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CUSD Decides Fate of $22-Million Windfall

In one instance, trustees move to refund taxpayers. In another, they consider spending it on a deteriorating school.

The Capistrano Unified school board. Patch file photo.
The Capistrano Unified school board. Patch file photo.

Flush with a $22-million windfall, Capistrano Unified school board members discussed on Wednesday what to do with it.

In one case, they decided to hold onto the money to address a deteriorating San Clemente High, while in another – Las Flores – they decided to reduce taxes for landowners. A third area, Mission Viejo and Aliso Viejo, may see a slight decrease in tax levies but that decision was postponed a few weeks.

The school district recently refinanced the bonds associated with several Community Facilities Districts, or Mello-Roos districts. The end result is CUSD now has on hand more money than anticipated when the districts first formed.

Mello-Roos districts are a way to pass along infrastructure costs, such as roads and schools, to homeowners who buy in new developments. The money can only be used on facilities, and specifically for bringing them up to current safety codes or renovations.

School board members had a philosophical discussion of what to do with the money, which amounts to $17.4 million from Talega residents and $4.8 million for Las Flores residents.

The money raised was for a “discrete” purpose, said board President John Alpay. The district has accomplished those purposes.

“The money, in my opinion, should go back to the taxpayer,” he said.

But Trustee Amy Hanaceck said residents want the district to invest in good schools, which includes facilities as well as strong educational programs.

“I would think that the homeowner would recognize that the biggest return on your money is schools,” she said.

Trustee Jim Reardon said it was “not a Republican or Democrat issue.” Instead of relying on scattered Mello-Roos districts, the district needs to come up with a “sustainable facilities solution,” one that may need the vote of the people.

“We can’t get the public’s attention about taxation when they are being taxed to death,” he said.

