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Dkt. No. 06-10-14 DRAFT Decision

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Dkt. No. 06-10-14 DRAFT Decision Powered By Docstoc
					                        STATE OF CONNECTICUT


                   DEPARTMENT OF PUBLIC UTILITY CONTROL
                          TEN FRANKLIN SQUARE
                          NEW BRITAIN, CT 06051



DOCKET NO. 06-10-14       CALL BEFORE YOU DIG, INC. - PROPOSED BUDGET
                          FOR 2007




                                  December 13, 2006

                           By the following Commissioners:


                                  John W. Betkoski, III
                                  Donald W. Downes
                                  Jack R. Goldberg




                                      DECISION



       By application submitted to the Department of Public Utility Control (Department)
on October 27, 2006 pursuant to Section 16-345-2(d) of the Regulations of Connecticut
State Agencies (Connecticut Agencies Regs.) Call Before You Dig, Inc. (CBYD)
requests approval by the Department of CBYD’s proposed 2007 Operating budget.
Specifically, CBYD proposed a 2007 budget of $1,716,990 which represents an
increase of 4.1% in operating expenses over the previous year’s (2006) budget of
$1,648,853. The proposed budget would result in an increase in the membership
mileage charge of five cents ($0.05). The new mileage charge would increase from its
existing level of $3.75 per mile of registered underground plant per month to $3.80.
Application, p.1.

        The year 2006 was the second year of a four-year contract with Asplundh One
Call, Inc. (Asplundh). This contract was reviewed and approved by the Department in
the 2005 CBYD Budget application, Docket No. 04-10-19. This contract provides for a
3.0% increase from $1,131,556 (2006) to $1,165,503 (2007). Application p.4.
Docket No. 06-10-14                                                                  Page 2


       The implementation of 811 as the national one-call number will be completed by
all communication carriers in April, 2007. CBYD had activated a dedicated phone line
to handle incoming 811 calls. CBYD must ensure that the final implementation of 811
does not impact the operations of the call center, and that excavators obtaining locate
requests are adequately serviced. Although no significant costs are expected relative to
the implementation of 811, CBYD has proposed that any unexpected costs that might
be incurred during 2007 be funded from its operating capital reserve. Application p. 2.
The Department supports that proposal as it is possible that final 811 implementation
might require the addition of phone lines, interactive voice response (IVR) or other
related items. It is important that CBYD takes the steps necessary to keep the
Department informed during the period leading up to, and following full implementation
of 811. CBYD shall meet with the Department on an as-needed basis to ensure that
811 is fully functional by April, 2007.

        In a review of its risk management practices, CBYD identified that power
interruptions to the clearinghouse render the telephone system inoperable. CBYD
proposes to purchase an Uninterrupted Power System (UPS) to operate the Center’s
phone system for a period of up to 8 hours in the event of a power outage. This is
itemized in account 428.2. This will allow the center to process emergency locate
requests during a power outage. Application p.2. The Department supports this
proposal and directs here-in that CBYD take the steps necessary to purchase and
install a UPS no later than June 1, 2007.

        The proposed budget provides for a new line item (424.1) establishing a funding
source for future back-up system modifications at the Center to sustain operations
during an unexpected power outage, computer malfunction or communication failure.
These modifications could include a secondary default system that would operate in
parallel with the primary system to provide real-time back-up of data, or backup
generation capabilities so the center could operate during a power outage. This fund
will incrementally reserve funds for major future purchases. Application p.4. The
Department believes that backup generation capabilities at the Call Center should be
strongly considered at some point in the future, thus, the establishment of a reserve
fund for this purpose is highly advisable at this time. Given the other initiatives that will
be underway in 2007 as discussed here-in, the Department believes that it is
appropriate to seriously consider implementing this initiative at some point after 2007.
By establishing a fund for this initiative at this time, CBYD can avoid a rate spike in the
future.

       The Department has reviewed the annual audit of the financial position of CBYD
as of December 31, 2005 as filed by an independent auditor. Application, Exhibit B.
The auditor determined that the financial statements audited present fairly, in all
material respects, the financial position of CBYD. The auditor also determined that the
financial position of CBYD and the results of its operations and its cash flows for the
year ended December 31, 2005 are in conformity with U.S. generally accepted
accounting principles. Application, Exhibit B, p.1.

        The funding of the Operating Capital Reserve line item (Expense Account 940.5)
is not required in 2007. That account is funded to the auditors recommended level of a
Docket No. 06-10-14                                                                Page 3


minimum of two (2) months of operating expenses. Application, Exhibit A p.7. CBYD
shall ensure that the contingency fund remain funded to the recommended level.

