PUBLIC SERVICE COMMISSION OF WEST VIRGINIA CHARLESTON * * * * * * * * * * SWF-X * * * * * * * * * HEARING TRANSCRIPT * * * * * * * * *

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1 PUBLIC SERVICE COMMISSION OF WEST VIRGINIA CHARLESTON * * * * * * * * * BOONE COUNTY TRANSFER STATION * * --SWF-X * * * * * * * * * * HEARING TRANSCRIPT * * * * * * * * * BEFORE: MATTHEW MINNEY, Administrative Law Judge HEARING: Friday, March, :0 a.m. LOCATION: Boone Co. Courthouse Circuit Courtroom 0 State Street Madison WV Reporter: Guy Starrett Any reproduction of this transcript is prohibited without authorization by the certifying agency.

2 A P P E A R A N C E S JOHN LITTLE, ESQUIRE West Virginia Public Service Commission Brooks Street Charleston, WV Counsel for the Public Service Commission KEITH RANDOLPH, ESQUIRE Boone County Commission 0 State Street Suite 0 Madison, WV 0 Counsel for the Petitioner WENDLE COOK, ESQUIRE Cook & Cook P.O. Box Madison, WV 0 Counsel for the Intervenors

3 INDEX TO WITNESSES DISCUSSION AMONG PARTIES - WITNESS: WILLIAM THORNTON DIRECT EXAMNIATION By Attorney Randolph CROSS EXAMINATION By Attorney Cook CROSS EXAMINATION By Attorney Little DISCUSSION AMONG PARTIES REDIRECT EXAMINATION By Attorney Randolph RECROSS EXAMINATION By Attorney Cook DISCUSSION AMONG PARTIES WITNESS: JAMES GORE DIRECT EXAMINATION By Attorney Randolph CROSS EXAMINATION By Attorney Cook - CROSS EXAMINATION By Attorney Little EXAMINATION By Judge 0

4 INDEX (CONT D) DISCUSSION AMONG PARTIES 0 WITNESS: JOSHUA BARKER DIRECT EXAMINATION By Attorney Cook CROSS EXAMINATION By Attorney Randolph CROSS EXAMINATION By Attorney Little DISCUSSION AMONG PARTIES WITNESS: KEVIN HILL DIRECT EXAMINATION By Attorney Cook CROSS EXAMINATION By Attorney Little EXAMINATION By Judge REDIRECT EXAMINATION By Attorney Cook CROSS EXAMINATION By Attorney Randolph DISCUSSION AMONG PARTIES WITNESS: JENNINGS MILLER

5 INDEX (CONT D) DIRECT EXAMINATION By Attorney Cook - EXAMINATION By Judge - WITNESS: DANIEL LIGHT DIRECT EXAMINATION By Attorney Cook - WITNESS: CHET BURGESS DIRECT EXAMINATION By Attorney Cook - WITNESS: MICKEY BROWN DIRECT EXAMINATION By Attorney Cook - EXAMINATION By Judge - REDIRECT EXAMINATION By Attorney Cook - DISCUSSION AMONG PARTIES - WITNESS: GEORGE CHAAIN DIRECT EXAMINATION By Attorney Cook - DISCUSSION AMONG PARTIES -

6 INDEX (CONT D) WITNESS: THOMAS FOSTER DIRECT EXAMINATION By Attorney Cook - DISCUSSION AMONG PARTIES - WITNESS: DELMAR BROWNING DIRECT EXAMINATION By Attorney Cook - WITNESS: DANNY WARNER DIRECT EXAMINATION By Attorney Cook - WITNESS: HARRISON JACKSON DIRECT EXAMINATION By Attorney Cook - WITNESS: CLARK GILLUM DIRECT EXAMINATION By Attorney Cook - DISCUSSION AMONG PARTIES - WITNESS: JAMES FLENNER DIRECT EXAMINATION By Attorney Little - CROSS EXAMINATION By Attorney Randolph -

7 INDEX (CONT D) CROSS EXAMINATION By Attorney Cook - 0 EXAMINATION By Judge 0 - DISCUSSION AMONG PARTIES - RECROSS EXAMINATION By Attorney Cook - RECROSS EXAMINATION By Attorney Randolph DISCUSSION AMONG PARTIES -

8 E X H I B I T S Number Description Petitioner s Exhibits: Page Offered Waste Management s Tariff Allied s Tariff Budget Revenues Revenue Breakdown Statement of Expenditures, Encumbrances and Appropriations Intervenors Exhibits: Letter from Jeff Eldridge Letter from Rupie Phillips, Jr. Letter from the th Senatorial District Senators Photographs Staff s Exhibits: Final Memorandum

9 P R O C E E D I N G S Good morning. My name s Matthew Minney. I m the Administrative Law Judge the Commission assigned to this case. This is Boone County Transfer Station, Case Number --SWF-X. At this time, I will take the appearances of the parties, starting with Boone County. ATTORNEY RANDOLPH: Your Honor, Keith Randolph on behalf of Boone County Commission. Thank you. Wendle Cook on behalf of the City of Madison, Town of Danville and the Concerned Citizens of Boone County. You represent all three parties? Yes, sir. Thank you. Staff? ATTORNEY LITTLE:

