20071211UWI to Staff 11, 13, 37-40.pdf

McDevitt & Miller LLP
Lawyers
[phone]
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. 420 W. Bannock Street t:C t \ O¡"I'1 2: 51
P.O. Box 2564-83701 'lU~'l UL 1 i
Boise, Idaho 83702
Chas. F. McDevitt
Dean J. (Joe) Miler
December 11, 2007
Via Hand Delivery
Jean Jewell, Secretary
Idaho Public Utilities Commssion
472 W. Washington St.
Boise, Idaho 83720
Re: Case No. UWI-W-07+04
Dear Ms. Jewell:
Enclosed for filing in the above matter please find three (3) copies of United Water Idaho's
Responses to Commission Staffs First Production Requests, No's 's 11, 13,37,38,39, and 40.
An additional copy of the document and this letter is included for return to me with your fie
stamp thereon. .
Very Truly Yours,
&L&~
DJM/hh
Enclosures
ORIGINAL
,Ar:';
\..11.-..,.,
Dean J. Miler (ISB No. 1968)
MCDEVITT & MILLER LLP
420 West Banock Street
P.O. BOX 2564-83701
Boise, Idaho 83702
Tel: [phone]
Fax: [phone]
joeØlmcdevitt-miller .com
"~c'_l¿'.. i
Attorney for United Water ldaho lnc.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
)
IN THE MATTER OF THE APPLICATION )
OF UNITED WATER IDAHO INC. TO )
IMPLEMENT A PROGRAM OF MONTHLY )
BILLING AND FOR RECOVERY OF COSTS )ASSOCIATED THEREWITH )
)
CASE NO. UW-W-07-04
UNITED WATER IDAHO INC'S
RESPONSE TO COMMISSION
STAFF'S FIRST PRODUCTION
REQUESTS
United Water Idaho Inc, ("United Water") by and though its underigned attorneys,
hereby submits its Responses to the Commssion Staffs First Production Requests No.'s 11, 13,
37,38,39, and 40.
DATED this n day of December, 2007.
UNITED WATER IDAHO INC.
BYllUL
Dean J. Miler
Attorneys for United Water ldaho, lnc.
UNITED WATER IDAHO INC'S RESPONSE TO COMMISSION STAF'S FIRST PRODUCTION
REQUESTS- i
,
CERTIFICATE OF SERVICE
I hereby cefy that on the ~y of December, 2007, I caused to be sered by the
method(s) indicated below, a tre and correct copy of the foregoing document, upon:
Jean Jewell, Secretar
Idaho Public Utilities Commission
472 West Washington Street
P.O. Box 83720
Boise, il 83720-0074
i i ewell'fuc. state. id. us
Hand Delivered
U.S. Mail
Fax
Fed. Express
Email
Donovan Walker
Deputy Attorney General
Idaho Public Utilities Commission
472 West Washington Street
P.O. Box 83720
Boise, ID 83720-0074
Hand Delivered
U.S. Mail
Fax
Fed. Express
Email
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UNITED WATER IDAHO INC'S RESPONSE TO COMMISSION STAFF'S FIRT PRODUCTION
REQUESTS-2
UNITED WATER IDAHO INC.
CASE UWI.W.07.04
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Record holder: Jeremiah Healy
Sponsoring Witness: Greg Wyatt
Telephone: [phone]
Title: General Manager
REQUEST NO. 11:
Please identify the process and any formulas and inputs or assumptions used in
estimating each of the costs identified on Exhibit No. 1 in Mr. Wyatt's direct
testimony.
RESPONSE:
The Company surveyed its operating costs and determined which costs would be
materially and incrementally impacted by the conversion to monthly biling. The
expenses were categorized as Personnel Costs, Biling & Payment Processing
Costs, and Transportation and Other Costs.
Generally, the twelve month period ended August, 2007 was utilzed as a base
period for the purpose of documenting actual historical costs and costs per
transaction, which were then used to develop pro forma costs in many instances.
The Excel file titled "UWID Monthly Meter Reading Workpapers UWI-W-07-04"
containing much of the general ledger detail and workpapers that support this
case was sent to Staff Auditor Joe Leckie on September 28,2007. Following are
inputs and assumptions used by category of expense:
Personnel Costs
Labor: Meter Reader wages were based on the actual hourly wage, in
accordance with the current bargaining unit agreement, paid to the most recently
hired meter readers at the time of filng. Customer Service Representative
(CSR's) salary was based on the salary paid the Company's newest CSR's at the
time of filng.
Payroll taxes: were computed using statutory rates in effect at the time of filing.
Benefits/Administrative: Workers compensation insurance, medical insurance,
pension, post-retirement health care, long-term disabilty insurance, benefit and
payroll costs, benefit administration costs, payroll processing, information
technology and corporate training costs were based on the base period actual
cost per books divided by base period average employee count times the
number of new positions. Costs for the 401 (k) company matching contribution
were based on the average employee participation rate as of August 2007.
Biling & Payment Processing Cost
Bil Generation Costs: The actual customer count as of August, 2007 was
annualized and multiplied by six to approximate the additional customer bil
count. This count, 497,520, was multiplied by the current UBS contract rate of
$0.93 per bil.
Postage Costs: The average costs to mail a bil was generated for the base
period ($0.3125) and multiplied times the 497,520 additional bils.
Customer Notice Generation and Postage: The additional customer notice
count of ao,ooo wa demi as inieatooby Rese No. 28. The we
95,894 notices produced in the base period. The current UBS contract rate of
$0.60 was used to price the notices. These notices are mailed locally at an
average rate of $0.373.
