Debt service and cash flow (July 27, 2015)

Art Bishop writes (Time for the truth, Daily Press, July 16, 2015), By eliminating the profit margin and other unnecessary corporate costs, the Town can more than pay the debt service — rebutting another of AVR’s claims.

That’s quite a bold statement, coming from someone who doesn’t know what the Town is going to be paying for Ranchos, doesn’t know what the Town is going to be receiving for that payment, doesn’t know how to run a water utility, doesn’t know who is going to run the system for the Town, and doesn’t know how much it’s going to cost the Town to run the system.

To hear Bishop tell it, you’d think that water rates would tumble after the Town seizes control of Ranchos in the hostile takeover toward which it has worked so fervently for the last four years. But no.

From the beginning, the Town has made it clear that water rates will not go down after the takeover. So even though they attempt to create confusion by trotting out a bunch of imagined savings, the Town fails to account for where all the money from the profit margin and unnecessary corporate costs will go, if not back to the ratepayers in the form of lower rates.

That’s because the facts are not flattering to the Town. The Town has racked up a small mountain of debt, the ramifications for which will start becoming clear starting in 2016. That’s right: Next year. Without the cash flow it hopes to realize from seizing Ranchos, the Town has little hope of papering over it prior bad decisions. These inconvenient facts are why the Town goes to such extraordinary lengths to hide costs, sequester and redact documents, and fight the release of information the public needs to make informed decisions about the Town’s actions. This is why the Town doesn’t care how much it has to borrow to take over Ranchos, as long as it receives the cash flow and the monthly payments can be fobbed off onto the taxpayers.

No government entity does things as efficiently as private enterprise. When a government official claims otherwise, guard your wallet.

Greg Raven is Co-Chair of Apple Valley Citizens for Government Accountability, and is concerned about quality of life issues.