Thursday, November 4, 2010

The Tattler Answers The 7 Water Questions The City Council Passed On

At the October 26th City Council meeting City Staff presented the elected officials with 7 questions on how exactly to proceed with the water rate hike. The purpose being, or so it seemed at the time, for the CC-1 to give the worker bees a little direction on how best to push this turkey along. Obviously the restless residents weren't all that into it, so was it really fair to expect the help to carry the entire onus all by themselves? Blame needed to be shared.

But that wasn't to be. While it is true the City Council did push these questions around their plates a little, it seemed pretty obvious they were not happy about the position they'd been put into. It hardly being the style of Mayor Mosca and his 3 amigos to allow themselves to be seen supporting something quite this unpopular. Better instead to wait until there is an opportunity to blame it on someone, or something, else. You know, like the water pipes. Which was the original strategy.

So what the City Council eventually got around to doing was order City Staff to go back, do a little research, and then at an unspecified later date present them with 3 options related to servicing the water bond debt. The real cause for raising water rates, as I am sure you know by now. City Staff then apparently referred this "guidance" to the same consultants that cooked up the original water rate hike. You know, the proposal that sent folks out into the streets gathering signatures to protest what seemed like a water rate increase that made absolutely no logical sense.

However, that was hardly the point. The actual process here being to make absolutely certain that no possible strategy for avoiding responsibility on charging more money for water was not carefully examined. Which is why this effort was passed on from the City Council to the City Staff, and from there to the appropriate consultants. Thereby covering all endangered fannies.

We here at The Tattler, however, engage in no such responsibility avoidance. And since the City Council refused take the bull by the tail and face this situation, we feel that duty now falls upon us. So we will answer City Staff's 7 questions on behalf of the City Council. And in a way that more accurately reflects their real concerns.

Question #1: Should the City comply with the bond obligation to achieve 120% net revenues ratio, achieved after operations, capital expenditures, and debt services? If yes, by which year should the ratio be achieved?

What the City Staff needs to realize is that the only thing the Gang of 4 really cares about is servicing the bond debt. By publicly relegating bond debt behind such things as fixing water pipes and reservoir dams, they put the City Council into the position of appearing to not care very much about water infrastructure maintenance. Which, while true, is not how they want to be perceived. Only when Sierra Madre's bond rating is once again at the "AAA" level can those other matters be considered. And then only by the sale of yet more bonds to raise the necessary capital.

Question #2: Should the Water Utility Fund be self-supporting; meaning should the City General Fund subsidize the Water Utility? If yes, by how much?

The General Fund is going to have to support the Water Utility, at least for a while. With $19 million dollars worth of water bond debt to take care of, there really aren't any other options. Once the rates are hiked and the bond companies and banks assured that their pound of flesh is secured, only then can we raise the needed cash by selling more bonds. Only at that time will we be able to take the burden for paying the Water Company's debts off the shoulders of the General Fund.

Question #3: Over the five year period, what dollar amount, if any, should be set-aside or accumulated toward capital projects?

The City cannot do both. If we service the bond debt, there is no money for capital improvements. And if the City spends the Water Department's dwindling reserves on capital improvements, we'll get into to trouble with the banks holding the bond paper. The only way that both needs are to be met is through the sale of more bonds. Which means we must take care of existing bonds first so that our ratings improve. Then we can sell new bonds and raise some cash. Which is when we can start replacing pipes. Short answer: Not one dime for maintenance until new bond sales are executed.

Question #4: What dollar amount (or percentage of fund reserves to operations) of cash reserves should be available to meet contingencies and emergencies?

The least possible amount.

Question #5: Should the Water Utility have a tiered consumption rate structure? If yes, what is the preferred differential between tiers? What is the preferred number of tiers?

If the tiers are taken out of the water rate increase process, it will change that document to the point of becoming an entirely new proposal. Which means that Proposition 218 would once again be triggered, and God only knows what those people will do with that opportunity back in their pockets. So the tiers have to stay. As far as the technical aspects of the tiers, that is for City Staff to figure out. Or, if they don't want to dirty their hands with it, assign the responsibility to the consultants.

Question #6: Should the Water Utility continue to maintain different meter charges, based upon the size of the meter?

