PUBLIC SERVICE COMMISSION
OF WEST VIRGINIA
CKARLESTON
Entered:
June 5, 1989
CASE NO. 88-142-WS-C
PAUL W. SOWARDS, et al.
Rt. 1, BOX 180-A
CuPloden, Cabell County,
Complainants,
V.
CIJLLODEN PUBLIC SERVICE DISTRICT,
a. public utility,
Defendant.
ADMINISTRATIVE LAi.4 JUDGE’S DECISION
PROCEDURE
On March 15, 1988, Paul W. Sowards, Brenda J. Sayre, Kalhery Sowards,
Kenneth C. Mercer, Mr. and Mrs. Charles M. King, T.D. Mallett, Larry and
Brenda Pruett, John A. and Stephanie N. Burks, Mr. and Mrs. Harold I.
Ushman, Gramt and Judy Thaxton, Fred Lewenberger, Jeff Hoffman, Mr. and
Mrs. Ronald Shilot, Mr. and Mrs. David Howard, Dwayne L. Hayes, Susan I.
Shoffnex, Mr. and Mrs. Junior Sunderland, Mr. and Mrs. Marc0 Fizer, Connie
Alford, Franklin E. Crist, Mr. and Mrs. Paul R . Anteman, Edward Lee
Sunderland, Mr. and Mrs. P. M. Clark, M r . and Mrs. William D. Drake,
Plr. and Mrs. Thomas G. Field, Don F . Stephens, 11, Janice Adkins, John D.
Freeman, and Mr. and Mrs. Wayne Dicken filed a duly verified formal
c:oinp’l.aintagainst Culloden Public Service District (Culloden or District),
a p u b l i c utility.
On March 21, 1988, several other residents of the
Cullloden area filed amendments to the formal complaint fiied in the
above-captioned proceeding.
By Orders of this Commission entered on March 15 and March 21, 1988,
Culloden Public Service District was required to satisfy the complaints or
answer them, in writing, within ten (10) days of the service upon it, by
certified mail, of a copy of the complaint and the amended complaint, and
a copy of said Orders, in accordance with the provisions of Rule 7 of the
Commission’s Rules of Practice and Procedure. Service was made upon the
Defendant as required. On March 23, 1988, t h e Defendant filed its answer
to the initial complaint and subsequently filed an answer to the amended
formal coinplaint on March 3 0 , 1988.
s
PUBLIC S E R V I C E C O M M I S S I O N
This matter was referred to the Commission's Staff to investigate the
allegations set out in the complaint and the amended complaint. Staff
performed its investigation and contacted the parties with their findings.
However, no resolution to the matters which gave rise to the complaint and
amended complaint was forthcoming. Therefore, by Order of this Commission
entered September 23, 1988, the matters involved in the complaint filed by
Paul W. Sowards, et al., were set for hearing to be conducted before this
Administrative Law Judge in the Commission's Hearing Room, 201 Brooks
Street, Charleston, West Virginia, on Thursday, October 20, 1988, at
6:OO p.m., EDST.
Proper notice of this hearing was served on all parties of record.
The Notice of Hearing also required the Commission's Executive Secretary
to publish a copy of the notice attached to said Order one time in The
Herald Dispatch, Huntington; The Charleston Gazette, Charleston; and The
Putnam Post, Culloden. Publication was made as required.
The initial hearing in this case was convened as scheduled.
The
first named Complainant, Paul W. Sowards, appeared in person, as did many
other of the named Complainants. Representing the Complainants in this
matter was James W. St. Clair, Esquire.
The Defendant, Culloden Public
Service District, appeared by its proper officials and was represented by
Counsel, Ronald J. Flora, Esquire. The Commission's Staff was represented
by its Legal Division, by Steven Hamula, Esquire.
Appearing as Staff
Members in this proceeding were Utility Engineer David Hippchen and
Utility Analyst Geert Bakker. Testimony was taken and evidence introduced
on behalf of the Complainants.
To allow the Complainants to conclude their presentation and to
accept the evidence on behalf of the Defendant and the Commission's Staff,
the Administrative Law Judge (ALJ) conferred with Counsel for all parties
regarding a subsequent hearing date. Thus, with the agreement of Counsel
for all parties, the ALJ continued this matter from the bench, at the
conclusion of the evening's hearing, and notice was given to all present
in the hearing room, that the matter would be reconvened on Thursday,
November 3 , 1988, at 6:OO p.m., in the Commission's Hearing Room, 201
Brooks Street, Charleston, West Virginia.
At said time and place, this matter was reconvened, with all parties
being present and represented as they were in the initial hearing. At
this latter hearing, further testimony and evidence was introduced. One
witness who was subpoenaed by the Complainants, Vernon Browning, who is
employed by the District as its Plant Manager, could not attend either
hearing.
Thus, leave was granted to the Complainants to take a posthearing evidentiary deposition of Mr. Browning. Mr. Browning's deposition
was taken at 2:OO p.m., on November 17, 1988, at the law offices of
Marshall & St. Clair, 717 Sixth Avenue, Huntington, Cabell County, West
Virginia. All parties to this proceeding were present at this deposition.
At the conclusion of the hearing held on November 3 , 1988, pending
receipt of Mr. Browning's deposition, the Administrative Law Judge submitted this case for the entry of an Administrative Law Judge's Decision,
pending the receipt of proposed orders from the parties.
The
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Administrative Law Judge did not make submission of these orders mandatory, but indicated that they would be useful and considered welcome. No
party submitted a proposed order.
DISCUSSION OF THE EVIDENCE
The exhibits tendered and received in evidence were as follows:
Compl. Exh. No. 1
Letter dated September 3 0 , 1976, to
District Chairman Rhodes from State
Dept. of Health, Environmental Health
Service Director.
Compl. Exh. No. 2
Answer to Amended Complaint
Compl. Exh. No. 3
Minutes of regular District meeting held
July 1 3 , 1988.
Compl. Exh. No. 4
Letter dated October 26, 1987 to Cabell
County Commission from District Chairman
Rhodes.
Compl. Exh. No. 7
Dept. of Natural Resources Inspection
Reports.
Compl. Exh. No. 8
Photographs of District's reservoir.
Compl. Exh. No. 9
Minutes of District's July 1 3 , 1988
meeting, both water and sewer.
Compl. Exh. No. 10
Minutes of District's meeting Feb. 11,
1988 - water and Feb. 15, 1988 special meeting.
Staff Exh. No. 1
Report and Recommendations from
Staff Engineer Hippchen.
Def. Exh. No. 1
Composite exhibit which contains a copy
of Deed from Keiffer Realty Co. to
District dated June 27, 1988.
The Complainants tendered two exhibits which were represented as water
samples taken during July and September. 1988. The Administrative Law
Judge allowed the supporting witness to describe these water samples
rather than accept these bottles of water into evidence.
(Reference to testimony adduced at the hearing held on
October 20, 1988 shall be by designation - Tr. Vol. I,
PPReference to testimony adduced at the hearing
held on November 3 , 1988, shall be by designation Tr. Vol. 11, pp.
) ; Reference to testimony obtained
from Vernon Browning, by post-hearing deposition held
-Y
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November 17, 1988, shall be by designation - Tr. Vol. 111,
PP- -1.
The first witness to testify in this proceeding was Charles Morris,
who has been employed by the Department of Natural Resources (DNR), Water
Resources Division, for six years. Mr. Morris testified that he inspects
sewer utilities throughout Cabell, Wayne and Mingo Counties. His job is
to enforce the stream pollution laws and to inspect facilities that have a
DNR discharge permit.
The purpose for his inspection is to determine
whether the facility is operating in compliance with its permit.
Mr. Morris also has other duties unrelated to his investigation in this
matter. (Tr. Vol. I, pp. 6, 7, 19, 25).
Mr. Morris testified that he has regularly inspected the Culloden
sewer plant since approximately 1984. Inspections are made between three
and fives times per year on an irregular or unscheduled basis. A written
report of each inspection is prepared and filed with the St. Albans
District Office and the Main Office, in Charleston, with a copy provided
to the District. (Tr. Vol. I, pp. 8 , 9).
The witness testified regarding inspections of this facility, which
were made on May 25, June 17 and October 5, 1988. The reports concerning
these inspections showed that the District has been out of compliance with
its discharge permit on various occasions during the last two years. The
biggest problem noted by these inspections is the condition of the receiving stream below the outfall location.
The stream is generally clear
above the outfall and shows signs of sludge contamination and buildup
below the outfall. On at least one occasion, one of the District's lift
stations was inoperative and raw sewage was being discharged directly into
the receiving stream. On two occasions, Mr. Morris filed complaints in
Magistrate Court against the District, due to the poor stream conditions.
One of these occasions was as a result of his June 17th inspection, when
he found the sludge line plugged and the treatment plant bypassing raw
sewage into the receiving stream. (Tr. Vol. I, pp. 8, 9, 12-16; Compl.
Exh. No. 7).
Mr. Morris indicated that the problems encountered by the Culloden
PSD are not unique.
He finds other districts are failing to operate
within the parameters set out in their discharge permits.
While
Mr. Morris swore out warrants against the District on two occasions, the
sludge problem experienced by the District has not been corrected, but the
plugged sludge line has been cleared. DNR, if it feels the situation
warrants such action, can pursue other sanctions against the District,
such as administrative actions or a civil action in State Circuit Court.
One of the problems pointed out by Mr. Morris is that the District does
not maintain adequate spare parts for its lift station.
However, the
District has made some improvements such as erecting a roof over the
drying beds, to increase drying bed capacity, and the repair and calibration of the effluent flowmeter. Apparently further corrections, such as
the possibility of upgrading the overall system to meet tertiary treatment
standards may be necessary for long range corrections. At present, there
(Tr. Vol. I,
are no plans or funding available for such improvements.
pp. 10-13, 16, 18-21).
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The next witness to testify was Mr. James Hodges who is the Assistant
Director of the Environmental Engineering Division of the State Department
of Health. Mr. Hodges is a registered professional engineer with almost
thirty years' experience. He has b e e n with the State Department of Health
fer approximately seventeen years and has oversight responsibility for
both public water supplies and sewer systems operating in approximately
fifteen counties. His geographical territory incl-ucles C a b e l l County and
the Culloden Public Service District. (Tr. Vol. I, pp. 2 6 - 2 8 ) .
