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HomeMy WebLinkAbout20070613Vol III Hearing.pdfORIGINAL ~ ' BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF THE APPLICATION OF UNITED WATER IDAHO INC. TO AMEND AND REVISE CERTIFICATE OF CONVENIENCE AND NECESSITY NO. 143 ) CASE NO.UWI-W-06- ,,)=:'"""~~ ~ ~i~~ 0.:;- ce" LfJ (:; o-=:, (.....:; ~2( :O. "- :;;'0'= - "' - --'."' );, ,'- ~;' ; BEFORE ' - (.J)C) (I) -.! COMMISSIONER MARSHA SMITH (Presiding) COMMISSIONER MACK A. REDFORD COMMISSIONER PAUL KJELLANDER ):~ - PLACE:Commission Hearing Room 472 West Washington Boise, Idaho DATE:May 30, 2007 VOLUME III - Pages 133 - 273 CSB REPORTING Constance S. Bucy, CSR No. 187 17688 Allendale Road * Wilder, Idaho 83676 (208) 890-5198 * (208) 337-4807 Email csb~heritagewifi.com For the Staff:Scott Woodbury, Esq. Deputy Attorney General 472 West WashingtonBoise, Idaho 83720-0074 For United Water Idaho:McDEVITT & MILLER by Dean J. Miller , Esq. 420 West Bannock StreetBoise, Idaho 83702 For the City of Eagle:MOORE SMITH BUXTON & TURCKE by Bruce M. Smith , Esq. 950 West Bannock, Suite 520Boise, Idaho 83702 For Kastera Development, LLC: Tom C. Morris , Esq. Kastera LLC 15711 Highway 55Boise, Idaho 83714 CSB REPORTING Wilder , Idaho APPEARANCES 83676 WITNESS EXAMINATION BY Mr. Miller (Redirect) Mr. Woodbury (Recross) Mr. Morris (Direct) Prefiled Direct Testimony Prefiled Rebuttal Testimony Mr. Woodbury (Cross)Mr. Smith (Cross) Commissioner SmithMr. Morris (Redirect) Mr. Smith (Direct) Prefiled Direct Testimony Mr. Woodbury (Cross)Mr. Morris (Cross) Commissioner Redford Mr. Smith (Direct) Prefiled Direct Testimony Mr. Woodbury (Cross)Mr. Morris (Cross) Mr. Miller (Cross) Commissioner Redford Mr. Smith (Direct) Prefiled Direct Testimony Prefiled Rebuttal Testimony Mr. Woodbury (Cross)Mr. Morris (Cross) Mr. Miller (Cross)Mr. Smith (Redirect) PAGE 133 138 141 144 155 160 167 177 178 187 189 196 201 202 203 206 213 214 221 230 232 235 239 243 247 248 265 Scott Rhead (UWI) Thomas Fassino (Kastera) Mayor Nancy Merrill (City of Eagle) Nichoel Spencer (Ci ty of Eagle) Vern Brewer (Ci ty of Eagle) CSB REPORTING Wilder , Idaho 83676 INDEX Premarked Admitted Marked Admi tted Premarked Admitted Premarked Admitted Premarked Admi tted Premarked Admi tted Premarked Admitted Premarked Admitted Premarked Admitted PAGE 272 218 272 272 272 272 272 272 272 272 NUMBER DESCRI PTION FOR KASTERA DEVELOPMENT , LLC: 301.City of Eagle s Responses to First Production Request of Kastera 302.Email from Darryl Cernusak to Nancy Merrill, etc. FOR THE CITY OF EAGLE: 201.Properties Included in City Planning for City Services & Annexation 202.2007 City of Eagle Comprehens i ve Plan 203.(No exhibit marked) 204.City of Eagle System Development Plan Map 205.City of Eagle, Kastera/ Triple Ridge Area 206.Letter from Holladay Englneering to Mayor NancyMerrill, dated September 22 2006 207.Donation of Water Systems to the City 208.Ordinance No. 623 CSB REPORTING Wilder , Idaho 83676 EXHIBITS E X H I B T S (Continued) NUMBER DESCRIPTION Admitted Marked Admitted Marked Admitted Marked Admi tted Marked Admitted Mar ked Admitted PAGE 272 221 272 255 272 257 272 257 272 259 272 FOR UNITED WATER IDAHO INC. 1. - Ci ty of Eagle s Responses to First Production Request of Kastera DEQ - Idaho Rules for Public Drinking Water Systems Copy of picture of the Brookwood well , 5/23/07 Copy of picture of the Brookwood well , 5/23/07 Ci ty of Eagle s Responses to First Production Request of Kastera CSB REPORTING Wilder , Idaho 83676 EXHIBITS BOISE , IDAHO, WEDNESDAY, MAY 30,2007,1:15 A. M. on the record. COMMISSIONER SMITH:All right, we re back Mr. Miller. MR. MILLER:Thank you , Madam Chairman. think I've achieved the goal of streamlining, although CSB REPORTING Wilder, Idaho not the absolute goal of zero, so if you ll bear with me, I have just a few redirect questions. COMMISSIONER SMITH:Okay. SCOTT RHEAD, produced as a witness at the instance of United Water Idaho Inc., having been previously duly sworn , resumed the stand and was further examined and testified as follows: REDIRECT EXAMINATION Mr. Rhead, you ve been employed by United Water for how long? Since 1990. And you ve been the director of engineering for how long? BY MR. MILLER: 133 RHEAD (Di) Uni ted Water Idaho Inc.83676 Last five years. In the course over that period of time, has the Company developed business practices it uses evaluate applications for service and determination of can ability to serve letters? Yes, we have. According to those standard established practices, does the Company require applicants to provide full build-out plans in making a can serve determination? That's not necessary to have full development plans in place.We need to know primarily fire flow limitations , what fire departments want , what' the range of density and what's the approximate schedule. We usually satisfy the things we need to know at that planning stage. According to the Company s established business practices, do you require that all other governmental approvals be in place before you d make a can serve determination? No, that's not necessary.We essentially act independent from them.They usually want to know from us can we serve. Could you clarify or expand that just slightly? CSB REPORTING Wilder , Idaho 134 RHEAD (Di)United Water Idaho Inc.83676 Well, how the other agencies interact with us as a development is becoming conceptualized and becoming planned, what usually they want to see is where are their utilities coming from, can you serve them , is there a will serve letter, and I think not only in the Water Company s case, but probably even the other utilities. So it's your experience that determination of availability of water service is often necessary as a condi tion for other governmental approvals? That's correct.It's a check mark right in their application. Was the Kastera application for serVlce evaluated under United Water s standard business practices and procedures? Yes, it was.We talked with them about, you know, what the acreage was, how many they had, what would be the range of density, were they going to be in the county, were they outside Eagle s impact area, what would be their expectations for fire protection, their demand, did they have alternative irrigation available, which they don t, so that was all information we were able to get up front and that's normal. Were the business practices that United Water customarily follows in the evaluation of CSB REPORTING Wilder, Idaho 135 RHEAD (Di) Uni ted Water Idaho Inc.83676 applications to serve relaxed in any way as some sort of a special consideration for Kastera? No, it was just done in our normal routine evaluation. Have those business practices used by the Company to evaluate applications for service ever , to your knowledge, been found to be imprudent in a Company rate case? No, not to my knowledge. There was some discussion of 12 inch versus 16 inch and so on and the number of customers that would be at the end of that pipe.In addition to the number of customers connected, are there other considerations the Company takes into account in the sizing of facilities? Yeah , I think I failed to comment on one of the primary factors would be fire protection, so 1 500 gallons a minute expected fire flow would be what would be a major element in the decision of the design of that 12 inch line. So regardless of the number of connected customers, you still have a fire protection obligation that has to be satisfied? That's correct. You indicated that the United Water system CSB REPORTING Wilder, Idaho 136 RHEAD (Di) Uni ted Water Idaho Inc.83676 has been growing in terms of number of customers at two or two-and-half percent a year , but it has not been necessary for the Company to add additional source of supply in the recent past, why is that? You know , I think it's primarily related to two things:Our consumption per customer is going down.re seeing in the range of a 10 percent decline in the recent past.relating it to, hopefully, the effect of our conservation plan.We have a pretty aggressive conservation plan and effort.Customers seem to be aware of that.I think there is some al ternati ve irrigation being used which is bringing it perhaps down, so one way we re meeting our source of supply requirements and still grow is the consumption per customer is coming down. Thank you, Mr. Rhead.MR. MILLER: more questions, Madam Chairman. MR. WOODBURY:Madam Chair , In light of the cross, Staff has a question for purposes of clarification. COMMISSIONER SMITH:That was actually redirect, Mr. Woodbury, but try your question. MR. WOODBURY:All right. CSB REPORTING Wilder , Idaho 137 RHEAD (Di) United Water Idaho Inc.83676 CROSS-EXAMINATION BY MR. WOODBURY: Mr. Rhead, with respect to developers requests for service, it was established on redirect that the analysis of the Company is conducted pursuant to formal business practices and procedures.My question is are those practices and procedures written? I think partially written.We have some procedures for evaluating demand, you know, as it fits to our master plan and we have, of course, the Commission rules, so they re written in that regard. Nothing formal which is referred to in all analyses of service requests, no checklist to go through on behalf of the Company? We have a developer s packet that we give out that has some information in it that they need to gi ve us, so it's partially written, but it's nothing real formal. MR. WOODBURY:All right, thank you. Madam Chair, no further questions. COMMISSIONER SMITH:Thank you, Mr. Woodbury. Does that conclude your case, Mr. Miller? MR. MILLER:It does, if the witness can CSB REPORTING Wilder, Idaho 138 RHEAD (X)United Water Idaho Inc.83676 be excused. (The witness left the stand. MR. MILLER:m not sure precisely how to handle this, but in my opening statement, I asked the Commission to take into account the comments previously filed in the case and would now like to expand that to include the comments of the Commission Staff that were filed previously and I'm asking this in light of the implied point of view contained in Mr. Woodbury cross-examination and would just like to point out two aspects of the Staff comments.The first is you ll find when you look at them on page 3, Staff says , " United Water is capable of serving the development.As long as Uni ted Water follows its established line extension rules, other customers of United Water should not be adversely affected by the addition of Trailhead. In the comments, there is no criticism that the Company s application is premature; rather comments go on to say, "Staff recommends a hearing date be established for a more formal record for decision ; so at that point it was not the Staff's view that this application was premature, but that a hearing was appropriate. COMMISSIONER SMITH:Mr. Miller, I think all the comments that were filed are part of the record CSB REPORTING Wilder , Idaho 139 COLLOQUY 83676 and will be considered, have probably already been read and will be considered by the Commission. MR. MILLER:I just wanted to call those to your attention in light of my understanding of the implication of the cross-examination, so with that, we rest. COMMISSIONER SMITH:Thank you.It seems the most logical thing to do now is go to Mr. Morris case , but if your witnesses have time constraints, I want to be accommodating for that. Thank you, Madam Chairman.MR. SMITH: agree that it would be proper for Kastera to testify. have no limitations. COMMISSIONER SMITH:Okay.It's yours, Mr. Morris. MR. MORRIS:We would like to call Thomas Fassino as our witness. CSB REPORTING Wilder , Idaho 140 COLLOQUY 83676 THOMAS FASSINO produced as a witness at the instance of Kastera Development, LLC , having been first duly sworn, was examined and testified as follows: BY MR. MORRIS: DIRECT EXAMINATION Please state your name. Thomas Fassino. And are you the same Thomas Fassino who previously filed direct testimony in this case consisting CSB REPORTING Wilder , Idaho I am. Are there any additions or corrections that need to be made to that testimony? There are none. Are there any exhibits that accompanied There are none. Wi th regard to the direct testimony, perhaps I could have you look at that.I believe there May I approach? COMMISSIONER SMITH:Yes. of six pages? that testimony? is one exhibit. 141 FASSINO (Di) Kastera LLC83676 (Mr. Morris approached the witness. BY MR. MORRIS:So now that you re looking at that testimony, is there an exhibit that accompanies that direct testimony? There is a vicinity map. And if I asked you today the same questions contained in your testimony, would your answers CSB REPORTING Wilder , Idaho to those questions be the same as written in the They would. Are your answers true and correct to the best of your knowledge? They are. And did you also submit rebuttal testimony consisting of three pages in this matter? I did. Are there any exhibits attached to that There were -- no.m sorry, maybe I' got the two mixed up. (Mr. Morris approached the witness. THE WITNESS:There are no exhibits to the testimony? BY MR. MORRIS:And if I asked you today the same questions contained in your rebuttal testimony, testimony? rebuttal. 142 FASSINO (Di) Kastera LLC83676 would your answers to those questions be the same written in the testimony? They would be. Are your answers true and correct to the best of your knowledge? They are. MR. MORRIS:At this point I would request that the direct and rebuttal testimony be spread upon the record as if read and that Exhibit No. 301 be marked and the witness is available for cross-examination. COMMISSIONER SMITH:If there is no obj ection, we will spread both the direct and rebuttal testimony as if read and identify Exhibit 301. (The following prefiled direct and rebuttal testimony of Mr. Thomas Fassino is spread upon the record. CSB REPORTING Wilder, Idaho 143 FASSINO (Di) Kastera LLC83676 Please state your name and business address. Thomas Fassino, 8850 Emerald St., Suite 164 , Boise, Idaho, 83704. Please describe your employment with Kastera LLC. I am employed by Kastera Homes LLC , a subsidiary of Kastera LLC ("Kastera ) as a land use planner. I have worked on the Trailhead development for almost two years now. For much of that time, I was the proj ect manager. What is the purpose of your testimony? I will generally describe the Trailhead development and Kastera ' s involvement with the City of Eagle , Idaho ("City " or "City of Eagle ) and Uni ted Water Idaho, Inc.Uni ted Water ) in seeking drinking water for the proj ect and possible annexation into the City of Eagle. Please describe the Trailhead development. Kastera is developing 660 acres of property owned by Legacy Investments LLC in an un-incorporated area of Ada County wi thin an area generally referred to a "north Ada County , with access 144 Fassino, DI Kastera Development , LLC to Willow Creek Road. The property is sometimes referred to as the Olsen property or the Olsen ranch. Approximately 140 acres in the southeast and southern most part of the property is included in the City of Eagle Area of Impact Boundary. At this time , Kastera does not anticipate that any water service will be necessary from United Water for this 140 acre area. Approximately 520 acres, which is the balance of the property, is not wi thin the City of Eagle s Area of Impact. Does the Trailhead property have any irrigation or drinking water rights associated with it? No. 145 Fassino, DI Kastera Development, LLC How does Kastera intend to provide water to the Trailhead development? Kastera approached the City of Eagle in early February of 2006 to inquiry about water service in the area of the Trailhead property. During this meeting Kastera discovered that the Trailhead property was not included in the City of Eagle s water master plan. Wayne Forrey, Kastera ' s Director of Planning and Development , spoke with Vern Brewer of Holiday Engineering, who is the City Engineer for the City of Eagle. They met at Eagle City Hall. Mr. Brewer told Wayne that it would take the City of Eagle at least two to three years before the City would have a well, water right , and the necessary storage, pumping and mainline infrastructure in place to provide water to the Trailhead development. In addition , the City did not master plan to provide water to land north of Beacon Light Road, which is where the Trailhead property is located. Kastera was not willing to wait two or three years to develop the property so we approached United Water to see if they could provide water to the proj ect sooner than the City of Eagle could. What did United Water tell Kastera about its ability to provide water to the Trailhead development? 146 Fassino, DI Kastera Development, LLC I met with Mr. John Lee of United Water in February of 2006.Mr. Lee explained that United Water had the current capacity and the ability to provide all of the water service necessary for the Trailhead development that we were proposing at that time. We then sent a letter to Mr. Lee on February 21 , 2006, formally requesting water service for the Trailhead property via United Water. United Water then filed its Application with the Commission in April of 2006. 