The MUD board signed on the line for a $5.8 million bond last night to fund projects they breezily admit could be paid for with cash on hand.
Why borrow? According to Chris Rocco, it’s about "Generational Equity": the idea that because infrastructure lasts for decades, future residents should be forced to help pay for it through long-term debt. The truth is, Rocco’s devotion to "equity" is purely transactional; it's a trendy buzzword used to justify an ulterior motive. But even if we pretend this is a good-faith argument, it is economically hollow.
Debt is for the Indivisible, Not the Inconvenient
Municipal debt has a legitimate, specific purpose: acquiring massive, productive assets you cannot possibly build incrementally.
A mile of water pipe is worthless if it doesn’t connect to a treatment plant. You cannot buy the pipe this year, save up for the plant next year, and generate revenue in the interim. Debt bridges the gap for these indivisible, all-or-nothing capital requirements. But when a board borrows money for projects it can already afford, it isn't financing a necessity. It's just hoarding cash.
The Price System vs. Central Planning
MUDs are natural monopolies, but basic economic principles still apply. True generational equity doesn't require a 25-year bond; it is naturally maintained by the price system.
If we pay cash to upgrade the water system today, that value is capitalized into the local real estate market. The future residents pay their "fair share" by paying a premium to buy your house. The original taxpayers recoup their investment, the new residents pay for the utility they receive, and the transaction is settled perfectly through the private market.
The chief frustration of the “generational equity” crowd is that they don't trust the real estate market to price in the value of their utility projects. But is this a failure of the market or the hubris of government officials?
Rather than let the market function, our elected board has decided what you will buy for the next 25 years. They are also dictating what the next generation will buy, forcing future taxpayers to pay for a decision they never got to vote on, which is a funny way to practice "equity." Another word comes to mind: Central Planning. The idea that the price system can be bypassed and engineered for some perceived social good glitters like gold to every politician’s eye. Remember the old Soviet joke? "Come the revolution, everyone will eat strawberries and cream." — "But I don't like strawberries and cream!" — "Come the revolution, you'll eat strawberries and cream and like it!"
The Disney Vacation Analogy
To strip away the lofty rhetoric, apply this logic to your own household.
Imagine you have plenty of cash in your bank account to buy a new air conditioner. Instead of paying cash, you finance it. Your justification? Generational equity. The AC has a 10-year warranty, so it's only "fair" your future self helps pay for it month by month.
What is the actual result? You bleed unnecessary interest to a bank purely so you don't have to touch your cash pile—perhaps so you can still take that vacation to Disney. Not to discount vacations, but you might as well be honest about your spending priorities.
The board is doing the exact same thing. They are borrowing money to buy the AC and saddling the MUD with interest payments, simply to keep a mountain of taxpayer cash on hand for their own political whims.
That’s not equity. That's greed.