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HomeMy WebLinkAbout2005032415th Response of UWI Part I.pdfOR\G\NAl ECflVED (fJIt.ED 2005~1AR 2 3 r~f 4:41Dean J. Miller McDEVITT & Mll..LER LLP 420 West Bannock Street O. Box 2564-83701 Boise, ill 83702 Tel: 208.343.7500 Fax: 208.336.6912 ioe~mcdevitt-miller.com it) riu i ijiiLiC rill T IES . co~1i'1lSS1nN Attorneys for Applicant BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF THE APPLICATION OF UNITED WATER IDAHO INC. FOR AUTHORITY TO INCREASE ITS RATES AND CHARGES FOR WATER SERVICE IN THE STATE OF IDAHO Case No. UWI-O4- FIFTEENTH RESPONSE OF UWlD TO STAFF'S PRODUCTION REQ VESTS COMES NOW United Water Idaho Inc. ("United" , " the Company ) and responds to Request Numbers 165 , 166, 167, 168, 172, 173, 174, 178, 180, 182, and183 of Staffs Sixth Production Requests; Number 196 of Staff s Seventh Production Requests; and Numbers 202 203 205, and 206 of Staffs Eight Requests. United further provides its first supplemental responses to Request No. 26 of Staff s First Production Request and Request No. 54 of Staff s Second Production Request. Dated this~ day of March, 2005. McDEVITT & MILLER LLP ~UO Dean J. Miller Attorneys for United Water Idaho Inc. FIFTEENTH RESPONSE OF UWID TO STAFF'S PRODUCTION REQUESTS-1 CERTIFICATE OF SERVICE I hereby certify that on eZ;n~of March, 2005, I caused to be served, via the method(s) indicated below, true and correct copies ofthe foregoing document, upon: Hand Delivered S. Mail Fax Fed. Express Email Hand Delivered S. Mail Fax Fed. Express Email Hand Delivered S. Mail Fax Fed. Express Email Brad M. Purdy Attorney for the Community Action Partnership Association of Idaho 2019 North 17th Street Boise, Idaho 83702 Fax: 208.384.8511 bm urd hotmai1.com Hand Delivered S. Mail Fax Fed. Express Email William M. Eddie Advocatesfor the West o. Box 1612-83701 1320 West Franklin Street Boise, Idaho 83702 Fax: 208.342.8286 Hand Delivered S. Mail Fax Fed. Express Email Bill Sedivy Idaho Rivers United O. Box 633 Boise, Idaho 83701 Fax: 208.343.9376 iruC81id~orivers.org Sharon Ullman 9627 West Desert Avenue Boise, Idaho 83709 Fax: 362-0843 ~haron uC81cab leone.net Chuck Mickelson Boise City Public Works O. Box 500-83701 150 North Capitol Boulevard Boise, Idaho 83702 Fax: 208.384.7841~e IsonC81c it yo oise.org Douglas K. Strickling Boise City Attorney s Office O. Box 500-83701 150 North Capitol Boulevard Boise, Idaho 83702 Fax: 208.384.4454 ingC81cityofjJoise .org Hand Delivered S. Mail Fax Fed. Express Email Scott L. Campbell Moffatt Thomas 101 South Capitol Blvd., 10th Floor O. Box 829-83701-0829 Boise, Idaho 83702 Fax: 208.385.5384 ~cC81moffatt.com Hand Delivered S. Mail Fax Fed. Express Email --/_- . f1k /J r-/3/;.1" ~ -r~ ~.r/ FIFT~NTH RE 'NSE OF WID STAFF'S PRODUCTION REQUESTS-2 UNITED WATER IDAHO INC. CASE UWI-O4- FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF PreparerlSponsoring Witness: Scott Rhead Telephone: (208) 362-7345 Title: Managing Engineer REQUEST NO. 26: Reference Exhibit 8. For each project listed, please provide the completion date, the in-service date, and the final cost. For any projects not yet completed, please provide the expected completion date and documentation of a contract for completion. RESPONSE NO. 26 (1st Updatet. The Company indicated in the original response to Production Request No. 26 that it would provide an update to Mr. Rhead's Exhibit 8 as of the accounting month of February 2005. Please see the attached Exhibit 8 update as of the end of February 2005. UNITED WATER IDAHO INC. CASE UWI-O4- SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF Preparer/RecordholderlSponsoring Witness: Greg Wyatt Telephone: (208)362-7327 Title: General Manager REQUEST NO. 54: Please provide further details on the Company s proposal regarding assistance for low-income customers. How does United Water determine which customers are low income? RESPONSE NO. 54: First Update As part of it's filing before the Idaho Public Utilities Commission for authority to increase its rates and charges for water service , United Water Idaho (United) proposed to convene a workshop(s) to evaluate the need for, scope and design of a low-income assistance program for customers, (see Wyatt Direct Testimony page 16, line 18 through page 17 , line 16). After adequate public notification , a workshop was conducted on February 23 , 2005 at the Commission offices from 10:00 A.M. until approximately noon. In addition to United and Commission Staff, representatives of Community Action Partnership of Idaho (CAPAI) and one individual customer participated in the workshop. A copy of the workshop agenda is attached. Following the workshop, United and CAPAI have continued a dialogue regarding a low-income assistance program resulting in the following proposal. United's proposed low-income assistance program is comprised of three components: a lower priced initial rate block in the summer, a fund from which customers may receive water bill payment assistance, and targeted water conservation help. Residential Summer Rate Block United proposes implementing a two-tier inclining summer rate structure for residential customers where the first 3 hundred cubic feet (ccf) of water consumed in a billing cycle is priced at the winter rate, and all other water consumption priced at the 250/0 higher summer rate. This inclining rate block structure would be effective May 1 through September 30 of each year to coincide with the current "summer rate" timing. The "lost revenue" from 3 ccf of consumption in the summer priced at the winter rate has been calculated to be $100 406. United recommends spreading this revenue across the entire year and adjusting both the winter rate and the summer rate accordingly in order to make this component of the low-income assistance program essentially revenue neutral to the Company. The 3 ccf level (2 244 gallons) was chosen based on the perception that a subsistence" level of water could be priced at the winter rate in order to enable residential customers to "flush the toilet and take a shower" in the summer for the same cost as in the winter. Statistics from a 1997 Idaho Department of Environmental Quality report (the most current IDEQ data available) shows that average daily household toilet and shower use is approximately 30 gallons a day, (18 gallons for toilet and 12 