shelly August 17, 2013 at 01:00 PM
Dawn, Volunteer more? Currently you are not volunteering at all by your own admission. Personally, if I thought the schools my children were in was a "sinking ship" I would get them out. But I don't. There are thousands of parents who are involved and committed to their children's schools and their education. Volunteer if you want to Dawn and don't if you don't want to. It is not mandatory but your children benefit because they see you involved and committed.
Mission Viejo Mom August 17, 2013 at 01:38 PM
Shelly, if Dawn chooses not to volunteer, that is her choice. Good for you that you don't work and you have the time to do so. Please remember that many of us "middle income" people need two incomes to make a household run so we don't have as much free time as you. And yes, I am involved in my kids school and education even though I rarely set foot on campus.
shelly August 17, 2013 at 03:22 PM
Mission Viejo Mom, Yep, it is a choice to volunteer and contribute. Most people do what they can but it is not mandatory. We are middle income (without the quotes) with 4 kiddos. Both my husband and I volunteer and are involved and that is our choice. "Good for you that you don't work and you have the time to do so." I made the choice to stop working and stay home with my kids. Others make choices that are best for themselves and their family. Most of us do what we can and some don't.
shelly August 17, 2013 at 03:28 PM
Mello roos are put in place to benefit the local schools. I do not see how there can be a 17 million dollar "surplus" when SCHS is in need of repair. The money should go to repair the schools of the area where the mello roos were collected.
fact checker August 17, 2013 at 03:28 PM
Many working parents volunteer. There are lots of opportunities to do so and it doesn't all have to be done during the school day.
Shripathi Kamath August 17, 2013 at 03:51 PM
shelly, I would respectfully submit that you are not thinking this through. Mello Roos does have the stated purpose (one of them, anyway) that you suggest (Thank you Prop 13), but most running for the school board are eventually going to run for other political offices; and in OC, Republicans running for such offices are going to be pilloried or canonized based on the lip-service they pay to taxation. "Taxed to death," "No new taxes" <insert Obama, IRS-ghazi, freedumbs slogan here> will be the lowest bar one has to jump over. ______________________________________________________ Pop quiz: One of the members of the board is going to run for the 73rd district. That member votes with two others on most issues. Yet those two members have endorsed one of her/his rivals. Even as that rival is careless enough to have the endorsements listed on his/her site and misspell it. Think about it. A person of political standing is endorsing you, you misspell the endorser's name—goes to show how much that person will care about other people. But endorsement stands. It'd be like me endorsing Dawn after her continual butchery of my name. Politically there are not enough votes in demanding that Mello Roos funds be properly used for their intended purpose. Who is the slighted CUSD board member and how was his/her vote on this matter?
shelly August 17, 2013 at 04:30 PM
Shripathi, My bad. I thought it was about the kids and not about politics. I keep forgetting.
Capo Parent August 17, 2013 at 08:14 PM
Shelly You seem to like giving other people's money away. Why should Talega fund all the needed repairs at SCHS because they happen to be in a Mello Roos district? You seem to forget that Talega homeowners are paying higher property taxes (because it is new development) AND Mello Roos taxes. As I understand it, Talega is the only part of SC that is in a Mello Roos district. You and others, including Amy Hanacek, have no problem with Talega paying for most if not all of the needed repairs at SCHS because CUSD has spent basically all of its deferred maintenance funds on compensation and benefits, and has failed (miserably) to maintain & repair SCHS. But hey, that's ok, Talega is there to subsidize the needed repairs of SCHS to the benefit of the rest of the students/families that attend SCHS. FYI, La Pata will be open in roughly 2 years, if not sooner, because RMV is coming online at a rapid pace. When it opens, a large chunk of Talega (if not all) will be reassigned to SJHHS due to the close proximity of SJHHS and the overcrowding. So you want Talega Mello Roos payers to solely fund repairs at SCHC even though most will be reassigned from SCHC in roughly 2 years. Of course you do because you're not paying it! By the way, do you and your husband pay Mello Roos? Me thinks the answer is No.
fact checker August 17, 2013 at 08:29 PM
I pay Mello Roos. As a homeowner it benefits me and my home values to have good facilities in my neighborhood. Mello Roos pays for fire stations and other public facilities besides schools. My development would not have those facilities if Mello Roos districts did not exist. How old is Talega? How many developments there are at the end of the 20 year Mello Roos cycle? So Capo Parent perhaps you can answer this question: Will the folks in Ladera be paying for facilities used by those Talega folks (with their Mello Roos taxes)? I am, quite frankly, unsympathetic to folks who insist that they only want their taxes to pay for things that they will benefit from personally. I find this shortsighted and self involved.
shelly August 17, 2013 at 11:17 PM
Capo parent, Mello Roos are supposed to be used for the schools in the area. I believe there was a lawsuit so that the Talega kids would go to SCHS. They can go to any school they want to. People who live in Talega chose to live in Talega. They were not forced to live there. They bought knowing full well that they would have to pay mello roos. I did not design the tax system nor did I have anything to do with Prop. 13. Anyone who lives and has purchased a home in CA knows that they will need to pay taxes on the purchase value of their home. The money collected in mello roos and is designated for schools where the children of the area will be going. The children in Talega have been going to SCHS. There have been kids from Talega who have gone through SCHS and graduated. This school was built before they were born. Other people's taxes paid for this school. This is how the system works.
