Two-and-a-half times (October 8, 2015)
I was interesting to read that Assemblyman Jay Obernolte (R-Hesperia) 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, in reference to the proposed hostile takeover of Apple Valley Ranchos Water Company by the Town of Apple Valley (
Assemblyman discusses benefits, pitfalls of water system acquisition, Daily Press, October 8, 2015).
I don’t know either the appraised value or the final purchase price of the Big Bear water system, but here in Apple Valley, we could be talking about some serious money if we follow in Big Bear’s footsteps.
In 2011, the Town’s Blue Ribbon Water Committee took eight months to determine that the value of Ranchos was $121,000,000, but that the Town should forgo purchasing it because the final purchase price might go as high as $200,000,000.
Nearly four years later, the Ranchos water system is in what might be the best shape it’s ever been in, and Ranchos owns more water rights than ever in its history.
Yet when the Town asked its
experts for a new appraisal, those
experts took half an afternoon and came up with a value of $45,540,000. After a local retiree showed the
experts that they hadn’t added $12,000,000 of assets correctly, the Town’s
experts raised the appraised value to $50,000,000, which is just under what the Town offered Ranchos in its
good faith purchase proposal.
Maybe in the fact-free environment of Town hall, it seems OK to pay two-and-and-half times $50,000,000 for Ranchos: That’s only $125,000,000. But two-and-a-half times $121,000,000 is $302,500,000, and two-and-a-half times $200,000,000 is $500,000,000. Ranchos is probably worth more than $140,000,000 at a minimum, and two-and-a-half times that puts the starting price at $350,000,000.
Maybe before committing the residents of Apple Valley to decades of debt, the Town Council should think about this hostile takeover two-and-a-half more times, and then get back to us.
— Greg Raven is Co-Chair of Apple Valley Citizens for Government Accountability, and is concerned about quality of life issues.