Payment Processing Costs: The most recent six month period was reviewed to
determine how customers pay their bils. It was determined that 86% pay through
Mellon Bank and the remaining 14% are processed by US Bank. These
percentages were applied to the additional 497,250 bils and priced using the
base period average rates of $0.1192 for Mellon Bank and $0.1300 for US Bank.
Bil Insert: The Company wil produce an additional 510,000 customer
communication inserts for inclusion in monthly bils and to distribute at the offce.
Base year costs per insert were determined to be $0.04911.
Bad Debt Expense/Imputed Working Capital Reduction: The cost reductions
were computed as indicated in Response No.'s 9 & 10.
Transportation & Other Costs
Vehicle lease, fuel, insurance & maintenance: A lease pricing of $300
monthly for four Ford Rangers for meter readers was determined via quote from
vendor Lease Plan. Annual miles driven (8,500) was estimated on base year
data for meter readers. MPG (18) and the costs of fuel ($3.25 per gallon) were
estimated based on knowledge of the vehicles and current pricing. Insurance
costs were estimated on base year costs divided by vehicle count. Other costs
were based on the estimated costs of annual registration, oil changes and routine
maintenance, etc.
Uniform Costs/ltron Support: The uniform costs for meter readers were
estimated and Itron support fees for additional hand held devices were based on
base year costs.
UNITED WATER IDAHO INC.
CASE UWI-W-07 -04
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Record holder/Sponsoring Witness: Greg Wyatt
Telephone: [phone]
Title: General Manager
REQUEST NO. 13:
Please describe any other outside firms, including those that may be corporate
affilates of United Water Idaho, that provide any services to United Water Idaho
that are expected to be either increased or decreased if the Company
implements monthly billng. Describe in detail the nature and current costs of
those seices, and provide any conac-t that may ap to such se.
RESPONSE:
All costs increases included in the Company's proposal have been described in
Response No.'s 1, 2, 11 and other responses, along with the Excel file provided
to Staff. All cost increases are extensions of existing relationships, contracts or
pricing arrangements. The primary cost driver, billng services provided by UBS,
has been disclosed and contracts provided. The other primary cost driver is
personnel cost (labor and benefits). Aside from the affilated relationships
already provided in previous responses, there are no other affliates of United
Water Idaho that are expected to provide service increases or decreases as a
result of the Company implementing monthly biling.
UNITED WATER IDAHO INC.
CASE UWI-W-07-04
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Record holder: Jeremiah Healy
Sponsoring Witness: Greg Wyatt
Telephone: [phone]
Title: General Manager
REQUEST NO. 37:
Please provide all documentation showing that the additional cost for the long-
term disabilty insurance is equal to the average cost for each employee. Is the
cost of the insurance dependent upon the level of the employee's compensation?
RESPONSE:
The Company does not have documentation showing that the additional cost for
LTD coverage is equal to the average cost per employee. Yes, the cost of LTD
coverage in 2007 is $0.57 per $100.00 of employee pay.
UNITED WATER IDAHO INC.
CASE UWI-W-07-04
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Record holder: Jeremiah Healy
Sponsoring Witness: Greg Wyatt
Telephone: [phone]
Title: General Manager
REQUEST NO. 38:
Please provide all documentation showing how the total amount of administrative
costs of $32,040 for 401 k, VEBA, Med.Open enrollment & Actuarial Services was
determined.
RESPONSE:
As indicated on the attached worksheet, the total amount of administrative costs
represents the sum of the charges from the twelve month period ending August,
2007 for 401 (k) / VEBA ($2,732.29), Medical Open Enrollment ($4,708.58) and
actuarial services related to Pension & Post Retirement Health Care
($24,600.00) totaling $32,040.
UNITED WATER IDAHO INC.
CASE UWI-W-07 -04
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Record holder: Jeremiah Healy
Sponsoring Witness: Greg Wyatt
Telephone: [phone]
Title: General Manager
REQUEST NO. 39:
Please provide all documentation showing how the total cost of ADP payroll,
HRIS, Health & Welfare Cost in the amount of $17,237.35 was determined.
RESPONSE:
As indicated on the attached worksheet, for the twelve month period ended
August, 2007 charges from APD for HRIS (Human Resources Information
System) were $7,107.96; ADP Charges for payroll processing were $5,868.96
and ADP charges for ADP Health & Welfare administrative costs were $4,260.83
for a total of $17,237.75.
UNITED WATER IDAHO INC.
CASE UWI-W-07-04
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Record holder: Jeremiah Healy
Sponsoring Witness: Greg Wyatt
Telephone: [phone]
Title: General Manager
REQUEST NO. 40:
Please provide the following related to training:
a) All documentation showing that the average cost of $426.90 per
employeeft)r corpoate traifif fes was dein.
b) Please explain why the actual costs of corporate training are spread
evenly over all employees.
c) Are the actual costs of training each employee the same?
d) Please provide any studies or documentation showing that training
each employee is the same, or any studies showing the cost of training
different employees is different.
RESPONSE:
a) Please see Response No. 34.
b) Corporate training costs are allocated to business units based on
number of employees in each BU. Since it is impossible to determine
the exact costs attributable to a particular employee, cost per
employee was utilzed as the basis.
c) No. Training costs wil vary depending on the nature of an employee's
job, the extent of their work experience, their skil level, the training
provided, etc.
d) The Company does not possess such studies.
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