Illustration by James McHugh.
Illustration by James McHugh.

Desperate Homeowners

Bravo, Bravo TV. In just two programming seasons, your Real Housewives of Orange County deluded the American public into believing that the privileged and pampered lives of Coto de Caza's denizens represent all of OC. Which is ironic, as the 13,000 residents of the 8-square-mile tract of unincorporated real estate have, since the place's founding in 1970, done everything in their power to separate themselves from the rest of us. Just getting into Coto requires one of those nifty in-car transponders that automatically opens the gates.

Some Coto residents have re-defined the term "outsider" to include not just everyone outside the gates, but also Coto residents who aren't dues-paying members of the community's largest homeowners group: the CZ Master Association. These deadbeats, association members say, ride their horses on CZ-funded trails, enroll their kids in sports leagues that tear up the CZ-funded Sports Park and benefit from CZ-contracted security services—all while contributing a fraction of what CZ members pay every month in association dues.

"We've just experienced two increases in dues, two years in a row," says Joseph Morabito, a former CZ Master Association board member and perhaps the current board's biggest critic. "If this were Santa Ana, where people couldn't afford to pay for their services, believe me, I wouldn't be complaining. But these are wealthy people—they can afford to pay."

He's talking about the residents of the Los Ranchos Estates and the Village, the oldest and arguably wealthiest of Coto's opulent subdivisions. Consisting of about 475 homes, the Estates and the Village were grandfathered into the formation of Coto de Caza and thus avoided falling under the umbrella of the 3,474-home CZ Master Association.

Also, while only Coto residents (Estates and Village residents included) have access to the horse trails and security services, children from the nearby communities of Rancho Santa Margarita and Las Flores also play in the Sports Park. The disaffected CZ residents consider them deadbeats, too.

"About 50 percent of the kids in the Coto sports leagues do not live in Coto," Morabito says. "We pay about $300,000 per year to maintain those fields, while we probably charge the sports teams about $12,000 per year. We should be charging user fees so we can bring our dues down to a base amount. All I'm arguing for is fairness."

Morabito and others are also furious with the CZ board for not asking the county to help defray the burden. Since so many "outsider" kids play on Coto fields, they reason, the CZ Master Association is essentially subsidizing the county to not build more public parks.

Anger among some Coto residents has risen to just below the boiling point. Preston W. Walrath, a commercial-real-estate broker and one of Coto's 45 delegates to the board, says he's considering starting a recall petition against board member Jerry Mezger.

"There should be fees tied to people not included in the Master Association," says Walrath, 63. "I didn't realize it was to the extent that it is until this past election, when all this stuff started coming out about user fees and the board's inability to respond to it."

In May's CZ board election, Vince Hylka, the candidate considered a potential reformer, received more votes than the other four candidates combined. But re-elected to the board were Mezger and Bob Varo, who, during their four years in office, have wielded so much influence that residents refer to the board as simply "Varo/Mezger." Critics such as Morabito and Walrath accuse the pair of mismanaging CZ's finances and taking a dismissive attitude toward calls for change.

Anger toward the pair erupted three years ago when the board, with Varo as president, voted to end its contract with the CHP to patrol Coto's streets. Varo told a reporter from The Orange County Register that the CHP wasn't "supplying the services it promised."

Whatever the reason, the result was predictable: Traffic accidents skyrocketed. In December 2006, after 16-year-old Coto resident Rianna Woolsey was killed in a high-speed accident on Coto de Caza Drive, the board voted to bring the CHP back.

Varo declined a request for comment for this story. Mezger, by e-mail, fiercely defended the board's policies.

"This whole topic is a dead end," he states. "The founding documents of Coto de Caza spell out who is responsible for what amenities, and right or wrong, fair or not, CZ is responsible for its own neighborhood streets, the major street arteries in Coto, the gates and for the trails within CZ, regardless of who uses them. CZ's board has been advised (for many years) that CZ does not have the legal basis to start charging fees to non-CZ members for the street, gate, or trail use. End of story."

Messages left with the Estates' and Village's property-management firm—Progressive Community Management—seeking comment for this story were not returned.

Disgruntled CZ members, though, have plenty to say, including Ed Caruso, whom Mezger kicked out of a board meeting last year, saying Caruso wasn't a Coto resident.

"If the board members only used their heads and had no personal agendas to take care of first, they could see where they are going is wrong," says the 72-year-old security consultant, who splits his time between working in Nevada and his daughter's home in Coto. "But no, they refuse to look at anything that is not their idea and on their agenda. Charging outsiders more—not on their agenda. Mr. Varo and Mr. Mezger manage by intimidation and dictatorship. They would make Stalin and Hitler look like angels."


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