Again, any change to the original proposal changes it to the point where Proposition 218 would come back into play. Which could screw up the whole bond situation. Besides repairing water infrastructure, we will also require bonds for both sewer upgrades and street repaving. If we are ever to initiate new large scale (i.e. profitable) development in this town, we will first need to rebuild all sorts of infrastructure. And to do that we will need to sell at least three new rounds of bonds.

Question #7: Should the Water Utility continue to maintain the same rate structure for all customers? Or, should rates be based upon type of use: I.e. commercial, single-family residential, or agricultural?

Again, the original proposal for the water rate hike must not be changed. We don't need another Prop 218 uprising in this town. Do whatever it takes to make it seem like we are dealing with the concerns of the residents, but do not, under any circumstance, actually initiate anything new. And please, take your time with this. People are much too aware of this situation right now. Better to hold off for several months until things are quiet again. In other words, engage in the process.

There you go. The Sierra Madre Tattler. Here to help.

http://sierramadretattler.blogspot.com

54 comments:

  1. I want to thank the Doyle Council (including the distinguished Mr.John Buchanan, Esq.) for what one fine commedian said, "This is a fine mess you got us into Ollie."

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  2. Reduce city services enough to pay for this puppy out of the General Fund

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  3. Nothing is ever straight forward with this City Council. It's nothing but curve balls. Water pipe repair turned out to be bond debt. Can we call it lying yet?

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  4. Our city council's public policy guideline:
    "If you wish to strengthen a lie, mix a little truth in with it."

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  5. Reduce everything to personalities and gossip. Deflect every serious policy question to personal matters. Change the subject.

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  6. I caught the Planning Commision (appointed..no pay) working their magic on a zone variance to the (HMZ) for a home on Camello high atop a commanding ridge line. They would have none of it. "Conform or forget it" Wow, they stuck to the rules and I hope will prevail, (for no pay)

    Contrast the City Administration (who knows how many bodies?), An oversized Police Dept plus "fleet of vehicles", A Paramedic Unit, a $94,000 Librarian, a retained quarter of a million plus Attorney (to protect the Adm. & CC), not the residents, and enormously expensive Consultants who give us (prototype documents with names, places, dates, and rearranged paragraphs) which resemble that provided to other Cities. And don't forget the disability and pension scams.

    City Council....You want to service existing debt, float new bonds to upgrade streets, sewers, and water infrastructure, and make Sierra Madre the Village it could be. Look no farther than what is being frittered away by payroll and exhorbitant expenses. When will you "get it"?

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  7. The point is the council wants a way to justify raising the water rates and floating new bonds.
    They need now to pay more money for "consultants" to justify for their actions.

    CAN THINGS GET MUCH WORSE, SIERRA MADRE?

    Yes, they can. Just you all wait.

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  8. The point is the city council needs to hire consultants to justify raising the so called water rates for new bonds to float other bonds.

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  9. Can anyone remember a single instance where Mayor Mosca has stated that he wants to raise the water rates, and here are the reasons why?

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  10. From the “OFFICIAL STATEMENT” 2003 Water Bonds
    “No Liability of the Authority to the Bondholders”

    "Except as expressly provided in the Indenture, the Authority will not have any obligation or liability to the Bondholders with respect to the payment when due of the Installments, or with respect to the observance or performance of other agreements, conditions, convents and terms required to be observed or performed by the City under the Installment Sale Agreement or any related documents or with respect to the performance by the Trustee of any duty required to be performed by it under the Indenture."

    Limited Recourse on Default
    "If the City defaults on its obligations to make Installment payments, the Trustee, as assignee of the Authority, has the right to accelerate the Installment Payments. However, in the event of a default and such acceleration, there can be no assurance that the Trustee will have sufficient revenues to pay the accelerated Bonds. In other words if the money is not in the hands of the Trustee, the Trustee can’t pay the money."

    Forecasts.
    …"There can be no assurance that the Water Enterprise will not be adversely affected by future economic conditions, governmental policies or other factors beyond the control of the City."

    The Official Statement goes on to say that there may not be sufficient funds in the future to pay the bond holders.

    The City Council should spend some money to speak to a Bond Attorney (not Sandy Levin) concerning what exactly would happen if the 120% is not maintained. It is possible that nothing would happen. That is a consultant that would be worth paying for.

