James Bond, councilmember for the City of Encinitas, serves as chairman of the budget-and-finance committee for the Metropolitan Water District &mdash the multi-member agency responsible for supplying water to nearly 16 million residents throughout Southern California.
San Diego County is one of the six Southern California counties that pays the Metropolitan Water District for its domestic and municipal water.
According to their website, “Metropolitan will carefully manage the rate-setting process to maximize cost certainty and minimize cost increases for our member agencies. Equally important to our financial stability is the prudent and efficient management of Metropolitan resources. With inflationary pressures increasing, creative efforts at cost containment and budget control will become even more important.”
At the September 24th meeting of the regional San Dieguito Water District, one of the agencies that comprise the Metropolitan Water District, Bond updated his fellow members on the Metropolitan Water District’s board meeting that had taken place the day before.
Apparently, some of the “creative efforts” mentioned on Metropolitan’s website to ensure financial stability included playing the stock market: $5 million worth of capital was invested in the Lehman Brothers global investment firm.
Bond explained in a somber tone, “On Friday it was an A-rated investment, and on Monday they were bankrupt. The value of that money, at the current market rate, is 30 percent of the value.”
Bond continued by saying the board of directors for the Metropolitan Water District decided to ignore the policy of promptly selling off bad stocks in hopes things might turn around.
“The plunge was so quick and so great that the value could at least go up to 50 cents on the dollar before we sold it. It would be prudent to see what happens; we aren’t going to lose much more than we already have lost.”
The councilman went on to say that a while back the water district also opted for some $550 million worth of bonds. “Anybody going into the bond market now would need a saliva test because it’s not where you want to be.”
Bond said the water district has got money in the reserves and will subsist on those funds until the market stabilizes.
For a full financial report on the Metropolitan Water District and their financial savvy, go to mwdh2o.com.