Lake East Water Company to
transfer title of the water system to for the sustained
operation of same.Ini tial overtures to the Spirit Lake
East Water Company determined the latter entity was
interested in such a transfer in that Hanson Industries
no longer owns any lots in either housing association
other than the small parcel upon which the well,
reservoir, and the pumping station is located.
If successful in the effort to obtain title to
the water system , Spirit Water Association intends to
allow any current customer of Spirit Lake East Water
Company to join Spirit Water Association by simply
gi ving their consent to join.Spiri t Water Association
intends to sustainably provide safe drinking water to
its members.
In developing a business plan to satisfy this
intention, Spirit Water Association has analyzed the
financial information submitted by Spirit Lake East
Water Company in their rate increase request to the
Idaho Public Utilities Commission and the financial
information contained in the Public Utilities Commission
Staff position paper of 19 January 2007.Spirit Water
Association has obtained guidelines from the United
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States Environmental Protection Agency regarding
estimation of useful life for various system equipments.
According to these guidelines, the estimated
useful life of storage tanks is 30 to 60 years.Current
age of the storage tank is 30 years and has already
required repair of one maj or failure.The local
Department of Environmental Quality is recommending
Estimated useful lifereplacement of the storage tank.
The current age of the mainof pumps is 10 to 15 years.
well pump is two years.Current age of the three
distribution pumps is unknown.Estimated useful life of
distribution piping is 35 to 40 years.Current age of
the distribution piping is 30 years.PUC Staff comment
paper highlights the severe leakage conditions already
existing in the distribution piping.
Federal EPA guidelines strongly suggest that
significant replacement of the water system physical
plant will be required wi thin the next decade.The
financial data supplied by Spirit Lake East Water
Company does not budget a capital improvement fund for
such replacement.The PUC Staff position , stated in
their comments paper, is that the current annual
depreciation write-off , less than $7,000 a year , could
be redirected into a capital improvement fund.And in
ten years such a fund would accumulate only about
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$70,000.
Spirit Water Association s analysis of
available information shows that a basic monthly rate of
$12 a month is inadequate to ensure sustained water
system operation; that the PUC Staff recommendation of a
basic monthly rate of $13 a month is inadequate to
ensure sustained water system operation; that the Spirit
Lake East Water Company s modified requested basic
monthly rate of $17.64 a month is inadequate to ensure
sustained water system operation; and that Spirit Lake
East Water Company s initially requested $24 a month is
inadequate to ensure sustained water system operation
commodi ty rates notwithstanding.
Idaho public law, as well as common sense
requires that a privately owned water system be
sustainably operated.Spirit Water Association believes
that the right answer does not appear to be on the
table.
Subj ect to your questions, that concludes my
remarks.
COMMISSIONER KJELLANDER:Thank you.And we
probably will see
--
first and foremost, I did not take
the appearances of the parties before we came up because
I looked around and didn t see Spirit Lake still in the
room.
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There we are.
John, you need to come up and sit up here at
the table.
MR. HAMMOND:, okay.
And let's take theCOMMISSIONER KJELLANDER:
And if you could hold tightappearances of the parties.
because I do believe there will be some questions.
(Brief pause.
I f you could goCOMMISSIONER KJELLANDER:
ahead and grab the microphone very quickly, Mr. Hammond,
ll begin with the Company with the appearances of the
parties for the record.
MR. HAMMOND:My name is John Hammond.I work
for Batt & Fisher , LLP , in Boise, Idaho.And we
represent -- our firm represents Spirit Lake Water -- or
Spirit Lake East Water Company.
COMMISSIONER KJELLANDER:And Mr. Stutzman.
MR. STUTZMAN:Thank you.My name is Weldon
Stutzman , deputy attorney general here on behalf of the
commission staff.
COMMISSIONER KJELLANDER:Thank you.
Now at this time we will see if there are any
questions from Mr. Stutzman.
MR. STUTZMAN:Thank you.Just one.
CROSS-EXAMINATION
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QUESTIONS BY MR. STUTZMAN:
If I understand what you were saying, you
believe that the solution is not on the table currently.
So my question to you is:What do you think is the
proper solution to these problems?
Before the current round of repairs became
necessary, we were looking at around $40 a month basic
rate, plus or minus $5 a month.But I would have to go
back and rework that in light of the current repairs
that are being undertaken.
The quotes that the Company has received on
the
--
just the generator, it amounts to $ 92 000.And a
capital improvement fund of $7,000 a year , it would
require 14 years for the Company to accumulate enough
money to pay for that.That's just one repair.
MR. STUTZMAN:Thank you.That's all I have.
COMMISSIONER KJELLANDER:Mr. Hammond.
MR. HAMMOND:(Nodding.
COMMISSIONER KJELLANDER:Are there questions
from the Commission?I have one real quick question.
EXAMINATION
QUESTIONS BY COMMISSIONER KJELLANDER:
So would it be something that I might be able
to derive from your conclusion that if this rate
increase were granted, we d be called right back here in
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a very short period of time if the improvements are made
looking at another rate increase?
That was in the comments submitted by the
Company, that they reserve the right to come back with a
surcharge to pay for these repairs.
Okay.
The answer to your question is yesSo yes.
the Company s telling you you re going to be right back
here.
And one additional follow-up.In the amount
you mentioned, the $40-month basic rate, and without
golng into all the details that went into factoring
that, could you give me just a quick --
What we essentially looked at was the expenses
claimed by the current Spirit Lake East Water Company
Administration.And we also -- when we got the Staff
posi tion comments, we went back and reworked that with
the
--
factoring in all the amounts that they had
disallowed.And we still feel that the Company
claimed labor expenses are too small.
It's a perennial problem with multi-profit
center corporations, they don t accurately track their
labor.If you look at their claimed labor, at $20 an
hour labor cost, they re able to pay for three rounds of
meter readings plus 56 hours of repair, by those
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claimed -- repair and operation by those claimed labor
So we feel the labor costs are unrealistic.costs.
We bumped them up to around $15,000 a year.
And after coming up with all of our expenses, we then
looked at how much we need for a maintenance fund each
year and how much we need for a capital improvement fund
And to get a substantial capital improvementeach year.
fund built up rapidly required that kind of $40-month
income.
COMMISSIONER KJELLANDER:Thank you.
Questions from the Commissioners?
EXAMINATION
QUESTIONS BY COMMISSIONER SMITH:
My questions are does your 40 -- did your $40
a month include any water or was that just a basic fee
and then
m sorry.That was for
--
$40 a month for
the first 9,000 gallons.And we assume the same
commodity usage that was claimed in the PUC Staff paper
because that seems to be good historical data.And we
just assumed that 20 -- we -- I think the budget
analysis we did assumed 20 cents per hundred on that
commodi ty usage.
When was your Spirit Water Association formed?
We incorporated -- filed our articles of
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incorporation in November -- December.Sorry.December
of last year.
And how soon do you think a transfer could
occur given what you
--
what's happened until now?
We still need to do some homework on our end.
We need to contract for the services of a class 1
licensed system operator.We need to arrange for
insurance.We need to arrange for standing engineering
services and
--
and the normal operation , chemical
analysis services.And we ve got to finish our budget
analysis.The Company has got to finish their repairs.
So we re looking at a minimum of six months
before we d be ready.And I can t answer for the Spirit
Lake East Water Company, however long they think they
going to need.
Well, generally, in the past, when homeowners
have banded together to form nonprofit associations to
assume, in essence , their own destiny -- control of
their own destiny by owning their water company --
I like to drink water.I like to flushSure.
my toilets.I like to water my lawn.
Exactly.Yes.
So the Commission in those circumstances
sometimes in the past has stepped back to give the
parties the opportunity to make that happen before we
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step in.
Is that something you want to see, or would
you rather just have the Commission go ahead and do
whatever it's going to do?
Well, what we were kicking around was at the
time that we would apply to the Commission for transfer
of title, we d also apply to de-list it from control --
Right.And that's exactly what would --
that's exactly what would happen.
Because we d no longer be investor owned.
d be user owned.We would be controlling our own
destiny, setting our own rates.
Exactly.
Setting our own expenditures.
So my question is:Do you want us to forbear
from action while you investigate that, or would you
like us to just go ahead and do what we re going to do
and while in the meantime you and the Company negotiate
however you re going to negotiate?
I -- I wasn t prepared for that question.
give second
Sure.
fumble around.
Our perception is that Spirit Lake East isn
ready to deal with us until this rate case is ruled on.