shelly August 17, 2013 at 11:29 PM
Capo Parent, CUSD has deferred maintenance because we the taxpayers have not provided our school district with enough money to pay for everything. If we did then our budget would not have been cut for the last 5 years. The biggest cuts to our district have been employee compensation. If we want to maintain our children's schools it is our responsibility to pay for it. Other districts have chosen to pass bonds for maintenance. It is our responsibility and we have a choice. But it is not politically popular to suggest this. Some people's only interest is for their own needs and wants. Teachers are a classroom expense by the way. Teachers deserve to be compensated for the job they do. What would a classroom be without teachers? Homeschool.
shelly August 17, 2013 at 11:32 PM
Capo Parent, So yes, the mello roos should go to the schools where the children of Talega have been going and are currently going and one of the schools is SCHS! The children have gone to SCHS since Talega was developed
Capo Parent August 18, 2013 at 01:36 PM
Shelly Maybe you and FC believe you haven't provided enough money to CUSD, that's your prerogative. I and others like me have provided enough money to CUSD. The fact that CUSD has not spent its money wisely is not a reason to sock it to tax payers further. You keep forgetting that CUSD had serious money problems several years before the Great Recession. Remember Fleming's plan to close 3 schools several years before the Great Recession? You & FC also continue to overlook the fact that the Telage Mello Roos (TMR) payers in Talega have done their part. As I understand it, all the Mello Roos bonds for Talega have been issued and CUSD has used or allocated all the bond proceeds. The TMR payers are now paying off the bonds, specifically, the principal, interest and other bond related costs. The extra money comes from a reduction in the interest rate for the bonds already issued. TMR payers are the only ones paying the interest on the bonds, so they should get the benefits of the savings in the form of a rebate or a pay down in the bonds, not CUSD. You & FC are ok with TMR payers, who pay higher property taxes and Mello Roos, having to pay more of the upkeep of SCHS than any other students/families that attend SCHS. If the TMR payers are not going to get the benefit of the savings in the interest they solely pay, then make the families that attend SCHS who do not pay Mello Roos pony up more money for SCHS. Otherwise, TMR payers are solely bearing the burden of fixing up SCHS for the benefit of the rest of SC. Such a scenario was never the intent of Talega Mello Roos.
fact checker August 18, 2013 at 01:53 PM
As I said, no one gets to target their taxes for only things that, seemingly, benefit themselves. Look at the bigger picture and consider how good schools benefit everyone. Keeping score is for sports.
Capo Parent August 18, 2013 at 01:58 PM
FC The Ladera Mello Roos (LMR) payers have also done their part. All the LMR bonds have been issued and used by CUSD. LMR payers are now paying off the principal, interest and other associated costs of the bonds. Due to a reduction in the interest rate paid solely by LMR payers, there will be savings that are rightfully being passed along to the LMR payers. There is no logical reason why TMR payers should not be treated the same. As for Telaga families using schools in Ladera, if that comes to pass, and it appears it will, what's your point? Each community is paying off bonds that were used to mitigate the effect each would have on CUSD. To my understanding, all of Ladera pays Mello Roos and all of Telega pays Mello Roos. Neither Ladera nor Telega is subsidizing the other, because both pay Mello Roos. In contrast, except for Telega, it is my understanding that no other part of SC pays Mello Roos. You and others want to use savings in interest paid solely by TMR payers to fix SC for the benefits of the rest of families/students that attend SCHS.That is unfair, inequitable and plainly wrong. If the TMR payers want to let CUSD use the savings in the interest they solely pay, that's their choice, but CUSD should give them the option to exercise that choice. If not, then it should pass the savings along to the TMR payers like they are doing with the LMR payers.
fact checker August 18, 2013 at 03:18 PM
So should only students whose parents pay Mello Roos benefit from the upgrades? How can that be accomplished? Rebates during a time of financial duress make no sense. And a board member who proposes doing that has political motives no matter who he/she is. What do you think those rebates would be for each individual tax payer? I think a pittance. Use the money where it is needed most.
Penny Arévalo (Editor) August 18, 2013 at 04:49 PM
Mello Roos districts are to provide infrastructure to a new area. The funds can only be spent in very specific ways. This has even more force behind it than even a contract because they are brought about with an election (usually when the developer still owns the land). So a refinancing of the bonds that paid for the outlined projects may bring about a savings at some point in time, but that doesn't mean those savings can be spent just anywhere. At Las Flores, for example, the projects were completed, even if the identified schools are now in a place where they need some repairs. Talega's funds CAN be used at San Clemente High as specified, so that opens a window of opportunity but by no means is it a big window. It's a very specific window, if that makes sense. Hope this helps.
Shripathi Kamath August 18, 2013 at 04:58 PM
Penny Arévalo (Editor) August 18, 2013 at 04:49 PM Talega's funds CAN be used at San Clemente High as specified, so that opens a window of opportunity but by no means is it a big window. _____________________________________________________ What would be an example of a big window? _____________________________________________________ "It's a very specific window, if that makes sense. Hope this helps." __________________________________________________ Immensely. Specifically that it is a very specific window.