147 Fassino, DI Kastera Development, LLC Did you at some point explore the possibili ty of annexation with the City of Eagle? Yes. At about the same time that Uni ted Water was filing the Application , Kastera sent a letter to the City of Eagle Mayor Nancy Merrill , dated April 18, 2006, requesting a meeting to discuss possible annexation of the Trailhead property and our Shadow Valley property. We were aware that United Water served other areas wi thin the City of Eagle and believed that annexation and water service were two separate issues. On May 18, 2006, Var Reeve, President of Kastera, and Wayne Forrey met with two City of Eagle council members and one staff member to discuss development issues. The issue of water came up at that time and Councilman Stan Bastian and Councilman Scott Nordstrom confirmed that, while the Ci ty was taking steps to work faster on the process, their City engineer believed that it could be at least two to three years before the City could provide water to the Trailhead property area. Kastera informed the City Council members and staff member that it was working with Uni ted Water to provide water for the proj ect because Uni ted Water had immediate capacity and facilities in place to serve Trailhead. Did you have any further contact with the City as a result of the May 18, 2006 meeting? 148 Fassino, DI Kastera Development, LLC Yes. When the City found out that we had requested that United Water provide water service to the Trailhead property and that United Water had filed the Application with the Commission, we were contacted by Ci ty Councilman Stan Bastian who claimed that Vern Brewer had been mistaken in his previous assessments of the water situation and that in fact the City could provide water service to Trailhead wi thin one year. We were also informed that annexation into the City of Eagle would not be possible unless 149 Fassino, DI Kastera Development , LLC we committed to obtain water from the City. Because our goal was to develop our Trailhead property and be annexed into the City of Eagle, but only if the City could assure us of certain development issues, and provided the City could in fact provide water wi thin our time schedule for development, we decided to further pursue the issue with the City and discussed entering into a Memorandum of Understanding concerning these development issues. Did you believe that the City of Eagle could provide you with water as represented? No. We had very serious reservations about the City s ability to perform as represented. We sent a letter to the Commission on July 24 , 2006, hoping to get some feedback and help in determining if the City could provide water in 6 months. We did not want to agree to annexation and then be without water for two or three years. At a meeting on August 10 , 2006 with the Commission staff, United Water , Mayor Merrill, Councilman Bastian , and City of Eagle attorneys, the City again confirmed that it would not allow annexation if United Water provided water service to the property. At that time the City further informed all parties that the City would pursue legal action to prevent Trailhead from receiving water from United Water even if Kastera did not seek annexation. I felt like the City had put a gun to 150 Fassino, DI Kastera Development, LLC our head! Wanting to avoid litigation , Kastera determined that it would be prudent to further pursue annexation with the City. What was going to be the path of annexation for Trailhead? Kastera was told on multiple occasions by City Council members, staff members and their attorneys, including in the meeting on August 10, 2006 , and in a letter dated August 25, 2006 , from Bruce Smith to me, that the City had, or was in the process of 151 Fassino, DI Kastera Development, LLC finalizing, contracts and agreements to provide the annexation path for Trailhead. Kastera was never privy to the exact path of annexation but was told by City attorneys Bruce Smith and Susan Buxton , and staff member Nicole Baird Spencer that it would go through the Triple Ridge subdivision to the south of the Trailhead property. Based upon these representations by City staff and their attorneys, Kastera continued to pursue annexation into the City and eventually filed an application with the City for annexation and rezone in December of 2006. Did the promised annexation path ever materialize? No. Kastera subsequently determined that the Triple Ridge subdivision had no agreement with the City for annexation and in fact did not want to be annexed. This was confirmed with Nicole Baird Spencer, Eagle City staff member and Susan Buxton , Eagle City attorney. Based on the City of Eagle s inability to identify any existing or planned annexation path or contractual agreements to support such a path (See CITY OF EAGLE'S RESPONSES TO THE FIRST PRODUCTION REQUEST OF KASTERA LLC TO THE CITY OF EAGLE , IDAHO, Response to Request No.4, a copy of which is attached hereto), it appears that no annexation path was ever secured. As a resul t of a lack of an annexation path and the City 152 Fassino, DI Kastera Development, LLC inability to provide water service plus inability to commi t to certain development requests that Kastera deemed critically necessary, Kastera notified the City by letter dated February 15, 2007, that it was withdrawing its application for annexation and rezone. Kastera also requested refund its application fees. What are Kastera ' s current development plans for the Trailhead property? 153 Fassino, DI Kastera Development , LLC Kastera is pursuing development of Trailhead wi thin Ada County. Our application in nearly ready for filing, and Kastera has had several pre-application meetings with Ada County staff. It is still Kastera ' s desire that United Water provide water services to the Trailhead development. Are you confident United Water can provide immediate water service to Trailhead? Yes. Is Kastera able to develop the Trailhead property in Ada County with water service from Uni ted Water? Yes. Does that conclude your testimony? Yes. 154 Fassino, DI Kastera Development, LLC Please state your name and business address? Thomas Fassino, 8850 Emerald St., Suite 164 , Boise, Idaho, 83704. Please describe your employment with Kastera LLC? I am currently employed by Kastera Homes LLC, a subsidiary of Kastera LLC ("Kastera ) as a land use planner. I have worked on the Trailhead development for almost two years now. Have you reviewed the Direct Testimony of Nichoel Baird Spencer? Yes. On page 3, lines 19 thru 23, Ms. Spencer says, "However , some of the identified landowners backed out, in part , because they could not get Kastera to explain or commit how the development was to be done. The landowners were concerned about traffic, densities and other matters.Because they could not get clear explanations from Kastera, they decided not to complete their annexations.Do you agree with her testimony? No.I believe her testimony mischaracterizes the decision of the Triple Ridge homeowners who decided not to be annexed. I met with Darryl Cernusak and Mike Ferrera, representing Triple 155 Thomas Fassino Kastera LLC Ridge homeowners, on a number of occasions to discuss the Trailhead proj ect and its potential impact on the Triple Ridge Subdivision. The last time I met with Darryl and Mike was on January 22, 2007. Immediately thereafter on January 23, 2007 , Darryl sent a letter on behalf of the three affected homeowners to City of Eagle representatives, outlining why they did not want to be annexed.(*Note - the City of Eagle is currently searching for a copy of this letter). I believe the letter expresses that the homeowners were simply not comfortable with the whole planning process.I do not believe there is any reference to Kastera not providing them with information or 156 Thomas Fassino Kastera LLC commi tments about the Trailhead development. On the contrary, I believe the letter actually praises Kastera for their openness in the process. It is my belief that the decision by Triple Ridge homeowners not to seek annexation had more to do with their conclusion that the resul t of annexation would be higher taxes for homeowners wi thout any appreciable increase in services. Have you reviewed the Direct Testimony of Mayor Nancy Merrill? Yes. On page 2, Lines 11 thru 14 , Mayor Merrill claims that the Trailhead development is included in the City s Master Water Plan. Is that the case? No, only 120 of the total 660 acres are included in the City s Master Water Plan. The remaining 540 acres are not now, nor have they ever been included in the City s Master Water Plan. Mayor Merrill references that the Trailhead property is included in the City comprehensive plan for future planning purposes. Is the Trailhead property currently also included in Ada County s planning? Yes. The City s comprehensive plan only a proposal and has not been adopted. Ada County has also included the Trailhead property in its master 157 Thomas Fassino Kastera LLC planning. The City and the County have competing plans for this property. Does the City of Eagle have a legal basis to force Kastera to seek annexation into the City? No. There is no law or ordinance that requires Kastera to annex into the City in order to develop its Trailhead property.The City is seeking to indirectly do what it 158 Thomas Fassino Kastera LLC cannot directly do. By requiring Kastera to seek annexation in order to get water to its project, the City is attempting to force annex the Trailhead development. Do you think the discussion regarding annexation is relevant to who should provide water to the Trailhead proj ect? I believe it is entirely irrelevant. If Kastera obtains water for its proj ect from United Water , the City can still maintain the core values and concepts that make Eagle what it is today. These so called core values are wholly unrelated to water service. The best evidence of that is United Water already provides water service to some homeowners wi thin the City of Eagle, without in anyway affecting the core values identified by Mayor Merrill. Who does Kastera want to provide water service to its Trailhead development? United Water. 159 Thomas Fassino Kastera LLC open hear ing . (The following proceedings were had in COMMISSIONER SMITH:Mr. Miller, do you have any questions? BY MR. WOODBURY: MR. MILLER:I do not. COMMISSIONER SMITH:Mr. Woodbury. MR. WOODBURY:Thank you, Madam Chair. CROSS-EXAMINATION Mr. Fassino, in your direct testimony, page 7, you indicate that the application, county CSB REPORTING Wilder, Idaho application, for the development was nearly ready for filing.Has that filing been made? That filing has not been made. When do you anticipate that the filing My expectations, wi thin the next couple of weeks.There was an expectation that it would be filed prior to this hearing; however, as stated earlier, Mr. Forrey was involved in a traffic accident and so there was some delay internally. Would I be correct in surmising that to the extent that your application was nearly ready for will be made? 160 FASSINO (X) Kastera LLC83676 filing that the conceptual plan for Kastera that will be presented to the county for approval is somewhat more known than it has been as reflected in the direct? That's correct.It would be the non-farm cluster. How many acres is the company going to request approval of for development? The application for the non-farm cluster only consists of the 520 acres out of the area of impact. I will preface that by saying that as with most municipali ties, if there s a common ownership of contiguous land that a municipality may require it be included even though it will not be a developed part of that application. And what is the proposed density of the 520 acres? It would be a non-farm cluster which in Ada County standards is one per five acres on a density bonus, which is approximately 105.Depending on the final survey, it's between 104 and 108.Those lots are maximum size of three-quarter acres with a shared common boundary, they re a property line of 100 feet. How long do you anticipate the county approval process will take? From our conversation with the county in a CSB REPORTING Wilder , Idaho 161 FASSINO (X) Kastera LLC83676 non-farm cluster, approximately six months. Do you anticipate -- is it Kastera ' s anticipation as reflected in prior City comments that the CSB REPORTING Wilder , Idaho Ci ty will participate in that county filing? That is an answer I can t give.I do not In the second half of May, Kastera filed a first supplemental response to the City of Eagle s first production request.Are you familiar with that m not. It included a Power Point presentation. Okay, I'm familiar with the Power Point It's not reflected -- and was this prepared as a neighborhood presentation as required by This was the initial neighborhood meeting that Wayne Forrey did in early 2006.This is not a result of the December 2006 neighborhood meeting. Kastera also held a December 7 , 2006 That is correct. Okay.Did you participate in the December know. response? presentation. county planning? meeting? 7th meeting? 162 FASSINO (X) Kastera LLC83676 I did. And there were, like, three conceptual proposals or concepts that were presented in the earlier 2006? Yes. Did Kastera ' s understanding as to what its conceptual development would be change from early 2006 to December? There was a potential that it did change. The neighborhood meeting in December was primarily for a rezone and an annexation which only requires that Kastera present the proposed rezone density and not a conceptual plan of lot placement. What is Kastera ' s position with respect to the 140 acres that lies below Homer Road as far as water service? Kastera s position is that it's not to be developed as a party to this Trailhead development. There s been talk in the company of actually splitting those off because they are in the Eagle area of impact and an RUT designation. Have there been any discussions yourself with United Water with respect to providing of water service to those 140 acres? No, there has not. CSB REPORTING Wilder, Idaho 163 FASSINO (X) Kastera LLC83676 Is it Kastera ' s intention to request water from the City for the 140 acres because the area lies wi thin the City s area of impact? It is not.That property would follow development trend that currently exists in the RUT zone which are five-acre lot minimums and allow for individual well and septic service, so would not require City services. Are the parties -- is United Water and the Ci ty correct in their belief that there are no surface irrigation waters available to the Trailhead development for which United Water seeks to serve? That is correct. When Kastera approached United Water, how soon did you say you needed the water? We did not give a time frame at that point.We were trying to determine where we could receive water services from.After initial conversations with Eagle, we approached United Water.As stated in earlier testimony, it's a requirement of municipalities to be able to designate where your services, whatever those are, are coming from. Was it Kastera ' s representation to United Water at the time of application for service that you anticipated at full build-out it could approach 500 to CSB REPORTING Wilder , Idaho 164 FASSINO (X) Kastera LLC83676 700 homes? That is a potential maximum.It's the carrying capacity of the land and what's allowed under Ada County Code in a non-farm cluster.As stated earlier , there is a set aside requirement of 75 percent where the cluster must occur in 25 percent; however, that set aside 75 percent can be redeveloped in the future should municipal level services, not necessarily municipal services but municipal level services, reach that property and there is a rezone to the property, so there is future potential. In your direct testimony on page 4, you state that Kastera informed the City Council members on May 18th of 2006 that United Water had immediate capacity and facilities in place to serve Trailhead.Do you recall -- were you party to that meeting? I was, uh-huh. And was that the representation that was made to the City? It was. And you said you were here this morning? Yes. And is it your understanding that with respect to facilities, you know, enough information has not been provided to determine whether storage facilities CSB REPORTING Wilder, Idaho 165 FASSINO (X) Kastera LLC83676 or a booster pump would be required? I would disagree with that.I think that Kastera has provided enough information in that our potential maximum number and I believe United Water spoke that that was the number they looked at. How can Kastera speak with confidence regarding United Water s capabilities when it had refused to define the proj ect with any specificity? I think that we did define it.We defined it as a minimum initial development of 104 lots with a maximum dictated by the carrying capacity of the land between 500 and 700 lots, all single family residential. How long do you believe United Water should stand ready to serve? m sorry? How long should United Water stand ready to serve this development? The question being how long should they wait until we re ready to go?re ready to start moving with the application process now.How long should they wait?I don t know.I can t answer a question for them. You would agree that what is being, I guess what is being, proposed for the county is not a CSB REPORTING Wilder , Idaho 166 FASSINO (X) Kastera LLC83676 planned community? It is not. And you would agree that under Ada County Development Services and county rules that a planned CSB REPORTING Wilder, Idaho communi ty must contain 640 acres and be located outside an existing area of city impact? That is true. MR. WOODBURY:Thank you, Mr. Fassino. Staff has no further questions. COMMISSIONER SMITH:Thank you, Mr. Smith. MR. SMITH:Thank you. Mr. Woodbury. BY MR. SMITH: CROSS-EXAMINATION Mr. Fassino, I apologize, I missed some of the first answers you -- COMMISSIONER SMITH:Mr. Smith, is your MR. SMITH:m sorry. microphone on? COMMISSIONER SMITH:Thank you. BY MR. SMITH:Mr. Fassino, I missed some of the first answers you gave, but when did you say your application will be submitted to the county? 