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Home My WebLink AboutDeclaration of Degginger - Copy1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 BEFORE THE HEARING EXAMINER OF THE CITY OF RENTON RE: TracFone Wireless, Inc. Administrative Appeal I, Grant Degginger, declare as follows: DECLARATION OF GRANT S. DEGGINGER I am one of the attorneys for appellant TracFone Wireless, Inc.("TracFone"), and make the following statements based upon my personal knowledge. Attached are true and correct copies of the following exhibits: 1. Exhibit 1: Respondent City of Renton's Final Witness List 2. Exhibit 2: Respondent's Preliminary Witness and Exhibit List Also attached are excerpts of the following depositions: 3. Garth Ash au h 4. Nate Malone 5. Jan Hawn 6. Chesley Dillon 1 DECLARATION OF GRANT DEGGINGER - 1 LANE POWELL Pc 1420 FIFTH AVENUE, SUITE 4200 P.O. BOX 91302 SEATTLE, WA 98111-9402 206.223.7000 FAX: 206.223.7107 125110.0002/8343687.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 I declare under penalty of perjury under the laws of the United States and the laws of the State of Washington the foregoing is true and correct to the best of my knowledge. EXECUTED at Seattle, Washington, this 291h day January, 2021. I DECLARATION OF GRANT DEGGINGER - 2 /s/ Grant S. Degginger Grant S. Degginger LANE POWELL Pc 1420 FIFTH AVENUE, SUITE 4200 P.O. BOX 91302 SEATTLE, WA 98111-9402 206.223.7000 FAX:206.223.7107 125110.0002/8343687.1 1 2 3' 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 CERTIFICATE OF SERVICE I hereby certify under penalty of perjury of the laws of the State of Washington and the United States that, on the date listed below, I caused to be served a copy of the attached document to the following persons via electronic mail: Kari L. Sand Ogden Murphy Wallace P.L.L.C. 901 Fifth Avenue, Suite 3500 Seattle, WA 98164 ksand@omwlaw.com Cynthia Moya Renton City Clerk 1055 So. Grady Way Renton, WA 98057 cmoya@rentonwa.gov olbrechtslaw@gmail.com Executed on the 29t1i day of January, 2021, at Seattle, Washington. I DECLARATION OF GRANT DEGGINGER - 3 s/Norma Tsuboi Norma Tsuboi, Legal Assistant LANE POWELL Pc 1420 FIFTH AVENUE, SUITE 4200 P.O. BOX 91302 SEATTLE, WA 98111-9402 206.223.7000 FAX:206.223.7107 125110.0002/8343687.1 Exhibit 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 BEFORE THE HEARING EXAMINER OF THE CITY OF RENTON RE: TracFone Wireless, Inc. RESPONDENT CITY OF RENTON' S FINAL Administrative Appeal WITNESS LIST Respondent City of Renton submits the following final witness list: I. WITNESSES 1. Nate Malone, Tax Manager at City of Renton 1055 S Grady Way Renton, WA 98057 (425) 430-6936 NMalonegRentonwa.gov Mr. Malone is expected to testify generally regarding administration of the City of Renton's telephone utility tax and specifically regarding application of the telephone utility tax provisions of the Renton Municipal Code (Title V, Finance and Business Regulations), and Washington state law, to the business activities of TracFone Wireless, Inc. ("TracFone") conducted within the City of Renton. {KCO2336466.DOCX;1/07851.000003/ } OGDEN MURPHY WALLACE, PLLC RESPONDENT CITY OF RENTON'S FINAL WITNESS LIST - 1 901 5th Ave, Suite 3500 Seattle, WA 98164 Tel: 206-447-7000/Fax:206-447-0215 2 3 4 5 6 7 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 2. Tax Recovery Services, LLC Michael Crisp, President Tamara Crisp, Vice President P.O. Box 608 Spanaway, WA 98387.0608 (253) 223-4986 Cri.sp.oTRS -Integrity .co.m Mr. Crisp's company, Tax Recovery Services, LLC ("TRS"), particularly TRS Vice President Tamara Crisp, that conducted the audit of TracFone for the City of Renton. Michael and/or Tamara Crisp is expected to testify regarding application of the telephone utility tax provisions of the Renton Municipal Code (Title V, Finance and Business Regulations), and Washington state law, to TracFone's business activities conducted within the City of Renton. Further, Michael and/or Tamara Crisp is expected to testify regarding the audit process and the methodology used to assess the telephone business utility tax due for the audit period at issue, which is January 1, 2007 through May 31, 2013. 3. Garth Ashpaugh, CPA Ashpaugh & Sculco, CPAs, PLC 300 N. New York Avenue, #879 Winter Park, FL 32790 (407) 645,2020 xl gasbj2augh@ascVas.com Mr. Ashpaugh is expected to testify regarding the prepaid wireless business model, his expert opinion that TracFone is engaging in a telephone business within the City of Renton based on the applicable provisions of the Renton Municipal Code and Washington state law, and that the exemptions in the authorizing state statue do not apply to TracFone. RESPECTFULLY SUBMITTED this 21St day of December, 2020. OGDEN MURPHY WALLACE, PLLC By /s/Kari L. Sand Kari L. Sand, WSBA #27355 Attorney for Respondent City of Renton ksand&omwlaw.com 901 Fifth Avenue, Suite 3500 Seattle, WA 98164-2008 {KCO2336466.DOCX;1/07851.000003/} RESPONDENT CITYdrenton'sFINAL.WITNESSLIST- ( OGDEN MURPHY WALLACE, PLLC 901 5th Ave, Suite 3500 Seattle, WA 98164 Tel: 206-447-7000/Fax: 206-447-0215 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 DECLARATION OF SERVICE I, Kenya Owens, an employee of Ogden Murphy Wallace, PLLC, certify that on the date below, I filed and served the Respondent City of Renton's Final Witness List via email on the following parties: TracFone Wireless, Inc. Scott Edwards Lane Powell, PC 1420 5th Avenue, Suite 4200 Seattle, WA 98101 Ecl.wardsS LanePowell.com Grant S. Degginger Lane Powell, PC 1420 5th Avenue, Suite 4200 Seattle, WA 98101 Deg €T,in ,erG(a�LanePowell.com City of Renton Hearing Examiner Cynthia Moya Renton City Clerk 1055 South Grady Way Renton, WA 98057 cmo a c trentonwa. v olbrechtslaw&mail.com I declare under penalty of perjury under the laws of the State of Washington that the foregoing is true and correct. Executed at Seattle, Washington this 2lst day of December, 2020. Is/Kenya Owens Kenya Owens Legal Assistant {KCO2336466.DOCX;1/07851.000003/ 1 RESPONDENT CITY of renton's FINAL WITNESS LIST- OGDEN MURPHY WALLACE, PLLC 3 901 5th Ave, Suite 3500 Seattle, WA 98164 Tel: 206-447-7000/Fax: 206-447-0215 Exhibit 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 BEFORE THE HEARING EXAMINER OF THE CITY OF RENTON RE: TracFone Wireless, Inc. Administrative Appeal CITY OF RENTON' S PRELIMINARY WITNESS AND EXHIBIT LISTS The City of Renton submits the following preliminary lists of witnesses and exhibits. I. WITNESSES 1. Nate Malone, Tax Manager at City of Renton 1055 S Grady Way Renton, WA 98057 (425) 430-6936 NM.alone(a Rentonwa.gov Mr. Malone is expected to testify generally regarding administration of the City of Renton's telephone utility tax and specifically regarding application of the telephone utility tax provisions of the Renton Municipal Code (Title V, Finance and Business Regulations), and Washington state law, to the business activities of TracFone Wireless, Inc. ("TracFone") conducted within the City of Renton. Estimated duration of Mr. Malone's testimony: 2. Tax Recovery Services, LLC Michael Crisp, President Tamara Crisp, Vice President (KCO2267414.DOCX;1/07851.000003/ ) CITY'S PRELIMINARY WITNESS AND EXHIBIT LISTS - 1 1.5 hours (approximately) OGDEN MURPHY WALLACE, PLLC 901 5th Ave, Suite 3500 Seattle, WA 98164 Tel: 206-447-7000/Fax: 206-447-0215 2 4 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 P.O. Box 608 Spanaway, WA 98387-0608 (253) 223-4986 Crisp( u),TRS-Jnterit .com Mr. Crisp's company, Tax Recovery Services, LLC ("TRS"), conducted the audit of TracFone for the City of Renton. Mr. Crisp is expected to testify regarding application of the telephone utility tax provisions of the Renton Municipal Code (Title V, Finance and Business Regulations), and Washington state law, to TracFone's business activities conducted within the City of Renton. TRS Vice President Tamara Crisp is expected to testify regarding the audit process and the methodology used to assess the telephone business utility tax due for the audit period at issue, which is January 1, 2007 through May 31, 2013. Estimated duration of TRS testimony: Garth Ashpaugh, CPA Ashpaugh & Sculco, CPAs, PLC 300 N. New York Avenue, #879 Winter Park, FL 32790 (407) 645.2020 xl ag_shpaug.h&ascpas.com 2 hours (approximately) Mr. Ashpaugh is expected to testify regarding the prepaid wireless business model, his expert opinion that TracFone is engaging in a telephone business within the City of Renton based on the applicable provisions of the Renton Municipal Code and Washington state law, and that the exemptions in the authorizing state statue do not apply to TracFone. Estimated duration of Mr. Ashpaugh's testimony: 1 hour (approximately) H. EXHIBITS Description Date Bates Range 1 TRS Opening Audit December 27, 2013 000971 Letter 2 Renton Agent February 21, 2014 001674 Confirmation Letter 3 Letter and First N/A 000973 & Estimated Tax 001009 4 TracFone-Renton WA February 14, 2019 000473- Audit — Telephone 000485 Utility Tax Assessment 5 Copy of N/A 000489- ExcelPrelim3Renton 000524 Tracfone {KCO2267414.DOCX;1/07851.000003/ } CITY'S PRELIMINARY WITNESS AND EXHIBIT LISTS - 2 OGDEN MURPHY WALLACE, PLLC 901 5th Ave, Suite 3500 Seattle, WA 98164 Tel: 206-447-7000/Fax: 206-447-0215 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 6 Renton N/A 001694- TracFone3Methodology 001726 A 7 Renton Tax Rule 242 Telecommunications Service, Telephone Business, and Network Telephone Service — Adopted January 1, 2016 8 Renton subpoena to May 2015 TracFone 9 Renton Administrative June 19, 2019 — Original Date N/A Orders to TracFone July 29 2019 — First Revised Date 10 TracFone Wireless, Inc. September 12, 2019 Conference for Review — Agenda & Exhibits from City of Renton 11 Renton's Final October 17, 2019 — Affirming the City of Determination of Renton's February 14, 2019 Telephone Telephone Utility Tax Utility Tax Assessment in the amount of Assessment $326,145.06 12 TracFone Appeal of November 6, 2019 Renton's Utility Tax Assessment —1 Reseller Agreement October 23, 2007 TF (AT&T) 000001- 000166 14 PCS Services Agreement July 11, 2011 TF (Sprint) 000167- 000366 15 Purchase Agreement September 4, 2009 TF (T-Mobile) 000367- 000495 16 Reseller Agreement March 29, 2005 TF (TracFone Wireless) 000496- 000723 17 Retail Distribution June 23, 2009 TF Agreements 000724- 000875 18 TracFone Wireless Terms htti)s://www.tract.one.com/termsandconditi N/A ons and Conditions of Service with Customers 19 TracFone Wireless Brochures, pamphlets, flyers, etc. N/A marketing materials 20 TracFone Wireless Basic N/A Phone Card — sample 21 Monthly Status Reports July 5, 2013 -- December 5, 2013 000001- for 2013 000018 & (a/k/a "Audit/Tax 001472- Investigation Update- 001477 Renton" 22 Monthly Status Reports January 6, 2014 — December 5, 2014 001479- for 2014 {KCO2267414.DOCX;1/07851.000003/ } CITY'S PRELIMINARY WITNESS AND EXHIBIT LISTS - 3 OGDEN MURPHY WALLACE, PLLC 901 5th Ave, Suite 3500 Seattle, WA 98164 Tel: 206-447-7000/Fax: 206-447-0215 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 001482; 001484- 001486; 000019- 000023; 23000027 -000029; 000037- 000049 23 Monthly Status