Alright. In that case, let's go ahead and go on the record. Good morning everyone and welcome to the Arizona Corporation Commission. This is the time set for the hearing in the matter of the application of Jackson Spring Estates Home and Property Owners Association for an adjudication not a public service corporation. The docket number is WDash02486ADash25Dash0153. I'm administrative law judge Charles Haines. I'll be presiding over this matter and to start I'll take appearances beginning with the
applicant mister Johnston. Could you give your appearance? Yes, sir. William Johnston. I am the president of the homeowners association at the Jackson Springs Estates Home and Property Owners Association. Excuse me. And I have authority to act on a part of the association. Alright. Very good. Thank you. And on behalf of the utilities division. Good morning, your honor. Nicole Layton on behalf of utilities division staff. Thank you. And before getting into the meat of things, are there any procedural matters we need to discuss at this time? None from staff?
Mister Johnston, any procedural matters you wanted to have brought up at this time? No, your honor. Alright. Very good. In that case then, now is the time for public comment. I'll ask now, is there any member of the public present here who wishes to provide comment with regard to the matters before us this morning? Alright. Seeing a wide empty room of no one here and no one running for the mic I'll ask is there anyone on the line who wishes to provide public comment with regard to the matter before us today? Alright. Hearing no response, let the record reflect that there was no member of the public who wished to
get public comment at this time during this proceeding. Alright. So now I'll ask, mister Johnston, did you want to provide an opening statement this morning, just a a brief summary of the things that you wanna talk about? You're you're under no obligation to if you don't want to. I don't believe, your honor, that, it's necessary. Miss Wilkins has been very good at putting together in her executive summary what the situation is. Okay. Alright. Miss Leighton? I'll just briefly state, your honor, that staff has evaluated the application and agrees that,
the applicant qualifies to be adjudicated, not public service corporation. So we support approval of the application. Alright. Alright. In that case, let's go ahead and move into the presentation of witnesses. Mister Johnston, were you going to provide a statement or are are you calling yourself as the witness in this case? Yes, your honor. Alright. And, as as stated in the executive summary Hold up. Hold up. Hold up. Let let let let's get you teed up here. It's always a little weird when when somebody presents themselves. So I'll ask you a few questions just to get you started here. So first Okay. I'll ask if you could give your name and spell your name for the record.
Do you want him sworn in, your honor? Hold on. Oh, yes. Yes. Yes. Yeah. We're getting way ahead of myself. So please, if you could swear him in first. Sir, please raise your right hand. And before I swear you in, please keep your voice up. It's very quiet. You saw me state the testimony you are about to give in this proceeding shall be truth, the whole truth, and nothing but the truth, so help you God. I do. Alright. Alright. Now, I'll ask mister Johnston if I could give you have you give your full name with spelling for the record. William Harold Johnston, j o h n s t o n. Alright.
And are you a customer or a member of the, Jackson Spring Estates, homeowners association? Yes, sir. I am. And are you also are you involved with the operations of the HOA in any capacity beyond simply being a member of the HOA? Yes, sir. I am. I'm also the president of the association. Okay. And you indicated before, but I'll I'll have you repeat it now. You you were, designated or approved by the HOA to represent it in this matter? Yes, your honor. How long have you been a, member of the HOA? Since 1997.
Alright. And you are a customer with a home within the, affected area? Yes, sir. And does that also coincide with the 1997? Yes, sir. I didn't hear. Sorry. You seem to look it looks like you're talking, but it sounds like you got muted there. I I am the mute. Oh, your your volume is way down. Okay. You're gonna have to do something there. Yeah. We're not hearing you at all. Just off the record for a second here. It's like so are did you it doesn't look like you're muted. So do you have, like, a a microphone there that might be blocked by something?
