AVRWC customers to bear burden of YWC acquisition (July 1, 2015)

TOAV - Town of Apple Valley

Already hit with excessive rate increases and surcharges, customers of Apple Valley Ranchos will pay the price for AVR’s imminent acquisition of the troubled Yermo Water Company.

The San Bernardino County Superior Court last week finalized the $300,000 sale, which will have significant economic impact on all AVR ratepayers. In its initial approval of the sale last year, the California Public Utilities Commission authorized $732,000 in initial repairs with an expected $7 million in additional short-term upgrades.

Apple Valley Ranchos customers have had to bankroll corporate profits for years, and now we’ll be paying for the acquisition of Yermo, which benefits no one in our community, said Apple Valley Mayor Pro Tem Barb Stanton. The repairs and upgrades alone will lead to more rate increases, for the current Yermo customers and for AVR customers.

Chris Schilling, CEO of AVR parent Park Water Company, conceded as much last year. He said that while the costs of purchasing and repairing Yermo Water were not included in AVR’s current three-year rate plan, that will likely change in 2018.

The Town of Apple Valley protested the acquisition of Yermo, citing economic and environmental concerns. The transaction was orchestrated out of the public eye and without the environmental review mandated under the California Environmental Quality Act.

The sale comes as the Town considers acquisition of AVR. Last week, the Town announced that it has made an offer of just compensation totaling $50.3 million. The offer amount was determined by the Town’s valuation expert to represent the fair market value of the water system.

At this time, the Town Council has not decided to proceed with any eminent domain action and may only do so at a hearing on a resolution of necessity.

Source: www.applevalley.org/index.aspx?recordid=1687&page=333

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