Talega Taxes to Be Put on January CUSD Agenda

Residents want the savings from a recent refinancing of school bonds to go back to them. Some trustees want to hold onto the money.

Talega residents want to see their Mello-Roos taxes reduced. Photo courtesy of the city of San Clemente.
Talega residents want to see their Mello-Roos taxes reduced. Photo courtesy of the city of San Clemente.

One after another, about a dozen Talega residents told trustees on the Capistrano Unified school board that they deserve to have their taxes lowered after the district achieved $17 million in savings by refinancing the bonds used to build Talega schools.

After all, it’s their money, they said. And everything that they were contractually obligated to be pay for has been built.

The money they were discussing is a special tax Talega residents pay, called Mello Roos. Talega residents are the only ones in San Clemente who pay Mello Roos fees.

After refinancing several bonds for Mello-Roos districts throughout the sprawling school district, trustees decided in August they would hold onto the Talega windfall, $17 million, to repair dilapidated San Clemente High School. Meanwhile, landowners in Las Flores saw their taxes lowered.

“There are some inequities here that must be addressed with the surplus,” said Susie Hattan, a Talega resident, tax attorney and mom of three students. “This isn’t about a tax break for Talega residents but …following the law.”

Hattan said it’s also not fair that Talega residents should disproportionately have to carry the financial burden of repairs at San Clemente High.

“The intent of the Mello-Roos statute was not to create an endless stream of revenues,” she said. “The savings should be returned to the taxpayers.”

Hattan added that a school board resolution in 2006 declared the projects envisioned by the Talega Mello-Roos district complete.

Resident Jason Ewell pointed out that it is illegal to use Mello-Roos dollars to cover maintenance, and many of the items on San Clemente’s to-do list are deferred maintenance projects

“We as a united body of Talega residents,” Ewell said, demanding the district investigate how it spends the Talega money.

Amanda Earnest presented the board with 324 signatures on paper and another 462 signatures gathered online. She and others have also been canvassing every single Talega neighborhood, with only four more to go.

“Everyone had no idea that they were paying more than the bond payment and interest,” she said.

The school board will take up the question of the refund at its next meeting.