How is this, your honor? Oh, that that's much better. Okay. Alright. Back on the record. And you were saying? I I've owned the property. We've my wife and I have owned the property since 1997. The house hasn't been wasn't built until 2006. Okay. I see. Alright. And alright. So what did you want to provide as your testimony here this morning? Just, within about the last year, we realized that, we have been a public corporation as a utility, and this maybe we did not qualify that we should not be a public utility,
because the actual people that use the water are strictly homeowners. And we do not sell the water to anybody, and we do not have any more property to go. Okay. Hold up. Hold up. So I'm gonna I'm gonna pause you there, and we're gonna go off the record again just very briefly because there's there's some feedback going on. Okay. Okay. And so I'm I'm told by my tech support fellow here from media services that, Robin, it sounds like your mic is is causing a feedback loop here. So you might wanna mute yourself.
Alright. Just checking very quickly. Everybody can still hear me? Okay? Yes. And it doesn't sound like we have the echo anymore, so it sounds like we're okay. Alright. Back on the record. Alright. And, mister Johnson, was there anything else you wanted to add? No, your honor. Okay. Alright. And with regard to the application, did you want to offer that as an exhibit in this matter? Yes, your honor. Alright. Let's go ahead and identify the application as exhibit a one. With regard to the application, mister Johnston, was the application prepared by you or under your direction? It was prepared by me. Okay. If I were to ask you questions based on the, information contained in the application, you are on the,
information contained in the application, your answers would be the same today? Yes, sir. They would. Alright. Do you adopt the application as part of your testimony here today? I do, your honor. Do you have any changes, corrections, or modifications to make are there any objections to the admission of exhibit a one? No objections. Alright. Exhibit a one is hereby admitted. Alright. And, mister Johnson, I'll ask one more time. You Alright. And, mister Johnson, I'll ask one more time. You had nothing more you wanted to to testify at this time? No. No. Okay. Alright. Are there any questions, from staff? I think with, mister Johnston adopting the application as part of his testimony,
I do not have any questions. Okay. Alright. Then it it's the me show. Okay. Mister Johnston, again, good morning. I'll ask first, have you had an opportunity to read the staff report that was filed in this matter? Yes. I have. And do you agree with the conclusions and the recommendations staff has made? Yes. I do. On the staff report, it mentions they couldn't analyze the water loss and production and capacity of the system because the last annual report only shows water pumped. Just so I understand for so I can accurately express this in the,
recommended opinion in order. Why is that? Is it because the HOA didn't track, water sold or, you know, what what is this just a one time thing or is that just how you just never never were tracking it? We we don't sell the water to to outside, the actual association members, for any reason. So, the way we track is strictly the amount of water that is, released out of the well, and we don't track it individually to each association member. Okay. Do you not even charge for the water if if that's the case?
There there is a charge that we put to the association members, because the Department of Revenue, because we've been a public corporation, set a minimum amount that we had to charge. So we would end up having to pay taxes on, and and also that is strictly the only reason why we've been doing it. Okay. So in any event, you weren't tracking you weren't tracking it by sales at all? No. We were not. Okay. With regard to the, the division of property according to votes, so I I wanted to get clear on this because it's it's expressed one way
in the staff report. It's worded a little differently inside the application, so I just wanna get it straight. In the application I think it says something to the effect that the property is owner occupied and that some owners own multiple acres or lots and that there are 19 owners. I think it mentioned there's 34 total lots and 38 acres total. So I just wanna be clear, how does it all divide up? Is it is it it's accurate that one, it's 38 acres. Is that correct? To the best of my knowledge, yes. Okay. And it's divvied up into approximately 34 lots?