Mr. Hodges testified that there are two main aspects to be reviewed
when investigating the overall performance of a system such as that of
Culloden. The first involves the safety of the water itself. The Health
Department records indicate that there have been no maximum contaminate
level violations. Therefore, there is no reason to believe the water is
unsafe to drink. (Tr. Vol. I, pp. 28, 3 2 - 3 4 , 4 6 ) .
The witness testified that Culloden would be required to submit at
least two samples per month to the Health Department for bacteriological
In the past four months, Mr. Hodges found no improper test
testing.
results. He did explain that he is now aware that the District has been
taking water samples at the water plant or in the District's office,
rather than at other points throughout the distribution system. Thus,
alone, the samples cannot support the finding that water throughout the
entire system is safe.
H o w e v e r , Mr. Hodges testified that t h e county
health department also collects bacteriological samples approximately once
p e r quarter and their samples are taken at locations throughout the
distribution. system. This witness has reviewed these reports concerning
the District's system f o r the last eighteen months to t w o years, and has
found one bad sample cut of all these reports. The follow-up sample on
t h a t report was satisfactory
T h u s in Mr. Hodges ' judgmen-t , even though
the sampling technique used by the District was improper, if is providing
safe water throughcwt: its distribution sys tern.
(TP. Vol.. I, pp. 28,
3 2 - 3 4 , 4 4 , 51-52),
e
The other area of review pertinent to this matter involves the
aesthetic acceptability of finished water produced by the District.
Culloden does have a problem with manganese and algae growth. Mr. Hodges
explained that normally manganese is a colorless, odorless and tasteless
material naturally found in raw water. A s manganese begins to oxidize, it
begins to cause problems.
Normally, manganese passes through a water
treatment plant and begins to collect in the distribution system. MangaIt can
nese can cause aesthetic problems with both taste and odor.
produce a "weak tea" odor and it can resemble traces of motor oil, with a
black, greasy aspect to it. A s it continues to accumulate in the system,
it eventually solidifies into black particles which can break loose and
periodically cause staining of clothes and appliances.
(Tr. Vol. I,
pp. 2 0 - 3 0 ) .
The removal of manganese from raw water can be accomplished by use of
Mr. Hodges testified that recently the City of
Ripley installed such a system in its plant, at a cost of approximately
$20,000.
That system is somewhat larger than the Culloden system. With
proper maintenance, the sand filter can be regenerated by use of potassium
permanganate, and can be useful throughout a ten-year life span.
The
a green sand filter.
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witness testified that he knows of approximately twenty-five to thirty
systems throughout the State that use such a filter, of which between six
and eight are in his operational area. Green sand filters will remove
manganese from the treatment process but a periodic flushing program is
necessary to remove accumulated deposits in the lines themselves. (Tr.
Vol. I, pp. 3 0 - 3 2 , 4 0 - 4 6 , 5 3 , 5 4 ) .
Mr. Hodges did state that he is personally familiar with the District's new Manager, Vernon Browning.
Mr. Hodges has respect for
Mr. Browning and is willing to allow Mr. Browning to attempt to control
the manganese problem by the distribution of potassium permanganate in the
water impoundment, thus avoiding the expense of purchasing a green sand
filter at this point. Mr. Hodges went on to state that he has faith in
Mr. Browning's ability to correct the manganese and other problems found
in this system and believes that the District's Board of Directors should
provide Mr. Browning with the proper financial and other necessary support. (Tr. Vol. I, pp. 4 4 - 4 8 ) .
While Mr. Hodges is aware that the District has flushed its lines
from time to time, he would not contradict the statement that Culloden has
no ongoing program whereby lines are periodically flushed.
He would
recommend that these lines be flushed at least once per year, and more
often while the District is attempting to remove accumulated sediment or
when there is a reverse in the flow of the system, such as when the source
of water supplies change. In the past, the District has purchased water
from the City of Milton and West Virginia-American Water Company. The
Department of Health does not have flushing requirements nor does it keep
records on such matters. (Tr. Vol. I, pp. 3 0 - 3 2 , 40-46,5 3 - 5 4 ) .
Mr. Hodges further testified that the District must be aware of
another problem that it faces and that is the periodic rapid growth of
algae. During the spring and fall of the year, shallow impoundments, such
as that used by Culloden, experience a rapid algae bloom. This can be
controlled by the periodic distribution of copper sulfate, which can be
accomplished for as little as $100 per year. The District has experienced
customer complaints with algae for years and apparently does not take
preventive measures to control algae growth but attempts to control the
algae after the bloom has already caused problems. The Health Department
has no regulations governing algae.
However, Mr. Hodges believes any
properly certified water plant operator is qualified to control algae
problems. (Tr. Vol I, pp. 3 5 - 3 7 , 5 0 , 5 2 ) .
Two other points the Complainants wished to bring out concerned the
water supply used by the District and whether a qualified treatment plant
operator is on duty at all times. The Complainants introduced a letter
dated September 30, 1976 from R. G. McCall, Director of Environmental
Health Services which was addressed to Mr. James Rhodes, Chairman of the
Culloden Public Service District. This letter was sent to approximately
six water distribution systems in the Teays Valley area. It warned these
water systems that, due to the high growth rate of this area, these
systems should begin to plan to meet such factors as future customer
demand, development of new or expanded sources of water, treatment plant
and distribution system improvements, possible interconnection and joint
operation and emergency water conservation plans. The letter was intended
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to point out these potential problems to the water systems in question and
encourage them to plan accordingly. Apparently, no particular contingency
plans were formulated and placed into effect by the District, as during
the summer of 1988, the Culloden system, as well as a number of others in
the State, ran out of water and were forced to purchase water from other
sources. (Tr. Vol. I, pp. 38-41, Compl. Exh. No. 1).
In addition, Mr. Hodges testified that at one time his office used
the services of Willard Rowsey, as a consultant to water and sewer systems
in this part of the State. Apparently, Mr. Rowsey observed the Culloden
system and on several occasions he did not find certified operators
actually in the Culloden water and/or sewer treatment facilities. Due to
the apparent lack of enthusiasm on the District's part towards receiving
Mr. Rowsey's assistance, he ceased his visits to their facilities.
Mr. Hodges agreed that a system the size of Culloden would sometimes need
the treatment plant operators in other areas of the system. However, as
the plant utilizes surface water as its raw water source, the Health
Department's regulations require that a treatment plant operator be on
duty at the plant, whenever the pumps are in operation. Therefore, during
these occasions that Mr. Rowsey visited the plant and found no certificated plant operator present, a violation of the Health Department's
( T r . Vol. I, pp. 3 7 - 4 5 , 48, 4 9 ; Compl. Exh.
regulations did occur.
No. 1).
Called briefly as a witness for the Complainants was Doug Berger.
Mr. Berger is a resident of the Culloden area and has been involved with
the local volunteer fire department for approximately ten years. He was
Assistant Chief for a total of four years. Approximately six years ago
the fire department approached the District and inquired as to whether the
District would be interested in having the fire department flush its
lines, which would also assist the fire department in its practice. The
offer was declined by the District on the grounds of expense. A subsequent witness, Roger Gibson, confirmed that the District turned down the
fire department's offer for assistance in flushing lines, on the basis
that the proposed flushing would be too costly. (Tr. Vol. I, pp. 5 5 - 5 8 ,
81-83).
The next witness to testify was David Shirkey, who is employed as a
field foreman by the District. Mr. Shirkey testified that, during May of
1988, all lines were flushed before the water level in the reservoir
become too low. (Tr. Vol. I, pp. 58-60).
Mr. Shirkey was also questioned regarding several other areas. The
witness confirmed that on at least one occasion, he and other employees of
the District installed a line on property owned by a Mr. Thompson, as well
as on property owned by the Complainant, Paul Sowards. Apparently, the
District purchased the water line and its employees furnished the labor.
In turn, the property owner was billed for the work performed, although it
is unclear whether the District included any amounts for Workers' CompenIn addition, Mr. Shirkey confirmed that
sation, Social Security, etc.
normally he arrives at the treatment plant a few minutes before the plant
operator. When this occurs, he begins to start the treatment plant but
does not actually begin the treatment of the raw water itself.
The
witness is now aware that, when water is processed, a certified operator
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must be on duty. This witness' testimony also confirmed that, on occasions, sludge or raw sewage has been discharged into the receiving stream,
when breakdowns occurred. Apparently, on some occasions, a full inventory
of replacement parts could have alleviated the problem. He also agreed
that, if the District spent more money on improving its facilities, this
problem would not occur as often. (Tr. Vol. I, pp. 60-66).
The witness was also questioned regarding the District's prior use of
a backhoe, which was owned by the sewer system's superintendent,
Mr. Gibson. Prior to the last one and one-half years, the District rented
a backhoe from Mr. Gibson. This occurred for the other eight and one-half
years of this witness' employment by the District. Mr. Shirkey stated
that whenever his crew needed a backhoe, Mr. Gibson's backhoe was brought
to the site. The witness could not confirm what rate the District was
charged by Mr. Gibson or what other customers used this backhoe.
(Tr.
Vol. I, pp. 66-69; Compl. Exh. No. 2).
The next witness to be called to testify on behalf of the Complainants was Roger Gibson, who was employed in various capacities by the
District, over a period of seventeen years ending in 1986. The witness
confirmed that during his years of employment, Mr. Rhodes was either a
Board Member or Advisor to the District and several other Board Members
(Tr.
have been associated with the District for long periods of time.
Vol. I, pp. 69-70, 73, 84).
Mr. Gibson w a s also questioned by Mr. St. Clair, concerning several
M r . Gibson confirmed that, on several occasions, he
unrelated areas.
recommended to the Board that water mains to be installed have a diameter
of six inches or greater. The reasons for his recommendations were that
the initial cost would not be that much greater, because this work is so
labor intensive, and the larger lines would take care of any future growth
and provide adequate fire protection. Despite his recommendations, the
Board usually directed him to install smaller mains, including four-inch
mains which are not approved by the Health Department to support fire
hydrants. (Tr. Vol. I, pp. 71-73, 83).
This witness also confirmed that during the years of 1978 through
1986, he leased two backhoes to the District at a rate of $ 2 0 . 0 0 per hour.
No
His bid was lower than two other bids solicited by the District.
advertised bids were taken for this service.
During these years, he
billed the District a total of approximately $47,000 for backhoe rental.
Mr. Gibson explained that during some of the earlier years that he was
employed by the District, a backhoe was not often needed. For example, in
1978 and 1979 the District was billed $1,881 for service to the water
system and $253 for service to the sewer system. Mr. Gibson acknowledged
that, at some point during his employment by the District, the purchase of
a backhoe could have been justified and that sometime after 1986 a backhoe
was actually purchased by the District.
