TOAV eyes AVRWC (July 12, 2014)

Town responds to rate increase concerns, considers acquisition of Apple Valley Ranchos

APPLE VALLEY — Amid growing fervor about rising water prices, the town is taking its first solid step toward purchasing a major water supplier.

The council last week authorized town managers to prepare a request for proposal for property appraisal and acquisition services. The possible acquisition is Apple Valley Ranchos Water Co.

A town staff report said residents have repeatedly expressed concern regarding the continuous rate increases imposed on property owners for utility services. In addition to these concerns, the Town Council has also been displeased with its inability to control these increases in utility rates specifically for water services.

That’s something we need to get a handle on, Town Council member Scott Nassif said Thursday.

According to a PowerPoint presentation that was recently made before the Town Council by Apple Valley Ranchos General Manager Tony Penna, One of the slides clearly shows an overall average increase of 3 percent per year since 2003, he said.

Also, the water company has reduced line leaks by 85 percent from 1995 to 2013, and by 25 percent since 2011, the presentation shows.

The town is challenging Apple Valley Ranchos’ latest rate-case request, which would raise water rates about 30 percent over the next three years if approved by the California Public Utilities Commission.

As a whole, we estimate about 80 percent of the water customers in (Apple Valley) are served by AVR vs. other providers or private wells, spokeswoman Kathie Martin wrote in an email.

Apple Valley Ranchos is owned by Park Water Co., of Downey, a subsidiary of Western Water Holdings LLC. Western Holdings is a wholly-owned indirect subsidiary of Carlyle Infrastructure Partners LP, a limited-life entity with a sunset date of September 2021.

The town’s action to hire an appraiser follows another recent effort by a municipality to buy a water provider. Missoula, Montana offered to purchase at least a portion of the Western Water/Park Water company serving its area.

CIP had no intention of dissolving before its sunset date. However, Chairman Robert Dove wrote to the CPUC, Western Water recently has decided to entertain offers to purchase its stock in Park Water.

Controlling our destiny is vital to the survival of this community, Councilwoman Barb Stanton said during Tuesday’s council meeting.

The council voted 5-0 to authorize the RFP. It is in process of being written but a distribution date is not known, Martin said.

Source: Gary Brodeur, Daily Press