The real costs (May 7, 2017)
Re: “Shame On Us,” (4/24/17) … The contributor of this letter faults the calculation of the total (potential) cost of the Town Of Apple Valley’s purchase of Liberty Utilities by adding the $150 million purchase price plus 30 years interest at 12 percent, implying that the interest costs are not relevant. These numbers are exactly as defined in Measure F.
To base your decision on a purchase price of $150 million, without regard to the cost of money ($540 million) is misleading and naive in that the cost of money in this Measure is more that three times the defined purchase price.
The contributor’s comment “That’s just not the way we think about loans and financial obligations” in my opinion, offers a perfect example of why we as a society experience so many bankruptcies and foreclosures. The total of the principal and interest (as well as the term and interest rate) are the key elements determining your periodic and total payments and indeed, the affordability of the transaction.
If you vote in favor of Measure F you are authorizing the town to pay (not to exceed) $690 million for the assets of Liberty Utilities. The debt service alone could well exceed $20 million annually.
Anyone who believes the Town staff can save that much money by taking over the assets of Liberty Utilities must have access to far more data than has been revealed to the general public.
Dean Schepis, Apple Valley
Source: Daily Press