shelly December 16, 2013 at 10:46 AM
SC Parent, If the Talega kids go to SCHS it is part of the parents' responsibility to maintain SCHS just like most of the other SCHS parents do. If you chose to live in Talega you chose to pay Mello Roos that were to be spend on the schools where your children would attend. Mello Roos money is to be spent on the schools where the children of the area attend. Most of the Talega parents who have high school age children who choose not to attend private choose for their children to attend SCHS. Right? The parents who came before you paid for SCHS. Parents who buy later are paying higher property taxes than those who have been in their homes longer. We all choose where we live. And we know up front the cost of living there. SCHS is a wonderful school. Why is there an issue for people supporting the school where their children attend and will attend?
SC Parent December 16, 2013 at 11:19 AM
The property taxes in Talega go towards maintaining schools. MR is an additional tax that has been allocated for something specific and that isn't what it was allocated for. This is exactly what Penny has tried to tell you. Argue all you want, you are not making a valid point. It doesn't matter how many kids to there or not, Talega's property taxes support the ongoing maintenance of the schools...not MR. That is not what it was designed for. Sorry, 1 community alone does not support the ongoing maintenance of schools that many other communities go to. That is what property taxes are for that everyone pays. If you don't take Penny's word for this go see a professional who can explain things better to you.
SC Parent December 16, 2013 at 11:58 AM
....and Talega does support the schools through property taxes just like everyone else. Again, MR is an additional tax that had a specific purpose that yes was made clear to those who bought in Talega. The ongoing maintenance of SCHS was NOT where the money was to be allocated. Our property taxes cover that. The fact that the school is wonderful has nothing to do with this. If you are so worried why don't you foot the bill alone....why do you expect Talega too? The MR was not allocated for this....you cannot change the game after the fact. You choose to live in Talega you agree to pay MR yes...for where and what it was allocated to be spent only! You can't keep adding things on and changing it.
Dawn Urbanek December 16, 2013 at 02:29 PM
The Districts handling of Mello Roos Taxes is actually worse than most people understand. The District has been using Mello Roos funds to pay for the interest expense on the District Administration building through what they call a "Special Reserve Fund" (about $1.5 million dollars per year). That expense was suppose to be paid for with rental income generated from leasing space at the new administration building. So what has happened is that CUSD uses the Mello Roos money to pay the Interest expense on the Administration Building debt and uses the money generated from rents to pay general fund expenses. Over 92% of the Districts General Fund expenses go to employee salary, pensions and benefits. So the result is that money that should have been used to up-grade facilities for our children has instead been diverted to pay for facilities for administrators and compensation for employees. In fact- almost every fund in the district has been drained and used for general fund purposes. So now we are stuck with facilities that need $822 million in repairs and no way to pay for that because all of the money is gone. The only reason some Trustees want to keep these income streams from the Mello Roos is so that they do not have to tell parents and the public the truth about the Districts finances. CUSD increases Mello Roos taxes by 2% a year. The District is collecting way more money in taxes then it actually needs to pay the principal and interest on the bonds. It is creating a revenue stream that they need to continue operating which is why they are having a hard time doing the right thing which would be to refund Talega $17 million in interest savings from refinancing the Talega Mello Roos and ending the 87-1 Mello Roos for MV and AV.
Dawn Urbanek December 16, 2013 at 02:35 PM
Talega- You need to remind Trustees that they have a fiduciary duty to represent students and the tax payer- that is what they are elected to do. Sometimes they get confused and think they represent employees. It is the Union that represents employees. Sometimes parents get confused and think that the teachers union represents students. That is how we have gotten into this mess. We let the Teachers Union pick our Trustees so that everyone at the District who has a voice in how money should be spent is representing employees and no one is representing our children. Here we are- $822 million in needed repairs- highest class sizes in the entire state of California- Highest paid employees- and a superintendent that is leaving. Nothing will get better until the District decides to work with parents rather than go around parents.
shelly December 16, 2013 at 05:26 PM