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  11. Interesting point, 11:05. Turns out the "old pipes" argument for raising water rates was a canard, so maybe the whole "bond covenant" argument is as well?

    Anything to get more of our money without sharing the real reasons.

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  12. So, if the water department fee was the ATM for the city in the past to make up for the General Fund, why can't that be reversed now as per Question #2? Then when, and if, it gets back on track, we can find out what real charges for water would be. If our small water department can't cover it, then maybe we would have to join up with another system--better delivery for less overhead per person. Wouldn't it be a shame to have to hook up with Arcadia--Lucky Baldwin would win all these many years later, after all.

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  13. no more bonds damitNovember 4, 2010 at 12:19 PM

    Walsh made a lulu of a remark in her eagerness to get that 120% - with a proclaimed fiduciary responsibility line. She actually said "I don't care what the percentages are" of raises for thee and me. She doesn't care, as long as they get us up to that 120%.
    If that seems unbelievable to you, you can see it on the playback.

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  14. Thank you Tattler!
    Logic is a beautiful thing.

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  15. Regarding #5, city staff also cannot do anything to the tiers without triggering Prop 218, technical or otherwise. The tiers are set in concrete.

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  16. Is this accurate?
    "If we service the bond debt, there is no money for capital improvements. And if the City spends the Water Department's dwindling reserves on capital improvements, we'll get into to trouble with the banks holding the bond paper. The only way that both needs are to be met is through the sale of more bonds. Which means we must take care of existing bonds first so that our ratings improve. "

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  17. Already hooked up to State Water ProjectNovember 4, 2010 at 1:14 PM

    If the water company was set up as a non profit organization way back when, then how can it afford to pay for bonds? Sounds like extortion to me. But all California cities need new pipe,the last big infrastructure was done after WW2. But where is the pipe residents keep paying for over and over? To do it properly you would have seen mass road ripping and pipe inserting then you would have to foot your share from your water pipe imput as a private property owner to the street connection. The sewer too. What does SGVMWD do for its request for an increase, seen any plans?

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  18. Let's see. We need to raise the water rate to cover the debt from the Bart Doyle 2003 water bonds ... so our bond rates improve ... so we can sell more bonds and get further in debt.

    And people say Joe isn't a genius!

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  19. I hate being trapped like this, and wish there was a way to force the people responsible to work on getting us out of the mess they made.
    Joe was pumping out appreciation for the old councils' decisions to go into bond debt, as in previous councils did this, and they had to, and good thing they did, but it wasn't me, it was them, but it was a good thing.
    Anybody remember why Joe said it was a good thing?

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  20. Hot Enough For Anyone!November 4, 2010 at 1:28 PM

    Joe just wants money to spend. That is what he thinks his job is.
    And he gets very upset when we don't give it to him. Actually doing
    something to save money being a completely alien concept to
    him.

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  21. worked on the recallNovember 4, 2010 at 1:29 PM

    1:25, don't remember the reason he gave, but do remember him simultaneously extricating himself from any blame and showing respect for the councils that were to blame.

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  22. Great gauntlet throw down Sir Eric. Perhaps a gift of new shovels with red bows with little nameplates of each council person, awarded at a council meeting will bring the oppositions solution to better light. (Oh heck shovels are cheap get one for Bruce, Karen, Ms Aguilar, and Ms Levin too).

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  23. I want to see a small child at the podium asking the
    Mayor why the city is creating so much debt for him
    to have to pay.

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  24. The mayor will say:

    Thank you small child so very, very much. You small children so important, so very important in our village, you are the true Americana of the Americana that is Sierra Madre. All Sierra Madreans listen to this small child to preserve our village. And small child, it wasn't me. Thank you! Be sure to come to my office hours, or call or email me anytime. Thank you.

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  25. The small child should then reply: "You gutless lying weasel!"

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  26. It took a real effort to screw up Sierra Madre so badly.
    Small unpretentious town, with its own supply of water.
    Stable population, because it wasn't desirable until everyplace around it got too built up and built out.
    Nice people. Nice trees.
    We did pretty good for a long time.

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  27. The Sierra Madre Tattler: Force Feeding the Facts

    Thanks Crawford.

