$10-Million Rebate Thrown Out; Lesser Figure Considered

Calling it fiscal folly, the City Council on Monday night strongly rejected a proposed $10-million rebate to city taxpayers.

The proposal by Councilman William S. Craycraft was shot down by the four other council members after each criticized it as a political ploy that would jeopardize the city’s financial health.

However, the council unanimously approved formation of a committee to determine how much of a rebate might be returned to residents without jeopardizing city services. The committee was proposed by Mayor Robert A. Curtis in his annual state-of-the-city speech.

Quarter-page advertisements announcing Monday’s speech and the mayor’s own rebate proposal were placed in Sunday and Monday editions of The Times and Orange County Register. City Manager Fred Sorsabal said the ads, which cost a total of about $3,000, were paid by his office. That drew some criticism that the city was helping to advance the political fortunes of Curtis, who has been considering running for the proposed 71st Assembly District.

In his speech, Curtis did not directly propose a rebate amount but instead suggested that a committee be formed, chaired by him, to determine that amount how it should be distributed.

Other members of the committee, he said, would include Sorsabal, Finance Director Irwin Bornstein and Councilwoman Susan Withrow. The committee would have up to 90 days to make a recommendation to the council after holding at least one Town Hall meeting to explain what residents would give up in exchange for the rebates.

The final decision, he added, might be made by the taxpayers in a ballot measure that would allow residents to choose between a rebate or some project, such as a new library.

The idea of a tax rebate, although informally discussed for several months by the council, was publicized last week by Craycraft, who has proposed a $10-million rebate, or $500 per taxpayer.

Craycraft was immediately charged with irresponsible grandstanding by other council members, particularly Curtis.

Curtis said Monday that Craycraft had learned of his plans to propose a rebate in the state-of-the-city report and had “tried to upstage it with this half-cooked proposal.”

City financial officers say Mission Viejo has a $21-million surplus, of which about $5 million is not earmarked for any project or program. The surplus is largely the result of Mission Viejo’s low overhead and of state funding formulas that deliver extra money to new cities.

But Curtis said a $10-million rebate would be at least twice what the city could afford and would require the city to raise taxes in the future or decrease public services. He said Craycraft has no support on the council or among the city financial staff.

Craycraft denied that his proposal would harm Mission Viejo and said a $10-million rebate would prevent the city government from growing excessively.

“It is my earnest desire to keep Mission Viejo city government as lean and mean as possible,” he said.

But Councilman Robert D. Breton said he and the remaining two council members, Withrow and Sharon Cody, were more skeptical that any rebate was wise.

“It is very irresponsible when we are facing these hard economic times for us to give away any of the cushion we have built up over the years,” he said.