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HomeMy WebLinkAbout20071003Vol IV Hearing.pdfOR\G\NAL 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-07- BEFORE COMMISSIONER MARSHA SMITH (Presiding) COMMISSIONER MACK A. REDFORD COMMISSIONER PAUL KJELLANDER PLACE:Cornmission Hearing Room 472 West Washington Boise, Idaho DATE:September 24, 2007 VOLUME IV - Pages 145 - 277 CSB REPORTING Constance S. Bucy, CSR No. 187 23876 Applewod Way * Wilder, Idaho 83676 (208) 890-5198 * (208) 337-4807 Email csb~heritagewifi.com c: I""...!)::1 gg . r- -.I ---iCJ ("") m-r ....:t(1)(5 I C") "T1 (..) 0 . ..; s::~ ~ (/)0U) -.,.. w-.t ~J;~. ;;;0 (") For the Staff:Scott Woodbury, Esq. Deputy Attorney General 472 West Washington Boise, 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. and Susan E. Buxton , Esq. 950 West Bannock , Suite 520Boise, Idaho 83702 For Capital Development, Inc. :MOFFATT THOMAS BARRET ROCK & FIELDS by Robert B. Burns , Esq. 101 South Capitol Blvd. 10th FloorBoise, Idaho 83702 CSB REPORTING Wilder , Idaho AP PEARANCE S 83676 WITNESS EXAMINATION BY Mr. Burns (Direct-Cont' Prefiled Direct Testimony Prefiled Rebuttal Testimony Prefiled Supp. Testimony Mr. Woodbury (Cross) Mr. Miller (Cross)Mr. Smith (Cross)Mr. Burns (Redi rect) Mr. Smith (Direct) Prefiled Direct Testimony Prefiled Supp. Testimony Mr. Woodbury (Cross)Mr. Burns (Cross) Mr. Miller (Cross) Commissioner Redford Mr. Smith (Redirect) Ms. Buxton (Direct) Pre filed Direct Testimony Prefiled Rebuttal Testimony PAGE 145 147 152 161 178 181 184 199 202 213 224 229 236 247 250 252 254 257 264 J. Ramon Yorgason (Capi tal Development) Vern Brewer (City of Eagle) Mayor Nancy Merrill (City of Eagle) CSB REPORTING Wilder, Idaho 83676 INDEX Premarked Admitted Premarked Admitted Premarked Admitted Premarked Admi tted Premarked Admi tted Premarked Admitted Premarked Admi t ted Premarked Admi tted Premarked Admi tted Premarked Admitted Premarked Admi t ted Premarked Admitted PAGE 276 276 276 276 276 276 276 276 276 276 276 276 NUMBER DESCRIPTION FOR CITY OF EAGLE: 201 - Properties Included in City Planning for City Services Annexation 202 - 2007 City of Eagle Comprehensive Plan 203 - City of Eagle Water System 204 - City of Eagle System Development Plan Map 205 - City of Eagle, Preliminary Plat Staff Report 206 - Ordinance No. 623 207 - Annexation and Cooperation Agreement 208 - E-mail from Bill Vaughan to Susan Buxton with attached pictures FOR CAPITAL DEVELOPMENT, INC. 301 - Eagle City Council Minutes, May 22, 2007 302 - Annexation and Cooperation Agreement 303 - E-mail from Bob Burns to Susan Buxton, 8/8/2007 304 - E-mail from Bob Burns to Susan Buxton , 8/16/2007 CSB REPORTING Wilder , Idaho 83676 EXHIBITS (Continued) Premarked Admitted Premarked Admitted Premarked Admitted Premarked Admitted Admi tted Admitted PAGE 276 276 276 276 276 276 NUMBER DESCRIPTION FOR CAPITAL DEVELOPMENT , INC.(Continued) 305 - E-mail from Bob Burns to Susan Buxton , 9/13/2007 306 - Letter from Ken Sommer to Gene P. Smith, P. E . 307 - E-mail from Bob Burns to Susan Buxton, 6/7/2007 308 - Confidentality and Non-Disclosure Agreement 311 & 317 FOR UNITED WATER IDAHO INC. 1 - 5 CSB REPORTING Wilder, Idaho 83676 EXHIBITS BOISE , IDAHO, MONDAY , SEPTEMBER 24 , 2007, 1: 40 P. COMMISSIONER SMITH:All right, we will go back on the record.Before we broke for lunch , Mr. Burns was identifying his witness and we have all been provided wi th properly marked exhibits for Mr. Yorgason , so please proceed. MR. BURNS:Thank you. J. RAMON YORGASON, produced as a witness at the instance of Capital Development, Inc., having been previously duly sworn resumed the stand and was further examined and testified as follows: DIRECT EXAMINATION BY MR. BURNS:(Continued) Mr. Yorgason, with the substitution of Exhibi ts No. 301 through 308 which we did just before lunch , is your testimony that's contained in your supplemental submissions, your direct rebuttal testimony and your supplemental direct testimony or direct supplemental testimony that we described before lunch, to CSB REPORTING Wilder , Idaho 145 YORGASON (Di ) Capi tal Development83676 your knowledge, is it true and correct and accurate to the best of your knowledge at this time? Yes, it is, to the best of my knowledge. MR. BURNS:I would ask , then, to spread the testimony of Mr. Yorgason on the record and make him available for cross-examination. COMMISSIONER SMITH:If there s no obj ection , we will spread the prefiled testimony of Mr. Yorgason as identified earlier upon the record as if read and Exhibits 301 through 308 are identified. (The following prefiled direct, rebuttal and supplemental testimony of Mr. J. Ramon Yorgason is spread upon the record. CSB REPORTING Wilder , Idaho 146 YORGASON (Di) Capi tal Development83676 I am the President of Capital Development Inc. an Idaho Corporation.Capi tal Development Inc., is the developer of the Lanewood Estates development, which is the subj ect of this proceeding.I have been engaged in the business of residential real estate development in Ada County, Idaho for over 30 years, and make this affidavi t of my own knowledge. I have reviewed the Letter Comments of the City of Eagle dated February 23 , 2007 (Letter Comments) and make this Affidavit in response to certain statements therein. We have made application to Ada County for approval of our Lanewood Estates development.The County has completed its initial staff review and provided comments on the application.We have responded to those comments and are awaiting the completion of the second staff review and scheduling of the initial public hearing.We expect to complete the 147 J. RAMON YORGASON (Di ) Capital Development hearing process with the County and receive approval for our development by May 2007, and to start construction of the first phase in July 2007. The Letter Comments (Pg 2.) assert that the Ci ty of Eagle s main line will be ready for use by Lanewood Estates by the time it completes the local government approval process.However , United Water already has a functioning 12-inch water main in Linder Road immediately adj acent to our proj ect.Based on the foregoing and my understanding of the location of existing City facilities, it is highly unlikely that the Ci ty would be able to extend its facilities, including having an active well completed and connected to its water deli very system , by the time we will have approvals to commence construction.It is also exceedingly unlikely - if not impossible - that we would have approvals from the City to start construction by this summer if the City were to hear and decide the subdivision application for our Lanewood Estates development.In fact , in one of our prior City of Eagle subdivisions (Countryside Estates), we were delayed approximately two years and it took nearly three years to get approvals because the various affected agencies could not come to an agreement. In addition to the issue of ability to provide 148 J. RAMON YORGASON ( Di ) Capi tal Development timely interconnection of the Lanewood Estates development , Capital Development Inc. desires to obtain water service from United Water because: The review and approval process is shorter using Uni ted Water.Normally, DEQ approval is required for all subdivisions before construction can begin (upon approval of the water system , DEQ lifts sanitary restrictions and approves construction).This process is shortened by using United Water.Currently, DEQ allows United Water to independently lift sanitary restrictions to start construction (DEQ does not need to independently review and approve United Water s water delivery systems). DEQ does not have the same arrangement with 149 J. RAMON YORGASON (Di) Capi tal Development the City.DEQ and the City s outside engineer must both approve Eagle City water plans, meaning that the review and approval process will result in a delay of at least three months; Any delays in starting construction will be VERY expensive.We have currently paid for approximately half of the land for our Lanewood Estates development.The interest payment to hold that portion of the land is nearly $76,000.00 per month.In July, we are contractually obligated to purchase the remainder of the property (more acres than the first takedown, with a higher per acre price) Our interest payment to hold the land will more than double to an amount in excess of $160,000.00 per month.We cannot afford even the chance of being delayed waiting for the City to get its water system operational; and Because the City is just now in the process of establishing its municipal water system, there can be no certainty or assurance that it will be able to accomplish all that it must do to provide water service to the Lanewood Estates development.In this regard, because Capi tal Development Inc.' s property is not located wi thin the City, Capital Development Inc. should be not be exposed to the risk and uncertainty arising out of the Ci ty I S current desire to enter into a new and complex 150 J. RAMON YORGASON (Di ) Capi tal Development venture: the establishment, construction and operation of a municipal water system. 151 J. RAMON YORGASON (Di) Capi tal Development Please state your name and identify your posi tion with Intervenor Capital Development Inc. My name is J. Ramon Yorgason, and I am the president of Capital Development, Inc. Are you the same Ramon Yorgason who provided direct testimony in this proceeding? Yes. What is the purpose of your rebuttal testimony? I would like to respond to certain statements contained in the direct testimony of Mayor Nancy Merrill and of Vern Brewer. Mayor Merrill, at pages 3-4 of her direct testimony, and Vern Brewer, at pages 2-3 of his direct testimony, have expressed concern that your Lanewood Estates development conform with the City of Eagle comprehensive plan.Do you know whether your development application to Ada County is in substantial compliance wi th Eagle s comprehensive plan, as well as its planning and zoning requirements? Yes, it is.We have undertaken a review of our Ada County application to determine its compatibility wi th Eagle s comprehensive plan and its planning and zoning requirements and believe our Lanewood Estates development both substantially complies with Eagle requirements-other than with respect to who would provide 152 Yorgason , Di-Reb Capi tal Development water service to the development-and would be approved by Eagle with but possible minor revisions if our property were annexed by it. 153 Yorgason , Di-Reb Capi tal Development Has the City of Eagle initiated annexation proceedings with respect to your Lanewood Estates development? No.Al though we have been invited by representatives of the City of Eagle to request annexation , Eagle has neither initiated annexation proceedings itself nor requested our consent to its annexation of our property. At pages 6-7 of his direct testimony, Vern Brewer expressed concern that allowing United Water to serve the Lanewood Estates development would frustrate completion of Eagle s water system and associated services.Is this a legitimate concern? I believe Mr. BrewerI don t think so. primary concern has to do with the extension of a 16" water main through the Lanewood Estates development. This water main can obviously be extended through Lanewood Road already, and I also have no problem with Eagle extending the water main beneath the streets of our development if Eagle will construct the main in conj unction with the orderly improvement of our proj ect. Capi tal Development Inc. will provide Eagle with an easement to this effect, if it requests one. Do you have a response to Mr. Brewer addi tional concern that excluding Lanewood Estates from 154 Yorgason , Di-Reb Capi tal Development Eagle s system would raise the cost of storing water to the remaining residents of Eagle? Yes.Eagle should reduce the size of its planned storage reservoirs and related improvements to accommodate the reduced number of users of Eagle services resulting from United Water s service of the Lanewood Estates development.By doing so, those connected to Eagle s system will pay for only 155 Yorgason, Di-Reb Capital Development those lesser improvements they use, and the residents of Lanewood Estates will not be asked to subsidize the residents of Eagle. Do you have a concern that the residents of Lanewood Estates might be required to subsidize the residents of Eagle? Yes, I do.I have been advised by legal counsel that because our property is not wi thin the city boundaries of Eagle, Eagle would have the right under the law to discriminate in multiple respects against those Ii ving in Lanewood Estates, such as by charging them more for water or limiting service in the event of a water shortage.In fact, I was advised that Section 6-4G of the Eagle Municipal Code specifically provided for the preferential treatment of the residents of Eagle with respect to water service until last month when it was amended because of this PUC case.Of course, Eagle can also amend its municipal code again as soon as this PUC case is decided, or at any time later, to discriminate in any manner it chooses without recourse by me or the future residents of Lanewood Estates or the PUC.That concern is part of the reason I asked United Water-which I have found to be a tested and reliable provider whose rates and services are regulated by the PUC-to provide water service to Lanewood Estates. 156 Yorgason , Di-Reb Capital Development What other reason did you have for asking Uni ted Water to provide water service to Lanewood Estates? Al though both Mayor Merrill and Mr. Brewer have testified about the anticipated construction of the necessary improvements to Eagle s water system for Eagle to timely serve Lanewood Estates, Mr. Brewer admits in his 157 Yorgason, Di-Reb Capi tal Development direct testimony at page 3 that Eagle does not have established water rights to provide this service and that Eagle s pending applications for such water rights have been protested.Thus, even assuming Eagle s pending applications are initially approved, a judicial appeal could deprive the City of Eagle of the necessary water rights to provide water service for an indeterminate period , and perhaps forever.Considering the fact that we are currently paying $76,000 a month in interest on our purchase of the first half of the land and, as a resul t of our recent negotiations with the seller of the property, will be paying more than double that amount as we take down the second half of the land in two increments over the next two years, we simply cannot afford to run the risk that Eagle s hopes with respect to getting its water system operational this summer will prove unfounded. Finally, Mayor Merrill also expressed concern at pages 2-3 of her direct testimony that the City of Eagle will be adversely impacted by your Lanewood Estates development because the residents of the development will use the amenities that Eagle offers.What is your response to this concern? As I earlier indicated, Lanewood Estates will be developed in substantially identical form whether or 158 Yorgason, Di-Reb Capi tal Development not it is annexed by the City of Eagle.Accordingly, whether United Water or Eagle provides water service-which is really what the present controversy is all about-the impacts on Eagle will be the same. Further, the principal impacts of our proposed development will be on the roads, sewers, schools, and fire and sheriff's departments, and the City of Eagle is not responsible for any of these "amenities.Finally, if Eagle wants the residents 159 Yorgason, Di-Reb Capital Development of Lanewood Estates to be residents of the City of Eagle, Eagle can always annex their property. 