Inside Apple Valley’s Costly Bid To Seize Its Water Utility

A decade of courtroom battles, ballooning invoices, and a promise that cheaper, locally controlled water is just over the next hill—only to find another hill. We pull back the curtain on Apple Valley’s bid to seize its water utility, mapping the timeline from a last-minute eminent domain filing to a 67-day trial loss, a reversal hinging on judicial deference, and a California Supreme Court review that could reshape how public takeovers are judged across the state.

We walk through what the judge actually said when he called the proposed takeover a risky experiment, and why the appellate “win” didn’t validate the economics or engineering behind municipal ownership. Then we follow the money: the $13.2 million fee order, ongoing monthly legal bills draining the general fund, and the deeper costs lurking in Measure F’s $150 million debt authorization. Beyond the headline debt, we examine the disappearing property tax revenue if the utility goes public, and what that means for schools and county services that rely on those dollars.

Zooming out, we explore the growing PFAS threat and why remediation liabilities won’t vanish under public ownership. We compare CPUC-regulated rate hikes with the hard reality that a city-run system would still face capital upgrades, bond payments, and compliance costs. Along the way, we track leadership changes, reduced services, and delayed projects, revealing how legal strategy can crowd out everyday governance. If local control remains the goal, we lay out what honest accountability and sustainable financing would look like—so residents aren’t left paying more for less.

If this kind of clear, local oversight matters to you, follow the show, share it with a neighbor, and leave a review with your take on the water fight. Your questions and ideas guide where we go next.