Mr. Gibson testified that he
openly discussed this arrangement with the Board and was informed that no
conflict of interest arose from his rental of equipment to the District.
(Tr. Vol. I, pp. 73-76, 84-85).
The last area of inquiry of this witness concerned the District's
purchase of a truck in 1985. Mr. Gibson was the District's Superintendent
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during 1984 and 1985. At this time, it apparently was decided that the
District was in need of a new pickup truck. The District chose not to
advertise for bids as required by Chapter 16 of the West Virginia Code
but, instead, wrote to area truck dealers and directly solicited bids.
The particular specifications necessary were described in the letters.
The Board discussed this procedure with Mr. Gibson and directed him to
pursue this course. (Tr. Vol. I, pp. 77-81, 8 6 - 8 9 ) .
The vehicle cost over $5,000 and was purchased from one of the
dealers that was contacted by the District. Mr. Gibson is now aware that
any commodity purchased over $5,000 must be advertised by publication, as
governed by the West Virginia Code, and that the practice followed by the
Mr. Gibson stated that he cannot remember any
District was improper.
advertising for bids or services made by the District. The Administrative
Law Judge did agree to take judicial notice of West Virginia Code
§16-13A-7. In mitigation it was pointed out that, during this period, the
District did not have regular advice of counsel and that they apparently
believed soliciting bids by means of letters addressed to the various
vendors was proper, as the letter contained a full disclosure of the
terms, dates, conditions and specifications of the proposed sale. (Tr.
Vol I, pp. 76-81, 86-89).
The next witness to testify was the first named Complainant, Paul W.
Sowards, who is a customer of the Culloden Public Service District.
Mr. Sowards testified that, approximately six months prior to the hearing
date, he w a s able to obtain water service from the District. During this
period of time, he attended public meetings of the District's Board and
attempted to tape record one of the proceedings. He was requested to
cease. taping, which action apparently led to some argument and hard
feelings.
Mr. Sowards also referred to some difficulties he had in
obtaining and reviewing financial records and minutes of other District
meetings. He stated that, on several occasions, he could not obtain the
information he sought and he believes he had already filed a complaint
against the District with the Public Service Commission.
(Tr. Vol. I,
pp. 92-96, 118-121).
Mr. Sowards testified that, prior to its purchase of a new office
building and land, the District operated from a rented office building in
Culloden, for which it paid approximately $150 per month and that, when
the lease was broken, he believed approximately three years remained. The
District has purchased two lots and a doublewide, modular office building,
Mr. Sowards does not see the necessity for this
at a cost of $ 5 5 , 0 0 0 .
expenditure and believes it was an unwise purchase, especially in light of
the District's decision not to reinvest these funds back into the system
itself. (Tr. Vol. I, pp. 96-98, 102, 112, 113).
Mr. Sowards believes that the District has been authorized to charge
a tap fee of $100 and that it unilaterally decided to begin charging $175
as a tap fee, approximately six years ago. This was the fee he paid for
water service approximately six months prior to the hearing date.
In addition to the tap fee, the witness testified that his examination of District records indicated that the District did not have a
Class 11 water or sewer plant operator on duty at all times, as required.
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(Tr. Vol. I, pp. 106-109). Further, Mr. Sowards registered his complaint
about several other aspects of the District's operations. This included
its decisions to install four-inch water mains rather than six-inch water
mains.
The record shows there has been a breakdown of communication
between the District's Board and many of its customers, which has given
rise to a great deal of negative feelings on the part of all parties.
(Tr. Vol. I, pp. 109-121)
The last witness to testify at the October 20, 1988 hearing was
Dreama King. Ms. King brought two jars of water which she described for
the record.
Complainants' Exhibit No. 6 was a jar containing a water
sample drawn from Ms. King's kitchen sink and Exhibit No. 5 contains water
drawn from her bathroom. These exhibits contained water that was discolored and shows signs of sediment. Ms. King stated that, at the time these
samples were drawn, the washing machine was operating and, as a result,
the laundry in her washer was ruined. She described the color of this
water as that of weak tea and she has seen black specks in the water, as
was mentioned by Mr. Hodges. She described these samples as being representative of water she has received from the District over the last ten
years.
She has discussed the problem with the District and has been
informed that she is located in a portion of the system that undergoes a
periodic change of flow, which stirs up sediment easily.
(Tr. Vol. I,
pp. 124-128).
Ms. King also testified that she has been present at regularly
scheduled meetings of the District in the last four to six months. She
was critical of the demeanor shown by Mr. Rhodes and apparently believed
it was directed at her in an attempt to intimidate her, due to her involvement in this proceeding. She stated that she has read the minutes of
the District's meetings from the point the District was actually established. These minutes do not reflect that the District has advertised f o r
bids when equipment was purchased. She also was present when Mr. Sowards
requested access to certain financial records, which said request was
denied by Mr. Rhodes. (Tr. Vol. I, pp. 128-132).
The last witness to be called on behalf of the Complainants was
Kenneth Edward Plants who is a public accountant and has been auditing the
District's books and records since 1983. Mr. Plants stated that he has
The
had some previous contact with the District dating back to 1966.
District also employs a full-time bookkeeper, Kyra Sue Hicks. Mr. Plants
explained that he had not yet had a chance to prepare the District's 1988
audit, which would reflect the District's purchase of its new office
building. Copies of his audit report are submitted to the United States
Department of Housing and Urban Development, the State Tax Department, the
Cabell County Commission and the Public Service Commission. None of these
parties has contacted Mr. Plants in past years concerning the figures
contained in these reports or the manner in which they were prepared.
(Tr. Vol. 11, pp. 8, 17, 18, 21-23).
Mr. Plants confirmed that the 1987 audit shows that the Board Members
were paid fees totaling $5,400. There was no breakdown by Member, meeting
attendance or any other manner. All fees were apparently paid by funds
from the water operation. He confirms that this was an incorrect procedure which he failed to note. These fees should have been broken down
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more explicitly and allocated on a 50/50 basis between the water and sewer
operations. In 1986, the District reported a total of $1,125 in fees paid
to its Board Members. Mr. Plants also confirmed that the District previously did not follow statutorily mandated bidding procedures prior to
1987. In addition, the District did not use purchase orders to track its
expenses prior to 1987.
Now, the District has implemented procedures
which call for the use of purchase orders and insure that proper bidding
procedures are followed. These changes are reflected in the 1987 audit.
(Tt. Vol. 11, pp. 9-16).
Upon confirming these shortcomings in the District's bookkeeping
procedures, needed corrections are set out in the cover letter accompanying the submitted audit report. The witness stated that he pointed out
the District's failure to use purchase orders in his reports from 1983
His report now shows that these documents, which are
through 1986.
necessary to a proper centralized bookkeeping system, are being used. The
District's records now show what is purchased, the price, by whom and each
expense is able to be allocated to the water and/or sewer operation.
Mr. Plants did find that common expenses, such as office supplies, have
not been properly allocated but , apparently, payments had been alternated
between each operation.
This practice should be changed and common
expenses allocated in a more identifiable manner, such as on a 50/50
basis. (Tr. Vol. 11, pp. 15-17, 26-27).
I
~
The Defendant called one witness to testify, James N. Rhodes, Chairman of the Board of Directors of the Public Service District. Mr. Rhodes
has been a member of, or associated with, the Board for thirty-three
years. When Mr. Rhodes first become associated with the District in 1955,
In 1963 the water plant was built and
it had no facilities at all.
initially served 221 customers. There are now over 1,000 water and sewer
customers. (Tr. Vol. 11, pp. 29, 30).
In response to an allegation by Mr. Morris, Mr. Rhodes represented
that since 1977 almost $100,000 of improvements to the District's water
plant alone have been made. The water system was designed by a competent
engineering firm and, when it was installed in 1963, Mr. Rhodes estimates
that 90% of the water mains had a diameter of four-inches. The District
was originally equipped with 26 fire hydrants and now possesses 50 fire
hydrants.
He estimated that all but four of the fifty hydrants are
located on four-inch lines and originally were acceptable to the fire
marshall. (Tr. Vol. 11, pp. 29-33).
Mr. Rhodes acknowledged that the District did consider recommenda-
decision to use four-inch diameter line in this area to save money rather
than to install a six-inch line, which would have been connected to the
existing three and four-inch line, with the intent to later upgrade the
previously-existing line. (Tr. Vol. 11, pp. 84-88).
Probably the single most important reason for the Complainants
bringing this action before the Public Service Commission concerns the
District's purchase of two lots and a modular office building. Mr. Rhodes
testified that the District previously rented two rooms in an office
building for $150 per month. The District had a ten-year lease, which had
three years remaining at this low rent. When the District hired a new
manager, he apparently needed one of the two rooms for his office, which
left far too little space for the District to adequately manage its
affairs and serve its customers.
Therefore, the District breached its
lease, moved out and stopped paying rent. Mr. Rhodes stated that the rent
was on terms beneficial to the District and the new tenant now pays $275
per month for the same space. (Tr. Vol. 11, pp. 88-92).
Mr. Rhodes originally testified that the topic of the District's need
for a new office was discussed at a regularly scheduled Board meeting,
However, it was
which was not attended by any member of the public.
developed through further testimony that public comment on the proposed
purchase of this building was not sought and the only alternative discussed was the purchase of another parcel, 60 feet by 150 feet, which was
t o o expensive ($118,000).
The motion to buy the subject lot and building
was discussed in a meeting of the Board, which he described as regularly
scheduled. However, the topic of the proposed purchase of this property
was originally brought up at a meeting held at 1:30 p.m. on February 11,
1988. Mr. Rhodes confirmed that regularly scheduled meetings are held at
7:OO p.m. Thus, he agreed that this was not a regularly scheduled meeting. Then, a special meeting was held without any notice to the public on
February 15, 1988, wherein a vote was taken and a contract to purchase the
property and modular office building was signed. Mr. Rhodes agreed that
the purchase of this property was never discussed at a regularly scheduled
meeting of the Board, with notice having been given to the public. (Tr.
Vol. 11, pp. 90-92, 108-110; Compl. Exh. No. 10).
The property and building in question consist of two 70x100 foot lots
upon which is situated a six room modular office building with additional
space in a second floor loft. The purchase price was $55,000 and was paid
for with funds on hand.
These funds consisted primarily of tap fees
collected in 1962, which originally amounted to $18,000, and which had
been invested and allowed to accumulate interest to a balance of $49,500.