160 Yorgason, Di-Reb Capi tal Development Please state your name and identify your posi tion with Intervenor Capital Development Inc. My name is J. Ramon Yorgason, and I am the president of Capital Development, Inc. Are you the same Ramon Yorgason who provided both direct and rebuttal testimony in this proceeding? Yes. What is the purpose of your supplemental testimony? I would like to provide the Commission with those documents and related testimony pertaining to the terms and status of the agreement that was reached between Capital Development and the City of Eagle concerning the pending application of United Water Idaho Inc. Before turning to the agreement itself , can you tell me whether the intent of your agreement with Eagle has been summarized in the official records of the City? The intent was explained and set forth Yes. the Minutes of the Eagle City Council attached as Exhibit 301 on page 8, where Eagle s city attorney, Susan Buxton summarized the terms of the agreement I had reached with the Eagle City Council. The Minutes state on page 9 that Ms. Buxton explained to the Eagle City Council as follows: 161 Yorgason, Di-Sup Capi tal Development The developer would agree to have the PUD served by the City Water System in compliance wi th Eagle 162 Yorgason, Di-Sup Capital Development Ci ty Ordinances and if at the time the Lanewood PUD needs hook up to public water system and the City system not available then the PUC matter would be reinstated with regard to whether that area should be served as part of the United Water certificated area. Is this an accurate summary of the intent of your agreement with Eagle? Yes, with one modification it is. Was this intent incorporated into the written agreement you and Eagle executed? Yes it was.A copy of the agreement between Eagle and Capital Development is attached as Exhibit 302 and the intent articulated by Mrs. Buxton with the modification I mentioned was expressed and implemented through four provisions contained in the agreement. Would you please identify each of these four provisions and explain its relevance. The first provision is contained in the last sentence of the Preliminary Statement where Eagle acknowledges that the reason it had previously contested both Capital Development's development applications with Ada County and United Water s application with the PUC was "based principally on Eagle s determination that it will obtain in the near future those water rights 163 Yorgason , Di-Sup Capi tal Development necessary to provide water service " to Lanewood Estates. What were you told about those water rights? 164 Yorgason, Di-Sup Capital Development I was assured on several different occasions by Mayor Merrill , who is a personal friend, that Eagle would have these essential water rights first in May and then in June of this year. To your knowledge, has Eagle obtained the necessary water rights? Not to my knowledge, and my attorney has repeatedly asked for evidence that these water rights exist.For instance, by his August 8, 2007 , e mail to Mrs. Buxton attached as Exhibit 303, my attorney asked for an explanation with respect to whether the water rights that were tentatively awarded to Eagle and are now being challenged could even be used to service Lanewood Estates.We have received no response to this inquiry. And by his August 16, 2007 , e mail to Mrs. Buxton attached as Exhibit 304, my attorney provided Eagle with our development schedule for Lanewood Estates and explained to Mrs. Buxton why based on the attached schedule Capital Development had no al ternati ve but to forward with this PUC application.Further, when Mrs. Buxton called my attorney in response to Exhibit 304 and asked what Eagle might do, my attorney suggested that Eagle provide Capital Development with an unconditional will-serve letter or other reasonable documentation establishing Eagle s ability to provide water service to 165 Yorgason, Di-Sup Capi tal Development Lanewood Estates.As referenced in my attorney s very recent e mail to Mrs. Buxton of September 13, 2007 attached as Exhibit 305, we are still waiting for such documentation. What is the second of the four provisions contained in your agreement with Eagle that expresses and implements the intent as stated in the City of Eagle Minutes (Exhibit 30l)? 166 Yorgason, Di-Sup Capi tal Development The second provision is contained in the "NOW, THEREFORE" clause of Exhibit 302, where it states that the purpose of the agreement was to allow for the orderly development of the Property without undue and costly delay, and provide for United Water s service of water to the Property in the event Eagle is unsuccessful in obtaining the water rights it requires to service the Property. . . . " Is your development of Lanewood Estates currently being delayed? Ada County approved the developmentYes. applications for Lanewood Estates on July 11, 2007, and the appeal period for the approval expired 28 days later in August.Further , because no grading permit is required and our drainage plans were approved by Ada County as is reflected in Exhibit 306, we would start grading today if we knew that we had water. Why can t you start grading today anyway? It would be financial Russian roulette to start the construction of millions of dollars in improvements wi thout knowing that we will have the water necessary to complete the improvements and sell lots and homes. Because Eagle s water rights are being challenged and protested, it could conceivably be years before Eagle has the necessary water rights to service our development. 167 Yorgason, Di-Sup Capi tal Development In sum, not only would the interest costs on the constructed improvements be enormous if we couldn t get water, but we might lose our property to foreclosure by our lender by incurring construction costs that we couldn t recover through sales. 168 Yorgason, Di-Sup Capi tal Development But couldn t you also lose your property to foreclosure to your lender if you don I t start construction? Yes.Because we are incurring interest at the rate of $76,000 a month, we have got to get Lanewood Estates under construction, but increasing the amount borrowed and the resulting interest carry without having assurance of water would make it more likely that we get in trouble with our lender , not less likely. Okay.What is the third of the four provisions contained in your agreement with Eagle that expresses and implements the intent as stated in the City of Eagle Minutes (Exhibit 301)? The third provision is contained in Section 1 of Exhibit 302, where it states that we would "continue the hearing of United Water s Application currently set for May 24 , 2007 , to the first available date after August 24, 2007. What is the significance of this provision? August 24 was the latest I possibly could wait until having to again ask the Commission to grant United Water s application , so that I would not be delayed until after winter to pave the proj ect; and I made the importance of this date clear to Eagle.In fact, before agreeing to the August 24 deadline, Eagle asked that the 169 Yorgason, Di-Sup Capital Development date be extended from June 30 to the end of July and then finally to August 24, so that Eagle could have all the time that I could possibly give it to obtain the water rights it was counting on getting to serve Lanewood Estates. 170 Yorgason, Di-Sup Capi tal Development What then, is the last of the four provisions contained in your agreement with Eagle that expresses and implements the intent as stated in the City of Eagle Minutes (Exhibit 301)? The fourth provision is contained in Section 4 (d) of Exhibit 302, which states that "Eagle shall not adopt an ordinance annexing the Property until water service has been provided to the boundary of the Property for delivery of water. What is the significance of this provision? The provision was intended to ensure that Eagle would not obtain any jurisdiction over Lanewood Estates unless and until Eagle obtained the water rights necessary to provide water service to the property-which to my knowledge Eagle has not done and may not do for months or even years. You testified that the intent of your agreement as articulated in the City of Eagle s Minutes (Exhibit 301) was modified somewhat.Can you explain how? Yes.Exhibit 302 was revised and executed on May 23, 2007 , the day after Mrs. Buxton explained the intent of the proposed settlement contained in Eagle Minutes.As I previously stated, the agreement with Eagle that was negotiated gave Eagle until August 24 to obtain the water rights necessary to provide water 171 Yorgason , Di-Sup Capi tal Development service to Lanewood Estates.I never agreed that Eagle would have until after I had constructed the water system for the proj ect to obtain the necessary water rights. Nor for the economic reasons previously discussed would 172 Yorgason, Di-Sup Capi tal Development I ever agree to first construct substantial improvements and then pray somebody could provide water. Didn t you agree in Exhibit 302 to file an application for annexation promptly following Ada County s approval of your development applications, which became final in August? Yes, we did. Have you filed an annexation application with Eagle? Yes, we filed an annexation application with Eagle today. Why didn t you file an annexation last month? In simple terms, I overlooked the matter and nobody at Eagle even raised the issue until last week, when Mrs. Buxton sent her September 13, 2004, letter to my attorney. Did Eagle ever overlook any of its obligations to you under your agreement? As provided in Section 1 of Exhibit Yes. Eagle was obligated to provide Capital Development with wri tten status reports every two weeks.But as established by my attorney s e-mails of June 7 , June 25, and August 7 attached as Exhibit 307 , my attorney had to send repeated requests to Mrs. Buxton to obtain these reports. 173 Yorgason, Di-Sup Capi tal Development To your knowledge, has Eagle been harmed in any way by the delay in the filing of Capital Development' annexation application? No, and considering the proscription on Eagle annexing our property under Section 4 (d) of Exhibit 302 it is inconceivable to me that Eagle 174 Yorgason , Di-Sup Capital Development suffered any more detriment by our submission today, than Capi tal Development did by Eagle s delay in submitting several of its written status reports. Eagle has pointed to the confidentiality agreement attached as Exhibit 308 that you entered into wi th United Water as evidence that you were conspiring wi th United Water against Eagle.Were you? No, and the allegation is insulting and absurd for two reasons.First, my agreement with Eagle specifically provides that United Water could provide water service to Lanewood Estates if Eagle couldn obtain the water rights it needed by August 24.Second, because my agreement with Eagle provides for concessions by Eagle-including the waiver of certain filing fees, the expedi tious review and processing of certain plans and applications, and the preparation and submission of written status reports-the very purpose of the confidentiality agreement was to protect Eagle interests by keeping the terms of the agreement between Capi tal Development and Eagle out of the hands of other developers, who might ask for similar concessions from Eagle. Mr. Yorgason, to your knowledge, is Eagle ready, willing, and able to provide water service to Lanewood Estates? 175 Yorgason, Di-Sup Capi tal Development Certainly not to my knowledge, and as I earlier indicated, my attorney has repeatedly asked Eagle to provide reasonable evidence that it has the necessary water rights, without success. One final question.Based on the foregoing, do you and Capital Development want United Water to provide water service to Lanewood Estates? 176 Yorgason , Di-Sup Capital Development Yes, we desperately need water , and United Water is the only purveyor that actually has the water rights to service Lanewood Estates. 177 Yorgason , Di-Sup Capi tal Development open hear ing . (The following proceedings were had in COMMISSIONER SMITH:Mr. Miller , do you have any questions of Mr. Yorgason? BY MR. WOODBURY: MR. MILLER:I do not, Madam Chairman. COMMISSIONER SMITH:Thank you. Mr. Woodbury? MR. WOODBURY:Thank you, Madam Chair. CROSS-EXAMINATION Mr. Yorgason, it's my understanding that you received the county plat approval on July 11th of CSB REPORTING Wilder , Idaho That is correct. COMMISSIONER SMITH:Is your microphone 2007. MR. WOODBURY:Yes. BY MR. WOODBURY:Is that correct? on? Yes. And did you identify a water provider in We provided two water providers, but through the county we told them we thought it was going that application? 178 YORGASON (X) Capi tal Development83676 to be United Water and they accepted that. They accepted United Water? Yes, that's my understanding. That's reflected in their approval? That is correct. And you have -- looking at your direct testimony, you have some familiarity with the City annexation process? We work with a lot of cities, but I ' somewhat familiar with the process. Okay, and do you believe that Capital Development has provided the City with all the information required to process your annexation request? We have provided them all the information they ve asked for.ve applied for annexation and given them our construction plans. Okay.In your supplemental testimony, you attempt to tie the annexation and cooperation agreement to the City minutes.You would agree, though, in paragraph 7 of the agreement, that reflects that the agreement itself wi thin the four corners constitutes the final and entire expression of the parties and supersedes all prior agreements? That is our agreement. CSB REPORTING Wilder, Idaho 179 YORGASON (X) Capi tal Development83676 Yes, and was that agreement executed were there multiple copies because the agreement that' part of the testimony doesn t seem to have a date next to the signatures? I don t know.I know the agreement was hammered out at 1: 00 0 ' clock in the morning or the bulk of it.I don t know the answer to that. Okay, the agreement on the final page does indicate it's executed as of the date indicated opposite each of the signatures below, but it doesn t seem to indicate any date, but you indicated in your, I guess, supplemental testimony that it was executed on May 23rd, the date prior to hearing in this matter in May? To the best of my knowledge. On page 4 of your supplemental, you state that my attorney suggested that Eagle provide Capital Development with an unconditional will-serve letter or other reasonable documentation establishing the City abili ty to provide water service to Lanewood.Is it your experience, I guess, that the City of Eagle has previously granted unconditional will-serve letters? m not aware of any condition or any other proj ects where there has been so much confusion of whether or not they had water , so I don t know if they have or not. CSB REPORTING Wilder, Idaho 180 YORGASON (X) Capi tal Development83676 But is it my understanding, though, that the City refused to provide that type of letter to you? CSB REPORTING Wilder, Idaho That is my understanding. MR. WOODBURY:Madam Chair , Staff has no further questions.Thank you. COMMISSIONER SMITH:Thank you , Mr. Woodbury. MR. MILLER:Madam Chairman. COMMISSIONER SMITH:Mr. Miller. MR. MILLER:I forgot I actually did have a couple of questions. proceed. BY MR. MILLER: COMMISSIONER SMITH:You do?Please MR. MILLER:Wi th your indulgence. CROSS-EXAMINATION Just very quickly, sir.In your first affidavi t or first testimony, you indicate that you have been engaged in residential real estate development in Ada County for over 30 years? That's approximately correct, just over During the course of that long period of years. 