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<p class=MsoNormal align=center style='text-align:center'><b><font size=4
color=black face="Times New Roman"><span style='font-size:15.0pt;color:black;
font-weight:bold'>Private Water Contractors in CA Owe Taxpayers $500 million<o:p></o:p></span></font></b></p>
<p class=MsoNormal align=center style='text-align:center'><b><font size=4
color=black face="Times New Roman"><span style='font-size:15.0pt;color:black;
font-weight:bold'><o:p> </o:p></span></font></b></p>
<p class=MsoNormal align=center style='text-align:center'><b><i><font size=4
color=black face="Times New Roman"><span style='font-size:15.0pt;color:black;
font-weight:bold;font-style:italic'>New government audit finds that the bulk of
an interest-free loan from the 1960s is still unpaid by irrigation water
contractors<o:p></o:p></span></font></i></b></p>
<p class=MsoNormal><b><font size=3 color=black face="Times New Roman"><span
style='font-size:12.0pt;color:black;font-weight:bold'><o:p> </o:p></span></font></b></p>
<p class=MsoNormal><st1:State w:st="on"><b><font size=3 color=black
face="Times New Roman"><span style='font-size:12.0pt;color:black;font-weight:
bold'>WASHINGTON</span></font></b></st1:State><b><font color=black><span
style='color:black;font-weight:bold'> – Four large irrigation water
districts in the Central Valley of <st1:State w:st="on"><st1:place w:st="on">California</st1:place></st1:State>
still owe federal taxpayers nearly $500 million for a network of dams and
canals constructed for their benefit in the 1960s, <a
href="http://gao.gov/docsearch/abstract.php?rptno=GAO-08-307R"
title="blocked::http://gao.gov/docsearch/abstract.php?rptno=GAO-08-307R">according
to a new report issued by the non-partisan Government Accountability Office</a>
(GAO). Only 14 percent of capital costs have been repaid.<o:p></o:p></span></font></b></p>
<p class=MsoNormal><b><font size=3 color=black face="Times New Roman"><span
style='font-size:12.0pt;color:black;font-weight:bold'><o:p> </o:p></span></font></b></p>
<p class=MsoNormal><b><font size=3 color=black face="Times New Roman"><span
style='font-size:12.0pt;color:black;font-weight:bold'>“This independent audit
confirms that taxpayers are still owed an awful lot of money by some of the
largest private users of water in the state," said Rep. George Miller
(D-CA), the former chairman of the House Natural Resources Committee and author
of several key water reform laws. Miller and two of his colleagues
requested the GAO report.<o:p></o:p></span></font></b></p>
<p class=MsoNormal><b><font size=3 color=black face="Times New Roman"><span
style='font-size:12.0pt;color:black;font-weight:bold'><o:p> </o:p></span></font></b></p>
<p class=MsoNormal><b><font size=3 color=black face="Times New Roman"><span
style='font-size:12.0pt;color:black;font-weight:bold'>“Taxpayers paid for
these water projects decades ago, taxpayers paid for the cleanup of some of the
projects’ worst environmental consequences over the years, and now the
taxpayers are still waiting to be repaid nearly a half a billion dollars that
they are owed,” Miller added. “The Bush Administration is
responsible now to ensure that the new water contracts for these agribusinesses
are strengthened not only to end the devastation of <st1:State w:st="on"><st1:place
w:st="on">California</st1:place></st1:State>’s fish and wildlife but to
recoup in a timely manner this long-standing debt owed to the taxpayer.”<o:p></o:p></span></font></b></p>
<p class=MsoNormal><b><font size=3 color=black face="Times New Roman"><span
style='font-size:12.0pt;color:black;font-weight:bold'><o:p> </o:p></span></font></b></p>
<p class=MsoNormal><b><font size=3 color=black face="Times New Roman"><span
style='font-size:12.0pt;color:black;font-weight:bold'>The Central Valley
Project (CVP) is the largest federal irrigation system in the nation, and the
beneficiaries of the CVP’s San Luis Unit include some of the most
productive and lucrative farms in the world. The irrigation districts that were
the subject of the report were assessed $523 million by the Bureau of
Reclamation for the construction of the San Luis Unit, which was first
authorized in 1960. <o:p></o:p></span></font></b></p>
<p class=MsoNormal><b><font size=3 color=black face="Times New Roman"><span
