Residents irate over surcharge (September 24, 2015)

Some AV Ranchos ratepayers remain wary of acquisition

APPLE VALLEY — Residents took to the Town Council lectern in droves Tuesday night to express continued shock, displeasure and anger over the amount of money they’re paying for water usage, focusing primarily on the drought surcharges implemented by Apple Valley Ranchos Water Company.

Several residents asked why Ranchos is the only water provider in the High Desert that has imposed a drought surcharge on its customers, alleging that Ranchos is profiting from the move.

I find these practices to be criminal, 32-year Apple Valley resident Wilfred Crepeau said during public comment, referring to a $132.95 drought surcharge he received on his most recent water bill. Crepeau’s two-month water bill totaled a whopping $548.36 — and others who showed up at the meeting had bills that were even higher.

Apple Valley Ranchos has maintained that these bills aren’t representative of most ratepayers’ experiences. More than 70 percent of Ranchos’ customers are not incurring a drought surcharge, Ranchos Finance Manager Eric Larsen said.

During public comment at the Tuesday meeting, Larsen denied claims that Ranchos profits from the surcharges.

While folks are thinking (drought surcharges are) a boon to Ranchos Water, Larsen said, folks need to keep in mind that our sales are down well over 30 percent over the last several months, and when your sales are down your revenue is down dramatically. And part of that — only part of it — is recovered through a drought surcharge.

Despite the outcry, the high bills haven’t necessarily garnered more support for the town’s efforts to take over the water system. Crepeau told the Daily Press that Council members are like a dog chasing its tail with regard to Apple Valley’s proposed acquisition of the system.

Apple Valley resident Tony Tyler said Apple Valley is in the unique position of having multiple water companies within its borders. Tyler advocated for competition within the free market — rather than acquisition — so Ranchos would have to compete for residents’ business.

Thomas Morris also seemed hesitant to support acquisition despite his complaints over some of Ranchos’ business decisions.

They (Ranchos) don’t need to be drilling wells (or) taking over Yermo utilities, Morris said, referring to a new well being dug east of Apple Valley Road and Ranchos’ recent acquisition of Yermo’s water district. Because all they’re doing is trumping it up to sell it to you people, and you people will be the suckers at the end.

David Christman — who referenced social media comments describing him as a water-wasting, rich crony of the town’s government — said despite his high water usage he didn’t expect his $969 two-month water bill that came with a $309 drought surcharge.

What I’m offended by most is learning that this drought surcharge money goes back to Apple Valley Ranchos, not to the state for digging more reservoirs, Christman said. I personally have communicated with hundreds of Apple Valley citizens that believe our water rates are nothing short of insane.

Ranchos General Manager Tony Penna previously told the Daily Press that Ranchos Water does not receive any additional revenue from drought surcharges.

Monies received from drought surcharges are used to offset other customer fees, Penna said. Ranchos Executive Vice President Lee Jordan corroborated Penna’s comments at the Aug. 25 town council meeting.

Mayor Pro Tem Barb Stanton called Ranchos’ position on monies collected from drought surcharges contradictory.

If I recall, Mr. Jordan said that the surcharge is being set aside, Stanton said during the meeting. It wasn’t being used for bottom line. You said something different today.

Larsen told Stanton she was not accurate in claiming that he made a contradictory statement.

Stanton elaborated on her exchange with Larsen on Wednesday.

I give (Larsen) credit for answering our questions, Stanton told the Daily Press, (but) I don’t think they know what they’re doing with this drought surcharge. Where is this money going? That’s the real question.

Ranchos’ water usage allotment threshold, which is currently fixed at 32 units per billing cycle, will drop to 18 units per cycle in November, prompting Councilman Scott Nassif to wonder how many more Ranchos ratepayers would incur the drought surcharge as a result of the lowered threshold.

Larsen responded to Nassif’s concerns by stating water sales in the High Desert are extremely seasonal.


Last month, Penna told the Daily Press 10 percent of customers account for 80 percent of the drought surcharges.

Following Gov. Jerry Brown’s April 1 water reduction mandate, Ranchos implemented Stage Two of its California Public Utilities Commission-approved Water Shortage Contingency Plan, according to Penna.

Failure to comply with this mandate can result in fines of up to $10,000 a day, Penna said in an Aug. 29 written statement.


Source: Matthew Cabe, Daily Press