181 YORGASON (X) Capi tal Development83676 being engaged in this business, have you had occasion to be a customer of United Water Company? On many occasions. Based on that experience, is it your belief that United Water Company has the managerial and other capabilities to successfully operate a domestic water system and provide service to its customers? They have always provided good water service to us when they were in the area where we needed water for our subdivisions. And with respect to the Lanewood proj ect, is it your -- based on your examination of the circumstances, is it your understanding that United Water is prepared to immediately provide service to the Lanewood development? Yes, they re immediately there and have water there. MR. SMITH:I want to obj ect to that as lacking any kind of foundation for this witness to testify to that. COMMISSIONER SMITH:Mr. Miller. BY MR. MILLER:Mr. Yorgason, would you explain to the Commissioners what you have done to examine the ability of United Water to provide service to the Lanewood development in terms of your investigations CSB REPORTING Wilder , Idaho 182 YORGASON (X) Capital Development83676 and so on? We have talked with them.Yes.They have given us information about where their water main is. It's adj acent or next to, just directly adj acent to our They ve expressed to us they have the capacityproperty. and the ability to serve our proj ect, and we have seen nothing that would stand in the way short of receiving approval here at this venue. Based on that evaluation , is it your understanding and impression that United Water has the ability to immediately provide service to the development? Yes. MR. SMITH:And I'm going to obj ect that question as lacking foundation as well. Mr. Yorgason testified that it was -- and it's also a hearsay obj ection.Mr. Yorgason is basing his testimony on some undescribed conversation with United Water saying that he believes that they have the ability to serve. has added no foundation to justify that kind of conclusion. COMMISS lONER SMITH:Mr. Miller. MR. MILLER:ll submit it to the Commission for your ruling on that. COMMISSIONER SMITH:All right.I guess CSB REPORTING Wilder, Idaho 183 YORGASON (X) Capital Development83676 ll just take it as his opinion and the Commission based on the evidence provided in this hearing may form its own opinion. MR. MILLER:But you are willing to consider his? COMMISSIONER SMITH:Well , his opinion is what it is based on what he knows, so we ll give it the appropriate weight, how is that? MR. MILLER:So the record can reflect that it is his opinion that United Water is capable of immediately serving? COMMISSIONER SMITH:Yes. MR. MILLER:Very good.Those were the questions I forgot to ask.Thank you. COMMISSIONER SMITH:Thank you. Mr. Smith. CROSS-EXAMINATION BY MR. SMITH: Mr. Yorgason , when will you have some lots available for sale? fast can get water. desperate get water and we just been delayed and delayed and we just desperate.Just fast can CSB REPORTING Wilder , Idaho 184 YORGASON (X) Capi tal Development83676 get water, we ll be under construction and it will take as short a period as humanly possible to get it constructed, barring weather, and the way we re getting delayed, it still could be in November, it could be next spring, depending on how many delays.It could be several months after that, depending on what kind of delays we continue to have. So you don t have a date in mind on which you could sell lots? November. November? Uh-huh, that's lots. How many? Approximately 20.ve continued to chop the si ze of our first phase down so we could do it faster, because our delays have just been horrendous to us, just devastating. When you acquired the property to be developed as Lanewood, you knew it was in the area of impact of the City of Eagle, didn t you? Somewhere in the process I knew it was close to Eagle and would be someday involved in Eagle. don t know that I knew when we bought it if it was in the area of impact , but we knew eventually it would -- we suspected eventually it would be in Eagle and the entire CSB REPORTING Wilder, Idaho 185 YORGASON (X) Capi tal Development83676 area probably would be. Do you have any idea when you learned that it was in the area of impact? CSB REPORTING Wilder, Idaho I don t have that date. Was it prior to the time that you approached United Water about serving? We talked with Eagle, the staff at Eagle, and they explained to us prior to the time we talked to Uni ted Water, that's correct, so it was prior to the time we talked to United Water and then we learned that there was problems getting water, so that's when we went to And you said we learned there were problems getting water, would you expound on that, Yes, we had understood that they did not have a certificate for their water, that Eagle did not have a certificate, a water certificate. How did you learn that? I believe it was through our engineer , but I don t have that -- we talked to a lot of people and believe it was our engineer that shared that with us. Are you aware that the City of Eagle does have water rights? m aware they re claiming they have water Uni ted Water. please? 186 YORGASON (X) Capi tal Development83676 rights. But you re not aware that the City does have existing water rights? CSB REPORTING Wilder, Idaho They have water rights for some places in the City.I I m not aware of water rights that will serve But if the City does have water rights to serve this property, you re not aware of that? not aware -- would you restate the If the City does have water rights that would allow service to this area, you aren t aware of I don t have personal knowledge of a water right that will serve this area that's an approved water Okay, and the agreement that Mr. Woodbury referred to between you, "between you " being Capital Development, and the City, that agreement called for the Ci ty to withdraw its obj ections to your applications at the county, did it not? That is correct.That is my And the City did that, didn t they? That is correct. this property. question, please? that, are you? right. understanding. 187 YORGASON (X) Capi tal Development83676 And they did that immediately upon execution of that agreement, didn t they, wi thin a day or CSB REPORTING Wilder, Idaho Yes.I don t know the date, but yes, they two? Okay, and did you file or did Capital Development file an annexation application with the Yes. When did you that? Last week. On September 17th; correct? That's approximately correct.It was just Okay, and you did that because the City as ked you to follow through with your end of the agreement, didn t they? That is correct.As soon as they brought did. it to our attention, we filed it immediately and we also provided all the plans immediately. What plans did you provide? The construction plans, including the When did you provide the water plans? A week ago, same time. Ci ty? about a week ago. water plans. 188 YORGASON (X) Capital Development83676 week ago? So you provided water plans to the City a That is correct. Did you personally do that? No. Who did that? My son it. And your son being? David Yorgason. Okay.When you or Capital Development and the City executed this agreement, did you provide a copy of that agreement to the county? I don t know.I don t know.If they asked for it, we probably would have, but I don t know if they asked for it.We try and keep agreements pretty close in, so we don t typically take agreements someplace if someone doesn t ask for them. And as I read your testimony, and correct me if I'm misinterpreting it, you signed the CSB REPORTING Wilder, Idaho confidentiali ty agreement with United Water in order to protect the City; is that correct? We signed the confidentiality -- when we were talking to United Water, we asked them to not disclose or not discuss the agreements that we had.The outcome of that was a confidentiality agreement with 189 YORGASON (X) Capi tal Development83676 Uni ted Water and also with the City, and the question has come up since then why does that help the City.Well, there are certain things in the agreement the City agreed to give to us , waiver of certain fees, expeditious review of our plans, those types of things.If other developers saw it, if it wasn t held confidential and other developers saw it, they may be upset with us or the City, so we feel it's appropriate to keep those agreements in a close circle, but we didn t do it just to protect the Ci ty, but that was part of the outcome , evidently. So did you not think it was important to let the City know that you entered into that confidentiality agreement? It was just with United Water.It was our agreement with United Water.The outcome was that it also protected the City, but we didn t do it for that purpose. You didn t do it for the benefit of the Ci ty? Not the sole purpose of the City. Okay, but you would agree with me, would you not, that that agreement provided for the City to provide -- the intent was for the City to provide services to the development? If they could provide water and they CSB REPORTING Wilder, Idaho 190 YORGASON (X) Capi tal Development83676 wanted to.I fully believe they probably wanted to as bad as we wanted to, but just things beyond on their control they weren t able to and still aren t in our opinion, and so yes, they wanted to, we wanted them to, it just didn t happen.I mean , it's delayed from May 24th to June 24th to July 24th and they said what's the last date you need water , you know, if you re going to get water and we said if we can know by August 24th, we can still get it done, so we set that as a date for our hearing, not realizing that when we come back later and say well, we re not going to quite make it , we re going to have to have a hearing, then it pushes us off another 30 days until September 24th and it really hammers us to try and get construction in by this fall. Our expenses are just horrendous on this proj ect.It's a huge proj ect and very high expense.The cost of the land is very high and it's just -- we desperate to get water and that's all we want is water. We don t really care where it came from, but we can just wait in hopes that somebody can provide water and we can t put water in, all of our pipes in , and then find out you don t have it several months later and then we ' really stuck, so we had to know before we can start construction.We have to know where the water is coming from. CSB REPORTING Wilder, Idaho 191 YORGASON (X) Capital Development83676 Under that agreement with regard to the submission of water plans to the City Yes. -- if you were so concerned about the supply of water to the development by the City, why didn t you submit your water plans to the City before September 17th? Well , two or three reasons.As we were going forth and realized from our perspective that there was no way that they re going to have water , then we went wi th the county, because we knew if we went with the county, United Water was right there.The subdivision is basically the same whether it's the City or the county, it's the same project, it's the same density, it's the same layout.We meet the City conditions, so it's the same subdivision. Eventually, I hope it's in the City, I think it will be, but we have to have water and we can go laying water lines with the hope that we re going to have water, and then with people beyond our control, beyond Eagle s control, coming out here and protesting and possibly holding us in court for possibly years or at least months and months and months as has already happened, I mean , I'm sure Eagle never dreamed it would take this long and we didn t dream it would take this CSB REPORTING Wilder, Idaho 192 YORGASON (X) Capi tal Development83676 long, but we can t move forward with a hope.It's like playing Russian roulette.You re going to put a lot in the gun and you hope you get the right bullet.I just can t do it.I mean, the expenses are just too horrendous. But those -- well, strike that.You testified that -- I obj ect to the question and answer -- but you testified that you are , I guess, assured that Uni ted Water can serve; is that correct? Uni ted Water is right at the proj ect and we know physically they can get us water.Now , they have to go through this process and get it approved and so, again , we can t start construction, same thing, but they have physical water , and it was our understanding that Eagle still doesn t have a water right.I know they trying desperately, also, to do everything they possibly can to get it, but they still don t have it. Mr. Yorgason Yes. -- how do you know the City of Eagle does not have a water right? ve asked them for it and we haven received it.We asked them clear back -- clear back in May we were asking for it, even before then , and we were told we d have it, we were told we d have it.May 24th CSB REPORTING Wilder, Idaho 193 YORGASON (X) Capi tal Development83676 we were told we I d have it in two weeks, and then they said, well , how about how July, how about August and we said okay. MR. SMITH:Madam Chairman, I'm going to move to strike the answers as non-responsive, okay? asking Mr. Yorgason specific questions and he is now elaborating on the history of negotiations and so at this time I want to do one thing.I want -- we have an agreement before -- we have an agreement between Capital Development and the City of Eagle.Mr. Yorgason has offered testimony about that agreement.I would like to move to strike his testimony that seeks to interpret the agreement.The agreement has a consolidation clause in it that says it basically concludes all -- it rolls all prior discussions into the agreement and the agreement is the agreement between the parties, and Mr. Yorgason ' s supplemental testimony as well as some of the testimony he provided today seeks to interpret that agreement differently from what the agreement says, so I would like to have -- like I said, I'm making a motion to strike his testimony that seeks to interpret or add to that agreement beyond the four corners of the document itself. COMMISSIONER