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CUSD Decision to Retire Mission Viejo, Aliso Viejo Taxes Early Postponed

The move, which would eliminate the taxes by 2016 instead of 2020, proved controversial among Capistrano Unified trustees.

The performing arts center at Capistrano Valley High School was built largely with tax money from landowners in 87-1 Mello-Roos district. Patch photo credit: Penny Arévalo
The performing arts center at Capistrano Valley High School was built largely with tax money from landowners in 87-1 Mello-Roos district. Patch photo credit: Penny Arévalo

The Capistrano Unified school board had a chance to bring to an end a special tax in Mission Viejo and Aliso Viejo Wednesday night, but put off a decision when some trustees said they don’t want the revenue stream to end just yet.

The school district’s handling of its Mello-Roos districts was the topic of several items Wednesday. The districts are created when a developer is first building out a housing tract. It’s a financing tool that allows the builder to put in roads and schools and other infrastructure, then pass that cost on to future homeowners.

Capo Unified has 10 Mello-Roos districts within its boundaries, the Mission Viejo/Aliso Viejo one – called 87-1 – being the oldest.

CUSD attorney Robert Anslow said when 87-1 was first formed, it had no end date. But the bonds issued to build the infrastructure, about $100 million in all, have been sold and the projects enumerated in the formation documents – well, most of them – have been built. The others are no longer needed.

The last bond retires in 2020, although the district could retire it as soon as 2016, Anslow said.

And that’s exactly what several Mission Viejo residents urged, especially because the money ultimately didn’t serve Mission Viejo students that well.

Barbara Casserly said most of the money was spent in Aliso Viejo. It wasn’t until residents started digging 10 years ago that “horrible” conditions at Newhart Middle School and Capistrano Valley High School were finally addressed.

“A generation of students in Mission Viejo had horrible conditions because students in Aliso Viejo got new schools, she said. “It’s time for it to stop.”

Clark Hampton, deputy superintendent of business, said retiring the bond and ceasing tax collection four years ahead of schedule mean the district forfeiting $13 million.

But Mission Viejo City Councilwoman Cathy Schlicht said district officials shouldn’t be focusing on the perceived loss.

“This needs to end,” she said. “There’s always a need for money, whether it’s a local agency or school board or city council. But that also holds true for the homeowner, especially in this economy.”

Still, some trustees weren’t ready to give up the cash.

“I absolutely agree we have to have an end date,” said Trustee Lynn Hatton, who lives in Mission Viejo. “I think it should be 2020 … So we don’t’ cut off our nose to spite our face.”

She said the schools needed the money to stay “strong.”

And Amy Hanacek said the district should research keeping the money, doing its “due diligence” because the students deserve great things happening in their schools.

Superintendent Joseph Farley, who announced his retirement earlier in the meeting, said the district has been doing its due diligence. The effort to retire 87-1 is also a way to avoid a threat of litigation.

Mission Viejo resident and attorney Wayne Tate, who also urged approval of the early retirement, said after the meeting that the agreement he was helping to craft would help “all the sins” of the past to be “swept up under the rug.”

Among the complaints are spending Mello-Roos money to build the district headquarters in San Juan Capistrano – moreso than any other area – and on schools not named in the district’s foundation papers at levels disproportionate to the number of 87-1 kids who attend, such as the full funding of the new Capo Valley High theater.

“There are serious issues with 87-1 in how it was implemented, and how it was accounted for and how its funds have been spent,” Tate said.

Two trustees were ready to put 87-1 to bed, Jim Reardon and Ellen Addonizio, who both argued it was the only fair thing to do.

Meanwhile, John Alpay, who was voted in for his second term as president Wednesday, said he didn’t know what he wanted to do. He questioned why the district was negotiating with Tate and he also was unhappy about how the board handled his own Mello-Roos district in Talega, not refunding residents there $17 million in savings achieved with a recent refinancing of the bonds.

With Trustee Anna Bryson absent, the board delayed the vote on what to do with 87-1 until all trustees are present, to avoid a tie.

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