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BILL WILL COST EBMUD WATER USERS $11 MILLION IN FIRST YEAR

 BILL WILL COST EBMUD WATER USERS $11 MILLION IN FIRST YEAR
 OAKLAND, Calif., March 27 /PRNewswire/ -- A bill slated for approval by the California Legislature Monday (March 30) will cost East Bay Municipal Utility District water users approximately $11 million in the first year alone.
 By transferring EBMUD's current property tax revenues to the state's school district, Assembly Bill 3214 by Assemblyman Phil Isenberg, D-Sacramento, would strip the district of an important revenue source and could require an immediate water rate increase of more than 10 percent. In addition, EBMUD's Wastewater Department would lose $1.9 million, possibly adding 6 percent to wastewater rates to recoup the loss.
 The concept, first proposed by Republican Gov. Pete Wilson, is designed to support school districts with funds from special districts instead of from the state general fund. Other bills are also pending which could transfer onto special districts additional mandatory fees for services currently paid from the general fund.
 EBMUD Board President Nancy J. Nadel restated EBMUD's opposition to the bills, saying they are "regressive, and simply shift the state tax burden down to special districts. The funds the District receives from property tax are dedicated to maintenance and operation of water- system capacity for firefighting. At a time when we are looking for additional funds for these purposes, we will be hard hit by the state's proposed actions." Property tax received by the Wastewater Department is used to defray costs associated with the treatment of heavy stormwater flows that infiltrate the sewage system.
 The Isenberg legislation purportedly is to help finance education. Nadel said, however, "As I understand it, there will be no net increase to schools with the money taken from the special districts. If the result were to be more money for the schools, it might make more sense. EBMUD already is facing serious budgetary cuts, revenue shortfalls and rate considerations in May, and the state's actions will unfairly worsen our fiscal position."
 In a last-minute move, state legislators have accelerated the hearings on these bills from April 7 to March 30, giving special districts such as EBMUD little time to respond to the proposals. Gov. Wilson is expected to sign the legislation as soon as it is approved.
 -0- 3/27/92
 /CONTACT: Gayle Montgomery of EBMUD, 510-287-0141, or 510-689-2327 (home)/ CO: East Bay Municipal Utility District ST: California IN: SU: LEG


RM -- SF012 -- 2560 03/27/92 17:45 EST
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Publication:PR Newswire
Date:Mar 27, 1992
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