One-half the cost of this building was to have been allocated to each of
the water and sewer operations. In addition to the cost of the building
itself, the District spent $2,500 for heating and air conditioning, and
$4,400 for paving the driveway and parking lot.
Further, the District
installed a drive-in window which cost $1,070 for materials.
The
District's employees actually installed the window and floodlights, which
were donated. (Tr. Vol. 11, pp. 3 3 - 3 6 , 45-47, 49-51; Def. Exh. No. 1).
Mr. Rhodes confirmed that the District attempts to start its regular
Board meetings on the second Wednesday of each month at 7:OO p.m. However, there have been occasions, as many as eight meetings in the past,
PUBLIC SERVICE COMMISSION
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where the meeting was not started at the correct time. In one instance,
the minutes show that the meeting did not begin until 9:30 p.m., which may
have been an attempt to avoid some customer complaints and criticism. The
witness indicated that the Board Members have been angry at having been
accused of all manner of misdeeds. The Board does welcome customers to
attend meetings but insists that they be respectful. While minutes of all
meetings, both regular and special, are kept by the District and submitted
to the County Commission, the Board has not always given two weeks' prior
notice of special meetings, as required. On one occasion that the witness
could recall, Mr. Sowards was denied reasonable access to the District's
books and records. It is now the District's stated policy to allow any
customer to review these records at the District's office, during reasonable hours. (Tr. Vol. 11, pp. 77-80, 93-94; Compl. Exh. No. 9).
The next area of controversy involved the payment of fees to the
District's Board Members.
The District's auditor confirmed that the
District paid a total of $5,400 in Board Member fees for the twelve-month
period from July 1, 1986 through June 30, 1987. Each of the District's
three Board Members was paid $1,800.
During cross-examination by
Mr. St. Clair, Mr. Rhodes acknowledged that Board Members should be paid
according to the formula set forth by Senate Bill No. 191, which was
adopted in West Virginia Code Chapter 16. Board Members are entitled to
receive $100 per regular meeting and $50 per special meeting. Mr. Rhodes
attended all twelve regular meetings and the four special meetings, which
would entitle him to receive $1,400 in fees. Mr. White attended only
eight regular meetings and one special meeting, which would have entitled
him to receive $850 for this period.
Finally, Board Member Painter
attended eleven regular meetings and all four special meetings, which
would entitle him to receive $1,300. The total fees which should have
been paid to these three members, which did not take into account any
reimbursement for out-of-pocket expenses, totaled $3,550 which is $1,850
less than the total of fees actually paid by the District. The auditor
did not actually check each member's attendance nor confirm the accuracy
of the payments made to each Board Member with those to which the member
was entitled by virtue of West Virginia Code §16-138-4. (Tr. Vol. 11,
pp. 3 8 , 40-43).
The next major area where a violation of statute occurred involves
the District's failure to properly advertise for bids when purchases made
exceeded $5,000 in cost. Mr. Rhodes testimony indicates that, since 1977,
the District purchased two Chevrolet pickup trucks, a Massey Ferguson
backhoe and another piece of Massey Ferguson equipment. On one occasion,
and the record is not clear whether this was in 1987 or 1977, an advertisement seeking bids as required by the Code was published in an appropriate newspaper. Mr. Rhodes stated that the District got no responses to
this advertisement.
Therefore, as the District apparently did in all
other situations, specifications f o r the particular piece of equipment
were typed and mailed to various area vendors. Mr. Rhodes also testified
that in each case the low bid was taken. The District's answer confirms
that the District did not previously advertise f o r bids as required by
Code §16-13A-7. However, Mr. Rhodes now acknowledges that this Code
section requires the District to advertise for bids on all purchases over
$5,000. This procedure is now being used by the District. (Tr. Vol. 11,
pp. 73-76).
~~
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Another matter of importance to the Complainants concerned the fact
that during the summer of 1988, the District's reservoir went dry and
several days elapsed before suitable alternate connections were made
operational by the District.
Mr. Rhodes testified that for the past
fifteen years, the District has sold surplus water to the City of Hurricane. While he was reluctant to admit it, the District did sell water to
Hurricane throughout all of 1987 and up to June of 1988. Each bill for
1987 was reviewed and with one exception, these bills ranged from $401 to
$940. In September of 1987, the City of Hurricane's water system experienced a complete failure and it lost all of its stored water. The District ran its system 24-hours per day to replace the lost water and the
September, 1987 bill was $2,753.
Later, it was determined that the
District did not bill the City of Hurricane properly for water furnished
by the District. Mr. Rhodes testified that the District did not intend to
backbill the City of Hurricane the approximately $ 2 0 , 0 0 0 that was not
properly billed, because the mistake was the District's. Apparently, the
level of sales to Hurricane remained fairly constant up to the last bill.
This bill was for the amount of $893, and covered water service rendered
during June of 1988, up to the point when the District cut-off sales to
Hurricane. (Tr. Vol. 11, pp. 54-61, 69-70, 103).
Since this system began operation, the District's raw water source
has been a 13-acre reservoir. The witness confirmed that in June, 1988,
the District was warned that it could be faced with a water supply shortage and that it should take action to guard against this possibility. The
District sold water to the City of Hurricane throughout 1987 and its
reservoir did not dry-up. The District attempted to increase its reservoir capacity by adding two timbers to raise the spillway and adding a
flapper valve. It calculated these improvements would add approximately
thirty inches to the reservoir and increase its capacity from 13,000,000
to 21,000,000 gallons. Thus, the District apparently did not believe it
likely that its water supply would run dry. (Tr. Vol. 11, pp. 61-65, 73).
Mr. Rhodes testified that the District halted water sales to the City
of Hurricane anticipating a supply problem later that summer. The District estimated that it had approximately six weeks of storage at that
time. People were asked to conserve and the District banked on the fact
that rains would begin to replenish the reservoir. However, this did not
occur and no effort was made to connect the District's system with that of
another water utility. (Tr. Vol. 11, pp. 61-65, 71-73).
During the first week of August, 1988, Mr. Rhodes testified that he
was informed by the manager, Skip Browning, that the reservoir contained
an estimated two weeks of water, at that time. On the following Saturday,
it was estimated that the reservoir contained approximately seven days of
water. However, on the next day, August 14, 1988, he was informed that
the lake had gone dry. (Tr. Vol. 11, pp. 39-41).
During this period, the District had arranged a meeting for the next
day, August 15, 1988, with West Virginia-American Water Company to discuss
tying the District's system into that of the Company's Lake Washington
system. The meeting was held as scheduled and the District immediately
ordered approximately $17,000 worth of pipe and proceeded to lay the lines
and tie the District's system into that of West Virginia-American
PU6LIC SERVICE COMMISSION
O F WEST VIRGINIA
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Water. In addition, it was determined that it would be advisable to tie
the District's system into that of the City of Milton. The Cabell County
Commission donated an unspecified amount and the District paid $25,000
towards the estimated total cost of $49,000. This transmission main is
approximately 13,000 feet in length and can be used as an emergency source
of water in the future. The City of Milton uses the Mud River as its raw
water source and it has not had the supply problems experienced by other
water utilities in this area of the State.
Mr. Rhodes testified that
within a few days of the start of construction, water began to flow into
the District's system and all customers were served soon thereafter. (Tr.
Vol. 11, pp. 39-41, 61-65, 71-73, 99).
In an attempt to show lack of planning on the District's part,
Counsel for the Complainants inquired of Mr. Rhodes concerning the District's Sycamore Street project. In addition to the District's continued
sale of water to Hurricane and its failure to proceed with plans to tie
the District's system into that of the City of Milton or West VirginiaAmerican Water's Lake Washington system, prior to the District actually
running out of water, the District pursued this line extension project.
The District's Sycamore Street project consists of approximately 6 , 0 0 0
feet of eight-inch line and a 167,000 gallon storage tank. The project
was paid for with a grant from the Governor's Office of $107,000. In
addition to the original extension, further grant money was obtained and
this project has been extended to serve additional new customers by the
District. (Tr. Vol. 11, pp. 39-40, 63, 102-106).
The witness was also questioned regarding several other operational
decisions made by the District. The witness confirmed that the District
was aware of its algae problem over the years.
Until recently, the
District was not able to obtain proper advice concerning the application
of copper sulfate, to control the algae before it becomes a real problem.
Mr. Rhodes agreed that the periodic application of cooper sulfate is quite
cheap and should keep the problem in check. In addition, the District has
faith in Mr. Browning's ability to solve the District's manganese problem
without the purchase and installation of a green sand filter. Installation of this type of filter could cost the District $20,000. Mr. Rhodes
also referred to the faith shown Mr. Browning by the Department of
Health's representative, Mr. Hodges.
The District wants to give
Mr. Browning an opportunity to solve the manganese problem before it
actually purchases a green sand filter. (Tr. Vol. 11, pp. 66-70).
The examination of this witness also brought out several other minor
areas where violations of Commission rules or the West Virginia Code were
discussed. Mr. Rhodes confirmed that in the recent past, he operated as
general manager for the District for two years and that he did s o without
compensation. He explained that the District's manager and a Class I1
plant operator quit and he was trying to help the District out. In doing
s o , Mr. Rhodes explained that he performed whatever tasks were necessary
around the office to help the District and that he believed this was
proper because he was not being compensated for these additional services.
He now is aware that West Virpinia Code Q16-13A-5 prohibits the general
manager from being a member of the board, as was the case with his dual
employment. (Tr. Vol. 11, pp. 52-54). Another minor violation Mr. Rhodes
acknowledged was that the District purchased two tires, for $20, from one
PUBLIC SERVICE COMMISSION
O F WEST VIRGINIA
- 15-
of the District's other Board Members. This was a minor example, but he
acknowledges that it was a violation for the District to purchase materials from a Board Member. (Tr. Vol. 11, p. 102).
The witness explained that the District originally received approval
from this Commission for use of a tap fee of $100. In approximately 1980,
the Board, with Mr. Rhodes acting as an advisor, examined the cost of taps
and found that the District was spending approximately $200 for each tap.
So, the Board unilaterally decided to raise tap fees to $175 and never
sought approval from the Commission for this increase. He now notes that
this is also incorrect and that Commission approval is required prior to
such an increase. (Tr. Vol. 11, pp. 50, 94, 95).