Yes. They are. Okay. I are the lots all evenly sized, or are some of them, like, bigger than others? They're all approximately one acre. Okay. And then so they're all about about the same size as each other? Yes, sir. Okay. And then some property owners own more than one lot, and there's 19 That is Oh, go ahead. Yeah. That is correct. Alright. And there are 19 property owners in total. That is correct. And so with regard to the there's one of the criteria for the non adjudication finding is that it's a
fixed territory. I wanted to get straight on this. In looking at prior decisions involving adjudications, what I gather from how they treat it is that they're saying that to be a fixed territory that essentially the service territory is basically landlocked, that you're surrounded and so you don't have the ability to expand. I just wanted to get some clarity on that. Is there any ability for Jackson Spring Estates for the HOA to expand? Can you is there any property that's available to purchase along your borders that you
can expand into? No. There is not. Okay. Do you know what the ownership situation is around your your border? To my best of my knowledge, we do have another HOA that is to the east of us. And then everything to the north, south, and west are all individual property owners. Okay. Alright. And then, at least as of this time, you have no intention or plan or you don't foresee see anything that would cause the HOA to expand to include any of these, these kind of stray,
individual property owners? No. No. We do not. Alright. With regard to the restriction on preventing subdivision of the lots, staff mentioned that you have a, the CC and R's, that have been recorded. Are there restrictions within the deeds that also, prevent subdividing the lots or is it only the CC and Rs that supply that that kind of limitation? To my knowledge, it's only the CC and Rs. Okay. Do you have any limitations like zoning or or water rights restrictions or other government
re regulations that prevent further subdivisions? That, I do not know. Okay. Alright. And with regard to the number of lots to the number of owners, can can any of the lots that are owned where where you have a property owner owning multiple lots, can any of those spare lots be sold to your knowledge? They they could be sold. Yes. Okay. So you could have additional, member property owners joining the HOA at some point. That is correct. But it's capped at at peak. At maximum,
it's going to be the the 34 lots. So it can under no circumstance be more than the total number of lots you have to your knowledge. That's correct. Alright. With regard to the bylaws, I take it it's the bylaws that establish the voting rights per lot. I wanna ask, so that on the basis that that bylaws can be amended, do you understand that if a future amendment of the bylaws makes it possible to change the voting distribution, that that might change one of the criteria that is the basis for an adjudication
here that you're asking for? Do you recognize that's a possibility? Yes. Yes. I do. Okay. And if that does happen, do you have a position on or do you have any opposition to a condition that if the HOA ever does something that changes one of the basic facts that we're using to determine it's okay to no longer, regulate you as a PSC, that if you change that fact, we may require you to come in and file for a new CCNN at that point? I understand that, sir. Okay. Alright.
And same thing with regard to the CC and Rs. CC and Rs can be changed and recorded. Do you agree with that? Yeah. And same thing? Yes. I'm sorry? Yes. I understand. Okay. And, again, if if anything if that being a a assumption or a fact that we're using in order to determine you're not a public service corporation right now, if that changes, we may require you to come in for a CCNN if that changes. We understand that, sir. Okay. Alright. I'll look to staff. Is there any questions based on anything I asked?
No, your honor. Alright. Mister Johnston, I asked a bunch of questions of you, and so I don't know if any of that kind of gave you any desire to kind of, like, flesh out anything or if you felt that there was any sort of misunderstanding caused by any of that. So if you have any additional things you wanna testify to at this point, now would be the time. No. I don't, sir. Okay. Alright. Alright. Are you satisfied you got across everything that you wanted to speak to at this time? Yes. I do. Alright. Alright. In that case then, I thank you for your testimony. I don't have any further questions, and, I appreciate it.
And with that, I'll move on to staff. Staff, would you like to call your first witness at this time? Yes, your honor. Staff call is Cameron Aiden. Alright. And Mister Aton, please raise I'm sorry. Mister Aton, please raise your right hand. You just solemnly state the testimony you're about to give in this proceeding shall be the truth, the whole truth, and nothing but the truth, so help you, God. Mister Aton, can you please state your name and business address for the record? My name is Cam Ayton, and my business address is 1200 West Washington Street, Phoenix, Arizona. By whom are you employed and in what capacity?
