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Warning to Ratepayers a False Alarm

A flier from the Yorba Linda Water District says state action could force a record 9% rate increase. That couldn't happen, but the district may up the rates for its own reasons -- and by more than 9%.

September 02, 2003|David Haldane | Times Staff Writer

The mailing the Yorba Linda Water District sent to 22,000 customers was succinct:

"State proposes to confiscate $875,000 of your property tax revenue," proclaimed the flier, which went on to say that the loss would probably lead to a rate increase of nearly 9%, the largest in the district's history.

Trouble is, state officials say Yorba Linda won't be affected by pending legislation that would divert local property tax revenue to ease California's budget woes.

But rather than back off, district officials now say that the rate increase might still be necessary, but for reasons having nothing to do with Sacramento.

"It could be higher than 9%," said Michael Payne, the district's assistant general manager, saying the district needs a $7-million reservoir renovation and new $3-million administration building. "I don't have that number."

News of the misleading mailer has raised some eyebrows, including those of at least one Yorba Linda city councilman. "I don't think that's very fair to do," Michael Duvall said. "I don't approve of stuff like that. They ought to have some better information before they decide to do something. I sure as heck wouldn't get into that kind of political stupidity."

Payne says the district acted on the best information it had when the flier went out in mid-July. "There were rumors that it was very possible that the state of California would confiscate our share of the property tax," he said. "Our main goal was to let our customers know that there were talks at different stages of the budget process [to the effect] that we could lose [that money]. We felt that our customers needed to know. We were just trying to be proactive in protecting the community's money."

Indeed, there is a bill, SB 407, before the Legislature that would repeal 36 water districts' exemptions from having local property tax revenue diverted to other purposes. Such revenue makes up a large part of the districts' budgets. Lobbyists for the Assn. of California Water Agencies -- representing 470 water agencies statewide, including Yorba Linda -- have opposed the bill, calling it a money grab by the financially strapped state that would hurt the districts.

Yorba Linda, however, is not on the list of targeted agencies, nor is any other Orange County water district.

A spokesman for the bill's primary sponsor, Sen. Tom Torlakson (D-Antioch), said the Senate Local Government Committee, which Torlakson heads, first published the names of the 36 districts on the list in April. The Assn. of California Water Agencies got the list in May and immediately sent copies to all the districts affected. And in June, spokeswoman Jennifer Persike said, the association published the list in its newsletter, which all member districts receive.

Asked about the list last week, Payne said it was the first he'd heard of it. "All I can say is that we do get some of the [association's] news articles, but I'm not aware of any list," he said. "Until I see it, I can't comment on it. Sometimes we get information pretty quickly, and sometimes we don't."

He said it would be up to the agency's board of directors to decide whether to publish an "update" correcting the impression that Yorba Linda would be affected by SB 407.

Regarding the possible rate increase for internal reasons, Payne said, the board will spend September and October "reviewing all of our costs and what the water rates should be" before making a decision. "What we're trying to do is put some dollar amounts on it right now," he said, "but the final numbers will be determined later."

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