Reports January 5, 2015 — December 4, 2015 001499- for2015 001504; 001520- 001523; 001529- 001531; 001537- 001544; 001545- 001551; 000050- 000073; & 001552- 001558 February 5, 2016 — December 5, 2016 000074- 24 Monthly Status Reports for2016 000103 & 001561- 001571 January 5, 2017 —December 6, 2017 000104- 25 Monthly Status Reports for2017 000130; 001572- 001573; & 001577- 001578 26 Monthly Status Reports January 5, 2018 — December 6, 2018 000131- for 2018 January 5, 2019 — December 6, 2019 000146 27 Monthly Status Reports 000147- for2019 January 6, 2020 — March 5, 2020 000172 28 Monthly Status Reports 000173- for2020 000182 29 Email Email 3: June 13 2013 000533 30 Email & Attachment Email 26.1: February 21, 2014 000596 Attachment 26.2: Cit of Renton Letter 31 Email Email 30: September 24 2014 000600 32 Email Email 31: February 2, 2015 000601 33 Email & Attachment Email 37.1: May 5, 2015 000617 Attachment 37.2: City of Renton Administrative Subpoena 34 Email Email 44: June 30, 2017 with explanations 000633 of how to read the schedules (KCO2267414.DOCX;1/07851.000003/ ) CITY'S PRELIMINARY WITNESS AND EXHIBIT LISTS - 4 OGDEN MURPHY WALLACE, PLLC 901 5th Ave, Suite 3500 Seattle, WA 98164 Tel: 206-447-7000/Fax: 206-447-0215 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 35 Emails Email 45.1: June 30, 2017 000634- Attachment 45.2: Renton TracFone 000639 Methodology Attachment 45.3: Field Auditor's Report Summary Sheet 36 Email Email 50: July 28, 2017 000651- 000652 37 Email Email 53: August 7, 2017 000663 38 Email & Attachments Email 54.1: August 8, 2017 000665- Attachment 54.2: Renton TracFone3 000676 Methodology Attachment 54.3: ExcelPre I im3 Renton — TracFone. df 39 Email Email 55: August 10, 2017 000677- 000678 40 Email Email 57: September 21, 2017 000682 41 Email & Attachment Email 60.1: October 5, 2017 000686- Attachment 60.2: Kenyon Disend Memo 000687 42 Email & Attachment Email 65.1: November 6, 2017 000693- Attachment 65.2: Renton 000695 TracFone3MethodologyA 43 Email Email 66: December 8, 2017 — Corrected 000696- Methodology Sheet 000697 44 Email & Attachment Email 80.1: December 28, 2018 000735- Attachment 80.2: TracFone 000737 Recommendation to City of Renton 45 Email Email 82: January 3, 2019 000741- 000742 46 Email Email 87: February 7, 2019 000751- 000752 47 Email Email 88: February 19 2019 000753 48 Email Email 90: February 25, 2019 000756- 000757 49 Email Email 91: March 11, 2019 000758 50 Email exchanges between a. June 20, 2013 001094 TracFone and TRS b. December 23, 2013 001095 c. December 31, 2013 001096 d. September 5, 2014 001097 e. June 26, 2015 001098 f. August 13, 2015 001099 g. June 21, 2016 001100-001101 h. June 28, 2016 001102-001103 i. August 26, 2016 001104-001107 j. December 2, 2016 001108 k. December 7, 2016 001109 1. April 20, 2017 001110-001112 m. June 2, 2017 001113 n. August 4, 2017 001114 o. August 10, 2017 001115-001116 p. March 11, 2019 001117 {KCO2267414.DOCX;1/07851.000003/ 1 CITY'S PRELIMINARY WITNESS AND EXHIBIT LISTS - 5 OGDEN MURPHY WALLACE, PLLC 901 5th Ave, Suite 3500 Seattle, WA 98164 Tel: 206-447-7000/Fax: 206-447-0215 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 RESPECTFULLY SUBMITTED this 2 1 " day of September, 2020. OGDEN MURPHY WALLACE, PLLC By /s/ Kari L. Sand Kari L. Sand, WSBA #27355 Attorney for Respondent City of Renton ksar d@omwlaw.com 901 Fifth Avenue, Suite 3500 Seattle, WA 98164-2008 {KCO2267414.DOCX;1/07851.000003/ } CITY'S PRELIMINARY WITNESS AND EXHIBIT LISTS - 6 OGDEN MURPHY WALLACE, PLLC 901 5th Ave, Suite 3500 Seattle, WA 98164 Tel: 206-447-7000/Fax: 206-447-0215 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 DECLARATION OF SERVICE I, Kenya Owens, an employee of Ogden Murphy Wallace, PLLC, certify that on the date below, I filed and served the City of Renton's Preliminary Witness and Exhibit Lists via email on the following parties: TracFone Wireless, Inc. Scott Edwards Lane Powell, PC 1420 5th Avenue, Suite 4200 Seattle, WA 98101 EdwardsS &- LanePowel1.com Grant S. Degginger Lane Powell, PC 1420 5th Avenue, Suite 4200 Seattle, WA 98101 Deg Tin TerGPLanePowell.com City of Renton Hearing Examiner Cynthia Moya Renton City Clerk 1055 South Grady Way Renton, WA 98057 cmo a c rentonwa, Tov olbrechtslaw q�)mail.com I declare under penalty of perjury under the laws of the State of Washington that the foregoing is true and correct. Executed at Seattle, Washington this 21It day of September, 2020. /s/Ken a Owens Kenya Owens Legal Assistant (KCO2267414.DOCX;1/07851.000003/ ) CITY'S PRELIMINARY WITNESS AND EXHIBIT LISTS - 7 OGDEN MURPHY WALLACE, PLLC 901 5th Ave, Suite 3500 Seattle, WA 98164 Tel: 206-447-7000/Fax: 206-447-0215 Garth Ashpaugh Deposition Excerpts In Re: TracFone Wireless, Inc. Garth Ashpaugh Page 5 1 Q. Okay. When was the last time you had your 2 deposition taken, sir? 3 A. About two and a half, three weeks ago. 4 Q. Okay. And what was that matter involving? 5 A. Litigation between the City of -- well, actually 6 it's the Sacramento Municipal... Let's see. It's SMCTC 7 is the acronym. But it's basically the City and County 8 of Sacramento versus Comcast. 9 Q. And what's the issue in that case? 10 A. We did a franchise fee review for Sacramento on 11 a couple of occasions. The City is pursuing the amount 12 that was identified in the -- in the review. 13 Q. So you're -- are you representing the City -- 14 are you assisting the City of Sacramento in that case? 15 A. Yes, I'm engaged as an expert witness for the 16 City of Sacramento, and our firm did the -- did the 17 review. 