167 FASSINO (X) Kastera LLC83676 It is ready to be submitted wi thin the next couple of weeks.The intention of Kastera was to CSB REPORTING Wilder, Idaho submi t it prior to this hearing, but the unfortunate accident of Mr. Forrey delaying that internally. Okay, what else needs to be done to complete that application? That I can t speak directly to.The nature of my position of Kastera has changed in the last two months. What was that change? ve just moved to a different position. m not the proj ect manager anymore , but have the most insti tutional knowledge and that's why I'm testifying So you re not the proj ect manager now. Today? -- for Trailhead? For Trailhead I am not, no. Is it your understanding -- when you saying it's almost complete, you don t know what else needs to be added to it? Discussing with the development, land development, team , my understanding is there are a few geotechnical studies that they re waiting to receive back on that relate directly to sewer requirements, I believe, 168 FASSINO (X) Kastera LLC83676 and a potential membrane bioreactor. understanding. That is my But there is a physical application Yes , sir. -- is that correct? Yes, sir. Do you have any final designs yet for the Trailhead development? CSB REPORTING Wilder, Idaho I cannot speak to that 100 percent. know that we do have an engineer of record that has been working on designs and that would be JUB. Do you have road plans? The last I saw there were. Do you know when they were done? Wi thin the last few months. What about sewer lines? The sewer lines generally follow the road plans, so it would dictate that.Al though they may not be on paper, the general design would be the same as the And power lines? I can t speak to them. What about irrigation facilities? As stated earlier, the property has no ready road layout. 169 FASSINO (X) Kastera LLC83676 irrigation rights. No, but you are going to have irrigation? On the lots themselves. How will that be provided? Through United Water. Regarding the 140 acres within the area of impact in the City of Eagle, how is water service going to be provided to that 140? At this time we have no design plans, so I can t stipulate to how water would be provided there. Do you know what options you have? It's in the rural-urban transition zone which allows for a minimum lot size of five acres which allows for a permit to the Idaho Department of Water Resources to be applied for individual wells for each lot, so that is an option.You know, extension of United Water service is an option.Obviously, it's not an option that we are considering because they are just five-acre lots, so those would be the two that I would aware of. At page 5 of your direct testimony, you indicated that you were going to annex into the City only if the City could assure us of certain development issues and could provide water wi thin our time schedule for CSB REPORTING Wilder, Idaho 170 FASSINO (X) Kastera LLC83676 development. Right. Do you recall that? I do. What were the development issues you were The annexation path and the time line of the annexation , when it would occur. CSB REPORTING Wilder, Idaho And with regard to the providing of water within our time frame, time schedule, excuse me, what time schedule was that? Considering development, I mean , it would be in relationship to the development itself , so if the Ci ty could provide it, if we got annexation with the densi ty, you know , six months to develop a first phase wi th the infrastructure.Generally when you develop a subdivision , lots are ready wi thin about a six-month time frame from the first dirt turn, so that would be our time So you were expecting the City to commit to providing service within six months of your turning True. And your turning dirt would be at a minimum of six months out? referring to? frame. dirt? 171 FASSINO (X) Kastera LLC83676 Yeah , contingent on approval. Do you recall the memorandum of understanding that was submitted to the City of Eagle by CSB REPORTING Wilder, Idaho familiar with it.m not familiar wi th the exact language.I know that Mr. Forrey drafted Do you know that the MOU provided by Kastera to the City requested that the City start construction of main lines by July 4th , 2007? m unaware of that. But you don t disagree with that? I can t agree or disagree. Okay.The document would speak for Kastera? Are you aware of the fact the City approximately six months ahead of that schedule? m not aware of that. If you file your county application process, are you aware that it will take roughly six months to get approved? That's true. When I asked you about what the application contained, do you have access approval by Ada County Highway District yet? I cannot speak to that. that MOU. itself; correct? 172 FASSINO (X) Kastera LLC83676 At page 5 of your testimony, you make the statement we had serious reservations about the City abili ty to provide water.What caused you to have these reservations " ? The testimony or the meetings that Kastera had with City officials, initially Wayne Forrey with Mr. Vern Brewer stated that it would be at least a two- to three-year time frame for water and at that point no planning had been done north of Beacon Light Road, so that's where our reservations stem from. Are you aware that the City talked to Mr. Forrey after that and said that service could be provided wi thin a two-year time frame, not at least two years out? I am aware of that conversation. Did you discuss the City s providing of service with United Water? m sorry, can you repeat the question? Did you discuss the City s time line for providing service with United Water? Myself , no, I did not. Do you know where wi thin the 520 acres that you will cluster the 108 homes? Yes. Where would that be? CSB REPORTING Wilder, Idaho 173 FASSINO (X) Kastera LLC83676 It's approximately the very center of the property mass itself to the east of the main entrance off CSB REPORTING Wilder, Idaho of Willow Creek Road.It's the most topographically viable area for development. And the access to that would then be off Yes , sir. Is it your understanding that Kastera will pay for the pipeline extension that United Water is proposing to extend? Kastera has agreed to that. And that would be two-and-quarter Yes, that's correct. Are you aware that the City would build approximately only 1.3 miles of pipeline? Assuming an annexation path , yes, I' Now , I'm talking about the distance Yes. Now, I'm talking about the distance, the length of pipeline that would be required that you would That is correct and we ll -- of Willow Creek? miles? aware that. from have to pay for. 174 FASSINO (X) Kastera LLC83676 And would -- sorry, go ahead. Eagle did make request of Kastera, though, to provide the same dollar amount that we offered to CSB REPORTING Wilder, Idaho United Water, so distance beside itself, it was the same The distance is 1.3 versus 2 point I understand the question. Okay, and you agree with that? Yeah. Are you aware that the City s cost of water service is less than United Water not privy to the water rates. Have you checked that? No. But you wouldn t disagree with me if I suppose not. Okay.Would you disagree that if you went through the City approval process it would take approximately four months? I would disagree with that. What is the basis for that disagreement? The current comprehensive plan planning that is going on by the City of Eagle in conj unction with Ada County and who has jurisdiction over that plan and in dollar amount. told you that? 175 FASSINO (X) Kastera LLC83676 relationship to the annexation in defining that path they re all contingent on our approval. So how long do you think it would take to go through the City? I have no idea.ve already been working with the City for over a year, so it would be a big assumption. Based on the numbers that United Water has submi tted , if you build your 108 lots, the City provided testimony that the cost of water service to the lots would be about $11 000 per lot? That is correct. Do you agree with that? Yeah. MR. SMITH:I have no further questions. COMMISSIONER SMITH:Do we have questions from the Commissioners? COMMISSIONER REDFORD:No. COMMISSIONER KJELLANDER:No. CSB REPORTING Wilder , Idaho 176 FASSINO (X) Kastera LLC83676 EXAMINATION BY COMMISSIONER SMITH: I guess I have one question.m looking at the map, actually it was Exhibit A , I think, to the application and I'm trying to figure out where Willow Lane is.I assume that's north of Homer? It is.Willow Creek Road is actually just an extension of Eagle Road.It's just a name change once it crosses -- I see Willow Creek , but on this map Willow Creek is to the west of Eagle Road, so somewhere along there it hooks up to your property? That is correct.Kastera controls a parcel that does connect Willow Creek. COMMISSIONER SMITH:Okay,see.Okay, thank you. you have redirect? MR.MORRIS:Just one question. CSB REPORTING Wilder, Idaho 177 FASSINO (Com) Kastera LLC83676 REDIRECT EXAMINATION BY MR. MORRIS: You were asked, Thomas, about a memorandum of understanding that Kastera submitted.Was that submi tted in draft form? That was submitted in draft form. To the best of your knowledge, was a memo of understanding ever signed by both parties? No, it was not. MR. MORRIS:I have no further questions. MR. SMITH:Madam Chair , I want to raise a point. COMMISSIONER SMITH:Mr. Smith. An issue.MR. SMITH:As I stated at the beginning of this hearing, one of the concerns, one of the issues was over the lack of information regarding this development and exactly what the service providers would be looking at in terms of providing service. the discovery requests that we submitted to Kastera, we asked for these types of documents, particularly with regard to the application.That information was never provided to us and now today at this hearing we find out that there is a draft application that is largely CSB REPORTING Wilder, Idaho 178 FASSINO (Di) Kastera LLC83676 complete, even though Mr. Fassino has explained he doesn t know exactly what is in it.I think that raises serious questions about the information that's been provided to us in terms of preparing for this hearing, so m going to move at this time that the proceeding even if we finish today be continued to give the City time to look at this application and decide if we need to ask further questions of Kastera because it's a serious impediment to us getting ready for this hearing today when they have the application almost ready and don provide it to us. COMMISSIONER SMITH:Well, I guess, Mr. Smith, so you re asking for a continuation because you felt the responses to your discovery were not adequately provided? MR. SMITH:Correct. COMMISSIONER SMITH:And these were questions relating to the developer s plans on the property? MR. SMITH:m assuming from Mr. Fassino ' s testimony today that there are details in the application that would have been directly relevant to the questions of how service would be provided by either Uni ted Water or the City, what types of lines might be necessary, where those lines might be constructed, how CSB REPORTING Wilder, Idaho 179 FASSINO (Di) Kastera LLC83676 the service would be provided, the time lines for providing of service. COMMISSIONER SMITH:Well , I guess you understand that to the Commission that may be interesting, but it's not part of what we would consider when deciding whether to grant a certificate or not, because the utility would decide how it's going to provide the service and then it would come back to us again and we would say whether or not all or some of that money was prudently spent and gets to be recovered and if they chose to do it wrong or spent too much or they oversized it, we d just disallow that, so how the utility chooses to do that is really not something we need as part of our decision as to whether to certificate, so I guess the struggle having is how your understanding the developer s plans more fully relates to the decision the Commission has to make. MR. SMITH:My response would be that as we prepared for this hearing, one of the fundamental issues was trying to understand what we were responding to in terms of the inquiries from the developer, just as Uni ted Water was , and it seems to me that the cost of providing that service to the homeowners who ultimately are going to pay the bill, they re going to pay for the water bill that shows up every month, is directly CSB REPORTING Wilder, Idaho FASSINO (Di) Kastera LLC 180 83676 relevant to what the Commission is going to consider here. I mean , the cost of services to these homeowners is going to be or is a relevant issue for consideration, because we re talking about more than just whether United Water will recover rates for it. talking about , and I think, Madam Commissioner, I think it was you who indicated that one of the concerns of the Commission is how timely service is provided to customers.It's not just a question of what the utility would do. COMMISSIONER SMITH:Well , that was the question is which entity -- from my view , it's the people who own the property who have the money at risk and when they need service, in my view , then it's a question of who s ready to give the service at the time they need it because they re the people with the money at risk. Well, and the time at whichMR. SMITH: they need it is a directly relevant inquiry here.That was part of the entire analysis that the City and United Water , quite frankly, went through in terms of when do you need service. Okay.Well, weCOMMISSIONER SMITH: take your motion for a continuation under advisement and continue with the hearing today. CSB REPORTING Wilder, Idaho 181 FASSINO (Di) Kastera LLC83676 MR. SMITH:Okay, thank you. MR. MORRIS:Madam Chairman, can I respond to that? COMMISSIONER SMITH:Certainly. MR. MORRIS:m looking at the discovery requests and perhaps counsel can point out where I' wrong, but I don t think that we have misrepresented anything.The only request, formal discovery request, that we received that pertains to what counsel is currently talking about, the application to be made to Ada County, was in the City of Eagle s first production request to Kastera and it's request No.2 and it says Please provide a copy of your complete application to Ada County for rezone and subdivision approval. Our response was , " Kastera has had a pre-application meeting with Ada County, but no application has been made to date.That is entirely true.We did not have a complete application that was submi tted to Ada County.We have the pieces, the parts that we re putting together and still need to be put together, but I don t see any misrepresentation there and I certainly take issue with Mr. Smith's representation or submission to the Commission that we ve misrepresented something here. If he had any question about existing CSB REPORTING Wilder, Idaho 182 FASSINO (Di) Kastera LLC83676 parts of an application , he certainly could have followed up with a question, but there s nothing factually incorrect about our statement here that Kastera has had a pre-application meeting with Ada County, but no application has been made to date.That's entirely correct. COMMISSIONER SMITH:Mr. Smith. MR. SMITH:Complete in that inquiry referred to I wanted the entire document, I didn t want pieces of it.If they had the application ready, they could have submitted exactly what they had ready, not the application that they would finally submit to Ada County, because they kept saying we don t have it, we don t have it, but if they had an application in draft form , we wanted to see it. COMMISSIONER SMITH:I think it's a little late for a discovery dispute, but COMMISSIONER REDFORD:May I ask a question? COMMISSIONER SMITH:Certainly, Commissioner Redford. COMMISSIONER REDFORD:Mr. Smith , if you didn t feel you got what you asked for , why didn t you file a motion to compel? MR. SMITH:That certainly would have been CSB REPORTING Wilder, Idaho 183 FASSINO (Di) Kastera LLC83676 an option , Mr. Redford. COMMISSIONER REDFORD:It just seems to me it's a little late right now to start raising issues of discovery, as Commissioner Smith stated, when the rules provide that you could have filed a motion or asked for further interrogatories or discovery requests. MR. SMITH:But