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And I have not discussed with them the current round of
repairs.m certain they ll want to complete that too.
At which time, then, having invested a lot more money in
the system , they may be a lot more reluctant to off-load
it before they can recover some of the expenses they
plowed into it.
Okay.Thank you,COMMISSIONER SMITH:
Mr. Bart.
Are there any otherCOMMISSIONER KJELLANDER:
questions from the Commission?
COMMISSIONER REDFORD:No.
COMMISSIONER KJELLANDER:Thank you, Mr. Bart.
We appreciate your testimony.
(The witness left the lectern.
COMMISSIONER KJELLANDER:This time we ll call
Carla Strane.Ms. Strane, if you would move forward and
raise your right hand, Commissioner Smith will swear you
in.
CARLA STRANE
appearing as a public witness, being first duly sworn,
was examined and testified as follows:
EXAMINATION
QUESTIONS BY MR. STUTZMAN:
Please state your name for the record and
spell your last name.
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Company?
It's Carla Strane, S-t-
And you re a customer of Spirit Lake Water
Yes.
Are you representing anyone besides yourself
this evening or just yourself?
please.
No.
Okay.
And my husband maybe.Just me.
Can you please tell us your address.
Pardon me?
May we have your address for the record,
31076 North Spirit Drive.
Thank you.
Spiri t Lake.
COMMISSIONER KJELLANDER:Could we get you to
move just a little closer to the microphone.
THE WITNESS:You may.
COMMISSIONER KJELLANDER:Thank you.
THE WITNESS:I I m not even sure how to follow
that last testimony because it caught many of us off
guard.Many of us had some idea that this kind of thing
was taking place, but we didn t realize the scope.
First of all, I want to thank the Staff , the
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Commission Staff for the report that they did and for
the investigation that they did.I think they did a
really good job.My only concern is that it's not
strong enough.
The amount of leakage in our system is
unconscionable.For every gallon that is pumped into
our system that we get, another gallon and a half goes
into the ground.We don
--
two years ago
--
or,
In October of 2004 , we hadactually, longer than that.
a ten-day outage.That was because the pump
--
the well
pump failed.The Company ordered the wrong pump.And
as a result, it took longer for it to get here.I mean,
it took longer for us to get it repaired.
They brought in lots of water from Spirit Lake
water system.But for those of us on the east side, we
never saw a drop of that water because it never got to
us.Anyone who lived on the west side were so anxious
to get the water, after so many days of being without,
that they washed their clothes and took care their
dishes and all the things that they hadn been able
do,those on the east side didn get anything.
When that occurred, several of us called DEQ
and said, How can we make this stop?Because it had not
been the only water outage that we had suffered in the
years before.We had had a three-day water outage in
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July, in a very hot summer, in 1998.And so we said,
How can this stop?And at that point DEQ basically told
us that they didn t even know it was occurring, that it
had not been self-reported.And none of us knew enough
to call and report it.
It was then that DEQ started getting involved
or at least from our perception got involved in the
whole system and realized that there was so many
problems in this system that it was
--
they had a
complete list of things that had to be repaired.
The generator has always been a maj or issue
for us.Because whenever there s a power outage of any
type , we lose our water.And the people that live on
the west side of the system lose it immediately.
that backup generator has always been a maj or issue.
And up until that maj or power outage and when DEQ got
invol ved, it had never been addressed by the Company.
So as a result of that, the Company said that
they would
--
they were told that they had to get a
generator that was sufficient.And at that time, DEQ
said that it had to be sufficient to pump the water and
take care of the distribution pumps.
Now we re being told that DEQ backed up on
that.And they approved an insufficient sized generator
that will only pump the water that is existing in the
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tank to the customers.With the leakage problem that we
have, the pump can t keep up to keep the well -- the
reservoir full.And so as a result, when the reservoir
is half empty anyway, because it's not keeping up with
the leakage that's going into the ground, when we do
have a water outage, the water is gone immediately out
of the tank as well.So, again , we don t have any
water.
So we are constantly trying to get some
authori ty to say to this Company, You can t treat your
customers this way.You need to repair the problems.
And I understand that it takes a lot of money to do
that.But had the money been managed properly over the
last 30 years, it's our belief that a lot of these
repalrs could have been done on a proactive basis rather
than a reactive basis.And because now it is a reactive
basis, they have thousands and thousands of dollars
worth of repair to make.And they re wanting us to pay
for it first before the repairs are made.
I personally don t have a problem with an
increase in water rates.But I don t want that increase
to happen prior to the repairs being made.Because so
far our community, 287 families, have had to deal with
numerous power outages with insufficient care and
maintenance to the system.So we don t really trust
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that this system is going to
--
that the Company is
going to support us when these kinds of things happen.
And we haven t found a governmental agency that will
stand on its hind legs and say, You will do this before
you get the money.
We know , because we did investigation in 2004,
And with a company asthat there are ways to get money.
large as Hanson Industries, they should have been able
get loan years ago that would be sufficient have
repaired so many the problems that facing now.
And they failed to so.was not their best
interest.It'our best interest.And we have not
been the ones that are most concerned
--
being concerned
about.
The things that we want done are the things
that were recommended by your own Staff.We want the
leakage problems to be repaired.We want a stand-in --
a stand-up generator that's going to pump the water out
of the ground into the reservoir and into our pipes when
there s an outage.We want it big enough to do the job.
And we want the repair the roof done.
There was huge leak in the water reservoir
before 2004,when had our outage and DEQ got
invol ved.They have repaired it to the point where it
doesn t leak anymore.But there s a problem with the
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roof which will allow seepage.
So what I personally am asking for is is that
you consider strongly making some provision , if it's a
fine, if it's you don t get the money before you make
the repairs, whatever your authority has that can be
done to give us the service that we need so that before
we pay for it that we, in essence, have the water.And
we have it whenever there s power outages.And we
not paying the excessive electricity costs and the
excessive chlorine costs because half of the water or
150 percent of the water is going into the ground.
I don t know if there s politics involved
because Hanson Industries is such a large community.
would hope not.I hope that what we re looking at is is
that you consider that there s 287 families who need
water every day to function and to subsist.And that
this company in the past has not been servicing our
needs as strongly and taking care of us as strongly as
they should be.
And before they get the money, I think they
should take care of the problem.And then we ll pay the
money.But not until the problems are fixed and fixed
properly.
They tend to do just a Band-Aid repair.And
wi th a system as old and as poorly taken care of as this
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one has been , Band-Aids no longer work.We need a
And even after that there s maj or surgery.tourniquet.
So if we could just please have you consider, before you
gi ve them the money, as k them to make the repairs.
Thank you.If weCOMMI S S IONER KJELLAN DER :
could have you just wait for moment.
couple qu i c k questions.Mr.Stutzman.
MR.STUTZMAN:questions.
There may be a
Mr. Hammond?COMMISSIONER KJELLANDER:
MR. HAMMOND:No questions.
COMMISSIONER SMITH:No.
COMMISSIONER REDFORD:I don
COMMISSIONER KJELLANDER:Just one question.
EXAMINATION
QUESTIONS BY COMMISSIONER KJELLANDER:
If the Commission were to move forward with
this rate case and issue a decision and in that final
order also include in there some mandates for the
Company, it might include things like a capital
improvement plan that would have firm and hard deadlines
and might also have some other components to it that
would require reporting back to the Commission by
certain time frames, to help ensure that those
improvements are laid out, are reviewed by Staff and
meet those expectations.
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Would that be something that might ease some
of your concerns going forward?
The firm answer is no.And the reason that
give that answer is because this was done in 2005 when
DEQ made the original list of repairs that needed to be
And those repairs were
--
it was slip-slide away.done.
And things were backed up on.
So the
--
I saw the recommendations.And the
recommendations of your Staff is is that there be money
set aside and that they do this.But the problem is
that it doesn t get done.And without some
there
--
we haven t found anyone who will force them
to do this.
And, you know, DEQ said that PUC has the
power.PUC said, well, really DEQ is the authority when
it comes to this kind of thing.So I asked earlier in
the workshop, Who has the power?Who can do thi And
our understanding from another comment was is that you,
as the Commission, are the only ones who have the power,
and you have the power when there s a rate increase
requested.And that's the time when it can be done.
And if you do the same thing that DEQ did,
which was to say you need to do these things and you
need to do them by this time frame, it doesn t happen.
As an additional question, when you had the
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huge outage for ten days, were we called, the PUC?