gallons for shower). For a 60-day billing period this amounts to 1 800 gallons of water. Therefore the 3ccf threshold accommodates a small amount of water use (444 gallons) in excess of this "toilet and shower use each billing period. United also analyzed its billing data and determined that approximately 10% of its customers billed during the winter use period , use 3ccf or less in a billing period. It is reasonable to assume that low-income users would be in this low water consumption group so it is logical to project that, although the 3ccf rate block in the summer will benefit all users, it will benefit low-income users the most. United Water Shares United proposes a voluntary giving program to a "United Water Shares" fund among its customers through its billing and collections process. United' shareholders would initially support the United Water Shares fund in an amount of $10 000 in 2005 (assuming the program begins in July 2005) and would then match customer contributions to the fund up to $20,000 in ensuing years. Customers would have the option of donating to the United Water Shares fund when paying their bill. United would initially partner with CAPAI for customer screening and administration of the fund. CAPAI would screen applicants for eligibility and to determine account credits. The following describes the basic program parameters: In qeneral: CAPAI begins to process benefits as soon as the program- is authorized based on United Water shareholder initial infusion of funds. After the first six months , monthly distributions to be based on the average monthly collection of the previous three months including United Water shareholder contributions. CAPAI free to solicit other donations to the fund if they choose. Monthly fund amount to be made available to eligible customers on a first-come, first-served basis. CAPAI would charge United an administrative fee of 10010 of the funds used , which would be booked as a utility operating expense. Eliqibilitv: Eligible customers would be those at or below 1500/0 of the Federal Poverty Guidelines. Maximum individual benefit to be capped at $50.00. Water termination has to be imminent. Customer eligibility limited to one time in any calendar year. This limitation and/or the $50.00 cap may be revisited later based on fund utilization and balance. Distribution: United Water to hold the United Water Shares funds in a separate account. CAPAI determines applicant eligibility, gathers basic demographic information (name , address , account number, phone number, etc. and submits daily report to United Water. Upon notice from CAP AI , United Water credits eligible accounts and transfers appropriate amounts from United Water Shares fund to United Water and credits accounts receivable. Follow-up notice of accounts credited made back to CAPAI. United would communicate and promote the United Water Shares program and seek customer contributions by means of bill inserts and messages on the bill. United anticipates the annual cost for bill inserts to be $12,000, based on three inserts per year at $4 000 each time, which will be booked as a utility operating expense. IMgeted Conservation Hel~ United proposes targeting water conservation information and water conservation kits (indoor and outdoor kits) specifically to those customers who are determined eligible for assistance by CAPAI under the United Water Shares program. CAPAI estimates they serve approximately 300 United Water Idaho customers per year through its Weatherization program. These same customers are likely to have need of the United Water Shares program and could benefit by implementing water conservation practices. CAPAI would distribute conservation information and kits supplied by United to the targeted customers. UNITED WATER IDAHO INC. CASE UWI-O4- SIXTH PRODUCTION REQUEST OF THE COMMISSION STAFF Preparer: Mark A. Gennari Telephone: 201 750-5726 Director - Regulatory Business REQUEST NO. 165 Please provide any contracts with , or proposals from, any insurance providers that substantiate the requested increases in HMO Blue Insurance Plan , United Health Care Choice Plus Plans, and the Dental and Vision Coverage. These contracts and proposals should tie to the monthly pro forma calculations provided in Mr. Healy s workpapers for Company Adjustment No.3. If the amounts are different than what is provided in Mr. Healy s workpapers , please give a detailed explanation of the difference and provide a reconciliation between the amounts. RESPONSE: The attachments to this request constitute the contract rates for the various health insurance coverages provided to employees through United Water. United Water engages Mercer Human Resources health and welfare consultants and actuaries to develop the rates for the self-insured medical plans. As self- insured plans, Mercer actuaries review United Water s medical claims experience which constitutes the basis of the cost since it is based on the actual experience of the previous 12 months. Then they factor in the projected medical cost increase for the succeeding 12 months to determine these rates. Attachment 1 is a copy of 2005 self-insured medical plans administered by United Healthcare. Employees pay a portion of this cost as indicated on the attached chart. Attachment 2 is a copy of monthly premium rates for Idaho Preferred HMO plan administered by Blue Cross. These rates are effective 1/1/05 to 12/31/05. United Water receives an annual cost increase based on criteria used by Blue Cross to evaluate and price this insurance plan. They usually look at the community rating as well as the United Water specific claims paid. Attachment 3 is a copy of monthly cost of dental plan administered by Aetna. United Water did not get a cost increase for the Vision Plan administered by VSP. 2004 premium rates continue for 2005. UNITED WATER IDAHO INC. CASE UWI-O4- SIXTH PRODUCTION REQUEST OF THE COMMISSION STAFF Preparer: Mark A. Gennari Telephone: 201 750-5726 Director - Regulatory Business REQUEST NO. 166 Please illustrate how the expenses for Group Term Life Insurance coverage and Long-Term Disability coverage are allocated from the corporate level to United Water Idaho. Please include within your response each expense at the corporate level , the allocator used to derive the UWID expense, and the components of each allocator. RESPONSE: ~Ianation of Life and L TO allocations: Each month the invoices for Group Term Life and Long-Term disability are paid by corporate and allocated to the business units based on participation and election by employees. Group Term Life insurance charges are calculated based upon the total dollar coverage for each company. The current rate is 12 cents per 000 of coverage. All employees are eligible for 3 times their base annual salary in group term life coverage. Assuming, as an example, that base salary is $3,961 824 and multiplying by 3 , total coverage would be $11 885 471. Dividing this result by $1 000 and pricing it at 12 cents per thousand provides a monthly expense of $1 ,426 or $17 115 annually. Long-Term disability is allocated based upon total dollar coverage as well and the current rate is $.50 per $100 of coverage. Example Monthlv Calculation: Total volume for 600/0 coverage is: $1 532 741+ 111 559 + 81 500/100*50/12 = $719. Total volume for 66 2/30/0 coverage is: $111 559/100*12/12 = $11. Total volume for 700/0 coverage is $81 500/100*12/12 = $8. Total volume coverage is $1 725,800 total monthly premium is $738. Total volume for 600/0 coverage is: $1 805 689 + 268,091/100*50/12 = $864. Total volume for 66 2/30/0 coverage for is: $268 091/100*12/12 = $26. Total cost is $1 629.28 monthly or $19 551 annually. UNITED WATER IDAHO INC. CASE UWI-O4- SIXTH PRODUCTION REQUEST OF THE COMMISSION STAFF Preparer: Mark A. Gennari Telephone: 201 750-5726 Director - Regulatory Business REQUEST NO. 167 Please illustrate how pension expense is allocated from the corporate level to United Water Idaho. Please include within your response the pension expense at the corporate level , the allocator used to derive the UWID expense, and the components of the allocator. RESPONSE: Pension expense is not allocated from the corporate level to United Water Idaho. Rather, pension expense is actuarially calculated and directly charged to all subsidiaries of United Water. UNITED WATER IDAHO INC. CASE UWI-O4-04 SIXTH PRODUCTION REQUEST OF THE COMMISSION STAFF Preparer/Recordholder/Sponsoring Witness:Jeremiah Healy Telephone: 208-362-7337 Title: Coordinator of Planning and Rates REQUEST NO. 168: Please provide a list of all tank paintings done in the last 20 years. The list should include the date the tank was painted and the location of the tank. RESPONSE NO. 168: Please see the attached document that lists chronologically all tank paintings since 1984 to the present as well as the location of the tank. All tank paintings listed have been deferred and amortized. UNITED WATER IDAHO INC. CASE UWI-O4- SIXTH PRODUCTION REQUEST OF THE COMMISSION STAFF Preparer/Recordholder/Sponsoring Witness:Jeremiah Healy Telephone: 208-362-7337 Title: Coordinator of Planning and Rates REQUEST NO. 172: Please provide the price per unit of lockbox transactions as of December 31 2004. RESPONSE NO. 172: The unit price of lockbox transactions as of December 31 2004 is 14.77 cents. UNITED WATER IDAHO INC. CASE UWI-O4- SIXTH PRODUCTION REQUEST OF THE COMMISSION STAFF Preparer: Mark A. Gennari Telephone: 201 750-5726 Director - Regulatory Business REQUEST NO. 173 Please illustrate how casualty insurance , property insurance and worker compensation insurance are allocated from the corporate level directly to United Water Idaho. Please include within your response the components of each allocator and show the calculation. RESPONSE: Explanation of insurance allocations: General, Excess & Other (Casualty insurance), The allocation of insurance in the General , Excess & Other category is made on the basis of each entity s "Assets, less cash , Intercompany Receivables and Investment in Subsidiaries" against the corporate total. This allocation methodology has been in use for over ten years and provides commonality across all entities. Property Property insurance is purchased on a corporate-wide basis for all United Water entities and premiums are allocated to all entities having insurable property. The allocation is calculated as a percentage of the individual entity s "Property, Plant & Equipment" values as compared to the corporate total. This allocation methodology has been in use for over ten years and provides commonality across all entities. Workers Compensation Workers compensation insurance is purchased on a corporate-wide basis for all United Water entities and premiums are allocated to all entities having employee exposures. The allocation is calculated as a percentage of the individual entity payroll as compared to the corporate total payroll. This allocation methodology has been in use for over ten years and provides commonality across all entities. Example -March 2004: The total premium allocated for casualty insurance for the quarter was $824 874 of which $98 378 (11.60/0) was allocated to United Water Idaho. The 11.60/0 was arrived at by taking United Water Idaho s assets less cash intercompany receivables and investment in subsidiaries divided by the total for all business units included in the allocation $186 822/$1 613 927 = 11.60/0. The total deductible amount allocated for casualty insurance for the quarter was $149 023 of which $19 306 (13.0%) was allocated to United Water Idaho. The 13.00/0 was arrived at by taking United Water Idaho s assets less cash intercompany receivables and investment in subsidiaries divided by the total for all business units included in the allocation $186,822/$1 442 082 = 13.00/0. The total premium allocated for workers compensation was $223 780 of which $13 498 (6.00/0) was allocated to United Water Idaho. The 6.0% was arrived at by taking United Water Idaho s gross payroll divided by the total payroll for all the companies included in the allocation $3 983/$223,780 = 00/0. The total deductible amount allocated for workers compensation was $613 332 of which $32 142 (5.20/0) was allocated to United Water Idaho. The 2% was arrived at by taking United Water Idaho s gross payroll divided by the total payroll for all the companies included in the allocation $4 050/$77 282 = 20/0. The total premium allocated for property insurance was $100 844 of which $14 141 (14./0) was allocated to United Water Idaho. The 14.0% was arrived at by taking total property, plant and equipment by the total property, plant and equipment for all the companies included in the allocation $182 229/$1 