Esq. Box No. 10 You

2 reet, 812 C est Vi 5323

Phone: (304) 340-0300 Fax: (304) 340-0325

March 23,2020

Electronic Service Only

John W. Cooper, Esq. Counsel, Canaan Valley PSD Cooper & Preston, PLLC PO Box 365 Parsons, WV 26287

Robert Metzger, President Canaan Valley Public Service District PO Box 428 Davis, WV 26260

RE: Case No. 19-0887-WS-19A Canaan Valley Public Service District Receiver for Timberline Four Seasons Utilities, Inc.

Gentlemen:

The Staff Memorandum issued today was served via email on the above-listed parties. Any responses must be submitted to the Executive Secretary’s Office in writing within 10 days of this date, unless directed otherwise. You will not receive a copy of the Staff Memorandum by regular mail.

Your failure to respond in writing to the utility’s answer, Staffs recommendations, or other documents may result in a decision in your case based on your original filing and the other documents in the case file, without further hearing or notice.

When you provide an email address, you will automatically receive electronic docket notifications as documents are filed in this proceeding. The email notifications allow recipients to view a document within an hour from the time the filing is processed.

Please note - the Public Service Commission does not accept electronic filings.

Sincerely,

Connie Graley Executive Secretary

CG/tg Enc. Memo

FINAL JOINT STAFF MEMORANDUM

TO: CONNIE GRALEY Executive Secretary

DATE: March 23,2020

FROM: LESLIE J. ANDERSON, Supervising Attorney

RE: CASE NO. 19-0887-WS-19A CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES, INC.

Staff recommends the following:

The rates and charges shown on Exhibit 5 of the attached Revenue Requirements Staff Recommended Rates report be approved for all water service rendered on and after the date the order in this proceeding becomes final; The rates and charges shown on Exhibit 6 of the attached Revenue Requirements Staff Recommended Rates report be approved for all sewer service rendered on and after the date the order in this proceeding becomes final; The Receiver be directed to record 10.84% of customer water service billings and 1.85% of customer sewer service billings as a Contribution in Aid of Construction in Account 27 1.

Background

On September 12, 20 19, Canaan Valley Public Service District (Receiver) as receiver for Timberline Four Seasons Utilities, Inc. (Timberline Utilities) filed a letter requesting financial and engineering staff assistance in determining appropriate rates for Timberline Utilities. The Receiver asserted that Timberline Utilities’ finances are at crisis levels. The monthly revenues do not come close to meeting the monthly expenses and retiring accumulated debts to the creditors and taxing authorities. The Receiver requested that Staff examine whether emergency interim rates are needed.

As background, Canaan Valley Public Service District was appointed by the Circuit Court of Tucker County to serve as the Receiver of Timberline Utilities on March 13, 2019. During the past six months the Receiver believes it has identified most of Timberline Utilities’ creditors. The Receiver stated it is shocked by the amount of indebtedness accumulated by Timberline Utilities prior management. The Receiver hrther stated it has successfully set up regular monthly billing for Timberline Utilities customers.

Three of Timberline Utilities affiliates, Herz, Herz & Reichle, Timberline Four Seasons Resort Management Company, Inc., and Long Run Realty, Inc., are not paying

Case No. 19-0887-WS-19A March 23,2020 Page 2

their utility bills. All three of these affiliated companies have filed bankruptcy petitions in the Eastern District of Pennsylvania under Chapter 11 of the bankruptcy code. The President of Timberline Utilities, Frederick Reichle, who is also the President of each of the affiliated companies, has filed for protection under Chapter 13 of the bankruptcy code in the same District.

The Receiver has had difficulty in acquiring some banking records due to Timberline Utilities changing banks within the six months prior to the creation of the receivership. The Receiver stated that it

was finally able to secure the general account records from the last of the three banks within the last two weeks, but upon information, it believes that there may have been ACH or similar accounts in at least two of the banks with other parties listed on the account; thus the banks have been unwilling to provide records from those accounts for privacy reasons.

The Receiver further stated that the records for the water and sewer utilities of Timberline Utilities for the year 20 18 may not be complete.

The Receiver explained that because of the bank records issue and record-keeping problems of the Timberline Utilities water and sewer utilities, it very difficult for the Receiver to file accurate annual reports and federal and state tax returns for the year 20 18. The Receiver hoped to file the 20 18 annual reports for Timberline Utilities in the near future.

On October 2, 20 19, the Receiver filed the 20 18 water and sewer utility reports for Timberline Utilities.

On October 9, 2019, Staff filed a Joint Staff Memorandum Including Interim Rate Recommendation. Staff recommended that the District be allowed to proceed with its 19- A filing. Staff also recommended that an order be entered which (1) finds Timberline Utilities’ sewer operation is experiencing financial distress due to it having a negative net income of $438,889 for the test year of the twelve months ended December 3 1,201 8 and (2) approves the Staff Recommended Interim Rates (Exhibit 5 ) to become effective immediately, subject to refund.

By an order entered on November 18, 2019, the Commission approved the Staff interim rates for Timberline Utilities’ sewer operations subject to refund effective for bills rendered on or after the date its order. The Commission also directed the District to provide notice of the approved interim rates and to thereafter file Tariff Form No. 6-B as evidence that the District complied with the notice as required by Tariff Rule 8.2.7.

Case No. 19-0887-WS-19A March 23, 2020 Page 3

On December 2, 2019, Staff filed a Motion to the Commission to Extend Administrative Law Judge and Staff Report Due Dates. Staff explained that Canaan Valley was considering taking out a loan to address some of Timberline Utilities immediate financial needs. Canaan Valley, with Staff assistance, was actively exploring whether Timberline Utilities would qualify for a loan guarantee program. Additionally, news media had stories indicating that certain property of Timberline Utilities’ affiliates who had filed bankruptcy was sold at an auction. In support of its motion Staff stated that it would be beneficial to see what happened with Timberline Utilities’ pursuit of a loan as well as whether any additional information would be forthcoming from the bankruptcy proceeding that may impact rates needed to support Timberline Utilities’ cost of service. Staff requested that the Administrative Law Judges and Staffs due dates be extended by ninety (90) days.

By an order entered on December 4, 2019, the Commission rescinded its December 3, 20 19 order and extended the Administrative Law Judge’s decision due date from May 11, 2020, to August 10, 2020. The Commission also directed Staff to file its report on or before March 23,2020.

On December 9, 2019, Canaan Valley filed a completed Tariff Form No. 6-B as evidence that it provided notice of the approved interim rates. Canaan Valley stated it would be mailing the notice to its customer with the December billing. Canaan Valley also attached a copy of an affidavit of publication as evidence that the notice was published in The Parsons Advocate on November 27,20 19.

Engineering Staff Recommendation

In the attached Engineering Division Final Internal Memorandum, Jonathan Fowler, P.E., provided information on what his review and recommendations are for this case that will not be repeated in detail in this memorandum. In summary, Mr. Fowler recommended that Timberline Utilities be provided with an increase in hnding for maintenance, repair and replacement of $38,000 per year with this amount being allocated as $30,000 for the water operations and $8,000 for the sewer operations.

Mr. Fowler stated Timberline Utilities over some period of time may need to gradually increase its level of maintenance repair and replacement expenditures in order to reach a level that would be adequate to sustain this system indefinitely. Mr. Fowler further stated Timberline Utilities should prepare a written maintenance plan and develop a capital spending plan. Mr. Fowler cautioned Timberline Utilities that it needs to properly account for and spend this maintenance repair and replacement hnding in order for the Commission to consider these expenditures in any hture rate proceeding before the Commission.


Utilities Staff Recommendations

Nathan Mills, Utilities Analyst in the Commission’s Utilities Division, reviewed the District’s filing and documented final rate recommendations through two reports: (1) Staff Rule 42 Exhibit and (2) Revenue Requirements Staff Recommended Rates. The Staff Rule 42 Exhibit includes a transmittal letter describing the review of the District’s operations, the Staff adjustments, and the overall development of the Staff Rule 42 Exhibit. The Revenue Requirements Staff Recommended Rates report contains a summary, the revenue requirements, the bill analysis and the Staff Recommended Tariffs.

In summary, Mr. Mills explained:

Staff Recommended Rates for water operations would generate an additional $53,540 or 23.94% over annual revenue generated by the Company’s current water service rates. Staff Recommended Rates for water operations will be sufficient to cover the Company’s water operating and maintenance expenses of $226,407, taxes other than income taxes of $20,758, and provide a surplus of $30,036 to meet the level of water plant additions recommended by the Commission’s Engineering Division.

Staff Recommended Rates for sewer operations would generate an additional $89,978 or 24.72% over annual revenue generated by the Company’s current sewer service rates. This is an increase of $42,148 or 10.25% over Commission approved interim rates for sewer operations. Staff Recommended Rates for sewer operations will be sufficient to cover the Company’s sewer operating and maintenance expenses of $424,662, taxes other than income taxes of $20,928, and provide a surplus of $8,401 to meet the level of sewer plant additions recommended by the Commission’s Engineering Division.

Mr. Mills recommended the following:

The rates and charges shown on Exhibit 5 of the attached Revenue Requirements Staff Recommended Rates report be approved for all water service rendered on and after the date the order in this proceeding becomes final;

0 The rates and charges shown on Exhibit 6 of the attached Revenue Requirements Staff Recommended Rates report be approved for all sewer service rendered on and after the date the order in this proceeding becomes final;


0 The Receiver be directed to record 10.84% of customer water service billings and 1.85% of customer sewer service billings as a Contribution in Aid of Construction in Account 27 1.

Legal Staff has reviewed the relevant documents submitted in this matter, including the attached bound reports from the Utilities Division. Legal Staff requests these reports be made part of the record in this matter.

This matter is now ready for an order requiring publication of Staff recommended rates consistent with the new Rules for the Construction and Filing of Tariffs (Tariff Rule) 8.2.7 which became effective February 8,2019 and states:

Upon receipt of the Commission’s order requiring notice of Staffs recommended rates, the applicant shall give notice to its customers of any rate or rates so recommended within ten (10) days of such receipt, by: (i) publishing Tariff Form No. 10 by Class I legal advertisement in a qualified newspaper published and of general circulation in each of the counties where service is provided and mailing Tariff Form No. 10 to each of its resale customers; or (ii) mailing, as a bill insert or separate mailing, Tariff Form No. 10 to each of its customers. The Utility shall file a certificate of publication and mailing in the form of Tariff Form No. 6-B with the Commission to the effect that the requirements of Tariff Rule 8.2.7 have been met.

The Receiver must remember that after providing public notice to its customers of the Staffs rate recommendation as directed by the Administrative Law Judge’s order, then Tariff Form No. 6-B must be completed and mailed to the Commission. If the Receiver does not have a copy of this form, please contact Staff to obtain it. After proper notice is given, if no substantial protest is filed within the required time frame, the Staff Attorney recommends that the Administrative Law Judge issue a Recommended Decision approving Staffs recommendations and approving Staffs proposed new tariffs for the District.

LJA/s Attachment WB S:\-Staff-Files\LAnderson\wpdocs\19-0887 (cannaan valley psd for timberline 19A)\final memo.docx

CANAAN VALLEY PUBLIC SERVICE DISTRICT E C E I W R FOR TIMBERLINE FOUR SEASONS UTILITIES, INC.

REVENUE REQUIREMENTS STAFF RI2COMMENDED RATES

CASE NO. 19-0887-WS-19A

Staffs individual Rule 42 Exhibits for the water operations and sewer operations have been utilized to prepare the Staff Recommended Revenue Requirements and Staff Recommended Rates for Canaan Valley Public Service District, Receiver (Receiver) for Timberline Four Seasons Utilities, Inc. (Company).

Staff Recommended Rates for water operations would generate an additional $53,540 or 23.94% over annual revenue generated by the Company’s current water service rates. Staff Recornmended Rates for water operations will be sufficient to cover the Company’s water operating and maintenance expenses of $226,407, taxes other than income taxes of $20,758, and provide a surplus of $30,036 to meet the level of water plant additions recommended by the Commission’s Engineering Division.

Staff Recommended Rates for sewer operations would generate an additional $89,978 or 24.72% over annual revenue generated by the Company’s current sewer service rates. This is an increase of $42,148 or 10.25% over Commission approved interim rates for sewer operations. Staff Recommended Rates for sewer operations will be sufficient to cover the Company’s sewer operating and maintenance expenses of $424,662, taxes other than income taxes of $20,928, and provide a surplus of $8,401 to meet the level of sewer plant additions recommended by the Commission’s Engineering Division.

Exhibit 1 is a Cash Flow Analysis of the Company’s individual water and sewer operations under Staff Recommended Rates. Staff Recommended Rates reflect a surplus for plant additions as recommended by the Commission’s Engineering Division in the amount of $30,000 ($30,036) for water operations and $8,000 ($8,401) for sewer operations. Exhibit 1 reflects an increment related to plant additions as Contributions in Aid of Construction. For water operations, the $30,036 of customer supplied Contributions In Aid of Construction represents 10.84% of customer billings. For sewer operations, the $8,401 in Contributions In Aid of Construction represents 1.85% of customer billings. As shown in the Rule 42 Exhibit on Statement B, the Company’s rate base is depleted as the owners have transferred fimds exceeding the net investment in utility plant.

Exhibit 2 is a bill analysis showing the revenue generated under Staff Recommended rates for water and sewer operations. Exhibit 3 shows a comparison of current and Staff Recommended Rates. Exhibit 4 shows a comparison of customer bills under current and Staff Recommended Rates at various usage levels for water and sewer operations, including average usage by customers.

The Utilities Division calculated the leak adjustment rate for water and sewer operations. The Company’s current leak adjustment rate for water operations is $1.51 per M gallons. staff calculated the Company’s leak adjustment rate for water operations to be $2.06 per

M gallons. The leak adjustment rate for water operations is derived by adding the Company’s going-level cost of purchased power of $2 1,224 and chemicals of $7,076, and dividing by the going-level water sales volume of 28,300.0 M gallons. The Company’s current leak adjustment rate for sewer operations is $0.02 per M gallons. Staff calculated the Company’s leak adjustment rate for sewer operations to be $0.19 per M gallons. The leak adjustment rate for sewer operations is derived by adding the Company’s going-level cost of purchased power of $2,3 14 and dividing by the going-level sewer sales volume of 12,020.2 M gallons. Staff has also clarified language in the minimum bill and return check charge provision of the Company’s water tariff.

Under Staff Recommend Rates, the monthly water bill for a residential customer with an average of 2,500 gallons of usage will increase $9.04 or 23.94% over current rates. Under Staff Recommend Rates, the monthly water bill for a commercial customer with an average of 19,700 gallons of usage will increase $32.09 or 23.92% over current rates. Under Staff Recommend Rates, the monthly sewer bill for a residential customer with an average of 2,600 gallons of usage will increase $17.56 or 22.02% over rates in effect prior to this case. Under Staff Recommend Rates, the monthly sewer bill for a commercial customer with an average of 21,300 gallons of usage will increase $72.08 or 57.41% over rates in effect prior to this case. It should be noted that the monthly EDU charge of $65.00 was not increased since it is equal to the charge received from the wastewater treatment provider, Canaan Valley Public Service District. This leads to percentage increases to bills that are not equal across all levels of usage.

The Utilities Division recommends the rates and charges for water operations shown on Exhibit 5 be approved for Canaan Valley Public Service District, Receiver for Timberline Four Seasons Utilities, Inc. effective for all service rendered on and after the date the order becomes final. The Utilities Division further recommends the rates and charges for sewer operations shown on Exhibit 6 be approved for Canaan Valley Public Service District, Receiver for Timberline Four Seasons Utilities, Inc. effective for all service rendered on and after the date the order becomes final. The Company should be required to record 10.84% of customer water service billings and 1.85% of customer sewer service billings as a Contribution in Aid of Construction in Account 27 1.

CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. CASH FLOW ANALYSIS CASE NO. 19-0887-WS-19A

Available Cash

Metered and Measured Revenues Contributions in Aid of Construction Total Available Cash

Cash Requirements Operation and Maintenance Expenses Taxes Other Than Income Taxes

Surplus Available for Plant Additions

Staff Recommended

Rates Water

Operations $

247,164 30.036

Staff Recommended

Rates Sewer

Operations $

445,591 8.40 1

277.200 453.992

226,407 20,758

247,165

30.036

424,662 20,928

445,591

8.40 1

Exhibit 1

CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES PNC. CUSTOMER'S BILL ANALYSIS YEAR ENDED DECEMBER 3 1,20 18

Exhibit 2 Sheet 1 of4

Staff Recommended - Water Operations Number Minimum Bills First Next All Over Residential Customers of M. Gals 4 M 6 M 10 M January 20 1 8 - December 20 18 (1 2 Months; Bills Sold Rate Revenue Gallons Gallons Gallons Revenue

(1) (2) (3) (4) (5) (6) (10) (11) $ $ $ $ $ $

5/8 Inch Meter 4,483 6,940.1 46.80 209,804 314 Inch Meter 70.20 1 Inch Meter 117.00 1 1/2 Inch Meter 234.00 2 InchMeter 374.40 3 InchMeter 748.80 4 InchMeter 1,170.00 6 Inch Meter 2,340.00 8 InchMeter 3,744.00

4,001 - 10,000 Gallons All Over 10,000 Gallons

Total Rates

369 2,261.5 153 3,258.1

1,476.0 785.5 612.0 918.0 1,728.1

5,005 12,459.6 209,804 2,088 1,703 1,728 11.70 9.01 6.74

Residential Revenue Per Analysis Correction Factor Total Residential Water Sales Revenue and CIAC increment under Staff Recommended Rates CIAC Increment @ 10.84% Total Residential Revenues under Staff Recommended Rates

209,804 24,430 15,348 1 1,647 26 1,229

26 1,229 0.985260 257,378 27,888

229,490

CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. CUSTOMER'S BILL ANALYSIS YEAR ENDED DECEMBER 3 1.20 1 8

Exhibit 2 Sheet 2 of 4

Staff Recommended - Water Operations Number Minimum Bills First Next All Over Commercial Customers of M. Gals 4 M 6 M 10 M January 20 1 8 - December 20 18 (I 2 Months: Bills Sold Rate Revenue Gallons Gallons Gallons Revenue

(1) (2) (3 ) (4) (5) (6) (10) (11) $ $ $ $ $ $

5/8 Inch Meter 46.80 314 Inch Meter 70.20 1 InchMeter 32.4 1 17.00 819 1 1/2 Inch Meter 26.0 234.00 1,872 2 InchMeter 335.3 374.40 1 1,606 3 InchMeter 748.80 4 InchMeter 1,170.00 6 InchMeter 2,340.00 8 InchMeter 3,744.00


Total Rates

7 8

31

11 732.0 44.0 66.0 622.0

57 1,125.6 14,297 44.0 66.0 622.0 1 1.70 9.01 6.74

Commercial Revenue Per Analysis Correction Factor Total Commercial Water Sales Revenue and CIAC increment under Staff Recommended Rates CIAC Increment @ 10.84% Total Commercial Revenues under Staff Recommended Rates

14,297 515 595 4,192 19,599

19,599 1.01 1394

19,822 2,148

17.674

CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. CUSTOMERS BILL ANALYSIS YEAR ENDED DECEMBER 3 I , 20 18

Exhibit 2 Sheet 3 o f 4

Staff Recommended - Sewer Operations Residential O f M. Gals First 4,000 Next 6,000 All Over January 20 1 8 - December 20 18 (12 months) Bills Sold Rate Revenue Gallons Gallons 10,000 Gallons Revenue

Number

(1) (2) (3 1 (4) ( 5 ) ( 6 ) (7) (8) $ $ $

Minimum Bills 3,909 6,013.7 32.32 126,339 Annual EDU Charge @ 4,240.1 EDUs 65.00 238,951

4,000-10,000 Gallons All Over 10,000 Gallons

328 2,034.7 147 3,269.1

Total Rates

Revenue Per Analysis

4,384 11,3 17.5

Total Revenue Per Analysis Correction Factor Total Residential Sewer Sales Revenue and CIAC increment under Staff Recommended Rates CIAC Increment @ 1.85% Total Residential Revenues under Staff Recommended Rates

722.7 588.0 882.0 1,799.1

1,3 12.0

1,900.0 1,604.7 1,799.1 8.08 6.8 1 5.26

365,290 15,352 10,928 9,463 401,034

40 1,034 0.99 1001 397,425

7,354 390,070

CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. CUSTOMER'S BILL ANALYSIS YEAR ENDED DECEMBER 3 1,20 1 8


Staff Recommended - Sewer Operations Commercial of M. Gals First 4,000 Next 6,000 All Over January 20 18 - December 20 18 (12 months) Bills Sold Rate Revenue Gallons Gallons 10,000 Gallons Revenue

Number

(1) (2) (3) (4) (5) (6) (7) (8) $ $ $

Minimum Bills Annual EDU Charge @ 239.07 EDUs


Total Rates


15 28.0 32.32 485 65.00 52,200

8 55.9 10 618.7

33 702.7

32.0 23.9 40.0 60.0 518.7

Total Revenue Per Analysis Correction Factor Total Commercial Sewer Sales Revenue and CIAC increment under Staff Recommended Rates CIAC Increment @ 1.85% Total Commercial Revenues under Staff Recommended Rates

72.0 83.9 518.7 8.08 6.8 1 5.26

52,685 5 82 5 72 2,729 56,567

56,567 1.000006

56,567 1,047

55.520

Canaan Valley Public Service District Receiver for Timberline Four Seasons Utilities, Inc. Case No. 19-0887-WS-19A Comparison of Water Operations Current and Staff Recommended Rates

Water ODerations


Metered Rates First 4,000 gallons used per month Next 6,000 gallons used per month All Over 10,000 gallons used per month

Minimum Charges 5/8 inch Meter 3/4 inch Meter 1 inch Meter

1 1/2 inch Meter 2 inch Meter 3 inch Meter 4 inch Meter 6 inch Meter 8 inch Meter

Delayed Payment Penalty

Tar, Fee Pre-Construction Outside of Certificate Proceeding

Reconnection Charge

Leak Adjustment

Current Rates

$ 9.44 7.27 5.44

37.76 56.64 94.40

188.80 302.08 604.16 944.00

1,888.00 3,020.80

10.00%

100.00 300.00

20.00

1.51

Staff Recommended Rates Increase Increase

$ $ YO 11.70 2.26 23.94% 9.01 1.74 23.93% 6.74 1.30 23.90%

46.80 70.20

1 17.00 234.00 374.40 748.80

1 , 170.00 2,340.00 3,744.00

9.04 13.56 22.60 45.20 72.32

144.64 226.00 452.00 723.20

23.94% 23.94% 23.94% 23 .94% 23.94% 23 .%Yo 23.94% 23.94% 23.94%

10.00% 0.00 0.00%

100.00 0.00 0.00% 300.00 0.00 0.00%

20.00 0.00 0.00%

2.06 0.55 36.25%

Return Check Charge 25.00 25.00 0.00 0.00%

Canaan Valley Public Service District Receiver for Timberline Four Seasons Utilities, Inc. Case No. 19-0887-WS-19A Comparison of Water Operations Current and Staff Recommended Rates

Metered Rates First 4,000 gallons used per month Next 6,000 gallons used per month All Over 10,000 gallons used per month

EDU Charee

Minimum Char= Monthly Charge Minimum per EDU

Leak Adiustrnent


Sewer Operations Current Approved Interim Rates Staff Recommended Rates Rates Increase Increase Rates Increase Increase

$ $ $ YO $ $ %

$ 3.69 $ 6.20 $ 2.51 68.02% $ 8.08 $ 4.39 118.97% $ 3.11 $ 5.23 $ 2.12 68.17% $ 6.81 $ 3.70 118.97% $ 2.40 $ 4.03 $ 1.63 67.92% $ 5.26 $ 2.86 119.17%

$ 65.00 $ 65.00 $ - $ 65.00 $ -

$ 14.76 $ 24.80 $ 10.04 68.02% $ 32.32 $ 17.56 118.97% $ 65.00 $ 65.00 $ - $ 65.00 $ -

$ 0.02 $ 0.02 $ - $ 0.19 $ 0.17 862.74%

Canaan Valley Public Service District Receiver for Timberline Four Seasons Utilities, Inc. Case No. 19-0887-WS- 19A Bill Comparison under Current and Staff Recommended Rates

Exhibit 4 Sheet 1 o f 2

Water Operations Gallons Usage

0 500

1,000 2,000 2,500 3,000 4,000 4,500 5,000 7,000 8,000

10,000 15,000 19,700 20,000 25,000 30,000 50,000 75,000

100,000 150,000 200,000 500,000

1,000,000

Current Rates

Staff Recommended Rates Difference Difference

$ 37.76 37.76 37.76 37.76 37.76 37.76 37.76 41.40 45.03 59.57 66.84 81.38

108.58 134.15 135.78 162.98 190.18 298.98 434.98 570.98 842.98

1,114.98 2,746.98 5,466.98

$ 46.80 46.80 46.80 46.80 46.80 46.80 46.80 51.31 55.81 73.83 82.84

100.86 134.56 166.24 168.26 20 1.96 23 5.66 370.46 538.96 707.46

1,044.46 1,3 8 1.46 3,403.46 6,773.46

$ 9.04 9.04 9.04 9.04 9.04 9.04 9.04 9.91

10.78 14.26 16.00 19.48 25.98 32.09 32.48 38.98 45.48 71.48

103.98 136.48 20 1.48 266.48 656.48

1,306.48

% 23.94% 23.94% 23.94% 23.94% 23.94% 23.94% 23.94% 23.94% 23.94% 23.94% 23.94% 23.94% 23.93% 23.92% 23.92% 23.92% 23.91%

23.90% 23.90% 23.90% 23.90% 23.90% 23.90%

23.9 I Yo

Canaan Valley Public Service District Receiver for Timberline Four Seasons Utilities, Inc. Case No. 19-0887-WS- 19A BILL COMPARISON UNDER CURRENT AND STAFF RECOMMENDED RATES


Sewer ODerations Gallons Usage

0 500

1,000 2,000 2,600 3,000 4,000 4,500 5,000 7,000 8,000

10,000 15,000 20,000 21,300 25,000 30,000 50,000 75,000

100,000 150,000 200,000 500,000

1,000,000

Current Rates

Staff Recommended Rates Difference Difference

$ 79.76 79.76 79.76 79.76 79.76 79.76 79.76 8 1.32 82.87 89.09 92.20 98.42

110.42 122.42 125.54 134.42 146.42 194.42 254.42 3 14.42 434.42 554.42

1,274.42 2,474.42

$ 97.32 97.32 97.32 97.32 97.32 97.32 97.32

100.73 104.13 1 17.75 124.56 138.18 164.48 190.78 197.62 2 17.08 243.3 8 348.58 480.08 611.58 874.58

1,137.58 2,715.58

$ 17.56 17.56 7.56 7.56 7.56 7.56 7.56 9.4 1

2 1.26 28.66 32.36 39.76 54.06 68.36 72.08 82.66 96.96

154.16 225.66 297.16 440.16 583.16

1,44 1.16 5,345.58 2,871.16

YO 22.02% 22.02% 22.02% 22.02% 22.02 Yo 22.02% 22.02% 23.87% 25.65% 32.17% 35.10% 40.40% 48.96% 55.84% 57.41 Yo 6 1.49%

79.29% 88.70% 94.5 1% 0 1.32% 05.18%

16.03%

66.22%

13.08%

Canaan Valley Public Service District Receiver for Timberline Four Seasons Utilities, Inc Case No. 19-0887-WS-19A

Exhibit 5

Staff Recommended Tariff - Water Operations Effective for service rendered on and after the date of the final o rda

APPLICABILITY Applicable for entire territory served

AVAILABILITY OF SERVICE Available for general residential, commercial, condo, townhouse, industrial and resale service.

(I) METEREDRATES First 4,000 gallons used per month $1 1.70 per 1,000 gallons Next 6,000 gallons used per month $9.01 per 1,000 gallons All over 10,000 gallons used per month $6.74 per 1,000 gallons

(1,C) MINUMUM CHARGES No bill will be rendered for less than the following, according to the size of the meter installed:

5/8 314

1 1-112

2 3 4 6 8

inch meter inch meter inch meter inch meter inch meter inch meter inch meter inch meter inch meter

$46.80 per month $70.20 per month

$1 17.00 per month $234.00 per month $374.40 per month $748.80 per month

$1,170.00 per month $2,340.00 per month $3,744.00 per month

DELAYED PAYMENT PENALTY The above schedule is net. On all accounts not paid in full when due, ten percent (10Y0) will be added to the net current amount unpaid. This delayed payment penalty is not interest and is to be collected only once for each bill where it is appropriate.

TAP FEE The following charge is to be made whenever the utility installs a new tap to serve an applicant.

A tap fee of $100 will he charged to customers applying for service before construction completed adjacent to the customer’s premises in connection with a certificate proceeding before the Commission. This pre-construction tap fee will be invalid after the completion of construction adjacent to the applicant’s premises that is associated with a certificate proceeding.

A tap fee of $300 will be charged to customers applying for service outside of a certificate proceeding before the Commission for each new tap to the system.

RECONNECTION CHARGE $ 20.00

To be charged whenever the supply of water is turned off for violations of rules, non- payment of bills or fraudulent use of water.

(I) LEAK ADJUSTMENT $2.08 per 1,000 gallons is to be used when the bill reflects unusual consumption which can be attributed to eligible leakage on the customer’s side of the meter. This rate is to be applied to all such consumption above the customer’s historical average usage.

(C) RETURNED CHECK CHARGE A service charge equal to the actual bank fee assessed to the utility up to a maximum of $25 will be imposed upon any customer whose check for payment of charges is returned by the bank due to insufficient funds.

CANAAN VALLEY PUBLIC SERVICE DISTRICT, RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES, INC. - SEWER CASE NO. 19-0887-WS-19A

Exhibit 6

Staff Recommended Tariff - Sewer Operations Effective for service rendered on and after the date of the final order

APPLICABILITY Applicable in entire territory served.

AVAILABILITY OF SERVICE Available for residential, commercial, and industrial service.

(I) RATES BASED ON METERED WATER SERVICE First 4,000 gallons of water used per month $ 8.08 per 1,000 gallons Next 6,000 gallons of water used per month $ 6.8 1 per 1,000 gallons All over 10,000 gallons of water used per month $ 5.26 per 1,000 gallons

EDU CHARGE Each customer shall be billed $65.00 per month per EDU.

(I) MINIMUM CHARGE No sewer bill will be rendered for less tha $ 32.32 a month, plus $65.00 per EDU per month.

(I) LEAK ADJUSTMENT $ 0.19 per 1,000 gallons of water is to be used when a bill reflects unusual water consumption

which can be attributed to eligible leakage on the customer's side of the meter. This rate shall be applied to all such consumption above the customer's historical average usage.

(I) Indicates Increase

CANAAN VALLEY PUBLIC SERVICE DISTRICT - WATER CASE NO. 19-0887-WS-19A

TABLE OF CONTENTS

STATEMENT

Letter of Transmittal

Statement of Net Income Schedule 1 - Detail of Operating Revenues Schedule 2 - Detail of Operation and Maintenance Expenses Schedule 3 - Depreciation and Amortization Schedule 4 - Taxes Other Than Federal Income Taxes Schedule 5 - Federal and State Income Taxes Schedule 6 - Other Income Schedule 7 - Other Income Deductions

Average Rate Base Schedule 1- Utility Plant In Service Schedule 2 - Plant Held for Future Use Schedule 3 - Unclassified Plant in Service Schedule 4 - Cnstrn Work in Progress - Cmpltd and in Service Schedule 5 - Materials and Supplies Schedule 6 - Prepayments Schedule 7 - Working Cash Allowance Schedule 8 - Accumulated Depreciation Schedule 9 - Retirement Work in Progress Schedule 10 - Contribution in Aid of Construction Schedule 11 - Customer Advances for Construction Schedule 12 - Customer Deposits

Detail of Debt Capital

Customer's Bill Analysis Per Books Going Level Schedule 1 - Current Tariff

Comparative Balance Sheet Schedule 1 - Statement of Changes in Retained Earnings Schedule 2 - Cash Flow Analysis

Detail of Adjustments

PAGE NUMBER

1 2 3-6 7 8

9-10 1 1 12

13 14 15 16 17 18 19 20 21 22 23 24 25

26

27-28 29-30

31

32-37 38

39-40

4 1-45

201 Brooks Street, P.O. Box 812 Charleston, West Virginia 25323

Phone: (304) 340-0300 Fax: (304) 340-0325

March 23,2020

Commissioners Public Service Commission of West Virginia 201 Brooks Street Charleston, WV 25301

Re: Case No. 19-0887-WS-19A - WATER Canaan Valley Public Service District Receiver for Timberline Four Seasons Utilities, Inc.

Commissioners:

Transmitted herewith is a report outlining the results of the Utilities Division’s examination of the books and records for the water operations of Timberline Four Seasons Utilities, Inc. (Company) for the test year ended December 31, 2018. The purpose of this examination was to evaluate revenue, expense, and debt service accounts in order to determine going level and to prepare revenue requirements. Except to the extent necessary to develop rates, the scope of the examination preformed did not include confirmation of current asset or liability balances. Due to these limitations and the scope of the examination, this report should not be confixed with, nor substituted for an audit preformed by independent auditors.

On September 12, 20 19, Canaan Valley Public Service District, Receiver for Timberline Four Seasons Utilities, Inc. (Receiver) filed a letter signed by the Canaan Valley Public Service District Chairman requesting an increase in the rates for Timberline Four Seasons Utilities, Inc (Company). The letter also requests the determination, “. . .whether emergency rates under Rule1 9-A are warranted.”

On October 2, 2019, the Receiver filed the 2017 and 2018 Annual Reports for the Company’s water and sewer operations with the Commission. According to its Annual Reports covering the twelve months ended December 31, 2018, the Company provides water utility service to approximately 425 customers and sewer utility service to approximately 743 customers in Tucker County. The Company’s number of average of

Commissioners Case No. 19-0887-WS- 19A - WATER March 23, 2020 Page 2

sewer customers reflected in its annual report have been double counted since the Company’s sewer customers are charged both a flat rate and measured charge. The actual average number of sewer customers for the Company is approximately 377. The Company reported water operating revenues of $225,729 and sewer operating revenues of $401,349 for the year ended December 31, 2018. The combined reported operating revenue for this period is $627,078.

It should be noted that the Company was placed into the receivership of Canaan Valley Public Service District in March 20 19. Prior to receivership, the Company was engaged in an agreement with an affiliate, Timberline Four Seasons Management Company. Under this agreement, Timberline Four Seasons Management Company provided the Company with labor required for maintenance of assets owned by the utility; payroll overhead expenses related to labor; management, billing, and administrative services required for operation of utility; use of management company equipment at actual cost; materials at actual cost; and two full-time certified operators. The test year amount billed for this agreement totals $90,000 for the Company, which was then allocated $45,000 each to water and sewer operations.

It should further be noted that the Canaan Valley Public Service District’s board of directors voted in a March 3, 2020 board meeting to file for Chapter 11 bankruptcy for the Company.

Staff has made accounting adjustments (1) to reflect actual test year purchased power billings (2) capitalize pumping equipment (3) correct year end adjusting journal entries (4) include expenses for SCADA services that were allocated to sewer operations (5) allocate telephone expenses and (6) remove prior period expenses.

