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The Lockean Project

The real cost

The real cost,” Carmel Pine Cone, April 14, 2023

One thing proponents of a public take-over of the local water system never talk about is the financial cost of their dream. What is it exactly and how will it be paid for? Typically, financial costs are double the price of whatever you’re buying. If it’s a 30-year note to purchase the water system at $449 million, then the total price, including financing, will likely be near $1 billion. That financial cost is going to be passed on to customers as a surcharge on their monthly bills. Cal Am says the water system is worth $1 billion – that means financing costs could drive that figure up by double. Once again, the end users will pay.

Even if the advocates succeed in condemning Cal Am for the $449 million price, how are we going to have lower water bills when factoring in the cost of financing the takeover?  The media acolytes who’ve been among the most fervent supporters of the takeover never discuss the long-term cost of financing the buyout. Probably because they know that if the public actually realized what that cost would be on the monthly water bill, they would’ve rejected the 2018 effort at the polls.

Mark Carbonaro, Monterey