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Talega Homeowners Get $17 Mil Tax Break

And they might be eligible for more because Capo Unified may have over-billed them since 2006, trustees say.

Talega in San Clemente. Residents there will see their Mello-Roos taxes reduced by $314 a year on overage. Patch photo credit: Zac Arevalo.
Talega in San Clemente. Residents there will see their Mello-Roos taxes reduced by $314 a year on overage. Patch photo credit: Zac Arevalo.

Some Talega residents will receive the tax relief they have for months said they deserve, shrinking their annual Mello-Roos levy by $314 – on average – per year.

And they may be eligible for more.

The Capistrano Unified school board on Wednesday reversed a decision trustees made in August to hold onto $17 million in savings achieved with a recent bond refinancing. Originally, trustees thought they might take the windfall and spend it on much-needed repairs at San Clemente High School.

When Talega homeowners caught wind, a movement was born. They’ve been researching, collecting signatures and lobbying ever since.

Residents greeted the school board’s 6-0 vote Wednesday to pass the savings back to the taxpayers with applause, but there’s still more work to be done, they told trustees. That’s because in their research, they dug up a resolution following a previous refinancing in 2006 which said those savings must be returned to the taxpayers.

But the assessments in Talega Community Facilities District 90-2 never went down.

“For reasons unknown, it was not implemented and never done,” said Trustee Anna Bryson.

The 2006 refinancing resulted in a $4.7 million savings, according to a Power Point presentation shown Wednesday. If the numbers hold true, that means the district has been overbilling Talega landowners by $1.2 million in the intervening years, said Trustee Jim Reardon.

But the issue may not be that simple, said Clark Hampton, deputy superintendent of business services. Unlike the recent refinancing, which merely got a better interest rate for the outstanding bond, the 2006 financing actually decreased the bond and shortened the term of the levies.

“Normally, the terms don’t get shortened,” Hampton said.

If those two actions add up to $4.7 million, then that may have been the 2006 school board’s intent, Hampton said.

But trustees weren’t so sure.

“I’m very skeptical of reading into it lowering the terms of the bonds as return of the savings,” said President John Alpay. “Additional money was taken out of our pockets, from my view, especially during the Great Recession. … For me personally, that’s extra money that could gone to diapers, formula or AYSO registration. Those are real dollars.”

Trustee Ellen Addonizio said the 2006 school board’s intention is quite clear: Any and all savings needs to return to the taxpayers.

“Life isn’t as complicated as we sometimes make it to be,” she said.

Farley said he hopes staff’s analysis will result in more tax savings for Talega property owners, but he just doesn’t have all the information yet.

Hampton said he’ll have another report at the next board meeting.

Talega residents called for more transparency in how the district collects and spends Mello-Roos funds. They also said this episode has bred resentment and mistrust.

Passing along the $17 million from the recent refinancing is the first step in “healing the negativity,” said resident Susie Hattan. But she was frustrated by the delay in refunding the 2006 tax savings.

San Clemente Mayor Tim Brown also spoke, reminding the trustees that “there’s one thing that’s even more precious [than money] and that is community trust. … Keeping that community trust is so important.”

Laura Ferguson is hopeful it will all work out. She's lead the charge from Talega residents.

"I am however confident that the tax savings from the bond refinancing done in 2006 for CFD 90-2, will be resolved and the savings passed onto the Talega taxpayers. The law  prevails and requires the savings to be passed on."

Farley thanked the community members for their diligence.

“Hadn’t it been for the community group, I don’t know that we would have ever discovered this,” Farley said.

george gregory January 23, 2014 at 10:15 AM
so whats the up side of refinancing if cusd cant apply the savings to the students ???

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