Staff has made going level adjustments to account for known and measurable changes occurring during or subsequent to the test year. Those adjustments include changes to reflect the Company being placed into receivership of Canaan Valley Public Service District in March 2019 and the termination of the agreement with Timberline Four Seasons Management Company. Additional information supporting these adjustments can be found in Statement G. Other Staff adjustments are as follows:

e Staff has made a going-level adjustment to reduce revenue by $444 to reflect correct billing of the Company’s commercial customers. The Company is overbilling customers with meter sizes over a 5/8 inch meter.

Commissioners Case No. 19-0887-WS- 19A - WATER March 23,2020 Page 3

0 Staff has made a going-level adjustment to remove $1,624 of revenues, $266 of purchased power, and $89 of chemicals to reflect the closure of the Timberline Dormitories, an affiliated customer.

0 Staff has made a going-level adjustment to reduce purchased power expense by $972 to reflect the Company’s test year power usage based upon the current electric service rates of its purchased power provider, Monongahela Power Company.

0 Staff has made a going-level adjustment to remove the $45,000 annual fee paid to the Company’s former management company. The Company was placed into the receivership of Canaan Valley Public Service District in March 2019. The total billed to the utility from the management company during the test year was $90,000, which $45,000 was allocated each to water and sewer operations.

0 Staff has made an adjustment to include $57,556 of wages to reflect the Company now having its own employees. Hours from the most recent 26 two-week pay periods and current hourly pay rates have been used to determine wage expense. Wage expense of that amount was then allocated 50% to water operations and 50% to the sewer operations. Prior to being placed into receivership, the Company was provided labor services by an affiliate, Timberline Four Seasons Management Company.

0 Staff has made an adjustment to increase operating and maintenance expense by $1, 1 18 to reflect customer bad debt expense using a ratio of 0.5% of water sales. The Company has not collected total customer account billings for water and sewer service made to affiliates totaling approximately $236,000. Those extraordinary past due arrearages represent additional funds that should have been available to the Company. Those affiliated arrearages should not be considered bad debts for recovery from rate payers.

0 Staff has increased going-level accounting expenses by $13,672 to reflect monthly accounting services provided by Scott & Nypl CPAs. Staff has used the last six months of invoices to determine an annual amount of accounting expenses. This amount is then allocated 50% to water operations and 50% to sewer operations.

Commissioners Case No. 19-0887-WS-19A - WATER March 23,2020 Page 4

Staff has increased going-level contractual service expense by $34,764 to reflect the costs of a Canaan Valley Public Service District employee working for the Company. The ratio of the hours worked for the Company to total hours worked by this employee during the past 26 two week pay periods has been used to allocate regular and overtime hours to the Company. The amount of allocated hours to the Company are then priced at the employee’s current pay rate to determine the appropriate amount of wage cost to be assigned to the Company. Adjustments have also been made for the FICA and Public Employee Retirement System retirement expense for additional employee labor overhead costs assigned to the Company. This total cost to the Company is then allocated to water and sewer operations based on 50% to water operations and 50% to sewer operations.

8 Staff has removed $5,068 in legal expenses at going-level to eliminate test year costs associated with the Company being placed into receivership.

Staff has increased operation and maintenance expense by $1,800 for the lease of a new office for customer and billing services. The monthly office rent is $300 or $3,600 annually. This amount is then allocated 50% to water operations and 50% to sewer operations.

8 Staff has increased operation and maintenance expense by $2,100 to reflect a monthly lease for a utility truck from the Company’s receiver, Canaan Valley Public Service District. The monthly rent for this utility truck is $350 or $4,200 annually. This amount is then allocated 50% to water operations and 50% to sewer operations.

Staff has increased going-level insurance by $1,928 to reflect the Company current workers compensation insurance premium, effective May 17, 2019 through May 17, 2020. This amount is then allocated 50% to water operations and 50% to sewer operations.

8 Staff has increased going-level insurance by $1,197 to reflect the current annual property insurance for the Company. The Company’s assets have now been included in the property insurance policy of the receiver, Canaan Valley Public Service District. The increase in

Commissioners Case No. 19-0887-WS- 19A - WATER March 23,2020 Page 5

the Canaan Valley Public Service District’s insurance policy premium has been allocated in part to the Company. The current total annual premium of Canaan Valley Public Service District is $20,155.

e Staff has increased miscellaneous expenses by $601 to reflect the current annual expense for the Company’s phone services. Invoices from February 2020 have been used to determine the applicable current monthly cost and have been allocated 50% to water operations and 50% to sewer operations.

e Staff has eliminated depreciation expense at going-level to reflect the fact that the Company has improperly transferred fbnds to affiliates thereby nullifying all plant investment in the Company.

e Staff has made two adjustments to utility regulatory assessment fees for revenue and property assessments totaling $1 15.

Staff has also increased FICA expenses at going-level by $4,403 to reflect additional labor overhead costs based upon the salaries and wages for the Company’s water operations.

Revenue Requirements and Staff Recommended Rates will be presented under separate cover.

Respectfully submitted, L

Nathan Mills, Utilities Analyst 111 Utilities Division

NM:ls

Attachment

CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. - WATER STATEMENT OF NET INCOME YEAR ENDED DECEMBER 3 I, 20 18

Statement A

Reference Accounting Per Books Going Level Statement A Per Books Adjustments Adjusted Adjustments Going Level

(1) (2) (3 1 (4) (5 ) $ $ $ $ $

UTILITY OPERATING INCOME

Operating Revenues

Operating Revenue Deductions Operation and Maintenance Depreciation and Amortization Taxes Other Than Income Taxes Federal Income Taxes State Income Taxes

Total Operating Revenue Deductions

Net Operating Income

Other Income

Other Income Deductions

NET INCOME

Rate Base

Rate of Return

Schedule 1 225,729 225,729 (2,068) 223,66 1

Schedule 2 154,560 8,334 162,894 63,245 226,139

Schedule 4 13,614 13,614 4,5 18 18,132 Schedule 5 758 758 758 Schedule 6 25 1 25 1 25 1

Schedule 3 9,805 9,805 (9,805)

178,988 8,334 187,322 57,958 245,279

46,74 1 (8,334) 38,407 (60,026) (2 1,6 19)

Schedule 6 -

Schedule 7

46,74 1 (8,334) 38,407 (60,026) (21,619)

Statement B 188,862 191,332 NIA

24.75% 20.07%

CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. - WATER DETAIL OF OPERATING REVENUE YEARENDED DECEMBER 31,2018

Statement A Schedule 1

Account Number

Sales of Water

460.0 Unmetered Water Revenue

Total Unmetered Sales

461.0 Metered Sales

461.1 461.2 461.3 461.4

Meter Sales to Residential Customers Meter Sales to Commercial Customers Meter Sales to Indusbid Customers Meter Sales to Public Authorities

Total Metered Revenue

462.0 Fire Protection Revenue 462.1 Public Fire Proctection 462.2 Private Fire Proctection

Total Fire Protection

464.0 466.0 Sales for Resale 467.0 Interdepartmental Sales

Other Sales to Public Authorities

Total Sales of Water

Other Operating Revenues

469.0 Guaranteed Revenues 470.0 Forfeited Discounts 471.0 Miscellaneous Service Revenues 472.0 Rents from Water Property 473.0 Interdeptmental Rents 474.0 Other Water Revenues

Total Other Operating Revenues

Accounting Per Books Going Level Per Books Adjustments Adjusted Adjustments Going, Level

(1) (2) (3) (4) ( 5 ) $ $ $ $ $

209,291 16,438

209,291 (1,624) (9) 207,667 16,438 (444) (8 ) 15,994

225,729 225,729 (2,068) 223,661

225.729 225,729 (2,068) 223,661

Total Water Operating Revenues 225.729 225.729 (2,068) 223,661

CANAAN VALLEY PUBLIC SERVICE DISTRICT

DETAIL OF OPERATTON AND MAINTENANCE EXPENSES YEAR ENDED DECEMBER 3 1.201 8

RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. - WATER

Account Number

SOURCE OF SUPPLY AND PUMPING EXPENSES

Ooeration

601 1 Salaries and Wages - Employees 603.1 Salaries and Wages - Officers, Directors, etc 604.1 Employee Pensions & Benefits 610.1 Purchased Water

615.1 Purchased Power 616.1 Fuel for Power Production 6 18.1 Chemicals 620.1 Materials and Supplies

631.1-636.1 Contractual Services 64 1.1 Rental of BuildingReal Property 642.1 Rental of Equipment 650.1 Transportation Expenses

667.1 Regulatory Commission Expense -Other 668.1 Water Resource Conservation Expense 675.1 Miscellaneous Expenses

656.1-659.1 Insurance

Accounting Per Books Adjustments

(1) (2) $ $

Maintenance 601.2 Salaries and Wages - Employees 603.2 Salaries and Wages - Officers, Directors, etc 604.2 Employee Pensions & Benefits 618.2 Chemicals 620.2 Materials and Supplies

631.2-636.2 Contractual Services 64 1.2 Rental of BuildingReal Property 642.2 Rental of Equipment 650.2 Transportation Expenses

667.2 Regulatory Commission Expense -Other 675.2 Miscellaneous Expenses -


18,440 4,021 (1)

7,165 17,549 (4,942) (2)

5,000 (3) 74,671 9,931 (4)

5,581

Per Books Adjusted

(3) $

22,461

7,165 12,607

89,602

5,581


Sheet 1 of 4

Going Level Adjustments Going Level

(4) (5 ) $ $

(89) (11)

(45,000) (12)

7,076 12,607

44,602

5,581

9,607 9,607 9,607

Total Source of Supply and Pumping Expenses 133,013 14,010 147,023 (46,326) 100,697

w

CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TIMBERLNE FOUR SEASONS UTILITIES INC. - WATER DETAK OF OPERATION AND MAINTENANCE EXPENSES YEAR ENDED DECEMBER 3 1.20 I8

Account Number

WATER TREATMENT EXPENSES

ODeration

601.3 Salaries and Wages - Employees 603.3 Salaries and Wages - Officers, Directors, etc 604.3 Employee Pensions &Benefits 615.3 Purchased Power 616.3 Fuel for Power Production 618.3 Chemicals 620.3 Materials and Supplies

631.3-636.3 Contractual Semces 641.3 Rental of BuildingReal Property 642.3 Rental of Equipment 650.3 Transportation Expenses

667.3 Regulatory Commission Expense -Other 675.3 Miscellaneous Expenses


Maintenance 601.4 Salaries and Wages - Employees 603.4 Salaries and Wages - Officers, Directors, etc 604.4 Employee Pensions &Benefits 618.4 Chemicals 620.4 Materials and Supplies

631.4-636.4 Contractual Services 641.4 Rental of Buildinflea1 Property 642.4 Rental of Equipment 650.4 Transportation Expenses



Total Water Treatment Expenses


Sheet 2 of 4

Going Level Accounting Per Books Per Books Adjustments Adjusted Adjnshnents Going Level

(2) (3) (4) ( 5 ) $ $ $ $

(1) $

2 1,748 (13) 21,748

21,748 21,748

CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TLMBERLINE FOUR SEASONS UTILITIES INC - WATER DETAIL OF OPERATION AND MAJNENANCE EXPENSES YEAR ENDED DECEMBER 3 1,201 8


Sheet 3 O f 4

Accounting Per Books Going Level Account Number

Per Books Adjustments Adjusted Adjustments Going Level (1) (2) (3) (4) (5)

$ $ $ $ $ TRANSMISSION AND DISTRIBUTION EXPENSES

&eration

601.5 Salaries and Wages - Employees 603.5 Salaries and Wages - Officers, Directors, etc 604.5 Employee Pensions &Benefits 615.5 Purchased Power 616.5 Fuel for Power Production 618.5 Chemicals 620.5 Materials and Supplies

631.5-636.5 Contractual Services 641.5 Rental of Building/Real Property 642.5 Rental of Equipment 650.5 Transportation Expenses



Maintenance 601.6 Salaries and Wages - Employees 603.6 Salaries and Wages - Officers, Directors, etc 604.6 Employee Pensions &Benefits 618.6 Chemicals 620.6 Materials and Supplies

631.6-636.6 Contractual Services 641.6 Rental of Buildinflea1 Property 642.6 Rental of Equipment 650.6 Transportation Expenses



Total Transmission and Distribution Expenses

21,748 (13) 21,748

21,748 21,748

tn

CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. -WATER DETAIL OF OPERATION AND MAINTENANCE EXPENSES YEAR ENDED DECEMBER 31.2018


Sheet 4 of 4

Account Number

CUSTOMER ACCOUNTS EXPENSES

Oueration

601.7 Salaries and Wages - Employees 603.7 Salaries and Wages - Officers, Directors, etc 604.7 Employee Pensions & Benefits 615.7 Purchased Power 616.7 Fuel for Power Production 620.7 Materials and Supplies

631.7-636.7 Contractual Services 641.7 Rental ofBuildmfleal Property 642.7 Rental of Equipment 650.7 Transportation Expenses

667.7 Regulatory Commission Expense -Other 670.7 Bad Debt Expense 675.7 Miscellaneous Expenses

656.7-659.7 I n s m c e

Total Customer Accounts Expenses

ADMINISTRATIVE AND GENERAL EXPENSES

herat ion 601.8 Salaries and Wages - Employees 603.8 Salaries and Wages - Officers, Directors, etc 604.8 Employee Pensions & Benefits 615.8 Purchased Power 616.8 Fuel for Power Production 620.8 Materials and Supplies

631.8-636.8 Contractual Services 641.8 Rental of Buildinfled Property 642.8 Rental of Equipment 650.8 Transportation Expenses

656.8-659.8 Insurance 660.8 Advertising Expense 666.8 Reg. Commission Exp. - Amort. Of Rate Case Exp. 667.8 Regulatory Commission Expense -Other

675.8 Miscellaneous Expenses

Total Administrative and General Expenses

Total Operation and Maintenance Expenses

Accounting Per Books Going Level Adjustments Going Level Per Books Adjustments Adjusted

(1) (2) (3) (4) ( 5 ) $ $ $ $ $

1,118 (14) 1.118

1,118 1,118

2,592

13,820

14,060 (13) 14,060

2,592 2,592 34,764 (15) 13,575 (16)

(3.059) ( 5 ) 10,761 (5.068) (17) 54,032 1,800 (18) 1,800 2,100 (19) 2,100

_ I

1,928 (20) 1,197 (21) 3,125

(2,011) (6) 5,135 (606) (7) 2,518 601 (22) 3.1 19

2 1.547 (5,676) 15,871 64,957 80,828

154,560 8,334 162,894 63,245 226,139


DEPRECIATION AND AMORTIZATION YEAR ENDED DECEMBER 3 1,201 8

RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITES INC. - WATER Statement A

Schedule 3

Account Number

Accounting Per Books Going Level Per Books Adjustments Adjusted Adjustments Going Level

(1) (2) (3) (4) (5) $ $ $ $ $

403 Depreciation 9,805 - 9,805 (9,805) (23)

Total Depreciation and Amortization 9,805 9,805 (9,805)


TAXES OTWR THAN INCOME TAXES YEAR ENDED DECEMBER 3 1,201 8


Account Number

408.10 Utility Regulatory Assessment Fees 408.1 1 Property Tax 408.12 FICA 408.13 Sales & Use Tax

WV B&O Tax DEP Permit

Total Taxes Other Than Income Taxes



(1) (2) (3 ) (4) (5) $ $ $ $ $

14 (24) 1,s 15 1,115 101 (25) 1,230 2,599 2,599 2,599

4,403 (26) 4,403 88 88 88

9,682 9,682 9,682 130 130 130

13.614 13.614 4.5 18 18.132


FEDERAL INCOME TAXES YEAR ENDED DECEMBER 3 1 , 201 8

RECEIVER FOR TIMBERLM FOUR SEASONS UTILITIES INC. - WATER

Total Company Per Tax Return

WATER OPERATIONS Operating Revenues: 627,078 Less: Operating and Maintenance 586,574

Taxes Other Than Income Taxes 26,796 Net Operating Water Income before Federal Income Taxes 3,860

Depreciation and Amortization 9,848

SEWER OPERATIONS Operating Revenues: Less: Operating and Maintenance Depreciation and Amortization Taxes Other Than Income Taxes Net Operating Sewer Income before Federal Income Taxes

Net Operating Combined Income before Federal Income Taxes 3,860

Statutory Deductions State Income Taxes 25 1

Taxable Income 3,609

Federal Income State Calculation:

Federal Taxable Income Federal Income Tax Rate Current Federal Income Taxes

3,609 2 1 .OO%

758

Per Books Adjusted

225,729

162,894 9,805

13,614 39,416

40 1,349

41 5,175 43

14,633 (28,502)

10,913

709

10,203

10,203 2 1 .OO%

2,143

Provision for Federal Income Tax 758 2,143

Going-Level

223,661

226,139

18,132 (20,6 10)

364,014

424,2 15

19,180 (79,382)

(99,993)

(99,993)

2 1 .OO%


Sheet 1 o f 2


STATE INCOME TAXES YEAR ENDED DECEMBER 3 I. 201 8

RECEIVER FOR TIMBERLNE FOUR SEASONS UTILITIES INC. - WATER


WATER OPERATIONS Operating Revenues: Less: Operating and Maintenance Depreciation and Amortization Taxes Other Than Income Taxes Net Operating Water Income before Federal Income Taxes

SEWER OPERATIONS Operating Revenues: Less: Operating and Maintenance Depreciation and Amortization Taxes Other Than Income Taxes Net Operating Water Income before Federal Income Taxes

627,078

586,574 9,848

26,796 3,860


Taxable Income 3,860

State Income Tax Calculation:

State Taxable Income State Income Tax Rate Current State Income Tax

3,860 6.50%

25 1

Provision for State Income Taxes 25 1

Per Books Adjusted

225,729

162,894 9,805

13,614 39,416

40 1.349

415,175 43

14,633 (28,502)

10,913

10,913

10,913 6.50% 709

709

Going-Level

223,66 1

226,139

18,132 (20,610)

364,014

424,2 15

19,180 (79,382)

(99,993)

(99.993)

6.50%


Sheet 2 of 2


OTHER INCOME YEAR ENDED DECEMBER 3 1,20 18

RECEIVER FOR TMBERLINE FOUR SEASONS UTILITIES JNC. - WATER Statement A

Schedule 6

Account Number


(1) (2) (3 1 (4) ( 5 ) $ $ $ $ $

414 Gains (Losses) From Disposition of Utility Property 4 19 Interest Income 42 1 Nonutility Income - - -

Total Other Income -


OTHER INCOME DEDUCTIONS YEAR ENDED DECEMBER 3 1,20 18

RECEIVER FOR TIMBERLINE FOUR SEASONS UTEITIES INC. - WATER

Account Number

427.3 Interest on Long-Term Debt 427.4 Interest on Customer Deposits 427.5 Interest - Other

Total Other Income Deductions


Accounting Per Books Going Level - Per Books Adjustments Adjusted Adjustments Going Level

(1) (2) ( 3 ) (4) ( 5 )


AVERAGE RATE BASE YEAR ENDED DECEMBER 3 1,20 18


Per Books Going Level

Statement B

Per Books Adjustments Adjusted Adjustments Going Level

634,504 Utility Plant in Service 632,033 2,47 1 (2) 634,504 Utility Plant Held for Future Use Unclassified Plant in Service Construction Work in Progress - Completed and in

Total 632,033 2,47 1 634,504 634,504

Less: Accumulated Provision for Depreciation Retirement Work in Progress Contributions in Aid of Construction Customer Advances for Construction

443,172 443,172 - (23) 443,172

Total 443,172 443,172 443,172

Net Investment in Utility Plant 188,862 2,47 1 19 1,332 191,332

Working Capital Allowance Materials and Supplies Prepayments Working Cash Allowance

Customer Deposits

Total Average Rate Base 188,862 2,471 191,332 NIA

NOTE: THE COMPANY HAS MADE IMPROPER TRANSFERS OF COMPANY FUNDS TO ITS OWNERS (SEE DETAIL SHOWN ON STATEMENT C). THE TRANSFERS EXCEED THE CALCULATION OF A RATE BASE DETERMINATION. AS A RESULT OF THAT IMPROPRIETY, RATE BASE IS DEPCITED AS NOT APPLICABLE (N/A).

CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC -WATER WATER PLANT IN SERVICE YEAR ENDED DECEMBER 3 I , 201 8

Balance Balance Account Beginning End of Number of Year Additions Retirements Year

(1) (2) (3) (41 $ $ $ $

301 I 302 1 339 1

303 2 304 2 305 2 306 2 307 2 308 2 309 2 3102 311 2 339 2

303 3 304 3 311 3 320 3 339 3

303 4 304 4 3114 330 4 331 4 333 4 334 4 335 4 336 4 339 4

303 5 304 5 340 5 341 5 342 5 343 5 344 5 345 5 346 5 347 5 348 5

Intangible Plant Organization Franchises Other Plant and Miscellaneous Equipment Total Intangible Plant

Source of Supply & Pumping Plant Land and Land Rights Structures and Improvements Collecting and Impuding Reservoirs Lake, River and Other Intakes Wells & Springs Infiltration Galleries and Tunnels Supply Mains Power Generation Equipment Pumping Equipment Other Plant and Miscellaneous Equipment Total Source of Supply and Pumping Plant

Water Treatment Plant Land and Land Rights Structures and Improvements Pumpmg Equipment Water Treatment Equipment Other Plant and Miscellaneous Equipment Total Water Treatment Plant

Transmission and Distribution Plant Land and Land Rights Structures and Improvements Pumping Equipment Distribution Reservoirs and Standpipes Transmission and Dlseibution Mains Services Meters and Meter Installations Hydrants Backflow Prevention Devices Other Plant and Miscellaneous Equipment Total Trans and Distnbution Plant

General Plant Land and Land Rights Structures and Improvements Office Furniture and Equipment Transportation Equipment Stores Equipment Tools, Shop and Garage Equipment Laboratory Equipment Power Operated Equipment Communication Equipment Miscellaneous Equipment Other Tangible Plant Total General Plant

Total Tangible Plant

Total Plant

Adjustment No. 2 Per Books Adiusted

I ,000 210,477

89,863

74,835

113,108

1,000 210,477 89,863

74,835

113,108

14,710 14,710 17,930 17,930

521,923 521,923

12,199 12,199

12,199 12,199

63,023 15,000

63,023 15,000

78,023 78,023

1,348 18,274

1,348 18,274

266 266

Statement B Schedule I

Average Balance

(5 ) $

1,000 210,477 89,863

74,835

113,108

14,710 17,930

521,923

12,199

12,199

63,023 15,000

78,023

1,348 18,274

266

19,888 19,888

632,033 632,033

632,033

19,888

632,033

632,033

2,471 - 634,504

1 4


PLANT HELD FOR FUTURE USE YEAR ENDED DECEMBER 3 1,20 1 8

RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. - WATER Statement B Schedule 2

Balance Balance Account Beginning End of Average Number of Year Additions Retirements Year Balance

(1) (2) (3 1 (4) ( 5 ) $ $ $ $ $

THE COMPANY HAS NO PLANT HELD FOR FUTURE USE


UNCLASSIFIED PLANT IN SERVICE YEAR ENDED DECEMBER 3 1,2018



( 1 ) (2) (3) (4) ( 5 ) $ $ $ $ $

THE COMPANY HAS NO UNCLASSIFIED PLANT IN SERVICE

CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. - WATER CONSTRUCTION WORK IN PROGRESS-COMPLETED AND IN SERVICE YEAR ENDED DECEMBER 31,2018

Balance Account Beginning

Balance End of

Number of Year Additions Retirements Year (1 ) (2) (3) (4) $ $ $ $

Statement B Schedule 4

Average Balance

( 5 ) $

THE COMPANY HAS NO CONSTRUCTION WORK IN PROGRESS

17

CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TIMBElRLINE FOUR SEASONS UTILITIES INC. - WATER MATERIALS AND SUPPLIES YEAR ENDED DECEMBER 3 X,20 18


Account Number

15 1 Materials and Supplies

Average Balance

$

Total Materials and Supplies

CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES II\JC. - WATER Schedule 6 PREPAYMENTS YEAR ENDED DECEMBER 3 1,20 18

Statement B

Account Number

162 Prepayments Workers Compensation Liability Insurance Service Agreements

Average Balance

$

Total Prepayments


WORKING CASH ALLOWANCE YEAR ENDED DECEMBER 3 1,20 1 8


NOT APPLICABLE



ACCUMULATED DEPRECIATION YEAR ENDED DECEMBER 3 1,201 8

RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES PJC. - WATER

Account Number

108.1 Accumulated Depreciation

Balance Balance Beginning End of

of Year Additions Retirements Year (1) (2) (3) (4) _ I

$ $ $ $ 438,269 9,805 448,074

Total Accumulated Depreciation 438,269 9,805 448,074

Going-Level Adjustment #21


Average Balance

(5) $ 443,172

443,172

Going-Level 443,172


RETIREMENT WORK IN PROGRESS YEAR ENDED DECEMBER 3 1,20 1 8


Account Number

Balance Balance Beginning End of

of Year Additions Retirements Year (1) (2) (3) (4) $ $ $ $

Retirement Work in Progress


Average Balance

( 5 ) $

THE COMPANY DOES NOT HAVE RETIREMENT WORK IN PROGRESS


CONTRIBUTIONS IN AID OF CONSTRUCTION YEAR ENDED DECEMBER 3 I. 20 18


Balance End of Average

Balance Beginning Account -

Number of Year Additions Retirements Year Balance (1) (2) (3 ) (4) (5 ) $ $ $ $ $

271 CIAC

Total CIAC


CUSTOMER ADVANCES FOR CONSTRUCTION YEAR ENDED DECEMBER 3 1,201 8


Account Number

Balance Beginning

Balance End of


Average of Year Additions Retirements Year Balance

(1) (2) (3 ) (4) ( 5 ) $ $ $ $ $

252 Customer Advances for Construction

Total Customer Advances for Construction

CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. - WATER CUSTOMER DEPOSITS YEAR ENDED DECEMBER 3 1,20 1 8


Account Number

Average Balance

$ 23 5 Customer Deposits

Total Customer Deposits


DETAIL OF DEBT CAPITAL YEAR ENDED DECEMBER 3 1,20 18


Water Common stock issued Other paid-in capital Retained earnings Subtotal Affiliate Payable Subtotal Affiliate Receivable Water Operations Total

Sewer Common stock issued Other paid-in capital Retained earnings Subtotal Affiliate Payable Subtotal Affliate Receivable Sewer Operations Total

2018 150

8,472 552,558 561,180 139,363 700,543 92,494

608,049

150 8,472

(406,885) (398,263) 197,834

(200,429) 92.495

(107,934)

Combined Common stock issued 300 Other paid-in capital 16,944 Retained earnings 145,673 Subtotal 162,917 Combined Affiliate Payable 337,197 Subtotal 500,l 14 Combined Affiliate Receivable 184,989 Total 315,125 Less: Improper Transfers (176,318) Less: AMiliate Receivable (Watermastewater Servic (236,112) Less: Colonial Funding (129,606) Total Combined Equity (226,911)

Statement C

N ch


CUSTOMER'S BILL ANALYSIS YEAR ENDED DECEMBER 3 1,201 8

RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES PNC. - WATER Statement D Sheet 1 of4

PER BOOKS ADJUSTED Residential Customers

All Over Number Minimum Bills First Next of M. Gals 4 M 6 M 10 M

January 20 18 - December 20 18 (12 Months; Bills Sold Rate Revenue Gallons Gallons Gallons Revenue (1) (2) (3 1 (4) (5) (6) (10) (1 1)

$ $ $ $ $ $ 518 Inch Meter 4,505 6,969.9 37.76 170,109 314 Inch Meter 56.64 1 Inch Meter 94.40 1 112 InchMeter 188.80 2 InchMeter 302.08 3 Inch Meter 604.16 4 Inch Meter 944.00

8 InchMeter 3,020.80 6 InchMeter 1,888.00


Total Rates

369 2,26 1.5 155 3,398.5

Residential Revenue Per Analysis Correction Factor Total Per Book Adjusted Residential Revenue

5,029 12,629.8

1,476.0 785.5 620.0 930.0 1,848.5

2,096.0 1,715.5 1,848.5 9.44 7.27 5.44

170,109 19,786 12,47 1 10,056 2 12,422

212,422 0.985260 209,29 1



RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. - WATER Statement D Sheet 2 of 4

PER BOOKS ADJUSTED Commercial Customers

Number Minimum Bills First Next All Over of M. Gals 4 M 6 M 10 M

January 20 18 - December 201 8 (I 2 Months: Bills Sold Rate Revenue Gallons Gallons Gallons Revenue (1) (2) (3) (4) (5) (6) (10) (1 1)

518 Inch Meter 314 Inch Meter 1 InchMeter 1 112 Inch Meter 2 InchMeter 3 InchMeter 4 Inch Meter 6 InchMeter 8 Inch Meter


Total Rates

7 8

31

$ $ $ $ $ $ 37.76 56.64

32.4 94.40 66 1 26.0 188.80 1,510

335.3 302.08 9,364 604.16 944.00

1,888.00 3,020.80

11 732.0 44.0 66.0 622.0

57 1.125.6

Commercial Revenue Per Analysis Adjustments (Overbilling) Subtotal Correction Factor Total Per Book Adjusted Residential Revenue

44.0 66.0 622.0 9.44 7.27 5.44

11,535 415 480 3,384 15,814

15,814 439

16,253 1.011394

16.438

N m


CUSTOMERS BILL ANALYSIS YEAR ENDED DECEMBER 3 1,201 8


GOING-LEVEL Number Minimum Bills First Next All Over Residential Customers O f M. Gals 4 M 6 M 10 M January 20 1 8 - December 20 18 (I 2 Months’ Bills Sold Revenue Gallons Gallons Gallons Revenue

(1) (2) (3) (4) (5) (6) (10) (1 1) $ $ $ $ $ $

5 /8 Inch Meter 4,483 6,940.1 37.76 169,278 314 Inch Meter 56.64 1 InchMeter 94.40 1 1/2 Inch Meter 188.80 2 1nchMeter 302.08 3 InchMeter 604.16 4 Inch Meter 944.00 6 InchMeter 1,888.00 8 Inch Meter 3,020.80


Totai Rates

Residential Revenue Per Analysis Correction Factor Total Going-Level Residential Revenue

369 2,26 1 .5 153 3,25 8.1

1,476.0 785.5 612.0 918.0 1,728.1

5,005 12,459.6 169,278 2,088 1,703 1,728 9.44 7.27 5.44

169,278 19,711 12,384 9,40 1 2 10,774

2 10,774 0.985260 207,667


CUSTOMERS BILL ANALYSIS YEAR ENDED DECEMBER 3 1,20 1 8


GOING-LEVEL Commercial Customers

Number Minimum Bills First Next All Over of M. Gals 4 M 6 M 10 M

Revenue January 20 18 - December 20 18 (1 2 Months; Bills Sold Rate Revenue Gallons Gallons Gallons (1) (2) (3) (4) (5) (6) (10) 0 1 )

518 Inch Meter 314 Inch Meter I InchMeter 1 112 Inch Meter 2 InchMeter 3 InchMeter 4 Inch Meter 6 Inch Meter 8 InchMeter

4,OO 1 - 10,000 Gallons A11 Over 10,000 Gallons

Total Rates

Commercial Revenue Per Analysis Correction Factor Total Going-Level Commercial Revenue

7 8

31

32.4 26.0

335.3

$ $ $ !$ $ !$ 37.76 56.64 94.40 66 1

188.80 1,510 302.08 9,364 604.16 944.00

1,888.00 3,020.80

11 732.0 44.0 66.0 622.0

57 1,125.6 1 1,535 44.0 66.0 622.0 9.44 7.27 5.44

11,535 415 480 3,384 15,814

15,814 1.01 1394

15,994

Canaan Valley Public Service District Receiver for Timberline Four Seasons Utilities, Inc Case No. 19-0887-WS-19A

Statement D Schedule 1

Current Tarrif Effective July 25,2007

APPLICABILITY Applicable for entire territory served.

AVAILABILITY OF SERVICE Available for general residential, commercial, condo, townhouse, industrial and resale service.

METERED RATES First 4,000 gallons used per month $9.44 per 1,000 gallons Next 6,000 gallons used per month $7.27 per 1,000 gallons All over $5.44 per 1,000 gallons 10,000 gallons used per month

M1;NIMUM CHARGES

518 314 1

1-112 2 3 4 6 8

inch meter inch meter inch meter inch meter inch meter inch meter inch meter inch meter inch meter

$37.76 per month $56.64 per month $94.40 per month

$188.80 per month $302.08 per month $604.16 per month $944.00 per month

$1,888.00 per month $3,020.80 per month

DELAYED PAYMENT PENALTY The above schedule is net. On all accounts not paid in full when due, ten percent ( 10%) will be added to the net current amount unpaid. This delayed payment penalty is not interest and is to be collected only once for each bill where it is appropriate.

TAP FEE The following charge is to be made whenever the utility installs a new tap to serve an applicant.

A tap fee of $1 00 will be charged to customers applying for service before construction completed adjacent to the customer’s premises in connection with a certificate proceeding before the Commission. This pre-construction tap fee will be invalid after the completion of construction adjacent to the applicant’s premises that is associated with a certificate proceeding.

A tap fee of $300 will be charged to customers applying for service outside of a certificate proceeding before the Commission for each new tap to the system.

RECONNECTION CHARGE $ 20.00

To be charged whenever the supply of water is turned off for violations of rules, non- payment of bills or fraudulent use of water.

LEAK ADJUSTMENT $1.51 per 1,000 gallons is to be used when the bill reflects unusual consumption which can be attributed to eligible leakage on the customer’s side of the meter. This rate is to be applied to all such consumption above the customer’s historical average usage.

RETURNED CHECK CHARGE A service charge equal to the actual bank fee assessed to the sewer utility up to a maximum of $25 will be imposed upon any customer whose check for payment of charges is returned by the bank due to insufficient funds.