The witness acknowledged that in 1987, the District contracted with
the engineering firm of Appalachian, Hart & Milam for it to prepare a plan
to bring the District up to minimal compliance with existing Department of
Natural Resources effluent limits and other regulations. This contract
was never submitted for Public Service Commission review or approval. The
District apparently took these plans and acted as its own general contractor in performing some of the corrections addressed by the engineering
report. Mr. Rhodes also confirmed that on a second occasion the District
entered into another contract with an engineering firm and this contract
was not submitted to this Commission either. The witness acknowledges
that prior approval from the Commission is required in each instance where
the District contracts with an engineering firm, regardless of whether or
not the work involved will require an increase in the District's rates or
whether money must be borrowed for the engineering fees. (Tr. Vol. 11,
pp. 98-102).
The Commission called two witnesses to testify in this proceeding.
The first witness was Utilities Analyst, Geert Bakker. Mr. Bakker examined the books and records of the Culloden Public Service District for the
period of time from July 1, 1986 through June 30, 1987, and the disbursements from July 1, 1987 through March, 1988. Mr. Bakker stated that he
verified the customer billing for both the water and sewer operations and
examined a sample of the disbursement invoices, checking for both the
recording and the purpose for the disbursement. He also verified the bond
ordinance requirements and the District's line extension policy.
(Tr.
VOl. 11, pp. 111-112).
Mr. Bakker stated that he found the District's books and records in
good order and he found no unusual disbursements. As of July 1, 1987, the
District's water operation had unencumbered savings of $175,876 and
unencumbered savings for the sewer operation of $191,223. Thus, as of
July 1, 1987, the District had accumulated approximately $367,000 in funds
that were not allocated to a particular expense or reserve account. That
figure has been reduced since Mr. Bakker's original investigation, as the
District has purchased a backhoe, roofing materials for the drying beds
and the real estate and modular office. Mr. Bakker identified several
sources of these surplus funds. One source was the initial tap fees paid
by customers , which had originally accumulated to approximately $18,000.
Since their collection, interest was allowed to accumulate and, as of the
time of this audit, that account contained approximately $57,000. In
addition, the District had borrowed $145,000 from the Farmers Home
PUBLIC S E R V I C E C O M M l S S l O N
OF W E S T VIRGINIA
- 16-
Administration ( F a ) in 1980. After the sewer plant capacity was expanded, the District had $32,000 remaining from the loan proceeds, which
it invested and that account is presently worth approximately $45,000.
(Tr. Vol. 11, pp. 112-115).
Mr. Bakker also examined the billing records for water sold to the
City of Hurricane by the District. Mr. Bakker found that the master meter
was misread for a period beginning July 1, 1984 through June 30, 1987.
The revenue lost for this underbilling was $14,824. Of this amount,
approximately $3,130 was underbilled for fiscal year 1987, ending June 3 0 ,
1987. The witness also testified that he found that approximately 135
taps had been made, where the tap fee charged was $175. This amounts to
approximately $10,000. While not asked to reallocate accounting entries,
as he would have done during an investigation concerning a rate request,
he would consider some adjustments to be relatively minor in nature, such
as Board Members' compensation which should have normally been allocated
one-half to the water operation and one-half to the sewer operation. (Tr.
Vol. 11, pp. 114-118).
Staff's remaining witness in this proceeding was Utility Engineer,
David A. Hippchen. Mr. Hippchen testified that he made several trips to
the District and also relied on another Commission employee, Michael
Downs, who spent a number of days trying to assist the District and make
his investigation on behalf of the Commission's Staff in this proceeding.
These findings played an important part in the preparation of Staff's
recommendations, which were entered into evidence as Staff Exhibit No. 1.
(Tr. Vol. 11, pp. 119-122; Staff Exh. No. 1).
Mr. Hippchen testified that his general assessment of the water plant
itself was that it suffered from operational, not design problems.
Staff's investigations were performed with the intent of providing assistance and to determine what the plant basically could or could not do. In
Mr. Hippchen's opinion, the District is fully capable of providing a very
good quality of finished water. (Tr. Vol. 11, p. 122; Staff Exh. No. 1).
Mr. Hippchen has examined the Department of Health's proposal that
the District install a green sand filter at the District's treatment
plant.
The witness explained the presence of iron and manganese are
considered to be secondary contaminants in water and, within limits, a
water system is not required to remove them.
Typically, the forced
installation of this type of filter is something the Commission would not
recommend until the District has had an opportuni?y to explore other
reasonable alternatives.
In this case, the District must examine the
modification of its treatment process, if necessary, by adjusting the
location of chemical feed lines at the plant. Mr. Hippchen stated that
the plant operator could provide aeration to the water and add ph adjusting chemicals to the water to help settle out the manganese. Manganese
could then be removed from the settling tank itself or from the filter
bed.
Staff recommends that the District try this approach before purchasing expensive filtering equipment. In addition, Staff believes it is
mandatory to eliminate all deadends on this system by installation of
blow-off valves. Otherwise, the District will not be able to adequately
flush its system. (Tr. Vol. 11, pp. 122-125; Staff Exh. No. 1).
PU9LIC SERVICE COMMISSION
O F W E S T VIRGINIA
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The witness also addressed himself to the District's recent water
The installation of a permanent standby link between the
shortage.
District and the City of Milton's water system provides one good alternate
source of water, which is capable of suppling this District on a sustained
basis. Staff has recommended that the District be directed to develop a
proposal for tying its system into the West Virginia-American Water system
with a permanent line and to provide the cost estimates for that tie-in.
This would give the Staff information to base further recommendations on,
if necessary, and in any event, this would provide a cheaper alternate
source of water to the District. (Tr. Vol. 11, pp. 125-126; Staff Exh.
No. 1).
Mr. Hippchen also discussed the water reservoir used by the Culloden
Public Service District. Originally, the District served between 200 and
300 customers, and it now serves over 1,000 customers. He calculates that
the actual reservoir capacity has decreased between 33% and 50%, due to
the accumulation of silt.
Mr. Hippchen stated that he estimates the
District presently has a storage capacity of 35 days, which is inadequate
for a system of this size, especially one that is expanding its customer
base. Staff recommends that the District be directed to have all dredged
material at, or near, the impoundment site removed to prevent this material from being reintroduced into the reservoir. Staff also believes that
a plan to perform extensive dredging of the reservoir needs to be created.
Due to the size and scope of this project, it would require the granting
of a certificate of convenience and necessity by this Commission. The
Staff further recommends the District be directed to take steps to solve
its algae and manganese problems, as well as to resume a regular program
of flushing its lines. The District should also add fluoridation treatment to the water system as soon as possible. (Tr. Vol. 11, pp. 124-132,
139-140;Staff Exh. No. 1).
Staff witness Hippchen also addressed himself to the District's sewer
operations. Generally, the actual discharge of material into a receiving
stream by a sewer system falls under the jurisdiction of the Department of
Natural Resources. DNR has the ability to force the District to upgrade
its treatment plant and meet requirements of the District's discharge
permit.
Staff noticed that a problem exists with the accumulation of
sludge within the plant itself. Common since dictates that, if solids
entering the treatment plant cannot be removed, the plant will cease to
function properly. (Tr. Vol. 11, pp. 132-134).
Staff's investigation indicates that the District has not fully
followed the Commission's main extension rules. In the past, the District
has required customers wanting extensions to come forth with the necessary
funds to construct the extension. This is basically in agreement with the
Commission's rules and policy.
However, there apparently has not been
full compliance with the requirements that the District reimburse customers who seek reimbursement when the rules call for such reimbursement. He
points to the difference between main extension items and service items,
such as water meters and service lines or laterals, which are to be
covered by the payment of a tap fee. Tap fees must be approved by the
Commission and it is Commission policy not to approve a tap fee covering
the full cost of the tap. If the District wishes to follow an alternate
P U l L l C SERVICE COWMISSION
O F W E S T VIRGINIA
-18-
main extension rule, then it should file such a proposed rule with the
Commission for its review. (Tr. Vol. 11, pp. 134-137).
Mr. Hippchen reiterated that he believes most of the problems faced
by the District are operational, rather than design, problems.
The
District has sufficient funds on hand to make necessary improvements and
corrections. With a change in attitude towards spending necessary funds
in an effort to make the system more efficient, the District will be in a
position to provide the most efficient level of service to its customers
and residents of the area. (Tr. Vol. 11, pp. 139-142).
With the close of the Commission's presentation in this matter, the
Administrative Law Judge was in a position to take the public comments of
several customers of the District.
These individuals were Charles M.
King, Sharon Slater, Retta Thomason, Dreama VanHoose and Richard McDonie.
The comments of these individuals clearly indicate that the matters
discussed during these two hearings are of great concern to them.
In
recent years, there has apparently developed a feeling of mistrust between
certain groups within the District and this was shown by some of the
comments made. The comments of these customers also restated some of the
concerns expressed by the Commission's Staff and those presented by
witnesses called by Mr. St. Clair. One witness, Mr. McDonie, stated that
he has had samples of water taken from points in the system to be tested
by the Cabell County Health Department. He stated that the results of
these tests were that iron and manganese levels were objectionable.
(Tr.
However, these tests showed there was no health hazard present.
Vol. 11, pp. 144-168).
The testimony of Vernon Browning, who has been employed as the
District's Plant Manager since May of 1988, was taken by means of posthearing deposition.
The District presently does not have a general
manager and, therefore, Mr. Browning has been performing a wide range of
operational and administrative duties.
Mr. Browning holds a Class IV
waste water plant operator's license. Mr. Browning testified that he was
employed by the City of St. Albans in its Public Works Department for
14 years, working his way up to manager. He was also the manager of the
South Putnam Public Service District and has twenty-six years of public
works experience. During the spring of 1988, he became aware that the
District was in need of a manager and applied for this position. (Tr.
VOl. 111, pp. 3 - 4 , 19-21).
Mr. Browning reviewed each of Staff's sixteen recommendations, as set
forth in Staff Exhibit No. 1. Generally, Mr. Browning and the members of
the Board are in agreement that these recommendations are well considered.
Therefore, the District is in the process of implementing most of these
recommendations, as it is able.
The Board is reluctant to allow
Mr. Browning to begin installing fluoridation equipment until it receives
a direct order from this Commission to do s o .
Mr. Browning believes he
must receive this authorization from the Board before he can connect the
fluoridation equipment.
The witness did indicate that he believes the
District is able to remove the accumulated debris around the impoundment
site on its own.
Thus, he does not believe it will be necessary to
solicit bids to remove this material.
