Water rate recap (January 11, 2016)

In response to a Facebook post by the Town of Apple Valley announcing that it has commenced condemnation proceedings against Apple Valley Ranchos Water Company, Stacy Roberston commented:

The town has already stated in a public forum they will not be lowering the rates. Curious, how is the town plan on paying for the water system? A bond … a bond that every single homeowner within the Town’s limits will pay for the next 20 years … so not only are we having to pay the water bills we are going to be paying higher property taxes which could raise your house payment 100.00 plus dollars a month …

Source: Stacy Roberston, Facebook

In response, the Town of Apple Valley posted these comments:

Hi Stacy and Alan. Here is an article that will explain how the town will pay for the water system. avh2ours.com/…/here-is-how-the-town-will-pay…/

And, actually Stacy, The Town believes it can lower rates. It has analyzed the purchase further and thinks that water rates will come down if the Town purchases the water system.

Source: Town of Apple Valley CA, Facebook

Let’s recap, shall we?

The figures that supposedly prove that the Town can buy Ranchos and make all the bond (and other) payments purely out of the proceeds of the sale of water date back to April 28, 2015. As far as I know, there has been no updated financial analysis since then — certainly none that has been made public. (Remember that transparency pledge by the Town? One and done.)

At that time, the Town had working for it Assistant Town Manager Dennis Cron, offered as being the Town’s water system expert, who would ensure that Town control of our water system would create a nirvana for ratepayers.

Also at that time, the Town valued Ranchos at $45 million. Back then, Town representatives were pretty firm that there would be no decrease in water rates after the Town took over.

Then it turned out that the Town couldn’t add. So, after accounting for a $12 million oversight by the Town, the revised value for Ranchos was upped to $51 million (one-third or less of the actual value). Still no mention of a decrease in water rates, despite the Town continuously harping on the excessive nature of Ranchos’ water rates.

Since then, Ranchos has purchased additional water rights, Ranchos has purchased Yermo Water Company, Ranchos’ parent corporation has sold for an amount that implies that Ranchos is worth at least $100 million dollars, and the Federal Reserve Board has increased interest rates. (Even the Town has raised its estimate of Ranchos’ worth to $86 million — 88 percent higher than their first valuation.) Also, Cron retired in December, so there is no longer a water expert in the Town’s employ to guarantee that anyone there knows what the heck is going on.

So costs have gone way up and the person we were told was the water expert is gone. Only now is the Town saying that the April 2015 financial analysis — which takes into account exactly none of the new factors — actually shows that the Town will be able to lower water rates!

The only question is: How cynical do Town representatives have to be to think that Apple Valley ratepayers will believe this latest lie?

Greg Raven is Co-Chair of Apple Valley Citizens for Government Accountability, and is concerned about quality of life issues.