MID board should set policy now

July 25, 2013 

In response to The Bee's editorial "New board should shape MID policy" (July 23, Page A-10): Normally, that would be an appropriate approach, but these are not normal times economically. There are costs regarding renewal of Don Pedro powerhouse usage as well as urgent repair of some parts of the irrigation system that can only be covered by a new bond issue. That money cannot be raised in one or two years by raising rates.

Rates of long-term bonds are near an all-time low but are jumping and are expected to continue to increase substantially in the near future. That means that the long-term cost to ratepayers will only increase with delay in issuing the bonds. Since the bonds cannot be sold without a guaranteed source of repayment, there must be increased charges in place when bonds are sold. Water users must pay more and the amount decided very soon.

In the past when the Federal Reserve printed money at a high rate, as is being done now, inflation increased rapidly, so the cost of repairs is likely to increase sharply. Action is needed now! Actually, the best time has passed. The existing board understands the problem and should act. Future board members will take forever to learn and to move, at great cost to all water users.

VANCE C. KENNEDY

Modesto

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