The District is also awaiting
orders from this Commission before it authorizes Mr. Browning to reimburse
PUBLIC S E R V I C E C O M M I S S I O N
OF WEST VIRGINIA
-19-
customers who were charged a $175 tap fee, $75 of which was not authorized
by the Commission. (Tr. Vol. 111, pp. 4-12, 14, 16, 23-26).
Mr. Browning testified that, at present, the Board is not interfering
with his operation of this system. He expressed strong opinions to the
Board regarding the proper sizing of all future lines and the implementation of some of the Commission's recommendations. He indicated that, if
it was necessary, he would be willing to call a special meeting of the
Board to discuss action he deemed necessary for the benefit of the system
and its customers. Mr. Browning also confirmed that both he and the Field
Foreman take District trucks home, as they are on duty 24-hours per day.
He also confirmed that the office staff is aware that the general public
is to have access to the District's minutes and books and records. A s
part of his duties, Mr. Browning states that he intends to see that the
appropriate publication and bid taking procedures are followed. He also
believes that, if he is ordered to implement some correction or take some
action by the Public Service Commission, he will take the appropriate
(Tr.
steps without seeking specific Board approval f o r each action.
Vol. 111, pp. 23-31).
FINDINGS OF FACT
1. On March 15, 1988, Paul W. Sowards, and others, filed a duly
verified formal complaint against the Culloden Public Service District, a
public utility.
On March 21, 1988, several other residents filed an
amended complaint against the District.
Service of the complaint and
amended complaint was made upon the Defendant and answers to these pleadings were duly filed.
2.
Pursuant to an Order of this Commission, a public hearing in
this matter was held on Thursday, October 20, 1988, at 6 : O O p.m., EDST, in
Public
the Commission's Hearing Room, 201 Brooks Street, Charleston.
notice of this hearing was given by publication and by service upon all
parties of record. The ALJ continued this matter from the bench, at the
Notice was given to all
conclusion of the first evening's hearing.
present that the matter would be, and was, reconvened on Thursday, November 3, 1988, at 6:OO p.m., in the same hearing room. Leave was granted to
take the post-hearing evidentiary deposition of the District's plant
manager, Vernon Browning.
(Procedural Order issued September 23, 1988;
Tr. Vol. I, p. 133; T r . Vol. 111).
3.
The State Department of Natural Resources has periodically
inspected the District's sewer system and found it out of compliance with
its discharge permit. The receiving stream shows signs of sludge contamination and buildup.
On one occasion a lift station was found to be
inoperative and raw sewage was discharged directly into the receiving
stream. (Tr. Vol. I, pp. 8, 9 , 12-16; Compl. Exh. N o . 7).
4.
DNR Investigator Charles Morris has sworn out warrants against
the District on two occasions, for stream pollution. He acknowledged that
the District's problems are not unique but that its sludge problems have
not been corrected. DNR has other more drastic sanctions available to it,
such as administrative actions or civil actions against the District. He
~~
~
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did point out that the District has made some improvements which have
helped alleviate the overall problem, but no plans or funding are available for long range corrections, such as tertiary treatment facilities.
(Tr. Vol. I, pp. 10-13, 16, 18-21).
5.
James Rhodes , a registered professional engineer with the State
Department of Health, who has oversight responsibility for the water and
sewer systems operated by the District, testified that samples taken by
the District and County Health Departments show there are no maximum
contaminant level violations and he concludes that the District is providing safe water throughout its system.
(Tr. Vol. I, pp. 28, 3 2 - 3 4 , 4 6 ,
51-52).
6.
The District does have a problem with manganese, which is a
secondary contaminant. This mineral causes both taste and odor problems
which are evident throughout the District's system.
Over the years,
manganese accumulates in the system as solid black particles, which
periodically break loose and can cause staining of clothes and appliances.
The District has not historically coped with this problem in an adequate
manner. (Tr. Vol. I, pp. 20-30).
7.
Mr. Hodges testified that manganese can be removed from the
treatment process by the use of a green sand filter. A similar plant
operated by the City of Ripley recently installed this type of filter, at
Accumulated manganese can be removed from the lines by
a cost of $20,000.
a program of periodic flushing. (Tr. Vol. I, pp. 3 0 - 3 2 , 4 0 - 4 6 , 5 3 - 5 4 ) .
8.
Mr. Hodges is acquainted with the District's manager, Vernon
Browning, and believes he may be able to solve the manganese problem, with
the District's full cooperation. He is willing to allow Mr. Browning to
adjust the treatment process and use potassium permanganate, in conjunction with a flushing program. Mr. Hodges recommends that all lines be
flushed at least one time per year, and more often to remove accumulated
sediment, although the Department of Health does not have specific flushing requirements. (Tr. Vol. I, pp. 3 0 - 3 2 , 4 2 - 4 8 , 5 3 - 5 4 ) .
9.
The District has historically been unable to control its algae
problem. Algae grows rapidly in shallow impoundments, such as the District's reservoir, during the spring and fall. Testimony clearly indicates that this can be controlled by the periodic distribution of copper
sulfate, which can cost as little as $100 per year.
(Tr. Vol. I,
pp. 3 5 - 3 7 , 50-52).
10. By letter dated September 3 0 , 1 9 7 6 , the State Department of
Health put the District on notice that it should plan for future growth
and make plans to avoid potential problems and water shortages. This
letter was sent to six water systems in the Teays Valley area.
The
District made no particular contingency plans as a result of this notice.
(Tr. Vol. I, pp. 3 8 - 4 1 ; Compl. Exh. No. 1).
11. A Department of Health Consultant, Willard Rowsey, observed on
several occasions that there was not a certified plant operator at the
District's treatment facility. The water plant uses surface water and
therefore a plant operator must be on duty whenever the pumps are in
P U 6 L I C SERVICE COMMISSION
OF
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-21-
operation.
The plant operator's absence from the plant constituted a
technical violation of Health Department regulations.
(Tr. Vol. I,
pp. 37-45, 48-49).
12. The District's field foreman, David Shirkey, testified that when
he arrives at the treatment plant in the morning, he begins to start the
treatment plant but does not actually begin the treatment process. He
realizes a certified plant operator must be on duty before treatment
commences. He confirmed that, on occasion, sludge or raw sewage has been
discharged into the receiving stream when breakdowns occur and that some
breakdowns could be avoided if a full inventory of replacement parts was
maintained. Increased maintenance would also avoid future problems. (Tr.
Vol. I, pp. 60-66).
13. Between the years 1978 through 1986, the District rented a
backhoe from its manager, Roger Gibson, at a rate of $20 per hour. His
was the lowest of three bids received, although no advertisement for bids
was made.
During these years, fees for rental service accumulated to
approximately $47,000. Sometime after his departure in 1986, the District
purchased a backhoe. (Tr. Vol. I, pp. 73-76, 84-85).
14. Mr. Gibson discussed and fully informed the Board of his rental
arrangement. He also recommended to the District that it install new
water mains with a diameter of six inches or greater, rather than continuing to use four-inch mains, which would not adequately provide for
unexpected future growth or provide fire protection according to the most
recent Health Department design standards.
(Tr. Vol. I, pp. 69-73,
83-84).
15. In 1985, Mr. Gibson was the District's superintendent and was
directed to purchase a new pickup truck.
Bids were not solicited as
required by West Virpinia Code 516-13A-7. Specifications were provided to
area truck dealers and bids solicited directly. The lowest bid was then
accepted by the District. The vehicle involved did cost in excess of
$5,000. The witness could not remember any advertising for bids or
services being made by the District during his employment. (Tr. Vol. I,
pp. 77-81, 86-89).
16.
Complainant Sowards testified about his inability to gain access
He also testified that he was charged
a tap fee of $175, when he believes the District's authorized tap fee is
only $100. (Tr. Vol. I, pp. 92-96, 118-121).
to some District books and records.
17. The Accountant who audits the District's books, Kenneth Plants,
confirmed that the three Board Members were paid fees totaling $5,400 for
the twelve-month period ending June 30, 1987. Mr. Plants also confirmed
that the District did not follow necessary bidding procedures or use
purchase orders prior to 1987. The District is now using purchase orders
and this change is reflected in the 1987 audit. (Tr. Vol. 11, pp. 9-16).
18. The Chairman of the District's Board of Directors, James Rhodes,
became associated with the District in 1955, when there were no facilities. In 1963, an engineering firm designed the water system which was
built containing mostly four-inch diameter water mains. The District has
PU%LIC S E R V I C E COMMISSION
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received recommendations to use larger mains but has generally chosen to
continue to use four-inch mains, to keep costs down.
It has installed
fire hydrants on four-inch lines, contrary to Health Department design
standards. (Tr. Vol. 11, pp. 2 9 - 3 3 , 84-88).
19. Previously, the District rented two rooms in a Culloden office
building for $150 per month.
The District's ten-year lease had three
years remaining when the District moved out and stopped paying rent. The
property has since been leased at a rate of $275 per month. (Tr. Vol. 11,
pp. 88-92).
20.
The Board normally conducts regular meetings at 7:OO p.m., on
the second Wednesday of each month. Some meetings have not started at the
correct time, and in one instance, the meeting was delayed to avoid
possible customer complaints. Special meetings are occasionally held but
notice to the public has not always been given, such as when the Board
signed the contract to purchase its new office building. (Tr. Vol. 11,
pp. 77-80, 90-92; Compl. Exhs. Nos. 9 , 10).
21. The Board discussed the purchase of the District's new office at
a meeting which was held at 1:30 p.m., on February 11, 1 9 8 8 . No notice of
this meeting was given to the public. A special meeting was then held,
without notice to the public, on February 15, 1988, wherein a vote was
taken and the contract to purchase the property and modular office building was signed. The only alternate proposal considered by the Board was
the purchase of another parcel, which was dismissed as too expensive. The
purchase of this property and office building was never discussed at a
regularly scheduled Board meeting, pursuant to public notice.
(Tr.
Vol. 11, pp. 90-92, 108-110; Compl. Exh. No. 1 0 ) .
22. The property in question consists of two 7O'xlOO' lots upon
which is situated a six room modular office building, with additional
space in the second floor loft. The purchase price was $55,000 and was
paid with funds on hand. In addition to the initial cost, the District
spent $2,500 for heating and air conditioning, $4,400 for paving and
$1,070 for a drive-in window. (Tr. Vol. 11, pp. 33-36, 45-47, 49-51; Def.
Exh. No. 1).