I personally was in touch with -- oh,Yes.
I didn t bring my records with me.Johnson wasshoot.
No, it her name.
Did you speak to someone --
Was there an M. J. ?
MR. HAMMOND:
J. we talked to atTHE WITNESS:
length.And then when we went to see Steve Tanner
(phonetic) at the DEQ, we talked with someone else down
there.But mostly our conversations were with C. J.
that point.
And so we went into a lot of investigation at
that point about other water companies, how they were
run, what their costs were.North Idaho -- Kootenai
Water was interested in taking over, but they wanted to
be paid $75,000 for the company at that point.Plus the
Welch and Comer did a huge study.And that study said
that there was a million dollars plus in repairs and the
new well and all the other -- for an optimum system.
Not to just take care of the one that's here, but an
optimum system, which included a second well and booster
pumps and lots of other things.And at that point they
were talking lots of money too.
And I understand what Mr. Bart is saying.But
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my feeling is is that Hanson has owned this company.
got the money initially from the cost of our lots.When
we paid for our lots to build in here or to live in
here, that money was including a water system, short of
the hookup fees.So he got his money back for his
ini tial investment in putting the water system in.
Because every one of the lots had to pay.That was a
part of our payment back.
And he has never ever -- or the Company, I
should not say he
--
but the Company has never ever been
proactive in the way it maintains its company.And as a
resul t, it has fell into disrepair to the point where
it's in the condition that it is today.And Mr. Bart
saYlng it I s going to take this much money in order to
get it back into repair, in order for us to get water
every day.And I'm saying that Mr. Hanson is a very
weal thy man.His company is a very wealthy company.
And they are the ones that let this system fall into the
disrepair that it is today.And I think they should
have to pay for that for the 30 years that they have
done nothing for us, instead of having us pay for it.
Let them pay.
COMMISSIONER KJELLANDER:Thank you for your
testimony.We appreciate that.
THE WITNESS:Thank you.
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(The witness left the lectern.
Now call AnthonyCOMMISSIONER KJELLANDER:
Tarnowski.
ANTHONY TARNOWSKI,
appearing as a public witness, being first duly sworn,
was examined and testified as follows:
EXAMINATION
QUESTIONS BY MR. STUTZMAN:
Good evening.Please state your name for the
record and spell your last name.
Anthony Tarnowski , T-
Thank you.And can we have your address for
the record, please.
15230 West Coeur d'Alene Drive.
And you re a customer of Spirit Lake?
Yes.For almost eight and a half years.
Okay.Please go ahead and make your
statement.
I don t have much to say because the young
lady before me pretty much said what I feel and most
everybody else does.
But all I wish to add is unless we have a
optimum water system, our property values go down to
nothing except for grazing.We have to have an adequate
water system to keep our property values up.And if we
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don t, Mr. -- Hanson Industries will be responsible for
lowering our property values.
ThereAnd really that's all I have to say.
are more qualified people to speak after me.But my --
my opinion.
COMMISSIONER KJELLANDER:Thank you.I f you
could just wait a moment to see if there s any
questions.Any questions from members of the
Commission?
Thank you for your testimony.
(The witness left the lectern.
COMMISSIONER KJELLANDER:ll now call Bill
Strane.
MR. STRANE:m going to pass.She said
everything we wanted to say.ll pass.
COMMISSIONER KJELLANDER:Thank you,
Mr. Strane.Dick Hernandez.
DICK HERNANDEZ,
appearlng as a public witness, being first duly sworn
was examined and testified as follows:
EXAMINATION
QUESTIONS BY MR. STUTZMAN:
Please state your name for the record and
spell your last name.
Dick Hernandez , H-n-d-
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Thank you.And may we have your address for
the record, please.
5525 West Coeur d'Alene Drive.
And you re a customer of Spirit Lake?
Yes, I am.
Okay.Please make your statement.
I feel for a lot of these people here because
I have also gone without water, too, in my particular
neighborhood.I went without water for seven, eight,
nine, ten days.It's kind of tough.It seems li ke it
happens just about every year; something has happened
wi th the water.The power goes off; the water goes off.
Not only does the water go off, every year it
seems li ke we re dealing with some kind of a chloroform
(sic) problem in the water.We are asked to boil our
water.And that's been happening enough times now,
almost every year , that our water used to taste pretty
good.Now it has so much chlorine in it my dogs don '
even drink the water.It doesn t really taste very good
at all.
And now that Hanson is looking for a rate
increase, I also feel, too, that because of the many
problems I've been hearing about, and I've been also
experiencing living in Spirit Lake East area, that
Hanson should have developed a water system good enough
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to support the people that are using the water in that
community.
It's been in the ground probably
--
somebody
said about 30 years.I don t think it I S been quite that
But it's been in the ground for sometime.And iflong.
it's anything at all that speaks of Hanson, it'
probably not a very good system.
We had problems with our roads.They were
first supposed to be designed and built so the
--
so the
highway district can accept them into their system.
They will not even look at the roads because they
were
--
they weren t constructed, the materials weren
used in the roads to be considered worthy of a road for
the highway district.
The covenants we have are pretty much in
shambles.We don t even have a way really in a sense
where people feel agreeable to
--
to agree in spending
extra money for possibly road repairs or so.
m also subj ect to the water system , because
of all the major leaks that we have in the system, we
loosing 150 percent of the water.Also the pipelines,
like this here, is also of poor quality.And the
installation is not very good.And what I mean by that
is the installation of the lines they used, they should
be put in the ground at a certain depth with the proper
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material around them to protect those pipes from being
scratched or damaged in any way.
And I think what's happened is -- which I'
been noticing some of the
--
digging into the -- into
the earth and the ground, you find a lot of very large
rocks rubbing against those pipes.And the pressures
of -- of the water in the pipe, shutting off, coming on,
shutting off , coming on , you have a hammering effect.
And they ll soon start scratchingPipes do move.
against these rocks and start breaking.And it'
evident probably because of the water loss we have in
the system so far.
m firmly agreed with the fact here of any
repalrs in the system should be done first before we
have any increase in our -- an increase in our rates.
The water system should have been put in properly and
it's not.Hanson should be accountable to that, and
s trying to wiggle out of it.
And I think you people, Commissioners, have a
job right here to tell Hanson to get the system in shape
before we raise this -- ralse the rate increases to the
customers of this water system.And I think that should
be a directive on your part.
I also think , too -- and something was said
earlier tonight and that was that Hanson s rate
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increases is not enough.This has to do with another --
a nonprofit water company that's a company --
incorporated company here that's wanting probably to
take this water company from Hanson.I request that you
That has nothing tocompletely ignore that right now.
do with us at the time being.
If you do have these rates increases, going to
start looking for something higher, that's something
Because ifthis company would be looking for right now.
they take this
--
if they take the water company from
Hanson, they certainly will want a higher rate for
their -- for themselves to take this water , the prices
and possibly do repairs.I don t think they realize
what damages to this -- there is in this water system
and how much it's going to cost.
So until the system is completely repaired the
way it should be, provide adequate water when power is
off , and -- and safe water for us, nothing should be
transferred and no rate should be increased.
COMMISSIONER KJELLANDER:Thank you,
Mr. Hernandez.
(Applause.
COMMISSIONER KJELLANDER:Any questions --
ladies and gentlemen, as a formal hearing, we appreciate
it -- we recognize that you ve waited a long time to
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come and provide this testimony.But we don t allow for
clapping.
record.
It also doesn t show up very well on the
Are there any questions?Thank you forNone?
your testimony.
Martinez.
(The witness left the lectern.
COMMISSIONER KJELLANDER:Let I S move to Angelo
ANGELO MARTINEZ
appearing as a public witness, being first duly sworn,
was examined and testified as follows:
EXAMINATION
QUESTIONS BY MR. STUTZMAN:
Please state your name for the record and
spell your last name.
83869.
My name is Angelo Martinez, M-r-t-
And may we have your address, please.
33026 North Tahoe Drive, Spirit Lake, Idaho
Thank you.Go ahead with your statement.
Thank you.
In addition to the problems that we ve had
wi th water outages, I am in complete agreement with my
neighbors that Hanson Industries needs to get their
house in order.I would like to give you an example of
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some of their really poor practices.
Unfortunately I don t have exact numbers, the
dates and the names of the people I spoke to.I can
gi ve those to you at a later time.But during one of
the billing cycles last year, my wife and I received a
bill for $180 for water usage instead of the standard
36.This would have worked out to almost 50,000 gallons
of water.
