In addition to the Public Service Commission of West Virginia’s general investigation of Timberline Four Season Utilities, a West Virginia State Police and Tucker County Sheriff’s investigation are also underway.
Tucker County Prosecuting Attorney Ray LaMora stated there are two separate investigations into some of the allegations. LaMora declined to comment on which allegations are being investigated.
Timberline Owner Fred Herz stated his attorney is aware the investigations. “They’ve identified that it has to do with the utilities and it has to do with me,” Herz said.
“I think it’s important point that we not cower to the threats of the local government,” Fred said. “What I find highly disturbing and distressing is how things that would essentially in some cases if they were true create such a chilling effect on real estate sales, on refinancing, on all of these things that bring us right to the turning point in fully and completely recapitalizing and restructuring this business,” Fred said.
“That local government can essentially bring about criminal investigations and allow this to proceed forward as if it was real without any ability to identify who it is or who is behind it until the full course of the investigation has to come to completion.”
Citing legal responses to defamation or false accusations, Fred said, “It’s impossible to avoid the chilling effect that this is having. And I do believe it is coordinated. I think there are multiple interests involved, and I don’t know who they are.”
After a number of formal complaints were submitted to the Public Service Commission of West Virginia throughout the year, the commission has ordered a general investigation of Timberline Four Seasons Utilities.
The investigation concerns customers being required to boil water before using it, not having a licensed operator working for the utility, inconsistent billing of customers, the utility’s phone being disconnected, payroll checks to staff being declined for insufficient funds, failure to collect the ordered repayment for improper affiliate transfers of cash, failure to satisfy multiple years of federal and state tax liabilities and the utility not paying its bills, including to Canaan Valley Public Service District (CVPSD) for sewage treatment.
A statement from the Public Service Commission of West Virginia reads, “The situation at the Timberline Four Seasons Utilities, Inc. (TFSU) is increasingly untenable. In addition to a significant debt to its sewer treatment provider, TFSU has also lost its certified water operator. Commission Staff has filed allegations regarding serious financial and managerial irregularities. Additionally, it is possible that aspects of the alleged mismanagement may create civil or criminal liability for the owners and managers of TFSU.”
A similar case took place between Timberline Utility and Canaan Valley Public Service District (CVPSD) in 2016.
Tracy Edmonds Herz and Fred Herz cited poor weather, the lift failure, and previous mismanagement as contributing factors to the investigation of the utility’s finances.
Fred specifically noted the lack of an overdue rate increase for the utility as a large factor in operating in a deficit.
“The resolution was that we were going to be prudent and in getting the rate increase, which we ultimately did,” Fred said. “We have not yet been able to enjoy the substantial benefit of that rate increase because of the customer rate increase that is still long overdue.”
CVPSD Chairman Robert Metzger declined to comment on the current financial issues between the two entities.
In addition to the financial issue between Timberline Four Season Utility and CVPSD, the Class II operator for the utility’s water treatment facility recently resigned due to health reasons.
Without a Class II operator, a precautionary boil water notice was administered and is still in effect for the Timberline Four Seasons Resort public water supply.
Timberline Four Seasons Utility is legally required to staff a Class II operator. The facility is still in operation despite the lack of an operator.
Citing the experience and knowledge of the remaining staff working for the utility, Fred stated, “In our view, there’s nothing more than an administrative precaution that is the basis for the boil water advisory. It’s an administrative rather than a public safety issue.”
As of Sunday, Tracy stated via email, “On the twelfth day of the precautionary boil water notice, we have obtained a commitment on a Class II operator that will supply 24 hours per week, beginning the week after Thanksgiving. We will continue to keep you posted with our effort to secure a Class II operator for 56 hours per week while we concurrently pursue implementation of a W36 Protocol.”
The W36 Protocol provides that if the appropriate equipment is installed, a certified operator can connect to the water treatment system without being physically present. Thus, offering another partial solution to the current problem.
Best of Canaan Realty Partner and Broker Amy Barb said, “It certainly puts the brakes on our business all the way around. About half of rentals are on the BWN. What bothers me is that we are going in to our holiday season, which is a big money maker.”
“One thing that really concerns me is that the BWN everyone was not notified,” she said. “Timberline seems to have notified one property manager. All of these other BWN have been word of mouth.” Barb stated that utility bills were sent out last week, without a notice of the advisory.
The Chief Administrative Law Judge of the Public Service Commission scheduled a hearing for December 13, 2108, in Davis, West Virginia in order to make a determination as to whether to move forward with receivership. The hearing will take place at 9:30 a.m. in the Pine Room of the Canaan Valley State Park lodge.
The receivership decision will be made after a review of Timberline’s finances and management, including funding, utility operations, management of ratepayer revenues. The determination will also be made regarding, “Whether there is any evidence that TFSU funds have been wrongfully diverted to personal uses of the owners or affiliated companies without proper authority; The sources and uses of funds; The status and condition of the physical plant and operations of TFSU; and The training and technical abilities of the TFSU operational personnel.”
In 2016, Fred and Tracy permanently moved to the area in order to assume management roles for the four affiliated companies, which includes Timberline Four Seasons Utilities, Timberline Four Seasons Realty, Herz Herz and Reichle, and Timberline Four Seasons Resort Management.
Timberline plans to open for the ski season on November 30. “We are getting our snow guns put up on the mountain as we speak,” Fred said.
Both Fred and Tracy stated they have no intention to sell any of the four affiliated companies.