Talega's Money Baggers
Andrea Ewell stood in front of the Capistrano Unified School District (CUSD) board of trustees during an April meeting wearing a hot-pink T-shirt, her straight blond hair framing a passionate stare. She complained to the seven-member panel about how her daughter's math class at Vista Del Mar Elementary School in San Clemente was packed with 43 students, leaving some children to stand in the back while working on class assignments. Her education, the mother insisted, has suffered due to overcrowding.
"My daughter comes home upset because all the teacher does is hand out a worksheet at the beginning of class, and then collects it at the end of class," Ewell proclaimed. "How is that teaching?"
However, that wasn't the worst menace decried that night by Ewell and her fellow residents of Talega, the upper-crust neighborhood in the eastern hills of San Clemente. After she finished, seven others, including attorneys and self-proclaimed financial experts, insisted they have for years been overpaying their Mello-Roos taxes, the special levies put on new communities that require citizens to cover the pricy costs of building new roads, schools, parks and infrastructure in an undeveloped area.
The group requested $30 million in tax savings—including a $9.5 million cash refund from years of back taxes.
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"I think it is highway robbery," said Ewell, referring to the fees. Another resident warned the trustees there is "a huge ground swell of Talega residents who are thinking about putting their kids in private schools," which could cost CUSD "a lot of money."
Fellow Talegan Laura Ferguson said her group, Talega Residents for Fair Taxation, won't desist until the $30 million is accounted for. They weren't satisfied that CUSD had already saved $30 million through refinancing when the board voted to lower the tax rate by 12 percent to its 2006 level during the meeting or that the length of the Mello-Roos period had recently been shortened by seven years. Despite the savings, they feel they are legally entitled to CUSD's Mello-Roos funds.
"It is our issue that we cannot let go of," said Ferguson. "Law requires that the Mello-Roos refinance savings be passed on to us if all our buildings have been completed."
The irony, of course, is that the special tax Ferguson and her neighbors so hate is the lifeblood Talega needs to alleviate the very problems Ewell originally decried.
Talega is a master-planned community that started construction in 1999, making it San Clemente's youngest 'burb. The 9,000-resident neighborhood is home to everything you expect in South County: brand-new youth sports centers, private golf courses, well-manicured gated communities, a private day spa. Unlike most street, city and neighborhood names relying on nonsense Spanish, Talega lives up to its moniker; it translates as "moneybag."
Far from the beach-bum sensibilities of the Spanish Village By the Sea, Talega has more of a Stepford feel. But despite trying to think of itself as a city within a city (with the dividing line being the 5 freeway), Talega still has to rely on the rest of San Clemente for such basic needs as utilities and public education. And with property taxes forever frozen by Proposition 13, the neighborhood's Mello-Roos funds have proven crucial to a school district burdened by Talegans.
CUSD Deputy Superintendent Clark Hampton sent the Weekly a list of projects that could utilize these funds, including transportation, furniture, land and classrooms—such as the one Ewell's daughter so desperately needs. But the biggest project right now is San Clemente High School, which many Talega teens attend. The 50-year-old school has a crumbling roof and a series of other improvements that will cost $6.15 million, according to consultants WLC Architects. "Once funding is available, schools in dire need of facilities upgrades, San Clemente High School being a prominent example, will receive the extra attention they need and deserve," CUSD trustee president John Alpay told the Dana Point Times in February.
But it seems the angry Talegans may have the legal upper hand to block funding. According to a 2006 CUSD resolution, "The board has determined that it has now funded all projects intended to be funded with bond proceeds," which Ferguson argues means all the roads, schools and parks have been built in accordance with the initial Mello-Roos agreement, so tax savings should be passed on to residents. She understands the Mello-Roos fees can go to future projects, but she thinks those fees should not come disproportionately from Talega. "Taxpayers everywhere are overtaxed," said Ferguson. "Everybody wants their tax money back."
CUSD has not accepted these terms quite yet. "It was the intent in the [Mello-Roos agreement] for these funds to be used for authorized facilities," said Hampton in an email to the Weekly. "The board has requested staff to provide facilities needs in each [Mello-Roos] area that would fall under authorized uses."
Tax quarrels are old hat for CUSD. In 2005, the district drew barbs from Mello-Roos residents when its new headquarters, dubbed the Taj Mahal by critics, was largely funded with such fees. Many residents felt the building was overly lavish, especially considering some local schools were dilapidated. But unlike that incident, in which the school district completed its project despite public outcry, the Talegans are carping enough to influence CUSD. Trustee president Alpay (who represents Talega) recused himself during discussion, citing a conflict of interest, but trustee Ellen Addonizio sided with the Talegans, proclaiming CUSD is "keeping more than they need via a disproportionate fund." She requested a motion to have excess Mello-Roos taxes go directly to paying down the bond to eliminate Talega's fees quicker than required. The motion failed.
Trustee Amy Hanacek voted against Addonizio's motion, but she said of the issue, "It is our responsibility to see that all students are educated in the very best manner and environment possible, and that is why this district must explore other funding options for our facilities."
Dana Point resident Gail Benda was the sole person to speak out against the Talegans during public comments. She called it "amazing" that CUSD was able to shorten the length and tax percentage of the Mello-Roos bond while still maintaining fiscal responsibility, and she said she believed that by using the Mello-Roos funds on facilities, the board could free up more money in the general fund, allowing projects outside the parameters of the agreement to be completed.
"People buying homes in Mello-Roos areas know what they are going into," said Benda. "I think it is inappropriate to request tax money back. I have never heard of any school district giving refunds."
CUSD will vote again in August to decide how to use the excess taxes. Talegans will then get another opportunity to request their refund, moneybags in tow.
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