style='font-size:12.0pt;color:black;font-weight:bold'><o:p> </o:p></span></font></b></p>
<p class=MsoNormal><b><font size=3 color=black face="Times New Roman"><span
style='font-size:12.0pt;color:black;font-weight:bold'>But due to the heavily
subsidized and forgiving nature of antiquated federal western water policy, the
water districts had repaid to the federal treasury only $74 million of that
$523 million as of September 30, 2005, according to today’s GAO report. <o:p></o:p></span></font></b></p>
<p class=MsoNormal><b><font size=3 color=black face="Times New Roman"><span
style='font-size:12.0pt;color:black;font-weight:bold'><o:p> </o:p></span></font></b></p>
<p class=MsoNormal><b><font size=3 color=black face="Times New Roman"><span
style='font-size:12.0pt;color:black;font-weight:bold'>The approximately 600
agribusinesses that make up the Westlands Water District – the San Luis
Unit district that is often cited as the largest irrigation district in the
world – were assessed an additional $179 million for the construction of
their internal water distribution system. Including the remaining balance on
Westlands’ account, the San Luis Unit contractors still owe the federal
treasury approximately $497 million.<o:p></o:p></span></font></b></p>
<p class=MsoNormal><b><font size=3 color=black face="Times New Roman"><span
style='font-size:12.0pt;color:black;font-weight:bold'><o:p> </o:p></span></font></b></p>
<p class=MsoNormal><b><font size=3 color=black face="Times New Roman"><span
style='font-size:12.0pt;color:black;font-weight:bold'>The report was
commissioned by Congressman Nick Rahall (D-WV), Chairman of the House Natural
Resources Committee, Congresswoman Grace Napolitano (D-CA), Chairwoman of the
Water & Power Subcommittee, and Miller, to help them assess a recent
proposal by the San Luis Unit water districts and the <st1:country-region
w:st="on"><st1:place w:st="on">U.S.</st1:place></st1:country-region> Bureau of
Reclamation. <o:p></o:p></span></font></b></p>
<p class=MsoNormal><b><font size=3 color=black face="Times New Roman"><span
style='font-size:12.0pt;color:black;font-weight:bold'><o:p> </o:p></span></font></b></p>
<p class=MsoNormal><b><font size=3 color=black face="Times New Roman"><span
style='font-size:12.0pt;color:black;font-weight:bold'>That proposal included a
debt-for-cleanup deal, in which the federal government would forgive the water
districts’ debt and provide other benefits, and in exchange the water
districts would commit to cleaning up the salt- and selenium- infused water
that drains from their irrigated agricultural operations. How to manage that
toxic drainwater has been the source of substantial controversy over the life
of the water project: when the water was allowed to accumulate in the Kesterson
National Wildlife Refuge in the 1980s, it caused serious harm to wildlife,
including deaths and deformities in waterfowl. <o:p></o:p></span></font></b></p>
<p class=MsoNormal><b><font size=3 color=black face="Times New Roman"><span
style='font-size:12.0pt;color:black;font-weight:bold'><o:p> </o:p></span></font></b></p>
<p class=MsoNormal><b><font size=3 color=black face="Times New Roman"><span
style='font-size:12.0pt;color:black;font-weight:bold'>To mitigate and clean up
the Kesterson disaster cost the taxpayers $26.6 million, according to the new
report, of which about $19.8 million must be repaid by the Westlands Water
District. Cleaning up the broader regional drainwater problem, as proposed by
the water districts and the Bureau of Reclamation, is projected to be a
significantly greater expense. That problem already has cost taxpayers more
than $100 million in costs of studies for possible remedies.<o:p></o:p></span></font></b></p>
<p class=MsoNormal><b><font size=3 color=black face="Times New Roman"><span
style='font-size:12.0pt;color:black;font-weight:bold'><o:p> </o:p></span></font></b></p>
<p class=MsoNormal><b><font size=3 color=black face="Times New Roman"><span
style='font-size:12.0pt;color:black;font-weight:bold'>The U.S. Bureau of
Reclamation does not require the full repayment of construction costs for water
infrastructure such as the San Luis Unit, nor is the assessment adjusted for
inflation over the life of the repayment period; the amount owed by the four
