Not the whole system (October 8, 2015)

In the article about Assemblyman Jay Obernolte’s (R-Hesperia) address to Victor Valley Chamber of Commerce members, you quote Mayor Pro Tem Barb Stanton to the effect that it will be less expensive for the Town of Apple Valley to buy Apple Valley Ranchos Water Company than it was for Big Bear to buy its water utility, because the Town won’t be buying all of Ranchos — just the part it wants (Assemblyman discusses benefits, pitfalls of water system acquisition, Daily Press, October 8, 2015).

Unfortunately, this is not the whole story.

First, the Town’ fair market purchase offer for Ranchos never included Ranchos’ newly-acquired (September 1, 2015) Yermo system in the first place.

Second, the Town’s purchase offer is one-third or less than the actual value of Ranchos.

Third and perhaps most importantly, according to eminent domain law, if an entity such as the Town condemns only part of an entity such as Ranchos, the Town must pay whatever costs are involved in making certain that the remainder is viable as a stand-alone entity. In the case of Ranchos and Yermo, this could run into the millions of dollars, because Ranchos and Yermo share resources, processes, and debt with Park Water, the parent corporation of Ranchos. Separating Yermo from Ranchos means securing all new loans (which could be interesting given the condition of the Yermo system) and configuring Yermo with whatever resources are needed to allow it to continue as an entity.

These additional costs would show up in the bonds with which the Town Council wants to saddle Apple Valley residents, yet they buy us not one drop of water — kind of like the millions the Town is spending to attack Ranchos now.

The bottom line is that Mayor Pro Tem Stanton is wrong to think that the Yermo water system can simply be excluded from the discussion, as it certainly won’t be excluded from the cost of the Town’s seizure of Ranchos.

Greg Raven is Co-Chair of Apple Valley Citizens for Government Accountability, and is concerned about quality of life issues.