Debt, Good or Bad

During the hearings at ACC last April, one of the things that totally surprised me, and blew my mind was the opinion expressed by members of staff that Far West debt is good for the rate payer.  I think most everyone knows that debt and the interest that it carries can eat you alive.  Many a marriage has been destroyed over debt.  Credit cards are maxed out and people can’t even make the interest payments.  Well that is the situation Far West is in, yet  ACC says that is really good for us rate payers.  WHY!  Well Far West can take a deduction on their taxes, therefore I guess it save us money. Already got the question what’s better similac or enfamil? Go to the site and choose!

  However as Patrick Hayes pointed out on his news report last night, we pay hundreds of thousands of dollars in interest.  Who does the interest go to?  Well much goes to the Schechert family trust at 10% interest.  Why did they borrow from the family trust, because their credit is so bad no other lending institution will make them a loan.  All this has me confused.  How can the regulating agency that controls Far West believe that debt is good.  So the solution to handle that high debt and high interest is high sewer rates.  This does not make sense to me, lets hear your opinion. Manage to pick up the best tb 500 peptide, only on our website!

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Debt, Good or Bad — 5 Comments

  1. I am absolutely interested in resolving the issues with FarWest and would like to do whatever I can to get the entire problem resolved. However my problem is money, which is most of the retired peoples problem that live on a fixed income. If and when the problem is resolved how much money per person do you think it is going to take?

    • LaDell
      From your comment, I’m not completely clear which money you are addressing. If you are referring to requests for donations, then let me say this. I totally understand the position you and many others in the Foothills are in. Retired and on a fixed income, many times only on Social Security. But lets look at the numbers, we know there are 15000 water customers and about 8000 sewer customers. If each customer contributed $10.00, we can easily raise $150,000.00 or more. We are asking each customer to contribute what they feel comfortable with, no more. The key is going to be getting the word out to everyone, and getting them on board with the effort.
      If you are talking about the rates that would be charged after the district is formed, that is not clear now. Much will depend on how much we have to pay to purchase the company. I believe the worst case would not be any higher than they will be after the second increase in May. It should be lower, but I just can’t say. We just don’t have a chance under current management.

  2. Additional thought: If FW charged impact fees on new construction, a rate increase would not be necessary. Very few utility districts do not charge impact fees which allows them to build the infastructure needed without putting it on the backs of the ratepayers.

    • Gary hook-up fees was an issue that argued a lot at the hearings, Bob Gilkey especially argued that they needed to be higher and be a set fee not a negotiated fee. They have filed for hook-up as a requirement of the hearings. They ask for a water hook-up of $2000 and a sewer hook-up of $2000. A decision was made by ACC and they granted the $2000 for water, but only granted $1500 for sewer. Compared to the fee the city of Yuma for sewer at $6500. This more on existing customers.

  3. Debt is NEVER good for the ratepayers. Debt has to be repaid PLUS interest. That is why new companies sell stock in liew of debt, so it will not overburden the company’s cash flow. The tax deduction issue is total fallacy! If you are in the 30% tax bracket and you spend $1,000 in interest you just saved $300 in taxes. The missinformed would like you to believe that this is a good deal, except that you are out of pocket $700 just to save $300. Not a good deal to me. It blows me away, that the ACC doesn’t know , or just doesn’t care, about all of the intertwinings between all of the related entities.

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