33


COMPARATIVE BALANCE SHEET YEAR ENDED DECEMBER 3 1,20 1 8


ASSETS AND OTHER DEBITS

Utility Plant Plant Less: Accumulated Depreciation

Net Utility Plant

Other Property and Investments Investment in Associated Companies Utility Investments Other Investments Sinking Funds Depreciation Fund Other Special Funds

Total Other Property and Investments

Current and Accrued Assets Cash Special deposits Working funds Temporary Cash Investments Customer accounts receivable Other Accounts Receivable Accum prov for uncollectible accounts Notes Receivable Receivables from Associated Companies Materials and Supplies Prepayments Accrued Interest and Dividends Receivable Rents Receivable Accrued Utility Revenues Misc current and accrued assets

Total Current and Accrued Assets

Deferred Debits Unamortized Debt Discount and Expense Extraordinary Property Losses Preliminary Survey and Investigation charges Clearing Accounts Temporary Facilities Miscellaneous Deferred Debits Research and Development Expenditures Accumulated Deferred Income Taxes

Total Deferred Debits

Total Assets and Other Debits

Statement F Sheet 1 of 6

WATER OPERATIONS YEAR ENDED

12/3 1/17 1 2/3 1 /18 $ $

632,033 632,033 (438,269) (448,074)

193,764 183,959

5,940 39,753

70,737 83,438

491,805 5 18,464

568,482 641,655

762,246 825,614

32


COMPARATIVE BALANCE SHEET YEAR ENDED DECEMBER 3 1,20 18


LIABILITIES AND OTHER CREDITS

Capital Stock and Surplus Common Stock Other Paid-in Capital Retained Earnings

Total Capital Stock and Surplus

Long Term Debt Bonds Advances from Associated Companies Other long-term debt

Total Long Term Debt

Current and Accrued Liabilities Accounts Payable Notes Payable Payable to associated companies Customer Deposits Accrued Taxes Accrued Interest Accrued Dividends Mature Long-Term Debt and Interest Misc current and accrued liabilities

Total Current and Accrued Liabilities

Deferred Credits Unamortized Premium on Debt Customer Advances for Construction Other Deferred Credits Accumulated Deferred Investment Tax Credits

Total Deferred Credits

Contributions in Aid of Construction

Accumulated Deferred Income Taxes Accelerated Amortization Liberalized Depreciation Other

Total Accumulated Deferred Income Taxes

Total Liabilities and Other Credits

Total Liabilities and Equity



1213 1/17 1213 111 8 $

150 8,472

505,817

5 14,439

$

150 8,472

552,558

561,180

15,534 36,568

140,730

54,975

33,473 23,363

139,363

68,235

247,807 264,434

247,807

762,246

264,434

825,614

***Source: Annual Report for FYE December 31,2018

33






Net Utility Plant



Current and Accrued Assets Cash Special deposits Working funds Temporary Cash Investments Customer Accounts Receivable Other Accounts Receivable Accum. Provision for Uncollectible Accounts Notes Receivable Receivables from Associated Companies Materials and Supplies Prepayments Accrued Interest and Dividends Receivable Rents Receivable Accrued Utility Revenues M i x current and accrued assets





SEWER OPERATIONS YEAR ENDED

1213 1 I1 7 12/3 1/18 $ $

215,983 215,983 (206,705) (206,748)

9,278 9,235

168,573

106,445

275,018

237,320

92,495

~

329,815

Total Assets and Other Debits 284,296 339,050

3 4


COMPARATIVE BALANCE SHEET YEAR ENDED DECEMBER 3 1,2018



Capital Stock and Surplus Common Stock Issued Other Paid-in Capital Stock Retained Earnings


Long Term Debt Bonds Advances f?om Associated Companies Other long-term debt


Current and Accrued Liabilities Accounts Payable Notes Payable Payable to associated companies Customer Deposits Accrued Taxes Accrued Interest Accrued Dividends Mature Long-Term Debt and Interest Miscellaneous Current and Accrued Liabilities




Contributions in Aid of Construction Accum. Amort. Of Contributions in Aid of Construction Total Contributions in Aid of Construction





1213 1 I1 7 1 213 1/18 $

150 8,472

(362,996)

(354,374)

$

150 8,472

(406,8851

(398,263)

14,546 36,568

584,562

2,994

72,009 23,363

623,805

18,136

638,670 737,313

638,670

284,296

737,313

339,050

*Source: 2018 Annual Report

35






Net Utility Plant



Current and Accrued Assets Cash Special deposits Working funds Temporary Cash Investments Customer Accounts Receivable Other Accounts Receivable Accum. Provision for Uncollectible Accounts Notes Receivable Receivables from Associated Companies Materials and Supplies Prepayments Accrued Interest and Dividends Receivable Rents Receivable Accrued Utility Revenues Misc current and accrued assets






COMBINED OPERATIONS YEAR ENDED

1213 111 7 1213 111 8 $ $

848,016 848,016 (644,974) (654,822)

203,042 193,194

5,940

239,310

598,250

843,500

1,046,542

39,753

320,758

6 10,959

97 1,470

1,164,664

3i


COMPARATIVE BALANCE SHEET YEAR ENDED DECEMBER 3 I , 20 18
















1213 111 7 12/31/18 $

300 16,944

14232 1

160,065

300 16,944

145,673

162,917

30,080 73,136

725,292

57,969

105,482 46,726

763,168

86,371

886,477 1,001,747

886,477

1,046,542

1,001,747

1,164,664


3;


STATEMENT OF CHANGES IN RETAINED EARNINGS YEAR ENDED DECEMBER 31,2018

RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. - WATER STATEMENT F SCHEDULE 1

12/31/2017 12/3 1/20 18 $ $

Retained Earnings Balance At Beginning Of Year Net Income Adjustments Total Retained Earnings

482,880 5053 17 38,213 46,741

(15,276) 505,817 552,558

CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. - WATER STATEMENT OF CASH FLOWS

Statement F Schedule 2

Sheet 1 of 2

Cash Flows from Operating Activities Cash from Customers Attributable to Operating Revenues Less: Cash Paid for Operation & Maintenance Expenses

2 13,028 (137,539)

Cash Paid for Taxes Other Than Income Taxes (445) Income Taxes Paid

Subtotal of Cash Flows from Operating Activities 75,044

Interest and Other income Received (Interest Paid) Other Cash Inflows(0utflows) from Operating Activities:

Net Cash Provided by (Used in) Operating Activities Other Income Adjustments

75,044

Cash Flows from Investing Activities: Cash inflows: Proceeds from Sale of Utility Plant Contributions and Advances in Aid of Construction Contributions and Advances from Associated Companies Proceeds from Sale of Investment Securities Proceeds from Disposal of Other Non-current Assets Cash Outflows: Expenditures on Additions to Utility Plant Refunds of Customer Advances for Construction Investments in and Advances to Associated Companies Purchase of Investment Securities Acquisition of Other Non-current Assets

Cost of Removal Net of Salvage Acquisition Costs Preliminary Survey and Investigation Costs

(1,367)

(26,659)

Other Cash Inflows(0utflows) from Investing Activities:

Net Cash Provided by (Used in) Investing Activities

Cash Flows from Financing Activities: Cash Inflows - Proceeds from Issuance of: Long-Term Debt Preferred Stock Common Stock Cash Outflows Payments for Retirement of: Long-Term Debt Preferred Stock Common Stock

Dividends on Preferred Stock Dividends on Common Stock Other Cash Inflows(0utflows) from Financing Activities:

Net Increase or (Decrease) in Short-Term Debt Net Increase or (Decrease) in Customer Deposits Debt Issuance Costs Net Borrowings Under Line-of-Credit Agreement Net Cash Provided by (Used in) Financing Activities

Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents - Beginning of Year Cash and Cash Equivalents - End of Year

(28,026)

( 1 3,205)

(13,205) 33,813 5,940

39,153

35


STATEMENT OF CASH FLOWS RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. - WATER


Sheet 2 of 2

(12,701)

Net Income 46,74 1 Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 9,805 Net deferred taxes & investment tax credits (Allowance for funds used during construction) (Gain) Loss recognized on disposition of assets Amortization of debt discount (premium) on debt Net (increase) decrease in receivables (Increase) decrease in materials and supplies (Increase) decrease in prepayments Net (increase) decrease in other accrued revenues & assets Increase (decrease) in accounts payable Increase (decrease) in interest accrued Net increase (decrease) in taxes accrued & taxes payable Net increase(decrease) in other accrued expenses Increase (decrease) in operating reserves Other adjustments Income adjustments

17,939

13,260

Net Cash Provided by Operating Activities 75,044


DETAIL OF ADJUSTMENTS YEAR ENDED DECEMBER 31,2018


Adjustment Account Number Number

(1) 615.1 Purchased Power

(5)

(7)

ACCOUNTING ADJUSTMENTS

To reflect actual purchased power billings from Monongahela Power Company during the test year.

620.1 Materials and Supplies 311.2 Pumping Equipment

USA Bluebook: Invoice No. 462105 456 Milby Company: Invoice No. S1480246.001 4,486 Total 4,942

To capitalize the purchase of a pumps from Milby Company and USA Bluebook. One half of the invoiced purchase price has been used to calculate average plant in service.

631.1-636.1 Contractual Services

To correct an accounting entry to allocate invoices for SCADA services.

631.1-636.1 Contractual Services

To include SCADA services for water opeations that were allocated to sewer operations.

63 1.8-636.8 Contractual Services

To remove prior period legal expenses from Shuman, McCusky & Slicer PLLC.

676 Miscellaneous Expenses

To properly allocate telephone expenses that were not allocated during the test year based on a allocation factor of 50% water and sewer operations.


Statement G Sheet 1 of 5

INCREASE <DECREASE>

$

4,021

(4,942) 2,471

5,000

9,93 1

To remove prior period expenses for invoices from Frontier Communications. The two associated accounts have not been active for several years but have continued to be invoiced.

41


DETAIL OF ADJUSTMENTS YEAR ENDED DECEMBER 3 1,20 18

RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES Ih'C. - WATER


461.2

461.1

615.1

618.1 615.1

631.1-636.1

Meter Sales to Commercial Customers

To remove going-level revenue related to the overbilling of the Company's Commerical customers

Meter Sales to Residential Customers

Going-Level 207,667 Less:Per Books 209,291

( I ,624)

To adjust going-level revenues to reflect the closure of the Timberline Dormitories. The Company is no longer billing the associated accounts.

Purchased Power

General Service Rate Schedule "B" Units Unit Price Total

Customer Charge First 400 KWh All Additional KWh ECCN (kwh) ECC (kwh) ECC2 (kwh) Vegetation Management (kwh) Subtotal

84 5.00 420 19,821 0.10523 2,086

105,567 0.09214 9,727 125,388 0.00010 13 125,388 0.00278 349 125,388 0.00032 40 125,388 0.00792 993

13.627

General Service Rate Schedule "C" Units Unit Price Total

Customer Charge Demand Charge - All KW Energy Charge - All Kwh ECCN - Demand ECCN - Energy ECC - Demand ECC - Energy ECC2 - Demand ECC2 - Energy Vegetation Management - Demand Subtotal

12 245

80,178

245 80,178

245 80,178

245

40.00 15.43

0.03588

0.53000 0.00124 0.06000 0.00014

1.89

480 3,787 2,877

130 99 15 11

464 7.863

Total Going-Level Purchased Power Expense Less: Per Books Adjusted Purchase Power Adjustment L (972)

2 1,490 22,461

Enviromental Control Normalization Surcharge - Effective January 15, Enviromental Control Charge - Effective January IS, 2020 Enviromental Control Charge 2 - Effective January 15,202 1 Vegetation Management Surcharge - Effective January I , 2020

2020

To adjust purchased power expense to reflect the current rates of the Company's power provider, Monongahela Power Company.

Chemicals Purchased Power

Power Chemicals Metered M Gallons Usage 13,755.4 13,755.4 Going-Level Expense 21,490 7,165 M Gallon Cost 1.56 0.52 M Gallons Usage Reduction (1 70.2) (1 70.2) Adjustment (266) 89

To adjust power and chemical expense to reflect the reduction of usage fiom the closing of the Timerbline Dormitories, see adjustment 9.

Contractual Services

To remove expenses for the annual operation and management agreement with an affiliated entity, Timberline Four Seasons Management. The Company entered into receivership by Canaan Valley Public Service District in March 2019.


INCREASE <DECREASET

$

(444)

(45,000)

42

CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TlMBEFUlNE FOUR SEASONS UTILITIES INC. - WATER DETAIL OF ADJUSTMENTS YEAR ENDED DECEMBER 31,2018


~ _ r _ _

(13) 601.3 601.5 601.8

670.7

(15) 631.8-636.8

GOING-LEVEL ADJUSTMENTS

Salaries and Wages -Employees Salaries and Wages - Employees Salaries and Wages - Employees

Regular Overtime Current Regular Overtime Employee Pay Rate Hours Hours Pay Pay Total

Operator 1 19.00 2,111.50 234.50 40,119 6,683 46,802 Operator 2 18.00 2,071.50 107.50 37,287 2,903 40,190 Office Employee 13.50 2,080.00 2.00 28,080 41 28,121

6,263.00 344.00 105,486 9,626 115,112

Total Going-Level Wages 115,112 Water Allocation Factor 50.00% Going-Level Water Wages 57,556

Account Allocation % Adiustment 601.3 37.79% 2 1,748 601.5 37.79% 21.748 601.8 24.43% 14,060

100.00% 57,556

To reflect payroll expense for the Company using the most recent 26 two-week pay periods ending March 13,2020. The Company currently employs two full time operators and a full time office employee. Regular hours of the office employee have been increased above those in the latest 26 two week pay periods to reflect the Company's office opening in July 2019. The Company previously was provided labor services through a operation and maintenance contract with an affiliated entity, but has hired its own employees since entering receivership in March 2019 by Canaan Valley Public Sem'ce District.

Bad Debt Expense

Going-Level Sales Revenue 223,661 0.50% Allowance for Bad Debt Expense Ratic

Adjustment - 1,118

To provide bad debt expense at a rate of 0.5% ofgoing-level water sales revenue. The Company has not collected customer account billings made to affiliates totaling approximately $236,000. Those extraordinary past due mearages represent additional funds that should have been available to the Company. Those affiliated mearages should not be considered bad debts for recovery from rate payers.

Contractual Services Timberline Timberline

All Hours Allocated Hours Allocation % Regular Hours 2,159.5 1,163.5 Overtime Hours 897.8 897.8 Total 3,057.3 2,061.3 67.42%

Timberline Timberline All Hours Allocation % Allocated Hours

Regular Hours 2,159.5 67.42% 1,456.0 Overtime Hours 897.8 67.42% 605.3 Total 3,057.3 2,061.3

Timberline Curent Timberline Allocated

Regular Hours 1,456.0 25.00 36,399 Overtime Hours 605.3 37.50 22,698 Totat 2,06 1.3 59,097

Allocated Hours Pay Rate Wage Expense

Total Timberline Allocated Payroll 59,097 Add: PERS Expense @ 10% of Wages 5,910 Add: FICA @ 7.65% of Wages 4,521 Total Timberline Allocated Pawoll 69.528 Water Allocation Adjustment

50.00% 34,764

To adjust contractual senices expense to reflect an employee of Canaan Valley Public Service District that is working for the Company. The ratio of total hours worked and hours worked for Timberline has been used to determine the amount of regular and overtime hours allocated to Timberline. The hours have been priced at the employee's current pay rate of $25.00 per regular hour to determine the Timberline allocated portion of the Canaan Valley Public Service District employee. This Timberline allocated wage is then used to calculate additional labor overhead costs for retirement expense and pay011 taxes associated with


INCREASE <DECREASE>

$

21,748 21,748 14.060

1,118

34,764

CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TIMBERLTNE FOUR SEASONS UTILITIES INC. - WATER DETAIZ OF ADJUSTMENTS YEAR ENDED DECEMBER 3 1,20 18


INCREASE <DECREASE>

$

Adjustment Account Number Number GOING-LEVEL ADJUSTMENTS

(16) 631.8-636.8 Contractual Services 13,575

August 2019 September 2019 October 20 19 November 2019 December 20 19 January 2020 Subtotal (6 Months) Six Month Average To Annualize Annual Bookkeeping Service Water Allocation Factor Going-Level Accounting Expense Less: Per Books Accounting Expense Adjustment

Amount 3,562 6,234

602 4,163 1,962 1,562

18,086 3,014 12.00

36,171 50.00% 18,086 4,511

13,575

To adjust accounting expense to reflect an annualized of bookkeeping service from Scott & Nypl CPAs based on an average of the last six months of invoices. Bookeeping expenses have been allocated based on a 50% allocation factor to water and sewer

(17) 63 1.8-636.8 Contractual Services

Going-level Legal expense 2,365 Water Allocation Factor 50.00% Water Allocated Legal Expense 1,182 Less: Per Books Adjusted Legal Expense Adjustment (5,068)

6,250

To adjust legal expense to remove test-year expenses related to the Company being placed into receivership. This amount is allocated based on a factor of 50% to water operations and 50% to sewer operations.

1,800 641.80 Rental ofBuildingReal Propem

Monthly Rental Charge To Annualize Annual Rental Charge Water Allocation Factor Water Allocated Rental Expense

300 12

3,600 50.00%

1,800

To adjust rental expense to reflect the monthly rent for the Company's ofice that was opened July 2019. This amount is allocated based on a 50% factor to water and 50% to sewer operations.

642.80 Rental of Equipment 2,100

Monthly Rental Charge To Annualize Annual Rental Charge Water Allocation Factor Water Allocated Rental Expense

350 12

4,200 50.00% 2,100

To adjust rental expense to reflect the monthly lease of a utility truck from the Company's receiver, Canaan Valley Public Service District. This amount is allocated based on a 50% allocation to water and 50% to sewer

1,928 (20) 656.8-659.8 Insurance

Current Annual Premium 3,856 Water Allocation Factor 50.00% Water Annual Workers Compensation 1,928

To adjust insurance expense to reflect the current annual worker's compensation insurance, effective May 17,201 9 through May 17,2020. This amount is allocated 50% to water operations and 50% to sewer operations.

44

CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. - WATER DETAIL OF ADJUSTMENTS YEAR ENDED DECEMBER 3 1,201 8

Account Number

656.8-659 8

675.80

403.0

408.10

408.10

408.12

GOING-LEVEL ADJUSTMENTS

Insurance

Current Annual Premium 2,393 Water Allocation Factor 50.00% Water Annual Property Insurance 1,197

To adjust insurance expense to reflect the current annual property insurance applicable to Timberline Four Seasons Utilities, Inc. The Company's receiver, Canaan Valley Public Service District, has included the Company's assets in its property insurance policy. The incremental change in the District's policy premium bas been assigned to the Company. The current total policy premium for Canaan Valley PSD is $20,155 with $2,393 being assigned to the Company The Company assigned amount is allocated 50% to sewer and 50% to water . . . ..&% ..

Miscellaneous Expenses

Frontier (Account 1) Frontier ( Account 2) AT&T Total Monthly Telephone Expense Annualization Factor Total Annual Telephone Expense Water Allocation Factor Subtotal Less: Per Books Adjusted Adjustment

Amount 98

179 158 435

12 5,224

50% 2,612 2,011

60 1

To adjust miscellaneous expense to reflect the current annual telephone expense based on February 2020 invoices and a 50% allocation to water operations.