water contractors amounts to an interest-free loan from the taxpayer that will
not be repaid in full until 2030. <o:p></o:p></span></font></b></p>
<p class=MsoNormal><b><font size=3 color=black face="Times New Roman"><span
style='font-size:12.0pt;color:black;font-weight:bold'><o:p> </o:p></span></font></b></p>
<p class=MsoNormal><b><font size=3 color=black face="Times New Roman"><span
style='font-size:12.0pt;color:black;font-weight:bold'>The total capital cost to
construct the <st1:place w:st="on">Central Valley</st1:place> Project, the
massive federal infrastructure project that moves water for irrigation and
urban use throughout state, was about $3.4 billion, according to the GAO
report, and the San Luis Unit portion of the project had a total capital cost
of $778 million.<o:p></o:p></span></font></b></p>
<p class=MsoNormal><b><font size=3 face="Times New Roman"><span
style='font-size:12.0pt;font-weight:bold'><o:p> </o:p></span></font></b></p>
<p class=MsoNormal><b><font size=3 face="Times New Roman"><span
style='font-size:12.0pt;font-weight:bold'>The report is online at <a
href="http://gao.gov/docsearch/abstract.php?rptno=GAO-08-307R"
title="blocked::http://gao.gov/docsearch/abstract.php?rptno=GAO-08-307R">http://gao.gov/docsearch/abstract.php?rptno=GAO-08-307R</a><o:p></o:p></span></font></b></p>
<p class=MsoNormal><b><font size=3 face="Times New Roman"><span
style='font-size:12.0pt;font-weight:bold'><o:p> </o:p></span></font></b></p>
<p class=MsoNormal><b><font size=3 face="Times New Roman"><span
style='font-size:12.0pt;font-weight:bold'><o:p> </o:p></span></font></b></p>
<p class=MsoAutoSig><st1:PersonName w:st="on"><i><font size=3 color=gray
face="Times New Roman"><span style='font-size:12.0pt;color:gray;font-style:
italic'>Byron Leydecker</span></font></i></st1:PersonName><i><font color=gray><span
style='color:gray;font-style:italic'><o:p></o:p></span></font></i></p>
<p class=MsoAutoSig><i><font size=3 color=gray face="Times New Roman"><span
style='font-size:12.0pt;color:gray;font-style:italic'>Friends of <st1:place
w:st="on">Trinity River</st1:place>, Chair<o:p></o:p></span></font></i></p>
<p class=MsoAutoSig><i><font size=3 color=gray face="Times New Roman"><span
style='font-size:12.0pt;color:gray;font-style:italic'>California Trout, Inc.,
Advisor<o:p></o:p></span></font></i></p>
<p class=MsoAutoSig><st1:address w:st="on"><st1:Street w:st="on"><i><font
size=3 color=gray face="Times New Roman"><span style='font-size:12.0pt;
color:gray;font-style:italic'>PO Box</span></font></i></st1:Street><i><font
color=gray><span style='color:gray;font-style:italic'> 2327</span></font></i></st1:address><i><font
color=gray><span style='color:gray;font-style:italic'><o:p></o:p></span></font></i></p>
<p class=MsoAutoSig><i><font size=3 color=gray face="Times New Roman"><span
lang=ES-EC style='font-size:12.0pt;color:gray;font-style:italic'>Mill Valley,
CA 94942-2327</span></font></i><span lang=ES-EC><o:p></o:p></span></p>
<p class=MsoAutoSig><i><font size=3 color=gray face="Times New Roman"><span
lang=ES-EC style='font-size:12.0pt;color:gray;font-style:italic'>415 383 4810</span></font></i><span
lang=ES-EC><o:p></o:p></span></p>
<p class=MsoAutoSig><i><font size=3 color=gray face="Times New Roman"><span
lang=ES-EC style='font-size:12.0pt;color:gray;font-style:italic'>415 383 9562
fax<o:p></o:p></span></font></i></p>
<p class=MsoAutoSig><i><font size=3 color=blue face="Times New Roman"><span
lang=ES-EC style='font-size:12.0pt;color:blue;font-style:italic'>bwl3@comcast.net<o:p></o:p></span></font></i></p>
<p class=MsoAutoSig><i><font size=3 color=blue face="Times New Roman"><span
lang=ES-EC style='font-size:12.0pt;color:blue;font-style:italic'>bleydecker@stanfordalumni.org</span></font></i><i><span
lang=ES-EC style='font-style:italic'> <font color=gray><span style='color:gray'>(secondary)<o:p></o:p></span></font></span></i></p>
<p class=MsoAutoSig><i><font size=3 color=blue face="Times New Roman"><span
lang=ES-EC style='font-size:12.0pt;color:blue;font-style:italic'>http://www.fotr.org<o:p></o:p></span></font></i></p>
<p class=MsoAutoSig><i><font size=3 color=blue face="Times New Roman"><span
style='font-size:12.0pt;color:blue;font-style:italic'>http://www.caltrout.org<o:p></o:p></span></font></i></p>
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