Special-Tax Pact To Help Capistrano Schools Deal With Growth

Faced with booming student enrollment and a shortage of classrooms, Capistrano Unified School District in south Orange County on Friday signed a special-tax arrangement with the Mission Viejo Co. to finance construction of seven new schools.

The special assessment will be imposed on new homes and businesses to be built in the undeveloped parts of Mission Viejo and in the new planned community of Aliso Viejo next to Laguna Hills.

The tax will vary according to the size of the home, ranging from a maximum of $145 a year on a new apartment to a maximum of $773 for the largest (3,500 square feet or more) detached residences.

Enabled by 1983 Law

Capistrano Unified School District, which serves the San Clemente-San Juan Capistrano-south Mission Viejo area, is the third district in Orange County to enact a special taxing district enabled by a 1983 state law.

Irvine Unified and Saddleback Valley Unified had previously enacted so-called “Mello-Roos Community Facilities Assessment Districts” that allow the special tax on new development.

California has long had special-service districts, such as water districts, that allow taxes based on property valuation. But the ability to increase property tax revenues all but ended in 1978 when Proposition 13 froze the tax-valuation of homes at 1% of their fair-market value.

In the meantime, many communities, including those in south Orange County, continued to grow and need a wide range of capital-construction items, such as roads, sewers, fire houses and schools.

In 1982 the Legislature passed a law jointly sponsored by Sen. Henry Mello (D-Watsonville) and Assemblyman Mike Roos (D-Los Angeles). The bill provided a novel way for special taxing districts to be formed and still not violate the restrictions of Proposition 13, which says that a two-thirds vote of a community is required before any new tax may be imposed.

The Mello-Roos law, which took effect on Jan. 1, 1983, allows the new tax to be imposed on planned communities before the residents move in. “Dating back many years in California law is the premise that when there are under 12 residents of a community, the landowners can cast the votes on the basis of one vote per acre,” said Dean Misczynski, consultant with the state Senate Office of Research. Thus, explained Misczynski, the landowners, such as the Irvine Co. and the Mission Viejo Co. can “vote” their acreage majority and enact new taxing districts.

The Mission Viejo Co. said it agreed to the new tax because schools will be needed as more homes are built, but there is not enough state money to finance the school construction.

Jim Gilleran, president of Mission Viejo Co., said Friday, “We understood the district’s concern that the usual fees imposed upon development would not provide sufficient funds to provide the necessary classrooms when they are needed. Through our cooperative effort we were able to find the means to provide these facilities for our future children.”

The seven new schools would be a kindergarten through sixth grade and a kindergarten through eighth grade in Mission Viejo, and three kindergarten through sixth grade and one kindergarten through eighth grade in the Aliso Viejo development. The seventh would be a new high school in Aliso Viejo.

Development Fee

Like most school districts in Orange County, Capistrano Unified charges a development fee on new structures or new additions built since Jan. 1.

The Legislature allowed that special tax, beginning this year, as a way for money-cramped school districts to provide matching funds for state grants for new construction.

Jerome Thornsley, superintendent of Capistrano Unified, said Friday that the development fees alone would not provide the money the district needs to build the seven new schools. “Also, that state money may not be available when we need it,” Thornsley said. “There are many school districts with growing enrollments that are waiting for the state money.”

Thornsley noted that the new Mello-Roos District taxes will allow Capistrano Unified to sell bonds to finance the new schools. The money from the yearly special tax will pay off the bonds and interest.

“This is a better arrangement than what the state had before,” Thornsley said. “I’ve been in school districts where first you have to become overcrowded with students and have double sessions before the state would give the district money to build new schools. In this situation, we can build the new schools before the students arrive.”

Misczynski, of the Senate Office of Research, said that since the Mello-Roos law took effect in 1983, 28 new Mello-Roos Districts have been formed in California. He said that many of those districts, however, are to finance such projects as new water lines and new housing projects.