When I called Hanson for an explanation of why
the meter reading on the card, our bill, did not match
anywhere near to what the meter was displaying out on
the
--
on our property when I went and checked, I was
told that our meter had been installed backwards.And
that was the reason why it didn t match what was out
there now; why it didn t show up under the 9,000
gallons.That's ridiculous.
I have been
--
we had been a customer for over
three years.There had never been a problem.So I
asked, well, what happened?Did you change the water
meter back?This was the Hanson representative, the
engineer.And he stated, oh, yes, I did.I changed it
back for you, so it I S correct now.I said, well, why
didn t you inform me that you were shutting off my
water?I would think that would be something you
required by law to do, to inform me that you re going to
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M , M Court Reporting Service, Inc,aoo-a79-1700 PUBLIC HEARING FOR THE IDAHO PUBLIC UTILITIES COMMISSIDN
be shutting off my water and that there s a problem with
our water meter.
Well, I didn t get a satisfactory answer.
I contacted the PUC after a month of wrangling back and
forth , including the PUC supposedly having the meter --
my meter checked, a sample meter that -- to see whether
or not water
--
that it would register flowing backwards
They saw through the problem that it was justor not.
the -- the numbers had been transposed and -- when they
read the meter.So the PUC found in our favor.
So I know that the PUC can see through
Hanson I S smoke screens.Even if it just takes a little
bit of time.In addition, during this month, in fact,
Hanson
--
the PUC informed me that Hanson said that they
would pay half our bill if we agreed to accept the
billing.There s no way I'm going toAnd I said no.
pay for water didn use.
just wanted to give that example you
the kind quality service that had over
the years from this company.
Thank you.
COMMI S S IONER KJELLANDER:
are any questions.
MR.STUTZMAN:No.
Let's see if there
COMMISSIONER KJELLANDER:No questions.Thank
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you for your testimony.
Thank you.THE WITNESS:
(The witness left the lectern.
Let's move to ThomasCOMM IS S IONER KJELLAN DER :
Hansel.
m going to pass and letMR. HANSEL:
somebody else go here.
All right.ThankCOMMISSIONER KJELLANDER:
Wayne Nowacki.you.
WAYNE NOWACKI,
appearing as a public witness, being first duly sworn,
was examined and testified as follows:
EXAMINATION
QUESTIONS BY MR. STUTZMAN:
Please state your name for the record and
spell your last name.
Wayne Nowacki, N-a -c- k- i .
And may we have your address, please.
35198 North Hayden Drive.
Okay.Go ahead and make your statement.
I don t believe the Spirit Lake East Water
Company should receive any rate hike until such time
they bring this system up to standards.I believe the
system was built to sell property.All the property has
sold out.They ve taken all the tax breaks.Now
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they re going to go this route.I don t think they
They should bring it upshould be allowed to do that.
to standards and then talk about what the rate increase
is going to be.
I have a problem with the company being sneaky
and doing second-rate jobs.They built a building at
the pump house site.They didn t obtain a building
permi t.They didn t obtain a permit from the State
electrical board to do electrical work.And maybe
that's why the generator wouldn t start.Second-rate
work.Who done the work?
This system is supposed to be for us, for our
livelihood for us.Wi th that kind of performance, I
don t think it can be done.I agree with most of the
statements that have been brought forth.And I don
think they should get the rate increase until the system
is up to where it should be.
COMMISSIONER KJELLANDER:Thank you.Let'
see if there are any questions.
MR. STUTZMAN:No questions.
MR. HAMMOND:No questions.
COMMISSIONER REDFORD:No.
COMMISSIONER SMITH:No.
COMMISSIONER KJELLANDER:Thank you for your
testimony.
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(The witness left the lectern.
Joyce Nowacki.COMMISSIONER KJELLANDER:
JOYCE NOWACKI,
appearing as a public witness, being first duly sworn,
was examined and testified as follows:
EXAMINATION
QUESTIONS BY MR. STUTZMAN:
Please state your name for the record and
spell your last name.
Joyce Nowacki, N-a -c- k- i .
And your address.
35198 Hayden Drive.
Okay.Thank you.Go ahead and make your
statement.
Thank you.
I I m dismayed that we re here discussing the
possibili ty of a rate increase for Mr. Hanson s water
company.Current residents are being asked to foot the
bill for these many years of ignoring needed
maintenance.
I appreciate you folks coming here from Boise,
especially with our little snowstorm last night.And I
know that you may not have had a chance to taste the
water that we re discussing.So I brought you a sample.
And I have cups.ll pour it in a minute.
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The taste of this water is not to the liking
of our family since it's been added -- chlorine has been
added due to the filth of the patched together
reservoir.As for me and my house, we won t drink it.
We do not trust the water company to always provide us
safe drinking water., yes.They send us a letter,
three times in as many years, to not drink the water.
But we ve been drinking the water for over a week before
we got the letter warning us to not drink this bad
water.Not doing that again.
My family, we purchase bottled drinking water,
which has already increased the price of water at our
household by about $25 a month.To give Mr. Hanson one
penny increase is to say that you are accepting his ill
repairs and all is well
--
get the pun? -- with his
wa ter company.Please do not give him any rate increase
until the system is a hundred percent.
Would you like my water?
COMMISSIONER KJELLANDER:Let's see if we have
some questions for you.
MR. STUTZMAN:No questions.
COMMISSIONER REDFORD:No.
COMMISSIONER SMITH:No.
COMMISSIONER KJELLANDER:Thank you for your
testimony.
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Taste the water.THE WITNESS:
(The witness left the lectern.
Call Dee Edginton.COMMISSIONER KJELLANDER:
DEE EDGINTON,
appearing as a public witness, being first duly sworn
was examined and testified as follows:
EXAMINATION
QUESTIONS BY MR. STUTZMAN:
Please state your name for the record and
spell your last name.
Dee Edginton, E-n-t-
And may we have your address for the record,
please.
9214 Coeur d'Alene Drive.
Okay.Go ahead and make your statement.
We live at the very top of Spirit Lake East.
The only house further north than ours in Spirit Lake
East is that of the Murphys.
When we moved here four years ago, we weren
told that there was a problem with the water or the
water system.We only found out a year later that on
Saturday morning in the summer if you want a shower , you
better take it at 5:00 a.m. because by 7:00 you ll only
be getting a trickle.Or you could wait until 10: 00
p. m. but hopefully nobody will be having a barbecue or
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watering their horses or still watering their lawn or
doing their laundry.
When you go to Les Schwab to get your brakes
done, they give you an estimate.They do the work.You
pay the bill.It's just as easy as that.You have the
opportuni ty to tell Spirit Lake East Water Company,
You ve given us your estimates; you need to do your
work; then the people will pay the bill.
Where we came from, our water was 36 a month
instead of 36 every three months.We were willing to
pay it.We always had water.EvenWe had good water.
when we had Santa Anas at 50 miles an hour that took out
power everywhere in the valley, we still had water.But
the water company planned ahead.They knew there would
be growth.
There has been growth.There is very few
empty lots left in Spirit Lake East.People went from
building small two-bedroom homes to large four-bedroom
homes to big five-bedroom mansions.They all live here.
They all work here.They take baths, wash laundry and
eat food.They all need water.They all need it every
day.If none of us had a pet to water, we might cut
down a drop.But there are people with animals, small
domesticated and large equine.
We need the water.Our property values will
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drop if we don t have it.Those lots that haven t been
sold, won t be sold.And those people who live here now
will begin selling off to get away and get water.
That's all.
COMMISSIONER KJELLANDER:Thank you.Any
questions?
MR.STUTZMAN:No.
COMMISSIONER REDFORD:No.
Thank you for yourCOMMISSIONER KJELLANDER:
testimony.
THE WITNESS:Thank you.
(The witness left the lectern.
COMMISSIONER KJELLANDER:Steve Gray.
STEVE GRAY,
appearing as a public witness, being first duly sworn,
was examined and testified as follows:
EXAMINATION
QUESTIONS BY MR. STUTZMAN:
Please state your name for the record and
spell your last name.
Pardon me?
Please state your name and spell your last
name for the record.
My name is Steve Gray, G-I live at
14435 West Coeur d'Alene Drive, Spirit Lake, Idaho
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83869.
Thank you.Go ahead.
I just want to point out a couple things that
in my opinion are important to your decision and how you
make your decision and when you make your decision as to
the rates and the rate increase.
