What Are We Doing?

Acquiring Ranchos Water Company is right move for Apple Valley (March 8, 2015)

Our community has made it clear: The Town of Apple Valley should control its water future.

Years of out-of-control rate increases and being ignored by out-of-town, private owners have left us with no choice. Deepening the wound, those same out-of-town, private owners have launched a malicious misinformation campaign to try to convince the community that we’re wrong, they’re right and that somehow we should accept business as usual.

So let’s separate fact from the fiction that’s being spread, beginning with an Apple Valley Ranchos Water Company-crafted opinion piece published in last Sunday’s Daily Press. The piece states your Town Council has spent at least $500,000 to study a takeover of the company. No one seems to know where that number came from — thin air, perhaps — and, in fact, to date we have spent less than half that amount studying this option.

That same piece references a Blue Ribbon Water Committee empanelled in 2011, which recommended against potential acquisition at that time. What it fails to point out is that since 2011, Apple Valley Ranchos’ outside owners have accelerated rate increases, most recently requesting a 31.55 percent rate hike over the next three years.

What you also will not hear from the current owners is that because Apple Valley Ranchos is a private company, its rate increases are not subject to the same public scrutiny of a town-owned water system. Instead, Apple Valley Ranchos’ rates are governed by the California Public Utilities Commission, whose criteria include ensuring a profit for the company.

All of which leads us to where we are today — committed to stabilizing rates and protecting the interests of our residents and businesses. Contrary to what the company is saying, we are well positioned to pay a fair price for Apple Valley Ranchos. Instead, the company’s parent has chosen to try to sell the system and its assets to a foreign-owned, for-profit investment firm.

Not that we’re against companies making money. We pride ourselves as a business-friendly community.

Where we do have an issue is forcing ratepayers to feed a company’s profit motives. Water, we believe, is part of the public domain, which is why most water systems are publicly owned. It’s also why in cities where that is not the case — Claremont and Ojai, for example — residents are rallying behind efforts by their local leaders to take or retake ownership of their water systems.

In the case of Apple Valley, two-thirds of respondents in a recent survey said they supported the Town’s acquiring of Apple Valley Ranchos. We have a history of solid financial planning and fiscal responsibility. As has been demonstrated time and again, the Town knows how to efficiently manage community assets and we have senior managers already on staff with extensive water agency management experience.

In simplest terms, we have the experience and wherewithal to handle such a move. How we get there is largely up to Apple Valley Ranchos. The Town would prefer a friendly sale at a negotiated, fair market purchase of the company and its assets, and, despite the company’s claims, have no immediate plans or desire for eminent domain.

As for another company claim — that acquiring Apple Valley Ranchos would create a bigger taxpayer burden — the reality is the Town is well positioned to avoid that. Though debt service would increase initially, it will be offset by cost reductions resulting from the elimination of the 9 percent profit margin and the latest round of rate increases, but more importantly, all of those aggravating surcharges to your water bill will disappear.

Best of all, because we’re motivated not by profit but by protecting and serving our residents and businesses, we will be able to stabilize rates moving forward.

Acquiring Apple Valley Ranchos is the right move, and the smart move for Apple Valley right now.

That’s not conjecture. That’s a fact.

Frank Robinson is town manager of Apple Valley.

Source: Daily Press

Response:

• Response to Frank Robinson