SMITH:So Mr. Smi th , you not seeking to strike his prefiled testimony which we CSB REPORTING Wilder, Idaho 194 YORGASON (X) Capi tal Development83676 have already spread on the record; is that correct? MR. SMITH:To the extent that prefiled testimony is inconsistent with the agreement, Madam Chairman , I am. COMMISSIONER SMITH:But Mr. Smith, the time to obj ect to any of the prefiled testimony was before we put it on the record, so it I S already there and it's part of the record and I guess since the Commission s not going to interpret this contract, I guess I think I'll just let it stand and just direct the wi tness to please listen very carefully to the question and just try to answer that question only.I think the Commission has a clear sense of your level of frustration, so just try to concentrate on Mr. Smith' questions and provide just the answer to that question only. Okay.THE WITNESS: There we go.Thank you veryMR. SMITH: much. If you d repeat theTHE WITNESS: question, I'll try and be more direct and I apologize if I got wound up. That I s okay, Mr. YorgasonBY MR. SMITH: I appreciate it.When you refer to United Water has a line at the property, you re referring to the fact they CSB REPORTING Wilder, Idaho 195 YORGASON (X) Capi tal Development83676 have a water line at your property; correct? Yes. Okay, did you inquire of United Water about the specifics of the water rights that would be used to serve your property? I asked them about where the water was coming from.I don t know if that answers your question. m trying to be direct.I think that answers your question directly. No. Oh. I I m trying to distinguish between having a pipeline there and the water right that would provide water through that pipeline.Did you inquire of United Water about the specific water right that would be used to serve your property through that pipeline? I didn t inquire.I was told by United Water staff that it was coming from the Redwood well and they told me how many gallons it was approved for and how many they need and how it would be able serve our Does that answer your question?property. Uh-huh, and when did they tell you this? It's been several months ago.I don know the date.It was early in our discussion with Uni ted Water. CSB REPORTING Wilder, Idaho 196 YORGASON (X) Capi tal Development83676 Do you recall if it's before or after the agreement that you reached with the City? I believe it would have been probably I don t think it's been that long ago.I meanafter. it wasn t like a year ago, because we had the same concern for them.We wanted to be sure that if Eagle can I t provide water to our satisfaction, can United Water provide it to our satisfaction, so we had that same kind of a discussion.It wasn t technical in terms of permit number , but we were told how many gallons, I remember they talked about how many gallons, it would provide and it was capable of -- that it would be capable of providing to our property. Is it your testimony that your dissatisfaction with the City is based on the preliminary permi ts that are being considered by the department or, excuse me, the permits that are being considered by the Department of Water Resources, is that the basis for your concern about the City? No, sir. Is it about the lease? The basis for our concern is that weNo. can receive water.It'I don t care where they get it. not just because of the protestants or the lease, al though , as has been discussed, we have concerns, but CSB REPORTING Wilder, Idaho 197 YORGASON (X) Capi tal Development83676 it's just if we can get water.I mean, they can bring water from some other location and pipe it over , which was discussed, and that would be fine, that would be great.We just want to get water. So if the City can provide water , you would be satisfied with that? Yeah.ve always said that, yeah. And you re aware that the City constructed a main line up to the southern boundary of your property; correct? Through Legacy, that's my understanding, yes. So, in essence, the City has a main line to your property and United Water has a main line , in essence, to the border of your property; correct? Yes, one has water in it and one doesn ' to my understanding. Mr. Yorgason, I'm asking you about the physical pipelines right now. It's my understanding.Yes, I haven t -- the answer is yes. Okay.You testified when we were talking about the confidentiality agreement, you were talking about the, I'll call it , concessions made by the City to you, do you recall that? CSB REPORTING Wilder, Idaho 198 YORGASON (X) Capi tal Development83676 Yes. And you would agree that you got benefit from those; correct? CSB REPORTING Wilder, Idaho Yes. MR. SMITH:I have no further questions. COMMISSIONER SMITH:Do we have any questions from the Commission? COMMISSIONER REDFORD:No. Thank you. COMMISSIONER KJELLANDER:No. BY MR. BURNS: COMMISSIONER SMITH:Any redirect? MR. BURNS:Just a couple of questions. REDIRECT EXAMINATION Mr. Yorgason, do you remember testifying towards the beginning on cross-examination that you had incurred horrendous delays in starting the construction of your proj ect? Yes. What was the cause of those horrendous It was primarily trying to figure out get water to build a subdivision and delays? where we could 199 YORGASON (Di ) Capital Development83676 service a subdivision. So does it relate around the very reason that we re here today? That is correct, yes. Now , after careful consideration of the si tuation, do you and Capital Development still want Uni ted Water to provide water service to Lanewood Estates? We would like water.That I S all we want is water and it appears to us that United Water is able to provide it physically and so at this point in time we would like United Water because it appears they are the only one that can give it to us and that's our opinion. MR. BURNS:I have no further questions. Thank you. COMMISSIONER SMITH:Thank you, and thank you, Mr. Yorgason. (The witness left the stand. COMMISSIONER SMITH:Mr. Burns, do you have other witnesses? MR. BURNS:No, we have no more witnesses. Thank you. COMMISSIONER SMITH:Thank you. Mr. Smith. MR. SMITH:re going to call Vern CSB REPORTING Wilder , Idaho 200 YORGASON (Di ) Capi tal Development83676 Brewer.Wi th regard to the same issues that Mr. Burns had, when we initially filed, we had affidavits -- COMMISSIONER SMITH:Right. MR. SMITH: -- and then we went back and fixed our testimony to comply with Commission rules. COMMISSIONER SMITH:Okay. MR. SMITH:I want to make sure Mr. Brewer is aware of both of those so that when we ask questions about correcting testimony, he s aware of which ones re dealing with. COMMISSIONER SMITH:Do you want a few minutes, then? MR. SMITH:If I could. COMMISSIONER SMITH:ll be off the record for a few minutes. (Pause in proceedings. COMMISSIONER SMITH:ll go back on the record.Mr. Smith. MR. SMITH:Thank you. CSB REPORTING Wilder , Idaho 201 YORGASON (Di) Capi tal Development83676 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 Good afternoon, Mr. Brewer. Good afternoon. Mr. Brewer , what is your job? m president of Holladay Engineering Company and manager of parts of the company, a liaison to CSB REPORTING Wilder, Idaho the City of Eagle representing the City engineer which is the contract engineer for the City of Eagle. And what exactly does the City engineer do for the City of Eagle? We do a number of things, including infrastructure planning and development, plan review flood plan analysis , a full gamut of civil engineering functions that are required by the City. And would that include the issues related to provision of water services to customers wi thin the Yes, it does. Ci ty? 202 BREWER (Di) Ci ty of Eagle83676 Did you file direct testimony before the Commission on May 14th in this matter? CSB REPORTING Wilder, Idaho Yes, I did. Okay, and did you also file supplemental direct testimony before the Commission on September Yes, I have. Have you reviewed that testimony prior to I have. Wi th regard to the May 14th direct testimony, do you have any changes or additions to Yes, I do. Please explain that. The May testimony envisioned a number of development proj ects that were in the process of taking place.Those development proj ects, including construction of a water trunk line to the street abutting Lanewood development, have been completed.A number of the other proj ects, again , envisioned in that entire response to No.5 have been completed and have been tested and are basically usable at this time. Mr. Brewer, let me direct your attention to the direct testimony.It would have been in paragraph 17th? today? that? 203 BREWER (Di) Ci ty of Eagle83676 5 of the testimony with regard to how does the City plan to serve Lanewood. Yes.Thank you, I should have gone into that.At the time that the direct testimony was submi tted, the City was in the process -- we had completed our application and our hearing before the department, but we had not yet received any kind of an order back from the department, so one of the key issues that has occurred since that testimony is the City did on July 18 receive a preliminary order granting the City approval of its water rights, it's 8.9 cfs of water from the department and thereby, it set into play the responses to the various conditions in terms of that order.The City has also proceeded with that order in mind to do all the additional development and mitigation plans that were anticipated by the order of July 18th. Referring to that testimony, it was talking about the pending applications for water rights? That's correct. Has the City done other things with regard to water rights to serve Lanewood? Yes, it has.Because there was a gap of time between the end of the hearing and the issuance of the preliminary order, the City immediately began working CSB REPORTING Wilder , Idaho 204 BREWER ( Di ) Ci ty of Eagle83676 wi th the department on the ability to obtain water from -- In that area through a lease program.This was begun back in May or June.I don t know the exact date. I remember several discussions.After we received the preliminary order , we ve carried out or we completed those applications for the lease and the lease for the water was granted, I believe, on the -- I think it was in mid September, September 17th , I believe. With regard to that lease, what water right is being leased? MR. MILLER:Madam Chairman , if I might, wi th all due respect, the Commission established a date for supplemental testimony; that is, a date to update the previous testimony to bring us all up to date prior to or just prior to the hearing.The City had the opportunity to explain for the Commission everything that it wanted to try and explain that's occurred since the previous order, and I think it's improper now for the City to ignore its supplemental testimony opportunity filing and now in live testimony without any of the other parties having an opportunity to know and understand what could have been revealed in the supplemental testimony to do this in live testimony. There is a reason the Commission requires prefiled testimony and that is so that by the time of the CSB REPORTING Wilder, Idaho 205 BREWER (Di) City of Eagle83676 hearing the parties can know the other parties ' factual positions, and it's a , I guess, disrespect to the Commission s procedures to now attempt to do it in a way that's unfair to the other parties. COMMISSIONER SMITH:Mr. Smith. MR. SMITH:Madam Chairman , as a general response to things that show up at the last minute , I somewhat sympathize with Mr. Miller because that was the point of our motion to vacate and continue this morning because we thought there were factual issues that we were not aware of at the time of the hearing and some of the things that were brought up this morning.What we re now talking about is updating the testimony or changing the testimony of the direct testimony, not the supplemental testimony, to provide an up-to-date response to the Commission , and what Mr. Brewer is testifying about clarifies the information in the testimony about how the Ci ty plans to -- the question was how does the City plan to serve Lanewood and that's what Mr. Brewer is explaining. COMMISSIONER SMITH:And this was in his testimony MR. SMITH:His direct testimony, correct. COMMISSIONER SMITH:-- filed May 14th? CSB REPORTING Wilder, Idaho 206 BREWER (Di) Ci ty of Eagle83676 MR. SMITH:Correct. COMMISSIONER SMITH:But you didn I t see the need to update that in your supplemental testimony for things that have changed since May 24th? MR. SMITH:What we provided in the supplemental testimony were the options that the City had available and so by the time we got around to looking the options that the City has, which is what is put into the supplemental testimony, the City still has all of those options available.They have the pending permits. They have the purchase of Eagle Water Corp. and they have this lease arrangement and that was the information that we provided in our supplemental testimony. COMMISSIONER SMITH:Okay.All right; so then I guess the question is if you adequately updated in your supplemental, what's the purpose of the live direct now? To explain how we plan toMR. SMITH: serve Lanewood.The question arose in our direct testimony. COMMISSIONER SMITH:And if your answer had changed, you would have explained that in the supplemental; right? No, unless I misunderstoodMR. SMITH: what you were asking for in supplemental testimony. CSB REPORTING Wilder , Idaho 207 BREWER (Di) Ci ty of Eagle83676 thought the supplemental testimony was to add anything else that we wanted to add.I didn t think it was requiring us to provide specific information. COMMISSIONER SMITH:I believe MR. SMITH:Let me just address Mr. Miller s point.There s no disrespect meant to the Commission s proceedings. COMMISSIONER SMITH:I understood that. MR. SMITH:We were filing what we thought we were supposed to file. COMMISSIONER SMITH:Yes , I believe in our Notice of Additional Scheduling and Second Notice of Hearing, which was issued on August 30th, 2007 , we provided for a September 17th, 2007 date for the simultaneous prefile deadline of supplemental testimony; i. e., changes that have occurred subsequent to May 24th, 2007, so I guess that's Mr. Miller s objection , that somehow these are changes that should have been in your supplemental testimony, but what I understood you to say is your supplemental explains that all the options you had previously still exist. MR. SMITH:m sorry? COMMISSIONER SMITH:All the options you had previously to answer the question how does the City plan to serve Lanewood still exist today, isn t that what CSB REPORTING Wilder, Idaho 208 BREWER (Di) City of Eagle83676 you just said? With certain limitations.MR. SMITH:For instance, on the pending applications, I mean , we readily acknowledge that we don t have an order from the Department of Water Resources. COMMISSIONER SMITH:Right. MR. SMITH:So that is an option, but depending upon when the development needs water,that may or may not available us. COMMISSIONER SMITH:That'not change though, right, that's the same as it was in May? THE WITNESS:No. MR. SMITH:Well, except for the fact that we now have a preliminary