299,550 = 14.00/0. UNITED WATER IDAHO INC. CASE UWI-O4- SIXTH PRODUCTION REQUEST OF THE COMMISSION STAFF Preparer/Recordholder/Sponsoring Witness:Jeremiah Healy Telephone: 208-362-7337 Title: Coordinator of Planning and Rates REQUEST NO. 174: Please provide a narrative to describe why there were three large credits to account 924000 (Property Insurance) during the test year as shown on Mr. Healy s workpapers for Adjustment No. 26, page 5 of 5. Please provide the source documents to verify the amounts. RESPONSE NO. 174: The credit entries to account 924000 (Property Insurance Expense) in the test year totaling ($193,796.47) were actually miscoded and should have been credited to account 924090 (General Corporate Insurance). Two schedules are attached that indicate the test year "as booked" business insurance expense by account as well as the re-stated business insurance expense had the entries been properly recorded. The total test year expense of $789 765 does not change. UNITED WATER IDAHO INC. CASE UWI-O4- SIXTH PRODUCTION REQUEST OF THE COMMISSION STAFF Preparer/Recordholder/Sponsoring Witness:J eremiah Healy Telephone: 208-362-7337 Title: Coordinator of Planning and Rates REQUEST NO. 178: Provide an itemized listing, in electronic format, that shows item purchased, date, vendor and amounts for the fiscal year ended July 31 2004 and separately, for the current fiscal year through the most recent date available for each of the following accounts: a. Expenses Charged to Account 921- Office Supplies and Expenses b. Expenses charged to Account 923- Outside Services c. Expenses charged to Account 930- Miscellaneous Expenses d. Account 935 -- Maintenance of General Plant RESPONSE NO. 178: Please see the attached schedule that indicates the requested information by account for the entire period indicated. The Company believes that part d. of the question actually is intended to reference account 932 Maintenance of General Plant instead of account 935 - Maintenance of General Plant. UNITED WATER IDAHO INC. CASE UWI-04- SIXTH PRODUCTION REQUEST OF THE COMMISSION STAFF Preparer: Mark A. Gennari Telephone: 201 750-5726 Title: Director - Regulatory Business REQUEST NO. 180: Please provide a cost/benefit analysis of the expenses associated with the Early Retirement Program and Enhanced Severance Program that the Company deferred and is now seeking to amortize in current rates. RESPONSE NO. 180: The attached study was prepared for United Water by its actuary, AON Consulting. As acknowledged and accepted by Staff in other requested pension requests , these studies are performed on a total pension plan basis and are not specific to any individual company. Each of the scenarios contained in the attached show that the present value of payroll savings achieved through the offers clearly exceeds the cost. UNITED WATER IDAHO INC. CASE UWI-04- SIXTH PRODUCTION REQUEST OF THE COMMISSION STAFF PreparerlRecordholderlSponsoring Witness:Jeremiah Healy Telephone: 208-362-7337 Title: Coordinator of Planning and Rates REQUEST NO. 182: Please provide all documents supporting the budgeted levels of overtime premium pay and other labor. What assumptions were used to derive these levels. RESPONSE NO. 182: The Company has included in the gross payroll calculation $103 374 of overtime pay. This figure represents 2.30/0 of total payroll ($4 399,566). The overtime pay is based on test year experience and is in line with historical annual overtime pay as indicated below and as documented on the attached schedules. Year Total Overtime P 2000 $117,502 2001 $105,917 2002 $113,683 2003 $ 92,360 2004 $ 99 136 Five Year Average $105 720 By premium pay, this answer assumes Staff is referring to certification pay andlor standby pay that are contractually available to bargaining unit employees. Certification pay eligibility is covered in the bargaining unit agreement, previously provided to Staff, section 10.2. The Company requires certification by the Idaho Water and Wastewater Certification Board or the International Society for Instrumentation and Control for certain job classifications. Certification pay ranges from $0.15 per hour to $0.50 cents per hour added to the position base wage , depending on the level of certification required. In the Company calculation of Payroll to Operations and Maintenance expense (Healy Exhibit No. , Schedule 1 , page 1 of 34 and associated work papers) unfilled entry-level bargaining unit positions are included without any provision for certification pay. Stand by pay is available to the Operator and Control System Technician job classification. Stand-by pay is covered in the Union agreement section 25.5. The Company requires one ground water Operator, one water treatment plant Operator and one Control System Technician to be on call at all times, seven days a week, fifty two weeks a year. The annual cost of stand-by used in thecase, $28,023, is calculated by multiplying the per day standby rate of two Operators ($25.24 ea.) and one Control System T echs . ($26.30 ea.) times 365 days. The Company assumes that the reference in the Production Request to "otherlabor" means summer temporary labor. The Company hires additional seasonal employees in the Production Department (three temps) and Transmission and Distribution Department (two temps) Department to assist with operation and maintenance during the summer months when all water sources are being used maintenance and weed control at all facilities is necessary and the meter change out program is in full operation. These employees also cover for regular employees who may take vacation during the busy summer season. UNITED WATER IDAHO INC. CASE UWI-O4- SIXTH PRODUCTION REQUEST OF THE COMMISSION STAFF PreparerlRecordholderlSponsoring Witness:Jeremiah Healy Telephone: 208-362-7337 Title: Coordinator of Planning and Rates REQUEST NO. 183: Please provide all documents supporting the rates used to escalate each labor group. What assumptions were used to derive these rates? Did the rates take into account employee turnover, retirements, etc? If included, how were they incorporated? RESPONSE NO. 183: The Company has previously provided some of this requested information. In Audit Request No. 24, a copy of the current Bargaining Unit agreement was provided. This document served as the basis for escalating the wages bargaining unit