23. Each District Board Member was paid $1,800 as compensation f o r
meetings attended for the period July 1, 1986 through June 30, 1987. West
Virginia Code 516-13A-4 authorizes these Board members to receive $100 per
regular meeting and $50 per special meeting, up to a maximum of $1,800,as
their total compensation to be received from the District. Mr. Rhodes
attended twelve regular meetings and four special meetings, entitling him
to receive $1,400; Mr. White attended eight regular meetings and one
special meeting, entitling him to receive $ 8 5 0 ; and Board Member Painter
attended eleven regular meetings and four special meetings, entitling him
to receive $1,300. The Board's auditor did not check the member's atten(Tr.
dance nor confirm the accuracy of the payments made to each.
Vol. 11, pp. 3 8 , 41-45; Code §16-13A-4).
24. Mr. Rhodes confirmed that on one occasion, the District published an advertisement seeking bids but received no response.
The
Board's practice has been to seek bids directly from individual area
PUBLIC S E R V I C E COMMISSION
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vendors and accept the lowest bid for that piece of equipment. This is
contrary to Code Q16-13A-7 and the Board has now amended its procedure to
correspond with said statute. (Tr. Vol. 11, pp. 73-76; Code 516-13A-7).
25. Up until 1988, the District's sole source of raw water was its
original thirteen-acre reservoir. The District has increased its number
of customers from approximately 250 in 1963 to approximately 1,000 customers, at the present time.
The District attempted to increase its
reservoir capacity by adding two improvements to raise the level of the
reservoir and by performing some minor dredging. Staff witness Hippchen
testified that, over the years, the District's reservoir capacity has
actually been reduced by approximately one-third to one-half its original
capacity. (Tr. Vol. 11, pp. 61-65, 73, 123-127).
26. Despite receiving notice in 1976 that the District should begin
to make contingency plans, no such plans were created. The District sold
water to the City of Hurricane for approximately fifteen years, including
all of 1987 and up until June, 1988. Over the last three years, the
District underbilled the City of Hurricane approximately $14,824. (Tr.
Vol. 11, pp. 54-61, 69-70, 103, 115-116).
27. In June, 1988, the District came to believe it could be faced
with a water shortage later in the summer. While observing the water
level being reduced, the District put off expending funds to connect the
On Sunday, AuDistrict's system with other sources of water supply.
gust 14, 1988, the District's reservoir went dry. A previously-scheduled
meeting was held with West Virginia-American Water Company the next day
and the decision was made to immediately tie the District's system into
the Company's Lake Washington system. In addition, the District donated
$25,000 towards laying a transmission line between the District and the
City of Milton. This transmission line is a permanent emergency standby
connection. (Tr. Vol. 11, pp. 39-41, 61-65, 71-73, 99).
28. The District is aware of its algae problem and believes it has
now obtained sufficient advice to allow Mr. Browning to keep the problem
under control. In addition, the District is relying on Mr. Browning to
solve its manganese problem without the purchase of a green sand filter.
(Tr. Vol. 11, pp. 66-70).
29. Mr. Rhodes confirmed that for approximately two years he was a
member of the District's Board of Directors and also operated as its
general manager, although he did so without additional compensation. He
is now aware this arrangement is contrary to Code 516-13A-5, which prohibits a general manager from being a member of the Board. (Tr. Vol. 11,
pp. 52-54; Code §16-13A-5).
30. The District originally obtained Commission approval for use of
a $100 tap fee. In approximately 1981, the District unilaterally raised
its tap fee to $175, without mandatory prior Commission approval, Ap(Tr.
proximately 135 customers have been charged the $175 tap fee.
Vol. I, p. 116; Vol. 11, pp. 50, 94-95; Water Rule 5.06, Sewer Rule 5.04).
31. On two occasions the District entered into two contracts for
engineering services to be supplied by the firm of Appalachian,
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Hart & Milam.
Prior Commission approval was not obtained in either
instance and the District is now aware of this mistake and has changed its
procedures accordingly. (Tr. Vol. 11, pp. 98-102; Code §16-13A-25).
32. Utilities Analyst Geert Bakker examined the District's books and
records and found them to be in good order and without unusual disburseThe District's water and sewer operations held unencumbered
ment s .
savings of approximately $367,000, prior to its purchase of a backhoe,
drying bed roofing materials and its new office and real estate.
The
District has taken care to reinvest all unused funds and accumulate the
interest earned thereon. (Tr. Vol. 11, pp. 112-115).
33. Staff Engineer David A . Hippchen presented Staff's recommendations, which were based, in part, upon the onsite investigations of
another Commission employee, Michael Downs.
Mr. Hippchen generally
described the problems as operational and not design problems. He believes the District's system is capable of providing a very good quality
of finished water. (Tr. Vol. 11, pp. 119-122; Staff Exh. No. I).
34. Staff prepared sixteen specific recommendations. Mr. Browning
testified that the District is in the process of incorporating virtually
The Board finds these
all of these recommendations, as it is able.
recommendations to be well founded. (Tr. Vol. 11, pp. 119-122; Vol. 111,
pp. 4-12, 14, 1 6 , 23-26; Staff Exh. No. 1 ) .
35. Mr. Hippchen indicated that Staff recommends that the District
be allowed to proceed to solve its manganese problems without requiring
the installation of a green sand filter, at this time.
The District
should also be directed to install blow-off valves immediately, s o that
accumulated sediment can be removed.
(Tr. Vol. 11, pp. 122-125; Staff
Exh. No. 1 ) .
36. Staff further recommends that the District be directed to take
action to remove excess material, previously dredged from the reservoir,
from the impoundment site.
In addition, the District should also be
directed to immediately connect its fluoridation equipment. Staff further
made other recommendations which would require the District to comply with
Commission main extension rules and the collection of an appropriate tap
fee. (Tr. Vol. 11, pp. 134-137; Water Rules 5.05, 5.06; Sewer Rules 5.03,
5.04).
37. Since May of 1988, the District has employed Vernon Browning as
its plant manager.
Mr. Browning holds a Class IV waste water plant
operator's license and has twenty-six years of public works experience.
Mr. Browning is known and respected by the Commission's Staff and the
State Department of Health. He has begun to implement many of Staff's
recommendations and will continue to do s o without being directed to adopt
these recommendations. Mr. Browning is hesitant to install any fluoridation equipment without a specific order from the Commission to do s o , as
the District's Board has not authorized him to take said action.
(Tr.
Vol. 111, pp. 3-12, 14, 16, 23-26).
38. Mr. Browning represented to the Commission that the Board is not
interfering with his operation of the system. He has the authority to
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call a special meeting and intends to s o , if he deems it necessary. A s
part of his duties, Mr. Browning testified that he will insure that
appropriate publication and bid taking procedures are followed and he has
instructed the office staff to allow the general public free access to the
District's official records. (Tr. Vol. 111, pp. 2 3 - 3 1 ) .
COMMENTS
A review of the total record of this proceeding indicates to this
Administrative Law Judge that the actions of the Board of Directors of the
Culloden Public Service District, over the years, have basically been made
with the best interest of the District and its customers, at heart.
The record clearly reveals a number of past practices and actions of
the District, which were contrary to statute, and the rules and regulations of this Commission. These actions, such as the District's failure
to advertise for bids when purchases were over $ 5 , 0 0 0 , not giving adequate
notice of Board meetings, overpayment of fees to Board members, etc., are
clearly wrong and must be corrected. This order will take such corrective
actions. However, the record also shows that, in most cases, when the
Board was informed as to what the proper procedure was, it complied.
Compliance with the statutes of this State and the rules and regulations
of this Commission should be, and is, the main objective of this order.
The ALJ trusts the District will show the same willingness to comply now
as it has shown in the past.
The ALJ does not mean to downplay the severity of the Board's improper actions, which may or may not involve other civil or criminal
actions.
However, it appears that the terms and conditions of these
transactions, such as the purchase of the two lots and office structure,
were neither alleged nor proven to be detrimental, or even unfavorable, to
the District. The ALJ has not been shown where one of the Board members
profited from the Board's actions, directly or indirectly, except f o r the
overpayment of fees for 1987-88, for which reimbursement will be ordered.
In fact, when Mr. Rhodes improperly acted as a Board member and general
manager, he received no salary as the general manager.
Another fault disclosed by the record of this case concerns the
Board's unwillingness to make necessary or highly desirable investments or
purchases, until they are faced with a crisis or immediate problem. It is
hoped by the employment of a general manager, whose authority is clearly
spelled out, adoption of Staff recommended actions and subsequent Commission review of the corrections employed, the Board's overzealous protection of District funds can be tempered and changed.
The Administrative Law Judge does not believe that seeking the
immediate removal of these Board Members will solve all problems faced by
this District. The Commission has no control over who might be appointed
to replace them and it cauld find this whole complaint process repeated.
Aside from the pendency of this proceeding, there is nothing that this ALJ
is aware of that would have prevented the removal of these Board Members
by an appropriate petition filed with the County Commission or Circuit
Court having jurisdiction, by means of an independent proceeding.
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The present Board has significant accumulated experience, which
should be retained, if the Board shows a willingness to abide by this
Order. The customers of this District also need to show a desire to make
this situation work.
They ultimately will be most helped or harmed by
their actions. The mandatory review provided for herein will insure that
a complete and thorough review of the present Board’s compliance with this
order is made. At that time the Commission will be able to better judge
if further action is warranted, and if s o , what action should be taken.
CONCLUSIONS OF L A W
After due consideration of all matters contained in the record of
this proceeding, the Administrative Law Judge is of the opinion, finds and
concludes that:
1.
In cooperation with the Public Service Commission and State
Department of Health, the District should establish and adhere to a
written timetable for the routine application of copper sulfate to its
reservoir, to prevent algae growth problems. This written program should
be filed with the Commission’s Utilities Division within three ( 3 ) months
from the date this order becomes the Final Order of the Commission.
2.
The District should establish a comprehensive program for the
elimination of excess manganese from the raw water and oxidized manganese
which has accumulated within the lines. This program should likewise be
reduced to writing, and a copy filed with the Commission’s Utilities
Division within three ( 3 ) months from the date this order becomes the
Final Order of the Commission.
3.
T h e District should immediately change its method of drawing
water samples for testing and it should draw water from points in its
system, other than at the water treatment plant or the District’s office,
in accord with Department o f Health policies.
4.
The District should post notice of all meetings, both special
and regular, at least two (2) weeks prior to each regular meeting and as
soon as practical in the case of special meetings, at the District’s
office and at least two (2) other specified locations in the District,
such as a post office or other available public location where other
public notices are posted. The location of these other posting locations
should remain the same, unless changed by a duly adopted resolution of the
Board. Notice of special meetings should state the topic or topics to be
considered by the Board.