18 Q. Okay. When you say your firm, that goes on -- 19 that's a good segue to my next question, which is: 20 Where are you employed, sir? 21 A. Ashpaugh & Sculco, S-c-u-I-c-o, CPAs, PLC, 22 Winter Park, Florida. 23 Q. And what does Ashpaugh & Sculco do, sir? 24 A. Our primary focus is working for local 25 governments in telecommunications and cable, the cable BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Garth Ashpaugh Page 6 1 matters. 2 Q. So as a CP -- are you doing any work that is 3 traditional CPA work? 4 A. N o. 5 Q. And -- 6 A. It's -- excuse me, it's all consulting work. 7 Q. So and how long have you been doing solely 8 consulting work? 9 A. Roughly since about 1991. 10 Q. Okay. Are you still a CPA? Are you licensed as 11 a CPA, sir? 12 A. Yes, in the states of Missouri and Florida. 13 Q. Okay. 14 Just to get a little bit of a -- of a history of 15 your -- of your work, you've told us what you're doing 16 currently. We'll talk about that some more. What did 17 you do prior to -- to joining Ashpaugh & Sculco? 18 A. We formed Ashpaugh & Sculco December 1, 1999. 19 Prior to that I was with a small consulting firm, Public 20 Resources Management Group, in Maitland, Florida. I was 21 there for about two and a half years. And before that 1 22 went -- I was working as a consultant with R.W. Beck, 23 B-e-c-k. It's a consulting and engineering firm. 24 Client base is mainly municipal electric utilities, or 25 municipal governments. BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Garth Ashpaugh Page 13 1 1 it's litigation work, I -- I principally take it. 2 If it's analytical work, for example, doing 3 franchise fee reviews, we just kind of split that up as 4 it comes along. And we -- we kind of shift it around 5 between -- for example, she'll work on a client and then 6 I'll work on the client the next time we get them, that 7 kind of stuff, so we both stay fresh with the client, 8 and kind of keeps us fresh on the ideas of what goes 9 into each of the reviews also. 10 Q. How much of your time is spent on forensic work? 11 A. Probably about 80 percent. 12 Q. And by "forensic work" I -- what I mean is work 13 that is related to litigation or litigation support. 14 Did you understand that in your prior answer? 15 A. Well, my -- my reference would have been a 16 little broader to that. Every time we do a franchise 17 fee review, we assume that it could lead to litigation. 18 So that's -- that's why I'm involved in -- in all of the 19 reviews, and that's why Carolyn's involved in all of our 20 reviews also. 21 Q. Okay. 22 And when you do a franchise fee review, what is 23 the nature of the employment relationship with your 24 client? 25 A. Are you asking me if it's cost work or if it's BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Garth Ashpaugh Page 41 1 1 buildings, so my role in it was to testify as an expert 2 in that matter. And I did testify. 3 Q. What did you -- what did you testify about? 4 A. The FCC rules concerning access that Comcast had 5 to allow Marco Island Cable for the buildings. 6 Q. Was any of your testimony or your report or 7 testimony in that case excluded? 8 A. No, I -- I don't recall anything like that, no. 9 Q. In looking at your work that's described in the 10 record of testimony, Exhibit 53, 1 didn't see any work 11 or testimony that occurred in the state of Washington; 12 is that correct? 13 A. I believe we talked about that earlier, yes; 14 that's correct. 15 Q. Just want to confirm. 16 1 also didn't see any that related to work 17 involving wireless carriers, cellphone companies; is 18 that correct? 19 A. I --I don't recall any testimony that was 20 specific to wireless. It was addressed in general form 21 in some of the right-of-way work that we did, but 1 22 don't -- I don't recall any specific matter. I mean, 23 for example, in metro -- in Metro Nashville/Davidson 24 County, Tennessee, the party on the other side was AT&T, 25 and I believe part of the -- part of the operation that BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Garth Ashpaugh Page 42 1 1 they had at the time and that was contested was -- part 2 of it was cellular, but it was -- the case wasn't about 3 that. The case was about what was the cost of being in 4 the rights -of -way, so... that's -- I think that's as 5 good as I can answer. 6 Q. So none of your testimony or your reports 7 identified in the record of testimony relate to a 8 specific issue where you were hired by a city to address 9 issues related to a wireless service provider? 10 A. That's -- that's correct. 11 Q. Okay. 12 And none of the work that you've listed here 13 involved interpretation of Washington law; correct? 14 A. That's correct. 15 Q. Have you performed any consulting work for 16 Washington governments regarding the scope or 17 limitations applicable to the imposition of a utility 18 tax in their jurisdiction? 19 A. Well, for example, with City of Seattle, 20 Washington, and for King County for that matter, we've 21 also done work for Bellevue, Washington. 22 Q. What did you do -- hold on a second. What did 23 you do for Bellevue, Washington? 24 A. It was a franchise fee review. 25 Q. When did you do it? BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Garth Ashpaugh Page 43 1 1 A. Oh, wow. It was over four years ago. Carolyn 2 actually did that review. I'm not sure what the dates 3 of the -- what the dates were. 4 There was another job that we did for somebody 5 in -- in Washington, but I can't recall who it was with. 6 Anyway, when we do that work, we always have to 7 interpret what's included and what's excluded for the 8 utility tax. Cable companies in Seattle, for example, 9 they have a utility tax that's applied to cable 10 companies in addition to the franchise fee so that we 11 have to do an interpretation of -- of what's the right 12 components that need to be included in that, because 13 it's different than the revenue components that are in 14 there for franchise fees or video. 