Dawn, You would like everyone to work with you and yet you do not work with everyone. You are a parent who has decided not to work improving your child's school. You stopped volunteering at and donating to your child's school when the economy tanked because you felt the teachers should make all the financial sacrifices. We all pay taxes even teachers. Why do you always blame the teachers for everything. Teachers deserve their salaries and they did not cause our schools to age and need repair nor did they stop, us, the taxpayers from paying to fix them. We did that. And parents picked and voted for candidates. Teachers are not responsible to pay for repairs, the taxpayers are.
shelly December 16, 2013 at 05:32 PM
SC parent, Are you saying that people who have lived in SCHS longer than Talega has existed have not paid as much as or more than you for the upkeep and the buildings of SCHS? You moved to Talega knowing that you would have to pay Mello Roos. The school in which Talega the majority of high school age children attend is SCHS. And this school needs repairs and a new theatre. Builders of Talega were tasked with improving and paying for the infrastructure of the schools where the children of the new Community would attend so as not to put the whole burden of a new community on the established community. Correct?
shelly December 16, 2013 at 05:33 PM
Penny, Are you saying the Mello Roos money cannot be spend on SCHS? Where are the documents that support this?
shelly December 16, 2013 at 05:37 PM
SC Parent, Even though my children do not attend SCHS if I had the money I would finance the theatre there. Because it is important and the children of the community need a functioning school.
Dawn Urbanek December 16, 2013 at 05:38 PM
Shelly- Listen to the audio from the Board Meeting. The parents that spoke cited the documents and the legal arguments: ------------------------------------------------------------------------------- http://cusd.capousd.org/cusdweb/boardaudio/12-11-13/12-11-13RegularBdMtg.mp3 at 50 minutes 30 seconds ------------------------------------------------------------------------------- http://cusd.capousd.org/cusdweb/boardaudio/12-11-13/12-11-13RegularBdMtg.mp3 at 2 hours 11 minutes
shelly December 16, 2013 at 05:40 PM
Take your money back and only do what everyone else does. Talega must need the money more than their schools.
Dawn Urbanek December 16, 2013 at 05:40 PM
Shelly - I do not blame teachers. I blame the District for putting employee compensation above the needs of our children so that would include District Staff- Superintendent Farley- Trustees and the employee unions.
Dawn Urbanek December 16, 2013 at 05:44 PM
Shelly- San Clemente High School has roofs that leak because the District has transferred deferred maintenance funds to the General Fund for the last five years and hasn't invested any money in building maintenance. We need $880 million in repairs in the District do you expect that to be paid for by Talega residents and a small portion of residents who live in Mello Roos areas?
Dawn Urbanek December 16, 2013 at 05:51 PM
Shelly- Do you not find it strange that we passed prop 30- we received $8.24 million in New LCFF money and even with all that nothing has changed for our students. The kids did not get any benefit from all the new money and unfortunately there is now no money to pay for what the District was obligated to pay for before giving employees increases in pay. For 2014- 2015 the District is going to look for another $12 million in cuts- but that is after including a COLA salary increase a Step & Column Salary increase and the restoration of $5.62 million in salaries from the 2010 teachers union strike. If they did not include these "increases" we would not have to continue to furlough our children, cut programs, defer maintenance and increase class size.
shelly December 17, 2013 at 01:24 AM
Dawn Urbanek, Do you not realize that the economy tanked? Do you not realize that teachers took cuts for 5 years or lost their jobs while you did nothing for our schools but comment on comment boards. And many of our our kids managed to learn and get into colleges and be successful because of their teachers. Do you not realize how important good teachers are and we have many in CUSD. Do you not realize that in the last 5 years school budgets have been cut everywhere and many schools and school districts have had to defer maintenance. Did you step in to help? What did you do to help our schools when our budget was cut every year. Oh, yes, you kept telling us how the teachers were making too much and should take deeper cuts meanwhile you stopped volunteering and did not contribute. Teachers are professionals, Dawn. They deserve their compensation. You want the schools to have more money then contribute more money and stop expecting the teachers to keep taking cuts. You want 180 days then pay for 180 days, Dawn. You want our schools to be maintained then pay for it. You want small class sizes then pay for it.
shelly December 17, 2013 at 01:29 AM
Dawn, And no I do not expect Talega to pay for everything. I think everyone should. I don't expect the teachers to pay for the fix either but you seem to. I believe that people should actually value education and the children of their community. It is sad that our schools have had deferred maintenance but do you know who is responsible for paying for the maintenance? It is us, the taxpayers. We need to all put our kids first.
Dawn Urbanek December 17, 2013 at 06:24 AM