order that approved those water rights or those applications, excuse me. Right.COMMISSIONER SMITH: I guess if the question is areMR. SMITH: you asking did we not see a need to indicate the lease arrangement to the Commission , we had an agreement with Capital Development and we provided that information to That goes to the very heart of our agreement withthem. them about providing information with regard to water rights. All right, well , ICOMMISSIONER SMITH: see I have taken us down into a morass that we probably CSB REPORTING Wilder, Idaho 209 BREWER (Di) Ci ty of Eagle83676 don t need to go in, so I'm going to overrule your obj ection, Mr. Miller.Mr. Smith, if you have changes or clarifications that need to be made, then let's do those now. Okay.MR. SMITH:Can you read back the last question I asked of the witness, please? (The last question was read back by the . Notary Public. BY MR. SMITH:Mr. Brewer, do you know? I do.The water right that is being leased is the City s existing right 63-12448. Okay. That right was granted to the City many years ago and unlike other leased rights that were previously referred to is not a right from some third party or dependent upon a third party.Basically the Ci ty is leasing its own water right from itself to meet this requirement and therefore, the lease portion of this is entirely wi thin the control of the City to perpetuate. And that leased water right is available to be diverted from the same location , the same well, as the pending applications? That's correct, it is. Mr. Brewer, would you look at your CSB REPORTING Wilder, Idaho 210 BREWER (Di) Ci ty of Eagle83676 testimony, supplemental testimony, of September 17th your supplemental direct? Yes, I have that. Are there any changes or additions to that testimony? Yes, there are.In that testimony on page 2 and going into page 3, lines 23 on page 2 and line 5 on page 3, we had stated that as of 9: 30 that morning we had not received plans or inquiries or information from Capi tal Development on their water system.That supplemental direct was filed on September 17. Subsequent to that, we have on September -- later that day on September 17th , we received, the City received, an application for annexation, and on September 18th , the Ci ty received the plans for the water system for us to review.Said review has now been drafted, but all of those items have changed since that supplemental was submitted to the Commission. MR. SMITH:Madam Chairman , we would ask to spread Mr. Brewer s testimony across the record and tender him for cross-examination. COMMISSIONER SMITH:If there is no obj ection, we will spread the prefiled testimony of Mr. Brewer across the record as if read and identify Exhibits 203, 204, 207 and 208. CSB REPORTING Wilder, Idaho 211 BREWER (Di) Ci ty of Eagle83676 (The following prefiled direct and supplemental testimony of Mr. Vern Brewer is spread upon the record. CSB REPORTING Wilder , Idaho 212 BREWER (Di) City 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/Liaison between the City and our team of Professional Engineers and Geologist responsible for the water system design and construction.Holladay Engineering Company was appointed City Engineer in 1997 and currently serves in that capacity.Holladay Engineering is responsible for plan review , water system and well design, system modeling, infrastructure planning, and financial planning for the Professionals assigned to these taskswater system. include: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 includes, in part, that area between Linder Road and Highway 16, from the Boise River to Homer Road on the North.A portion of this area 213 VERN BREWER , Di Ci ty of Eagle now being proposed for Lanewood Estates.In accordance wi th the Plan , the City has designed a series of trunk lines and laterals, two one-and-half-million gallon water storage tanks, and five wells in order to serve the entire area.The water trunk line and well system is capable of supplying the 214 VERN BREWER, Di Ci ty of Eagle entire area based on the pressure and flow requirements in accordance with the City s Comprehensive Plan. Wi th regard to the Lanewood development, are you familiar with its location? Yes, it is immediately adj acent to the City limits and within the City s area of impact. Has the City planned to provide water service to Lanewood? This is consistent with the City 'Yes. Comprehensive Plan and Ada County. How does the City plan to serve Lanewood? The City has been working with some large developments near Lanewood to complete the first phase of the City s western area municipal system.Construction should be completed by July, 2007.Two wells capable of pumping about 4,000 gallons per minute have been constructed.Both wells were constructed according to the IDEQ' s standards for municipal wells.A third well wi th 1,500 gallons per minute capacity is scheduled for 2008, bringing capacity to 5,000 gallons per minute.The Ci ty has pending applications for water rights for these wells.Because the water right applications were protested, the City had to go through a lengthy hearing process which has now been completed.The City received a favorable staff recommendation and expects the 215 VERN BREWER, Di Ci ty of Eagle applications to be approved in the June-July period. Interestingly, part of the delay in getting the applications approved was caused by United Water protesting the applications. 216 VERN BREWER, Di Ci ty of Eagle In addition to the wells, a 16" main line is currently under construction from one well to the southern boundary of the Lanewood property.This line should be completed in July.If Lanewood completes its county approval process and wants to begin construction of its distribution system , it can do so.See Eagle Exhibit 203. The 16" main is an important component of the Ci ty ' s system because it will run through the Lanewood development and connect to other portions of a loop system designed to bring water to many properties in the Ci ty I S western expansion area.It will connect to future storage reservoirs. The western expansion area is shown on Eagle Exhibit 204.This is the area where the City has been and is planning to provide water service.Under the present configuration and capacity of the existing wells, all IDEQ requirements for the public water system can met now and in the future.All of the existing infrastructure under construction and being planned conform with the City s approved Water Master Plan for the area. What is the City s cost of service? The City s annual cost of water service is $344.76.I checked United Water s websi te and they 217 VERN BREWER, Di City of Eagle charge $398.43.Ci ty of Eagle customers pay less based Does the City encourage conservation of on comparable use. water? 218 VERN BREWER, Di Ci ty of Eagle Yes, the City encourages all citizens to conserve their use of water.For instance, the City requires use of surface water for irrigation. In Scott Rhead' s testimony, he indicated that the two existing City wells are not constructed to municipal standards and that construction of a mainline to Lanewood has not begun.Is this correct? No.Both City wells are brand new and are constructed to IDEQ standards.The mainline is under construction and will be built to the Lanewood boundary. The developer has suggested that he intends to begin construction of his water distribution system in July, 2007.Will this schedule of development be impeded by the construction of the City s mainline or IDEQ approval of the distribution system? No.Lanewood can begin construction of the distribution system as soon as IDEQ regulations IDEQ has granted the City Engineer the ability toallow. review and approve plans for the distribution system in accordance with the approved Master Plan in the same manner that United Water is capable of approving plans to their system.The timeframe and process for review and approval of plans is the same through the City as it through United Water.Most recently the plans for the Legacy development were approved in about a three-week 219 VERN BREWER, Di Ci ty of Eagle turn around through the City.In the event that Capital Development were to submit complete plans for the Lanewood development to the City, the City Engineer would begin the plan review.The plans could be reviewed and approved wi thin about thirty (30) 220 VERN BREWER, Di Ci ty of Eagle days and the developer could begin construction on July wi thout any delay to their construction schedule.IDEQ does not need to independently review and approve the City of Eagle water delivery system in the western expansion area. Would allowing United Water to serve the Lanewood development interfere with the completion of the Ci ty ' s water system and associated services? Yes.The City s planned trunk line loop, which includes a 16-inch water main coupled with 12-inch and 8-inch laterals to serve the area within the western expansion designated boundary, is a fully integrated system developed by modeling flows and pressures for the entire western area.The 16- inch main runs through the Lanewood development.The insertion of United Water into this system will disrupt a four or five-year planning process engaged in by the City, and it would certainly impair the ability for the City to close its loop to ensure that the residents north , south, and west of Lanewood could participate in a fully integrated and designed water system. A second component of the integrated water system for the western area is the development of a financial model for residents of that planning area to contribute to a storage and trunk-line network fund to 221 VERN BREWER , Di Ci ty of Eagle provide for the eventual construction of two one-and-half-million gallon storage reservoirs that would provide emergency and fire flows at build-out. Excluding Lanewood from the system will have the effect of raising the cost of storage to the remaining residents participating in the construction and would interfere wi th the obj ecti ve of 222 VERN BREWER , Di Ci ty of Eagle spreading costs equitably among the users of the system. Eliminating Lanewood participation would cause an immediate 4.5% increase to all other planned residents for those storage and trunk line fees.Based on these factors, I believe it is in the public interest to allow the City to serve this area. 223 VERN BREWER, Di City of Eagle Wha t is your name? Response: Vern Brewer. Who do you work for? Response:Holladay Engineering. What is Holladay Engineering s relationship wi th the City of Eagle? We are the appointed City Engineer.Response:I am the proj ect Manager for Holladay Engineering assigned to the City of Eagle. Are you the same Vern Brewer who has previously provided testimony in this matter? Response:Yes. Do you have any supplemental testimony to add to the testimony previously provided? Yes.At the last hearing in this matterResponse: which occurred on May 24 , 2007, I am aware the City of Eagle and Capital Development reached a settlement agreement which is attached as Exhibit 207 to my testimony.That agreement called for the City to withdraw its objections to the applications filed by Capi tal Development with Ada County, to apply for annexation with the City of Eagle, and to provide development improvement plans, and specifically water improvement plans to the City for review. As City Engineer , Holladay Engineering would 224 BREWER , Di-Supp Ci ty of Eagle normally be aware of the annexation application and would be the reviewer for the plans that were to be submitted. I have checked with City Staff and Holladay Engineering 225 BREWER, Di-Supp City of Eagle Staff and I have information that Capital Development has submitted an annexation application at 9:30 a.m. this morning.Holladay Engineering has received no information or communication from Capital Development about its water improvement plans, or requirements for connection to the City s water system.The City has only had written or oral inquiries from Capital Development regarding water rights and well construction schedules which have been provided in the City s status reports sent to Capital Development through their attorney, Bob Burns. As part of its work with the City, Holladay has inspected the area where the development is to take place.As of last week, there is no construction work ongoing.In fact, the site is a cornfield, as shown on the photos as Exhibit 208.It will be quite some time before there will be a need for water service.The City has provided written status reports approximately every two weeks as agreed.The City of Eagle is prepared to provide water service to this development as set forth the Agreement. The well that will provide water is in the final stage of completion.A pipeline from that well has been constructed to the boundary of the Lanewood As for water rights to be used for service,property. 226 BREWER , Di-Supp Ci ty of Eagle the City has a number of resources.The City has existing water rights that can be used if necessary. Since the previous hearing in May, the City has contracted to purchase Eagle Water Corporation and that process is 227 BREWER , Di -Supp Ci ty of Eagle underway.Eagle Water Company has a number of water rights that could be potentially be used.The City also has applications for almost nine (9) cfs of water that received preliminary approval from the Idaho Department of Water Resources.The order approving the applications is being reconsidered but, based on the requests for reconsideration, the City anticipates the applications will be approved in the imminent future.The City had anticipated that the final order would be issued by now but, for unknown reasons, it has not.Al though I cannot be sure, based on discussions with other Holladay Engineering Staff , it could be associated with workload requirements at the IDWR.However , even if the order requires mitigation of any type, the City has already arranged for payment and implementation of any required mi tigation. Regardless of which of the above described options is finally used, the City can and will provide water service to the development as reflected in the Agreement. Does this conclude your supplemental testimony? Response:Yes. 228 BREWER , Di -Supp Ci ty of Eagle open hear ing . (The following proceedings were had in COMMISSIONER SMITH:Is Mr. Burns going first? Mr. Woodbury, do you have questions? MR. WOODBURY:Thank you.I do, thanks. BY MR. WOODBURY: CROS S - EXAMINA T ION Mr. Brewer , if I could direct your attention to your Exhibit 203.That's a map of the City of Eagle water system. That exhibit, for clarification, that exhibi t was part of the May testimony; is that correct? CSB REPORTING Wilder, Idaho Yes. Okay, I recall that. Do you have it in front of you? I do not. (Mr. Smith approached the witness. BY MR. WOODBURY:Mr. Brewer , as I look at this, it purports to be the City s water system west of North Linder and south of West Floating Feather Road; is That is correct. that correct? 