15 Q. Other than franchise fee reviews for cable, have 16 you done any work in Washington where you have analyzed 17 the imposition of a utility tax? 18 A. Other than in conjunction with a franchise fee 19 review, no, I can't think of it. 20 Q. Okay. And you haven't done any work that would 21 involve a wireless company franchise fee review? 22 A. No, I haven't. 23 Q. Have you published any articles or written about 24 the application of utility tax in Washington? 25 A. No, I have not. BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Garth Ashpaugh Page 46 1 1 regulation of those hardwired providers of cable and 2 franchise services; is that correct? 3 A. No, it's on use of rights -of -way. A big focus 4 over the past three years has been the FCC's intrusion 5 into the use of rights -of -way by cellular companies. 6 Q. Those are cellular companies that have 7 facilities in the rights -of -way; correct? 8 A. Yes, that the -- are -- are -- either have 9 facilities in, want to expand facilities in, or what is 10 referred to as small cell companies that want to put 11 facilities in the rights -of -way. 12 Q. Okay. 13 Would you agree that you are not an expert on 14 state and local tax law in Washington? 15 A. I'm -- I agree I'm not an expert on tax law in 16 Washington. 17 Q. Okay. 18 Can you take a look at the next exhibit, which 19 is going to be... It's listed as -- it's in -- it's in 20 package D, as in Degginger. 21 A. Oh, so we're skipping over C? 22 Q. We are, just to speed things up. 23 A. Okay. 24 (Exhibit No. 54 marked.) 25 THE WITNESS: And will this then become 54? BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Garth Ashpaugh Page 52 1 1 of organizations; is that correct? 2 A. I can't recall any, no. 3 Q. Okay. And you haven't written any papers about 4 the prepaid wireless industry? 5 A. No. 6 Q. Have you taken any -- have you attended any 7 seminars to learn about the prepaid wireless industry? 8 A. No, my... Excuse me. My knowledge of that 9 industry is based upon reviews of companies that operate 10 as prepaid companies. 11 Q. Based upon your reviews of them, what do you 12 mean by that, sir? 13 A. For example, Cricket and Nextel/Boost, doing 14 reviews of those companies. 15 Q. When you say you've done reviews of them, what 16 do you mean, sir? 17 A. Reviews for -- to address their payment of 18 franchise fees and occupation taxes for municipal 19 clients. 20 Q. When did you do -- well, strike that. 21 How many reviews of prepaid wireless industry 22 companies have you performed? 23 A. I've looked at Nextel/Boost, and also Cricket 24 for the City of Lincoln, Nebraska. I -- I think I've 25 looked -- I think I've looked at Cricket for somebody BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Garth Ashpaugh Page 62 1 1 practice; correct? 2 A. I consider it to be the best practice to -- to 3 be prepared for litigation. For example, the litigation 4 we're involved in in Texas, the work that we did was 5 actually done five years ago. So, you know, we don't 6 recall it. We have to have the ability to go back and 7 look at that, so... 8 Q. Okay. Have you done any consulting or auditing 9 for cities regarding TracFone? 10 A. No. 11 Q. In any of your work for your -- other than this 12 matter that brings us here today, have you done any work 13 where you've reviewed any of TracFone's business? 14 A. No. 15 Q. And I take it you've never testified -- 16 testified about TracFone before in any proceeding? 17 A. That's correct. 18 Q. Are there -- has there ever been an occasion 19 where you were alleged to have violated any professional 20 standards? 21 A. No. 22 Q. Any disciplinary actions at all I take it? 23 A. No. 24 Q. Okay. 25 A. None. BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Garth Ashpaugh Page 63 1 Q. I'm going to ask you some questions about the 2 matter that brings us here today. 3 When were you retained in this matter and by 4 whom? 5 A. I was retained by the City, I believe... 1 6 believe it was in September. 7 Q. September of 2019 or 2020? 8 A. 2020. 9 Q. Okay. Who retained you? 10 A. The City -- what person at the City? 11 Q. Yeah. 12 A. It was... Oh, heck, now you would ask a tough 13 question. 14 Q. Like who's your client? 15 A. Yeah. Well, the client is the City of Renton. 16 I'm... I think it was Mr. Malone and Ms. Clark. And 17 Ms. Clark's with the City Attorney's Office. I believe 18 that's her name. 19 Q. Okay. 20 A. Is it Leslie Clark? 21 Q. We'll call her Ms. Clark. Sounds more formal. 22 A. All right. 23 Q. Have you ever worked for the City of Renton 24 before? 25 A. No. BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Garth Ashpaugh Page 76 1 1 A. No, it does not. 2 Q. Okay. 3 A. Not yet anyway. 4 Q. Have you spoken with... Mr. or Ms. Crisp? 5 A. I have spoken with Ms. Crisp. 6 Q. Tamara Crisp? 7 A. Yes. 8 Q. Okay. 9 Why did you speak with Tamara Crisp? 10 A. It -- I have over the years dealt with a lot of 11 folks who are not familiar with having -- of being 12 deposed, and I just thought it would be comforting to -- 13 to discuss with her depositions, and that she would 14 still live through it afterwards, and to try to be calm 15 and keep her answers to yes and no and that kind of 16 stuff. 