In my opinion, we ve got two kinds of problems
that you re dealing with , it appears.One of them is
long
--
or a number of them are long-term.They involve
the leakage.They involve the lack of a well pump -- a
well backup generator for the main pump.They involve
the storage area, where the water is stored, which I
guess still leaks through the top.
And you ve had a numerous -- you ve had
numerous requests from people -- various people to
please don t reward this person or water company,
depending on how you look at it -- I think we look at it
as a person rather than a company in a lot of ways --
because we don I t feel that anything that any of the
government agencies have been able to do has produced
any results.
The Spirit Lake East Water Company has managed
to evade every significant expensive repair that was
called for by either the DEQ or anything that came out
of the Attorney General's office, any of the threatened
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lawsui ts, anything.It didn t work.
I visualize it as a little man in a cart with
And the only way you can get the donkey to goa donkey.
is put the carrot out on the stick.The stick is long
enough so the donkey can t get ahold of it.The minute
you pull the stick back where the donkey can eat the
carrot, all deals are off, as far as I'm concerned.
ll be back to obfuscating and trying to maneuver out
of anything that can be expensive.
The pump that was supposed to go in
originally
--
or excuse me
--
the generator to run the
pump was a 1500-horsepower diesel generator.What went
in was 500 horsepower.Significant difference in
expense.
It was supposed to run originally the main
well pump and all three of the booster pumps.That
didn t happen.All it runs is the booster pumps.And
due to leakage and
--
in not only the reservoir but the
pipes and everything else, it can
--
it empties the
reservoir in no time because it's running three little
pumps.And they just spit it all out, and it goes out
through the holes in the pipes and that's the end of it.
So we have got the short-term problem, which
, in my opinion, the most pressing, which is we don
have a generator that will run the main pump.So every
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time there is a power outage, we have no water.I have
lived here since 1992 in Spirit Lake East.And there
have been numerous long power outages when we did
wi thout water.
a licensed real estate broker in the state
of Idaho.ve been in the real estate business and a
real estate broker for 30 years.Were we to lose our
water company, in my opinion, based on the houses that
are down in Clagstone that have no water, the properties
in our development would diminish in value somewhere
between 50 and $100,000.There are some expensive homes
in Spirit Lake East.There are homes that cost a
million dollars.They don get water either.And
people that have that much money don want move into
place that'got a history of bad water,bad water
company, bad well, bad this, bad that.They don t want
to move here because they don t want the same problems
that we ve already got.
The repairs that you ve been told about, such
as a gallon and a half leaking out through the holes in
the pipes for every gallon that actually reaches a
consumer , the reservoir that still leaks through the
roof, the fact that there is no generator backup for the
main pump, the fact that there s no water pressure down
at the far end, the east end of the development, hardly
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in places, all these problems are
--
in my opinion are a
resul t of either bad planning by Hanson Industries or
just plain neglect.
They have collected $12 a month from the
consumers in Spirit Lake East each month.And that'
But if you re putting it all innot a lot of money.
your pocket and you re not spending it for anything and
it's 1982 , that's a lot of money.Because in 1982, 12
bucks was worth almost 40.And if you don t make
repairs for a long period of time and you re a
businessman, what's the best way to ensure you re not
going to have to make repairs?It's don t make any
waves.
It's like all the people standing in the tank
wi th it right up to here (indicating) and the voice
comes out of the clear , Don t make waves.Well, that'
kind of the way we ve been
--
that's how we feel we
been treated.And unfortunately now the issues have
just blossomed.ve got all these problems that are
long-term problems that are due to neglect.And we
got a problem that's an immediate problem for a lot of
us which is when the power goes out, we have no water.
It's that simple.
All of this obfuscation about, well , we have a
reservoir , we have this and we have that, all of it
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It doesn t get to the people.And we haveleaks out.
now Hanson Industries who has delineated the water
company as a separate entity for which they don t want
to be responsible, obviously, the problem has now become
one where all of this maintenance that was deferred,
when this water company is taken over by somebody,
unless you all force this guy to do some of the things
that he should do, which a person of good character
would do, we re going to end up doing it all.
Because the water company that picks up this
water company is going to say, you know what, folks --
and they re going to come right to you.They re going
to say, We got to have this, this, this, this, this,
this.And you ll sit there and say okay.re going
to give you more money so you can do all these things.
And guess what?You effectively have transferred it
from Spirit Lake East Water Company and R. A. Hanson to
the consumers at Spirit Lake East.Because we ll end up
paying for it if you all don t do something to do the
right
--
to force him to do the right thing and to treat
us properly.
That's all I got to say.
COMMISSIONER KJELLANDER:Thank you.Let'
see if there s some questions.
MR. STUTZMAN:No.
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I just have one.MR. HAMMOND:
EXAMINATION
QUESTIONS BY MR. HAMMOND:
Mr.Gray,have you read the Staff comments?
Yeah,did.
Okay.Are you aware that on page the
Staff comments regarding reservoir roof repairs, Staff
Are you aware of that?noted the roof does not leak.
m aware that evidently in the Attorney
General's report they re addressing and the DEQ also
addressing the roof repairs.
Correct.Is there anything in your knowledge
from those DEQ communications that you ve seen that has
said clearly that the roof is leaking?
I just heard Ron whatever his name was said
that that was part of the issue with the Attorney
General's office.Now , either he s misinformed; you
misinformed.You said that you, I think, are a little
bi t behind the curve as far as all this stuff that'
going on out there.Is that
...
COMMISSIONER KJELLANDER:You just hadNo.
some movement behind you.I thought it might be well
just to let you complete your testimony.
THE WITNESS:Oh.That you
--
you weren
aware of all of the things that were in the Attorney
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General's edict to Hanson Industries to do the work that
was called for.
So I'm just assuming if he s right and you
behind the curve, then it probably still leaks.
Otherwise it wouldn t be an issue.Am I wrong?
BY MR. HAMMOND:
Well, I'm not testifying, Mr. Gray.So ...
Beg pardon?
m not testifying, Mr. Gray.m just asking
you a couple questions.
Well, but you re an attorney and you represent
them.I asked you a question that has to do with them.
COMMISSIONER KJELLANDER:Let me interrupt
here for just a point of information.
If you would like to talk to the Company
further afterwards, there will be an opportunity
hopefully for some additional questions for them.But
as far as the testimony this evening, it's an
opportuni ty for us to take your testimony, then have a
few questions.And we do appreciate
THE WITNESS:Well, he asked me the question
and all that started, you know.
COMMISSIONER KJELLANDER:And no, no.That'
okay.
THE WITNESS:Otherwise I wouldn t have asked
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him a question.
Unless you testifyCOMMISSIONER KJELLANDER:
daily, there s probably no way for you to know how the
rules of these things operate.So that's what we do is
try to help move things along.
Let me see if there are any additional
questions.
COMMISSIONER REDFORD:No.
COMMISSIONER KJELLANDER:We do appreciate
your testimony and thank you.
THE WITNESS:Thank you.
(The witness left the lectern.
COMMISSIONER KJELLANDER:Arnold Pearson.
ARNOLD PEARSON,
appearing as a public witness, being first duly sworn
was examined and testified as follows:
EXAMINATION
QUESTIONS BY MR. STUTZMAN:
Please state your name for the record and
spell your last name.
My name is Arnold Pearson.And the spelling
is P-
Thank you.And may we have your address for
the record.
It's 9229 West Liberty Drive.
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Okay.Thank you.Please make your statement.
Well , I bought property, the lot that I live
So the water system has, in 1977.I built in 1978.
been in in excess of 30 years.It's deteriorated to the
point it is now.
And the relationship between the homeowners
out here and Hanson over the years hasn t been very
But that's past history.But that has givengood.
people now the idea that we can t trust him.And most
of the things that have been said, I can tell you that
most of that is true.
And that's about all I have to say.
COMMISSIONER KJELLANDER:Thank you.Let me
see if there are some questions.
COMMISSIONER REDFORD:No.
MR. HAMMOND:No.
MR. STUTZMAN:No.
COMMISSIONER KJELLANDER:Thank you for your
testimony this evening.
(The witness left the lectern.
COMMISSIONER KJELLANDER:James Barker.
JAMES BARKER
appearing as a public witness, being first duly sworn,
was examined and testified as follows:
EXAMINATION
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QUESTIONS BY MR. STUTZMAN:
Please state your name and spell your last
name.