10 John Little, Staff Attorney for the Public Service Commission, Your Honor. All right. Thank you. Let me read a brief introductory statement. On October,, Boone County Commission filed a letter announcing its intent to close the solid waste resource stations located at Rock Creek and Fosterville. On January 0th, Boone County cited its financial condition as grounds for the closure and asserted that alternative services exist. On November th, the Commission Staff recommended that this matter be referred to the ALJ Division. On November th,, the Commission referred this matter to the ALJ Division for a recommended decision on or before May th,. On December,, the City of Madison and the Town of Danville each filed letters objecting to the proposed closure of the transfer stations. Madison also appeared to seek to intervene. On December th, the presiding ALJ directed Boone County to provide notice of this matter. On January, I directed Madison to clarify whether or not it actually wanted to intervene. On January th,, Boone County filed an affidavit demonstrating that it published notice, certified that it

11 mailed a copy of the notice to regular commercial customers, posted the notice to each transfer station and it also filed a list of its expenses. On January th,, Staff recommended that we should approve the request in Boone County to cease operating, but also recommended that it retain its certificate. On January,, Madison, Danville and the Concerned Citizens of Boone County each petitioned to intervene in this proceeding. The Intervenors raised a variety of objections. The Intervenors also filed a separate response to the January th memorandum. On January, I granted the request to intervene. On January th, Boone County requested me to close the transfer stations. On January th, I scheduled this matter for the evidentiary hearing today, directed that Boone County be granted a pardon pending the outcome of this proceeding and directed it to provide its current tariff rates. Is there any preliminary matters before we take evidence from the parties? Mr. Randolph? ATTORNEY RANDOLPH: No, Your Honor. Mr. Cook?

12 No, Your Honor. Mr. Cook, based on your representations earlier, it s my understanding that a good number of people in the audience here today are going to be called as witnesses in your case; is that correct? That s correct, Your Honor. All right. Thank you. Anything from Staff before we get started? ATTORNEY LITTLE: No, Your Honor. In order to prevent putting you folks on twice, I m going to go ahead and defer the public comment to the end of the hearing. And if we miss anybody, the folks that you call, Mr. Cook, then we ll catch them at the end. Mr. Randolph, well, you have the burden of proof. Call your first witness. ATTORNEY RANDOLPH: Your Honor, if I could? Before I call the first witness, I have a couple exhibits I d like to have introduced and marked.

13 All right. Why don t you have them marked by the court reporter? ATTORNEY RANDOLPH: And I ve provided copies to Mr. Cook. Thank you. That document at PSC designated number, that would be marked as Petitioner s. (Petitioner s Exhibit marked for identification.) And I have Allied Waste Services in that PSC originally number. That would be Petitioner s. Those are so marked. (Petitioner s Exhibit marked for identification.) ATTORNEY RANDOLPH: And Your Honor, at this time, I would go ahead and move --- let the court take judicial notice of both these documents. They are both orders issued by the Public Service Commission in those particular matters.

14 You mean their tariffs that you ve already mentioned were approved by the Commission? ATTORNEY RANDOLPH: They appear to be certificates, Your Honor, and they indicate also the tariffs as a part of it. And they reflect that both agencies do provide some portion of service in Boone County, and ---. And you re --- oh, finish your ---. ATTORNEY RANDOLPH: And I would just say that because they are a document filed on behalf of the Public Service Commission on behalf of both of these agencies and this document was provided by the Public Service Commission, we would ask that you would take judicial notice and then allow the admission of these two exhibits. Is there an objection? Yes, sir. I reserve the right to Cross Examination regarding these documents, I just seen them for the first time this morning. And I don t know if everything is in it, but if they are, in fact, on file with the Public Service Commission, then judicial notice will be appropriate. But I feel that I have the right to

15 Cross Examination. They ll be admitted. Does Staff object? ATTORNEY LITTLE: No, Your Honor. Admitted subject to Cross. ATTORNEY RANDOLPH: Thank you, Your Honor. And just --- the County Commission would call as their first witness William Thornton. All right. Can you come forward, please? And I ll ask the court reporter to swear the witness WILLIAM THORNTON, HAVING FIRST BEEN DULY SWORN, TESTIFIED AS FOLLOWS: State your name for the record, please, and spell it. A. My name is William Thornton, W-I-L-L-I-A-M T-H-O-R-N-T-O-N.

16 All right. And go ahead, Counsel, he s your witness. DIRECT EXAMINATION BY ATTORNEY RANDOLPH: Q. Mr. Thornton, how are you employed? A. I m with Waste Management. Q. And what is your position with Waste Management? A. District Manager. Q. And as District Manager, do you oversee a certain area in West Virginia as far as providing the trash service? A. I m sorry? Q. Do you oversee a certain --- a particular area in West Virginia --- A. Yes, sir. Q. --- in providing trash service? A. Yes, sir. Q. And what would that area be? A. We service Boone, Kanawha, Putnam, Roane, Clay and Fayette. ATTORNEY RANDOLPH: And if I could approach, Your Honor? Please.

17 BY ATTORNEY RANDOLPH: Q. I will provide you what s been marked as Petitioner s Exhibit Number and ask you, do you know what that particular document is? A. Yes, sir. Q. And what is that document? A. That is our certificate pages for the rights to service. Q. And does that particular certificate give you rights to serve in all or a portion of Boone County? A. Yes, sir. Q. And can you tell the Court generally what that portion of Boone County is? A. I think it s pretty much all of the county except for an area around Julian, West Virginia down Route. Q. And you re the District Manager of this particular area. Do you currently provide services in Boone County? A. Yes, sir. Q. Consistent with that particular certificate? A. Yes, sir. Q. And as far as infrastructure, you have the infrastructure in place to haul trash? A. Absolutely.

