Joan Rutschow Addressing The MID Board of Directors
By Joan Rutschow of the Stanislaus Taxpayers Association
Good morning, MID Board and ratepayers and voters. I would like to address the water contract.
The water sale contract puts San Francisco in 1st position ahead of Modesto residents and farmers.
MID would have no “out” on the contract for 50 years unless San Francisco defaults. San Francisco can terminate the deal in any year by deciding not to allocate funds. Very simply, the contract ties up our water for 50 years, giving San Francisco priority over Modesto. San Francisco would be entitled to the full contract amount even if MID cuts deliveries to Modesto and our farmers due to drought or any other unforseen reason.
Bee Article (6-16-12), “San Francisco cannot agree to a water sale contract that gives preference to Modesto!” MID is agreeing to sell water we might not have! Suggesting that we have excess water to sell, MID management has increased the risks that we will face onerous bypass flow regulations under our new FERC license and jeopardize our ability to meet local needs. San Francisco understands this and can terminate the agreement if they cannot live with the bypass requirements. There is no similar right to terminate by MID!!! MID will be solely responsible for all costs, compliance with all laws, agreements with all third parties. The agreement shifts all risk, liability and compliance with laws onto the MID ratepayer. This entire contract stinks to high heaven!
Question – what caused this gigantic mess? A long list of poor policies and poor decisions by management and directors! Let me count the ways:
1. $1.3 billion debt (Editorial in Modesto Bee, 6-6-12 – Ed Bearden)
2. Phase 2 treatment plant failures
3. Significant deterioration of MID’s balance sheet during past ten years (Editorial in Modesto Bee, 5-17-12, Jeff Burda – unfunded pension obligations of $60 million (2010), unfunded health care obligations – $66 million)
4. Unprecedented increase in electric rates, reversing our competitive advantage for job creation
5. Recent settlement of the biomass lawsuit for $1.2 million
MID management has put the rate payers and farmers into a deep financial hole. Unfortunately, MID is willing to sacrifice our economic lives for its immediate financial needs.
Selling our water is NOT a good idea. It is a disaster. It violates Modesto’s contract with MID from 2005 to supply Modesto with 30 – 36 million gallons per day of treated Tuolumne River water. MID is trying to break that contract.
Yes to food, yes to jobs, yes to life, because water = food = jobs = life itself.
NO to selling our precious resource (our water) to San Francisco!