James Barker, B-
It might help if you speak a little closer to
the microphone.And may we have yourThank you.
address, please.
15846 West Coeur d' Alene Drive.
Thank you.ahead and make your statement.
ve been out here about year and a half,
and I've seen
--
just since the last three months, I'
seen water flow cut to half in my shower and in my
sinks.That assures me that the leakage is up to
probably full potential right now.
My concern is everyone stated that the water
tank has been patched and repaired except for a roof
leaking or a leak.m a state building inspector.And
from what I've learned in the year and a half since I'
li ved out here is this tank has been leaking about 15
years.
I know due to water and chlorine to the
reinforcing bars in this tank being a building inspector
that you have accelerated erosion , decomposition and
everything else of the reinforcing bars inside.
I don t know how they fixed it or how they
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repaired the tank, but my question is, Was there any
nondestructi ve testing done on this tank?So that's my
question directed towards the five of you sitting here.
Another question comes up is:Is there a
system that you can hold him to that is an early warning
system to let us know that the water is contaminated?
My two kids and wife were sick for four days after the
last contamination of the water system.And I, too,
received a notification three days later in the mail
after the water was contaminated.Because you could
taste the chlorine also.You use color on your hair,
it'd probably turn your hair white.But that's the
problem.
And my other statement is I've been
--
been on a lot of big proj ects .And I've learned half
way or three-quarters of the way through, they usually
change the superintendent and the foremans because they
know too much.My question to you is:Why did they get
rid of the gentleman that was working on the system for
so long?Does he know too much?Does he know what
needs to be replaced?Does the pipes need to be
replaced?
ve worked with the San Diego Department of
Water District a few times.Got to see them open up a
10-inch water main.Inside that 10-inch water main is
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about 4 inches of sludge all the way around it with
about a 6-inch passage of water through it.Roughly 50,
60 years of this.So I can imagine what our 10-inch
mains and our 6-inch mains look like out here right now.
My big concern is probably the sludge in the
bottom of the water tank.d like to have someone go
in and take a sample.Was the tank cleaned, purged?
And get a verified report that there ain t something in
there floating around causing these problems.And I'
sure the water they re pumping up out of the ground
isn t any different than the water that Spirit Lake is
getting itself.
That's all I have to say.
COMMI S S IONER KJELLAN DER :Thank you.Let me
see if there are questions.
MR. STUTZMAN:Just one.
CROSS- EXAMINATION
QUESTIONS BY MR. STUTZMAN:
Based on what you said earlier about the water
pressure having dropped off, is it your belief that the
leakage problem has significantly increased in the last
year and a half?
I used to take a shower about 5: 00,6: 00
' clock, and I used to have adequate water pressure.
Now it's about half.So, yeah , I can say it's dropped
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off quite a bit.
Thank you.MR. STUTZMAN:
Just one question.MR. HAMMOND:
EXAMINATION
QUESTIONS BY MR. HAMMOND:
Were you aware or did the company ever inform
you that the tank was in fact cleaned -- I'm sorry --
the interior of the tank was in fact cleaned?
ve never been informed that the tank was
drained all the way and cleaned and removed of all
sludge, no.
Were you aware that DEQ or the Department of
Environmental Quality required the Company to have a
di ver go into the tank and clean the tank out?Were you
aware of that?
No, I wasn t aware that they required them to
go in and clean the tank out with a diver.My common
sense tells me why are you sending a diver in a full
tank to clean it?Isn t the contamination in the water?
Why not drain the tank and then clean it?
The problem we have here is the tank going dry
all the time anyhow.Why do you need a diver in it?
Common sense tells you you don t need a diver when
there s no water in the tank.
COMMISSIONER KJELLANDER:Any other questions?
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COMMISSIONER REDFORD:
COMMISSIONER KJELLANDER:
testimony.
No.
Thank you for your
(The witness left the lectern.
COMMISSIONER KJELLANDER:James Barker.
COMMISSIONER SMITH:That was him.
COMMISSIONER KJELLANDER:
like to try again?Once was enough.
much.
Mike Schmidt.
MALE VOICE:He left.
James, would you
Thank you very
FEMALE VOICE:I think Mike left.
COMMISSIONER KJELLANDER:Bill McNamara.
MR . MCNAMARA :ll just be redundant, so I'
just pass.
COMMISSIONER KJELLANDER:
Larry, come on down.
Thank you, Bill.
MR. GIZDICH:ve got more of the same kinds
of comments, so I'm going to pass for now.
COMMISSIONER KJELLANDER:
Sincerbeaux.
CARMEN S INCERBEAUX,
Thank you.Carmen
appearing as a public witness, being first duly sworn,
was examined and testified as follows:
EXAMINATION
M , M Court Reporting Service, Inc,aoo-a79-1700
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PUBLIC HEARING FOR THE IDAHO PUBLIC UTILITIES COMMISSION
QUESTIONS BY MR. STUTZMAN:
Please state your name for the record and
spell your last name.
Carmen Sincerbeaux, S-
Thank you.And your address.
32454 North Priest River Drive.
Thank you.Go ahead and make your
statement.
d just like to be brief.I want to
rei terate that we really feel that the rate increase
should wait until some of the improvements are done.
287 families with I don t know how many children.
There s at least probably at an average two children in
each of those households who don t have safe, adequate
drinking water.And we need to have that brought up to
standards before any rate is increased.
COMMISSIONER KJELLANDER:Thank you.Are
there any questions?I just have one.
EXAMINATION
QUESTIONS BY COMMISSIONER KJELLANDER:
In listening to some of the testimony today,
you were living the area when the outage lasted for
ten days?
Yes,was.
It'Kootenai Electric that serves the
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terri tory?
generator.
Correct.
Which doesn t excuse the need for a backup
But my question is so the power was out for
seven to ten days as well?
We didn t have a loss of power duringNo, no.
those ten days.
There was no loss of power on that one?
Correct.
Okay.
The pump went out.
The pump went out?
Correct.And the wrong part was ordered and
so it delayed fixing the well.
So earlier when there was testimony about
power outages, those are generally brief?
No.December 13th or 14th of this year, we
Power lines were down.had a big wind storm.We were
It's veryTha t 's not uncommon.out for 36-some hours.
Most of therare that it's a quick one-hour outage.
time it's more than 12 hours.
And those are common occurrences then in the
electrical system?
Yes.
COMMISSIONER KJELLANDER:Thank you.
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COMMISSIONER REDFORD:I have one question.
EXAMINATION
QUESTIONS BY COMMISSIONER REDFORD:
During these outages, did Hanson Industries
offer to bring in water , water tanks, bottled water?
During the -- when we have short times, no.
When we had the ten-day outage, they did truck in water
from Spirit Lake East
--
or Spirit Lake, in town here,
and filled the reservoir.And it was all gravity fed.
There wasn t a way to put any pressure to it.So that'
when the people at the far end of the subdivision got no
water because it was all gravity fed and everyone used
it up before they could get to it.
Did anyone inquire of Hanson Industries and
request that they provide water?
Yes.A number of households requested that.
And the response was?
I didn t personally request, so I don t know.
But I don t believe -- I don t know of anyone who
received any water from Hanson Industries.
COMMISSIONER REDFORD:Thank you very much.
THE WITNESS:May I add just one more thing?
COMMISSIONER KJELLANDER:Certainly.
THE WITNESS:In regards to the water
pressure.This morning I was up at 4: 00 0 ' clock in the
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morning, and my water pressure was below half to take a
I don t know if -- I know a number of us in theshower.
subdivision get up early because we commute to Coeur
d' Alene or Spokane, so we do have early risers.But I
have never been up at that time before where my water
pressure is in half.
Thank you for yourCOMMISSIONER KJELLANDER:
testimony.
Thank you.THE WITNESS:
(The witness left the lectern.
COMMISSIONER KJELLANDER:Ralph Smith.
FEMALE VOICE:He left.
COMMISSIONER KJELLANDER:Finally a name I can
pronounce and he s not here.Kris Kramer.
KRIS KRAMER
appearing as a public witness, being first duly sworn,
was examined and testified as follows:
EXAMINATION
QUESTIONS BY MR. STUTZMAN:
Please state your name and spell your last
name for the record.
Kris Kramer.Last name is spelled
Thank you.And your address?
31914 North Priest River Drive.
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Go ahead with your statement.
I just wanted to make a few comments regarding
the history that I've experienced with the water
service.ve been with -- or been in the community
approximately four years.Most of that time I have
ei ther assisted or been on the board for the association
In various capacities.