18 Q. And do you know how many customers that your particular company has in Boone County at this time? A. We currently have over,000 customers. ATTORNEY RANDOLPH: Your Honor, I have nothing further for Mr. Thornton. All right. Mr. Cook? CROSS EXAMINATION BY Q. Mr. Thornton, I am Wendle Cook, and I represent the City of Madison, the Town of Danville and the Concerned Citizens of Boone County. Can you hear me okay? A. Yes, sir. Q. Does Waste Management operate transfer stations in Boone County? A. No, sir. Q. Does Waste Management operate any offices in Boone County? A. No, sir. Q. Does Waste Management employ any residents of Boone County? A. Yes, sir. Q. How many of them?

19 A. I don t have an exact count. Q. You don t know? A. No, sir. Q. Has Waste Management received complaints regarding the service that it provides to Boone County residents? A. No, sir. With the PSC, no sir. Q. What about from the residents themselves? A. I m not aware. Q. Are you personally in charge of the complaints? A. No, sir. I have management as well. Q. Do you ever speak to the persons employed by your company who s in charge of receiving complaints from the residents? A. Can you ask that again? Q. Yeah. Do you ever talk with people that for you who are the same people who deal with the residents? A. Yes, sir. Q. And have any of your employees ever advised you of continuing complaints about the services rendered by Waste Management Corporation? A. No, sir. Q. You never had any complaints? A. Again, I m not saying that I deal with complaints, but ---.

20 Q. You just don t know about it? A. Yes, sir. Q. What is the Waste Management policy as far as picking up trash from residents? Do you go on private property? A. We service according to our PSC certificate. Q. Well, that s what I m asking about. What is your service? A. We collect on every public road access. Q. Public roads; correct? A. Yes, sir. Q. So if you have an elderly person who lives away from the road, long driveway, you don t go to their home to pick up their trash because it s their duty to bring it out to the public road; correct? A. Our certificate also has language for what s called backdoor service. Q. Well, explain that to me. What is a backdoor service? A. If they were to arrive to the need for such an evert, then we would walk up the driveway and collect it for them. Q. How much does that cost? A. It s no extra charge. Q. Good. How many Boone County residents use that

21 backdoor service? A. I don t have a count, sir. Q. Oh. Is there a limit on the amount of garbage that Waste Management picks up at the public road? A. No, sir. Q. No limit? A. No, sir. Q. Well, is there an extra charge if you --- if the person has more than six bags? A. Yes, sir. Q. And what is that extra charge? A. I believe it's $.. Q. Per bag? A. Yes, sir. Q. What happens if the person hauls their trash out the public road and leaves it there for the garbage truck and the dogs get into the trash? Do your people pick up that trash, or do they leave it? A. Do you have a particular incident, sir? Q. Well, I m going to present evidence of several incidents where that did happen, but I m asking you about your policy. Is the policy of your personnel to pick up the trash? ATTORNEY LITTLE: I would object to this line of

22 questioning, Your Honor. We re not here --- this is not a formal complaint hearing regarding the quality of Waste Management s service. This is a hearing on the petition of the Boone County Commission to terminate the operations of transfer stations. ATTORNEY RANDOLPH: We would join in that objection. Well, the quality of the service is certainly an issue. We re here to determine whether or not, now and in the future, we believe it necessary or ---. If there s adequate alternative service? Correct. We re kind of getting aside, but I ll let you ask --- well, I ll let you ask the question. Thank you, sir. Answer the question. Go ahead. A. Could you re-ask it?

23 BY Q. I was asking about the policies employed by your personnel and followed by Waste Management Corporation, and I was asking you what the policy was if your employees --- if they come upon trash that s been placed there. It s in the driveway of the road, and dogs have gotten into it and scattered the trash. Do your employees pick up the trash, or do they leave it? A. We try to clean it up the best that we can, sir. Q. And is that the policy? A. Yes, sir. Q. What about appliances and furniture? Does Waste Management Corporation pick up those items? A. Yes, sir. Q. Do special arrangements have to be made? A. You do have to call us. Yes, sir. Q. Now, what s the procedure? A. You would contact our customer service line and request what s called a bulky pick up. Q. Is there an extra charge for that? A. Depending on the service provided. Q. Well, suppose we have a stove that s not working, and I want it hauled. How much would you charge me for that? A. For that, there would not be a charge.

24 Q. No charge? A. That s correct. Q. What if they had a ---? ATTORNEY LITTLE: Your Honor, Staff would object. Basis? ATTORNEY LITTLE: The Waste Management s certificate of hauling with the Public Service Commission is subject to rules and regulations of the Public Service Commission. Whether or not --- the practice of what they can pick up are governed by the rules, they have to obey those rules. If there s a problem with the service from Waste Management, there's always a formal complaint process. This is not the issue before the Court, of whether Waste Management obeys the rules of the Public Service Commission. Again, the issue is whether or not transfer stations should be closed. Let me reformulate Mr. Cook s question for him. Mr. Thornton, does Waste Management have a book in its policy and tariff? A. Yes, sir.

25 Is that tariff contained in Petitioner s Exhibit? A. It is. Thank you. BY Q. Have there been complaints against Waste Management Corporation that the employees of Waste Management have not been following the policies and have been failing to pick up appliances, furniture, these other goods? A. Not that I m aware of. Q. You don t know of any? A. No, sir. Q. Tell me about your contact with the County Commission. Have there been negotiations between Waste Management Corporation and the County Commission? A. Could you define negotiations? Q. Yeah, have you had any meetings with the Boone County Commission to discuss Waste Management Corporation picking up trash for the County? A. The only conversation we ve had was pertaining to our certificate. Q. Has Waste Management Corporation offered to purchase the transfer station?

