Demise of Redevelopment Agencies Won't Hurt CUSD for Now

Redevelopment agencies disappeared Feb. 1, but the money they funneled to the Capistrano Unified School District will not.

“There will be no immediate impact to the district from the change in this law,” said Robyn Phillips, interim deputy superintendent of business and support services. “We should see the same revenues.”

However, longer term, the district may receive less of the money now being used to pay off major construction projects around the district, including the , Phillips said.

School district trustees heard a report on the issue at their last board meeting Wednesday.

The school district receives about $2.5 million a year from three now-defunct redevelopment agencies inside its boundaries: Mission Viejo, San Juan Capistrano and San Clemente, Phillips said.

The , which were designed to eliminate blight with new development projects and low- and moderate-income housing. , and redevelopment agencies went the way of the dinosaurs earlier this year.

The cities had agreed that they would pass along the additional tax revenues generated by the projects to the school district as long as the money was spent in their towns, Phillips said.

The same will be true with money that continues to flow, even if the redevelopment agencies no longer exist, Phillips said.

All of the money passed through from the city of San Juan Capistrano goes to help pay off the certificates of participation (COPs) – a financing tool similar to a mortgage but used to fund construction – for the CUSD’s headquarters in San Juan. Phillips said that account is tapped dry each year and does not currently have a balance.

Mission Viejo’s redevelopment funds pay for COPs used to upgrade and (although not the theater now under construction). That account has a current balance of $5.5 million, Phillips said.

So far, the district hasn’t spent any of the redevelopment money from San Clemente.

In 2002, CUSD issued $32 million in COPs financing: 75 percent of it to pay for the headquarters, and the rest for the Mission Viejo schools projects, Phillips said. The remaining principal balance is $22.8 million, to be paid back by 2023, according to a staff report.

San Juan Capistrano’s redevelopment agency was set to expire in 2023, while Mission Viejo’s lifespan would have stretched to 2043, Phillips said.

Now that the cities are unable to undertake any new projects, the money anticipated by the school district eventually may not be as bountiful, Phillips said.

The last time the district took a look at the revenues flowing from the redevelopment agencies was in 2007, she added.

“It would serve the district to update the revenues it can expect over time,” she said.

In addition, the district could come up with a plan for the San Clemente funds, which so far total $250,000 and have not been spent, Phillips said.