Shelly- We have all stepped up to do our part- through higher taxes, fundraising and volunteering. It is never enough because the money never goes to the classroom. California Tax payers spend $53 billion on education per year - all time high- and the result is the same. This year has been no different for our children than any I have seen at CUSD. Largest class sizes in the state- buildings that are falling down- massive cuts to programs. The only expenditure that grows every year is employee compensation. The Orange County Department of Education has told CUSD many times that they have a spending problem. Taxing Orange County Residents to death is not a solution- we only get 11 cents back from every dollar. 6.5 cents goes to our schools. CUSD increases its spending by more than 6.5 cents per year. It is unsustainable. Until people understand the problem - we cannot work together to find solutions. More money is not going to fix the problems CUSD is having.
Dawn Urbanek December 17, 2013 at 06:26 AM
Let me clarify- higher taxes will not fix the problem. The DIstrict needs to seek remedies in Sacramento and not simply allow the STate of California to redistribute our tax money to places like San Francisco- and LA and Sacramento.
Dawn Urbanek December 17, 2013 at 06:27 AM
Oh - and Oakland. They should be returning tax dollars to our children. It is a political issue.
shelly December 17, 2013 at 10:37 AM
Dawn Urbanek, Teachers and all employees took cuts. Their compensation was not increasing those 5 years but cut. Are you only a CUSDian or are you a Californian and a US citizen? We educate all. We do not pay taxes just for our kids but for all kids. If you do not have children you pay taxes, if your children are grown you pay taxes, before you had children you paid taxes, etc. Our taxes are to educate the children of CA and the USA. And if our taxes are not covering educating all and at the same time educating these children in decent buildings everywhere then something is wrong. And it has nothing to do with teachers who are not getting rich being teachers. Value education everywhere. Because of prop. 30 we do not have huge cuts. But Prop. 30 was not written to fix all the problems but to stave off huge cuts. Read up on it. Value education. Our children are the most important resource. Dawn, what exactly would you cut if you feel like we have enough money to fix everything?
shelly December 17, 2013 at 10:41 AM
Dawn, You by your own admission did not step up beyond taxes but blogged about how we shouldn't step up beyond taxes while others volunteered and contributed.
Dawn Urbanek December 17, 2013 at 10:49 AM
Shelly- You may choose to volunteer and fundraise. I am volunteering in my own way to see that Orange County children get the resources they deserve. School districts are required to pay for the education of our children which does include more than just paying its employees. If our budget continues to get cut by $15 million a year then it is unreasonable for employees to expect that the cuts come from everything except the 93% of the budget that goes to compensation.
shelly December 17, 2013 at 09:21 PM
Dawn, You blog, write letters, and comment, okay. Meanwhile at our schools the employees that you believe should pay partially for your child's education have been busy educating our kids. The teachers have been very busy getting them into college and through graduation. Your blogging did not accomplish teaching kids to read, write, do math, learn science, etc. You blog against the PTA, PTSA's, school volunteers, fundraising, teachers, employees, etc. Who exactly educates the children? Teachers have educated our children successfully for the last five years while you blogged and investigated them and told them they are overpaid and over compensated. What is the most important classroom expense, Dawn? Teachers! If you want a better education system for your children then value and respect the people who are educating your children. We, the taxpayers are required to pay for education. We are responsible if our schools are falling apart. A community, people should step in for children and not make it a dog eat dog world. Kids are kids and they are our future. Value education.
rlferg January 02, 2014 at 09:03 PM
Talega pays double that of San Clemente residents outside of Talega. People outside of Talega might say we should pay for the San Clemente High School because some of our 500 high school-aged children attend there, but they do not realize we already pay the basic tax levy just like them, and also funneled $10.3 million into the high school since 2002 while remaining committed to our $17.4 million obligation to San Juan Hills High School. Not all high school-aged kids in Talega use San Clemente High School and represent a small percentage of the 3,250 students. If funds are used at SCHS, they need to be calculated on the pro-rata benefits derived by each parcel of property as a result of the those who attend the school. Talega should not, for example, foot the entire bill for a new $2 million roof on San Clemente High School that serves an entire community of 65,000 people, or pay the entire $60 million cost of renovating the nearly 50-year old high school that has significant deferred maintenance issues at no fault of the 13-year old Talega community.
Dawn Urbanek January 03, 2014 at 09:03 AM
