CUSD Trustees to reconsider Talega tax vote after outcry from citizens

Talega residents advocating for a rehearing on whether to return funds from a recent refinancing of the development’s bonds by the Capistrano Unified School District. Photo by Jim Shilander
Talega residents advocating for a rehearing on whether to return funds from a recent refinancing of the development’s bonds by the Capistrano Unified School District. Photo by Jim Shilander

By Jim Shilander

Talega residents seeking redress on what they saw as a mischaracterization of their intentions were given a victory last week as the Capistrano Unified School District Board of Trustees voted to rehear a resolution approved last fall that failed to return funds from a recent refinancing to taxpayers. But long term questions remain to be settled for the development and its schools.

In August, members of the board approved a refinancing of a community finance district, or Mello-Roos fund, for the area, along with a CFD for the Las Flores area of Rancho Santa Margarita. The refinancing would have allowed savings to be returned to taxpayers, or to keep the difference in a facilities fund or to keep half the savings in the fund and return half to the taxpayers.

The board approved returning the funds, about $133 a year, to the Las Flores residents. The board voted to keep Talega CFD funds, pending the result of a district-wide survey assessing the maintenance needs of its schools, including San Clemente High School. The savings to Talega residents was believed to be about $344 per year, on average, per parcel.

Complicating the matter, CUSD Board President John Alpay of San Clemente, a Talega resident, had to recuse himself from the discussion due to his financial interests as a homeowner. During last week’s meeting, Alpay was present for a discussion of the CFD as it related to the funding needed for repairs at San Clemente High School, but recused himself during the consideration of the rehearing.

Capistrano Unified School District. File photo
Capistrano Unified School District. File photo

Talega residents began voicing their displeasure to trustees last month, pointing to the recusal of their district’s representative, as well as a lack of publicity about the vote. Residents complained they only received word on the vote, after the school year began, via discussions with other parents.

One trustee, Jim Reardon of San Juan Capistrano, noted a lack of Talega residents speaking for the fund’s return played a role in his vote to hold onto them in August.

A number of Talega residents also noted remarks by Trustee Amy Hanacek at the August meeting intimating that taxpayers in Talega would be happy to see the funds kept in place for at least a year in order to provide for facilities needs at SCHS.

Resident Laura Ferguson said when residents found out about the vote, she and others began organizing Talegans on a door to door basis, gathering more than 300 petition signatures and more than 400 online signatures.

Realtor Laura Ginn said paying additional taxes in Talega served to make the area less attractive for home purchases. She noted that Talega residents also paid into the district’s general funds as well.

“We already pay the basic tax levy, just like they (the residents of other parts of San Clemente) do,” Ginn said. “In effect, we’re being taxed twice.”

Ginn noted Talega students made up a small percentage of the students at SCHS and were being asked to pay for a roof for students in a city of nearly 70,000. The number of Talega residents protesting the board’s vote only increased at last Wednesday’s meeting, as questions about funding repairs at SCHS with funds from the Talega CFD were addressed.

Susan Hattan, a tax attorney who lives in Talega, said the district should not view the Talega CFD as a handout that it can use for any project.

“This is not about a tax break for Talega residents,” Hattan said. “It’s about responsible spending and following the law. And where there’s a perceived windfall … it’s very easy for government officials to spend other people’s money. The needs and desires of Talega residents do not get trumped by the needs of the district.”

Hattan said she and others felt the district was unreasonably relying on funds from the CFD. The board determined in 2006 Talega taxpayers had paid for the facilities it was supposed to, including Vista del Mar Elementary School, San Juan Hills High School and improvements at San Clemente High School.

Mark Veale, a Talega resident and certified public accountant, said Talega residents were being asked to pay above and beyond their assessments, which he said was up to $6 million. He asked the board to reduce the assessment to the amount needed to service the bonds.

Vista Del Mar was one of two schools built with funds from the Talega Community Finance District. It is the only public school located in the Talega development. Photo by Jim Shilander
Vista Del Mar was one of two schools built with funds from the Talega Community Finance District. It is the only public school located in the Talega development. Photo by Jim Shilander

“We are done with funding facilities, there is no doubt Talega has met its commitment,” Veale said.