employees through both lump sum payments and escalation the hourly wage rate. With regard to non-bargaining unit employees , the Response to Production Request No. 181 states that the Company used a 3.50/0 planning assumption in the original filing to escalate wages. This response also documents that since the original filing, the Company has received documentation that the actual wage escalation rate for non-bargaining employees will be 3.30/0. The Company intends to adjust it's original filing to reflect the revised wage escalation rate. Employee turnover and retirements were accounted for in the Company s filing. As indicated in Mr. Healy s testimony, the Company workforce is increasing from eighty-eight to ninety-one employees as a result of new surface and ground water treatment facilities, and the need for a Public Affairs Manager. There were also five positions that were unfilled due to employee retirements/turnover. For bargaining unit positions, it was assumed that new, or existing but unfilled positions, would be internally filled , thus creating a cascading effect that tends to leave entry level position s open for external hiring. The new hires are included in the case per the bargaining-unit agreement wage requirements for new employees. In many cases, the hiring of a new employee reduces the Company overall payroll costs because of provisions in the agreement (section 10.1) that pay lower wages to employees in certain positions hired after April 1 , 2003. UNITED WATER IDAHO INC. CASE UWI-O4- SEVENTH PRODUCTION REQUEST OF THE COMMISSION STAFF Preparer/RecordholderlSponsoring Witness:Jeremiah Healy Telephone: 208-362-7337 Title: Coordinator of Planning and Rates REQUEST NO. 196: For all incentive payments made to employees from April 1 , 2000 through December 31 , 2004 , please provide the annual amount capitalized , the associated depreciation expense, and account numbers charged. Please list all amounts by year paid. RESPONSE NO. 196: Following are the capitalized amounts of incentive payments by year: Year Amount Capitalized 2000 2001 2002 2003 2004 $17 724 $ 8 493 $18 243 $46,229 $54 675 The Company charges capitalized incentive pay to the Overhead Local project that is allocated to all construction projects in the 107000 account that ultimately are charged to the various plant accounts. It is not possible to precisely calculate depreciation expense associated with these payments nor is it possible to determine which accounts were charged with the amounts detailed above. UNITED WATER IDAHO INC. CASE UWI-04- EIGHTH PRODUCTION REQUEST OF THE COMMISSION STAFF Preparer/RecordholderlSponsoring Witness:Scott Rhead Telephone: 208-362-7345 Title: Managing Engineer REQUEST NO. 202: Please describe all significant differences between the design of the CWTP as proposed by CDM in its proposal and the final design as is being constructed. Please describe all significant changes made from the initial plant design, the reasons for each change and the corresponding change in project cost. RESPONSE NO. 202: The design concept initially proposed by CDM included a masonry treatment building, steel clearwell , a single step raw water pumping station located at the river intake, no pretreatment, membrane filtration , advanced disinfection using ultraviolet light, pH adjustment , chlorine addition , treated water pumping, and return to the Boise River of filter backwash wastes. The proposal non-binding target cost in June 2002 was $16,112 997. Early in the design phase, CDM and United Water conducted numerous internal workshops evaluating design alternatives and confirming project scope limits. Several meetings were also held with Idaho Department of Environmental Quality and Ada County to confirm permitting requirements. Decisions from these workshops and meetings resulted in a final design concept that was substantially the same as that originally proposed with respect to the treatment building, raw and treated water pumping, membrane filtration , and treatment chemical systems. The final design differs from the initial proposal in only two significant ways. First, the ultraviolet disinfection system was deferred, since it is not required by current regulations, and there is uncertainty about when it may be required in the future. Second, waste washwater from the membrane filtration system is captured and clarified on site, and returned to the raw water feed rather than being piped to the Boise River for discharge as initially proposed. Uncertainty about the ability to obtain a discharge permit in a time frame that would support the project schedule led to this change. It is also more efficient overall because wastewater is returned to the head of the plant and not "wasted" back to the river. The project Guaranteed Maximum Price in January 2004 based on the final design is $16,844 498. The non-binding Target Cost of Work and the Guaranteed Maximum Price provided in Response No.06 follow an identical division-by-division breakdown format and provide a detailed itemization of changes in project costs. United Water believes COM did an excellent job of estimating an initial cost ($16 112 997) with only a 100/0 design basis, and then eighteen months later provided a guaranteed cost ($16,844 498) after the design and project scope was fully identified. This represents only a 4.340/0 change over the original estimate from which they had essentially no design to guide them. UNITED WATER IDAHO INC. CASE UWI-04- EIGHTH PRODUCTION REQUEST OF THE COMMISSION STAFF PreparerlRecordholderlSponsoring Witness:Scott Rhead Telephone: 208-362-7345 Title: Managing Engineer REQUEST NO. 203: Reference Rhead p., lines 15-18 and Rhead Revised Exhibit No. 11. What is the source of the $12.87 million cost for the CWTP as listed in the tables of Exhibit No. 11 and as used to compute the cost per gallon for the plant? Why wasn t the $16.84 million Guaranteed Maximum Price (GMP) amount or the $18.20 million amount shown in the attachment to United Water s response to Staff Request No.08 used instead for the computation? RESPONSE NO. 203: The cost per gallon computation for the Columbia WTP was specifically focused on the treatment complex portion of the project, to facilitate a representative comparison with other treatment plant projects. The treatment complex portion of the project Guaranteed