The day long West Virginia Public Service Commission (WVPSC) hearing over the status Timberline Utility’s efficacy brought forth additional details regarding the financial and engineering management of the utility.
The night before the hearing, Timberline Owner Fred Herz was arrested from his home at 9:45 p.m. on Wednesday, December 12 by the county and taken to Tygart Valley Regional Jail.
He was arrested for $4,787.46 in unpaid hotel/motel taxes. F. Herz bail was set at $6,258. Tracy Herz said in an email that First United Bank sent a wire to post bail.
“We have been told this is a shocking abuse of authority by both our attorney and our tax consultant. We were not given an opportunity to remedy this before the county chose to escalate in this way,” T. Herz said in an email.
“Nonetheless, this will not affect our work or our relentless enthusiasm and love for the area, our sports or our neighbor. The opening of Timberline and our work is not compromised by the judgment or conduct of others,” T. Herz’s email concluded.
Representing the Herzes, Capstone Tax Consulting Enrolled Agent Charlotte Cowie-Bozner said in an email to West Virginia Senate Finance Chairman Senator Mike Hall, ” The county never made the taxpayer aware of what was owed following their review of documentation seized from the business location on October 20, 2018. The taxpayer was never given an opportunity to address the balance prior to being arrested. The only communication from the county or the sheriff’s office came in the form of arresting Mr. Herz last night. There were no other attempts to rectify the situation prior to this escalation.”
At the start of the WVPSC hearing, Attorney Christopher Negley representing Timberline announced F. Herz resigned as manager of the utility and named T. Herz as the new manager.
WVPSC Chief Administrative Law Judge Keith George presided over the hearing. Initial briefs will be made public on January 14.
WVPSC Attorney Leslie Anderson’s questioning drove much of the hearing. Anderson’s avenues of inquiry were methodical and thorough. A large amount of the evidence presented through questioning was previously published through WVPSC memoranda.
Anderson’s questioning of WVPSC Utilities Analyst Tara Gilkey lasted the entire morning. Gilkey relayed the financial findings as a result of her investigation into Timberline Utility.
Gilkey concluded that the utility failed to meet federal and state tax liabilities and failed to collect payment on water and sewer services provided to affiliates. The amount transferred from the utility to affiliates increased from $180,212 in January 2015 to $319,253 in October 2018.
There were moments when new, more detailed evidence was presented regarding the utility’s doings. PSC Engineer Jonathan Fowler’s testimony revealed certain details that were previously unbeknownst to the public.
Fowler was also assigned to the 2016 investigation. “As far as I can tell, there are two persons operating the utility,” Fowler said. He mentioned that the utility employees also help with resort operations. “That’s in and of itself not a bad thing, because that way you can optimize labor. But what is a bad thing is when you don’t have enough people and you don’t have a licensed operator. That’s what we are seeing here,” he said.
Fowler noted that the two main utility employees expressed a dedication to their job and to keep the water on. “This attitude of those guys to come in and keep the water on is not unusual. People who get into this don’t get into it for the money. They get into it because they have a dedication to the public,” Fowler said.
“And that leads me to another thing,” he continued. “I don’t see that dedication to operating a public utility at the level of management in this utility. I don’t get that feeling,” he said.
Fowler cited high projected maintenance costs for the utility. Fowler noted the utility also struggled to abide by a number of WVPSC requirements.
Fowler expressed concern over Timberline Utility’s unaccounted water loss. The WVPSC recommended water loss rate is 15 percent. To determine water loss percentage, a utility calculates the figure of the total water they produce, subtract the sold water, subtract accounted for water, and then unaccounted water loss is left. In 2016 the unaccounted water in the Timberline Utility system was estimated at 42.5 percent. “It’s a little bit excessive,” Fowler said.
Fowler described Timberline Utility as an “accidental utility.” “They come in to develop or build, and they need utility service. They put it in, but that’s not their primary purpose and overtime it degrades.”
Negley’s cross examination of Fowler included a spreadsheet of different utilities throughout the state who have operated on a boil water notice for years, one dating back to 2002. General investigations were not filed for any of these cases.
“Do we have an issue with how drinking water is being provided to customers of the utility?” Negley asked. “Every time I’ve been here, there’s been service available,” Fowler said.
Canaan Valley Public Service District has agreed to step up as receiver if they are required for the water and sewer side. CVPSD Chairman Robert Metzger testified at the hearing.
The resort plans to open their slopes on Friday, December 21.
