What Are We Doing?

Town business practices (September 6, 2016)

Mayor Pro Tem Scott Nassif covered a lot of ground in his recent letter to the editor (Peter Allen supporting Measure V, Daily Press, September 4, 2016). Let’s look at a few things he left out.

Peter Allen might have had a moment of enlightenment about the way the Town charges for sewer services after reading the text of the Proposition 218 lawsuit that was filed against the Town (Lawsuit against Apple Valley alleges Prop 218 violations related to Wastewater Division, Daily Press, April 21, 2016). This litigation is still ongoing. He might also have seen that this is just the nose of the camel getting under the edge of the tent, so to speak, with other issues to be raised at trial, and millions of penalties and fees on the line.

As for the valuation of Liberty Utilities’ Apple Valley water system, the Town presentations have been unsatisfactory at best, bordering on incompetent and fraudulent. There’s no other way to describe the Town valuing the water system at $45 million (or later, $54 million) when Liberty Utilities has $68 million in water rights alone, on top of the 20,000 connections, 465 miles of water mains, 25 wells, emergency generators, storage tanks, booster stations, and pressure zones. Add to that an office, maintenance and installation equipment (including trucks and heavy machinery), inventory, and other assets. Even if these additional assets were worth only the same amount as the water rights, that still puts the valuation of Ranchos close to $150 million, $100 million more than the town says is the fair market value for Ranchos.

In Missoula, the court accepted the city’s argument that the water system needed $95 million in immediate repairs and upgrades, which brings the actual price to around $183 million. Liberty Utilities’ system is in better shape, but you can add at least $8 million per year that this drags on in repairs and upgrades because that’s what Liberty Utilities is prohibited from spending since the Town stepped in. Even Nassif himself implied that Liberty Utilities could be worth more than $100 million (Voter Guide: Town leaders grappling with water rates and control, Daily Press, October 29, 2014), and the system is better now than it was in 2011.

While we’re still on the subject of valuation, Nassif says he doesn’t know where Mr. Allan came up the $120 million price tag for the purchase of Liberty Utilities. Well, in 2011, the Town’s Blue Ribbon Water Committee took eight months to determine that the value of Ranchos was $121,000,000, but that the Town should forgo purchasing it because the final purchase price might go as high as $200,000,000. This Report was completed December 2011 and presented to the Town Council (Nassif included) on January 2012. This isn’t the first time Nassif has questioned where opponents have gotten their information, even though the source was the Town itself.

As for water rates in Apple Valley, they are comparable to those in surrounding communities once you account for all the hidden ups and extras there always are in municipal water systems (State Audit confirms reasonableness of Apple Valley area water utilities’ costs and rates, California Water Association, July 27, 2015). If realtors are telling him different, they are either ignorant or lying, and Nassif should know this. Even if water prices were higher in Apple Valley than in surrounding cities, you’d think that a Town Councilmember, former mayor, and current mayor pro tem such as Nassif would be enough of a booster of the town to point out the wonderful service we have received from Liberty Utilities for 70 years, without even a hint of the scandals and mismanagement of surrounding municipal water systems. But instead, Nassif seems to be saying, Move to Apple Valley, and if there is a private company you don’t like (besides those owned and operated by the Town Councilmembers), we’ll seize it. By the way, there are lots of reasons homes aren’t selling in Apple Valley, including the impact of other poor decisions by the Town Council.

Neither the lawsuit nor the facts matter, though, because Scott Nassif wants this, and he has assembled the financial wizard of Flint, MI, and the legal wizards from Bell, CA, to get it done. Meanwhile, even though the Town pays $10 million annually in employee costs it cannot maintain what it already has.

Measure V is important because it represents the last chance for true local control by the residents of Apple Valley until we can vote out the current council.

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

Published: Daily Press, September 8, 2016