Apple Valley Ranchos To Purchase Yermo Water Co.

(December 25)  YERMO—The long-troubled Yermo Water Company is in the process of being purchased in its entirely by the Apple Valley Ranchos Water Company.
On December 5, Apple Valley Ranchos and Yermo Water, which has been operated by the Yermo Community Services District since November 2012, jointly filed an advice letter to the Public Utilities Commission preparatory to that takeover.
According to the letter, Apple Valley Ranchos intends to “purchase all of the public utility assets owned by Yermo and used by Yermo to provide public utility water service in San Bernardino County, California” and seeks “commission authorization for a transfer of ownership of an inadequately operated and maintained Class D water utility.”
In August 2012 the California Public Utilities Commission filed to take control of the severely undercapitalized and dilapidating water company. Three months later, the Superior Court entrusted operation of the Yermo Water Company to the Yermo Community Services District and appointed California Public Utilities Commission Attorney John Richardson to act  as receiver. The Yermo Community Services District has made $40,000 in emergency renovations to the system to keep it functioning.
Last month, Richardson chose Apple Valley Ranchos Water to be the buyer of the company and he petitioned the Public Utilities Commission for a water rate increase.
The Yermo Water Company, formerly owned by Donald Walker, fell into severe disrepair early last decade, a situation which was exacerbated by Walker’s departure to Florida, making it difficult for his company’s customers to contact him.
As the absentee owner, Walker did not have a licensed operator available to operate the system. During the summer of 2006, the primary water tank serving the Yermo community’s water system developed a leak and customers were without water for a week in the small community near Barstow, where temperatures exceeded 100 degrees every day. The California Department of Health and the California Public Utilities Commission initiated an investigation into the matter in 2007.
A decision to pursue the appointment of a receiver was issued in May of 2009.  At that time, however, a community-based prospective buyer had surfaced and the receivership was suspended while it appeared that a sale of the system was possible.
After more than two years of negotiations, Walker refused to inform the prospective buyer how much he owed in back taxes and fines to the California Department of Health. As a result, the sale fell through. The receivership arrangement that took place in November 2012 was contested by Walker’s family. His wife, Charlene, filed an opposition to the appointment of a receiver, raising a number of claims that were ultimately denied by the Superior Court on March 6, 2013.
In July, Apple Valley Ranchos bid $300,000 on the purchase of the Yermo Water Company. On the company’s website, Bob Smith, president of the Yermo Community Services District. informed customers of Richardson’s decision to accept Apple Valley Ranchos’ offer, telling them they should have or would soon receive a letter spelling out the particulars, including the proposed rate increase.

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