Maximum Price totaled approximately $12.87 million and includes the following elements: Pressure and gravity flow yard piping 2 MG Clearwell Raw water strainers Membrane filtration units and control system Membrane system backwash blowers and air compressors Membrane system monthly cleaning system Sodium hypochlorite generation , storage and feed systems Caustic soda storage and feed system Waste washwater clarification basins (3) Ferric chloride storage and feed system Reclaimed water pump station Treated water pumping facilities Treatment plant building structure Building mechanical HV AC , plumbing, fire protection Building and treatment process electrical systems Instrumentation and control system On-site sanitary system Plant laboratory Stormwater management facilities Landscaping Security and fencing Roadways and parking The purpose of the comparison was to provide a way to evaluate CWTP against other membrane plants. No two plants are ever the same. The $16.84 million GMP or $18.20 million projected total cost included items that make an equitable comparison to other plants nearly impossible. The major items removed for comparison purposes include raw water pump station , 30" raw water pipeline design , utility company upgrades, land , company labor, overheads, AFUDC , etc. UNITED WATER IDAHO INC. CASE UWI-04- EIGHTH PRODUCTION REQUEST OF THE COMMISSION STAFF Preparer: Mark A. Gennari Telephone: 201 750-5726 Director - Regulatory Business REQUEST NO. 205 Please provide a copy of Document Number FO01 03 published by the Design- Build Education and Research Foundation as referred to in United Water response to Staff Request No.05. RESPONSE: The Company is not in possession of multiple copies of the requested document and therefore has only provided a single copy for use by Staff. The document is protected and is not permitted to be copied. As a convenience to Staff, the copy is being provided in lieu of Staff having to view the document at the Company office. UNITED WATER IDAHO INC. CASE UWI-O4- EIGHTH PRODUCTION REQUEST OF THE COMMISSION STAFF Preparer: Mark A. Gennari Telephone: 201 750-5726 Director - Regulatory Business REQUEST NO. 206 In addition to the FAS 87 and FAS 132 Disclosures already provided, please provide a report from the Company s actuaries that illustrates all of the following for the past five yea rs: RESPONSE: Development of the Actuarial Value of Plan Assets Detail of Employer Contributions Development of Credit Balance/(Funding Deficiency) Minimum Funding Standard Account Development of the Current Annual Cost and the Minimum Required Contribution Development of Normal Cost Development of Unfunded Frozen Actuarial Liability Schedule of Outstanding Balances and Amortization Amounts; Charges to the Minimum Funding Standard Account Schedule of Outstanding Balances and Amortization Amounts; Credits to the Minimum Funding Standard Account Development of the Maximum Deductible Contribution Calculation of the Full Funding Limitation In the Company s response to Audit Request No. 58, the Company supplied Staff with copies of all Actuarial Reports and all filed Form 5500's for the last five years. In the above request, Staff acknowledges receipt of this material and requests information in addition to that sent. Through discussions with our actuary, it was determined that with one exception , there was little more information available to respond to this question other than what had been supplied. In a discussion with Donn English of the Idaho Public Utilities Commission Staff on March 11 , 2005, he was informed of the discussion with the actuary and told of the one additional piece of information that could be provided. Mr. English was accepting of this and was asked to let the Company know what else he required that he believed had not been provided. As of the date of this response , the Company has not received any further requests from Mr. English therefore the Company considers this response complete. The information that follows was verbally provided to Mr. English during the March 11 2005 conversation. ERISA funding requirements are determined on a plan basis and not on a specific Company basis, Le., Idaho. In years where the minimum required contribution is greater than zero, the minimum is allocated over the participating companies in the plan. years where the minimum contribution is zero and no contribution is made, there is no allocation needed or performed. United Water Resources Inc. Retirement Plan - No contributions were required or made to the Plan for the five plan years covering 2000 through 2004. All information requested can be found on the Schedule B of Form 5500, which had been supplied in Audit Request No. 58. United Waterworks Inc. Employees' Retirement Plan - Bargaining Unit - contributions were required or made for the three plan years covering 2000 through 2002. As stated above, the information requested can be found on the Schedule B of Form 5500. For years 2003 and 2004, the minimum contribution and/or actual contribution was greater than zero and was allocated to the various companies participating in the plan which is also shown in all of the cost information and actuary reports previously provided. Lastly, the part of the question requesting the development of the Unfunded Frozen Actuarial Liability doesn t apply to United Water, and is therefore not applicable. UNITED WATER IDAHO INC. CASE NO. UWI-O4- FIRST PRODUCTION REQUEST IPUC STAFF TT A C H MEN T RESPONSE TO REQUEST NO. 26 (1st update) SEE CASE FILE FOR SPREADSHEE TS UNITED WATER IDAHO INC. CASE NO. UWI-O4- SECOND PRODUCTION REQUEST IPUC STAFF TT A C H MEN T RESPONSE TO REQUEST NO. 54 1st Update II. III. IV. AGENDA UNITED WATER IDAHO LOW-INCOME PROGRAM WORKSHOP IDAHO PUBLIC UTILITIES COMMISSION OFFICES 10:00 A.M. FEBRUARY 23, 2005 Introduction / Purposea. Introductionsb. General purpose and goals of the workshop Identify Level of Need for a Low-Income Program a. Boise demo graphics (CAP AI) b. LlliEAP information c. United Water data Identify Program Feature Options a. Tariff/non-tariff options b. Budget billing (level pay) for eligible participants c. Time of year availability Mechanics of a Low-Income Program a. Use of a third-party to administer (i.e. Salvation Army) b. Mechanism to assess/certify eligibility (LlliEAP certification?) c. Funding - sources and administration Next Steps UNITED WATER IDAHO INC. CASE NO. UWI-O4- SIXTH PRODUCTION REQUEST IPUC STAFF TT A C H MEN T RESPONSE TO REQUEST NO. 165 Un i t e d W a t e r - R e g u l a t e d S e g m e n t 20 0 5 B u d g e t R a t e a n d E m p l o y e e C o n t r i b u t i o n A n a l y s i s Mo n t h l y An n u a l To t a l C o s t ee C o s t Co b r a R a t e s To t a l C o s t ee C o s t Co b r a R a t e s Ch o i c e P l u s P l a n $3 9 6 . $6 3 . $4 0 4 . 