        CBYD has proposed to increase Expense Account 470 (Public Awareness &
Education) by $10,000 in 2007, for a total of $230,000. Application, Exhibit A, p.3.
Activities relative to CBYD’s public awareness and education efforts are one of the most
important aspects of the CBYD program. The Department has reviewed the details
(Exhibit A, p.6) of the various activities CBYD is proposing for 2007. Included is funding
for a variety of initiatives including various magazine and trade publication ads, the
addition of newspaper advertising, telephone directory listings and several recall items
that will be distributed at various events. CBYD will continue to participate at selected
trade shows and other events. The CBYD web site will continue to play a significant
role in public awareness and education as well. In addition, CBYD will continue to direct
its advertising via radio, buses and television to reach the excavating community.

        A new Public Awareness and Education item in 2007 is $10,000 allocated for
promotion of the e-ticket process, including direct mailing of e-ticket informational
postcards to all registered members. Application, Exhibit A, p.6, item 10. The
Department strongly encourages the promotion of e-ticket entry by excavators, and
supports this additional expenditure. CBYD is directed to consider the promotion of e-
ticket entry a major initiative for 2007.

       Expenses related to the CBYD Public Awareness and Education program
represent a significant portion (approximately 13.5%) of the overall CBYD budget. It is
important that funding for this most important segment of CBYD’s program be targeted
in the most effective way possible. The Department continues to be supportive of the
elements contained within this initiative and approves the funding as requested. The
Department is committed to working with the Compliance Committee and the Public
Awareness and Education Committee to review damage statistics and damage trends in
order to identify areas of needed improvement, so advertising locations and messages
can be targeted. It is essential that CBYD advertisements address specific regulations,
such as when CBYD is required, hand digging near gas lines, renewing CBYD tickets,
and properly white marking proposed excavations. By this Decision, CBYD is directed
to schedule a meeting with the Department within 30 days of the date of this Decision to
review and further discuss CBYD’s 2007 education and publicity initiatives, including the
e-ticket promotional activities.

        Another effective means of informing excavators of their responsibilities and
obligations is their mandatory attendance at remedial programs conducted at the CBYD
Clearinghouse. These programs are scheduled on a monthly basis. Contractors who
commit violations are notified by the Department to attend one of these morning
sessions. During the past year, attendance numbers have increased significantly.
Statistics indicate that there are very few repeat offenders. CBYD shall continue to
provide this forum for program violators referred by the Department as part of the
Department’s enforcement effort.

      In September 2004, CBYD entered into a new four-year (2005-2008) contract
with Asplundh One-Call, Inc. to run the day to day operations of the Call Center.
Application, p. 3. Therefore, CBYD will be entering into the third year of the contract in
Docket No. 06-10-14                                                               Page 4


2007. At the direction of the Department, CBYD conducted a benchmarking study
during 2006. A final report was filed with the Department during November. The report
included conclusions and recommendations for the Board to take with respect to
determining the efficiency and effectiveness of current programs and operations at the
Center. This information will also be used as a guide for the Board to use in the near
future, and for considerations when the existing contract expires at the end of 2008.
Application, p. 3.

       The Department believes that the benchmarking report should be a key element
among the various alternatives that will need to be considered relative to the operation
of the Central Clearinghouse beyond the end of its current contract with Asplundh. A
variety of options should be considered including but not limited to simply renegotiating
a new contract with Asplundh, bidding out a contract, or moving the operation in-house.
Whatever the chosen option will be, it is important that CBYD begin weighing the
various options during 2007. CBYD is directed to initiate a meeting with the Department
no later than June 1, 2007 to review and discuss the various options and actions that
will need to be taken to ensure a smooth transition following the expiration of the
contract with Asplundh at the end of 2008.

        The CBYD Board of Directors presently meets bi-monthly and various
committees meet on an as-needed basis, but no less frequently than each month in
which the Board of Directors does not meet. This practice should continue. Minutes of
all Board meetings and Committee meetings are to be maintained and provided to the
Department within 15 days following the meeting date. Attendance at Board and
Committee meetings is a primary and essential responsibility of all Board members, as
is their active participation in at least one of the various events conducted during the
year. The Department will monitor attendance of Board members.

        The Department has reviewed the proposed budget and finds that it will permit
CBYD to fulfill its statutorily mandated duties and responsibilities. The CBYD Board of
Directors has done an effective job in taking steps to maximize the effectiveness of the
CBYD program and its activities at the lowest possible cost. The Department will
continue to review the operations of CBYD to ensure that it continues to function
effectively. The Department approves the proposed budget and its proposed rates.
DOCKET NO. 06-10-14      CALL BEFORE YOU DIG, INC. - PROPOSED BUDGET
                         FOR 2007

This Decision is adopted by the following Commissioners:




                   John W. Betkoski, III


                   Donald W. Downes


                   Jack R. Goldberg




                            CERTIFICATE OF SERVICE

        The foregoing is a true and correct copy of the Decision issued by the
Department of Public Utility Control, State of Connecticut, and was forwarded by
Certified Mail to all parties of record in this proceeding on the date indicated.




                                                                December 13, 2006
                         Louise E. Rickard                      Date
                         Acting Executive Secretary
                         Department of Public Utility Control

				
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