26 A. No, sir. Q. Has Waste Management Corporation offered to purchase any of the assets owned by the County that they need to pick up trash? A. No, sir. Not that I m aware of. Q. Has the Boone County Commission offered any of those assets for sale to the Waste Management Corporation? A. No, sir. Not that I m aware of. Q. Has Waste Management Corporation offered to pay the Boone County Commission any money for being allowed to assume this service and picking up all of these customers? A. I m sorry? Q. It s my understanding that Waste Management Corporation claims a --- the sole right to pick up trash in Boone County other than what s picked up by Boone County Commission; is that correct? A. Well, we have a certificate of service in Boone County issued by the PSC. Q. Is that an exclusive permit? A. In regards to what somebody can do at the PSC, I m not aware, sir. Q. Has Waste Management Corporation filed a lawsuit against other carriers to prevent these other carriers

27 from picking up the trash in Boone County? ATTORNEY RANDOLPH: I would object, Your Honor. I don t think that s relevant to the proceeding that we re having. We re now stepping out into ---. That question really is going into a question of law. Sustained. BY Q. Does Waste Management Corporation pick up the dead carcasses of animals? A. I believe there s a --- it has to be prepared. The animal carcass would have to be prepared, and I can t speak to that right now, sir. Q. You don t know if they do or not? A. I'm aware that we service, like, animal shelters and things. Yes, sir. Q. Does Waste Management Corporation have any plans to increase its assets to take up a slack if the transfer stations do close? A. Yes, sir. Q. And what are the plans of Waste Management Corporation? A. That we re going to rely on our PSC tariff. Q. What does the PSC tariff require?

28 A. That we offer the solid waste service in the areas of Boone County that we can direct. Q. What is the procedure when a resident has a complaint against Waste Management Corporation? A. I believe they would contact the PSC. Q. And does Waste Management Corporation have its own internal complaint department? A. We also have a customer service number. Q. And do you know what that line is, what the number is? A. No, sir. Q. Is it posted in the phone book, or ---? A. Yes, sir, it is. Q. And what would it be referred to? What s the name of the complaint line? A. It would just be our --- it would just be Waste Management. All right. That s it. I don t have any other questions at this time. All right. Thank you. Staff? CROSS EXAMINATION BY ATTORNEY LITTLE: Q. Are you familiar with the monthly bills that are

29 sent to customers? Do you have an idea of what those would look like? A. Yes, sir. Q. All right. On those bills that are sent to customers --- well, do you bill monthly or quarterly? A. We bill quarterly. Q. So on the quarterly bills that are sent to customers, is there a --- something written on the bills that states something to the effect that if there is a complaint for the Public Service Commission, to call the Public Service Commission? A. I don t know if that s specifically on there. We do provide our customer service line on our bill if there are any questions or concerns. Q. So the customer service number for Waste Management? A. Yes, sir. Q. And then if somebody calls out with a complaint, would that be --- that person be either --- will they be referred to another person or a note made or can you explain that to me? A. That person would contact our customer service line for inquiries regarding pickup or services, complaints, and that information would be disseminated out to the local operation.

30 0 Q. And where is the local operation of Boone County? A. Spring Street, Charleston. Q. So the trucks from --- where do the garbage trucks originate from in the morning when they come up to pick up the garbage? A. Charleston, West Virginia. Q. And the headquarters in Boone County is there? Now, let s --- let me ask you about your certificates. Are you familiar with the territory that Waste Management serves? A. Yes, sir. Q. Is that the entire county? Can you describe what the county --- the territories for Waste Management, please? A. In Boone County? Q. Yes, sir. A. It would almost contain the whole county, except for an area --- it's Route, and it leads to Julian on into Lincoln County, we do not provide service there. Q. But everywhere that you're authorized to file --- certificates on file with the Commission you provide service to that territory? A. Yes, sir. Q. Have you ever --- to the best of your knowledge,

31 has Waste Management ever denied service to either a residential or a commercial customer in the territory of Boone County that Waste Management is authorized to serve? A. No, sir. Q. And to the best of your knowledge, has Waste Management complied with all the rules of the Public Service Commission related to the pick-up of garbage? A. Yes, sir. Q. Now, you re also --- you have to deal with environmental rules; is that correct? A. Yes, sir. Q. And those are done by the Department of Environmental Protection? A. I m sorry, could you ask again? Q. Do you know if the environmental rules are under the Department of Environmental Protection? A. Yes, sir. Q. And those rules generally prevent you from taking hazardous materials like chemicals and things that can't be disposed of properly, things that can t be disposed of in a landfill? A. Yes, sir. Q. Do you offer a service --- does Waste Management offer a service to dispose of hazardous material?

32 A. Not that I m aware of, sir. Q. Hazardous material is a different ballgame than just trash pick up; correct? A. Absolutely. Q. If you can't answer this question, that's fine. Are you familiar with the way the certificate process at the Commission works and allows protection for waste haulers at the Commission? A. Could you ask that one more time? Q. The Commission grants certificates to waste haulers for territories. Then you are the sole provider of that --- of the garbage hauling of that territory? Is that a fair statement? A. As far as the other haulers, I wouldn t know how to answer that --- Q. That s fine. A. --- for the PSC. They grant us our certificate in an area, and then we re obligated to service that area. Q. And you serve that entire area? A. Yes, sir. ATTORNEY LITTLE: That s all the questions I have, Your Honor.