229 BREWER (X) City of Eagle83676 And it does depict a subdivision apparently platted subdivision , that's south of West CSB REPORTING Wilder, Idaho Floating Feather Road and adj acent , immediately south of the Lanewood subdivision.What is the name of that There are actually two subdivisions One is the subdivision known as Eaglefield. The other one is generally the area known as Legacy, al though the subdivision that is actually submitted has been renamed to Mosca Seca or something like that. And is the City providing actual water service to any of that area? The City is providing water service to all You are presently providing and serving customers in that area? There are no customers as of this date in And this particular exhibit identifies two there, the Legacy well and the Eaglefield That is correct. Are either of those wells the water rights that the company is trying to secure for Lanewood? COMMISSIONER SMITH:Do you mean the City, subdivision? depicted. of that area. that area. wells located well. 230 BREWER (X) Ci ty of Eagle83676 Mr. Woodbury? MR. WOODBURY:Pardon? COMMISSIONER SMITH:You said " company, " did you mean the City? CSB REPORTING Wilder, Idaho MR. WOODBURY:The City, excuse me , thank you. THE WITNESS:Each of those wells commonly known as Eaglefield and Legacy wells each make up a point of diversion of the overall water right that the City has applied for and has preliminary approval from the department. BY MR. WOODBURY:Okay; so these are the same wells? That's correct. And do I understand that the City I S main line that you would seek to serve Lanewood is along West Floating Feather Road No. -- the southern portion? That is not entirely accurate.The line on Exhibit 203 that is marked 16 inch trunk line runs generally parallel with Linder Road west of Linder , but it's not on Linder Road itself.It will wind its way up through the subdivisions based upon as they come in. All right, and do I understand that wi thin 231 BREWER (X) Ci ty of Eagle83676 this Eaglefield and Legacy area and the two wells that are depicted in there, although you might have pipe in the ground, there is no water in the pipe? At this time there is not.The lines are in the ground, tested and ready to receive water. Thank you.As part of your oral amended testimony with respect to Lanewood' s submission of plans following its annexation request, I refer you back to your direct testimony and you stated that if Capital were to submit complete plans for Lanewood to the City, plans could be reviewed and approved within 30 days.Ha ve you reviewed the submittal by Lanewood? We have.We received those plans on the 18th and our review, our draft review, is being circulated internally right now.It will be ready for release tomorrow. And do you believe that what was submitted are the complete plans that you would be looking for? I don t have that review available to me right now.I don t know if there was something lacking. I just don t have that in front of me at the present time. COMMISSIONER SMITH:Mr. Woodbury, I apologize for interrupting, but the Commission needs about a five-minute break. CSB REPORTING Wilder, Idaho 232 BREWER (X) City of Eagle83676 (Recess. ) COMMISSIONER SMITH:All right, I think re ready to go back on the record.Mr. Woodbury, I apologi ze for the interruption.Please proceed. MR. WOODBURY:Thank you, Madam Chairman. BY MR. WOODBURY:Mr. Brewer, my question was with respect to your initial testimony filed in this case and you stated that if Capital were to submit the complete plans for Lanewood to the City, the plans could be reviewed and approved within 30 days.Do you think that is still a reasonable time line? Mr. Woodbury, let me clarify my statement just as we ended testimony for the break.As I stated, we have received plans from Capital Development.I spoke wi th the reviewing engineer during the break and those plans are complete and are in substantial compliance with the City requirements, so in response to the 30 days, it would appear to me that we ve reviewed those plans and are able to get a response back to Capital Development tomorrow, which is about a week's turnaround time on those plans. Okay, and that review and approval process is separate from the annexation request? Yes, those are two distinct, separate actions by the City. CSB REPORTING Wilder, Idaho 233 BREWER (X) Ci ty of Eagle83676 And to your knowledge, has the City ever extended water while an annexation request is pending? The City of Eagle has never been as ked to do that. With respect to Legacy and Eaglefield, what kind of a time line are you on to provide water to them? The Eaglefield well was initially scheduled to be completed by October 3rd and now appears it will be October 17th.We just received an updated schedule from the contractor.The Legacy well, it was testified to in our public meeting last week that they would be complete by October 15th. And are those areas, the Legacy Subdi vision and the Eaglefield Subdivision, have those been annexed by the City? Yes, both of those areas have been annexed. And you indicated in your original testimony that in addition to these two wells , Legacy and Eaglefield, that there was a third well that was scheduled of 1,500 gallons per minute scheduled for 2008? That is correct. Is that a presently pending application? CSB REPORTING Wilder, Idaho 234 BREWER (X) Ci ty of Eagle83676 That application has been reviewed and approved by the City.There is a development agreement approving that additional well or an MOU, excuse me, on that additional well and to my knowledge, the plans are proceeding on schedule to have that in by 2008. And where is that in relation to the Legacy and Eaglefield wells? That well would be just south of State Highway 44 south of Eaglefield. And do I understand, also, just in referring back for purposes of clarification to this Exhibit 203 that the Lanewood Estates Subdivision is immediately north of the area depicted as your water system? That's correct. MR. WOODBURY:Madam Chairman, Staff has no further questions.Thank you. COMMISSIONER SMITH:Thank you. Mr. Burns. MR. BURNS:Thank you. CSB REPORTING Wilder, Idaho 235 BREWER (X) Ci ty of Eagle83676 CROSS-EXAMINATION BY MR. BURNS: Mr. Brewer , you testified on page 3 of your supplemental direct testimony starting at line through line 21, "The well that will provide water is in the final stage of completion.A pipeline from that well has been constructed to the boundary of the Lanewood property. "Now , that portion of your testimony deals wi th the physical construction of the infrastructure to allow service of water to the Lanewood Estates; correct? That is correct. Now , the next line starting on line 20 through 21 says, "As for water rights to be used for service, the City has a number of resources.That was your testimony; right? That's correct. Okay.Now, I want to focus just on the water rights, the water that goes into those physical improvements that are being constructed and it has to get from those physical improvements to Lanewood Estates. Now , can you describe each and every water right that Eagle currently has that it can use at the present time to provide water from the well referenced in your CSB REPORTING Wilder , Idaho 236 BREWER (X) Ci ty of Eagle83676 testimony? The water right that would currently apply is the one I cited earlier, 63-12448. And that's the only water right, then that the City of Eagle currently has that can be utilized to provide water to Lanewood Estates; correct? That's correct. Okay. MR. BURNS:Now, I earlier submitted copies of Exhibit 311 to each of the Commissioners and would like to hand one to this particular witness because this particular document is not part of the record and has not been previously supplied if that would be okay. COMMISSIONER SMITH:That would be fine. (Mr. Burns approached the witness. BY MR. BURNS:Now, Mr. Brewer, is this the water right that you are relying on, then , for your testimony that Eagle has water rights to provide water service to Lanewood Estates? Yes, this is permit 12448, a lease agreement dealing with that water right. Okay, can you tell me what the date of this lease was or is? The stamp date on this is September 12th, 2007. CSB REPORTING Wilder, Idaho 237 BREWER (X) Ci ty of Eagle83676 Now , this lease wasn t in existence back on August 24th, was it? No. Okay, and can you tell me what the volume of water that this lease is for? This annual rented volume is 130 acre feet. And what is the cfs? 8 cfs. Okay.Now , have you reviewed the preliminary report that was issued with respect to the water rights that the City anticipated it would obtain and anticipated using for serving Lanewood Estates as well as the Legacy proj ect? m not sure.Could you name the report please? It's attached as Exhibit 105 orSure. excuse me, Exhibit 5 now in these proceedings.It's a preliminary report.It's in the matter of applications to appropriate water numbers 63-32089 and 63-32090 in the name of the City of Eagle. Pardon, could we clarify whichMR. SMITH: exhibi t? This is Exhibit 5 and this wasMR. BURNS: an attachment to the supplemental testimony of Scott CSB REPORTING Wilder, Idaho 238 BREWER (X) Ci ty of Eagle83676 Rhead. COMMISSIONER SMITH:So this is the preliminary order of the Department of Water Resources? MR. BURNS:Yes, ma ' am. THE WITNESS:I have that before me now. Wha t was your question again? BY MR. BURNS:You have that in front of you? Yes. Okay, and have you reviewed this document Yes, I have. Okay, could you turn to page 7 of that document, preliminary order page 7 , down at the bottom CSB REPORTING Wilder, Idaho left-hand portion, and tell me what the finding of the hearing officer was with respect to the amount of the water that was necessary to service the area? If you may be referring to item 10 Item 10. -- on page 7? I am. It says, "The applications propose delivery of water primarily for in-house use in the 2,000 homes proj ected for construction.The peak one-hour demand for in-house use in 2,000 residential units is before? 239 BREWER (X) Ci ty of Eagle83676 23 cfs. Okay, keep going. In addition, Eagle is required to supply the development with 6.68 cfs for fire protection.The total proj ected instantaneous demand is 8.9 cfs, the combined flow rate sought by the two applications. Now, that's about 11 times more than the cfs that is granted under this water lease, isn t it? That's correct. Okay, and this reference to the fire protection volumes that are needed of 6.68 cfs for fire protection , that's about eight times more than the water that's covered by this lease which is Exhibit 311; right? That's correct. Okay.Now , the City of Eagle hasn challenged the findings of the hearing officer in this Exhibi t 105 with respect to the quantity of water that' necessary to provide water service and to provide fire protection, have they? No, we have not. Now, looking at Exhibit 311 , can you tell me what the term of the lease is? The term of the lease is September the 11th to December 31st or the date of final resolution of CSB REPORTING Wilder , Idaho 240 BREWER (X) City of Eagle83676 contested matters associated with water permits 63-32089 and 63-32090, whichever occurs first. So what's the longest period of time this It might run for five years. Does it say anything about running five years on this lease? CSB REPORTING Wilder, Idaho The application stated five years.It was lease might run? anticipated by the department that the issue on the preliminary order would be resolved before that time, so we have communicated with the department and they willing to grant this on a year-by-year extension.They anticipate the preliminary order would be completed in this period that's cited here on the lease. So you applied for a five-year lease term Correct. And you didn t get a five-year lease term, No, we did not. Okay, and according to the express terms of this lease, it expires at the outside date of December 31st of next year; correct? That's correct. Okay, and it also says that if there is a originally? did you? 241 BREWER (X) City of Eagle83676 final ruling on those two water permits that you are relying on to provide water to the proj ect, Lanewood Estates, that if there s a final ruling on that, this lease expires at that time; right? That's correct. And the final ruling could be adverse to the City of Eagle, couldn t it? Obj ection.MR. SMITH:It calls for speculation. COMMISSIONER SMITH:Mr. Burns, do you want to respond to the obj ection or are you just remodeling your question? MR. BURNS:No, I'm asking this witness who is an expert or who has provided testimony on behalf of the City with respect to the terms of the lease and how the City is going to be able to provide water to Lanewood Estates with respect to exactly what kind of character of water rights the City is looking to and has in order to provide those water rights and that's what all these questions go to. COMMISSIONER SMITH:Right, but that specific question seemed a little speculative. MR. BURNS:Well , let me ask a different question, then. BY MR. BURNS:You re aware , are you not CSB REPORTING Wilder , Idaho 242 BREWER (X) Ci ty of Eagle83676 Mr. Brewer, that there are a number of protestants who are challenging the preliminary order that was granted by the hearing officer with respect to the preliminary order to the City of Eagle; right? Yes. Do protestants ever prevail in your experience in challenges to water rights? They can. And in fact the City itself has protested the preliminary order and some of the conditions in there, hasn t it? The City has sought clarification. And it's asked for -- it I s filed a motion for reconsideration; correct? Correct. Just as the so-called protestants have asked for reconsideration by the hearing officer; right? That's correct. And the hearing officer, to your knowledge, has the power to clarify or reconsider the order and issue a ruling more favorable to the City or less favorable to the City; right? Yes, the hearing officer has that authori ty. CSB REPORTING Wilder, Idaho 243 BREWER (X) City of Eagle83676 Now, this lease, to your knowledge , it' subj ect to both administrative and judicial challenge, isn t it? That's really not my area of expertise. don t know. So you don t know one way or the other whether or not this lease can now be challenged by any of these so-called protestants who have expressed opposition to the water rights with respect to the Legacy well? My very limited understanding is we I re leasing our own water and it is not subj ect to a challenge. MR. BURNS:I have some excerpts of Idaho statutes dealing with leased water and the appeal of leased water and I'd ask to circulate them to all parties and also have the Court take official notice of them pursuant to your Rule No.2 63. COMMISSIONER SMITH:Mr. Smith. MR. SMITH:In order to speed things up, m going to go ahead and interj ect my obj ection now if s getting ready to ask the witness about interpreting statutes. I think what he askedCOMMISSIONER SMITH: is that the Commission just take official notice of it. That is correct.MR. BURNS: CSB REPORTING Wilder, Idaho 244 BREWER (X) Ci ty of Eagle83676 COMMISSIONER SMITH:Which is something re allowed to do under our rules. MR. SMITH:Tha t 's true. (Mr. Burns distributing documents. BY MR. BURNS:So Mr. Brewer, you don have any testimony one way or the other with respect to whether people who are -- who have