75 4 . $7 6 0 . 84 9 . EE + 1 $7 9 2 . $1 4 3 . $8 0 8 . 50 8 . 72 0 . 69 8 . Fa m i l y 18 8 . $2 1 5 . 21 2 . $1 4 26 2 . 58 0 . $1 4 54 8 . Ch o i c e P l u s P l a n 2 $3 5 6 . $4 7 . $3 6 3 . 27 8 . $5 7 0 . 36 4 . 4 3 EE + 1 $7 1 3 . $1 1 5 . 4 6 $7 2 7 . 4 1 55 7 . 38 5 . 72 8 . Fa m i l y 06 9 . $1 7 3 . 09 1 . $1 2 83 6 . 07 8 . $1 3 09 3 . Ch o i c e P l u s P l a n 3 $3 1 6 . $3 3 . $3 2 3 . 80 3 . 4 3 $3 9 8 . 4 5 87 9 . 4 9 EE + 1 $6 3 3 . $8 4 . $6 4 6 . 60 6 . 01 4 . 75 8 . Fa m i l y $9 5 0 . $1 2 6 . $9 6 9 . $1 1 41 0 . 52 1 . $1 1 63 8 . 4 8 Me r c e r H u m a n R e s o u r c e C o n s u l t i n g ... .Cl . (" ) .. . . . . 0" : p :J . . . . . . -u ~ ~ DJ . Q tO c 3 CO c o c o (I J : J Pa g e 1 o f 9/ 2 / 2 0 0 4 ~ : : : : C: \ D o c u m e n t s a n d S e t t i n g s \ d a n i e l - da v e y \ L o c a l S e t t i n g s \ T e m p o r a r y I n t e r n e t F i l e s \ O L K 2 6 \ 2 0 0 5 S e p a r a t e d R a t e s a n d C o n t r i b s F i n a l . x l s ! R e g u l a t e d ' : P P O :: ~ 0 : J : Ii : m" . . !tj , ! J.." . I;; : !:; .. ~;. !~:. :': $;''j'! .., ;: ~!:;,. :~' ;(I..: 'A . ;;;. ' ii: i ;), : 5"i " ! : I :' I . . ~' ' t;... , l~ . ,j;.. ii' . :f' : ,~:"~~' MAR-02-2005 . 13: 31 Attachment 2 to Production Request 165 Page 1 of BLUE CROSS OF I . ~ 0""" BlneCro ' . ;s.s. ~~~, ..:--.. .~ . United Water Resources GROUP NUMBER: TYPE OF COVERAGE; EFFECTIVE DATES: BROKER #: SALES REP: '. - 0019692 P~S 1/1/2005 12131/200~ N/A Cathy. Parkinson RENEWAL RATES AT CURRENT BENEFITS ACTIVE RATES MEDICAL DENTAL VISION EAP COBRA TOTAL$359.$0.$0.$0.$0.$359.EE + SP $719.$0.00 $0.$0.$0.$719.EE + 1 ~HJLD,. $719.$0.$0.$0.$0.$719.EE +.CHILDREN-:.$1;079.$0.$0.$0.$0.079.EE + Sf!: ,. CHILD(R!;N), . , . $1 079.$0.$0.$0.$0.$1.079. , ... ". ' . c . . COBRA RATES . , MEDICAL DENTAL VISION EAP TOTAL$0.$0.$0.$0.$0.EE + SP $0.$0.$0.$0.$0.EE + 1 CHILD $0.$0.$0.$0.$0.EE + CHILDREN $0.$0.$0.$0.$0.EE + SP + CHIL.,D(REN)~ SO.$0.$0.$0.$0. COBRA DISABILITY RATES MEDICAL DENTAL VISION TOTALEE . ... -:;. :$0.$0.$0.$0.$0.EE + S~.$0.SO.$0.$0.$0.EE+ CHilD.: SO.$0.$0.$0.$0. . . EE + CHILDREN $0.00 '$0.$0.$0.$0.EE + SP + .Ct:!.lLD(REN)~O_OO.$0.$0.00.$0.$0. _., f" , . .. . Confidential '1/1512004 TOTAL P. .J_.. Attachment 3 to Production Request 165 Page 1 of 4 Dental Quotation Page - United Water & TractebeI/Teris-Suez US Plan Desi DMO PPO Dental In-etwork N on-etwork Individual Deductible:None $50 $50 Family Deductible:None $150 $150 Annual Maximum (per person):None 500 500 Office Visit Copayment:None N/A N/A Preventive/Diagnostic:100%100%100% Basic:100%80%80% Maj or:60%50%50% Orthodontia:50%50%50% Orthodontia Deductible:None None None Orthodontia Lifetime Maximum:None 000 000 The Annual Deductible is waived for PreventivelDiagnostic services under the PPO Dental Plan. ~ DMO Orthodontia applies to adults and children and is limited to one treatment per member per lifetime. ~ PPO Orthodontia applies to children up to age 19 only. ~ Non-Network Benefits under the PPO Dental Plan will be paid using the 90th percentile ofUCR. Dual Option (Annual Election) Fully Insured Monthly Rates: Employee Only: Employee and Spouse: Employee and Family: DMO $17. $33. $53.46 PPO Dental $31. $59. $94. 06-25-2004 Attachment 3 to Production Request 165 Page 2 of 4 Dental Quotation Page - 2 United Water & TractebeVTeris-Suez US Quotation Information, Assumptions, and Requirements: Policy Period - Our quotation is based on a January 1 , 2005 effective date. Subject to the terms and conditions indicated below, the quoted rates are guaranteed for 12 months with the first renewal scheduled for January 1, 2006. This proposal is valid for 90 days from the date of this decision up to the effective date quoted. The presence of any rate guarantee is not a guarantee to renew the contract. Guarantee Terms - Aetna reserves the right to recalculate rates in the event of any of the following: Requested change in effective date; The final benefit provisions, account structure, or services change from those proposed; The number of enrolled employees changes by more than 15% from that identified in this quote; Final enrollment does not meet the minimum participation requirements; New or changes to legislation or regulations that affect t~e benefits payable eligibility or contractual provisions. Plan Offering - Our quotation is contingent on Aetna being the only dental plan offered (total replacement). Dual Option allows members to switch between plans during annual enrollment only. Note that Aetna s PPO plan is referred to as "PDN" in Texas. Funding/Rating - The DMO plan is offered on a community rated, prospectively insured basis. The PPO plan is offered on a prospectively insured basis and, at renewal, may take into account the customer s own experience to determine the appropriate rating action. Producer Compensation - All fully insured rates are quoted net of commissions. Enrollment Assumptions - Our quotation is based on the census submitted which indicates approximately 3451 total eligible employees and COBRA participants with approximately 3451 enrolled in the dental plan. EmployerlEmployee Contributions & Participation - This proposal assumes that United Water will contribute 500/0 towards the cost of employee coverage and at least 50% towards the cost of dependent coverage regardless of plan selected. Minimum participation requirement for this contribution structure is 75% of total eligible lives. Eligibility - Our quotation assumes employees must be full time, scheduled to work at least 25 hours a week, to be eligible for coverage. Dependent children are covered to age 19 or age 25 ifa regularly enrolled student. 