09 March 2010

Water is money is politics

Someone forwarded this to me; it's quoted verbatim below, with some formatting. It's a good example of how water and money are related. Note that the water may not be used to generate additional jobs.

From: Mark M. Borba
Sent: Friday, March 05, 2010 10:32 AM
To: 'Thomas W. Birmingham, Esq.';'zzCardoza, Dennis'; Jim Costa'
Cc: 'Sarah Woolf'; 'Jean Sagouspe (E-mail)'; 'John Harris'; 'david e wood; 'don devine'; 'DonP'; 'j flores'; 'John Diener'; 'Stuart Woolf'; 'Jason Peltier'
Subject: THANK YOU! WWD allocation announcement impacts

Jim, Dennis & Tom:

Thought I'd share my rough calculation of the impact of the (30% + 8-10%) = 38-40% allocation announcement now anticipated (thanks to all of your tireless efforts) from the Bureau on March 15th:

It was a $140,000,000 phone call!.....adding an average of $312/ac to the "margins" of every grower's budget in the District:
  1. (Increase by 35%) = 420,000 AF X $300/af (ie. $465-vs-$165; Supplemental -vs- O&M)
  2. (Total 40%) = 480,000 AF X $30/af (ie. Est.reduced O&M/af)
  3. $140,000,000 over 450,000 acres = $311/acre
How growers elect to "spend" that is anybody's guess:
  1. Plant more acres (Cotton?)
  2. Substitute for Supplemental water (no acreage change; lower input costs; shift to capital spending?)
  3. Substitute for Well Water (no acreage change; lower input costs; add margin to financing package?)
  4. "blend" all water costs; farm more acres (NOTE: +35% = 0.8925 AF/acre)
Any grower talking to a lender about 2010 financing not only shows this increase in margin, but can now "show me the water", which has become the bankers lament...and a prerequisite to getting crop financing.

Thanks to Cong. Costa and Cardoza for not only pushing for this accelerated announcement in the increased water supply, but for insisting that the allocations (both the 30% and the addn'l 8-10%) be delivered at "Contract Rates".

This is HUGE...combined = $140,000,000!

3 comments:

Mister Kurtz said...

David, I think it would be courteous to block out the email addys of the recipients (the names are informative) because of spammers, harassment idiots, etc.

james rickert said...

Ditto to above comment.

David Zetland said...

Done. (Good point; I knew that the email was in circulation about forgot about spammers).