33 Okay. Thank you. Mr. Thornton, let s start with a little bit about yourself. What is your job function as District Manager? A. The job function of a District Manager is to ensure the compliance of the company in regards to the PSC and also environmental safety training of all employees. Are you the individual who s coordinating the schedules and the coming and going of the garbage trucks that go through your territory? A. I have a management staff that watches over the day-to-day operations. So you re --- you d be the guy above that guy? A. Yes, sir. Can you give me an idea, maybe a rough layout of how many routes of Waste Management operates in Boone County? A. We operate routes over the five day span. So essentially, your territory in Boone County would operate on routes?

34 A. Yes, sir. Do those routes include the municipalities, the city and towns of Boone County? A. They do contain some. Do you provide service in Madison and Danville? A. Currently, Danville and Madison have their own service with their own vehicles. But we do have residents that use Danville and Madison as an address that would be outside of the city limits. So you don t serve the municipalities. They serve themselves? A. Yes, sir. But you have folks with their addresses in the adjacent areas that you do serve? A. Correct. Did I understand you actually have approximately,000 customers in Boone County? A. Yes, sir.

35 So that s,000 households and businesses? A. Correct. Are there rural areas within those routes? A. Yes, sir, there is. Are there any gravel roads within those routes? A. Yes, sir, there is. Can you characterize for me how many ---? Can you --- if you know, how many complaints have been filed in the past year against Waste Management for Boone County? A. With the PSC? Well, either complaints to your customer service line or complaints to the Commission? A. There have been very few. I m going to say, over the past year we were at zero. And that s zero in the past year? A. I wouldn t want to say it's been absolutely zero

36 for the past year but the ---. A small number, but you re not exactly sure how many? A. Yes, sir. Do my questions raise any questions? So do you have any Redirect? ATTORNEY RANDOLPH: I do have a couple of Redirect, Your Honor. All right. Proceed. REDIRECT EXAMINATION BY ATTORNEY RANDOLPH: Q. Mr. Thornton, Mr. Cook asked you a couple questions about discussions with, essentially, the --- Waste Management operating the transfer station. And so just to clear that up, are you familiar with the Boone County Commission approaching Waste Management to take over the transfer station down there? A. I don t remember or recall any direct question about us taking over. You know, I believe Waste Management would be ---. Q. Well, why would Waste Management not take over

37 something like the transfer station in Boone? A. We do have two operations. We have one in Charleston. We also have one in Mill Creek or Pecks Mill, West Virginia where we re already operating a transfer station. Q. And so based on the operations you already have in Boone County, would it be more economically feasible to provide service as you now have it or to provide a transfer station to the citizens of Boone County? A. Currently, with the infrastructure that we already have in place, it would not be feasibly financial fit to add a transfer station to the operation. Nothing further? ATTORNEY RANDOLPH: Nothing further, Your Honor. Recross? Yes, if I may. Please. RECROSS EXAMINATION BY Q. How often do your trucks run a normal route?

38 A. We run a weekly service. Q. Once a week? A. Yes, sir. Q. Are there certain roads that Waste Management Corporation refuse to traverse? A. If it s a public access road, the PSC --- the certificate of the PSC, we do have to service or travel the roadway. Q. How do you define hazardous materials? A. I m not sure. Q. You were asked a question about that, and you responded with regard to hazardous materials. And I m just asking you what your understanding of the definition of hazardous materials is. A. That s what we would assign as a hazardous class. Q. Did Waste Management Corporation perform any studies to determine the economic feasibility of operating the Boone County transfer station? A. No, sir. Q. You re sure about that? A. Yes, not that I m aware of. No, sir. We have not. Q. Were you ever --- was Waste Management Corporation ever requested to conduct such a feasibility

39 study? A. Currently, sir, we already have the infrastructure in place. Q. So Waste Management simply was not interested in operating the Boone County transfer station? A. Again, I can t speak for the company as a whole, whether it's been or not. Thanks. I don t have any other questions for you. Staff? ATTORNEY LITTLE: Nothing further, Your Honor. Nothing further for this witness? ATTORNEY RANDOLPH: No, Your Honor. All right. Thank you very much. You may step down. ATTORNEY RANDOLPH: Can he be excused, Your Honor? Is there any objection to excusing him?

40 0 I don't know, Judge, we might want to recall him. Have him stick around. ATTORNEY RANDOLPH: I don t see any reason why he needs to remain. He s has every opportunity to cross examine him. Do you have something specific in mind? I don t know, because I m expecting there s going to be some more issues about the Waste Management service, and I'd like to reserve the right to recall Mr. Thornton to the stand. Why don't you have a seat in the audience. A. Yes, sir. Thank you. Is there anything further with Petitioner s Exhibit? ATTORNEY RANDOLPH: I would now at this time move for the admission of that exhibit, Your Honor. Which one is that, the ---?

41 ATTORNEY RANDOLPH: That s --- The Waste Management tariff. ATTORNEY RANDOLPH: --- the certificate of need of Waste Management. There are two of them. ATTORNEY RANDOLPH: The thin one. Thin one? ATTORNEY RANDOLPH: The one that says Waste Management on it. Petitioner s is the Waste Management tariff. Petitioner s is the Allied tariff. Judge, I don t know if was ever qualified. So you don't think ---?