if I could respond, in that instance, you re asking me why I don t file a motion to compel something I don t know they have.My inquiry was to get them to produce it.They did not obj ect producing it.They just didn t produce it, so my motion to compel would have been a motion to compel production of something I'm not sure they have. THE WITNESS:m sorry if it's out of line, may I speak? COMMISSIONER SMITH:No, too many people are talking already, including me.Well, I really think there s not a lot the Commission can do right now because we don t see the discovery.Only if there s a dispute over whether the discovery has been adequately responded to do we ever get discovery or if some party wants to make one of the responses an exhibit, so we haven t seen it, so I'm not sure what to do with your continuation except to take it under advisement and the Commission can address that in its Order. CSB REPORTING Wilder, Idaho 184 FASSINO (Di) Kastera LLC83676 MR. SMITH:Thank you. COMMISSIONER REDFORD:Could you give us an offer of proof as to what you would do with the application or what other questions you believe are relevant out of the application?It seems to me that you were always aware that Kastera was going to file with Ada County and possibly your questions were not articulated. m just -- you ve opened up an area now that I don know is really relevant.Now, what the application says, I just don t have any idea where you re going with that. If you re trying to prove your case based upon a deficiency in the application , that's not -- that's up to Ada County and I think , really, you re expanding the scope of your questions to something that may not be very relevant. MR. SMITH:Okay, thank you. Madam Chairman , I'm not sure where we left it, but think I had concluded my questions for Mr. Fassino. COMMISSIONER SMITH:Oh, that was it? MR. SMITH:Yes. Okay.That's right,COMMISSIONER SMITH: because I had already asked mine and we already did redirect. MR. MORRIS:Yes, so that concludes our case. CSB REPORTING Wilder , Idaho 185 FASSINO (Di) Kastera LLC83676 COMMISSIONER SMITH: Okay, thank you very much. I think we re done. (The witness left the stand. COMMISSIONER SMITH: witnesses; is that correct? before I begin? Staff has no MR. WOODBURY:That is correct. COMMISSIONER SMITH:Okay, Mr. Smith. MR. SMITH:Could I have five minutes COMMISSIONER SMITH: MR. SMITH:Thank you. Sure, let's take 10. All right, we ll go MR. SMITH:The City of Eagle would call 186 83676 (Recess. ) COMMISSIONER SMITH: back on the record.Mr. Smi th . Mayor Nancy Merrill. CSB REPORTING Wilder , Idaho FASSINO (Di) Kastera LLC MAYOR NANCY MERRILL, produced as a witness at the instance of the City of Eagle, having been first duly sworn, was examined and testified as follows: BY MR.SMITH: record? DIRECT EXAMINATION Would you please state your name for the Nancy Merrill. Ms. Merrill, what is your position? m the Mayor for the City of Eagle. Okay, and did you previously submit written testimony in this matter? CSB REPORTING Wilder, Idaho I did. And I think with your testimony were City Exhibits 201 and 202? That's correct. Have you reviewed your testimony in preparation for today ' s hearing? I have. And to the best of your knowledge, is that testimony still correct? It is. 187 MERRILL (Di) Ci ty of Eagle83676 Let me ask you, is there anything in the testimony that needs -- I think the testimony was filed May 11th.Is there anything in that testimony that needs to be updated or changed? The only thing that I can think that would need to be explained would be the continual ongoing planning in the foothills between Highway 16 and Highway 55. Could you explain that, please? It's part of a new comprehensive planning process that we re now engaging in that includes all of the area between north of Homer Road, Highway 16 and Highway 55 and north to the Gem County boundary. That would include this area that's at issue with Kastera? It does. MR. SMITH:With that, I'd ask that Mayor Merrill's testimony be spread across the record, including Exhibits 201 and 202. COMMISSIONER SMITH:If there s no obj ection, we will spread the prefiled testimony across the record as if read and identify Exhibits 201 and 202. (The following prefiled direct testimony of Mayor Nancy Merrill is spread upon the record. CSB REPORTING Wilder , Idaho 188 MERRILL (Di) Ci ty of Eagle83676 Please state your name and identify your posi tion with the City of Eagle. My name is Nancy Merrill , and I am the Mayor of the City of Eagle. Are you familiar with the location of the proposed Trailhead development? The Trailhead development isYes, I am. located at the northern edge of the City limits.Some of the area is wi thin the City s Area of Impact as approved by Ada County and some is in the county. Is it the City of Eagle s intent and desire to provide municipal water service to the Trailhead Community development? Yes, the City for some time has been aware of the pending development of this property and has had extensive discussions with the owners and developers from some time about annexation and service.Because of this and its proximity to the City, its partial location within the City s impact area, its consideration in the Ci ty ' s Comprehensive Plan , and its inclusion in the Ci ty ' s Master Water Plan , the City has been preparing to serve this area and include it wi thin the City. In addition to providing water to Trailhead, are there other issues and planning efforts that involve the Trailhead Community development and the 189 MAYOR MERRILL, DI CITY OF EAGLE Ci ty? Yes, because Trailhead is partially wi thin the City s Area of Impact and is generally surrounded by other developments that will be included in the City, Trailhead will , in effect, be part of the City of Eagle. It will use City amenities, 190 MAYOR MERRILL, DI CITY OF EAGLE its traffic will affect the City and its citizens, and its homeowners will use the amenities that the City Furthermore, because properties wi thin the Cityoffers. of Eagle have traditionally higher values, it will be able to use that circumstance to its benefit.Homebuyers in Trailhead will be able to take advantage of the benefi ts of the City without paying for them.As shown at Exhibit 201, it is surrounded by properties in some phase of being included wi thin the City.Trailhead should be part of the City of Eagle. When you refer to the City s planning efforts, can you describe in general terms what you mean? As with any local governmental body, the Ci ty of Eagle develops a Comprehensive Plan pursuant to Idaho Code.This plan deals with features such as planning and zoning matters, transportation, and City services.In effect, the Comprehensive Plan and associated documents detail how the City is to look and feel, how it is to grow, and how it will provide for its citizens. The City of Eagle takes this obligation very seriously.That is why the City of Eagle is one of the most desirable places to live in the Treasure Valley. care about the City of Eagle and believe the results of that caring and attention reflects the importance that 191 MAYOR MERRILL , DI CITY OF EAGLE people who live there place on maintaining the core values and concepts that make Eagle what it is today. These planning efforts include items such as providing City services, including water.We would like to think 192 MAYOR MERRILL , DI CITY OF EAGLE we would have the support of the Public Utili ties Commission in helping the City develop according to its planning efforts.A copy of portions of the City Comprehensive Plan addressing water is attached as Exhibit 202. Has this planning process included the land which is being developed as the Trailhead development? Yes, it has.Trailhead, for all practical purposes, will be located in the City of Eagle.How it is developed will have a significant influence on the City.We hope and intend to see that it is developed consistent with the City s Comprehensive Plan. Did United Water participate or comment on development of the City s Comprehensive Plan? No, not that I am aware of , although the Ci ty did notify United Water that it was developing its plan. Is the City capable of providing water service to the Trailhead Community development? Yes, it is.The City is committed to working with the developer to incorporate this development into the City.Even though Eagle understands that the developer intends to file an application with the county, the City of Eagle will participate in 193 MAYOR MERRILL , DI CITY OF EAGLE we would have the support of the Public Utili ties Commission in helping the City develop according to its planning efforts.A copy of portions of the City Comprehensive Plan addressing water is attached as Exhibit 202. Has this planning process included the land which is being developed as the Trailhead development? Yes, it has.Trailhead, for all practical purposes, will be located in the City of Eagle.How it is developed will have a significant influence on the City.We hope and intend to see that it is developed consistent with the City s Comprehensive Plan. Did United Water participate or comment on development of the City s Comprehensive Plan? No, not that I am aware of , although the Ci ty did notify United Water that it was developing its plan. Is the City capable of providing water service to the Trailhead Community development? Yes, it is.The City is committed to working with the developer to incorporate this development into the City.Even though Eagle understands that the developer intends to file an application with the county, the City of Eagle will participate in 193 MAYOR MERRILL , DI CITY OF EAGLE tha t proceeding.It will likely recommend that the county disallow the application and direct the developer to file a request for annexation with the City and use City 194 MAYOR MERRILL , DI CITY OF EAGLE water services. Why would the City take that position? Trailhead will , for all practical purposes, be in the City.If not developed consistent with the City s Comprehensive Plan, it could have significant detrimental effects on the City.It would disrupt the City s planning process and would negatively affect the City s development, roads, and open spaces. What is the City s policy on how water is to be provided to new developments wi thin the City? The City believes that new developments should provide their own water in order not to impose burdens and costs on existing customers.Since the City does not seek to generate profits from its water system, the City believes it can provide water to its citizens less expensively than a for-profit entity such as United Water. We believe water customers would appreciate that. 195 MAYOR MERRILL , DI CITY OF EAGLE (The following proceedings were had in open hearing. MR. SMITH:Wi th that, we d offer our wi tness for examination. COMMISSIONER SMITH:Thank you.Do you have any questions, Mr. Woodbury? MR. WOODBURY:Yes, I do.Thank you. CROSS-EXAMINATION BY MR. WOODBURY: Madam Mayor, Kastera states that it's not its intention at this time to develop the 140 acres wi thin the City s area of impact.Kastera has not requested service from United Water for the 140 acres and Uni ted Water is not requesting that its service area be expanded to include the 140 acres.If all that is true and if Kastera ' s county application does not include the 140 acres, is it still the City s intent to object to its county filing? You know , I would have to lean to the planners on how exactly that works.I know if it's in our area of impact that our area of impact agreement with the county states that the land would be serviced by our City water service, so not sure how that works the CSB REPORTING Wilder, Idaho 196 MERRILL (X) Ci ty of Eagle83676 other way around. If they are not requesting from the county the area included wi thin your area of impact, does the fact that it's just adjacent to your area of impact, is that of such significance that the City would still participate? I believe that the City would.We would not receive a request probably for recommendation on that, but the City would definitely weigh in on that as it is in our next planning area. Is it the City s intention to expand its area of impact to include the remaining 520 acres? Yes, we ve been going through that process now and the application is through the Planning & Zoning and will be completed and the decision should be made through the City Council by the end of July. And when the City Council approves that, then application would have to be made with the county? Yes, that is true.We have a date set aside for three days at the end of July to meet with the county commissioners now. And when an application is made to amend your comprehensive planning area and area of impact, what is the time line on that before the county? You know, I'm not sure.The planners CSB REPORTING Wilder, Idaho 197 MERRILL (X) Ci ty of Eagle83676 could probably answer that.It depends on how complete our application is.ve been going through an extensi ve comprehensive planning process that we will be able to hand them a complete application. Is the master water plan , the City master water plan , submitted to the county for approval or filing? It's usually not submitted to the county. We have to show that we can serve, but not necessarily the lines and all the water.That goes to DEQ for approval. As presently configured with your area of impact, I guess, south of Homer Road, under what condi tions can the City annex Trailhead without a request for annexation? State law allows annexation under 50-222. To that there are three categories of which the City can annex.It's been our policy that we usually don t annex unless a property requests annexation; however , there is a provision in that chapter of the state code that allows ci ties to annex property. 50 what? 222. Thank you.You state on page 2 , line 18 that Trailhead is generally surrounded by other CSB REPORTING Wilder , Idaho 198 MERRILL (X) Ci ty of Eagle83676 developments that will be included in the City and you reference your Exhibit 201.Does that exhibit, is it sufficient enough for you to explain what developments are occurring around Trailhead? I can certainly tell you the ones that have requested annexation to the City and it would be including the Avimor property that would come down and touch the Kastera property, so everything that is north of the Gem County boundary and I don t know have it designated on this as such, but it does touch the Kastera property and that's on the west and coming from the east on Highway 16 is the -- and that's about 23,000 acres of Avimor property.On the west on Highway 16 moving to the east is another 6,000 acres of the M3 property, and yesterday I had in my office the Connolly property of 000 acres which surrounds the Kastera property. On page 5, you state the City believes that new developments should provide their own water. Would Kastera if they received water from the City be required to contribute its pro rata share of the supply well cost? Yes, they would. Is it your understanding that the county pursuant to county ordinance or state statute is obliged to pay any deference to the City s water service plans in CSB REPORTING Wilder, Idaho 199 MERRILL (X) Ci ty of Eagle83676 areas of impact? I don t believe the county does anything wi th services, so I don t believe they do. CSB REPORTING Wilder, Idaho Okay, and with respect to development of master water plans, I think Mr. Wyatt this morning indicated that he would like to see cooperation between water providers in development of plans, are you of a Absolutely.We have been trying to get together for several weeks here and we have met previously to try to do some of these things, so I think we all believe it's in the best interests of all the ci tizens if we work together. And with respect to the City s water plan was Mr. Brewer the principal architect of that? Yes, he was. MR. WOODBURY:Madam Chair, Staff has no further questions. COMMISSIONER SMITH:Than k you, similar mind? Mr. Miller. MR. MILLER:No questions of the Mayor. COMMISSIONER SMITH:Mr. Morris. MR. MORRIS:I just have two questions. Mr. Woodbury. 