I work for the Arizona Corporation Commission as a utilities engineer. Do you have a copy of exhibit s one in front of you? Yes. I do. Okay. As a utilities engineer, are you adopting the engineering memo that's attached to exhibit s one, memo that's attached to exhibit s one, which was originally authored by Ryan Witt as your own today? Yes. I am. Do you have any corrections or additions to make to the engineering memo? I do not. Do you adopt the engineering memo as part of your sworn testimony? Yes. And, is it your understanding that ADQ, Arizona Department of Environmental Quality,
does not currently regulate Jackson Spring Estates? Yes. That's correct. Is it also your understanding that the Arizona Department of Water Resources does not currently regulate Jackson Spring Estates? Yes. That is correct. So by default, we can conclude that Jackson Spring Estates is not in violation of any regulations from either of those agencies? Yes. Is Jackson Spring Estates currently in violation of any commission requirements? No. I believe, they are in compliance with the commission. And do you recommend that the application for adjudication, not a public service corporation,
be approved? Yes. I have no further questions, your honor. Thank you. Alright. Very good. Mister Johnston, did you have any questions for this witness? No. I do not. Alright. Good morning, mister Ratten. Good morning. So first off, with the ADEQ and ADWR non regulation, just to to tie the bow on that, So we're clear, cutting them loose by finding them not a PSC, that's not changing any of the amount of regulation that they're already under at this time. Correct? That is correct. As the once the system passes the threshold that ADEQ will consider them a public
water system, ADEQ would still have jurisdiction over them. Okay. And whether we regulate them or not, that doesn't change if they do grow. Like, for instance, if they expand to a full 34 occupied lots, if that crosses a threshold that ADQ will consider or not, that that's ADQ. So nothing about what we're doing changes whether ADQ will or will not regulate them? That's correct. Okay. Same question with with regard to DWR? Yes. It's the same. Okay. One thing I should have asked this of, mister Johnston, but since you're here, I'll ask you.
With regard to wastewater, do you know if this is there's a sewer system or if they all use septic? I do not know. Okay. Yeah. I'm not aware. Okay. I might have to go back to mister Johnston for that later. With regard to the commission compliance, you said that to your knowledge, they're in compliance with all commission requirements? Yes. I believe that's correct. Based on on mister Johnston, what he said you were present earlier when mister Johnston was testifying? Yes. And do you recall he's mentioned something about how they they charge for the service they're providing? Yes. I I heard that. I I I'm I don't mean to challenge you on this in case this is
a loaded question, but you didn't evaluate it for whether they're complying with their approved tariff at all in terms of how they're charging for their their service. I I don't believe that was evaluated. Okay. Alright. Okay. Fair enough. Okay. Mister Johnson, did you have any questions for you any of that sparked that you wanted to ask this witness? No. I do not. Okay. Alright. Staff, any redirect? No, your honor. Alright. Alright. Thank you for your testimony. Alright. Staff, you ready to call your next witness? Yes. Staff calls Vicky Wallace. Miss Wallace, please raise your right hand. You just solemnly state the testimony you're about to give in this proceeding shall be
the truth, the whole truth, and nothing but the truth, so help you, God. Okay. Got it. Miss Wallace, can you please state your name and business address for the record? I'm Vicky Wallace, and I'm at 1200 West Washington Street, Phoenix, Arizona. By whom are you employed and in what capacity? I'm employed by the Oklahoma corp the Arizona Corporation Commission, in the utilities division as an executive consultant three. And were you assigned to review this application for an adjudication, not a public service corporation?
Yes. I was. What did your review of the application consist of? I analyzed the application against the supporting data and the criteria to which was established by the court to determine whether the, application met those guidelines. Okay. And you mentioned the court. I know that the the staff report does reference, a court decision. But is it correct that there's also a commission decision, which says that's a commission policy. One at a time. K. Thank you.
