PUBLIC SERVICE COMMISSION OF WEST VIRGINIA CHARLESTON COMMISSION ORDER. Backeround

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Lewis Booker
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1 PUBLIC SERVICE COMMISSION OF WEST VIRGINIA CHARLESTON At a session of the PUBLIC SERVICE COMMISSION OF WEST VIRGINIA in the City of Charleston on the gth day of January 2015 CASE NO PWD-P LINCOLN COUNTY COMMISSION Petition for a General Investigation of the Lincoln County Public Service District. COMMISSION ORDER I The Commission schedules an informal conference in this matter on Tuesday, 1:ebruary at 1 :30 p.m. Backeround On October , President K.K. Matthews of the Lincoln County Commission (Lincoln Commission) filed a letter requesting that the Public Service Commission open a general investigation of the Lincoln County Public Service District (Lincoln PSD). On November 10, 2014, Savana Priest of the Lincoln PSD filed a letter stating concerns about services performed for the Lincoln PSD by Scotty Saul, a contractor operating as Saul Pipeline Services. Ms. Priest stated that two board members of the 1,incoln PSD contracted with Mr. Saul without advertising the work for bid, and the contractor's bill exceeded $10,000 for the first thirty to sixty days of work. Ms. Priest stated that Mr. Saul's services were unnecessary because the Lincoln PSD owns and operates two backhoes. Ms. Priest stated that the Lincoln PSD General Manager also thought that the work was unnecessary. Ms. Priest attached invoices, copies of checks and billing system information to her Ictter. On November , Commission Staff filed a response to the October 24, letter from the Lincoln Commission requesting a general investigation. Staff stated that filings did not confirin whether the Lincoln Commission served its petition on the Lincoln PSD. Staff recommends that the Commission join the District as a necessary party to this proceeding. Staff commented that although the Lincoln Commission petition did not include any supporting facts or documentation to justify a general investigation. Staff

2 communicated with Lincoln Commission President K.K. Mathews who expressed concerns about Lincoln PSD operations under the direction of its board. Staff stated that two members of the Lincoln PSD Hoard resigned after the Lincoln Commission filed the instant petition. President Mathews stated concern about custoiner billing issues, proper maintenance of financial records and documents, possible misappropriation of funds by Board members and staffing issues, including but not limited to, mistreatment of District Staff by Board members. President Mathews requested that the Commission investigate the operations of the Lincoln PSD to determine if it can continue to operate on a going forward basis. Staff summarized three recent formal complaints regarding the Lincoln PSD s provision of bulk water to customers and stated that Mr. Matthew s accusations raise additional questions concerning the overall operations of the Lincoln PSD and its customer service. Staff attached a memorandum from the Public Service Commission Utilities Division indicating that Lincoln PSD has failed to submit audited financial information to either the Lincoln Commission or the Public Service Commission for the last ten years. Staff recommended that the Commission require Lincoln PSD to immediately provide audited financial records for the years ending 2013 and 2014, in accordance with W. Va. Code 9: 16-13A-11. If the District cannot provide this information, Staff recommended that the District hire a certified public accountant to conduct an audit of the District s records. Staff also stated that it needed additional information from the Lincoln Commission and the Lincoln PSD to determine whether a full investigation by the Commission is warranted. Accordingly, Staff requested that the Lincoln Commission provide the names of all current and recent District board members, including dates of appointment and dates the terms will end. Staff requested that the Lincoln PSD provide: 1) the name, qualifications and hiring date of the current General Manager; 2) an Organization chart of all employees, including names, job titles, duties and date hired; 3) a statement of commitment that audited financial statements will be submitted for years ended 2013 and 2014, or. alternatively, a commitment to hire an independent CPA to conduct an audit of 1,incoln PSI) records in compliancc with W.Va. Code 9: 16-i3A-11; and 4) a response to Savana Priest s filing of November 6, 2014, describing the hiring of Scotty Saul of Saul Pipeline Services and the services provided. Staff recommended that the Commission name the Lincoln PSD as respondent and require both the Lincoln Commission and the Lincoln PSD to provide the information that Staff requested. On Novcmber 25, 2014, the Lincoln Commission tiled a response to the Staff request for information. I he response stated: 1. Brenda Esquc was appointed November , to fill the term previously held by deceased board member Rudy Thomas. and that 2

3 was temporarily filled by Gary McMellon who resigned November 6, Ms. Esque s term will expire June 30, Mike Fioravante was also appointed November 20, 2014, to fill the term of Ron Gregory who resigned November 6, Mr. Fioravante s term will expire June 30, Bruce Tulley is serving a term of July through June 30, As of the date of this Order. the Lincoln PSD has not filed the information requested by Staff. DISCUSSlON The Lincoln Commission has constituted a new Lincoln PSD Board by the recent appointment of two of its three Board members. The filings in this case, however, indicate that the Lincoln Commission continues to have concerns about future operations of the Lincoln PSI>. The Commission will require the Lincoln PSD to provide the information requested by Staff, and will schedule an informal conference to acquire a better understanding of the situation. The Coininission will require representatives from the Lincoln Cornmission, the Lincoln PSD and Commission Staff to attend. The parties will not be required, but niaq elect, to participate in the informal conference with representation by an attorney. The Commission will not take sworn testimony at the conference but will have a court reporter present to make a record of the discussions. Thc discussions inay lead to resolution ofthis matter, or, in the absence of resolution, the Coinmission will open a formal investigation and schedule a future evidentiary hearing. FINDINGS OF FACT 1. The Lincoln Commission president requested that the Public Service Coinmission open a general investigation of the Lincoln PSD. Petition filed October 24, Two Lincoln PSI1 Board members resigned recently and the Lincoln Coinmission appointed two new Board members in November Staff Response filed November 19, 2014: 1,incoln Commission filing November 25, The Lincoln PSD has not filed audited financial information with the Public Service Commission for the last ten years. Id. 3

4 4. The Lincoln Commission filed a response to the Staff request for additional information. Lincoln Commission filing November 25, The Lincoln PSD did not file a response to the Staff request for additional information, CONCLUSIONS OF LAW 1. The Lincoln PSD should be required to respond to the Staff Memorandum filed on November 19, The Commission will schedule an inforinal conference to acquire a better understanding of the Lincoln Commission petition and the Lincoln PSD situation. 3. It is reasonable to have a court reporter make a record of discussions at the conference although no sworn testimony or evidence will be taken. 4. The parties are not be required. but may elect, to participate in the inforinal conference with attorney representation. ORDER IT IS THEREFORE ORDERED that the Lincoln PSD is named a respondent to this matter. 17' IS FURTHER ORDERED that the Lincoln PSD file a response to the November 19,2014 Staff Memorandum on or before January 28, '1' IS FURTHER ORDERED that representatives from the Lincoln Commission, the 1,incoln PSI) and Commission Staff shall attend an informal conference with the Commission at 1:30 p.m. on Tuesday, February 3: 2015, at the Public Service Commission Offices; ilearing Room No. 2, 20 1 Brooks St. Charleston, West Virginia. 11- IS 1;IJR'THER ORDERED that discussions during the informal conference will be recorded by a court reporter. 4

5 IT IS FIJII?'HER ORIIEREII that the Commission Executive Secretary serve a copy of this Order on all parties of record that have filed an e-service agreement, or by United States First Class Mail on parties that have not provided the Commission with an address, and on Staff by hand delivery. A True Copy, Teste, Ingrid Ferrell Executive Secretary JMIAcw c.doc 5

LIC SERVICE OM MISSION F WEST VIRGINIA ~HA~LESTON

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