Schools

CUSD Rental Income to No Longer Pay for Salaries

Capo Unified will redirect lease payments from businesses sharing space at its headquarters.

When administrators planned Capistrano Unified’s new headquarters in San Juan Capistrano – which critics ridiculed as a “Taj Mahal” – they promised to lease out some of the space and give the cash to local schools for modernization.

But it’s unclear if the money ever made it there. For years, it's been going into the district's general fund, which pays for employee salaries and other items.

Recently, the school board decided the rental income will now go to paying down the debt for constructing the headquarters.

Find out what's happening in San Juan Capistranowith free, real-time updates from Patch.

So far, the district has collected $3,549,104 in rent, according to Marcus Walton, the district’s chief spokesman. The figure includes revenues estimated for this year.

The leases are expected to generate another $5.1 million between 2013 and 2025, according to a staff report.

Find out what's happening in San Juan Capistranowith free, real-time updates from Patch.

The district now leases out one-fifth of the complex’s 129,000 square feet to various tenants, he said.

In May 2007, short-lived superintendent Dennis Smith announced in a weekly update to parents that income from the leases would be poured back into local school facility needs:

The plan calls for leasing space to generate revenue, which would then be directed to schools in Mission Viejo and San Juan Capistrano that are at least 25 years old, for facility needs as determined by each school. According to the plan, 7 elementary schools would receive $25,000 per year; 2 middle schools would receive $60,000 per year; and one high school would receive $125,000 per year for facilities enhancements.

Instead, since 2008-09, that income has been diverted to the district’s general fund, which primarily pays for employee salaries, but also other expenses, such as books. Once the money is in the general fund, there’s no way to specifically track where it is spent, Walton said.

As for which schools would have benefited from the former superintendent’s plans, Walton could find no official vote on the matter but said, “If I were to guess, [Capistrano Valley High School] is the high school being referenced." At the time, San Juan Hills High was brand new and the only other possible high school would be Junipero Serra High School in San Juan Capistrano.

Last week, the school board looked at how some homeowners throughout the district have been paying down the headquarters’ construction debt via their Mello-Roos taxes.

An earlier look at the issue found that some residents, primarily homeowners in Mission Viejo and Aliso Viejo, had been paying the lion’s share of construction and debt reduction costs. 

CUSD staff asked the school board to even out the contributions, which would take more money from some areas, such as San Clemente and Coto de Caza, and put it into the pots for Mission Viejo and Aliso Viejo school needs. That way, every homeowner would be paying about the same for CUSD’s headquarters, about $454 a household after factoring in revenue from the office leases.

When asked how the contributions got out of whack in the first place, Clark Hampton, deputy superintendent of business services, said district officials previously made “arbitrary" decisions on which homeowner group to tap.

Trustee Jim Reardon said he was thankful staff found a way to offset some of the cost to homeowners for paying down the debt and to even out the pain.

Mission Viejo and Aliso Viejo homeowners “made a huge contribution to this building,” he said. “There is an obligation to correcting that and moving forward.”

Trustee John Alpay said he was troubled by the move because San Clemente homeowners already helped build a high school -- San Juan Hills -- that their children don't attend, but ultimately he voted for it. In the future, Talega residents may go to San Juan Hills after La Pata Avenue is punched through.


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