42 I know you took judicial notice of it, but I don t think it was ever qualified by the witness. Response? ATTORNEY RANDOLPH: Except for --- he identified it as, yes, the certificate that s on file with the Public Service Commission that they operate under. Does Staff have an objection? ATTORNEY LITTLE: No, Your Honor. I believe my recollection is that he did identify the tariff as the utility s tariff, and it is admitted. Do you have another witness? ATTORNEY RANDOLPH: Yes, the County would call Jim Gore to the stand. All right. Come forward. I ll ask for the court reporter to swear in the witness, please JAMES GORE, HAVING FIRST BEEN DULY SWORN, TESTIFIED AS FOLLOWS:

43 State your name for the record, please, and spell it. A. I m James Gore. That s J-A-M-E-S G-O-R-E. Thank you. He is your witness. ATTORNEY RANDOLPH: Thank you, Your Honor. DIRECT EXAMINATION BY ATTORNEY RANDOLPH: Q. Mr. Gore, how are you employed? A. I m employed by the County Commission as the County Administrator. Q. And what are your duties as the County Administrator? A. My duties as the County Administrator is to run the day-to-day business of the County and to see that the policy and procedures are abided by in the County and to work with the mayor of the city. Q. And do you also, on some level, monitor and keep up with the financial condition and financial matters of the County? A. Yes, probably on a monthly basis, I do have to reports run to make sure we have cash to pay the bills,

44 and make sure that our, you know, revenues are matching our expenses or at least the revenues are not less than our expenses, yes. Q. And is it also part of your role that you communicate your information from day-to-day operations to the County Commission on days that they meet? A. Yes, I do. I do not do the financial report, but anytime that there s a problem or question, I ll do my best to get the answers. I m not an accountant, so we have other people that actually run the numbers. Q. And how often does our County Commission in Boone County meet? A. The County Commission meets three times a month. Q. And so it s safe to say the rest of the time, Mr. Gore, the handling of the County business falls back on your shoulders? A. Yeah, according to the way that I ve been hired and the way that I read the office of the County Administrator, I have the authority to run day-to-day business. But of course, I work under the direction of the County Commission of Boone. Q. So now, Mr. Gore, if I can direct your attention back to last fall, did there come a time when the County Commissioners felt the need to take up the matter of the transfer stations and the funding associated with it?

45 A. Yes, there was. Of course we all knew that the coal industry was going down, and we were afraid our tax base was going down. And we got a call from the Sheriff s Tax Office. A lady named Juanita called. She told us that we might want to look at our cash --- our cash compared to other accountants. Q. And why is the coal account so important in this particular case? A. Our coal account pays for our --- it pays for almost everything except the salaries and the Constitutional offices like the County Clerk and --- you know, it pays for that stuff. Q. So when we re talking about the transfer station, are you testifying that it covers the cost of that, also? A. Part of it. I believe the salaries come out of an agenda budget, which is a different budget. We have separate budgets. And our coal, that s how we pay our fees and our expenses if we have to buy a new truck, things that come up? Q. And so back last fall when this came to your attention, what was the concern that was raised by the Sheriff s Tax Office? A. She was concerned that the money was going out faster than it was coming in, and she just wanted to

46 bring our attention to what was going on. Q. And so when you had an opportunity to sit and look at that and discuss it with the County Commissioners, what was the end result of that discussion? A. Well, we had to find places to cut our ---. We didn t have enough money to continue spending at the rate we were spending. Q. And so what type of things did you look at as far as what we re going --- what we may need to cut or where we should cut or what we can cut? A. We looked at the entire budget. We looked at our transfer station. We looked at our parks. We looked at our health department. We looked at our economic development of Boone County to help the elderly. We looked at everything. Yes, we did. Q. And so just so that the people that are here and the Judge know, are there certain things that the County s required to fund? A. Yes, the County s required to fund all the Constitutional offices. Q. And who do you mean by Constitutional offices? A. It s the elected officials. Q. So you re talking the Sheriff, the Assessor, the County Clerk, the Circuit Clerk, the Prosecutor ---

47 A. Yes. Q. --- is that what you re ---? Okay. As well the County Commission; correct? A. Yes. Yes. Q. All right. So what else is the ---? Are there other statutory or constitutional mandates for funding? A. Not to my knowledge. I think that s what we re required to fund and make sure that we ve got the money to do that. Q. What about things like the jail bill? How does that --- what s ---? A. The jail bill, we have to pay the jail bill. Our jail bill --- we have to budget close to $00,000 a year to pay our jail bill. We re required to pay that, and that entire amount has always came out of our coal budget. Q. And when you re talking about the jail bill are you talking about the daily cost of housing inmates in our regional jail? A. Yes. Q. Now, after looking at all of that, you mentioned some others that didn t sound like they --- some other areas that the County funds that are mandatory funding, some senior centers, the Health Department and so on. And so did you look at the possibility of cutting their

48 budgets at the time back last fall? A. Back last fall, the Commission had --- we discussed the finances. It was decided then by the Commission to cut the outside agencies, which includes the Health Department and it includes Parks and Rec, by at least 0 percent. Now, I think there was one outside agency that didn t get cut, and there were some that got more than 0 percent. Q. But the way that fell --- would it be safe to say the weight fell on the transfer station? A. The transfer station is the one biggest thing, our largest expense going out. Q. Well, when you talk about a large expense, what are we talking about? A. Back two years ago, we were spending close to $0,000 a month, and that included part of our general budget and part of the coal budget. The coal budget side was probably close to half of that, probably $00,000 to $00,000. Q. So just so the Judge knows, what kind of service was the County providing to the citizens in regard to the transfer station? A. The transfer stations have been open for close to years. They have --- they had probably went through ---. I think when they first opened it, they