200 MERRILL (X) Ci ty of Eagle83676 CROSS-EXAMINATION BY MR. MORRIS: Mayor Merrill, hasn t the City of Eagle publicly taken the position that it will not force annex anyone? We have not had any forceable annexations for several years, that is true. And is it the City s position that there may be situations where they will force annex someone? Yes.In fact, we have a piece of property right now that is an enclave.When a property has become enclaved and they are an obstruction to growth and services being provided, then at that time we do annex them in. And I'm not sure if I understood your testimony.Are you testifying that the Avimor property touches, is contiguous to the Trailhead property? It will be contiguous to the Trailhead as well as the Connolly property. Can you point out on a map where the Avimor property would touch the Kastera property, the Trailhead property? I think my planner could.I don t know if m that familiar with it. CSB REPORTING Wilder , Idaho 201 MERRILL (X) Ci ty of Eagle83676 To the best of my knowledge, it does not. I guess we ll save that question.Likewise, with regard to the M3 property, is it your testimony that that property touches the Trailhead property? No, not the Trailhead, the Avimor. MR. MORRIS:No further questions. COMMISSIONER SMITH:Are there questions from the Commissioners? COMMISSIONER REDFORD:I just have one. EXAMINATION BY COMMISSIONER REDFORD: Did I hear you correctly, Mayor , when you said that Kastera or Avimor has asked for annexation? Yes, we re processing a consent to annex right now. COMMISSIONER REDFORD:Thank you.have further questions. COMMISSIONER SMITH:you have redirect Mr.Smith? MR.SMITH:No. COMMISSIONER SMITH:Than k you for your testimony,Mayor. THE WITNESS:Thank you.That wasn CSB REPORTING Wilder , Idaho 202 MERRILL (Com) Ci ty of Eagle83676 difficult. (The witness left the stand. MR. SMITH:As its next witness, the City of Eagle will call Nichoel Baird Spencer. NICHOEL BAIRD SPENCER produced as a witness at the instance of the City of Eagle, having been first duly sworn, was examined and testified as follows: BY MR. SMITH: DIRECT EXAMINATION Ms. Spencer, would you state your name for the record, please? CSB REPORTING Wilder, Idaho My name is Nichoel Baird Spencer. And what is your position with the City of a planner III in charge of long range Sorry, I have a cold, so I'm stumbling a Did you previously submit written testimony in this matter? I did. I believe there were no exhibits attached Eagle? planning. bit. 203 SPENCER (Di) Ci ty of Eagle83676 to your testimony. No, there were not. Did you review that testimony in preparation for today ' s hearing? Yes, I did. Were the testimony and answers still correct to the best of your knowledge? To the best of my knowledge, with one exception. What is that? I wanted to make a clarification on page 3, lines 1 through As of last week , the City did meet with the property owners providing an annexation path along Highway 55 and through the assembly of four property owners have been told to anticipate an annexation application bringing the Trailhead property contiguous to the City limits this summer. Are there any other corrections or updates tha t need to be made? No. MR. SMITH:I would ask that Ms. Spencer testimony be spread across the record and we d offer her for cross-examination. COMMISSIONER SMITH:Without objection, is so ordered. CSB REPORTING Wilder , Idaho 204 SPENCER (Di) Ci ty of Eagle83676 (The following prefiled direct testimony of Ms. Nichoel Baird Spencer is spread upon the record. CSB REPORTING Wilder , Idaho 205 SPENCER (Di) Ci ty of Eagle83676 Please state your name and identify your posi tion with the City of Eagle. My name is Nichoel Baird Spencer.I am a Planner I I I for the City and am responsible for long range planning for the City. Are you familiar with the location of the proposed Trailhead development? Yes.Trailhead is located at the northern boundary of the City of Eagle.A portion of it, 140 acres, is located wi thin the City s area of impact, and another part, 520 acres, is outside, but adj acent to, the area of impact. How did you become familiar with the Trailhead Community development? The City has been meeting with owners and/ or developers of the property for 2 ~ years about annexation.There have been numerous meetings and other contacts, so we are very familiar with the property. Has Kastera filed for annexation of the property into Eagle? Yes, they did, but subsequently withdrew their application. Do you know if Kastera has filed an application for a subdivision with Ada County? 206 NICHOEL SPENCER , Di CITY OF EAGLE No.If it had been filed, the City would review the application from the county, but we have not recei ved any notice or copy of an application. Please describe the City s efforts to address Kastera ' s request for annexation. The City has expended considerable effort and costs trying to facilitate annexation for Kastera. The City has worked with various landowners on 207 NICHOEL SPENCER , Di CITY OF EAGLE Beacon Light Road and along Highway 55 to provide an annexation pathway for Kastera.The City anticipates an annexation application this summer that would establish a pathway. Since Kastera has not applied yet to the county for approval of a subdivision, if they applied, how long would it take to complete the process? Assuming no problems, it would likely take about six (6) months.Any problems, including appeals, would extend the approval period. Has Kastera ever provided any details of their plans for development to the City? No.Kastera only filed an application for annexation and rezone.They have never provided any conceptual plans or plats.As far as I know , they have not actually figured out what or how the development will proceed or what it will consist of. What is the status of the annexation pathway for the Trailhead Community? The City had previously identified an annexation pathway through an area known as Tripleridge and was working to complete the necessary steps. However , some of the identified landowners backed out, in part, because they could not get Kastera to explain or commi t how the development was to be done.The 208 NICHOEL SPENCER , Di CITY OF EAGLE landowners were concerned about traffic, densities, and other matters.Because they could not get clear explanations from Kastera, they decided not to complete their annexations. 209 NICHOEL SPENCER, Di CITY OF EAGLE However, the City has also worked out another annexation pathway along Highway 55 that would allow a pathway for the Trailhead Community.The City expects to get an application for this pathway this summer.This pathway has additional benefits to Kastera because it solves significant access problems for the Trailhead Community. Based on your experience, do you believe it is possible to complete an annexation pathway? Yes, but it will require that Kastera make some basic decisions to decide what and how it intends to develop or if, in fact, it is going to develop. Assuming a best case scenario , how long would it take for Kastera to complete its development process using the City s process? Using the City s approval process, this could be done in about four (4) months. If it used the county process, how long would it take? About six (6) months. Has Kastera conducted any public meetings with regard to Trailhead? Yes.They are required by law to conduct a neighborhood meeting prior to submittal of an application for annexation.The people who attended expressed concerns over the lack of details provided 210 NICHOEL SPENCER , Di CITY OF EAGLE about the pending development. If Kastera files an application with Ada County, will the City review and comment on the application? 211 NICHOEL SPENCER , Di CITY OF EAGLE Yes.Ada County will require that review because part of the area is wi thin the City s area of impact. Can Kastera develop a planned community through the county process? No.A planned community requires at least 640 acres outside of an area of impact.Trailhead does not meet that requirement. Does the county require that Trailhead be served by United Water? No.The county does not care who serves only that service is through a municipal provider. If Kastera develops through the county process , how many homes can it build on the 660 acres? A maximum of 108 under a non-farm cluster zone.Under current zoning, they would get one (1) lot per ten acres, or 66 lots. According to United Water s estimate, the cost of construction and development for facilities would be about $1.2 million, so the cost of facilities for each lot would be $11 111.00, if 108 houses are built or $18,182.00 if 66 homes were built, correct? Yes. 212 NICHOEL SPENCER , Di CITY OF EAGLE (The following proceedings were had in open hearing. COMMISSIONER SMITH:Mr. Woodbury, do you have any questions? MR. WOODBURY:Thank you, Madam Chair just one question. CROSS-EXAMINATION BY MR. WOODBURY: Did I understand that with respect to your testimony on page 3, line 2 and also page 4 , line 3 as far as the City anticipates an annexation pathway to Kastera by the summer that all of those pieces are in place with respect to annexation requests to provide that pathway? Correct.We are currently working with the City attorney to finalize the consents for annexations with those landowners ' attorneys and that' the meetings we had last week. Okay, and when you say this summer, by the end of summer? We anticipate an application as soon as we can get consents formalized and signed and by that point it takes about four months for us to process that CSB REPORTING Wilder, Idaho 213 SPENCER (X) Ci ty of Eagle83676 application through the hearing process. MR. WOODBURY:Thank you.Madam Chair , no further questions.Thank you. COMMISSIONER SMITH:Thank you, Mr. Woodbury.Mr. Miller , do you have questions? MR. MILLER:If I might, Madam Chairman , I might defer at least initially to Mr. Morris for questions. COMMISSIONER SMITH:Mr. Morris. MR. MORRIS:Yes, Madam Chairman. CROSS-EXAMINATION BY MR. MORRIS: I want to clarify that , Nichoel.Does the City currently have a binding agreement in place that would provide the Trailhead property with an annexation path? Agreements are only binding based upon execution of an application.At any point in a hearing process an application can be -- a consent for annexation could be withdrawn.At this point in time we do have draft consents of annexation out to the attorneys for property owners for their signature and notarization for us to file with Ada County and begin the hearing CSB REPORTING Wilder, Idaho 214 SPENCER (X) City of Eagle83676 process. So if I understand, no application has been filed; correct? At this point in time the first step would be a consent for annexation and that's where we re at. So no annexation application has been filed and there is no written agreement in place signed by these parties agreeing to annexation? The written agreement is in the hands of the landowners today. And it has not been signed? Not as I know of today. Has the City ever had binding written agreements in place that would provide Trailhead with an annexation path? The City has worked through several drafts wi th landowners as to annexation consents , those binding agreements.At this point in time due to our interaction wi th the landowners and similarly, the Trailhead proj ect interaction with landowners, those were not able to come to fruition. And were actual agreements sent and prepared to those parties? Yes, they were. And to the best of your knowledge, were CSB REPORTING Wilder, Idaho 215 SPENCER (X) Ci ty of Eagle83676 those ever produced in discovery? I do not know. Did the City have discussions with some of the Triple Ridge homeowners with regard to annexation? On numerous occasions. Did the Triple Ridge homeowners ever commi t in writing to annexation or file an application? No, at the point in which we discussed annexation with Triple Ridge, the application was very complex.It was mixed in with a series of neighborhood meetings being conducted by Kastera at the same time and several of their concerns came out through an annexation agreement that was being drafted and worked through. So did you actually have a written annexation agreement with the Triple Ridge homeowners? We had a drafted annexation agreement that was not executed. Was that document ever produced in discovery to the best of your knowledge? To the best of my knowledge , no. Did you ever receive a written explanation from the Triple Ridge homeowners why they did not want to be annexed? We received -- contrary to other testimony, there was never a letter , but we did receive CSB REPORTING Wilder , Idaho 216 SPENCER (X) City of Eagle83676 an e-mail that listed several reasons for the annexation, the withdrawal of the request for annexation.They had several concerns , including traffic and the use of Triple Ridge Place, densities that could be planned and some of it was just a continually changing understanding of what the proj ect exactly was going to be at the time of development and that made the homeowners very uncomfortable. And so with regard to your direct testimony on page 3 at lines 17 through 23, you say that the City had previously identified an annexation pathway through an area known as Triple Ridge and was working to complete the necessary steps; however, some of the identified landowners backed out, in part, because they could not get Kastera to explain or commit how the development was to be done.Are you aware of anything in the mail that you tal ked about that would support your conclusion that the Triple Ridge homeowners had any concerns that Kastera had failed explain its development? I think one of the things to keep in mind is our discussions with the Triple Ridge Homeowners Association have spanned over about two years with the City of Eagle and the e-mail alone is not the only interaction we ve had with them.The e-mail was the CSB REPORTING Wilder, Idaho 217 SPENCER (X) Ci ty of Eagle83676 final decision as to not to annex, but in subsequent discussions with them they did feel very uncomfortable wi th requesting a consent -- providing a consent to annex and an annexation path for a development that has not fully disclosed what the full intent of their development plan was. MR. MORRIS:May I approach? copies of this. (Mr. Morris approached the witness. MR. SMITH:Mr. Morris , I have some extra mark this? MR. MORRIS:I f I could get one more. Exhibi t 302. COMMISSIONER SMITH:So are we going to Exhibit 302. MR. MORRIS:I would like to mark this as COMMISSIONER SMITH:So mark this as (Kastera Development, LLC Exhibit No. 302 was marked for identification by the Notary Public. CSB REPORTING Wilder, Idaho BY MR. MORRIS:Nichoel , could I have you look at that e-mail which we ve marked as 302? Uh-huh. Is that the e-mail that you referred to? That is. And can you point out in that e-mail where 218 SPENCER (X) Ci ty of Eagle83676 it says anything that Kastera failed to explain or commit how the development was to be done? I believe in my discussions, subsequent discussions, with Mr. Cernusak and Mr. Ferrera and NACFA the North Ada County Foothills Association , the discussion was contained under bullet No.3, the possibili ty of annexing actually facilitating or expediting high density development in the foothills. There was a great concern that under the current comprehensive plan for the City and for the county -- and m going to kind of explain that, it's split.I mean the lower portion is in the City s area of impact and the northern portion in the county s rural plan , that the northern area would only be able to facilitate 106-108 uni ts and what the concern was at the time that this letter came in , Kastera had made an application to the Ci ty for annexation and rezone to a residential two or two units per acre with a development agreement which was well in excess of the rural densities described in both the City plan and the county plan and that was the concern being expressed here was that there that the annexation could provide additional densities that were unplanned for in this area and that was one of the concerns. Nichoel , in your testimony on page CSB REPORTING Wilder, Idaho 219 SPENCER (X) Ci ty of Eagle83676 lines 18 through 21, you reference a neighborhood meeting that took place.Did you attend that meeting? No, I did not. So when you say that people who attended expressed concerns over the lack of details provided about the pending development, you don t know that personally to be the case? We received the notice of the neighborhood meeting from the applicant which basically said due previous discrepancies in neighborhood meetings, they would not be disclosing the design of the proj ect, but only their intent to annex and rezone.That was information we did receive from the North Ada County Foothills Association which is the landowner group across the foothills. COMMISSIONER SMITH:That's non-responsive to his question. MR. MORRIS:I have no further questions. COMMISSIONER SMITH:Mr. Miller. MR. MILLER:Thank you, Madam Chairman. May I approach the witness? COMMISSIONER SMITH:You may. (Mr. Miller approached the witness. CSB REPORTING Wilder , Idaho 220 SPENCER (X) Ci ty of Eagle83676 CROSS-EXAMINATION BY MR. MILLER: Good afternoon, ma ' am.d like to follow up just briefly on a couple of areas that Mr. Morris touched on with you and it relates to your testimony at page 2, line 21 where you indicate that the City has expended considerable effort and costs trying to facili tate annexation for Kastera.Do you see that testimony? Uh-huh. ve handed you what's been marked as the exhibi t next in order which I believe would be COMMISSIONER SMITH:204 ? MR. MILLER:Just 04. COMMISSIONER SMITH:Exhibit 4 , I'm sorry. ll mark this as Exhibit (Uni ted Water Idaho Inc. Exhibit No.4 was marked for identification by the Notary Public. BY MR. MILLER:And I'll represent to you that this is a copy of a production request submitted by Kastera to the City of Eagle and direct your attention to request No.4 which is really a two-part question.The first is if the City has an enforceable annexation path, please provide the agreements in place to establish such CSB REPORTING Wilder, Idaho 221 SPENCER (X) Ci ty of Eagle83676 a path , and the second part provides that if an annexation path