contested the grant of the water rights that Eagle is obtaining whether or not those people can challenge the lease? I do not. Did you check with Central District Health Department to find out whether or not it would sign a final plat for the proj ect based on leased water? No, I did not.I checked with DEQ which is referenced in a previously cited document and DEQ indicated that they had no problem using leased water for this application. And who did you talk to DEQ? Tiffany Floyd. m sorry? Tiffany Floyd. And when did you talk to her? don have the record with me but was about three months ago when we first began investigating the use of potential for a lease for this CSB REPORTING Wilder, Idaho 245 BREWER (X) Ci ty of Eagle83676 application or for this particular issue before us. And what is Tiffany Floyd's position with DEQ? I believe -- I don t know for sure. There s been a lot of maneuvering and changes in there. At one time she was the -- all I can say is she s over the regional water for the district at DEQ and I really don t know her official title today. But you didn t check with anybody at Central District Health Department? No, DEQ has basically the authority over the health district in that matter , so I went directly to DEQ. Central District Health Department is the entity that signs the plat for recording, though; correct? Not necessarily in a city.I know they may, but I truly can t tell you that. So you don t know.Now , if the Central District Health Department did refuse to sign the plat, the Lanewood Estates proj ect would be stopped dead in its tracks, wouldn t it? I don t know the answer to that. Do you have any reason to believe that the proj ect could be built out if it didn t have a recorded, CSB REPORTING Wilder, Idaho 246 BREWER (X) Ci ty of Eagle83676 signed recorded, plat? Not if they re required to sign and it wasn t signed, then they could not proceed. CSB REPORTING Wilder , Idaho MR. BURNS:I have no further questions. BY MR. MILLER: COMMISSIONER SMITH:Thank you. Mr. Miller, do you have any questions? MR. MILLER:Just a couple, if I could. CROSS- EXAMINATION Mr. Brewer, I'm looking at your direct supplemental testimony on page 3, line 2, 1 and 2, which indicates that on the morning of September 17th , the date that you filed that testimony, you received an application from the City at 9: 30 that morning. m looking at that testimony and what was m just at this point directing your attention to that. Okay. So I take it this testimony was prepared some time later in the day on the 17th? The testimony was actually prepared prlor to then and I made those changes after doing a last the question? 247 BREWER (X) City of Eagle83676 minute check prior to filing. So you were able to include in the testimony information that came to your attention on the CSB REPORTING Wilder , Idaho morning of the 17th? That's correct. When did you become aware of this lease between the City and itself? I became aware of the existence of the lease on September 12th , but it had still not -- there was still no official ratification by the City, so it was not technically of record and I could not at that point attest to it in my testimony. Tell me why it is you didn t include of the existence of the lease on September At that time I treated it as a lease The copy I'm looking at indicates that was signed by counsel for the City agreeing to the conditions on September 12th. The Council meeting that was on the agenda to ratify that lease I don t believe was until the 17th or 18th and that action, to my knowledge, had not occurred when the information was filed. You could have informed the Commission of we 11,you knew 12th;right? offer,yes. 248 BREWER (X) City of Eagle83676 the existence of the lease and its status in your supplemental testimony, could you have not? I could have informed them of a draft. mean, at that point that I s aIl it was until it's ratified by the Council in my way I treat it. Even though it's signed by counsel for the Ci ty and appears to be fully executed by the department? It still had not been ratified by the City Council which resolution was either the 17th or the 18th and I'm not sure. Is there anything that made this confidential before it was ratified? Not to my knowledge. I guess a secret that everybody knows is that in the preparation of written prefiled testimony, it I s often a cooperative effort between the witness and the attorney for the party.Did Mr. Smith or Ms. Buxton cooperate with you or review your written prefiled testimony? My prefiled testimony was reviewed by them. MR. MILLER:That's all I have. COMMISSIONER SMITH:Thank you, Mr. Miller. CSB REPORTING Wilder , Idaho 249 BREWER (X) Ci ty of Eagle83676 Do we have questions from the Commission? COMMISSIONER REDFORD:I have one question. COMMISSIONER SMITH:Commissioner Redford. EXAMINATION BY COMMISSIONER REDFORD: you have any reason to believe that Lanewood Estates cannot be reasonably and adequately provided service by Uni ted Water? No, I have no reason to believe that. Do you believe that they can provide reasonable and adequate services to Lanewood Estates? They could.It certainly would fly in the face of everything the City has been working for for five years, but they could. So you have -- other than the City desire to provide that service, you have no complaint about the services that are going to be provided by Uni ted Water in the event that they receive the certificate? I absolutely have reservation for United Water providing that.Keep in mind we ve completed m sorry, before you answer that CSB REPORTING Wilder, Idaho 250 BREWER (Com) Ci ty of Eagle83676 Yes. -- I just want to make sure that your answer doesn t have anything to do with the City s desire CSB REPORTING Wilder , Idaho to serve that property. I think more importantly desire is the plan since our trunk line that is part of our master plan that forms part of our capital improvement plan goes right alongside and adjacent to this subdivision, that not completing that plan as we have worked a long time to do would absolutely inj ure the City in getting its master But as to those residents in Lanewood, does United Water have adequate water to provide Yes, they do. Do they have adequate ability to provide maintenance on that service? Yes. So notwithstanding your desire to have the water provided by the City of Eagle, you have no reason to believe that United Water can t adequately provide No, I do not. COMMISSIONER REDFORD:Thank you. plan carried out. services? COMMISSIONER SMITH:Mr. Smith , do you that service? 251 BREWER (Com) Ci ty of Eagle83676 have any redirect? BY MR. SMITH: MR. SMITH:Yes, just briefly. REDIRECT EXAMINATION Mr. Brewer, Mr. Burns asked you about the Central District Health Department signing off on CSB REPORTING Wilder, Idaho developments on the plat? Yes. Are you aware of Central District Health plats before the water line construction is No, I'm not aware of that. Are you familiar with the Mosca Seca Yes. Has Central District Health signed off on Yes, they have. And no construction has taken place on Yes, all the water lines are in. Oh, they are? Yes. signlng final taking place? development? that? that, has it? 252 BREWER (Di) City of Eagle83676 Okay, and that Mosca Seca is part of the Legacy development; is that correct? CSB REPORTING Wilder , Idaho Yes. And that is the same situation with regard to the water rights that are pending at the Department of Water Resources, is it not? That's correct. So those water rights haven t yet been finalized, but Central District Health has signed off on That's correct. MR. SMITH:No further questions.Thank COMMISSIONER SMITH:Thank you , Mr. Smith, and thank you, Mr. Brewer. (The witness left the stand. MS. BUXTON:Madam Chairman , Members of the Commission, Eagle City would next call Nancy Merrill that? you. to the stand. 253 BREWER (Di) City of Eagle83676 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: DIRECT EXAMINATION BY MS. BUXTON: Mayor Merrill, have you had an opportunity to review your direct testimony filed on May 14 , 2007 in this matter? I have. In regard to your direct testimony, did you also have an opportunity to review the supplemental testimony filed on September 17th , 2007 by Vern Brewer and the exhibits thereof? Of Vern? Yes. Yes. Mayor Merrill, I would direct you to your direct testimony of May 14th, 2007 , page 4, lines 15 through 17.Is it your understanding that you would strike that sentence to be accurate for the record? Yes, I would.After a very long Council meeting and a very long next day, we did reach an CSB REPORTING Wilder, Idaho 254 MERRILL (Di) Ci ty of Eagle83676 agreement with CDI that would allow them to go forward wi th their application to the county, so we did not recommend that the county disallow their application at that time. Mayor Merrill , with regard to page 5, line , is it accurate in your understanding that the main line that was discussed on that line has been constructed? Yes. wi th those amendments, are there any other changes to your direct testimony? Not at this time. MS. BUXTON:Madam Chairman, I would also like to go through her rebuttal testimony, too, before cross-examination. COMMISSIONER SMITH:Okay. BY MS. BUXTON:Mayor Merrill, I direct you to your rebuttal testimony filed in this matter on May 18th , 2007, and I direct you to page 2, lines 13 through 17.Specifically, lines 13 through 14, the sentence -- the recommendation is for denial of the requested application.Based on your prior testimony here, would you amend that sentence to say that the recommendation is for approval of the requested application? CSB REPORTING Wilder , Idaho 255 MERRILL (Di ) Ci ty of Eagle83676 Yes. And Madam Mayor , that you would also strike the next sentence starting with " I believe " and ending with "City s area of impact" Yes. And then would the rest of your rebuttal testimony remain the same? It would. MS. BUXTON:Madam Chairman and Members of the Commission , we move to spread Mayor Merrill' testimony across the record and tender her for cross-examination. COMMISSIONER SMITH:If there is no obj ection, we will spread the prefiled direct and rebuttal testimony of Mayor Merrill across the record as if read and identify Exhibits 201 , 202, 205 and 206. (The following prefiled direct and rebuttal testimony of Mayor Nancy Merrill is spread upon the record. CSB REPORTINGWilder, Idaho 83676 256 MERRILL (Di) City of Eagle 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 Lanewood development? Lanewood is immediately westYes, I am. of Linder Road and is adj acent to the Eagle City limits and wi thin the City s Area of Impact as approved by Ada County. Is it the City of Eagle s intent and desire to provide municipal water service to the Lanewood development? Yes, the City for some time has been aware of the pending development of this property.Because of its proximity to the City, its location within the City impact area, its inclusion in the City s Comprehensive Plan , and its inclusion in the City s Master Water Plan the City has been preparing to serve this area and include it within the City. In addition to providing water to Lanewood, are there other issues and planning efforts that involve the Lanewood development and the City? Yes, because Lanewood is adj acent to the Ci ty limits and is generally surrounded by other 257 NANCY MERRILL, Di Ci ty of Eagle developments that will be included in the City, Lanewood will , in effect, be part of the City of Eagle.It will use City amenities, its traffic will affect the City and its citizens, and its homeowners will use the amenities that the City offers.Furthermore, because properties wi thin the City of Eagle have traditionally higher values, it will be able to use that circumstance to its benefit. 258 NANCY MERRILL , Di Ci ty of Eagle Homebuyers in Lanewood will be able to take advantage of the benefits of the City without paying for them. shown at Exhibit 201, Lanewood is surrounded by properties in some phase of being included wi thin the City.Lanewood 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 people who live here 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 we would have the support of the Public Utilities Commission 259 NANCY MERRILL , Di 3 City of Eagle in helping the City develop according to its planning efforts.A copy of portions of the City s Comprehensive Plan addressing water is attached as Exhibit 202. 260 NANCY MERRILL, Di City of Eagle Has this planning process included the land which is being developed as the Lanewood development? Yes, it has.Lanewood will be located in the midst of the City of Eagle.How Lanewood is developed will have a significant influence on the City. We hope and intend to see that it is developed consistent wi th 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 Lanewood development? Yes, it is.The City is committed to working with the developer to incorporate this development into the City.Even though the developer has filed an application with the county, the City of Eagle will participate in that proceeding. Why would the City take that position? Lanewood will,for all practical aspects, in the City.not developed consistent with the Ci ty ' s Comprehensive Plan , it could have significant detrimental effects on the City. Ci ty ' s planning process and It would disrupt the 261 NANCY MERRILL, Di Ci ty of Eagle would negatively affect the City s water system development, roads, and open spaces in its western area. The developer of Lanewood has stated that the City will not have a completed well and other facili ties ready by time it has approval to commence construction.Do you believe that to be true? No, I do not.According to the City staff, the City has already constructed a well and a mainline is being constructed now.This line will go to the southern boundary of Lanewood.The county approval process will likely take longer to complete than will the extension of the mainline to Lanewood.By the time Lanewood completes the county approval process and is ready to utilize water, the City s system will be ready. What is the City s policy on how water 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 ci ti zens less expensively than a for-profit entity such as United We believe water customers would appreciate that.Water. 262 NANCY MERRILL , Di Ci ty of Eagle Do you know the basis for Mr. Ramon Yorganson s statements that the review process for his development will be shorter because United Water can independently lift sanitary restrictions to start construction but the City cannot do the same thing? No, I do not know the basis for this statement, but Mr. Yorganson is incorrect.The City can also lift the restrictions.I firmly believe that Mr. Yorganson ' s proj ect, if developed according to the City Comprehensive Plan, can be approved faster than through the county process.The City will certainly seek to work wi th him to do that.With his cooperation , I believe that can be done.If Mr. Yorgason is concerned about cost and certainty, given the location of his development, I believe the City provides a superior al ternati ve to development than does the county. Mayor, I am committed to helping him develop in a way that brings value to his proj ect and new citizens to I believe that the homeowners, who are ultimatelyEagle. the customers, will appreciate the lower costs and services that the City can provide.Ci ty Hall and my office are a ten-minute ride from the Lanewood development.If the customer has a problem, they can come see me or any of the City staff.I believe it is in the public interest for the City to serve these homebuyers, not United Water. 