Resident Jason Yewell said he and his neighbors understood there was a need at SCHS, calling the campus “neglected,” but the CFD funds could only be used for the construction of new facilities or the acquisition of land for those facilities.

“It is for construction of new facilities to mitigate the needs of new students coming from Talega, not for fixing leaky roofs of existing buildings,” Yewell said. “Maintenance is the responsibility of the general fund.”

Other residents said they felt the district had made the funding “a zero sum game,” allowing the board to vote to reduce the tax burdens elsewhere in the district by relying on Talega residents. Another resident indicated legal action might be sought if the board did not reconsider.

After hearing from residents on two different occasions, the board, minus the recused Alpay, voted 5-0 to rehear the issue in January. The board has two regularly scheduled meetings that month, on January 8 and 22.

What is a CFD?

Community finance districts are a way for districts to pay for new developments.

Because Proposition 13 limits the ability to raise funds with additional property taxes, cities or special districts can place special taxes on new developments (or in older developments) to pay for new or improved facilities. CUSD has used a number of CFDs over the last few decades, as areas from Mission Viejo to Talega were built up. The oldest and largest CFD is located in Mission Viejo. It began in the 1980s.

The district recently came to an agreement with Rancho Mission Viejo’s developers creating a CFD to pay for construction of at least one school for that new development. This allows fund availability districtwide for maintenance and other projects.

At the meeting last week, board members voiced confusion about what, exactly the CFD could pay for. Board Vice President Lynn Hatton, a resident of Mission Viejo, said she paid her Mello-Roos funds as just another fee with her home. Hatton asked that the board hold a workshop with district legal counsel in order to parse out what exactly could be spent.

“No one is trying to take anyone’s money, we’re trying to do what’s best for our schools,” Hatton said.

Reardon noted that an explanation of the CFDs was included in a previous packet given to the trustees.

“The information in that document is very clear,” Reardon said. “This money can’t be spent any way we want, and it’s important we don’t keep putting this decision off.”

Board member Ellen Addonizio said the district couldn’t simply use the excuse that the district’s children needed better facilities to justify taxing Talegans at a higher rate than necessary.

“Obviously it’s about the students, but it needs to be legal and equitable as well,” Addonizio said. “We can’t use that as an excuse all the time to burden people.” Addonizio said the district had “grown up” on CFD monies, and it was time for the district to “unwind” from that.

Board members also said the district needed to look for better methods of financing the whole district, rather than relying on a patchwork of CFDs.

Future Also a Question

A resident holds a sign reading "Talega residents for Fair Taxation" at a recent CUSD Board of Trustees meeting. Photo by Jim Shilander
A resident holds a sign reading “Talega residents for Fair Taxation” at a recent CUSD Board of Trustees meeting. Photo by Jim Shilander

The issue of where Talega students will end up for high school is still not entirely decided. Children from the development currently attend San Clemente High School.

However, upon the completion of the Avenida La Pata/La Pata Avenue extension–connecting San Clemente and San Juan Capistrano–students would be slated to attend San Juan Hills High School, which is located on a completed portion of La Pata in San Juan. Funds from the Talega CFD helped build San Juan Hills, and the fact that Talega students have thus far been unable to access a school that taxpayers in the area paid for remains a sore subject.

Hattan, whose children attended Vista del Mar, said she had been under the impression her children would ultimately attend San Clemente High School until this year, when she was first told Talega students were slated to attend San Juan Hills.

“They better figure it out,” Hattan said. “That’s a side issue, but it’s not going away.”

Alpay agreed at the meeting that the district needs to come to a final resolution about where students from Talega would go.

“We’re relying on Talega money for San Clemente High School, but we don’t know how much there is to take,” Alpay said. “In 18 months, La Pata’s going to go through. Are we going to send the students to San Juan Hills or to San Clemente High School? If we send them to San Clemente, I would want the money refunded from San Juan Hills to go back to the Talega CFD. If we’re going to San Juan Hills, then we don’t need it. We need to figure out the feeder patterns with regard to Talega.”

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