Depreciation

To eliminate depreciation expense to reflect the improper transfer of Company funds by its owner. See footnote on Statement B for details.

Utility Regulatory Assessment Fees

Current Invoice - Water Portion Less: Per Books Adjustment

1,129

14 1,115


INCREASE <DECREASE>

$

1,197

60 1

(9,805)

14

To adjust PSC intrastate revenue assessment expense to reflect the most current invoice, dated June 8,2019.


Current Invoice Water Allocation Adjustment

101

202 50.00%

101

To adjust PSC property assessment expense to reflect the most current invoice, dated December 4,2019. The property assessment is allocated based on 50% water operation and 50% sewer operations.

FICA

Going-Level Water Operations Wages 57,556

4,403

FICA Rate Going-Level FICA Expense

7.65% 4,403

To adjust FICA expense to reflect the water allocated going-level wages

STATEMENT

A

B

C

D

F

G

CANAAN VALLEY PUBLIC SERVICE DISTRICT - SEWER CASE NO. 19-0887-WS- 19A

TABLE OF CONTENTS

PAGE NUMBER

Letter of Transmittal

Statement of Net Income Schedule 1 - Detail of Operating Revenues Schedule 2 - Detail of Operation and Maintenance Expenses Schedule 3 - Depreciation and Amortization Schedule 4 - Taxes Other Than Federal Income Taxes Schedule 5 - Federal and State Income Taxes Schedule 6 - Other Income Schedule 7 - Other Income Deductions

Average Rate Base Schedule 1- Utility Plant In Service Schedule 2 - Plant Held for Future Use Schedule 3 - Unclassified Plant in Service Schedule 4 - Cnstrn Work in Progress - Cmpltd and in Service Schedule 5 - Materials and Supplies Schedule 6 - Prepayments Schedule 7 - Working Cash Allowance Schedule 8 - Accumulated Depreciation Schedule 9 - Retirement Work in Progress Schedule 10 - Contribution in Aid of Construction Schedule 11 - Customer Advances for Construction Schedule 12 - Customer Deposits Schedule 15 - Other Deferred Debits Schedule 16 - Other Deferred Credits

Detail of Debt Capital

Customer's Bill Analysis Per Books Going Level Schedule 1 - Current Tariff

Comparative Balance Sheet Schedule 1 - Statement of Changes in Retained Earnings Schedule 2 - Cash Flow Analysis

Detail of Ad.justments

1 2 3-6 7 8

9-10 1 1 12

13 14 15 16 17 18 19 20 21 22 23 24 25 26 27

28

29-30 3 1-32

33

34-39 40

4 1-42

43-47

Public Service Commission of West Virginia

201 Brooks Street, P.O. Box 812 Charleston, West Virginia 25323

Phone: (304) 340-0300 Fax: (304) 340-0325

March 23,2020

Commissioners Public Service Commission of West Virginia 201 Brooks Street Charleston, WV 25301

Re: Case No. 19-0887-WS-19A - SEWER Canaan Valley Public Service District Receiver for Timberline Four Seasons Utilities, Inc.

Dear Commissioners:

Transmitted herewith is a report outlining the results of the Utilities Division’s examination of the books and records for the sewer operations of Timberline Four Seasons Utilities, Inc. (Company) for the test year ended December 31, 2018. The purpose of this examination was to evaluate revenue, expense, and debt service accounts in order to determine going level and to prepare revenue requirements. Except to the extent necessary to develop rates, the scope of the examination preformed did not include confirmation of current asset or liability balances. Due to these limitations and the scope of the examination, this report should not be confused with, nor substituted for an audit preformed by independent auditors.

On September 12, 20 19, Canaan Valley Public Service District, Receiver for Timberline Four Seasons Utilities, Inc. (Receiver) filed a letter signed by the Canaan Valley Public Service District Chairman requesting an increase in the rates for Timberline Four Seasons Utilities, Inc (Company). The letter also requests the determination, “. , .whether emergency rates under Rule 19-A are warranted.”

On October 2, 2019, the Receiver filed the 2017 and 2018 Annual Reports for Timberline’s water and sewer operations with the Commission. According to its Annual Reports covering the twelve months ended December 31, 2018, Timberline provides water utility service to approximately 425 customers and sewer utility service to approximately 743 customers in Tucker County. The Company’s number of average of

Commissioners - SEWER Case No. 19-0887-WS-19A March 23,2020 Page 2

sewer customers reflected in its annual report have double counted since the Company’s sewer customers are charged both a flat rate and measured charge. The actual average number of sewer customers for the Company is approximately 377. Timberline reported water operating revenues of $225,729 and sewer operating revenues of $401,349 for the year ended December 3 1, 20 18. The combined reported operating revenue for this period is $627,078.

It should be noted that the Company was placed into the receivership of Canaan Valley Public Service District in March 2019. Prior to receivership, the Company was engaged in an agreement with an affiliate, Timberline Four Seasons Management Company. Under this agreement, Timberline Four Seasons Management Company provided the Company with labor required for maintenance of assets owned by the utility; payroll overhead expenses related to labor; management, billing, and administrative services required for operation of utility; use of management company equipment at actual cost; materials at actual cost; and two full-time certified operators. The test year amount billed for this agreement totals $90,000 for the Company, which was then allocated $45,000 each to water and sewer operations.

It should further be noted that the Canaan Valley Public Service District’s board of directors voted in a March 3, 2020 board meeting to file for Chapter 11 bankruptcy for the Company.

Staff has made accounting adjustments to (1) reflect actual test year purchased power billings (2) remove SCADA expenses related to water operations (3) correct year end adjusting journal entries and (4) remove prior period expenses.

Staff has made going level adjustments to account for known and measurable changes occurring during or subsequent to the test year. Those adjustments include changes to reflect the Company being placed into receivership of Canaan Valley Public Service District in March 2019 and the termination of the agreement with Timberline Four Seasons Management Company. Additional information supporting these adjustments can be found in Statement G. Other Staff adjustments are as follows:

0 Staff has made a going-level adjustment to remove $37,005 in revenue, $36,660 of purchased wastewater treatment costs, and $33 in purchased power costs to reflect the closure of the Timberline dormitories, an affiliated customer.

e Staff has made a going-level adjustment to reduce purchased power expense by $94 to reflect the Company’s test year power usage


based upon the current electric service rates of its purchased power provider, Monongahela Power Company.

0 Staff has made an adjustment to include $57,556 of wages to reflect the Company now having its own employees. Hours from the most recent 26 two-week pay periods and current hourly pay rates have been used to determine wage expense. Wage expense of that amount was then allocated 50% to water operations and 50% to the sewer operations. Prior to being placed into receivership, the Company was provided labor services by an affiliate, Timberline Four Seasons Management Company.

0 Staff has made an adjustment to reduce wastewater treatment expenses by $19,542 to remove non-recurring expenses related to late payment fees.

0 Staff has made an adjustment to increase operating and maintenance expense by $2,027 to reflect bad debt expense at a rate of 0.5% of water sales and forfeited discounts. The Company has not collected customer account billings made to affiliates totaling approximately $236,000. Those extraordinary past due arrearages represent additional funds that should have been available to the Company. Those affiliated arrearages should not be considered bad debts for recovery from rate payers.

0 Staff has made a going-level adjustment to remove the $45,000 annual fee paid to the Company’s former management company. The Company was placed into the receivership of Canaan Valley Public Service District in March 2019. The total billed to the utility from the management company during the test year was $90,000, which $45,000 was allocated each to water and sewer operations.

0 Staff has increased going-level accounting expenses by $13,672 to reflect monthly accounting services provided by Scott & Nypl CPAs. Staff has used the last six months of invoices to determine an annual amount of accounting expenses. This amount is then allocated 50% to water operations and 50% to sewer operations.


e Staff has increased going-level contractual service expense by $34,764 to reflect the costs of a Canaan Valley Public Service District employee working for the Company. The ratio of the hours worked for the Company to total hours worked by this employee during the past 26 two week pay periods has been used to allocate regular and overtime hours to the Company. The amount of allocated hours to the Company are then priced at the employee’s current pay rate to determine the appropriate amount of wage cost to be assigned to the Company. Adjustments have also been made for the FICA and Public Employee Retirement System retirement expense for additional employee labor overhead costs assigned to the Company. This total cost to the Company is then allocated to water and sewer operations based on 50% to water operations and 50% to sewer operations.

0 Staff has removed $5,068 in legal expenses at going-level to eliminate test year costs associated with the Company being placed into receivership.

e Staff has increased operation and maintenance expense by $1,800 for the lease of a new office for customer and billing services. The monthly office rent is $300 or $3,600 annually. This amount is then allocated 50% to water operations and 50% to sewer operations.

e Staff has increased operation and maintenance expense by $2,100 to reflect a monthly lease for a utility truck from the Company’s receiver, Canaan Valley Public Service District. The monthly rent for this utility truck is $350 or $4,200 annually. This amount is then allocated 50% to water operations and 50% to sewer operations.

e Staff has increased going-level insurance by $1,928 to reflect the Company current workers compensation insurance premium, effective May 17, 2019 through May 17, 2020. This amount is then allocated 50% to water operations and 50% to sewer operations.

e Staff has increased going-level insurance by $1,197 to reflect the current annual property insurance for the Company. The Company’s assets have now been included in the property insurance policy of

Cornmissioners - S E W R Case No. 19-0887-WS-19A March 23, 2020 Page 5

the receiver, Canaan Valley Public Service District. The increase in the Canaan Valley Public Service District’s insurance policy premium has been allocated in part to the Company. The current total annual premium of Canaan Valley Public Service District is $20,155.

e Staff has increased miscellaneous expenses by $601 to reflect the current annual expense for the Company’s phone services. Invoices from February 2020 have been used to determine the applicable current monthly cost and have been allocated 50% to water operations and 50% to sewer operations.

Staff has made two adjustments to utility regulatory assessment fees for revenue and property assessments totaling $145.

e Staff has eliminated depreciation expense at going-level to reflect the fact that the Company has improperly transferred funds to affiliates thereby nullifying all plant investment in the Company.

e Staff has also increased going-level FICA expenses at going-level by $4,403 to reflect additional labor overhead costs based upon the salaries and wages for the Company’s water operations.

Revenue Requirements and Staff Recommended Rates will be presented under separate cover.

Respectfblly submitted,

Nathan Mills, Utilities Analyst I11 Utilities Division

NM:ls

Attachment


STATEMENT OF NET INCOME YEAR ENDED DECEMBER 31,2018

RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. - SEWER Statement A

Reference Accounting Per Books Going Level Statement A Per Books Adjustments Adjusted Adjustments Going Level

(1) (2)

UTILITY OPERATING INCOME

Operating Revenues

Operating Revenue Deductions Operation and Maintenance Depreciation and Amortization Taxes Other Than Income Taxes

Total Operating Revenue Deductions

Net Operating Income

Other Income

Other Income Deductions

NET INCOME

Rate Base

Rate of Return

Schedule 1

Schedule 2 Schedule 3 Schedule 4

Schedule 6

Schedule 7

Statement B

401,349 40 1,349 (37,335) 364,014

430,562 (15,387) 41 5,175 9,040 424,215

14,633 14,633 4,547 19,180 43 43 (43)

445,238 (15,387) 429,85 1 13,545 443,396

(43,889) 15,387 (28,502) (50,880) (79,382)

(43,889) 15,387 (28,502) (50,880) (79,382)

9,257

-474.14%

9,257

-307.92%

NIA

Y

CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. - SEWER DETAIL OF OPERATING REVENUE YEAR ENDED DECEMBER 3 1.201 8


Account Number

Wastewater Sales

521 Flat Rate Revenues 52 1.1 Residential Revenues 521.2 Commercial Revenues 521.3 Industrial Revenues 521.4 Revenues from Public Authorities

Total Flat Rate Revenues

522 Measured Revenues

522.1 Residential Revenue 522.2 Commercial Revenue 522.3 Industrial Revenue 522 4 Revenue From Public Authorities

Total Measured Revenue

523 Revenues From Public Authorities

524.0 Revenues From Other Systems 525.0 Interdepartmental Revenues

Total Wastewater Sales


(1) (2) (3) (4) (5) $ $ $ $ $

275,611 52,200

275,611 275,611 52,200 (36,660) (7) 15,540

~ ~

327,81 I 327,811 (36,660) 291,151

71,545 1,993

71,545 (675) (7) 70,870 1,993 1,993

73,538 73,538 (675) 72,863

401,349 401,349 (37,335) 364,014

Other Operating Revenues

530 Guaranteed Revenues 531 Sale of Sludge 532 Forfeited Discounts 534 Rents From Wastewater Property 535 Interdepartmental Rents 536 Other Wastewater Revenue

Total Other Operating Revenues

Total Wastewater Operating Revenues 401,349 401,349 (37,335) 364,014

CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. - SEWER DETAIL OF OPERATlON AND MAINTENANCE EXPENSES YEAR ENDED DECEMBER 31,2018


Sheet 1 of 4

Account Number

COLLECTION EXPENSES

heration 701.1 Salaries and Wages - Employees 703.1 Salaries and Wages - Officers. Directors, etc 704.1 Employee Pensions & Benefits

715.1 Purchased Power 716.1 Fuel for Power Production 718.1 Chemicals 720. I Materials and Supplies

731.1-736.1 Contractual Services 741.1 Rental of BuildingReal Property 742.1 Rental of Equipment 750.1 Transponation Expenses

767.1 Regulatoly Commission Expense -Other 775. I Miscellaneous Expenses

756.1-7S9.1 Insurance


731.2-736.2 Contractual Services 741.2 Rental of Buildin&eal Property 742.2 Rental of Equipment 750.2 Transportation Expenses



Total Collection Expenses

Per Books Going Level Per Books Per Books Adjustments Adjusted Adjustments Going Level

(1) (2) (3) (4) ( 5 ) $ $ $ $ $

1,243 1,198 (1) 2,441

43,496 (9) 43,496

16,174 (13,733) 2.44 1 43,369 45,810

w

CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. - SEWER DETAIL OF OPERATION AND MAINTENANCE EXPENSES YEAR ENDED DECEMBER 31,2018


Sheet 2 of 4

Account Number

PUMPING EXPENSES

heration 701.3 Salaries and Wages - Employees 703.3 Salaries and Wages - Officers, Directors, etc 704.3 Employee Pensions & Benefits

716.3 Fuel for Power Production 718.3 Chemicals 720.3 Materials and Supplies

73 1.3-736.3 Contractual Senices 741.3 Rental of Buildinfleal Property 742.3 Rental of Equipment 750.3 Transportation Expenses


715.3 Purchased Power



731.4-736.4 Conhactual Services 741.4 Rental of BuildinglReal Property 742.4 Rental of Equipment 750.4 Transportation Expenses


Total Pumping Expenses


Accounting Per Books Going Level Adjustments Adjusted Adjustments Goinx Level Per Rooks

(1) (2) (3) (4) (5) $ $ $ $ $

h

CANAAN VALLEY PUBLIC SERVICE DISWCT RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. - SEWER DETAIL OF OPERATION AND !&UNTENANCE EXPENSES YEAR ENDED DECEMBER 31,2018


Sheet 3 of 4

Account Number

TREATMENT AND DISPOSAL EXPENSES

Oneration 701.5 Salaries and Wages - Employees 703.5 Salaries and Wages - Officers, Directors, etc 704.5 Employee Pensions & Benefits

710.5 Purchased Wastewater Treatment 71 1.5 Sludge Removal Expense 715.5 Purchased Power 716.5 Fuel for Power Production 718.5 Chemicals 720.5 Materials and Supplies

73 1.5-736.5 Contfactual Sewices 741.5 Rental of BuildingReal Property 742.5 Rental of Equipment 750.5 Transportation Expenses



Maintenance 701.6 Salaries and Wages - Employees 703.6 Salaries and Wages - Officers, Directors. etc 704.6 Employee Pensions & Benefits 71 1.6 Sludge Removal Expense 718.6 Chemicals 720.6 Materials and Supplies

731.6-736.6 Contractual Services 741.6 Rental of BuildinglReal Property 742.6 Rental of Equipment 750.6 Transportation Expenses



Total Treatment and Disposal Expenses

Accounting Per Books Going Level Adjustments Going Level Per Books Adjustments Adjusted

(1) (2) (3) (4) (5) $ $ $ $ $

354,552 (36,660) (1 1)

354,552 (19,542) (10) 298,350

34,764 (14) 34,764

354,552 354,552 (2 1,438) 333,114

CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. - SEWER DETAIL OF OPERATION AND MAINTENANCE EXPENSES YEAR ENDED DECEMBER 3 1.201 8


Sheet 4 of 4

Account Number

CUSTOMER ACCOUNTS EXPENSES

Accounting Per Books Going Level Adjusted Adjustments Going Level Per Books Adjustments

(1) $ $

(2) (3) (4) (5) $ $ $

berat ion 701.7 Salaries and Wages - Employees 703.7 Salaries and Wages - Officers, Directors, etc 704.7 Employee Pensions & Benefits 715.7 Purchased Power 716.7 Fuel for Power Production 720.7 Materials and Supplies

731.7-736.7 Contractual Services 74 1.7 Rental of Buildinflea1 Property 742.7 Rental of Equipment 750.7 Transportation Expenses

767.7 Regulatory Commission Expense -Other 770.7 Bad Debt Expense 775.7 Miscellaneous Expenses


1,820 (12) 1,820

1,820 1,820 Total Customer Accounts Expenses

ADMINISTRATIVE AND GENERAL EXPENSES

Oeeration 701.8 Salaries and Wages -Employees 703.8 Salaries and Wages - Officers, Directors, etc 704.8 Employee Pensions & Benefits 715.8 Purchased Power 716.8 Fuel for Power Production 720.8 Materials and Supplies