49 tried to charge. The people didn t want the charge for the transfer station, the coal was doing okay and the Commission found a way to fund the dumps without charging. Q. So it s been a free service for many years? A. Yes, it has, and the dumps are open six days a week, excluding holidays. But they re open from eight o'clock to :00 p.m. Q. So when you re looking at the transfer station and you re at about $0,000 a month a couple years ago, did that ever drop any more recent? A. Yes. So the last time I looked at it is --- it was below I believe $0,000. So we ve got it down by attrition. I m not rehiring people and moving people from one department to another to cut that. So we had got it down to that. Q. So you still have a total between $ and $. million that s the cost of the transfer station? A. If I was going to estimate, it d probably be $ million. Q. And does that include ---? Judge, I d object to speculation. ATTORNEY LITTLE: That is speculation, so ---.

50 0 All right. ATTORNEY RANDOLPH: Your Honor, the whole thing about formulating a budget is speculation, and we re going to get on to that here in a second. But when you re formulating a budget for the upcoming year, you re speculating about everything. Spending, revenue, all of it. Could you restate it? To the extent that you have knowledge about what the County has planned, if you can testify about it, go ahead. I m not sure how much ground we're gaining by speculating. ATTORNEY RANDOLPH: All right. BY ATTORNEY RANDOLPH: Q. So what in the current fiscal year has the County budgeted for the transfer station? A. Let s see. We're working on our budget ---. Q. Oh, in the current fiscal year, the one that we re in right now. A. The current fiscal year? Q. What would you --- what did the County budget for the transfer station?

51 A. It s close to $. million. I remember --- I don't have it in front of me. For the fiscal? A. Yeah, the first of the year when we had it. And do you have a budget prepared for what will be fiscal? A. Yes. What is the budget for the transfer station in fiscal? A. The coal budget is 0, and our general budget is probably $00,000 a month. That s the overall county budget or that's the intrinsic ---? A. The overall solid waste budget. The overall ---? A. Yeah. Thank you. BY ATTORNEY RANDOLPH: Q. And just so the Judge is clear, that particular

52 budget has not been approved as you sit here today; is that correct? A. No, it hasn t been approved. Q. And it s anticipated it will be on an upcoming agenda for the County Commission? A. It is on the agenda to approve next Tuesday --- Q. All right. So let s ---. A. --- or disapprove. It s up to the Commission. Q. So part of that --- part of the cost of the transfer station, does that go towards salary and benefits of the employees? A. Yes, that s the part we had budgeted. Q. And then another portion goes towards tipping fees, maintenance costs, that kind of thing? A. Yes, it does. Q. All right. So the expense I m talking about --- you know, that the County intends to close the transfer station but keep the employees. Can you explain that to the Judge? A. When we first brought the question up about closing the transfer stations, the County Commission had seen a lot of people lose their jobs in Boone County. For the last three years, when someone retires or quits out of the maintenance department, which was controlled by the County Commission, it's a requirement --- or the

53 solid waste, we had to replace them. The only people we replaced were if they were an essential employee. We had to have a CDL driver. But we had lost a number of employees and that s reflected in the reduction of our costs. I spoke with the County Commissioners when I started working on this. They said that they would like, if it were possible, not to have to lay off any of the County employees. So we re trying to --- as people retire, we re trying to hold those spots open, so you know, when we close, we can get those people into the other jobs. Q. Now, I think we also got some information that told the people and the Judge that we re currently in the process of preparing for the upcoming budget year; is that correct? A. We are working on our budget. Q. Could you explain that process? A. The only thing --- it s kind of hard to explain, but yes. The County Commission is responsible for establishing the budget for the County, for the Constitution office. And they re responsible for overseeing this money for other things. It s their job to spend the money wisely; all right? The way that the whole process starts is the Assessor's Office does an assessment or evaluation of property that s real property

54 for coal mine equipment, your land, your house. And then they d say, well, --- they're saying about the tax rate or what s called a maximum tax rate. And then it s calculated by our accountant, and he tells us how much money that we can anticipate if everyone pays their taxes with what we can budget. So on a general side of the budget, that s how we do it. But we take the estimated taxes, which it all be paid with some --- until it's paid. And then on our coal side, it s a guess. On our coal service tax, there is no way of knowing when your next check is going to be. Because it s based on the sale of coal and the price it s sold for. And Boone County has --- a lot of guys sitting here know this, but they ve lost their jobs. All of our coal miners are leaving, and our coal services went from $ million a year and this year, our estimate is three quarters of $ million. And they re estimating maybe a little carryover of the quarter million dollars, which would maybe last for a couple years. But yes, it --- well, it is a fact that ultimately, it is guesswork on our budget. But we try to be conservative so we got enough money to make sure that we don t go overdrawn and we have to cut services in the middle of the year.

55 Q. And we ll talk a little bit more about the details of the current budget shortly. ATTORNEY RANDOLPH: But Your Honor, if I could approach, I have another exhibit? You have another exhibit to mark? We'll mark this Petitioner s Exhibit. (Petitioner s Exhibit marked for identification.) ATTORNEY RANDOLPH: And I handed Mr. Cook a copy, and I forgot to take a copy and put it in my ---. This is? BY ATTORNEY RANDOLPH: Q. I'm going to hand you what's been marked as Petitioner s Exhibit Number and ask if you know what that is? A. I do. It is called the Boone County Commission weighted estimate, which is the budget. Q. And in fact, is that particular --- are there more than one year in that stack of documents there? Could you unbind that and ---? So let s just look at the top one. And what year does that reflect?

