Profits are essential (January 10, 2017)
Letter writer Bill McDaniel mushes together a bunch of non sequiturs on the backs of articles by that august source of fake news, The New York Times, paying scant heed to the facts (
Water and greed, Daily Press, January 9, 2017).
The gist of McDaniel’s screed seems to be that Liberty Utilities shouldn’t make a profit on monies it invests in maintaining and expanding our water system. He complains that regular businesses don’t get the same rate of return as Liberty Utilities, failing to mention that before Liberty Utilities qualified for any profit it had to pony up hundreds of millions of dollars. This puts its return on investment (ROI) in 144th place out of 186 businesses on the Yahoo Business Industry Summary. Top of the list? Hospitals and auto parts stores. Apple Valley mayor Scott Nassif owns auto parts stores, and apparently they’ve helped make him one of the richest persons in town, with eight times the ROI of a water utility, but with only one-fifth the debt-to-equity ratio (meaning he spends a lot less and makes a lot more). Yet McDaniels supports Nassif’s hostile takeover bid for Liberty Utilities.
He also falsely claims that Liberty Utilities are greedy investment bankers. Some people’s kids.
The reason it is vital for private water companies to make a profit is to provide incentive for continued investment in infrastructure. In Apple Valley, we have a pretty darned good infrastructure, thanks in part to Liberty Utilities, which stands ready to make further investments to replace old mains, etc. Compare that to the government-run Los Angeles DWP, which is a billion dollars behind in infrastructure maintenance.
Add to that the fact that the Apple Valley Town Council consistently mismanages funds and fails to maintain existing facilities.
As important as water is to life, we want the grown-ups at Liberty Utilities running our water system, not the feckless Town government.
— Greg Raven is Co-Chair of Apple Valley Citizens for Government Accountability, and is concerned about quality of life issues.
Published: Daily Press, January 16, 2017