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  28. There's a class that ought to be taught at Sierra Madre
    City College: "Deconstructing Joe."

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  29. Children in rusty chains of bond debt, Save FluffyNovember 4, 2010 at 3:12 PM

    Did not Joe Mosca himself take this to the schools to influence your children to influence you? I can understand Smokey the Bear, but what little characters and costumes were used to instill a if your mommy and daddy use to much water, blah blah, they probably told them to report you to the water police. Turnabout is fair play, I don't advocate getting down to a council that would stoop so low level. 5th graders are usually getting indoctrinated to civics, it would be good for them to see Mr Mosca answer or not answer their questions. 10 ought to do, at 3 minutes a piece, 30 minutes is much longer in child time.

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  30. How about a speech class taught by Mosca:

    How to Talk a Lot and Say a Little

    with guest lectures from J. Buchanan.

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  31. I think Joe tried to pressure schools to drag kids out to the water walks because attendance was so dismal. I took it to be a sign that their water propaganda wasn't impressing anyone.

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  32. Mosca's speeches are like a loaf of Wonder Bread. Full of air and
    about as nutritious as a cardboard shoebox.

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  33. Better watch it y'all. Someone will say you are against water.

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  34. Water haters out to destroy the wee village

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  35. When one of our more noted Realtors spoke before our city council recently and stood up for our flavorful and delicious water, I felt nothing but pride. People who hate our water also hate our mountains, our playgrounds, our police, our firemen, little doggies, kittens, Christmas and pumpkins.

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  36. Sierra Madreans for Sane Financial PracticesNovember 4, 2010 at 4:03 PM

    As a community we have been put in the position of debt that we cannot get out of.

    I would appreciate an honest discussion of this from the elected council.

    Let the lies of the past, go. No need to apportion blame. But in order to make the best decision, which may include bankruptcy, the true facts of our position need to be known by all.

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  37. Little community partners, and monopoly moneyNovember 4, 2010 at 4:04 PM

    From Sierra Madre School Website Dated Nov 2, 2010, just part of the article.

    SIERRA MADRE SCHOOL WATER CONSERVATION PROJECT

    The San Gabriel Valley Municipal Water District made a grant for $75,000 to develop a water conservation demonstration landscape and California native vegetation project at Sierra Madre School. Pasadena Unified School District is overseeing the project and providing “in-kind” support.

    ... Miss Blumentals Sunday Call
    Also, on Thursday we are having our first Community Partners Outreach Day. We have invited several members of our civic and business community to join us from 8 to 10:30 to meet the administration, staff, parents, and students. They will also have a chance to see one of our famous Spotlight Assemblies! So if you know a community partner you would like to invite, please do!

    Please go to the Sierra Madre School Site and see the 75 thousand dollar plot. Um hum?

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  38. The true facts are that some idiots started spending our money way beyond our means, and it's been a game of ketchup ever since.

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  39. 4:03 Was that Ms webbMartin? She sounded like an airhead, you must have missed one of the tattler commenters, that explained the charcoal filtered water.

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  40. I wonder if it matters to anyone that all of the water Sierra Madre pumps through its meters to the residents is charcoal filtered... the drinking water, the bath water, the water to irrigate the landscape, the water to flush the toilets, the water the SMVFD uses to put out fires, it's all charcoal filtered and stored in those reservoirs, monitored through the state of the art technology that Bruce Inman revealed to one and all at the water walks. All of it filtered, purified, sparkling with clarity at great expense, and pumped through aging pipes to the residents, businesses, fire hydrants, parks, schools, restaurants, gas stations, all over the city. Purified and filtered. $19,000,000 in bond indebtedness for decades into the future to be paid by all of us and those to come after us.

    Let's ask our greatest minds to give us alternatives to filtering and purifying the water that we so cavalierly assume will be there when we turn on the spiggot.

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  41. What is 4:51 saying?
    Have a nice glass of water and stop asking questions about finances and honesty?

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  42. Please, let's get it right! ....it's Smokey Bear...not Smokey the Bear!!!!! Does no one fact check on this blog?

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  43. I believe, 5:17, that was exactly what Ms. Judy Web Podly was saying.

    I wonder if 4:51 isn't saying why are we purifying water to flush the toilet?