17 Q. So you were coaching her up for her deposition; 18 correct? 19 A. Not really coaching her up. Just trying to make 20 her feel comfortable. 21 Q. Did you speak to her about any specific terms 22 that might come up in her deposition? 23 A. I... I -- I know we talked about a telephone 24 company and she said something to me about telephone 25 company. And I recall telling her that if it looks like BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Garth Ashpaugh Page 66 1 1 A. Initially those calls were about my expertise 2 and my ability to assist. 3 Q. Okay. After you got the work, after you got the 4 business, what did you do? 5 A. Well, I mean, stuff was provided for me to 6 review. For example, the City's -- the City's codes, 7 the -- the... the Washington code, and to just discuss 8 the nature of that, my opinions concerning some of 9 those -- some of that stuff. And in general, just my 10 feelings on was Trac- -- how did TracFone meet the 11 criteria of the telephone company in the state of 12 Washington and in the City of Renton. 13 Q. When you were contacted to do the work, what was 14 the problem -- what was the issue that they identified 15 for you? What -- what was the specific issue that they 16 were looking for help on? 17 A. Specifically they were just looking for 18 expertise in -- on, in my opinion, on a national basis 19 of what constitutes a telephone company and -- and my 20 interpretation of that in relation to -- to Washington 21 code and the municipal code in Renton. 22 Q. Okay. So just so I'm clear, you haven't worked 23 for Renton before; right? 24 A. That's correct. 25 Q. You had no involvement in preparing Renton's -- BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Garth Ashpaugh Page 80 1 1 usage. For example, you know, AT&T or a Cingular or a 2 Sprint, T-Mobile, those types of -- their typical type 3 of cellphone bills. And the -- the obstacles that I'm 4 aware of that we talked about earlier, for example, with 5 Cricket, in reviewing that kind of work. 6 Q. So just so I'm clear, your experience with the 7 prepaid wireless business model has been the two audits 8 performed for the City of Lincoln, Nebraska; is that 9 correct? 10 A. Like I said, I believe there was another one for 11 Cricket, but I can't remember who it was, but yes. 12 Q. But that's the sum total of your experience with 13 the prepaid wireless business model; correct? 14 A. Yes. 15 Q. Okay. 16 And you were asked -- it says you're going to 17 testify about whether TracFone is engaging in a 18 telephone business within the City of Renton; is that 19 right? 20 A. Yes. 21 Q. Based upon applicable provisions of the code, 22 Renton Municipal Code and Washington State law; is that 23 right? 24 A. Yes. 25 Q. I should have asked you this, but I -- I didn't. BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Garth Ashpaugh Page 82 1 1 identify for me what opinions you have formed that you 2 have been asked to testify about at this hearing. You 3 understand my question? 4 A. Yes, I do. 5 Q. Okay. Can you tell me how many opinions you've 6 formed? And then we can go through and, no doubt, there 7 will be some follow-up questions. 8 A. Sure. Principal opinion being that I believe 9 TracFone is operating as a telephone business in the 10 City of Renton, and that it is a telephone company 11 consistent with the municipal code and with the code of 12 the state of Washington, and as I indicated earlier, as 13 recognized as a telephone company by the Federal 14 Communications Commission, and subject to the utility 15 tax in the City of Renton. 16 Q. Is that all? 17 A. Yes. 18 Q. Okay. 19 What facts do you rely upon to conclude that 20 TracFone is operating as a telephone business in the 21 City of Renton? 22 A. Specifically the agreements that it has that 23 we -- that we referred to in these list of exhibits, the 24 reseller agreements that it has with AT&T and Sprint and 25 T-Mobile. I paid particular attention to those, and the BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 Nate Malone Deposition Excerpts In Re: TracFone Wireless, Inc. Nate Malone Page 20 1 1 Q. Are you able to tell me what industries they 2 were? 3 A. We looked at telephone, telecommunications. We 4 looked at garbage, electricity. Even recently water, 5 sewer. 6 Q. Okay. 7 In your -- based on your training and the work 8 you do in the -- in auditing still, can you describe for 9 me what information -- well, when you do an audit, do 10 you create an audit file? 11 A. Yes, I -- I would create an audit file. 12 Q. What information goes into an audit file? 13 A. In an audit file that I would be preparing, 1 14 would keep all of the relevant documents provided from 15 the taxpayer as well as a audit blue, which essentially 16 would be a timeline documentation of what I did during 17 the audit, who I contacted during the audit, discussions 18 with the taxpayer, relevant discussions with the 19 taxpayer. 20 Also would include work papers, summarizing work 21 paper and breakout work papers if -- if needed depending 22 on the audit complexity. Also might include some 23 emails, pertinent emails if there were emails that were 24 really pertinent to the case, but most of the time would 25 be summarized in -- in the audit blue. BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Nate Malone Page 21 1 1 Q. When you say "pertinent emails", would that be 2 emails with the taxpayer? 3 A. Yes. 4 (Inaudible due to crosstalk.) 5 BY MR. DEGGINGER: 6 Q. I'm sorry, go ahead and finish your answer. 