And in your review of the application, you also reviewed the CC and Rs that were attached? Yes. And did you personally prepare the staff report? I did. Do you have any corrections or modifications to the staff report? Not at this time. Adopt the staff report, which is marked as exhibit s one as part of your testimony today? I do. Okay. And we've kind of already answered this, but just to get the decision number in the record, you're familiar with commission decision number five five five six eight in the criteria it sets for these adjudications? I am. Is it your opinion that Jackson Spring Estates meets each of those seven criteria in
that decision? I do. And do you recommend that the commission approve Jackson Spring Estate's application to be adjudicated, not a public service corporation? Yes. I do. I have no further questions. Thank you. Alright. Mister Johnston, did you have any questions for this witness? No. I do not. Okay. Alright. Good morning, miss Wallace. Good morning. On the off chance you might know the answer to this, do you know if the houses out there are on sewer or septic? They're on septic, I believe. They're on septic? Mhmm. Okay. You were present for the earlier, Q and A I had with mister Johnston before? Yes. Okay.
So I did have the one question with regard to the neighboring there's the one criteria inside the prior commission decision that talks about having a fixed territory and and with regard to having the ability to expand into territories outside of the current territory they're approved for, staff is satisfied that under the current situation with kinda, like, just random individual homeowners who are outside the HOA, that right now that that's close enough for purposes.
Because those other areas are well established and have their own. Okay. Alright. And you would agree, likewise, with regard to the, criterias involving, the ability to have the voting rights set within so that everybody has one one vote. One vote. Yes. Right? And that those being established by the CC and Rs, as well as the the inability to do any further lot splitting. Right. That's criteria. Okay. And you would agree that CC and Rs, they they can be amended over over time? They can. Alright. And with regard to the possibility that they are amended,
does staff have any view or position whether as part of issuing the adjudication here that if the HOA ever does something to change the, CCNRs or they actually do start gobbling up their neighbors, anything that changes any of those criteria that we're using to say that it's okay to adjudicate them as of this moment, that it would be, that they would have to at that that point after due process have the adjudication rescinded and then be required to file a new CCNN application. Yes.
If staff were aware of that situation. And if that applied in this situation, they should come back in. But it's kind of a self regulation. Okay. Well, okay. I I don't so you take it so you, you know, somebody's gonna have to flag it for you is what you're saying. Right. Okay. Alright. And but you would not have staff has no problem with that being a condition of I would not. Okay. Alright. I think well, I guess one one question is, do you know if conditions like that have been required in prior, adjudications? They have not. I've handled all the due adjudications since I've been here for twenty three years.
So I have not seen that condition, but I don't see any reason why it couldn't be applied. Oh, okay. Alright. Alright. I think that's all the questions I have for you, and I'll ask mister Johnston. Did you have any any questions? No. I do not. Okay. Any redirect? No redirect, but I did forget to move for admission of exhibit s one. Alright. So I would do that at this time. Alright. Is there any objection, mister Johnston, to the admission of the staff report exhibit s one into evidence? No objection. Alright.
Exhibit s one is hereby admitted. I I I guess one question. One last question here just because you're here. So you do agree that it is in the public interest to go ahead and adjudicate, Jackson Spring Estates HOA as not a public service corporation based on the information presented? I do. As a matter of fact, this this has been a classic adjudication to me. Okay. It just has all the components that you're supposed to have. Okay. Alright. I appreciate it. Thank you for your testimony. Thank you. Alright. Alright. And I take it that's all of your witnesses staff. That's correct, your honor.
Okay. Alright. On to closing arguments. Mister Johnston, was there anything you wanted to say today by way of closing or conclusion? I have nothing further, your honor. Okay. Alright. Miss Layton? I don't have anything to add, your honor. Thank you. Alright. Alright. I thank you everyone for your participation here today. Appreciate it. And I will go ahead and draft a recommended opinion in order, with my recommendation for the commission to, vote on in an upcoming upcoming open meeting. With that, unless there's anything further from any of the parties,
we are adjourned. Alright. Hang on. So, mister Johnston, before you take off, I'll ask Robin, is there anything you needed any of us to clarify while we're here?