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  44. Oh. Good point.
    Sorry. I'm dense about many things - sarcasm being one of them.

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  45. Two questions:
    1--Why are we flushing to toilet with drinnking water?

    2--Have you got your fancy pants water bill?

    .....Shows the three tiers, now all at the same rate--the highest of our neighboring water rate paying communities;

    ... Shows the water meter size you are billed for. My bill says I have a 3/4 inch meter. Public works department during the height of the water walks told me my meter was 5/8th inch--so I will be making a call to City Hall on Monday, to be sure.

    I ooked up the Notice of Public Hearing that the city sent out that included the Proposed Water Rates: current and proposed bi-monthly meter charge was the same for 5/8ths abd 3/4 inch BUT the commodity charge difference for current was $20 more for the larger meter and proposed was $26 more. The combined total difference between 5/8th and 3/4 inch meter is currently: $21 dollars and proposed: $25.50 .

    So, if I had not asked (and if you haven't) I would not have noticed that my meter sized jumped into a higher catagory without
    1--the city notifying me or
    2--acutally changing out my old 5/8th inch meter for a 3/4 in meter.
    Fancy that!

    ... Bill is for Aug. Sept. usage, includes a bar graph for October and I will be trotting out my year ago bill and down to the meter in the morning to see what the reading looks like as of Nov 5.

    Let the Tattler readers know what you find out. Will take a little comparitive research for you to find out what you used a year ago and what your meter size is and if this is looks as odd to the rest of you as it does to me.

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  46. So there Miss BearNovember 4, 2010 at 6:23 PM

    Miss Bear 5:19, Please do not mince bear fur, it is either and or both. I checked and you will see it used both ways. Please choose your fact fights wisely. It is October you should be hibernating, it must be this extremely hot weather that has your bear barometer bursting with the unbearable lightness of bear etiquette breach.

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  47. Excuse me, but it's November, and yes I should be hibernating but I couldn't come up with Hibernation tax, so I have to stay up and watch Planning Commission meetings, those will definitely put me in a deep sleep, see y'all in April!

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  48. Mad Men the Money and the MetersNovember 4, 2010 at 6:51 PM

    Would you believe it is not the size of your meter, it is the calibration of the flow that counts. All test instruments, have to be calibrated. They can be offset or upset to misread the true flow of the medium in this case water by whoever maintains them, if not calibrated regularly.

    My mom hated new meters, the representatives told her that they automatically increase your bill, she refused to accept new meters. So I also imagine it is like a connection, like your old stoves took one connection size and the newer stoves take a newfangled one that is bigger it might be the year of your house as to what meter size. You need to look on your meter find the manufacturer and research their website and how they are being sold to the water companies.

    My water company San Gabriel Valley Water, talk about rusty pipes, I'll save that but what they did is spend a bunch of money for these readers they put underground next to the meter, in order to be able to read from the street like the electric or gas company, they made a great big fuss and hop ti do not to mention extreme pressure on the residents, for these expensive boxes, the boxes lasted about three months and they found the gophers just loved to eat the line connected to the box. That is like a 115 thousand electric toys, and/or a lot more hungry gophers. Of course they were soundly ridiculed by both humans and gopher bears.

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  49. http://www.reuters.com/article/idUSTRE6A35QB20101104

    Rep. Ron Paul is going to press of an audit of the Federal Reserve.

    Ron is the "Kurt Zimmerman" of the Congress!

    Kurt has been asking for an audit of Sierra Madre's finances since the get-go. Many thought he was just being an alarmist. WRONG.
    Kurt, if you're reading this, you were right all along.

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  50. These people at city hall don't care about our town. They don't give a damn.

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  51. Are you sure Kurt would be complemented that he is compared to ron paul? yuuuuuuk...

    joe and john party of no. they should move to texas with oil and gas....

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  52. Oh, Cal Am went thorugh San Marino years ago and swapped out the 3/4 and 5/8 meters to 1" and charged the difference. That amount comes to millions of $$ which was probably used to install the big MWD pipe on Lombardy Road for when the wells run dry. Trouble is, Lake Mead will go dry before that, which is where MWD water comes from.

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  53. John Buchanan's campaign slogan.

    Trust Me, I'm a Liar.

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