263 NANCY MERRILL , Di Ci ty of Eagle matter? Please state your name. My name is Nancy Merrill. Have you previously submitted testimony in this Yes, I have. Have you reviewed the testimony of Mr. Ramon Yorgason? Yes. you Yes. have any response to that testimony? He indicates that he expects to complete the hearing process with the County by May, 2007.The Ci ty ' s recommendations on the application were requested by Ada County.The City Planning and Zoning held a hearing on the staff recommendation on May 7 , 2005.The Ci ty Council has the matter on its agenda for May 22, 2007.The Staff recommendation and analysis of the application is attached as City of Eagle Exhibit 205. The recommendation is for approval of the requested application. See City of Eagle Exhibit 206. 264 NANCY MERRILL, Di-Reb 2 Ci ty of Eagle (The following proceedings were had in open hearing. COMMISSIONER SMITH:Mr. Woodbury, do you have questions? MR. WOODBURY:Thank you, Madam Chair. Staff has no questions of Mayor Merrill. COMMISSIONER SMITH:Okay, Mr. Burns, do you have questions? MR. BURNS:No, I have no questions. Thank you. COMMISSIONER SMITH:And Mr. Miller? MR. MILLER:We have no questions. COMMISSIONER SMITH:Does the Commission have any questions of the Mayor? COMMISSIONER REDFORD:No. COMMISSIONER SMITH:Then you have no redirect. MS.BUXTON:That'correct. COMMISSIONER SMITH:Thank you, Mayor. THE WITNESS:Thank you. (The witness left the stand. COMMISSIONER SMITH:Does the City have any other witnesses? MS. BUXTON:We do not. MR. SMITH:We do not. CSB REPORTING Wilder, Idaho 265 MERRILL Ci ty of Eagle83676 COMMISSIONER SMITH:Well, it appears we have come to the magic moment of being concluded, unless anyone wishes to correct me. Mr. Miller. MR. MILLER:If the Commission would permit, I would like to make just a brief concluding comment. COMMISSIONER SMITH:Always happy to have brief concluding comments from anyone who wishes to offer them.As the applicant, would you wish to also go last, assuming others have brief concluding comments? MR. MILLER:d prefer to go first and last. COMMISSIONER SMITH:I see.Please proceed. MR. MILLER:Thank you, Madam Chairman, Members of the Commission.I just wanted to follow up briefly on a discussion we had this morning regarding the scope of the Commission s inquiry and the Commission , I think, correctly identified the scope of its inquiry and it also indicated properly that there are some specific criteria to be applied and then there is some more general public interest criteria, and I I ve had opportuni ty to think a little bit about this public interest criteria. CSB REPORTING Wilder, Idaho 266 COLLOQUY 83676 In almost all of United Water s cases like this, the public interest never becomes a specific concern.There is a developer who requests service, Uni ted Water has the ability to serve, it's obviously in the public interest for that to occur, which is true here, but since the public interest concept has perhaps taken on a bigger, or at least a potentially bigger, role in this case, I had a few thoughts on what properly is considered under that criteria. I think the first obvious observation is that public interest criteria should be ones that are wi thin the scope of the Commission s scope of inquiry. It would obviously be in the public interest if the conflict in Iraq came to an end, but that's not wi thin the Commission s scope of consideration.Similarly, the ability and the desire of some other provider to provide service and the legal or practical ability of that provider to provide service the Commission has indicated is not a primary criteria wi thin its scope of interest, so by definition, it somehow should not become a public interest criteria. There are some things that I think do tradi tionally fit wi thin the public interest criteria as it might apply here.For example, the Commission is sometimes concerned of whether a course of action would CSB REPORTING Wilder , Idaho 267 COLLOQUY 83676 resul t in economic waste or duplication of services.The fact here is that the City seeks to duplicate services that United Water or facilities that United Water already has in place, so granting United Water I s application would not result in economic waste, unnecessary duplication of service that drives up the cost of providing water generally. Another public interest factor that the Commission has considered, for example, in the Avimor case, for example, is the effect of the application on existing ratepayers of the regulated company about whom The evidence here, obviously, is that there isyou care. almost no new investment required by United Water to serve this development.There will, however, be measurable new revenue from the development which you, of course, will capture in the next rate case; thus, reducing pressure on United Water s revenue requirement and costs to other customers. A third public interest criteria that think you may properly consider is the cost to the individual involved.The individual involved has indicated that the cost of delay, the cost of doing anything other than being immediately served by United Water is measurable, significant, perhaps overwhelming. The Commission, I think, can properly consider whether a CSB REPORTING Wilder, Idaho 268 COLLOQUY 83676 course of action drives up the cost to individuals or not. The Commission it seems to me can consider the fact that United Water seeks to have harmonious relations with its customers, not to litigate with them and I think the Commission can consider whether to, in effect, reward a party who in my opinion violates the obligation of candor to the tribunal in not fully disclosing information that was relevant to the Commission s decision , so just having a day to think about it, those are some of the criteria that I think the Commission can properly consider in its public interest evaluation, and when it does, I think it comes inevitably to the conclusion that the certificate expansion should be granted and in light of Mr. Yorgason ' s testimony and gi ven the amount of time that's gone on in this case, we hope it could be done as expeditiously as possible, so those are my thoughts. Thank you. COMMISSIONER SMITH:Do we have any questions for Mr. Miller? COMMISSIONER REDFORD:No. COMMISSIONER SMITH:Mr. Burns. MR. BURNS:I will just join Mr. Miller in his comments.Thank you. CSB REPORTING Wilder, Idaho 269 COLLOQUY 83676 COMMISSIONER SMITH:Mr. Woodbury, are you get ting in this? MR. WOODBURY:No. COMMISSIONER SMITH:Thank you. Ms. Buxton or Mr. Smi th? MS. BUXTON:Madam Chairman and Members of the Commission, I understand Mr. Miller s one-sided view of what the public interest is and there is a lot of public interest that boards like you have to look at. There s public interest that the City Council has to look at and I think that the public interest is something that is not as narrow as Mr. Miller is suggesting and I would suggest that or even offer that if even if you took this under advisement today that we would all be given the opportuni ty to brief the public interest from a legal perspecti ve for you and given that, I've been instructed by my client that Mayor Merrill would like to make a statement with regard to the public interest as at least she believes it and as a client, she has the ability to speak instead of her lawyers. MR. MILLER:This isn t the Buhl City Council.We actually have procedures here and a last minute statement by a witness is not one of them.There ought to be some adherence to procedures that are designed to ensure fairness to all the parties and last CSB REPORTING Wilder, Idaho 270 COLLOQUY 83676 minute statements by witnesses who -- well , just last minute, unsworn statements by witnesses are not contemplated and they re not fair to other parties. MR. BURNS:I would join that by noting that Mayor Merrill elected not to provide any supplemental testimony to open herself up to cross-examination and it seems peculiar to allow a wi tness to now join on the back side after she s no longer exposed to cross-examination and say whatever she wants, so I join in the obj ection to Mayor Merrill providing such a statement at this time. COMMISSIONER SMITH:Ms. Buxton? MS. BUXTON:Then I would obj ect and ask that Mr. Miller -- all his statements be stricken from the record because there was no unrebutted testimony to her public interest testimony that was already provided in her direct and supplemental direct testimony, so that is what you have on the record with regard to the public interest as far as the testimony, so with that being said, again, I have just been instructed by my client that she would like to make a final statement.Again , I don t believe that Mr. Miller s statement was any more than trying to put forth his client I s point of view with regard to unrebutted testimony that you have with regard to the public interest. CSB REPORTING Wilder, Idaho 271 COLLOQUY 83676 COMMISSIONER SMITH:Well , let me tell you how I'm going to resolve this.I think that generally Mr. Miller is correct.We don t allow witnesses to come up after their testimony and make statements; however, it's not often that we have a mayor who is our witness and I would remind Mayor Merrill that she s still sworn and in the interest of accommodating one decision making body to another public official , I think I I d let her. Now , if she does say something that you think warrants cross-examination or further argument, I ' certainly open to that request, so Madam Mayor. MAYOR MERRILL:Thank you very much. appreciate that and I don t have a lot to say. COMMISSIONER SMITH:It would probably be better for the reporter if you sat in front of the mic. Thank you. MAYOR MERRILL:Than k you.This has been a long and arduous hearing and it's not been fun , I would tell you that.I apologize.We have known these people for a long time personally and publicly and In no way do we want to injure them.I was hoping that we could come to some conclusion and I don t believe that always a court is the best place for that.We honestly, truly thought we were helping Capital Development from our last hearing to today as we went out to try to find a lease, a CSB REPORTING Wilder, Idaho 272 COLLOQUY 83676 water lease, that would supplement anything that would delay them. We were in contact with them regularly. myself even contacted them and said I think we have a solution.I think we have a water lease that's going to cover this gap before our final solution, and we really think that that would work and we want it to work and we believe that the lines are there and everything is ready to go, but even with that, there s things to be -- some concern and some trust that is missing here.m going to throw something out.I know that none of the attorneys have heard this and I don t know if the Commission would even agree, but as a Mayor, you can fire me. COMMISSIONER SMITH:No, I can MAYOR MERRILL:m at about my last end on this, so several years ago we ended up in this same si tuation with a development by Mr. Homichea called Brookside in which we did not have a decision from IDWR on a well and we entered into an agreement with United Water to temporarily allow them to serve to allow their subdivision to go through, their plats to come in, their buildings to go up while we were wrestling through this decision.We today do have that newIt worked. Brookwood well ready to go on line and we re ready to CSB REPORTING Wilder, Idaho 273 COLLOQUY 83676 serve that.It's been a long period of time and I think that that's probably why the applicant is concerned. The City of Eagle never seems to do anything easy.We always seem to run up against walls or get our nose stubbed somewhere, but we are trying to preserve the water in our area.We are trying to work wi th our aquifers.That's why we have the wells that we We are trying to integrate our system.We arehave. trying to provide a full-blown water system that will serve thousands of customers and ci ti zens throughout the future. We believe that we are trying to do it in the right manner , but if this is indeed an issue with Mr. Yorgason and the family out there as they re trying to move this thing through , I'm sure willing, I don t know if my attorneys are, to try to find a solution with this and allow them to move forward.If we keep allowing these certificate areas to move forward on a piece by piece and an inch by inch as you will see more of them, we are going to be here a long period of time trying to do this and we do need a solution and we do need an end to these as we ve got a master plan.I know United Water is trying to work there, we re trying to work through some other issues with them and I guess what I'm trying to tell you is we re willing to try to resolve this in CSB REPORTING Wilder, Idaho 274 COLLOQUY 83676 the best manner that we can if you ll give us a chance. COMMISSIONER SMITH:Thank you, Madam Mayor.I guess I would just note that I think the Commission some time ago in terms of years had a docket to try and geographically divide the Eagle area between water providers that exist there and I suspect that case is still open , so maybe we should check into it. Are there questions or comments from the Commission? COMMISSIONER KJELLANDER:No. COMMISSIONER REDFORD:No. COMMISSIONER SMITH:Any need from the attorneys to provide anything further?I know Mr. Miller as the applicant gets the last shot. re content with the recordMR. MILLER: as it stands. As is Capital Development.MR. BURNS: Thank you.COMMISSIONER SMITH:Well , I want to thank all the parties for their courteous and expedi tious participation in today ' s oral argument and hearing.We do appreciate that.The Commission will take this under advisement and issue as speedily as possible our decision in this matter.We do understand the time constraints the developer is under and we always endeavor to be as quick as we can in deliberating a CSB REPORTING Wilder , Idaho 275 COLLOQUY 83676 matter that's fully submitted before us, so we determine that this matter of the certificate amendment is fully submi tted and we will deliberate on it as speedily as possible.Thank you all and we re adj ourned. (All exhibits previously marked for identification were admitted into evidence. (The Hearing adjourned at 3:45 CSB REPORTING Wilder, Idaho 276 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 m., on Monday, September 24, 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 Commission is the sole responsibility of the submitting parties.. ! "-:::~ (tl, -:)"' L- ~ - ..".,,' CONSTANCE S. BUCY Certified Shorthand Reporter #187 . _._. / / \,\\\1111 II"~ :"'\CE .....~ . ~ :::. "r " """"" v.' / ~ / 0" AiJ~\ 0;\ ~8t~ .,() CJ~ lJB~\, ~.f oS',. ;""" ~Y' TE Of , . CSB REPORTING Wilder , Idaho 277 AUTHENTICATION 83676