During the beginning of that period,
approximately three years ago, if I recall right,
because of a lot of dissatisfied customers with -- you
know , dissatisfied with the water pressure primarily,
the water going out without any backup supply routinely,
our board thought that we d consider looking into
purchasing the water company.It's out of necessity
because we wanted better service.
During that time, I didn t directly but a
member or two of our board proposed the idea to try to
get a water study to try to have another company see if
they would be interested in perhaps taking over the
water company.Kootenai Water got involved in that
process once an engineering study was done.If I
recollect, we did participate in the cost.And I say
that as our community participated in the cost of having
an independent study done.
The study pointed out not only that the system
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was not sustainable in its present form, but also
pointed out very specific suggestions on how to improve
the system and make it sustainable, not only to provide
adequate water pressure throughout the entire system but
also to provide a capital expenditure fund to where that
could be used to sustain the water system to infinitum.
Now on to my personal experience.We moved
into our house December approximately four years ago.
Wi thin the first month , we did have a water
--
excuse
me -- a period of time where the power went out.We had
no water.That period of time we had
--
we received no
notice that there could be contamination to the water
supply.We did notice an increase in chlorine.
Later on that summer, we had another system
outage.We got our first notice that there was possible
contamination because the water supply was shut off
during a storm when the power went out.That was about
a week and a half after the power had gone out.
Routinely, yearly, our water supply has been
off.After noting these things and going through a
complaint process, we did recognize a need to make phone
calls.We did that.Not only have we suffered that
infrequent water outage, we have noticed our water
pressure significantly changes during normal operation.
I have witnessed at least two other members
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trying to water their lawn at various times.They had
no lawn because their water pressure would only shoot
the water out of one of these oscillating sprinklers.
It would only spray water that high (indicating).
That's during the morning and during late afternoon.
Luckily I live in on Priest River Drive, not
too far from the water tank.I do get fairly decent
water pressure, but it still is very unregulated.I can
watch it in the shower go up and down while I'm taking a
shower.I also have to move my sprinklers because I
don t have a sprinkler system.I have to move my
sprinklers regularly at different places just because
the water pressure varies so much.
I don t have a problem personally with rate
increases.In the water study that we helped pay for,
we were looking at a $40-plus a month rate increase for
the perfect system.I don t have a problem with that.
Little hard to swallow during the summer months when
re paying that plus additional water supply to water
the garden, water our yard, take care of the animals.
But we realize that for a good sustainable system, I
think a rate increase is important.ll have a system
that is what we want it to be, water when the power is
out, water that we can drink, and relatively normal
water pressure.
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The problem is, because of the work that we
put in , having the study seemed to be the catalyst that
started some organized effort to try to get something
I think that it's ultimately the catalyst whydone.
re here today.
ve tried to have recommendation pushed
Those things have been requested.They wereforward.
implemented.Many of them were implemented and
The main issues repeatedly wererequested by the DEQ.
not done in a timely manner.DEQ drew a line.They
redrew a line.They ve redrawn the lines.ve gone
approximately a year and a half from the time that it
was supposed to be completed for several of these items.
I think the track record is there to show the Company
has not performed wi thin those guidelines.
I don t think that is a good witness to
providing fair service.They haven t sustained the
system.They have not taken care of those matters in
timely manner.The DEQ has redrawn the lines several
times, giving them more time, more time, more time.
now we re here today.Several of those items were not
taken care of in the manner that they were originally
requested to be done.
I don t think it's appropriate to allow a rate
increase to pay for these things ahead of time.
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got no problem at all with a rate increase after these
things are done appropriately and where we have a
sustainable system with sustainable water pressure.
Thank you.
Thank you.Let meCOMMISSIONER KJELLANDER:
see if there are some questions.
MR. STUTZMAN:No.
MR. HAMMOND:No.
COMMISSIONER REDFORD:No.
COMMISSIONER KJELLANDER:Thank you for your
testimony.
(The witness left the lectern.
COMMISSIONER KJELLANDER:
MALE VOICE:left.
COMMISSIONER KJELLANDER:
Paul Peloquin.
Jacob Leisle.
JACOB LEISLE,
appearing as a public witness, being first duly sworn,
was examined and testified as follows:
EXAMINATION
QUESTIONS BY MR. STUTZMAN:
Please state your name for the record and
spell your last name.
Jacob Leisle, L-
Thank you.And your address, please.
m sort of a new guy in town.m building a
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Been here about a year and a few months.house now.
And retired from the Air Force, 37 years, and fixed
airplanes and stuff.Have aWe have little lights.
yellow light, concern; red light, watch out.
Well, I wasn t going to speak originally and
did sign up because my concern light kept on coming on.
I had a few of them come on when I first moved here.
Get a piece of paper saying, Don t drink the water,
after I've been drinking it for a couple weeks.It'
got E. coli in it.So you do -- run down to the doctor
and say, hey, I just been subj ect to E. coli?The docs
Don t worry about it.You know, you came out of the
military.You ve been shot for everything.There
nothing you can die from.But people here maybe not
have had all those shots that I have.
My concern light came on again when I was
setting there and the company that's representing the
water -- or Mr. Hanson , first thing he said after about
two or three people speak here, he says, if any of you
guys get out of hand or anything, I'm going to walk out.
Well, as a customer
--
and I know a lot of these people
back here.I mean , some of them are helping build my
house.I got one person who s painting my house.Steve
sold me the property to live here.And these are all
good people.
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And if the company says you better watch out
or we ll walk on you, I think they ve been doing that
for a long time.I haven t been here for a long time,
but I have a feeling they have been walking out on these
people.
But my testimony today, to make short and
sweet as my grandpa would, say what you re going to say
and then set your butt down.They need to fix the
lines.They need to put a pump that can pump the water.
First.Then ask us for a rate increase.Prove to us
why we have to have that rate increase.But I want you
to had -- to pay to fix it.You been drawing money from
this since you put it in the ground 30 years ago.You
should have put something in the bank.You can t afford
to do it now, which I doubt that Dan Hanson doesn t have
the money to do it.Fix it.m sure he does.
pay a fair charge, as far as I'm concerned.But give us
some water that we can drink and not have to worry about
going to doctor with all this E. coli appearing.
That's all I have.Any questions?
COMMISSIONER KJELLANDER:Any questions?
THE WITNESS:Thank you.
COMMISSIONER KJELLANDER:Thank you for your
testimony.
(The witness left the lectern.
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John Balbi.COMMISSIONER KJELLANDER:
JOHN BALB
appearing as a public witness, being first duly sworn
was examined and testified as follows:
EXAMINATION
QUESTIONS BY MR. STUTZMAN:
Please state your name and spell your last
name for the record.
My name is John Balbi, B-a -b- i .
Thank you.And your address, please.
31772 North Kelso Drive, Spirit Lake, Idaho
83869.
Than k you.Go ahead with your statement.
Commissioners, two years ago I was appointed
one the Spirit Lake East Water Committee members.
that time wasn the president,but later did
because illness with one the with the
president.
I have submitted to Harry Hall (phonetic) and
C. J. Cooper a full and unadvised record of all
communication between DEQ, between the PUC and Hanson
Industries.At this time I urge you strongly to read
that over.I am sorry I didn t have my own copy because
it is at the attorney s, John Whelan.He is located in
Coeur d' Alene.
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If you read this document, you will find that
repeatedly, time and time again, the deadlines were
The -- the shenanigans, thepushed back and back.
misconceptions, the misleadings led by Hanson and Spirit
Lake Water Company to the people of Spirit Lake East is
unbelievable.
I opened myself and my home and everything
know to the commissioners of the state of Idaho to give
you my full and truthful knowledge of what has gone on
between the gentleman and Spirit Lake East and all --
all state agencies involved.
COMMISSIONER KJELLANDER:
are some questions.
COMMISSIONER SMITH:No.
MR.STUTZMAN:No.
MR.HAMMOND:No.
COMMISSIONER KJELLANDER:
Let me see if there
Thank you.And I
think we probably will want to take a look at that when
we return.
THE WITNESS:Yes.
COMMISSIONER KJELLANDER:Thank you.
(The witness left the lectern.
COMMISSIONER KJELLANDER:Velorie Crist.
VELORIE CRIST,
appearing as a public witness, being first duly sworn
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was examined and testified as follows:
EXAMINATION
QUESTIONS BY MR. STUTZMAN:
Please state your name for the record and
spell your last name.