Transcript

Opening And Mission

SPEAKER_00 0:00

Hey there, Apple Valley. Are you tired of feeling like decisions are being made for you instead of with you? Do you ever wonder what the town council is actually voting on, or why that new development is suddenly popping up next to your favorite spot? Welcome to High Desert Insiders, the podcast dedicated to pulling back the curtain on our local government and the issues that truly matter right here in the High Desert. I'm your host, Scott, and every week we're diving deep into the heart of Apple Valley in Victorville, Hesperia, High Desert politics. We're not here for the drama, we're here for the discussion. Today we have an interesting discussion here with just myself, Scott, on the water situation here with Liberty Utilities and the lawsuit. So, here, this is where your voice gets heard, your questions get answered, and we all become a little bit more informed and engaged, residents of the High Desert. So whether you're passing by the iconic Apple Valley Golf Course or waiting for the light on Bear Valley Road, tune in. Let's get the real story. Let's make a difference. The High Desert Insiders starts right now. Alright, so let's get into the 10-year legal odyssey that has become the ultimate money pit for the town of Apple Valley. If you've been paying attention to the budget workshops or the town council meetings over the last few years, you know exactly what I'm talking about. It is the quote unquote water war. It is a saga that started with high-minded promises of local control and quote unquote lower rates. But a decade later, it has morphed into a masterclass in fiscal irresponsibility, driven by a mixture of political pride and legal ego. And so to understand how deep this hole actually goes, we have to look back all the way to 2011. That's when the first town uh started, that's when at first, sorry, the town started sniffing around the idea of seizing the Apple Valley Ranchos water system, which later became known as Liberty Utilities. The narrative they sold was simple. The California Public Utilities Commission, or the CPUC, was supposedly letting the private utility company gauge or gouge residents. And the only way to fix it was a government takeover. By late 2015, the town council pushed through two resolutions of necessity. In the world of eminent domain, those are the legal triggers that allow a government to take private property by force. But the timing of this was incredibly telling. They didn't just decide to buy a utility, they were trying to block a business deal. They filed their eminent domain lawsuit in January 2016, literally one day before Liberty Utilities finalized its purchase of the system from the Carlisle Infrastructure Partners. It wasn't just a takeover, it was a desperate last-minute sprint to block a merger, and it set the stage for one of the most expensive legal battles in the history of San Bernardino County. And what did that necessity look like when it actually got into the courtroom? Well, it looked like a 67-day bench trial that dragged on from late 2019 all the way into 2021. 67 days of high-priced lawyers from the firm Best Best and Krieger, or BBK, billing the taxpayers every single hour to try and convince a judge that a town with zero experience running a water utility could somehow do it better than a professional company. Now, Judge Donald Alvarez, who presided over that trial, was not impressed. In his 2021 statement of decision, he didn't just rule against the town, he essentially dismantled their entire argument. He called the proposed takeover a risky experiment. Think about that for a second. Our town leaders wanted to experiment with our primary water source. The judge noted that while Liberty had a perfect 30-year water quality record, the town's own record with its sewer system showed a pattern of neglect. The evidence showed the town was investing in its sewer system at a rate below the minimum of deprecation. Essentially, the court asked, You can't even maintain the pipes you already own. So why would we let you take ones that are actually working right now already? Now, the financial fallout from that trial was nothing short of a disaster. In August of 2022, the court ordered the town of Apple Valley to pay Liberty Utilities a soul-crushing$13,221,562.54 in litigation expenses and attorney's fees. That is$13,000 of public money ordered to be handed over to the utility company's lawyers because the town's case was so poorly supported. And that's just the big bill. We also saw smaller hits like$53,578 awarded to Jess Ranch residents for their legal fees. Now, if you listen to the current town leadership today, they'll tell you they've turned it all around. They are making a massive victory lap because in January 2025, the Fourth Circuit District Court of Appeal reversed Judge Alvarez's decision. They'll tell you that the$13.2 million fee order is quote unquote canceled. But we need to look at why it was reversed. It wasn't because the town was suddenly right about the economics or the engineering, it was a technicality about the standard of review. The appellate court basically said that the first judge used the wrong rules. They argued that because the town council is a legislative body, its decision that a takeover is quote unquote necessary should be given extreme deference, meaning the court shouldn't really question the town's logic unless it's a gross abuse of discretion. So the victory isn't that the plan is good, it's that the town believes the courts should have the power, or shouldn't have the power, excuse me, to stop them, even if the plan is bad. But this quote unquote victory has just led us into another expensive waiting room. The California Supreme Court has now stepped in, and on April 23rd, 2025, the Supreme Court granted review of the case, officially documented as case number S289391. They took the case because there is a massive conflict in California law. One appellate court in a different case involving PGE said judges should use their independent judgment in these utility takings. Well, our district said that the town council's word is essentially law. Now, as of late 2025, the case is fully briefed and the legal bills are continuing to mount as we wait for oral arguments. Every single month, the town is still cutting checks to BBK. Just looking at some of the recent records from February of 2025, we see legal fees of$5,600,$7,200, and$9,800. By September of 2025, more bills were rolling in, one for$11,000 and another for$1,500. This is death by a thousand cuts to the general fund. And let's talk about that general fund for a minute. The town has a history of seeing utility-related fees to shore up its budget. Remember the trash settlement? In 2019, the town had to create a$3.15 million fund because they were caught over charging residents for trash and then using that money to fund unrelated services like the town golf course and parks. That lawsuit costs the town over$226,000 in its own legal fees, plus over a million in fees for the plaintiff's attorney. It is a recurring theme. Treat the residents like an ATM to fund the pet projects and legal battles. Now, if the town ever actually wins at the Supreme Court, the real financial nightmare begins. To buy the system, they would have to use Measure F, which authorizes the town to incur up to$150 million in debt. But keep in mind that the$150 million figure is years old. Liberty Utilities has been investing in the system, spending twice the rate of deprecation on upgrades. Meanwhile, the town's own experts admitted during trial that they don't actually expect to decrease rates once they take over because the debt service payments on that$150 million would be so high. And there are the hidden costs that the town council never mentions in their press releases. Liberty Utilities is one of the largest property taxpayers in Apple Valley. In 2019 alone, they paid over$764,000 in property taxes. If the town takes over, that utility becomes tax exempt. That is nearly$800,000 in a year that disappears from the Apple Valley Unified School District and the County of San Bernardino. You, the taxpayer, will be the one filling that hole. The timing of this legal obsession couldn't be worse. While the town stays focused on its Supreme Court, Supreme Court White Whale, the rest of the town's responsibilities are slipping. On October 14th, 2025, Doug Robertson, the town manager who spearheaded this takeover for eight years, announced his retirement. He's walking away, leaving the new guy, Todd Bottom, to inherit a budget that is already strained. Just recently, the town voted to cancel its existing animal services contract, which has already led to a reduction in essential animal services. Now, we have major infrastructure needs like the Bear Valley Road Bridge Rehabilitation, sorry, that's a mouthful, and a$12 billion state deficit that is leading to cuts in natural resource and environmental protection funding at a st at the state level. And then there's the PFAS issue, the so-called forever chemicals. As of 2025, the EPA is uncovering widespread PFAS contamination in U.S. drinking water. Now, how that applies to us and this water topic? Well, Liberty Utilities is already setting up memorandum accounts to track the massive costs of future remediation. If the town succeeds in its takeover, they don't just win a water system, they win the right to pay millions of dollars for chemical cleanups that weren't even on the radar when they started this fight in 2011. The irony of this whole thing is that while the town spends millions on lawyers to quote unquote save us from high rates, Liberty is currently asking the CPUC for a 22.6% rate increase over the next three years to actually fund improvements to the system. If the town took over tomorrow, they wouldn't just be able to ignore those costs. They'd have to pay them plus the interest on$150 million in bonds. So here we are. At the end of 2025, about to be 2026, we have a town manager that's departing, a new lawsuit at the Supreme Court, and a budget that has been bleeding legal fees for 10 straight years. The town council calls it a fight for the people. But when you look at the$13 million penalties, the lost property taxes, and the mountain of debt waiting on the other side, it looks more like a fight for political pride. It is a strategy built on extreme deference, and the bill, one way or another, is one that Apple Valley residents will be paying for the next 30 years. So that's basically all I have to say on the water suit. So we'll have to wait and see what the Supreme Court says as that happens here in California. So we really want to thank you guys for joining us today as we shed some light and inform people on the water issue. Just remember altogether, your involvement in as is what makes the high desert thrive. And don't end the conversation here. You can end uh you can find, excuse me, all the resources we discussed, including links to the town council agenda and how to reach your local representatives. Um we'd love hearing what's on your mind. So send us questions, ideas for future topics, and feedback at the link in the top of the description on your podcast platform. We might even feature your comment or idea on the next show. So thank you for spending your time with us, staying informed, and being a high desert insider. Join us next week as we tackle another topic that's important for us here in the High Desert. Until then, be informed, be involved, and have a great week.