7 A. Yeah, that would mainly be emails with the 8 taxpayer. 9 Q. How about emails within your organization if 10 there were questions or issues that you were trying to 11 communicate or learn information internally? 12 A. I think it depends. I think most of the time 1 13 would probably summarize those conversations and put 14 them in the audit blue as part of the audit 15 documentation. 16 Q. If you spoke with or if you had contact or spoke 17 with others who were not either within your organization 18 or within the taxpayer's organization, would you have 19 a -- maintain a record of it? 20 A. If it was pertinent information relative to the 21 audit, yes, there would -- it would be tracked in the 22 audit blue. 23 Q. Is "audit blue" a sort of a term of art in the 24 audit world? 25 A. Yeah, it -- it's really -- it came from my time BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Nate Malone Page 95 1 providing you access to a telephone? 2 A. Your provider would be providing access to the 3 telephone network. 4 Q. My provider would be? 5 A. Uh-huh. 6 Q. How would they do that? 7 A. I am not well -versed in how the radio 8 communication between cell towers and cellphones works. 9 But they have sold you, I'm assuming, either prepaid or 10 post-paid plan that allows you to gain access to their 11 network. 12 Q. When you purchased -- did you say it was a card 13 or a phone and a card at Fred Meyer? 14 A. It was both. 15 Q. Did you pay sales tax to Fred Meyer? Did they 16 charge you sales tax? 17 A. I believe so. I don't recall specifically on 18 the receipt, but I believe so. 19 Q. Did they -- and you said you did this in -- 20 before you went on leave -- right? -- in -- 21 A. Yes, yes. 22 Q. And did they charge you the E911 tax as well? 23 A. I do not recall. I would have to look at the 24 receipt specifically. 25 Q. Do you have an understanding of whether they BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Nate Malone Page 125 1 Q. Okay. So it would have to be subject to a 2 public hearing and adopted by the Renton City Council; 3 correct? 4 A. Correct. 5 Q. And this document, Rule 242, has not gone 6 through that process? 7 A. That's correct. 8 Q. So would it be fair to say that it is not any -- 9 it is not a binding rule governing anything involving 10 the TracFone audit; correct? 11 A. It is not a binding rule; that would be correct. 12 Q. In reviewing the materials that were produced to 13 us as the -- as represented as being the TracFone audit 14 file, Rule 242 was not included in it; is that right? 15 A. I don't recall, but that could be possible. 16 Q. And I have not seen any emails or other 17 documents that refer to it in connection with the 18 TracFone audit; is that right? 19 A. That's likely true. 20 Q. Okay. 21 Well, I take it Rule 242 was not used in 22 connection with the preparation of the TracFone audit? 23 A. I do not believe that Mr. Crisp or TRS would 24 have relied upon this 242. 25 Q. Okay. And the City did not rely upon it either, BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Nate Malone Page 126 1 1 did it? 2 A. Other than a reference. 3 Q. What do you mean by "other than a reference"? 4 A. We would review this rule in helping -- because 5 the rule almost verbatim has been adopted by City of 6 Seattle, which has a similar controlling statute and 7 similar code to the City of Renton, we use this to kind 8 of help explain to our counsel and others involved on 9 how this would be taxed, but it would have been an 10 internal discussion document. 11 Q. Your counsel, your internal city attorney; 12 correct? 13 A. Yeah, 14 Q. Okay. 15 It wasn't provided to TracFone, was it? 16 A. No. 17 Q. Is it fair to say that the City is not relying 18 on any provisions contained in this rule or -- if you 19 want to call it a rule since it's not been adopted -- 20 for the purposes of this assessment? 21 A. Can you repeat that question? Sorry. 22 Q. Sure. You had testified previously that 23 although it says Rule 242, you made it clear that this 24 document, 242, has not been adopted by the City of 25 Renton? BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Nate Malone Page 127 1 1 A. That's correct. 2 Q. So it can't be relied upon as authority, if you 3 will, for applying -- for using it in connection with an 4 assessment? 5 A. This rule does not have any statutory authority 6 and has not been adopted as -- as a formal rule. 7 Q. Okay. Who prepared it? 8 A. I did. 9 Q. When did you prepare it? 10 A. This was a document along with many other tax 11 rule draft documents that I would have prepared back 12 when I was working for the City of Tacoma that I brought 13 with me because they were relevant to my new position. 14 Q. Was this a document that had been drafted at the 15 City of Tacoma? 16 A. Yes. 17 Q. Okay. 18 And this is your work; is that right? 19 A. It's a combination of my work and previous 20 others' work and work done by the City of Seattle. 21 Q. Where did the definitions that are contained in 22 it come from? 23 A. Many of these definitions come directly from the 24 Seattle tax rule which has been formally adopted. 25 Q. I'm just going to ask you a few questions about BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Nate Malone Page 135 1 1 Q. Okay. And --go ahead. 2 A. Sorry, I remember, like, Kmart was in there and 3 Sears and a couple others. 4 Q. And what do you remember about the Rent -A -Center 5 agreement that was relevant to your work on this matter? 