Velorie Crist, C-s-t.8743 West Liberty
Dri ve.
Thank you.Go ahead with your statement.
ll try not to be redundant.A lot has been
said and lot I agree with.
We can start with the water quality.You
know , I have got four kids.There s a total of six in
my family.I spend 1 to $200 in bottled water a month
because I am tired of my child
--
ve lived here for
12 years -- ending up sick and having to go to the
doctor to find out that it's, you know, something with
the stomach bacteria and things like that.
We agree also with the -- the water pressure.
The water pressure is atrocious.It doesn t matter what
time it is.The water
--
you know, it shouldn t take 15
minutes to fill up your sink to wash your dishes.
can t water my lawn because there is no water pressure.
ve had to change to oscillating sprinklers because
there s not enough water pressure to make the other
tripod mount ones move.There is
--
it's just they
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So there s that problem.dead.
The problem with
--
I had two years ago, in
2005, I installed a new lawn with sad.Everybody knows
that you water about three times a day.You water it
constantly because that is what you have to do with a
My bill at that time was under $200.Well,new lawn.
this past year , when I haven t been able to use my water
in the first place because there s not enough water
pressure, my little 4-foot-high oscillating I have to
move all day long, you know, to do the trick.But I
don t have to do it but maybe once a week.I got a $467
bill this past time.
When I called to find out what was going on,
nobody has returned my call , to start out with, to try
and figure out why there is such a huge bill.The last
time I called, I didn t know that there was anything
they could do about it because last time I got a $260
bill , they told me that I just didn t know what I was
doing about watering my plants.So I just believed
them.So I see from the nice gentleman that I'll be
getting ahold of the PUC on that.
You know , it's pretty standard.Everything
that has been said is absolutely true.We don t feel
that we ve been serviced.I don t mind paying a higher
bill.We don t use 9,000 gallons during the winter
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M , M Court Reporting Service, Inc,aoo-a79-1700 PUBLIC HEARING FOR THE IDAHO PUBLIC UTILITIES COMMISSION
But we still pay the $12 amonths.None of us do.
month, which is fine.They want to increase that,
that's fine.That would be considered maintenance
because that's above and beyond what we actually use.
So where has that money been going?
We didn t cut up the lots.They were done by
So he knew how many lots were here and how manyHanson.
people were going to be living here.So I would assume
that somebody would have known what size system was
going to be needed at some point.Unfortunately, it'
now not accommodating the people that are here.
Tha t 's it.
COMMISSIONER KJELLANDER:Let's see if there
some questions.
MR. STUTZMAN:No questions.
MR. HAMMOND:No.
COMMISSIONER SMITH:No.
THE WITNESS:Thank you.
COMMISSIONER KJELLANDER:Thank you for your
testimony.
(The witness left the lectern.
COMMISSIONER KJELLANDER:Roger Benoit.
MR. BENOIT:On the wrong list, obviously.
m not going to speak.I put my name on the wrong list
obviously.
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M , M Court Reporting Service, Inc,aoo-a79-1700 PUBLIC HEARING FOR THE IDAHO PUBLIC UTILITIES COMMISSION
Ba umann .
COMMISSIONER KJELLANDER:Thank you.Scott
(Brief pause.
COMMISSIONER KJELLANDER:Tim Larson.
(Brief pause.
COMMISSIONER KJELLANDER:re at the end of
the list that I have.Is there anyone else who wanted
to speak this evening who hasn t had an opportunity?
Sir?
MR. MUELLER:I would like to speak.
COMMISSIONER KJELLANDER:You need to come
down here and be sworn in.And we ll take your
statement.
BILL MUELLER,
appearing as a public witness, being first duly sworn,
was examined and testified as follows:
EXAMINATION
QUESTIONS BY MR. STUTZMAN:
Please state your name for the record and
spell your last name.
Bill Mueller, M-
And your address?
31116 North Hayden Drive.
Okay.Go ahead with your statement.
This is the first time I' ve ~ver seen Spirit
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M , M Court Reporting Service, Inc,aoo-a79-1700 PUBLIC HEARING FOR THE IDAHO PUBLIC UTILITIES COMMISSION
Lake East homeowners agree on anything.
I bought my first place in October ' 77.And
ve been in and out
--
ve worked and lived all over
the western United States.And I drink the water still.
Worked Vegas; Ketchikan , Alaska.You don t drink water
in those areas.But our water I felt has always been
good.
And we built a house down on the lower end,
east side.And we had to put a flow restrictor on it, a
regulator, because there was over 100 pounds of pressure
at that time.And apparently nobody has that kind of
pressure anymore.So there is something happened to our
water system here.
I seen the lines go in in places.They didn
bed the lines.They just pushed everything back on top
of it.But we re
--
you know , we re not in a rural area
anymore.ve always been very happy with what'
happened out here.But it's not a rural community
anymore.We are a big city here.So we do need big
ci ty amenities such as good water.
Thank you.
COMMISSIONER KJELLANDER:Thank you.Let me
see if there s some questions.
MR. STUTZMAN:No questions.
COMMISSIONER KJELLANDER:None.
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M , M Court Reporting Service, Inc,aOO-a79-1700 PUBLIC HEARING FOR THE IDAHO PUBLIC UTILITIES COMMISSION
(The witness left the lectern.
At this point weCOMMISSIONER KJELLANDER:
come to the conclusion of the public testimony portion
of the public hearing.like to remind you that if
you still would like to make a comment, there s an
opportuni ty to submit some additional written comments.
So if after you leave here this evening you think of
something else that you believe we need to hear , please
feel free to put that in writing and submit that.
And I believe that earlier I heard that it
was
--
Mr. Stutzman, we re looking at a ten-day or a
two-week window in terms of the comment period, written
comments?
MR. STUTZMAN:Probably a two-week period.
COMMISSIONER KJELLANDER:A two-week period.
So there will be two weeks for that to occur.
And another thing that I would just like to
say is that oftentimes the Public Utilities Commission
will go out and hold hearings, and more often than not
what we find when we show up are empty rooms.And so we
certainly do appreciate the fact that you all are here
this evening and that you took the time out of your busy
schedules, because we know the conflicts that you do
experience on a day-to-day basis, and that you took the
time out to come and provide that testimony, because
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M , M Court Reporting Service, Inc,PUBLIC HEARING FOR THE IDAHO PUBLIC UTILITIES COMMISSIONaoo-a79-1700
it's very helpful to us as we move forward with our
deliberations.And these public hearings don t work
when people don t show up.
So, again, thank you for doing your part in
being here this evening.And, again, we appreciate your
participation.
And at this point we ll bring the formal
hearing to a close.And, again, there s a two-week
opportuni ty for comments.So at this point we are
adjourned.
(The hearing concluded at 8:45
M , M Court Reporting Service, Inc,aOO-879-1700 PUBLIC HEARING FOR THE IDAHO PUBLIC UTILITIES COMMISSION
Page 77
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M & M Court Reporting Service, Inc,800-879-1700 PUBLIC HEARING FOR THE IDAHO PUBLIC UTILITIES COMMISSION
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M & M Court Reporting Service, Inc.800-879-1700 PUBLIC HEARING FOR THE IDAHO PUBLIC UTILITIES COMMISSION
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M & M Court Reporting Service, Inc.800-879-1700 PUBLIC HEARING FOR THE IDAHO PUBLIC UTILITIES COMMISSION
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800-879-1700 PUBLIC HEARING FOR THE IDAHO PUBLIC UTILITIES COMMISSION
AUTHENTICATION
This is to certify that the foregoing is a
true and correct transcript to the best of my ability of
the proceedings held in the matter of the Application of
Spiri t Lake East Water Company for Authority to Increase
its Rates and Charges for Water Service in the State of
Idaho , Case No. SPL-W-06-01, commencing on Wednesday,
February 28, 2007, at Spirit Lake Elementary School,
32605 North Fifth Street, Spirit Lake, Idaho, and the
original thereof for the file of the Commission.
IN WITNESS WHEREOF, I have hereunto set my
hand and seal this 8th day of March , 2007.
~~
d. IvJM
" ,
:1""""
(; PATRICIA L. RULLO
Notary F'ublic
State of idaho
\.. ,
:V'~v':$vVv0--;";'XA.'V
~ ~ ~,:;.
PATRICIA L. PULLO, CSR
Notary Public for Idaho
Residing at Priest River
Idaho CSR No. 697
My Commission expires 11/13/2012.
Page 78
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