does not exist, provide copies of all letters , contracts, agreements, memoranda of understanding, development agreements or similar documents that the City has used in its attempt to establish an annexation path, and the response to the exhibit or to the request was a one-page attachment which lS a map; correct? Correct. Can we infer , then, from your answer that there really are not any letters , contracts, agreements, memoranda of understanding, development agreements or similar documents that the City has used in an attempt to establish an annexation path? What I can tell you is at the time of discovery, the only memoranda of understanding that had passed between the City at the time of this discovery were those prepared by the Trailhead community in response to theirs.The only other documents are existing consents to annexations that have just been prepared in the last week in preparation of an annexation path along Highway 55. So at the time you made this discovery response, tell me again what there was. There was only the memorandum of CSB REPORTING Wilder , Idaho 222 SPENCER (X) City of Eagle83676 understanding as drafted by the Trailhead community to the City of Eagle and the City s response to that memorandum which was never executed.Prior to that You didn t provide that document in response to this production request, did you? CSB REPORTING Wilder, Idaho I did not prepare the production request. I cannot tell you as to what information was or was not Are you aware of the continuing obligation to disclose that accompanies production requests? I am not an attorney.m just a But it's true, is it not, that the City has not produced any documents that may have come into existence after this discovery request that would be responsive to the discovery request? m unaware.d have to defer to the provided. Ci ty attorney for that. Pardon? I would have to defer to my City attorney on what has or has not been provided. To the best of your knowledge, the answer To the best of my knowledge, I couldn planner. would be no? answer that. 223 SPENCER (X) Ci ty of Eagle83676 I f the City was going to provide these responsi ve documents, wouldn t you be the person that would provide them? Actually, no.The City staff does work wi th the landowners, but any legal documents, consents and memorandums of understanding, are a direct product of our City attorney.They do not come through staff. But you would be aware of them and assume work with them in the ordinary course of your business? You would think , but not always.Due to the size of our City and our City staff , sometimes we do require our counsel to have direct interaction with land developers and owners.It's not always exactly through staff. MR. MILLER:Maybe I can just do it this way:Mr. Smith , could we have your acknowledgement that documents responsive to request No.3 or 4 that may have come into the City s possession after the preparation of this document have not been provided? MR. SMITH:You can have my representation m not aware of any coming into the City s possession. BY MR. MILLER:Let me ask you this, am:Do you think there are currently documents that would be responsive to this production request that came CSB REPORTING Wilder, Idaho 224 SPENCER (X) City of Eagle83676 into existence after it was filed? I believe at this point in time our City attorney has control of such documents that may or may not meet this and whether they are part of attorney-client privilege or not, unclear and I would, again, defer to the City attorney on that matter. All right, and along similar lines of Mr. Morris ' question to your testimony on page 4, lines 19 through 21 regarding a hearing, I believe you testified you were not present at that hearing. d like to clarify.That was a neighborhood meeting, it was not a hearing. Right. There is no decision to come out of that meeting, it is informational for the neighbors.I was not in attendance.Ci ty staff does not attend those meetings. So anything that you know about that meeting somebody else told you; is that correct? That would be information we received from landowners adj acent to the site, yes. But somebody else told you what the landowners said there? No, the landowners told us what they saw CSB REPORTING Wilder, Idaho 225 SPENCER (X) City of Eagle83676 and said. But you if you weren t there, how do you know what they said? They came and informed it. Outside the meeting? Correct. But with respect to that meeting, you weren t there? Correct , but there s no transcribable record of that meeting either. So you don t of your own knowledge know who said what at that meeting? No. And you say that outside of that meeting other people came to you and apparently expressed similar thoughts, do I understand correctly? ve heard significant concerns about the Kastera and Trailhead proj ect throughout the people in the foothills in the last four months of doing a comprehensi ve plan for that area. And who have you heard from specifically? Could you give me their names? ve heard from the North Ada County Foothills Association, John Patrosky and CJ Thompson. ve also heard concerns from neighboring landowners. CSB REPORTING Wilder , Idaho 226 SPENCER (X) City of Eagle83676 And who would they be? ve heard from Darryl Cernusak Mr. Ferrera.ve heard concerns from several. brain is -- I mean , I could sit there and -- Alicia West has attended those meetings.These are the landowners ve heard from as to their concerns about development in that area. Have they filed any formal written materials with you that a person could examine to try and understand exactly what their concerns are? No, not per se. So we d have to rely on your representation or recollection of what they have told you that you re now telling us? Yes.I believe the easiest way to tell you that is that in a community there s often just discussion and dialogue about what's happening, especially as the City begins its comprehensive planning process.ve engaged over 1 000 citizens and over 000 hours of work in the foothills in discussing development impacts into this area, transportation, water, sewer, parks, open space, and individual landowners have all come in and said this is what we want to do and we ve heard significant input through public meetings from adj acent landowners. CSB REPORTING Wilder, Idaho 227 SPENCER (X) Ci ty of Eagle83676 But that's with respect to your overall planning effort for that northern area, is it not? I would say that it would be so much simpler if everybody could see the northern planning area as one large land mass and not individual proj ects within it.Unfortunately, everyone sees Kastera or M3 or Connolly or Suncorp and then does compare them, compare what their products are, what are they doing, how are they engaging the public, how are they not and what are our concerns.Unfortunately, I can t get people to erase property lines in a community planning process.It would make it much easier. It's true, is it not, that the Trailhead area is currently outside the City s area of impact? Correct.Well, the northern 520 acres lS. The portion that United Water is asking to serve is outside the area of the impact? From what I can tell , yes. And you ve heard the testimony today with respect to the area inside the area of impact that United Water does not intend to provide service to that area; correct? Correct. At page 5, lines 14 through 18 of your CSB REPORTING Wilder, Idaho 228 SPENCER (X) City of Eagle83676 testimony, you discuss the potential cost per lot of Uni ted Water providing service to the facilities or the area.Isn t it true that the City of Eagle were it to serve would also incur significant cost to construct facilities? d have to defer to the City engineer on that.This was based upon my review of the discovery wi th Mr. Smith and the additions of line construction and booster station and storage allocated across the number of lots being proposed.That's all it is, simple math. I could not testify as to costs for the City.It's not in my purview. MR. MILLER:All right, I think those are all my questions. COMMISSIONER SMITH:Thank you, Mr. Miller. Are there questions from the Commission? COMMISSIONER REDFORD:Yes. COMMISSIONER SMITH:Commissioner Redford. COMMISSIONER REDFORD:I have a couple of questions. CSB REPORTING Wilder, Idaho 229 SPENCER (X) Ci ty of Eagle83676 EXAMINATION BY COMMISSIONER REDFORD: In Mayor Merrill's direct testimony, there is an Exhibit 201 which you ve probably seen.It says, the title is Properties Included in City Planning for Ci ty Services and Annexation. Correct. And the pink color or rose color that's on this map shows that the City s probable annexation goes from the Boise River to the Gem County line into Boise County bounded by Highway 16 and 55; is that correct? Roughly, yes, correct. So the long range plan is that you will see Eagle eventually move into Boise County? It's a little more complex of a question The City of Eagle is running up againstthan that. development constraints in the existing valley.We have Boise to our east and Meridian to our south and Star is coming up on our west, so when the City began looking at our most recent comprehensive plan, the discussion was we needed to start looking north into the foothills as to concerns about planned communi ties occurring and urbanization of those foothills and how would that affect the City of Eagle. CSB REPORTING Wilder, Idaho 230 SPENCER (Com) Ci ty of Eagle83676 We kind of are a funnel, so we have 55 and 16 and anything that happens between there because there are no improved roads in the area will funnel into the City of Eagle.All those highways do converge in the City of Eagle, so at that point in time we began working between 16 and 55 and with that development of that plan we were then requested by Avimor, who is the large land holding in Boise and Gem County, to look at their entire proj ect as part of that plan.Whether that occurs or not is a future issue.They do have an application for a comprehensive plan amendment and for a pre-annexation agreement that we re working through, but at this point in time, that would be a build-out scenario for the City of Eagle, so we could be talking 35 plus years. You don t have an annexation path , though to that area? Actually, we are currently -- that's part of the Highway 55 annexation path.Through a series of four property owners, we would become contiguous to the Suncorp area. Thank you.I haveCOMMISSIONERREDFORD: no further questions. COMMISSIONER SMITH:Do you have redirect, Mr. Smith? MR.SMITH:No,I don Thank you. CSB REPORTING 231 SPENCER (Com) Wilder,Idaho 83676 City of Eagle help. COMMISSIONER SMITH:Thank you for your THE WITNESS:Thank you. Mr. Vern Brewer. (The witness left the stand. MR. SMITH:The City s last witness is VERN BREWER produced as a witness at the instance of the City of Eagle , having been first duly sworn, was examined and testified as follows: BY MR. SMITH: DIRECT EXAMINATION Mr. Brewer, would you state your name for the record, please? Vernon Brewer. And how are you employed? m president of Hollady Engineering Company, the firm that is designated the City engineer CSB REPORTING Wilder, Idaho for the City of Eagle and has been since 1997. Okay, thank you.Mr. Brewer, you previously submitted written testimony, both direct and rebuttal testimony, in this matter? 232 BREWER (Di) City of Eagle83676 I did. And attached to your testimony were City of Eagle Exhibits 204, 205, 206, 207 and 208? That's correct. MR. SMITH:For the record, we had a mistake in numbering exhibits, so there is no Exhibit 203. COMMISSIONER SMITH:Okay, thank you. BY MR. SMITH:Mr. Brewer, have you reviewed your testimony in preparation for today ' s hearing? I have. Is that testimony and your -- excuse me, the questions and answers still correct to the best of your knowledge? Not everything.I would like to direct your attention to page 3 of my direct testimony, lines and 11.The direct testimony was taken or offered on the 11 th of May and at that time I said the Brookwood well a new municipal well which will be on line in 45 to days.The actual award for construction of that well didn t take place until May 25th.I was under the impression that it had taken place when I made this comment, so everything in that scale would slide back to probably the May 25th time frame. CSB REPORTING Wilder , Idaho 233 BREWER (Di) Ci ty of Eagle83676 Is there any other testimony that needs to be corrected or , excuse me, updated? No, not at this time. Okay.With that, I'd ask thatMR. SMITH: Mr. Brewer s testimony be spread across the record and we would tender him for examination. COMMISSIONER SMITH:If there is no obj ection , we will spread the prefiled direct and rebuttal testimony of Mr. Brewer across the record as if read and identify Exhibits 204 through 208. (The following prefiled direct and rebuttal testimony of Mr. Vern Brewer is spread upon the record. CSB REPORTING Wilder, Idaho 234 BREWER ( Di ) Ci ty of Eagle83676 Please state your name and identify your relationship to the City of Eagle. My name is Vern Brewer. I am the President Holladay Engineering and proj ect Manager /Liasion between the City and our team of Professional Engineers and Geologist responsible for the water system design and construction.Holladay Engineering Company was appointed Ci ty Engineer in 1997 and currently serves in that capaci ty.Holladay Engineering is responsible for plan review, water system and well design, system modeling, infrastructure planning, and financial planning for the water system.Professionals assigned to these tasks incl ude Ken Rice, P. E., Senior Design Engineer; Chris Duncan, P.G., Geologist; Andy Gehrke, P.E., Engineer; and John Blom , P. E., Engineer.As proj ect manager I have been responsible for proj ect planning and management, cost analysis and the interface between the engineering team, the council, and the land use professionals employed by the City. What is the City s Water Master Plan? The City of Eagle, through a 4 -year land use and infrastructure planning process, adopted a City Water Master Plan that covers the part of the Trailhead Communi ty that is wi thin the City s area of impact.The Master Water Plan provides the planning details for the 235 VERN BREWER, Di CITY OF EAGLE City s municipal water service.See Eagle Exhibit 204. Wi th regard to the Trailhead development, are you familiar with its location? 236 VERN BREWER, Di CITY OF EAGLE Trailhead is located at the northernYes. boundary of the City of Eagle.A portion of it, 140 acres, is located wi thin the City s area of impact, and another part, 520 acres, is outside, but adj acent to, the area of impact. How does the City plan to serve Trailhead? Because the developer has provided no details or information about the development, it is impossible to determine at this time all the specifics. However, in earlier discussions with the developer , the Ci ty provided two al ternati ve routes for service as depicted in Eagle Exhibit 205.Water would be provided primarily from the Brookwood well which has a supply capacity of about 1,458 gallons per minute.The Brookwood well is a new municipal well which will be on line in about 45-60 days.The capacity of the well is more than sufficient to provide water to the 66 or 108 lots that can be built under County requirements. What is the pumping capacity of the City I Brookwood and Lexington area wells? The combined pumping capacity is 2,550 gallons per minute.This is wi thin the established demand that the Trailhead development would require using the number of homes that could be built. What is the City s cost of service? 237 VERN BREWER, Di CITY OF EAGLE The City s annual cost of water service is $344.76.I checked United Water s websi te and they charge $398.43.Ci ty of Eagle customers pay less based on comparable use. Does the City encourage conservation of water? Yes, the City encourages all citizens to conserve their use of water.For instance, the City requires use of surface water for irrigation. In your opinion, can the City provide service to the Trailwood development by the time the development completes the county process and gets its infrastructure in place? The development has no plan , no design, no approvals, not even an application.They can build a maximum of 108 houses.The City can serve this amount and can do so immediately.Based on consideration of the facts outlined in my testimony, I believe it is in the public interest to allow the City to serve this area. However, until the developer makes some basic decisions about what it is going to propose, it seems premature for Uni ted Water to amend its certificate. 