731 3-736.8 Contractual Services 741.8 Rental of Buildinflea1 Property 742.8 Rental of Equipment 750.8 Transportation Expenses

156.8-759.8 Insurance 760.8 Advertising Expense 766.8 Reg. Commission Exp. - Amort. Of Rate Case Exp 767.8 Regulatory Commission Expense -Other


Total Administrative and General Expenses

Total Operating Expenses

58.723 (3,059) (4) 55.664

14,060 (9) 14,060

(45,000) (13) 13,672 (15) (5,068) (16) 19,268 1,800 (17) 1,800 2,100 (18) 2,100

1,928 (19) 1,197 (20) 3,125

2,011 (5) 2,5 18 601 (21) 3,119

(1,654) 58,182 (14.7 10) 43,472

415,175 9,040 424,215

1,113 (606) (6)

59,836

430,562 (1 5,387)


DEPRECIATION AND AMORTIZATION YEAR ENDED DECEMBER 31,2018

RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES TNC. - SEWER

Account Number

403 Depreciation 404 Amortization



(1) (2) (3) (4) ( 5 ) $ $ $ $ $

43

Total Depreciation and Amortization 43 43 (43)


TAXES OTHER THAN INCOME TAXES YEAR ENDED DECEMBER 3 1,201 8

RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. - SEWER

Account Number

408.10 Regulatory Assessment Fees 408.1 1 WV Propery Taxes 408.12 FICA 408.13 Sales & Use Tax

WV B&O Tax DEP Permit

Per Books (1) $

587 2,599

88 1 1,229

130

Accounting Per Books Adjustments Adjusted

(2) (3) $ $

587 2,599

88 1 1,229

130


Going Level Adjustments Going Level

(4) (5) $ $

44 (22) 101 (23) 73 1

2,599 4,403 (25) 4,403

88 1 1,229

130

Total Taxes Other Than Income Taxes 14,633 14,633 4,547 19,180


FEDERAL INCOME TAXES YEAR ENDED DECEMBER 3 1,20 18

RECEIVER FOR TIMBEWINE FOUR SEASONS UTILITIES INC. - SEWER


WATER OPERATIONS Operating Revenues: 627,078 Less: Operating and Maintenance 586,574 Depreciation and Amortization 9,848 Taxes Other Than Income Taxes 26,796 Net Operating Water Income before Federal Income Taxes 3,860


Sheet I o f2

Per Books Adjusted Going-Level

223,661

226,139

225,729

162,894 9,805

13,614 18,132 39,416 (20,6 IO)

SEWER OPERATIONS Operating Revenues: Less: Operating and Maintenance Depreciation and Amortization

40 1.349 364,014

424,2 1 5

19.180

415,175 43

14,633 (28,502)

Taxes Other Than Income Taxes Net Operating Sewer Income before Federal Income Taxes (79,382)

(99,993) Net Operating Combined Income before Federal Income Taxes 3,860 10.913

Statutory Deductions State Income Taxes 25 I 709

10.203 Taxable Income 3,609 (99,993)

2 1 .OO%

Federal Income State Calculation:

Federal Taxable Income Federal Income Tax Rate Current Federal Income Taxes

3,609 10,203 21 .OO%

2,143 2 1 .OO%

758

Provision for Federal Income Tax 758 2,143


STATE INCOME TAXES YEAR ENDED DECEMBER 3 1,201 8



WATER OPERATIONS Operating Revenues: Less: Operating and Maintenance Depreciation and Amortization Taxes Other Than Income Taxes Net Operating Water Income before Federal Income Taxes

SEWER OPERATIONS Operating Revenues: Less: Operating and Maintenance Depreciation and Amortization Taxes Other Than Income Taxes Net Operating Water Income before Federal Income Taxes

627,078

586,574 9,848

26,796 3,860


Taxable Income

State Income Tax Calculation:

State Taxable Income State Income Tax Rate

3,860

3,860 6.50%

Current State Income Tax 25 1

Provision for State Income Taxes 25 1


Sheet 2 of 2

Per Books Adjusted Going-Level

225,729 223,661

162,894 226,139

13,614 18,132 39,416 (20,610)

9,805

401,349 364,014

41 5,175 424,2 15

14,633 19,180 (28,502) (79,382)

43

10,913 (99,993)

10,913 (99,993)

10,913 6.50%

709 6.50%

709


OTHER INCOME YEAR ENDED DECEMBER 3 1.201 8

RECEIVER FOR TIMBERLPNE FOUR SEASONS UTILITIES INC. - SEWER Statement A Schedule 6

Account Number

Total Other Income


(1) (2) (3) (4) (5) $ $ $ $ $


OTHER INCOME DEDUCTIONS YEAR ENDED DECEMBER 3 1,201 8


Account Number


Accounting Per Books Going Level -

Per Books Adjustments Adjusted Adjustments Going Level (1) (2) (3 ) (4) (5) $ $ $ $ $

427.3 Interest Expense 428.0 Amortization of Debt Discount and Expense 427.4 Interest on Customer Deposits 427.5 Interest - Other

Total Other Income Deductions


AVERAGE RATE BASE YEAR ENDED DECEMBER 31,2018

RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITES INC. - SEWER Statement B

Per Books Going Level Per Books Ad.iustments Adjusted Adjustments Going Level

(1) (2) (3) (4) (5) $ $ $ $ $

Utility Plant in Service 215,983 215,983 215,983 Utility Plant Held for Future Use Unclassified Plant in Service Construction Work in Progress - Completed and in

Total 215,983 215,983 215,983

Less: Accumulated Provision for Depreciation (206,727) (206,727) (206,727) Retirement Work in Progress Contributions in Aid of Construction Customer Advances for Construction

Total (206,727) (206,727) (206,727)

Net Investment in Utiliiy Plant 9,257 9,257 9,257

Working Capital Allowance Materials and Supplies Prepayments Working Cash Allowance

Total Average Rate Base

NOTE: THE COMPANY HAS MADE IMPROPER TRANSFERS OF COMPANY FUNDS TO ITS OWNERS (SEE DETAIL SHOWN ON STATEMENT C). THE TRANSFERS EXCEED THE CALCULATION OF A RATE BASE DETERMINATION. AS A RESULT OF THAT IMPROPRIETY, RATE BASE IS DEPCITED AS NOT APPLICABLE (N/A).

CANAAN \'ALLEY PUBLIC SERVICE DISTRICl

PLANT FW SERVICE YEAR ENDED DECEMBER 3 I , 20 I E

RECEIVEK FOR WERLINE F O I X SFASONS LnLrnEs ryr . SEH'LR

Account Number

351 1 352 1 389 1

353 2 354 2 355 2 360 2 361 2 362 2 363 2 364 2 365 2 3892

353 3 354 3 355 3 370 3 371 3 389 3

353 4 354 4 355 4 3804 381 4 382 4 3894

353 7 354 7 390 7 391 7 392 7 393 7 394 7 395 7 396 7 397 7 398 7

Intangible Plant Organization Franchises Other Plant and Miscellaneous Equipment Total Intangible Plant

Collection Plant Land and Land &ghts Structures and Improvements Power Generation Equipment Collection Sewers- Force Collection Sewers-Gravity Special Colleding Structures Services to Customers Flow Measuring Dences Flow Meamring Installations Other Plant and Mscellaneous Equipment Total Collection Plant

System Pumping Plant Land and Land Rights Structures and Improvements Power Generation Equipment Receiving Wells Pumping Equipment Other Plant and Miscellaneous Equipment Total System Pumping Plant

Treatment and Disposal Plant Land and Land Rights Structures and Improvements Power Generation Equipment Treatment and Disposal Equipment Plant Sewers Outfall Sewer Lines Other Plant and Miscellaneous Equipment Total Treatment and Disposal Plant

General Plant Land and Land Rights Structures and Improvements Office Furniture and Equipment Transportation Equipment Stores Equipment Tools. Shop and Garage Equipment Laboratory Equipment Power Operated Equipment Communicahon Equipment Miscellaneous Equipment Other Tangible Plant Total General Plant

Total Tangible Plant

Total Wastewater Plant

Gong Level Adjustments


Balance Balance Begwing End of Average ofyear Addihons Retirements Adiushnents Year Balance

(1) (2) (3) (41 ( 5 ) (6) IF $ I $ s I

7,000 88,830

7,000 88,830

7,000 88,830

100,467 7.000

100,467 7.000

203,297 203,297

1.133 1.133

8,553 8.553 9.686 9,686

3,000 3,000

3.000 3.000

215.983 215.983

100,467 7,000

203.297

1,133

8,553 9.686

3,OW

3,000

215.982

215,983

Total Gong Level Plant m Service 215,983


PLANT HELD FOR FUTURE; USE YEAR ENDED DECEMBER 3 1,20 18



( 1 ) (2) (3) (4) $ $ $ $


Average Balance

( 5 ) $

THE COMPANY HAS NO PLANT HELD FOR FUTURE USE


UNCLASSIFIED PLANT IN SERVICE YEAR ENDED DECEMBER 3 1,20 18



(1) (2) ( 3 ) (4) $ $ $ $


Average Balance

( 5 ) $

THE COMPANY HAS NO UNCLASSIFIED PLANT IN SERVICE

CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. - SEWER CONSTRUCTION WORK IN PROGRESS-COMPLETED AND IN SERVICE YEAR ENDED DECEMBER 3 1,201 8


(1) (2) (3) (4) $ $ $ $


Average Balance

THE COMPANY HAS NO CONSTRUCTION WORK IN PROGRESS

CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. - SEWER MATERIALS AND SUPPLIES YEAR ENDED DECEMBER 3 1,20 18


Account Number

15 1 Materials and Supplies

Average Balance

$

Total Materials and Supplies

t- M


PREPAYMENTS YEAR ENDED DECEMBER 31,2018


Account Number

162 Prepayments Workers Compensation Liability Insurance Service Agreements


Average Balance

$

Total Prepayments


WORKING CASH ALLOWANCE YEAR ENDED DECEMBER 3 1,201 8

RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. - SEWER Statement B Schedule 7

NOT APPLICABLE

N


ACCUMULATED DEPRECIATION YEAR ENDED DECEMBER 3 1.20 18

RECEIVER FOR TIMBERLTNE FOUR SEASONS UTILITIES INC. - SEWER

Account Number

108.1 Accumulated Depreciation

Balance Beginning

of Year (1)

Additions (2)

$ $ 206,705 43

Retirements (3) $


Balance End of Average

Year (4) $

206,748

Balance (5) $ 206.727

Total Accumulated Depreciation 206,705 43 206,748 206,727 I


RETIREMENT WORK IN PROGRESS YEAR ENDED DECEMBER 3 1,201 8


Account Number

Balance Beginning

of Year (1) $ $ $ $

Additions (2)

Retirements (3)

Balance End of Average Year (4)

- Balance

THE COMPANY DOES NOT HAW RETIREMENT WORK IN PROGRESS


CONTRIBUTIONS IN AID OF CONSTRUCTION YEAR ENDED DECEMBER 3 1,20 18



( 1 ) (2) (3 1 (4) (5 ) $ $ $ $ $

271 CIAC

Total CIAC


CUSTOMER ADVANCES FOR CONSTRUCTION YEAR ENDED DECEMBER 3 1,20 18


Account Number

Balance Balance Average Beginning End of

of Year Additions Retirements Year Balance (1) (2) (3 ) (4) ( 5 ) $ $ $ $ $

252 Customer Advances for Constuction

Toal Customer Advances for Constuction

CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. - SEWER CUSTOMER DEPOSITS YEAR ENDED DECEMBER 3 1,201 8


Account Number

235 Customer Deposits

Average Balance

$

Total Customer Deposits

CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. - SEWER OTHER DEFERRED DEBITS YEAR ENDED DECEMBER 3 1,20 18


Account Number

Average B a1 ance

186 Miscellaneous Deferred Debits

Total Miscellaneous Deferred Debits

N h

CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. - SEWER OTHER DEFERRED CREDITS YEAR ENDED DECEMBER 3 1,20 1 8


Account Number

Average Balance

253 Other Deferred Credits

Total Other Deferred Credits

N L.

Statement C Schedule 1

CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES TNC. - SEWER DETAIL OF DEBT CAPITAL YEAR ENDED DECEMBER 3 1,20 18

Water Common stock issued Other paid-in capital Retained earnings Subtotal Affiliate Payable Subtotal Less: Affiliate Receivable Water Operations Total

Sewer Common stock issued Other paid-in capital Retained earnings Subtotal Affiliate Payable Subtotal Less: Affiliate Receivable Sewer Operations Total

Corn bined Common stock issued

201 8 150

8,472 552,558 561 ,I 80 139,363 700,543 92,494

608.049

150 8,472

(406,885) (398,263) 197,834

(200,429) 92,495

(292,924)

300 Other paid-in capital 16,944 Retained earnings 145,673 Subtotal 162,917 Combined Affiliate Payable 337,197 Subtotal 500,114 Less: Combined Affiliate Receivable 184,989 Total 315,125 Less: Improper Transfers (176,3 18) Less: Affiliate Receivable (WatedWastewater Service (236,112) Less: Colonial Funding Total Combined Equity

(129,606) (226,911)



RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. - S E W R

PER BOOKS ADJUSTED Residential

Number of M. Gals

Statement D Sheet I of4

First 4,000 Next 6,000 All Over January 20 18 - December 20 18 (12 months) Bills Sold Rate Revenue Gallons Gallons 10,000 Gallons Revenue

(1) (2) ( 3 ) (4) ( 5 ) (6) (7) (8) $ $ $

Minimum Bills 3,93 1 6,043.5 14.76 58,022 Annual EDU Charge @ 4,240.17 EDUs 65.00 275,61 I


Total Rates


328 2,034.7 149 3,409.5

4,408 11,487.7

Total Revenue Per Analysis Correction Factor Total Per Books Adjusted Residential Sales Revenue

1,3 12.0 722.7 596.0 894.0 1,9 19.5

1,908.0 1,6 16.7 1,919.5 3.69 3.1 1 2.40

33 3,633 7,04 1 5,028 4,607 350,308

350,308 0.99 100 1

347,156


CUSTOMERS BILL ANALYSIS YEAR ENDED DECEMBER 3 1,20 18


PER BOOKS ADJUSTED Commercial

Number of M. Gals

Statement D Sheet 2 of 4

First 4,000 Next 6,000 All Over January 20 18 - December 20 18 ( I 2 months) Bills Sold Rate Revenue Gallons Gallons 10,000 Gallons Revenue

(1) (2) (3) (4) (5) (6 ) (7) (8) $ $ $


4,000-1 0,000 Gallons All Over 10,000 Gallons

Total Rates


15 28.0 14.76 22 1 65.00 52,200

8 55.9 10 618.7

33 702.7

Total Revenue Per Analysis Correction Factor Total Per Books Adjusted Commercial Sales Revenue

32.0 23.9 40.0 60.0 5 18.7

72.0 83.9 5 18.7 3.69 3.11 2.40

52,421 266 26 1 1,245 54,193

54,193 1.000006

54.193



RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. - SEWER Statement D Sheet 3 of 4

GOING-LEVEL Number Residential of M. Gals First 4,000 Next 6,000 All Over January 20 18 - December 20 18 (12 months) Bills Sold Rate Revenue Gallons Gallons 10,000 Gallons Revenue

(1) (2) (3 1 (4) (5) (6) (7) ( 8 ) $ $ $

Minimum Bills Annual EDU Charge @ 4,240.1 EDUs


Total Rates


Total Revenue Per Analysis Correction Factor Total Going-Level Residential Sales Revenue

3,909 6,O 13.7 14.76 57,697 65.00 275,6 1 1

328 2,034.7 147 3,269.1

4,384 1 1,3 17.5

722.7 588.0 882.0 1,799. I

1,312.0

1,799.1 1,900.0 1,604.7 3.69 3.1 1 2.40

333,308 7,011 4,99 1 4,3 18 349,628

349,628 0 991001 346,48 1

w Y



RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. - SEWER Statement D Sheet 4 of 4

GOING-LEVEL Number Commercial of M. Gals First 4,000 Next 6,000 All Over January 201 8 - December 2018 (12 months) Bills Sold Rate Revenue Gallons Gallons 10,000 Gallons Revenue

(1) (2) (3) (4) ( 5 ) (6) (7) (8) $ $ $


4,000-1 0,000 Gallons A11 Over 10,000 Gallons

Total Rates


Total Revenue Per Analysis Correction Factor Total Going-Level Commercial Sales Revenue

15 28.0 14.76 22 1 65.00 15,540

8 55.9 10 618.7

33 702.7

32.0 23.9 40.0 60.0 518.7

72.0 83.9 5 18.7 3.69 3.1 1 2.40

15,761 266 26 1 1,245 17,533

17,533 1.000006

17,533

CANAAN VALLEY PUBLIC SERVICE DISTRICT, RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES, INC. - SEWER CASE NO. 19-0887-WS-19A

Statement Schedule 1

CURRENT TARIFF Effective January 28,20 13

APPLICABILITY Applicable in entire territory served.

AVAILABILITY OF SERVICE Available for residential, commercial, and industrial service.

RATES BASED ON METERED WATER SERVICE First $3.69 per 1,000 gallons Next 6,000 gallons of water used per month $3.1 1 per 1,000 gallons All over $2.40 per 1,000 gallons

4,000 gallons of water used per month

10,000 gallons of water used per month

EDU CHARGE Each customer shall be billed $65.00 per month per EDU.

MINIMUM CHARGE No sewer bill will be rendered for less than $14.76 a month, plus $65.00 per EDU per month.

LEAK ADJUSTMENT $0.02 per 1,000 gallons of water is to be used when a bill reflects unusual water consumption.

which can be attributed to eligible leakage on the customner's side of the meter. This rate shall be applied to all such consumption above the customer's historical average usage.



