Yawn. Longtime readers have heard this before. The string of economic disasters were discussed here long ago. What got laughed at a year ago is mainstream thought today. This morning's disaster is water rates going up because of municipal borrowing rates exploding. And while the article is ignorant of the "other shoe" at least we are making progress.
But with Metropolitan Water District of Southern California's short-term loan interest rates shooting through the roof, and the shaky economy's effect on municipal bonds and investments unknown, another hurdle has risen.
The district that supplies most of Southern California with water has managed so far to deal with the flux in the budget by cutting back on capital costs. But that could change.
"If this whole situation blows up, all bets are off," Brian Thomas, Metropolitan's chief financial officer told the Ventura County Association of Water Agencies on Thursday at its monthly meeting.
The challenge Metropolitan and other public agencies face is how their debt will be managed in the short- and long-term, and how much access they will have to credit.
The article lamely parrots the water districts' claims:
He said water rates are expected to rise, but that's because of the increasing challenges of delivery, energy and lack of water coming from Northern California — not the credit crunch.
Capital costs is code for developer subsidies and cash advances. Well guess what's happened to that revenue stream? Dead. So higher waters rates for bad borrowing practices to subsidize abd development practices. Instead of paying double the California taxpayer is going to be paying 4x for the privilege of having a clueless cadre of urban planners degrade their quality of life.