rlferg- You are correct, and I would add that the issue isn't even regarding the actual tax. With interest rates at record lows, the District did a good thing by refinancing these bonds saving CUSD $22 million dollars. $17.4 million came from Talega Mello Roos, and $4.8 million came from Las Flores. At the August 14, 2013 Board Meeting Trustees voted to approve tax refunds for Las Flores residents, while deciding to keep the Talega money for facilities maintenance. So the issue being decided is whether or not CUSD is entitled to keep the savings or should that be returned to Talega. Why return the same money to Las Flores residents and not Talega residents? For more information - from my perspective- --------------------------------------------------------------------------------- http://sanjuancapistrano.patch.com/groups/eye-on-education/p/cusd-board-to-reconsider-talega-melloroos-windfall-at-tonights-board-meeting --------------------------------------------------------------------------------- http://sanjuancapistrano.patch.com/groups/eye-on-education/p/update-cusd-board-to-reconsider-tax-refund-for-talega-residents --------------------------------------------------------------------------------- http://sanjuancapistrano.patch.com/groups/eye-on-education/p/parent-barbara-casserly-makes-an-impassioned-plea-to-cusd-board
Laura Ferguson January 04, 2014 at 09:43 AM
Thank you Dawn. People need to know that this is about more than just the 2013 bond refinance in Talega. This is about the 2006 refinance, the 2006 Board resolution, and the concept that it is OK to keep surplus taxes. In 2006 CUSD refinanced the 90-2 bonds which resulted in a similar amount of savings. In the next year alone, the two CUSD CFDs expect $2 million in excess taxes from Talega residents in excess taxes required to service these bonds. If the CUSD Board believes that the original CFD facilities commitments for Talega are not yet met, they should consider the 2006 CUSD Board Resolution #0506-73 where in CUSD affirmed that “it has now funded all projects intended to be funded with the Bond proceeds of the CFD”. In the same resolution the Board eliminated the possibility of issuing more bonds by reducing the original $50M authorization down to the amount that had been issued to date, cementing the concept that future facilities needs are not the responsibility of the CFD.
Laura Ferguson January 04, 2014 at 09:50 AM
Yet here we are, nearly 8 years later, and several members--not all --on the CUSD board are trying to find any legal loophole that will allow them to finance more facilities on the backs of Talega homeowners who have already paid so much. January 22nd is the CUSD board meeting where the Talega agenda items carried over from December 11th meeting will be reconsidered, and at Talega's urging, also this 2006 refinance and resolution. We ask the board to honor its commitment to the citizens of Talega that it made in the 2006 resolution, those citizens that have already funded well over $50 million more for school facilities than our neighbors outside of the CFD have, and with whom we share those same facilities.
Dawn Urbanek January 04, 2014 at 02:56 PM
Laura- I hope this will be a wake up call for every tax payer within CUSD borders. The Teachers Union runs our District and has always placed employee compensation above the needs of our children. Jerry Browns "NEW" Local Control Funding is going to give more money to school districts AND is going to give districts greater flexibility on how to spend that money. But - along with that new flexibility comes the obligation of the District to include parents and tax payers in decisions about how CUSD should spend its money. _________________________________________________ CUSD's plan limits public in-put in such decisions to a written letter to the Superintendent with a written response back- no conversation with Trustees (our elected representatives) . Given the fact that Superintendent Farley is now "retiring" the public will essentially have no in-put. Let me give you an example of why CUSD does not want transparency-
Dawn Urbanek January 04, 2014 at 03:02 PM
Please Read July 31, 2013 memo from Clark Hampton to Trustees: http://capousd.ca.schoolloop.com/file/1343191429797/5667737573387975994.pdf In Short- Employee Groups and District Staff negotiated behind closed doors to delay the execution of employment contracts in order to be able to include new local control funding formula money with the COLA in order to trigger salary restoration from the 2010 teachers strike. So employees received $5.62 million in salary restorations and then set about the task of cutting $13,382 million from the District's budget. Had they negotiated in good faith pursuant to their contract- restoration would not have been triggered- read Page 1 paragraph 2 where Clark Hampton states " Before the LCFF was approved by the Legislature, the District built its 2013-2014 budget on the assumption that the only increase in District revenue came from the COLA, which generated $4 million to reduce budget deficits for the 2013-2014 fiscal year. The COLA alone, did not completely trigger restoration of the permanent cuts." _________________________________________________ Page 2 spells it all out again with a simple chart.
Dawn Urbanek January 04, 2014 at 03:05 PM
Had the District not delayed contract negotiations, our children would have had enough money to restore the school year to 180 days AND give employees their standard Step and Column Salary Increase (3% per year)- Health and Welfare benefit increase, Statutory benefit increases.


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