6 A. The Rent -A -Center agreement went into a lot more 7 detail regarding how TracFone was selling the cards and 8 how Rent -A -Center was going to be involved in the 9 process of getting these to consumers, and the... the 10 Rent -A -Center was a little bit unique because I think 11 they were kind of almost activating or working as more 12 of like an agent kind of from the look of it. It seemed 13 that they had a lot more rules that TracFone had set up 14 that they had to follow in terms of -- especially with, 15 like, the "bring your own SIM card" plan, there was a 16 lot more instructions in that agreement than any of the 17 other agreements. 18 Q. Did you look at any others that you had -- in a 19 way -- in sufficient detail that you relied on it for 20 anything involving this assessment? 21 A. I -- I mean, I looked at the remainder, but 1 22 don't think that there was anything of content that 23 would have impacted this assessment. 24 Q. Okay. You see that TracFone was often referred 25 to as a reseller? BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 Jan Hawn Deposition Excerpts In Re: TracFone Wireless, Inc. Jan Hawn Page 63 1 1 A. When you say "recently", how recently are you 2 referring to? 3 Q. You know, the last year. 4 A. We've updated parts of the tax code, but I don't 5 believe any part -- I don't recall it being the utility 6 tax code. 7 Q. Okay. 8 All right. Do you have an understanding of 9 how -- of whether TracFone... Well, strike that. 10 Did you review any of the exhibits, any of the 11 documents that TracFone was asked to provide to the City 12 after the audit was completed? 13 A. Are you referring to the documents that were 14 requested from the administrative order? 15 Q. Correct. 16 A. I did not. 17 Q. Okay. 18 Have you ever purchased any TracFone products? 19 A. I have not. 20 Q. Have you reviewed any information about the 21 services TracFone provides? 22 A. I've seen the TracFone website. 23 Q. When did you do that? 24 A. I did it as part of refreshing my memory 25 yesterday. I'm sorry, last week. BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 Chesley Dillon Deposition Excerpts In Re: TracFone Wireless, Inc. Chesley Dillon Page 17 1 am showing you, Mr. Dillon, what has been marked as 2 Exhibit 73, and these are TracFone marketing brochures 3 that were obtained from a retail location in Renton, 4 Washington. 5 Do you recognize these as TracFone marketing 6 brochures? 7 MR. EDWARDS: Kari, you say they were 8 obtained from a -- a location in Renton, Washington. By 9 whom were they obtained and when? I note that they do 10 not bear Bates numbers on them and were not produced by 11 the City of Renton as part of the audit file for the 12 TracFone audit. 13 MS. SAND: So these have been produced to 14 you, Mr. Degginger, previously, and these were obtained 15 by Mr. Malone at the Walmart in Renton. I'm not sure 16 when. 17 MR. EDWARDS: Well, when you say they were 18 produced to Mr. Degginger and I, you mean that they were 19 produced as copies of exhibits that you had disclosed on 20 an initial exhibit list. They have not been produced as 21 part of the audit file for the audit of the -- of 22 TracFone by the City of Renton; correct? 23 MS. SAND: That's correct. They're just 24 marketing brochures that were obtained in a Walmart in 25 Renton. BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Chesley Dillon Page 18 1 1 MR. EDWARDS: After the conclusion of the 2 audit. 3 MS. SAND: I'm not sure when they were 4 obtained, like I said. In any event -- 5 MR. EDWARDS: They were not maintained as 6 part of the audit file for the audit, though. 7 MS. SAND: That's correct. 8 MR. EDWARDS: So they have not been 9 identified by the City of Renton as being part of the 10 audit file. 11 MS. SAND: I said that's correct, yes. 12 MR. EDWARDS: Okay. 13 BY MS. SAND: 14 Q. So, Mr. Dillon, can you see what I'm sharing on 15 my screen here? It's a TracFone brochure that says -- 16 has a TracFone name and logo, and it says, "UNLIMITED 17 TALK & TEXT PLUS UNLIMITED CARRYOVER DATA." Do you see 18 that? 19 A. Yes, I do. 20 Q. Okay. 21 MR. EDWARDS: Kari, I want to be clear. 22 What you're showing on the screen is not the entirety of 23 a brochure, but a portion of a brochure. 24 MS. SAND: It is page 1 of what's been 25 marked as Exhibit 73, Mr. Edwards. BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989 In Re: TracFone Wireless, Inc. Chesley Dillon Page 30 1 1 from. 2 MS. SAND: Sure. So what's been marked as 3 Exhibit 74 does have that date and that's, I believe, 4 the date it was printed. These are -- 5 MR. EDWARDS: Printed by whom? 6 BY MS. SAND: 7 Q. This was printed by me. These are from 8 www.tracfone.com, the TracFone website, and these are 9 the terms and conditions from the TracFone website. And 10 if you go to the last page, it's marked pages 1 through 11 16. And that's in the lower right-hand corner. 12 And if you go -- I'm going to scroll down. I'm 13 screen sharing right now, so sorry, I'm going really 14 fast. I don't mean to make anybody seasick here, but 15 I'm going to scroll all the way down to the 16th page, 16 because on that page it says the effective date, 1 17 believe, of the terms of service. 18 Do you see at the bottom page 15 of 16, and do 19 you see where it says -- I'm trying to make it so you 20 can see. Do you see where it says, "Version: 201907"? 21 1 take that to mean it's the version effective July 22 2019. Is that your understanding, Mr. Dillon? 23 A. That's how I would read it. 24 Q. Okay. So now bear with me. Again, I don't mean 25 to make anyone motion sick with all my scrolling, but BUELL REALTIME REPORTING, LLC 206.287.9066 1 800.846.6989