06-25-2004 Attachment 3 to Production Request 165 Page 3 of 4 Dental Quotation Page - 3 United Water & TiactebeVTeris-Suez US Contract Situs - The primary contract situs is Connecticut. Separate DMO contracts will be issued for Arizona, California, New Jersey, and Texas ~ DMO Location Availability - Please refer to the network access .report for a detailed access summary ~ PPO Location Availability -Please refer to the network access report for a detailed access summary. Eligibility Transmission - Our proposal assumes we will receive eligibility information monthly or more frequently. Submission of eligibility information by more than one location or via multiple methods may result in additional charges. Costs associated with any custom programming necessary to accept eligibility infonnation are excluded. During the installation we can review all available methods of submitting eligibility information and identify the best approach. Obtaining & Uploading Prior Carrier History - There is no cost associated with receiving claim history files electronically from the prior carrier if it can be loaded into ACAS using a standard transfer program. Charges associated with non-standard transfers will be 'assessed separately based on complexity and format requirements. If the data cannot be transferred electronically, there will be an additional charge as accumulators would need to be updated manually for all members. The cost would be based on the number of members requiring accumulator updates. If requested, we will accept deductible credits via prior carrier EOB copies from members at no additional co , either at the time a claim is submitted or a recalculation of a claim is requested. The cost of obtaining claim history from the prior carrier is excluded from the proposed pricing. HIP AA - Plans are compliant with all portions of the HIP AA regulations that apply to dental programs. Policies and Claim Settlement Practices - Our quotation assumes our standard policy provisions and claim settlement practices will apply. This includes our standard limitations and exclusions, including missing tooth and late entrant provisions for employees who enroll more than 31 days after fIrst becoming eligible for coverage. Our quotation assumes no true open enrollments will be allowed except at the initial open enrollment for the first year of the plan with Aetna. The proposed plans and premiums do not cover Work-in-Progress. (Note: Certain state requirements may supercede the above conditions. Continuity of coverage rules will apply for members currently enrolled in the employer s dental plan. The group contract alone fonDS the agreement under which the payment of benefIts is made. HIP AA will not apply to the dental coverage. 06-25-2004 Attachment 3 to Production Request 165 Page 4 of 4 Dental Quotation PaGe - 4 United Water & Tractebel/Teris-Suez US Claim Fiduciary - Our proposal assumes that Aetna will maintain claim fiduciaryresponsibilities. As claim fiduciary, we will be responsible for final claim determination and the legal defense of disputed benefit payments. ~ Run-In Claim Processing - Expenses associated with run-in claims from the prior plan (claims incurred prior to the effective date of the plan) are excluded from the proposed pricing scenarios. ~ Run-Off Claim Processing - Our rates reflect an incurred (mature) claim base and take into account the expenses associated with the processing of run-off claims following cancellation subject to the conditions of our financial guarantee. Late Payment - Premium payments are due the 1 st of every month and must be paid within a 31- day grace period. Late payment charges are assessed after ,the expiration of the 31-day grace period and will be charged as incurred. ~ PPO Directories & ID Cards - Our quotation excludes the cost of PPO provider directories.They are available to the policyholder for an added fee which will be direct billed to thepolicyholder. Employees can obtain a personalized listing of PPO providers in their area by logging onto our web-site or by calling the 1-800 customer service center. The cost of PPO illCards is included in our quoted rates. Additional Products & Services - Costs for special services rendered, which are not included or assumed in the pricing guarantee will be direct billed. For example, there are additional charges for customized communication materials, as well as costs associated with custom reporting and booklet printing, etc. The costs for these types of services would be dependent on the actual services performed and would be determined at the time of request. Terms of Offering - This proposal is released with the understanding that it will be presented to clients only by an appropriately licensed and appointed individual or entity. Enrollment meetings will be held and conducted by a licensed Aetna representative. All enrollments must be completed and applications submitted to Aetna by the 1st of the month prior to the effective date. Aetna " is the brand name used for products and services provided by one or more of the Aetna group of subsidiary companies. PPO/PDN and Indemnity plans are underwritten by Aetna Life Insurance Company. DMO plans are underwritten by Aetna Life Insurance Company, except in the following states: Arizona, Georgia: Aetna Health Inc. California: Aetna Dental of California Inc. MarylandMissouri, North Carolina, Texas: Aetna Dental Inc. New Jersey: Aetna Dental Inc. and Aetna LifeInsurance Company. , A 06-25-2004 UNITED WATER IDAHO INC. CASE NO. UWI-O4- SIXTH PRODUCTION REQUEST IPUC STAFF . - TT A C H MEN T RESPONSE TO REQUEST NO. 168 Un i t e d W a t e r I d a h o Ta n k P a i n t i n g 1 9 8 4 - pr e s e n t Re s p o n s e t o S t a f f P r o d u c t i o n R e q u e s t No . 1 6 8 K: \ 2 0 0 4 R a t e C a s e U W I - 04 - 04 \ P r o d u c t i o n R e q u e s t # 6 - 1 6 2 t o 19 5 \ ( # 1 6 8 c h a r t x l s ) S h e e t 1 Iv e a r Ta n k N a m e Lo c a t i o n Mo n t h P a i n t e d 19 8 4 No r t h M o u n t a i n 29 4 0 N o r t h 2 4 t h S t J u n - 19 8 4 Cr e s t l i n e 84 5 C r e s t l i n e M a y - 19 8 8 Hi l l c r e s t ( e x t e r i o r ) 42 1 5 H i l l c r e s t D r i v e A p r - 19 8 8 Hi g h l a n d V i e w 40 7 H i g h l a n d V i e w D r i v e A p r - 19 8 9 Hi l l c r e s t ( i n t e r i o r ) 42 1 5 H i l l c r e s t D r i v e M a y - 19 9 1 Ca r t w r i g h t 11 6 9 E I P e l a r D r i v e D e c - 19 9 2 Gi n z e l 46 0 0 G i n z e l ( N o w re t i r e d ) M a r - 19 9 9 Go o d S t r e e t ( e x t e r i o r ) 15 0 0 C a m e l B a c k L n . 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