Reviving Goliath: Liberty Utilities contributes $410,000 to Measure F opposition (May 12, 2017)
With contributions currently totaling $410,000, Liberty Utilities has far outpaced the campaign raising money in support of Measure F. Should the water company contribute another $74,000 before the June 6 special election, the amount spent lobbying for Measure V last November will be surpassed. Meanwhile, Measure F proponents are attacking a Canadian corporation and pleading their case for ‘water freedom.’
APPLE VALLEY — The campaign against Measure F has spent nearly 93 times more than its opponent leading up to a June 6 special election that will determine whether the Town of Apple Valley can bankroll a potential Liberty Utilities water-system takeover and purchase by incurring a maximum of $150 million in revenue bond debt.
EXPENDITURES AND CONTRIBUTIONS
Between Jan. 1 and April 22, the No on Measure F/Apple Valley Taxpayers Against Higher Water Fees campaign spent $264,437.90 on its effort to defeat the measure, according to campaign finance documents.
As the sole funder of No on Measure F, Liberty Utilities has contributed $410,000 to the campaign as of Friday.
The Citizens for Water Freedom group, meanwhile, has spent $2,856.32 in support of the measure, with contributions from Councilman Larry Cusack, Burrtec Waste Industries and Apple Valley Communications — Cusack’s company — totaling $15,000, according to documents.
Liberty poured nearly $484,000 into the Yes on Measure V campaign last year. In contrast, proponents for Measure W raised less than $26,000, documents show.
At the time, Measure W supporters likened the funding disparity to a battle of biblical proportions, saying they were “competing with Goliath.” But on Election Day, Measure V garnered more than 67 percent of the vote, a decisive win that set up the Measure F vote.
Liberty has contributed nearly $894,000 between the two campaigns, documents show, a figure Citizens for Water Freedom member Rick Piercy called “amazing.”
“We feel like we need to do everything we can to stand up to what we see as a real problem in that a big corporation in Canada controls our water,” Piercy said. “I just get very upset about the fact that we’re being manipulated by the (California Public Utilities Commission) and the folks out of Canada, and my feeling is they really don’t care. We’re a source of revenue.”
The reference is to Algonquin Power & Utilities Corporation. As a subsidiary of Algonquin, Liberty purchased Apple Valley Ranchos Water Company — as well as systems in greater Los Angeles and Missoula, Montana — from the Carlyle Group in early 2016 for $327 million.
But Diana Carloni-O’Malley, of the No on Measure F campaign, said “the history of this takeover has been to demonize Liberty Utilities.”
“I do not fault any person or entity to fight for their business,” Carloni-O’Malley said of the money the company has spent thus far. “If the town wanted to take Napa Auto Parts, I believe (Mayor) Scott Nassif would fight for his business in the same way.”
WHAT THE MONEY BUYS
The more than $264,000 Liberty has put toward that fight has bought the campaign significant exposure, including more than $132,000 in “TV or cable airtime and production costs,” documents show.
It also funded economist John Husing’s recent analysis of the town’s takeover attempt; Economics and Politics, Inc. — Husing’s research firm — received $50,000, an amount Liberty officials say is standard for such services.
But nearly $39,000 in “campaign literature and mailings” has been the campaign’s driving force, according to Carloni-O’Malley.
“I don’t know how much people understand about this issue,” she said, “so the strength we’ve had is getting mailers out to people. We’ve sent multiple mailers that fact check and correct the town.”
As for Citizens for Water Freedom, contributions have afforded the group $2,251.32 in “campaign paraphernalia,” namely 50 signs erected throughout the town. Piercy said “getting boots on the ground” is how Measure F supporters are combating an aggressive opposition.
“We’re talking to groups. We need to spend a lot of time getting the truth out, talking to friends and letting people know what’s really going on here,” Piercy said. “This all makes Goliath a whole lot bigger than David, but we’ve got five smooth stones and our sling, so we’ll try our best.”
Last week, the campaign came under fire from Citizens for Government Accountability — a group against the takeover — after town resident Pat Hanson filed a complaint with the state’s Fair Political Practices Commission alleging failure “to disclose properly who the signs were from,” a post on CFGA’s website shows.
“The committee failed to include a disclosure statement of at least 5 percent of the height of the advertisement,” Hanson wrote in her complaint, also available on CFGA’s website.
In response, Piercy said Hanson was correct, adding that “the guy who printed our signs thought (the regulation) was 0.5 percent, not 5 percent” of the signs’ height.
“You make an error and you correct the error. That’s what we did,” he said. “We spent about $400 putting stickers on the signs with the correct size of the committee name. That could have been used for something else, but if you have integrity you fix what is messed up.”
The Citizens for Water Freedom campaign now awaits word from the commission’s Enforcement Division on possible fines.
WHAT’S AT STAKE
Passage of Measure F would authorize the town to finance a purchase of Liberty’s water system by issuing debt in the maximum amount of $150 million, according to the measure’s impartial analysis.
Pursuant to resolutions adopted by the Town Council on March 9, the interest rate on debt repayment cannot exceed 12 percent.
Measure F opponents have argued the town won’t have funds for improvements to the system’s aging infrastructure, let alone money for debt service.
Assistant Town Manager Marc Puckett has said he expects the price of the system to be far less than Measure F’s asking amount, adding that the interest rate will be closer to 5 percent. By Puckett’s estimation, nearly $12 million will be available to fund debt service and lower water rates via the elimination of profits, taxes and other expenses associated with Liberty’s ownership.
Opponents have also criticized the town for holding a special election — which comes with an estimated $220,000 price tag paid for by the town — before a right-to-take trial has been set.
But officials believe potential passage of Measure F is similar to “prequalifying before you shop for a house,” according to town spokesperson Kathie Martin.
“We need to know we have the approval of the citizens before we spend the money and see the takeover action to its conclusion,” Martin said.
A trial-setting hearing for the the right-to-take trial is scheduled for June 26, court documents show.
Source: Matthew Cabe, Daily Press