TIMBERLINE FOUR SEASONS UTILITIES, INC. - SEWER Statement F Sheet 1 of 6


1 213 1 117 1213 1/18



Net Utility Plant



Current and Accrued Assets Cash Special deposits Working funds Temporary Cash Investments Customer accounts receivable Other Accounts Receivable Accum prov for uncollectible accounts Notes Receivable Receivables from Associated Companies Materials and Supplies Prepayments Accrued Interest and Dividends Receivable Rents Receivable Accrued Utility Revenues Misc current and accrued assets




632,033 632,033 (438,269) (448,074)

193,764 183,959

5,940 39,753

70,737 83,438

49 1,805 5 18,464

568,482 641,655

762,246 825,614 Total Assets and Other Debits

34


COMPARATIVE BALANCE SHEET YEAR ENDED DECEMBER 3 1,2018



1213 111 7 1213 111 8 $ $


Capital Stock and Surplus Common Stock Other Paid-in Capital Retained Earnings




Current and Accrued Liabilities Accounts Payable Notes Payable Payable to associated companies Customer Deposits Accrued Taxes Accrued Interest Accrued Dividends Mature Long-Term Debt and Interest Misc current and accrued liabilities




Contributions in Aid of Construction

Accumulated Deferred Income Taxes Accelerated Amortization Liberalized Depreciation Other

Total Accumulated Deferred Income Taxes



150 150 8,472 8,472

505,817 552,558

5 14,439 561,180

15,534 36,568

140,730

54,975

33,473 23,363

139,363

68,235

247,807 264,434

247,807

762,246

264,434

825,614

***Source: Annual Report for FYE December 31,2018

35





1213 1/17 12/3 1/18



Net Utility Plant

215,983 215,983 (206,705) (206,748)

9,278 9,235



Current and Accrued Assets Cash Special deposits Working funds Temporary Cash Investments Customer Accounts Receivable Other Accounts Receivable Accum. Provision for Uncollectible Accounts Notes Receivable Receivables from Associated Companies Materials and Supplies Prepayments Accrued Interest and Dividends Receivable Rents Receivable Accrued Utility Revenues Misc current and accrued assets




168,573

106,445

237,320

92,495

275,018 329,s 15

Total Assets and Other Debits 284,296 339,050

3t





12/31/17 1213 1/18







150 150 8,472 8,472

(362,996) (406,885)

(354,374) (398,263)

14,546 36,568

584,562

2,994

72,009 23,363

623,805

18,136

Total Current and Accrued Liabilities 638,670 737,313






638,670

284,296

737,313

339,050


3;





$ $ 1 213 111 7 1213 111 8



Net Utility Plant



Current and Accrued Assets Cash Special deposits Working funds Temporary Cash Investments Customer Accounts Receivable Other Accounts Receivable Accum. Provision for Uncollectible Accounts Notes Receivable Receivables fi-om Associated Companies Materials and Supplies Prepayments Accrued Interest and Dividends Receivable Rents Receivable Accrued Utility Revenues Misc current and accrued assets





848,016 848,016 (644,9741 (654,822)

203,042 193,194

5,940

239,3 10

598,250

843,500

39,753

320,758

610,959

97 1,470

1,046,542 1,164,664

CANAAN VALLEY PUBLIC SERVICE DISTNCT




12/31/17 1 213 111 8







300 300 16,944 16,944

142,821 145,673

160,065 162,917

30,080 73,136

725,292

57,969

105,482 46,726

763,168

86,371

Total Current and Accrued Liabilities 886,477 1,001,747






886,477 1,001,747

1,046,542 1,164,664


39

CANAAN VALLEY PUBLIC SERVICE DISTRICT TIMBERLINE FOUR SEASONS UTILITIES, INC. - SEWER STATEMENT OF CHANGES IN RETAINED EARNINGS

YEAR ENDED DECEMBER 31,2018 STATEMENT F SCHEDULE 1

1213 1/20 17 12/3 1/2018 $ $

Retained Earnings Balance At Beginning Of Year Net Income

Total Retained Earnings

(336,828) (362,996) (26,168) (43,889)

(362,996) (406,885)

40


STATEMENT OF CASH FLOWS YEAR ENDED DECEMBER 3 1,20 18

TIMBERLINE FOUR SEASONS UTILITIES, INC. - SEWER

Cash Flows from Operating Activities Cash from Customers Attributable to Operating Revenues Less: Cash Paid for Operation & Maintenance Expenses

332,602 (37 1,846)

Cash Paid for Taxes Other Than Income Taxes Income Taxes Paid

Subtotal of Cash Flows from Operating Activities

(745)

(39,989)

Interest and Other income Received (Interest Paid) Other Cash Inflows(0utflows) from Operating Activities:

Net Cash Provided by (Used in) Operating Activities Other Income Adjustments

Cash Flows from Investing Activities: Cash inflows: Proceeds from Sale of Utility Plant Contributions and Advances in Aid of Construction Contributions and Advances from Associated Companies Proceeds from Sale of Investment Securities Proceeds from Disposal of Other Non-current Assets Cash Outflows: Expenditures on Additions to Utility Plant Refunds of Customer Advances for Construction Investments in and Advances to Associated Companies Purchase of Investment Securities Acquisition of Other Non-current Assets

Cost of Removal Net of Salvage Acquisition Costs Preliminary Survey and Investigation Costs

Other Cash Inflows(0utflows) from Investing Activities:

Net Cash Provided by (Used in) Investing Activities

Cash Flows from Financing Activities: Cash Inflows - Proceeds from Issuance of: Long-Term Debt Preferred Stock Common Stock Cash Outflows Payments for Retirement of: Long-Term Debt Preferred Stock Common Stock

Dividends on Preferred Stock Dividends on Common Stock Other Cash Inflows(0utflows) from Financing Activities:

Net Increase or (Decrease) in Short-Term Debt Net Increase or (Decrease) in Customer Deposits Debt Issuance Costs Net Borrowings Under Line-of-Credit Agreement Net Cash Provided by (Used in) Financing Activities

Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents - Beginning of Year Cash and Cash Equivalents - End of Year

(39,989)

13,951

39,243

53,194

(1 3,205)

(13,205)


Sheet 1 of 2

41


STATEMENT OF CASH FLOWS YEAR ENDED DECEMBER 3 1,201 8

TIMBERLINE FOUR SEASONS UTILITIES, INC. - SEWER

Net Income Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization Net deferred taxes & investment tax credits (Allowance for funds used during construction) (Gain) Loss recognized on disposition of assets Amortization of debt discount (premium) on debt Net (increase) decrease in receivables (Increase) decrease in materials and supplies (Increase) decrease in prepayments Net (increase) decrease in other accrued revenues & assets Increase (decrease) in accounts payable Increase (decrease) in interest accrued Net increase (decrease) in taxes accrued & taxes payable Net increase(decrease) in other accrued expenses Increase (decrease) in operating reserves Other adjustments Income adjustments


Sheet 2 of 2

(43,889)

43

(68,748)

57,463

15,142

Net Cash Provided by Operating Activities 139.989’1

42


DETAIL OF ADJUSTMENTS YEAR ENDED DECEMBER 3 1,201 8


Adjustment Number

(4)

Account Number

715.1

73 1.1-736.1

73 1 .l-736.1

73 1.8-736.8

775.8

775.8

ACCOUNTING ADJUSTMENTS

Purchased Power

To reflect actual purchased power billings from Monongahela Power Company during the test year.


To correct an accounting entry to allocate invoices for SCADA services.


To remove SCADA services for water operations that were allocated to sewer operations.


To remove prior period legal expenses from Shuman, McCusky & Slicer PLLC.


To properly allocate telephone expenses that were not allocated during the test year based on a allocation factor of 50% water and sewer operations.


To remove prior period expenses for invoices from Frontier Communications. The two associated accounts have not been active for several years but have continued to be invoiced.


INCREASE <DECREASE>

$

1,198

43

CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES MC. - SEWER DETAIL OF ADJUSTMENTS YEAR ENDED DECEMBER 3 I , 201 8

Adptment Account Number Number --

(7) 521.20 Commercial Revenues 522.1 Residential Revenue

WING-LEVEL ADNSTMENTS

Flat Rate Measured Total Going-Level 15,540 346,481 362,021 Less: Per Books 52,200 347,156 399,356 Adjustment

To adjust going-level revenues to reflect the closure ofthe Timberline Dormitories. The Company is no longer billing the associated accounu.

(8) 7 I 5 1 Purchased Power

General Service Rate Schedule "B" Unru

Customer Charge 24 First 400 KWh 9,003 AI1 Additional KWh 11,425 ECCN (kwh) 20,428 ECC (kwh) 20,428 ECCZ (kwh) 20,428 Vegetation Management (kwh) 20,428

Going Level Purchased Power Expense Less: Per Books Adjusted Purchased Power Expense Adjustment

Enviromenial Control Normalization Surcharge - Effective January 15, 2020 Enviromenial Control Charge - Effective January 15,2020 Enviromental Control Charge 2 -Effective January 15,2021 Vegetation Management Surcharge. Effective January 1.2020

Unit Price Total

500 120 0 10523 947 009214 1,053 000010 2 0 00278 57 0 00032 7 0 00792 162

2,347 2,441

To adjust purchased power expense to reflect the current rates of the Company's power provider, Monongahela Power Company

(9) 701 10 Salariesand Wages -Employees Salaries and Wages -Employees 701 80

Current Regular Overtime Regular Overtime Employee PavP.ate Hours Hours Pay Pay Total

Operator I Operator 2 Oftice Employee

19.00 2,111.50 234 50 40,119 6,683 46,802 18.00 2,071.50 107.50 37,287 2,903 40,190

41 28,121 13.50 2,08000 2 0 0 28,080

6,263.00 344.00 105,485.50 9,62625 115,111.75

Total Going-Level Wages 115,112 Water Allocation Factor 50.0ffA Going-Level Water Wages 57,556

Account Allocation % Adjustment 701 1 75.57% 43,496 701 8 24.43% 14,060

100 00%

To reflect payroll expense for the Company using the most recent 26 two-week pay penods ending March 13,2020. The Company currently employs two full time operators and a full time office employee. Regular hours of the office employee have been increased above those in the latest 26 two week pay periods to reflea the Company's office opening in July 2019. The Company previously WBS

provided labor services through a operation and maintenance contract with an affiliated entity, hut has hired iu own employees since entering receivership in March 201 9 by Canaan Valley Public Service District.

(IO) 710.50 Purchased Wastewater Treatment

To remove the non-recumng purchased wastemter treament expenses related to late fees

(11) 710 50 Purchased WastewaterTreahnent 71 5.10 Purchased Power

Annual EDUs 564 EDU Rate 65 Adjustment

Total M Gallons Usage 12.190.4 Going-Level Purchased Power 2,347 M Gallon Rate 0.19 M Gallon Usage Reduction 1702 Adjustment

To reduce purchased power and purchased wtewte r expense to reflect the closure of the Timberline dormitories


INCREASE <DECREASE>

E

(36,660) 1675)

43.496 14,060

(19,542)

(36,660) (33)

44

CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC. - SEWER DETAIL OF ADJUSTMENTS YEAR ENDED DECEMBER 31,2018


(12) 770.70 Bad Debt Expense

GOING LEVEL ADJUSTMENTS

Going-Level Sales Revenue 364,014 Allowance for Bad Debt Expense Ratio 0.50% Adjustment 1,820

To provide bad debt expense at a rate of 0.5% of going-level water sales revenue. The Company has not collected customer account billings made to affiliates totaling approximately $236,000. Those extraordinary past due arrearages represent additional funds that should have been available to the Company. Those affiliated arrearages should not be considered bad debts for recovery from rate payers.

(13) 731.8-736.8 Contractual Services

To remove expenses for the annual operation and management agreement with an affiliated entity, Timberline Four Seasons Management. The Company entered into receivership by Canaan Valley Public Service District in March 2019.

(14) 731.5-736.5 Contractual Senices Timberline Timberline

Allocated Houri Allocation % All Hours Regular Hours 2,159.5 1,163.5 Overtime Hours 897.8 897.8 Total 3,057.3 2,061.3 67.42%

Timberline Timberline Allocation % dlocated Hours

Regular Hours 2.159.5 67.42% 1.456.0 Overtime Hours Total

All Hours

897.8 67.42% 605.3 3,057.3 2,061.3

Timberline Curent tberline Allocated Allocated Hours Pay Rate Wage Expense

Regular Hours 1,456.0 25.00 36,399 Overtime Hours 605.3 37.50 22,698 Total 2,061.3 59,097

Total Timberline Allocated Payroll 59,097 Add: PEW Expense @ 10% of Wages 5,910 Add: FICA @ 7.65% of Wages 4,521 Total Timberline Allocated Payroll 69,528 Sewer Allocation 50.00% Adjustment 34,764

To adjust contractual services expense to reflect an employee of Canaan Valley Public Service Dishict that is working for the Company. The ratio of total hours worked and hours worked for Timberline has been used to determine the amount of regular and overtime hours allocated to Timberline. The hours have been priced at the employee's current pay rate of $25.00 per regular how to determine the Timberline allocated portion of the Canaan Valley Public Service District employee. This Tunberline allocated wage is then used to calculate additional retirement expense and payroll taxes associated with the allocated wages.

(15) 731.8-736.8 Contractual Services

Amount August 2019 3,562 September 2019 6,234 October 20 19 602 November2019 4,163 December 2019 1,962 January 2020 1,562 Subtotal (6 Months) 18,086 Six Month Average 3,014 To annualize 12.00 Annual Bookkeeping Service 36,171 Sewer Allocation Factor 50.00% Going-Level Accounting Expense 18,086 Less: Per Books Accounting Expense 4,414 Adjustment 13,672

To adjust accounting expense to reflect an annualized of bookkeeping service from Scott & Nypl CPAs based on an average of the last six months of invoices. Bookeeping expenses have been allocated based on a 50% allocation facto1 to water and sewer operations.


INCREASE <DECREASE>

$

1,820

(45,000)

34.764

13.672

CANAAN VALLEY PUBLIC SERVICE DISTRICT RECEIVER FOR TIMBERLINE FOUR SEASONS UTILITIES INC - SEWER DETAIL OF ADJUSTMENTS YEAR ENDED DECEMBER 3 1,201 8

Adjustment Account Number Number -____

73 1.8-736 8 Contractual Services

GOING LEVEL ADJUSTMEXTS

741 8

742 8

756 8-759 8

73 1 8-736 8

775 8

Gomg-level Legal expense 2,365 Sewer Allocation Factor 50 00% Sewer Allocated Legal Expense 1,182 Less Per Books Adlusted Legal 1 6,250 Adjustment (5,068)

To adjust legal expense to remove test-year expenses related to the Company bemg placed mto receivership This amount is allocated based on a factor of 50% to water operattons and 50% to sewer

Rental of BuildmgReal Property

Monthly Rental Charge 300 To annualize 12 Annual Rental Charge 3,600 Sewer Allocation Factor 50 00% Sewer Allocated Rental Expense ---.----L___ 1800

To adjust rental expense to reflect the monthly rent for the Company's oftice that was opened July 201 9 This mount is allocated based on a 50% factor to water and sewer operations

Rental of Equipment

Monthly Rental Charge 350 To annualize 12 Annual Rental Charge 4,200 Sewer Allocation Factor 50 00% Sewer Allocated Rental Expense 2,100

I

To adjust rental expense to reflect the monthly lease of a utility truck from the Company's receiver, Canaan Valley Public Service District This amount is allocated based on a 50% allocation to water and sewer operations

Insurance

Current Annual Premium 3,856 Sewer Allocation Factor 50 00% Sewer Annual Workers Compens 1,928

To adjust msurance expense to reflect the current annual workman's compensation msurance, effective May 17,201 9 through May 17,2020 This amount is allocated 50% to water operations and 50% sewer

insurance

Current Annual Premium 2,393 Sewer Allocation Factor 50 00% Sewer Annd Property Insurance, , 1197 ,

To adjust msurance expense to reflect the current annual property msurance assigned to Tirnberlme Four Seasons Utilities, Inc The Company's receiver, Canaan Valley Publlc Service District, has mcluded the Companyk assets m its property msurance policy The incremental change in the District's policy premum has been assigned to the Company The current total policy premium for Canaan Valley PSD is $20,155 with $2,393 bemg assigned to the Company The Company allocated mount is allocated 50% to sewer and


Amount Frontier (Account 1 ) 98 Frontier ( Account 2) 179 AT&T 158 Total Monthly Telephone Expenr 435 Annuallzation Factor 12 Total Annual Telephone Expense 5,224 Sewer Allocation Factor 50% Adjustment 2,612 Less Per Books Adjusted 2.01 1 Adjustment 601

To adjust miscellaneous expense to reflect the current annual telephone expense based on February 2020 mvoices and a 50% allocation to sewer operations


INCREASE <DECREASE>

$

(5.068)

1,800

2,100

1,928

1,197


DETAE OF ADJUSTMENTS YEAR ENDED DECEMBER 3 1.20 18



(22) 408.10

(23) 408.10

(24) 403.00

(25) 408.12

GOING LEVEL ADJUSTMENTS


Current Invoice - Sewer Portion Less: Per Books Adjustment

63 1 581 44

To adjust PSC intrastate revenue assessment expense to reflect the most current invoice, dated June 8,2019.


Current Invoice 202 Sewer Allocation 50.00% Adjustment 101

To adjust PSC property assessment expense to reflect the most current invoice, dated December 4,2019. The property assessment is allocated based on 50% water operation and 50% sewer operations.

Depreciation

To eliminate depreciation expense to reflect the improper transfer of Company funds by its owner. See footnote on Statement B for details.

FICA

Going-Level Sewer Operations Wages 51,556 FICA Rate Going-Level FICA Expense

1.65% 4,403


INCREASE <DECREASE>

$

44

101

(43)

4,403

To adjust FICA expense to reflect the sewer allocated going-level wages.

4;

Documents

Esq. Box No. 10 You