238 VERN BREWER , Di CITY OF EAGLE Please state your name. My name is Vern Brewer. Have you previously submitted testimony in this matter? Yes. Have you reviewed the testimony of Wayne Forrey and Scott Rhead? Yes. What comments do you have in response to Mr. Forrey s testimony? Mr. Forrey states that I informed him in February, 2006 that it would be at least two (2) years before the City could provide water service to Kastera ' s development. At the time of that meeting, February, 2006, I was responding to Mr. Forrey s questions based on the current status of several items and my understanding of his development timeline.I indicated to him that it could be up to two (2) years because there were some pending matters that were still being undertaken. In fact, several of these matters were completed in 2006 described in my September 26, 2006 letter to Mayor Merrill. City of Eagle Exhibit 206.So there is no misunderstanding, as stated in my initial testimony, the Ci ty can serve Kastera immediately. The problem with Kastera s proposed development from a service perspective 239 VERN BREWER, Di-Reb CITY OF EAGLE is that Kastera has never provided any details of its development, including its timing and plan for development. As Mr. Forrey indicates, approximately 140 acres of the development is in the City s Area of Impact. The City has an ordinance in place that requires developments that are annexed into the City to provide water for the development. This ordinance is attached as Kastera has also not, to my knowledge,Exhibit 207. 240 VERN BREWER, Di-Reb CITY OF EAGLE explained what it intends to do with this parcel which is wi thin the City s Area of Impact to which the City Comprehensive Plan is applicable. See City of Eagle Exhibit 208. Mr. Forrey states that Kastera withdrew its application for annexation, in part, because of the City s "inability to provide service . If that was the main reason for withdrawing the application , it was a mistake because the City can provide services. Do you have any reply to the testimony of Scott Rhead? Yes. Mr. Rhead testifies that service to Kastera would require extension ofa 12" main line from facili ties on Floating Feather Road. Previously, United Water had said it was going to extend a 16" main. United Water should clarify what size line would be proposed. The size of line that would be used should be clarified. If it is a 16" main extension, the expected cost of $600,000.00 would be underestimated. Also, the City main line extension to the Kastera property would be less than United Water s 2.25 mile extension. Mr. Rhead also states that depending on the eventual design of the development, additional facilities such as a booster station and storage reservoir will be required. That is likely correct. However, again, 241 VERN BREWER , Di-Reb CITY OF EAGLE Kastera s failure to provide any detail about its eventual design " precludes any determination of what might be required. However, the City will have a storage reservoir in place wi thin six (6) months. 242 VERN BREWER, Di - Reb CITY OF EAGLE open hear ing . (The following proceedings were had in COMMISSIONER SMITH:Do you have questions, Mr. Woodbury? just a few. MR. WOODBURY:Thank you, Madam Chair, BY MR. WOODBURY: CROSS-EXAMINATION Mr. Brewer , both Mr. Wyatt and Mayor Merrill expressed a desire for greater cooperation CSB REPORTING Wilder, Idaho between area water service providers in developing water Do you recall the testimony from both of I do recall that. And you re the primary architect, I guess, of the City s water master plan? Actually, Kenneth Rice is the senior engineer that actually was the primary author of the Ci ty ' s water master plan.I was in part responsible for the direction of that plan and a lot of the facilities planning components, including some of the financial components, but as far as the overall plan, we have a team of engineers, all of which had certain attributes of master plans. them? 243 BREWER (X) Ci ty of Eagle83676 the plan that they worked on. Mr. Scott Rhead indicated that he didn engage in any discussions with the City in preparation of Uni ted Water s water master plan.Did the City engage in any discussions with United Water in its plan preparation? Not directly. Okay.On page 3, line 3 of your direct testimony, of what significance is it that the 520 acres for which service is requested is outside, but adj acent to you say, the City s area of impact? The significance of that is I was acknowledging the portion that was in the impact area and the portion that was out.It's all one property, per se. A portion is in and a portion is out and I was just recognizing that fact. Okay.Scott Rhead in his rebuttal testimony, page 2 , line 17, states that it's not unusual for a developer to confirm there is a secure source of water supply before undertaking the expense and effort of developing a design and seeking other governmental Do you also find this to be true?approvals. No.In fact, I find just the opposite to be true.Typically -- and may I elaborate just one moment?Our firm is the city engineer for , I think it' CSB REPORTING Wilder, Idaho 244 BREWER (X) City of Eagle83676 13 cities in southwest Idaho, so a number of our engineers work in that capacity throughout the valley. Typically, when a developer will approach the city with a request for service or annexation, they will bring at least a concept level plan to the city so that we can actually talk about the parameters of service.Whether it be commercial, residential, industrial, whatever that might be, it gives us a starting point from which to begin the discussion. In your testimony on page 4 of your direct, you state that Trailhead has no plan , no design, no approvals, not even an application , they can build a maximum of 108 houses, and I look at Nichoel Spencer testimony on page 5, line 10 and she states -- the question was posed, "I f Kastera develops through the county process, how many homes can it build on the 660 acres?"And she answered, "A maximum of 108 under a non-farm cluster zone. Is it your understanding that the 108 houses would require 660 acres or the lesser 520 for which they made application? I would defer that opinion to Nichoel because I believe I received that number from her in our discussion of the application. Is it your understanding in Mr. Fassino ' s CSB REPORTING Wilder, Idaho 245 BREWER (X) Ci ty of Eagle83676 testimony with respect to the status or the conceptual plan that they re going to submit to the county that they will be requesting approval of a plan for 108-110 homes? ve heard everything from the 100 and so odd homes up to the 700 that's, I believe, in the record before us, so I really have no concept of what Mr. Fassino is planning to submit to the county. In your rebuttal, page 2 , line 16, you state that the City can serve this amount and do so immediately and you re talking about the 108 homes? Actually, the City could serve what the range homes being discussed. Sixty-six 108 was what she proposed? could,yes. And when you say can immediately, is that with or without approval of any of the three additional wells for which you have water right applications for before Water Resources? At the present time, if I could correct that inquiry, at the present time we have water applications for wells on the west side of town.That would be well 5 and We do not have any applications for the wells that would be servicing this area, the Trailhead development.That's already been approved and CSB REPORTING Wilder , Idaho 246 BREWER (X) Ci ty of Eagle83676 I believe I've represented earlier in my testimony that the bid for construction of the final well house has been awarded and there are no additional applications pending that would affect the Trailhead application. And that's the Brookwood well? Correct. MR. WOODBURY:All right, thank you. Madam Chair, Staff has no further questions. CSB REPORTING Wilder , Idaho COMMISSIONER SMITH:Thank you, Mr. Woodbury.Mr. Morris. MR. MILLER:Thank you, Madam Chairman. Good afternoon , Mr. Brewer. go ahead. MR. MORRIS:ll defer. BY MR. MORRIS: MR. MILLER:, if you want to go first, CROSS-EXAMINATION I just have one question.Are you familiar with the Avimor property? I beg your pardon?Could you reask the question? Are you familiar with the Avimor property, its location? 247 BREWER (X) Ci ty of Eagle83676 Generally, yes. Does the Avimor property touch or is it contiguous with the Trailhead property? CSB REPORTING Wilder, Idaho m not familiar with that aspect. MR. MORRIS:No further questions. COMMISSIONER SMITH:Mr. Miller. MR. MILLER:Thank you. BY MR. MILLER: CROSS-EXAMINATION Mr. Brewer, on page 3, line 1 , you say that Trailhead is located at the northern boundary of the Ci ty of the Eagle. COMMISSIONER SMITH:This is in direct? MR. MILLER:In the direct testimony. THE WITNESS:Yes, I see that. BY MR. MILLER:Where is the municipal boundary of the City of Eagle? Excuse me just a minute, I dropped my Certainly. I would refer to a map, but I believe at the present time it's at Beacon Light Road. Do you have Mr. Wyatt's testimony with pencil. 248 BREWER (X) Ci ty of Eagle83676 you? Yes , I do. Would you look at his Exhibit 3? Okay. It's correct , is it not, that the Trailhead development for which United Water seeks CSB REPORTING Wilder, Idaho approval in this case is north of Homer Road? That's correct. How far is it from Homer Road to Beacon Approximately, I don t know, half mile. So it's not precisely correct to say that Trailhead is at the northern boundary of the City of I consider it to be at the northern boundary of the City from a planning standpoint. From the way ordinary people use the word at," is it accurate to say that when the Trailhead development is, as you say, a half mile from the City boundary that it's at the boundary? I don t know if I should take exception to being called extraordinary, but I believe that the statement it's at the northern boundary is at our planning boundary. But your testimony says that it's at the Light Road? Eagle, is it? 249 BREWER (X) City of Eagle83676 northern boundary of the City of Eagle. Yes. All right.Now , it is correct, is it not that the City s area of impact extends up to Homer CSB REPORTING Wilder, Idaho Yes, at the current time that is But it does not extend north of Homer You know, I don t have an impact map right Would you look at Mr. Wyatt's Exhibit 3? You know , I have a black and white copy here.I have nothing really to go on outside of black MR. MILLER:I could hand the witness a Road? COMMISSIONER SMITH:You may. correct. Road? front of me. (Mr. Miller approached the witness. BY MR. MILLER:For clarity, I can and white. represent to you that this map is taken from the City comprehensi ve planning document and is it correct that it shows the northern boundary of the area of impact to be Yes, that's what the color on here faded, color copy. Homer Road? 250 BREWER (X) Ci ty of Eagle83676 I think, shows. Do you have any reason to believe that this map is incorrect? CSB REPORTING Wilder , Idaho No, I don All right.If the City desired to extend its area of impact north of Homer Road, would approval of Ada County be required, to your knowledge? To my knowledge, approval would be And that approval has not been obtained? No.As earlier testified, it's in the But as of today it's not? That's correct. You indicate somewhere in your testimony that the City has prepared a master water plan? That is correct. Would you again look at Mr. Wyatt's this ll give you a color copy. (Mr. Miller approached the witness. BY MR. MILLER:Do you have that with I do. And is this a map taken from the prepared by Hollady Engineering and taken from the City I requi red. process. time Exhibit 2? you? 251 BREWER (X) Ci ty of Eagle83676 master water plan? It does not include the entire portion that I believe is in the water master plan.Our water CSB REPORTING Wilder, Idaho master plan system development map goes up Highway 55 and includes what I understand to be the Heidi Patterson property and some other properties up 55, but the map that you ve given me truncates that area. This is a map prepared by Hollady Engineering; right? It's at least a portion of a map prepared by our office judging by the title at the bottom. I think I only have one copy of this map. (Mr. Miller approached the witness. BY MR. MILLER:Would you look at this I will and I do recognize that is the map that was actually included in the report.I believe what could be here is an earlier version of this map. So it shows an additional area going up That's correct. Maybe we could use this map again.Using this one, where would be the northern boundary of the Ci ty ' s, the area included in the City s master water map? this way? plan? 252 BREWER (X) City of Eagle83676 MR. SMITH:Mr. Chairman, could we just take a pause for a moment?Counsel is referring to "this map," I want to understand which one we re using. (Pause in proceedings. MR. SMITH:Okay, for the record , the map that counsel for United Water is using is Eagle Exhibit 204 ? THE WITNESS:Correct. MR. SMITH:And if the Commissioners would like , I have a copy of that. COMMISSIONER SMITH:We have that. MR. SMITH:You have that , okay. MR. MILLER:Thank you for that clarification. BY MR. MILLER:So with reference, then, to Exhibit 204 , can you identify the northern boundary of the area included in the City s master water plan? The northern boundary as described in the text is actually where the reach of that 16 inch trunk line at Beacon Light would extend topographically.It' represented by a straight line approximately a half mile above Beacon Light, but it would be all over the map. would actually follow a contour.Even though this is just a graphic generalization or a schematic, if you will, it's whatever would fit within that pressure zone CSB REPORTING Wilder, Idaho 253 BREWER (X) Ci ty of Eagle83676 and meet the DEQ requirements and that line would actually be -- could be all over depending upon the topography. So the line on the map is Beacon Light Road? No, Beacon Light Road is at this boundary right here.The line on the map, the area I'll call the salmon-colored or pink-colored, is a one-half mile representation above Beacon Light, but the text refers to it as a boundary defined by topographic considerations. That would roughly run along this Somewhere, yes. The master planning area does not extend north of Homer Road; is that correct? It didn t at the time of this version that's correct. And is this the current version? This is the version that has -- does have the DEQ approval on it.It is current. Now , when we say " DEQ approval " is the system map, the water system master plan the same thing as a facility plan that's required by DEQ? They can be one and the same and in this case it is the planning document of record for the City. CSB REPORTING Wilder, Idaho 254 BREWER (X) City of Eagle83676 This is what's been approved by DEQ? That's correct.It's a two-volume set, three-ring binder. And it's been approved as the facilities plan for the City s public drinking water system? That's correct. SO DEQ has not approved a plan for service by the City of Eagle north of Homer Road? Not at this time. (Mr. Miller approached the witness. (Uni ted Water of Idaho Inc. Exhibit No. was marked for identification by the Notary Public. handing you what'BY MR. MILLER: been marked as Exhibit No.5 which I'll represent to you is a portion of the administrative rules promulgated by the Idaho Department of Environmental Quality, particularly Rule 502 which sets out the requirements for facility plans for public drinking water systems.Are you generally familiar with these requirements? Yes, I am. Since you ve indicated that the existing master water plan of the City that's been approved by DEQ does not include the area north of Homer Road, I take it, then, that DEQ has not been provided and has not approved information relating to the hydraulic capacity, treatment CSB REPORTING Wilder, Idaho 255 BREWER (X) Ci ty of Eagle83676 capaci ty, proj ect financing, and operation and maintenance considerations with respect to the potential service north of Homer Road? The plan that they have is a snapshot in time of what has been submitted at that time.They have not been -- it has not been formally amended to date because it's, as Nichoel and the Mayor testified, it's in process of being completed going forward based on the foothill plan. But it's not possible for a municipal water provider to provide water service without an approved facility plan from IDEQ, that's correct, isn I it? That's not entirely correct.The facility plan, again coming back to the text of the plan, it's a schematic and there has been occasion and frequently is when development occurs that expands the schematic and that is simply turned into DEQ represented as an extension of the City system and DEQ has -- will approve it with just simply a letter explaining that the extension was necessary, so it's not a -- I understand the question.It's actually fairly fluid, no pun intended. Regardless of the fluidity, it hasn happened; isn t that correct? CSB REPORTING Wilder, Idaho 256 BREWER (X) Ci ty of Eagle83676 At this time, no. All right; so just to bring this part to an end, the City does not have an approved IDEQ facility plan that would permit service to Trailhead today? That's correct. Now , you indicated that at page 4 , line 12 that the City can serve -- well, lines 11 and 12, that the City can serve this amount, that is, Trailhead, and do so immediately.Is that your testimony? That is correct. m interested in your concept or defini tion of the word " immediately. " (Mr. Miller distributing documents. (United Water Idaho Inc. Exhibit Nos. 6 7 were marked for identification by the Notary Public. COMMISSIONER