Liberty argues Apple Valley not ready to run utility

SAN BERNARDINO — An attorney for Apple Valley’s largest water provider says the town is unprepared and unequipped to operate Liberty Utilities.

The comments came during opening arguments Wednesday during which Liberty’s attorney, George Soneff, presented an overview of why he believed the town’s attempted takeover of the investor-owned utility is not in the public’s interest.

The right-to-take phase of an eminent domain trial Apple Valley first filed three years ago in January 2016 began in Superior Court Judge Donald Alvarez’s courtroom.

Town officials contend the utility’s acquisition would likely result in lower water bills for its residents and greater local control over setting rates.

One of the town’s lawyers, Kendall MacVey, was able to present just a portion of his opening arguments on Wednesday. Apple Valley officials declined to comment until the town could more fully present its side in court.

Soneff characterized the eminent domain process as essentially a money grab.

The condemnation is an effort to take (Liberty Utilities) for revenue, he said.

To allow a public agency to acquire property, Soneff said, it must be shown that public interest and necessity require a public project.

In the case where an agency is attempting to take a property that already serves the public, it must be shown there is a more necessary public use justifying the takeover.

Soneff argued that those requirements hadn’t been met, as Liberty was already operating water infrastructure optimally.

He quoted town documents that defined the project as simply the proposed acquisition of the utility, citing no improvements or updates to the water system.

One attorney with Best Best & Krieger, the law firm that represents the town, was quoted as characterizing the takeover as largely a title transfer.

Plans for the water system’s acquisition, Soneff said, indicate the town isn’t prepared.

According to Soneff, former Apple Valley public works director Greg Snyder confirmed that the town’s plan was to hire as many Liberty employees as we can.

Snyder, who resigned in September 2018, had been hired partly because of his expertise in the water industry and to bring credibility that Apple Valley could run the utility.

Town Manager Doug Robertson previously told the Daily Press he would be able to fill the void because he had served as a general manager of the Victorville Water District.

On Wednesday, Soneff contended that even if Apple Valley won the lawsuit, it still wouldn’t be able to pass an assessment by the State Water Resources Control Board analyzing its technical, managerial and financial capabilities.

They couldn’t meet that requirement. Certainly, he said.

He noted two lawsuits were filed against the town regarding their sewer and trash programs.

Both alleged overcharging of customers and mishandling of revenues. The sewer lawsuit was settled, but it is unknown if the proposed trash rate settlement had been finalized.

Soneff also mentioned the town’s borrowing of up to $10 million in 2018, in part to pay for litigation costs associated with the eminent domain suit.

Robertson has said the money would be repaid by the end of the fiscal year, the Daily Press reported.

Additionally, Snyder disputed that Apple Valley’s acquisition would result in lower water bills. He said he would present evidence proving the opposite.

Voters passed a measure in June 2017 allowing the town to issue up to $150 million in revenue bond debt to acquire Liberty.

Soneff said the payments required to pay off the debt would be more substantial than the town estimates, resulting in an increase in water rates.

Source: Martin Estacio, Daily Press