Max here in beautiful Durango, Colo., just catching up on news from home. I swore this was going to be a few real days off. But then I read that the NLR Chamber of Commerce was recommending that the city take out a mortgage to cushion the coming electric rate shock. Mayor Pat Hays seems somewhat reluctant, with good reason.
Do you put YOUR electric bill on a credit card? Do you finance an electric bill for 30 years? Wait, don't tell me you wish you could. I know, many of you think check cashers provide a useful, fair service, too.
But if you DID finance your light bill for 30 years, have you given any thought to the accumulated carrying charges? UAMS is a helpful illustration for revolving credit, thanks to the recent legislative session, when it said it would much prefer bonds to pay for a $35 million cancer center expansion. This decision, rather than paying cash from the surplus, will cost taxpayers more than triple that $35 million if the bonds run to term. It's a bond underwriter/lawyer payday, but not exactly careful stewardship.
Same thing on the northside. NLR is looking at $79 $41 million wholesale rate increases each of the next three years. Nearly $250 $125 million all told. Finance that for 30 years and you're halfway a quarter of the way to a billion before you pay it back. When the news article says Electric Department "revenues" will pay for the borrowing, make no mistake. That means customers. Here's hoping the mayor stays cool on this one. And that the city's share of a new power plant really proves to be the panacea that's hoped. Otherwise, there's no way around paying the piper, a combination of higher rates and reduced city services most likely. That new Wal-Mart SuperCenter that's coming out Maumelle way will eventually ease some of the pain with a mighty flow of sales tax dollars (unsubsidized by school taxes, it's worth noting).
Back to nature.