5.
The District should establish and implement written practices
and procedures which are designed to insure that the District’s future
purchasing and bid taking procedures are in full compliance with the West
Virginia Code and it should file a copy of this program with the Commission’s Utilities Division within three ( 3 ) months from the date this order
becomes the Final Order of the Commission.
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6.
The District should periodically keep the Commission informed of
the steps it is taking to comply with the Department of Natural Resources'
discharge permit limitations.
7.
All engineering contracts the District proposes to enter into
should be submitted to the Public Service Commission for prior approval,
in accordance with Code 516-138-25.
8.
The District should advertise and seek to employ a qualified
general manager as soon as possible. The District should offer the final
candidate an employment contract which shall set forth those areas over
which the general manager has dominion and control, and can expect no
interference.
The Board of Directors shall agree that, in those areas
over which the Board retains control, it shall not exercise such control
in a manner which would unduly interfere with the general manager, and it
shall make necessary decisions in a timely manner. The Board should state
the reasons for its decisions in the minutes of the meeting, unless such
subject is otherwise exempted from disclosure.
9.
The District should examine its inventory of parts and materials, with the goal in mind of reducing any unnecessary down-time of
equipment, especially when this would cause raw sewage to bypass the
treatment plant , and the District shall authorize the necessary purchases
to give effect to that goal.
10. The Staff recommended changes, as listed in Staff Exhibit No. 1,
are reasonable and should be adopted herein, subject to appropriate
modifications to provide a reasonable time for compliance.
11. The testimony and evidence of this proceeding supports the
finding that Board Member Rhodes was improperly paid $400 as compensation
for meetings attended during the period July 1, 1987 through June 3 0 ,
1988. Similarly, Board Member White was improperly paid $ 9 5 0 for attendance during this period. Finally, Board Member Painter was improperly
compensated $500 during this period of time.
12. Each Board Member, as mentioned above, should reimburse the
District for these overpayments by working without payment until the
amounts are offset or by means of a cash payment, which should be made
within one (1) year from the date this order becomes the Final Order of
the Commission.
13. In the future, the District should only pay
compensation as set forth in West Virginia Code § 1 6 - 1 3 A - 4 .
Board
Member
14. The District should confer with the Commission's operating
divisions for advice and recommendations concerning the possible recovery
of underbilled amounts for past water sales to the City of Hurricane.
15. There is no reason to believe that the present District Board
Members cannot carry out the corrections and changes ordered herein. They
have adopted the correct procedures when the need for such change has been
pointed out in the past.
PUBLIC S E R V I C E COMMISSION
O F W E S T VIRGINIA
16. One (1) year from the date this order becomes the Final Order of
the Commission, the Commission's Staff should perform a follow-up audit of
the District's books and records to determine compliance with this order
In addition, the Staff's
arid whether a rate adjustment is necessary.
examination shall include an evaluation of the remedial practices and
procedures to be created and implemented by the District, to correct
problems pointed out herein, and to adopt other recommended changes.
17. Upon the completion of its investigation, Staff shall present
These recommendations
its findings to the Commission for its review.
shall address further remedial actions, reopening of this case or the
institution of a new proceeding entirely, if further action is deemed
necessary by said investigation.
ORDER
IT IS, THEREFORE, ORDERED that:
1. In cooperation with the Public Service Commission and State
Department of Health, the District shall establish and adhere to a written
timetable for the routine application of copper sulfate to the District's
reservoir, to prevent algae growth problems, and a copy of said program
shall be filed with the Commission's Utilities Division, within three ( 3 )
months from the date this order becomes the Final Order of the Commission.
2.
The District shall establish a comprehensive program f o r the
elimination of excess manganese from the raw water and oxidized manganese
which has accumulated within the lines.
This program shall also be
reduced to writing, and a copy filed with the Commission's Utilities
Division within three ( 3 ) months from the date this order becomes the
F i n d Order of the Commission.
3.
The District shall immediately change its method of drawing
water samples for testing and it shall draw water from points in its
system, other than at the water treatment plant or the District's office,
in accord with Department of Health policies.
4.
The District shall post notice of all meetings, both special and
regular, f o r at least two (2) weeks prior to regular meetings, and as soon
as practical in the case of special meetings, at the District's office and
at least two (2) other specified locations in the District, such as a post
office or other available public location where such public notices are
posted. The location of these other posting locations shall remain the
same, unless changed by a duly adopted resolution of the Board. Notice of
special meetings shall state the topic or topics to be considered by the
Board.
5.
The District shall establish and implement written practices and
procedures which are designed to insure that the District's future purchasing and bid taking procedures are in full compliance with the West
Virginia Code and it should file a copy of this program with the Commission's Utilities Division within three ( 3 ) months from the date this order
becomes the Final Order of the Commission.
PUBLIC S E R V I C E C O M M I S S I O N
OF W E S T V I R G I N I A
t
Y
6.
The District shall file, with the Commission's Utilities Division, quarterly progress reports indicating the steps it has taken to
comply with the District's Department of Natural Resources discharge
permit, until such permit is complied with or unless otherwise ordered by
the Commission.
7.
All engineering contracts the District proposes to enter into
shall be submitted to the Public Service Commission for its prior approval, in accordance with West Virginia Code 516-138-25.
8.
The District shall advertise and seek to employ a qualified
general manager as soon as possible. The District shall offer the final
candidate an employment contract which shall set forth the areas over
which the general manager has dominion and control, and can expect no
interference.
The Board of Directors shall agree that, in those areas
over which the Board retains control, it shall not exercise such control
in a manner which would unduly interfere with the general manager, and it
shall make necessary decisions in a timely manner. The Board shall state
the reasons for its decisions in the minutes of the meeting, unless the
subject is otherwise exempted from disclosure.
9.
The District shall examine its inventory of parts and materials,
with the goal in mind of reducing any unnecessary down-time of equipment,
especially when this would cause raw sewage to bypass the treatment plant,
and the District shall authorize the necessary purchases to give effect to
that goal.
10. Staff's recommended changes, which were hereinabove found to
reasODable, are adopted herein, subject to appropriate modifications to
Unless otherwise adprovide a reasonable time frame for compliance.
dressed in other parts of this order, these amended recommendations are as
follows:
1.
By December 1, 1989, the District shall install
blow-off valves on all dead end lines.
2.
The flushing of lines shall resume when the water
supply allows and it shall continue on a semi-annual
written schedule.
3.
Adequate public notice shall be provided when flushing resumes, and work scheduled for off-peak hours,
when possible.
4.
Fluoridation equipment shall be installed as soon as
possible and the specific requirements thereon
confirmed with the State Health Department.
5.
As of July 3 0 , 1989, the Commission's Staff shall be
provided with an updated water system financial
statement, which shall include operating expenditures
for the proceeding thirteen months.
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6.
A s of July 3 0 , 1989, the Commission's Staff shall be
provided updated information on the amounts of water
purchased
from
Milton,
Hurricane,
and
West
Virginia-American Water Company and sold to Hurricane, for the proceeding thirteen (13) months.
7.
Bids should be solicited and a contract awarded to
improve the impoundment site, removing the material
dredged from the impoundment in August, 1988.
8.
Cost estimates should be developed for the complete
dredging of the District's impoundment and the
removal of this material from the impoundment site.
9.
The District should develop a proposal and cost
estimate for the permanent tie-in to the West Virginia-American Water Company's system.
10. Water and sewer service shall be extended in accordance with the Commission's Water Rule 5.05 and Sewer
Rule 5.03.
11. The District shall charge tap fees in accordance with
Water Rule 5.06 and Sewer Rule 5.06, and its approved
tariff on file with the Commission.
12 *
The District shall reimburse each customer who was
charged a $175 tap fee, and whose whereabouts are
known, the overcharged amount of $75. The District
shall provide the Commission with a list of all
customers charged the $175 tap fee and indicate
whether these customers have been reimbursed, and if
not, why not.
13.
Provide the Commission with an updated sewer system
financial statement for the twelve (12) months ending
June 30, 1989, including cash disbursements for
operating items.
14.
The District's operating records should be made
available to the public for inspection at reasonable
times, during normal business hours.
11. Each of the District's Board Members who was improperly compensated for the period July 1, 1987 through June 3 0 , 1988; shall- reimburse the District for such overcompensations by working without payment
until the amounts are offset, or by means of a cash payment which should
be made within one (1) year from the date this order becomes the Final
Order of the Commission.
12. In the future, the District shall henceforth pay Board Members
compensation as set forth in West Virginia Code §16-13A-4.
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PUBLIC SER VIC E C O M M I S S I O N
O F WEST VIRGINIA
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13. The District shall confer with the Commission's operating
divisions for advice and recommendations concerning the possible recovery
of underbilled amounts for past water sales to the City of Hurricane.
14. One (1) year from the date this order becomes the Final Order of
the Commission, the Commission's Staff shall perform a follow-up audit of
the District's books and records in order to determine compliance with
this order and whether a rate adjustment is necessary. In addition, the
Staff's examination shall include an evaluation of the remedial practices
and procedures to be created and implemented by the District, as directed
above.
15. Upon the completion of its investigation, Staff shall present
its findings and recommendations to the Commission for its review. These
recommendations shall address further remedial actions, reopening of this
case or the institution of a new proceeding entirely, if further action is
deemed necessary by said investigation.
The Executive Secretary is hereby ordered to serve a copy of this
order upon the Commission by hand delivery, and upon all parties of record
by United States Certified Mail, return receipt requested.
Leave is hereby granted to the parties t o file written exceptions
supported by a brief with the Executive Secretary of the Commission within
If exceptions are
fifteen (15) days of the date this order is mailed.
filed, the parties filing exceptions shall certify to the Executive
Secretary that all parties of record have been served said exceptions.
If no exceptions are so filed this order shall become the order of
the Commission, without further action or order, five ( 5 ) days following
the expiration of the aforesaid fifteen (15) day time period, unless it is
ordered stayed or postponed by the Commission.
Any party may request waiver of the right to file exceptions to an
Administrative Law Judge's Order by filing an appropriate petition in
writ ing with the Secretary. No such waiver will be effective until approved by order of the Commission, nor shall any such waiver operate to
make any Administrative Law Judge's Order o r Decision the order of the
Commission sooner than five (5) days after approval of such waiver by the
Commission.
Mark T. Aliff
Administrative Law Ju
MTA:dfs
PUBLIC S E R V I C E COMMISSION
O F W E S T VIRGINIA
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