56 A. Okay. Yes, there are four different sets of paperwork. First, it reflects July, through June the 0th,. Q. And the second one? A. It s the July through June. Q. And the third document? A. July, through June 0th,. Q. And then the final one page document? A. The final one page is July, to June 0th,. Q. And that particular document, how ---? Is that something that the County Commission has to do in preparation for the budget for every year? A. This is the budget. This is what the County works up and has to send to the auditor s office for approval, this is the County budget. Q. And so that particular public record there, it sets out the County Commission s activities as it relates to the budget? A. It sets out the amount of money that we put in every department, yes. ATTORNEY RANDOLPH: Your Honor, I would move for the admission of Petitioner s Exhibit Number.

57 Is there an objection? Subject to my Cross Examination, Judge. Subject to Cross it's admitted. BY ATTORNEY RANDOLPH: Q. If we could, Mr. Gore, won t you refer back to the current fiscal year, July, through June 0th,. And let s just --- so everybody knows what we re looking at, as far as paper.? ATTORNEY RANDOLPH: through, Your Honor. Thank you. ATTORNEY RANDOLPH: Off the record. OFF RECORD DISCUSSION BY ATTORNEY RANDOLPH: Q. All right. So what we re looking at there, the first page of that particular document, do you know what that --- where that document comes from that you re comparing it to? A. Well, this is the cover sheet, and it s an

58 online document that we receive. And we put the numbers in the program and it calculates our revenue. Q. So at the top you see that it's for the current fiscal year. What are you using to apply it to? A. There s a number of different classes. Class one is the larger counties, class two is smaller one. And it goes maybe class C, I'm not sure. Q. And I ll direct you to the body. The number beside the total, can you describe what that is? A. Oh, that s the total expense value, so that is the amount that the assessor gives out, and they collect their information and add it to the amount of taxable property in the County. That includes the equipment, land, everything. Q. And the money that s derived from that, $. billion, where does all that money go to? Do you know? A. Well, that s not money. That s what s taxed. Q. Oh, so it says value? There it is. Okay. So how do you ---? How does the County get money from that particular value? A. Well, there s the formula that the state sets the maximum on, and it s calculated. And that's where the budget comes from is the specific classes of property. Q. And are the different classes set up on page

59 two? A. Yes. Q. And so based on that, the total property value, is there --- in that formula that is used, is there a number that comes out on what the actual income of the County ended up being? A. Yes, there is. Q. And who all gets shares of that particular income that comes in? A. The owed taxes --- the County Commission, of course, gets, the Board of Education. Your ambulance, your fire company. The cities would get a small amount of it, the nutrition levy, and the library levy. Q. Can we just go back through? You said page two, you describe it as you're setting out the separate classes of the property; is that correct? A. Yes. Q. So what about that following page, other than the top being County Commissioners collecting new information? What's that? A. Oh, that is part of the formula that we get, and that s where you plug the numbers in. Like, the percentage of the assessed value funds, that is a fund established by the Legislature to get the counties caught up from their assessment to make sure that they ---.

60 0 Q. And then, if you go to the following page, it is --- the top says fiscal year to and with expenditures. What are we seeing on that page and the following pages that we want to go through? A. This is the sheet where you put your new budget in, and it shows your last budget so you have a comparison; all right? And you have all --- it shows what your budget is for coal. And the first two columns are the general budget, and the last two are for coal. Q. So the very first column, is that the previous fiscal year s budget? A. Yes, that would be the one before this year in there. Q. And that s only the general revenue? A. Yes, just the first two columns would be. Q. So the second column is the current fiscal year we're in with the County budget; is that correct? A. We're good on that, yes. Q. And so it sets out bunch of numbers in different agencies, County Commission and all that --- does this particular document set up the funding for each and every office that the County funds? A. Yes, it does. Q. All right. And do you know how many pages we have of the proposed expenditures?

61 A. This is one of seven, so there's seven pages. Q. We re going to get back to near the end of that document. We ll get to another that says page one, and that says general fund revenue summary. And what does that tell us? A. Well, this is the record that --- this is the expected collection. Q. It s not what we actually had but we expect to collect? A. Yes, but you don t know what you have until you re paid. Q. And so again, does this document contain what the County believes it s going to get from all County sources? A. Yes. Q. Is there anything in regards to those documents that ---? Do you also have what s entitled 0 coal severance tax fund two pages back? A. Yes. Q. And if you could you explain the same with that? A. Well, that s the same as the general except it's /-/. That included our anticipated quarter. You know, what we think we re going to get, and we also have to guess on what we re not going to spend that we can carry over to the next year. That s called the

62 unemployment balance. Q. Is there anything else of significance in that group of documents that just would explain the general nature of information provided in those documents? A. No, this is the document that has been approved and prepared by our financial advisor and approved by the Commission. Q. So now, I m just going to walk through a couple of these and just point out a few things for the Judge. So if you can go to the first one, you had fiscal year and? A. Yes. Q. All right. And we ll put it up there right next to you. What is the total assessed value of that --- the fiscal year? A. In '/', the total assessed value was $,,,0. Q. Now, let s go to the next one, fiscal year and. A. Okay. Q. The same question, what is the total assessed value for that year? A. $,,,. Q. Now, if we can go to the one we just looked at? And just so everybody knows, what s the assessed value

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