SMITH:So I think we have a question outstanding that has not been answered. I don t think so.I think IMR. MILLER: had a prefatory lead-, but I don t think there was a question mark behind it. COMMISSIONER SMITH:Okay. MR. MILLER:Thank you. BY MR. MILLER:You ve been handed Exhibi ts 6 and 7 which are two photographs which bear a date stamp of May 23rd, 2007.Let me ask you if you CSB REPORTING Wilder , Idaho 257 BREWER (X) City of Eagle83676 recognize what is depicted in Exhibits 6 and I do recogni ze it.That is the Brookwood well casing as it exists prior to, again, the award of the construction of the well house and pipe string and pump. Is it an accurate description of how the Brookwood well looks today? It is. So at the current time the Brookwood well is a capped-off piece of pipe; isn t that correct? That's correct. So when you say that you can serve immediately, do you mean immediately after a well house is constructed? No.Actually, it's quite different than that.In the MOU that we ve been working with with Kastera since July 14th of 2006, Kastera made representations that they wanted the pipe and pipe string and well and everything served by July 4th, 2007 , and in fact, they don t say it has to be ready by then.It says that the City would commence construction by then and right now we are well ahead of that construction time frame and would anticipate having the construction far and away complete before any other entitlements could be granted and any construction started on the property. CSB REPORTING Wilder, Idaho 258 BREWER (X) Ci ty of Eagle83676 As of the current date, it's correct that the well is not equipped with a pump or a motor; isn CSB REPORTING Wilder , Idaho I think that's obvious. And it's not equipped with a well house? That's correct. It's not equipped with electronics or remote control facilities? That's correct. Just one more thing for you to look at, I think , Mr. Brewer. (United Water Idaho Inc. Exhibit No.8 was marked for identification by the Notary Public. BY MR. MILLER:You ve been handed what' that right? been marked as Exhibit 8 which is a production request response from the City of Eagle. MR. SMITH:Mr. Miller, which one are we MR.MILLER:Did not give you one? MR.SMITH:No. MR.MILLER:sorry. And this is a response toBY MR. MILLER: the City or Kastera ' s production request No.5 and the question is what capability does the City have to provide water service to the Trailhead community.The answer looking at? 259 BREWER (X) City of Eagle83676 goes on at some length and then concludes, "In the instance of Trailhead, this construction process could be done wi thin a year of plan approval depending on Kastera s plans and capabilities.Was that an accurate response to the question? I think that puts sideboards on the time frame, it certainly does.It could be done more quickly than that.It could certainly be done wi thin a year. So here the answer is it could be done wi thin a year but not immediately. Again, immediately is the City has been working for four years on their planning process.They keep ticking off more and more items completed, including there s pipe going in the ground right now , about over a half mile of pipe.There s the well coming on line All of these things are in processthat's been awarded. and it will be -- as soon as Kastera is ready to have anything done on its property, the system will be in place and that's in the context of the MOU that we been working -- I know it's a draft, but it's the context of the time frame we ve been working on from the onset, so the City is continually planning and executing those plans and we will be ready as soon as Trailhead is ready. That, of course, that assumes Trailhead CSB REPORTING Wilder , Idaho 260 BREWER (X) City of Eagle83676 still desires service from the City. That's correct. According to its current testimony, it does not. The City s master plan really is bigger than just Trailhead and the City is pursuing its master plan development to include all the area that's wi thin that map that you showed me, the earlier exhibit. But that would imply that the City would force service upon Trailhead against its will; correct? I don t see that implication. Well, hasn t Trailhead said they don I t want to be served by the City of Eagle? The City has a lot of other area that it is planning to serve and it will continue with its wells, wi th the pipe development, with its trunk line system and eventually serve the area that's outlined in its service area. But it may serve other people who want service from Eagle or from -- yeah, from Eagle, but not to belabor the point, in the absence of some form of legal compulsion, Trailhead's current position is that it doesn t want to be served by Eagle. MR. SMITH:I would obj ect to the question.It I S argumentative.I think the point has CSB REPORTING Wilder, Idaho 261 BREWER (X) Ci ty of Eagle83676 already been made. COMMISSIONER SMITH:Mr. Miller. MR. MILLER:That's a good obj ection and it should be sustained. COMMISSIONER SMITH:All right.I take it you may be done. MR. MILLER:All right. COMMISSIONER SMITH:Apparently not. BY MR. MILLER:At page 4 , lines 5 and 6 of your testimony, you indicate that the City encourages all citizens to conserve their use of water.How much to your knowledge, has the City spent on conservation efforts in the past year? I don t have a number on that budget. know in the coming fiscal year we have put in place as a mi tigati ve measure a fund to cap flowing artesian wells, free-flowing artesian wells, wi thin the City and I don know how much money is allocated to that or some of the other measures.I know there are measures afoot, but I' have to check the budget to give you a number. The City does not have a formal water conservation plan as I understand it; is that correct? Not a formal plan. Do you know if the City intends and when to have a formal conservation plan? CSB REPORTING Wilder, Idaho 262 BREWER (X) Ci ty of Eagle83676 Yes, I believe our -- I believe that in ei ther our comprehensive plan or one of our comprehensive plan proposals that's been through the water committee just recently, one of the big highlighted areas was to develop a very formal conservation plan , so it's, again, one of the things that Nichoel testified about earlier about the ongoing development of our , I guess what you call our, next foothill plan. But that's another thing that's sometime out into the future; correct? The City is growing and developing and as it grows, it takes on more and more responsibility. Out into the future, but not in place today? Well , I think that the formation of a water committee is a formative first step in that because we have spent hours working through how to develop conservation plans, how to provide service to the greater service area and I think that's not future.That's been going on and happening right along the last year. But as of today, there s nothing in wri ting that would constitute a conservation plan? That's correct. Are you acquainted with Scott Rhead? Yes, sir. CSB REPORTING Wilder, Idaho 263 BREWER (X) Ci ty of Eagle83676 Do you know him to be a competent and professional engineer? I suspect so. In his testimony, Mr. Rhead testifies that Uni ted Water has adequate existing supply to serve the Trailhead area, and as I read your testimony, you did not rebut that testimony.Do you have any reason to disagree wi th Mr. Rhead' s testimony on that point? No. And Mr. Rhead' s testimony is that the facili ties required to connect Kastera to United Water existing supply would be a 12 inch main line and there been a subsequent clarification today of why there might be a 16 inch main line and why there might be a 12 inch main line.Do you have any reason to -- and you did not dispute that in your rebuttal testimony.Do you have any reason to disagree with Mr. Rhead' s testimony on that point? No, I don That I S all we have.ThankMR. MILLER: you. COMMISSIONER SMITH:Thank you, Mr. Miller. Are there questions from the Commission? I s there redirect? CSB REPORTING Wilder , Idaho 264 BREWER (X) Ci ty of Eagle83676 MR. SMITH:Yes, a couple of questions, if I could. REDIRECT EXAMINATION BY MR. SMITH: Mr. Brewer, Mr. Miller was asking you questions about immediacy.Does Trailhead need service today? No, they don t, to my knowledge. And with regard to the facility plan that Mr. Miller was inquiring about, if it were necessary to modify that, could it be done in -- let me ask you this: What length of time would it take to make that adj ustment? On a case-by-case basis, probably 30 to days. Okay, and Mr. Miller showed you some pictures of the Brookwood well, I assume, to show what its current status is or what it looks like.Are you familiar with the Kastera land? Yes,am. What does look like today? Well it'pretty much barren sagebrush hillsides,access very limited access,maybe CSB REPORTING Wilder, Idaho 265 BREWER (Di) Ci ty of Eagle83676 four-wheelers or horseback.That's about it. How many streets are on it? There are no streets, no infrastructure, no lots. Are there any facilities on it? A few fences and I think that's about it. MR. SMITH:I have no further questions. Thank you. COMMISSIONER SMITH:Thank you, Mr. Brewer , you re done. THE WITNESS:Okay. (The witness left the stand. COMMISSIONER SMITH:Mr. Woodbury, you had reserved the right to recall a witness.Are you intending to do that? MR. WOODBURY:Madam Chair, no, I am not. Than k you. COMMISSIONER SMITH:Good decision.Okay. I think that has brought us to the end of the testimony that was pre filed in this case.Is there anything further to come before us?Closing statements, perhaps, or was this the one people wanted to brief extensively? MR. SMITH:I don t believe this was the case that we wanted to brief extensively.The City has CSB REPORTING Wilder, Idaho 266 BREWER (Di) Ci ty of Eagle83676 no further matters to bring to the Commission. COMMISSIONER SMITH:Thank you , Mr. Smith. Mr. Morris. MR. MORRIS:I would like to make a closing statement. COMMISSIONER SMITH:All right, this would be the time for that. MR. MORRIS:We appreciate the time of the Commission in hearing the testimony and dealing with this issue.As I was trying to explain to my wife what I was going to be doing today, I started off with it' complicated, but then I thought it really isn Kastera owns a piece of property out there, 660 acres, and we need water to develop, so we started off on a path to see where can we get water.The first place we went was to the City of Eagle and asked them.The response was it could be two or three years. That didn t fit into our time frame, so we talked to United Water.They said we can get water to you when you need it.ve got the capacity right now to serve your proj ect and we started down that path.The question is which of the water providers is currently better prepared to provide service to Trailhead.When I say currently, that's back when the application was filed.When we made that decision based on the CSB REPORTING Wilder, Idaho 267 COLLOQUY 83676 information that was provided to us at that time, as far as we were concerned, United Water was the logical choice. We later ended up in a brouha with the Ci ty of Eagle.We have no intent to get involved in political matters and wonder how in the world do we find oursel ves currently in this situation where we re this, for lack of a better term , a pawn between the two water providers trying to determine who is going to provide water out there.All we want is water.We believe that United Water is fully capable of doing that, that they can provide sufficient for our needs. The City of Eagle came forward later and said we were mistaken when we said it could be as much as two or three years.In fact, we can provide that much sooner.The problem with that was no annexation path. The City of Eagle said if United Water provides water out there , we will sue you , we will not let that happen. will not let that door be open.We then as a developer just wanting to get our proj ect off the ground talked to the City of Eagle and went down that path for almost a year with regard to seeking annexation. The City of Eagle represented numerous times through numerous parties that they had an annexation path for us, that the agreements were in CSB REPORTING Wilder , Idaho 268 COLLOQUY 83676 place.We heard it all.It never materialized and appreciate the work that they did in trying to get that done, but the fact of the matter is until parties commit to annexation in writing in a binding manner it's all speculation.We waited a year for that annexation path to develop.ve heard testimony today that we can get you that annexation path, we now have it.That's all speculation.There s still been no applications filed. There still aren t binding agreements.re no closer if we went with the City of Eagle than we were a year ago and for our two cents ' worth, we just want to get that proj ect off the ground. The concern is that if we re forced to go to the City of Eagle for water , they re going to say that's not going to happen unless we annex you.We still don t have an annexation path, we still don t know when re going to get water, and as a developer, we re going to end up sitting on our property for who knows how long while they try to get us an annexation path, while they try to get their water services up to par so that they can provide water.I don t think that's right that the Ci ty of Eagle can force us to annex by holding us hostage wi th regard to water. I don t appreciate all of the nuances here , but it strikes me that there shouldn t be a problem CSB REPORTING Wilder, Idaho 269 COLLOQUY 83676 wi th United Water providing water service to the Trailhead proj ect even if we were to seek annexation for the City of Eagle.m not privy to why that's such a big deal that we could be within the City of Eagle, but no one else can provide water.As a matter of fact, from what I've seen , United Water does provide water services to others wi thin the City of Eagle.I understand that that's got some political overtones for whatever reason. All we want is water in this case and we believe that Uni ted Water stepped up to the plate, said they could provide it, we believe that. We tried to work with the City of Eagle. That did not work out.No enemies there.They tried in good faith to make that happen through an annexation path.It didn It would be ridiculous for us to go wi th the City of Eagle and be held hostage at this point, to sign an agreement to work something out where we agree to annexation , but then have to sit around waiting for an annexation path to develop and for the water services to develop.We would ask that we be allowed to continue wi th our proj ect and that United Water be the service provider for that area which is outside of the City area of impact. It's not part of their comprehensive plan. I know that they would like to, Mayor Merrill said in her CSB REPORTING Wilder, Idaho 270 COLLOQUY 83676 direct testimony she would like us to follow that comprehensi ve plan and to be able to include us wi thin that.re outside of that area and we re just frankly tired of waiting and want to get on with this, which we will do once we figure out who is going to provide us water. Thank you. COMMISSIONER SMITH:Mr. Miller. MR. MILLER:I guess when you boil it all down , it's quite simple, which is from the Company perspecti ve, a potential customer has come to us, made a request for service.We have determined that we re able to serve, which is not seriously disputed, so we have a request, we re ready, willing and able to serve. requested a certificate expansion to permit that ready, willing and ableness to go into effect.Tha ti s the long and short of our point of view. COMMISSIONER SMITH:Okay, thank you. Anything else?Well, then we would like to thank all the parties for their time and efforts this day and the Commission will rule on this as expeditiously as possible, recognizing that people are making decisions based on the outcome, so we ll do our very best to get done quickly.We thank you for your time and the hearing is adjourned. CSB REPORTING Wilder, Idaho 271 COLLOQUY 83676 time. MR. MILLER:Thank you very much for your (All exhibits previously marked for identification were admitted into evidence. CSB REPORTING Wilder, Idaho (The Hearing adjourned at 3:50 p. 272 COLLOQUY 83676 This is to certify that the foregoing proceedings held in the matter of the application of Uni ted Water Idaho Inc. to amend and revise certificate of convenience and necessity No. 143, commencing at 9:30 a.m., on Wednesday, May 30,2007 , at the Commission Hearing Room, 472 West Washington Street, Boise, Idaho, is a true and correct transcript of said proceedings and the original thereof for the file of the Commission. Accuracy of all prefiled testimony as originally submitted to the Reporter and incorporated herein at the direction of the Comission is the sole responsibili ty of the submitting parties. Oft.s CONSTANCE S. BUCY Certified Shorthand \\\1111111" ,\\ .1C It. l.l." ,L . " ,."111'"" ' "'", '" (\' ~/O '\ ~ )::'\ J.\=o~~ % ::o~ \, A'. "" / 0 -:";. " " u '" "" ~ ::.$' ".".""""' ~~ ..:. 14 TE Of'\ ..:. 1/1/111111'"" CSB REPORTING Wilder , Idaho 273 AUTHENTICATION 83676