Unfounded Accusations Wastes The Time And Resources Of Water District

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Over the last few months, you have published several letters to the editor and written many stories quoting Sam Schwalm, a resident of the Pine Strawberry community. Most recently, a letter was published which raised issues concerning the integrity of the board of Pine Strawberry Water Improvement District and the competence of our consultants, especially Dan Jackson of Economists.com.

We congratulate Sam on exercising his First Amendment rights. As a public board elected by the property owners of the district, we realize the decisions the board makes and the experts we engage are in the public arena. The public has a constitutional right to comment on the business of the district. The constitutional right allows people to misstate, convolute, or otherwise distort the truth.

Mr. Schwalm has been asked what his qualifications are in rate making and financial analysis projections related to public utilities and acquisition of water companies. He has indicated he has none, other than he is interested in numbers and “truth.”

In contrast, Mr. Jackson of Economist.com, has earned an MBA in finance from the University of Chicago, and has over 22 years experience as a consultant in these matters. Anyone interested in a response to Mr. Schwalm’s “analysis” should go to the district’s Web site at www.pswid.org under “Document Library” and review the response Mr. Jackson has made to the district in his letter of Feb. 10.

The incorrect statements in Mr. Schwalm’s last letter to the editor (with the correct facts following) are:

“Purchasing the water companies would be ‘free’ for the rate payers for the first two years.” The truth: The board has indicated (based on the assumptions of the rate and expense model) that the board believes there will be no required rate increases for the first two years after acquisition. Hardly the same as saying the purchases would be “free.”

“The report uses a favorable purchase price and also uses creative financing by having the first two years be interest-only payments.” The truth: The model is based on appraised values from a nationally recognized professional engineering and appraisal firm and yes, interest-only terms are often used to make upfront cash outflows lower so the acquisition has a better chance to occur.

“The report contains six major errors.” The truth: No major errors that change any conclusion exist. The report clearly states that the model is based on the best information available to the district (Brooke Utilities, Pine Water Company and Strawberry Water Company have failed to provide requested information; therefore available public records have been used).

The report clearly indicates if other information requested from Brooke Utilities becomes available; the model would be modified and updated.

“The board refuses to admit to and correct the errors.” The truth: The report indicates if and when better information is available, any errors based on the incorrect information will be corrected.

“It is not hard to come to the conclusion that the 2008 report has been crafted to produce the conclusion that purchasing the water companies will be ‘free.’” The truth: While Mr. Schwalm is clearly entitled to his opinion, his opinion is incorrect.

The board, its manager and its professional advisers are all creditable people with integrity that think and act on their own in a group environment. Mr. Schwalm’s unfounded accusation is unfairly accusing the PSWID board and its manager and consultants of engaging in some nefarious activity.

Rather than relying upon the facts to sway public opinion, Mr. Schwalm appears to want to propagandize the community through name-calling and being disrespectful of the PSWID boards.

“The PSWID board is showing the ultimate disrespect to the community by not providing honest information to the public.” The truth: Mr. Schwalm is relying on his skewed interpretation of the facts, and is using inflammatory language to arouse the passions and prejudice of the community to generate an emotional reaction to the board’s actions.

The board has always appreciated well thought out questions, suggestions and criticisms, and invites Mr. Schwalm to participate in a public forum where he may present information that is based upon real facts and data. Wasting the time and resources of the district over unfounded accusations is not in the best interest of the district or the community. Our energy and money should go toward acquiring the water systems from an entity that has provided less than adequate service for over 12 years.

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