Penny Arévalo (Editor) August 18, 2013 at 05:23 PM
It's not a blank check. It may go to major renovations at the high school. It cannot go to other schools in San Clemente outside of the schools serving Talega (for example, Concordia and Las Palmas or Shorecliffs). With SCHS needing $60 million of work, the $17 million will not address one-third of the needs. See http://sanclemente.patch.com/groups/schools/p/school-board-tackles-deteriorating-conditions-at-san-clemente-high
Shripathi Kamath August 18, 2013 at 05:35 PM
Penny Arévalo (Editor) August 18, 2013 at 05:23 PM With SCHS needing $60 million of work, the $17 million will not address one-third of the needs. ____________________________________________________ Which is another way of stating "With SCHS needing $60 million of work, the $17 million will address a much-needed but still insufficient 28 percent of the needs." _____________________________________________________ But enough of the glass is 28 percent full - 72 percent empty metaphors. That sort of math is best reserved for harping that losing 3 days out of 180 in a district is a whopping 1.66% (rounded down) loss of education. _____________________________________________________ Call me cynical (and any other names one mutters under their breath because ToS) but all this indicates to me is that Mr. Alpay is planning a run for another political office in OC after he is termed out from CUSD.
Penny Arévalo (Editor) August 18, 2013 at 05:38 PM
"With SCHS needing $60 million of work, the $17 million will address a much-needed but still insufficient 28 percent of the needs." I'll agree with that phrasing. :-)
Shripathi Kamath August 18, 2013 at 05:40 PM
Darn you Penny! If you agree with me, we will never get to the hallowed ground of 500 comment toaster thread. Which reminds me, WHERE'S MY DARN TOASTER FOR THAT OTHER THREAD? ___________________________________________________ I hereby retract my phrasing!
Penny Arévalo (Editor) August 18, 2013 at 05:40 PM
I agree with your retraction!
fact checker August 18, 2013 at 05:57 PM
If it's legal and SCHS needs the funds, as seems to be the case, then I am in favor of that. It will benefit the Talega students now, right? Why argue about something that may happen when La Pata goes through? Repairs and upgrades are needed now and the funds are available now. Returning a small amount to some tax payers seems shortsighted.
Shripathi Kamath August 18, 2013 at 06:05 PM
fact checker August 18, 2013 at 05:57 PM Returning a small amount to some tax payers seems shortsighted. _____________________________________________________ Nope, it is quintessential long-term thinking. Do I have explain that this is is Orange (red, really) county, and returning taxes, or not being opposed to returning it (best case scenario because then you can legitimately claim that you would have voted one way to one group and another way to another group) is a BIG PLUS when you seek political office? Wait, I already did.
fact checker August 18, 2013 at 06:42 PM
And yet again Shri, exactly.
shelly August 18, 2013 at 08:14 PM
Capo Parent, The Talega kids have gone to SCHS since Talega was developed, they currently go to SCHS and they will still have the choice to go to SCHS because of the lawsuit. Therefore money from Talega's mello roos spent on SCHS benefits Talega kids and their property values. And the current taxes are not covering what we had before and they are not covering the maintenance of our schools so none of us are paying enough!!!
shelly August 18, 2013 at 08:15 PM
And by current taxes I am not speaking of mello roos but taxes everyone pays.
Mission Viejo Mom August 19, 2013 at 03:23 PM
Shri stated: Call me cynical (and any other names one mutters under their breath because ToS) but all this indicates to me is that Mr. Alpay is planning a run for another political office in OC after he is termed out from CUSD. You are absolutely right. That is why Mr. Alpay wants to return this money. However, he probably should recuse himself from a vote on this since he lives in Talega. I noticed Ms. Hatton did that on the vote regarding mello roos in her area. In my opinion, the money definitely should go to SCHS for the needed repairs. The argument that not everyone in SC pays mello roos is not a valid one at all. I live in MV and don't pay mello roos and have seen the benefit of it at Newhart and Capo Valley High School. However, I do pay measure A bonds which are not paid by mello roos households. Those bonds were used to pay for San Juan Hills High School and to repair various schools in the district. I understand there are restrictions on the use of both types of funds, however, I do not understand how the mello roos funds were allowed to be used for the administration building.
Shripathi Kamath August 19, 2013 at 03:37 PM
Mission Viejo Mom August 19, 2013 at 03:23 PM Shri stated: Call me cynical (and any other names one mutters under their breath because ToS) but all this indicates to me is that Mr. Alpay is planning a run for another political office in OC after he is termed out from CUSD. You are absolutely right. ____________________________________________________ Quick, someone call me a paramedic! ____________________________________________________ (Knock knock knock, Penny. Knock knock knock, Penny. Knock knock knock, Penny. Look at what you started, this is not good at all, we will not be getting to that hallowed 500 comment mark at this rate!) ____________________________________________________ "That is why Mr. Alpay wants to return this money. However, he probably should recuse himself from a vote on this since he lives in Talega. I noticed Ms. Hatton did that on the vote regarding mello roos in her area." ____________________________________________________ IIRC, Mr. Alpay did recuse himself from the Talega vote. (http://bit.ly/16hN4s1).

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