Assemblyman discusses benefits, pitfalls of water system acquisition (October 8, 2015)

VICTORVILLE — State Assemblyman Jay Obernolte, R-Hesperia, urged Apple Valley residents Wednesday to weigh both sides of the town’s proposed acquisition of the Apple Valley Ranchos water system and spoke about the long road Big Bear residents are still traveling toward lower water rates more than two decades after the city acquired its water system through eminent domain.

Obernolte, a former mayor of Big Bear Lake, spoke candidly after an address to Victor Valley Chamber of Commerce members at the organization’s latest Valley Morning Insight meeting, and he told the Daily Press that he still believes Big Bear’s acquisition was justified in the long run. But while the reasons are different in Apple Valley, residents must recognize the pitfalls that could come with acquisition, he said.

We (in Big Bear Lake) ended up paying about two-and-a-half times what we thought we were going to pay for the system, Obernolte said. As a result of that we had to issue bonds to fund that (price) and we have been repaying those bonds for the last 25 years. In 2019 — finally — the last of those bonds is going to roll off and we’re going to be able to lower our rates to what they should have been all along.

Apple Valley Mayor Pro Tem Barb Stanton recently told the Daily Press she believes water rates will go down once the town pays off a bond that would be used for the purchase. The town and Ranchos are at odds over the proposed acquisition of the system, which Ranchos says is not for sale. Apple Valley made an offer to buy the system for just over $50 million in July, but Ranchos officials were critical of the proposal. The acquisition would likely be settled with an eminent domain case in court.

Stanton said Wednesday the difference between Big Bear and Apple Valley is a matter of what exactly is being acquired.

I know in Big Bear — when they went before the judge — they were told they had to buy the entire system, which included components outside of Big Bear, Stanton said. We don’t expect that in Apple Valley. We’re talking about one system. We are not interested in Yermo and we’re excluding Yermo from any discussion of acquisition.

Ranchos completed its purchase of Yermo’s water system and the water rights of Yermo Water Company in August for $300,000 with a commitment to spend $750,000 in improvements.

A Big Bear Lake council member said the city has sold one of its outside components and is in the process of selling another, according to Stanton.

He said rates will go down after that, Stanton said.

And while Obernolte’s comments on Big Bear’s decades-long journey toward lower water rates provide at least one sobering warning for Apple Valley, he did say he believes acquisition was the right choice for Big Bear.

Our reasons (were) because the water system was in terrible shape and was not being properly maintained or updated, Obernolte said. We have an excellent water system in Big Bear now. We were able to fix the structural problems that existed with our system, and I think, in retrospect, we’re probably glad that we did it even though it’s been a very long road.

The infrastructure of Ranchos’ water system — roughly 70 years old — is in need of significant repairs (as is Yermo’s system). Chris Schilling, CEO of Park Water Company, which owns Ranchos, told the Daily Press Wednesday that Ranchos has been committed to incremental repairs since 2014.

Ranchos has an ongoing capital investment program of system renewal and replacement projects to ensure reliable quality water service and fire protection, Schilling said via email. Ranchos looks to maintain a pipeline replacement rate of four to six miles a year, plus other system improvements to increase efficiencies and support population growth.

Ranchos’ water system comprises over 465 miles of main pipeline, over 20 wells and eight booster stations, along with thousands of system valves and fire hydrants, according to Schilling. Stanton said the town is prepared to continue repairs if acquisition is successful.

Certainly there are repairs that will be needed, Stanton said, and the town is fully capable of maintaining the system. Our customers would not see a reduction in any services.

As to Obernolte’s comments on the reality of the ongoing water rates situation in Big Bear, Stanton said she knows Apple Valley could be in for a long journey.

But at the end of the day the town and its citizens will benefit, Stanton said.


Source: Matt Cabe, Daily Press