Mission Viejo City Council Talked Out of Rebate Plan : Taxes: When majority of residents who turned out in rain denounce idea, majority on council agrees it’s a dead issue.

With many residents braving the rain Wednesday night to strongly urge the city not to refund a dime of its $21-million surplus, a majority of City Council members are calling the controversial tax rebate proposal a dead issue.

Although Councilman Robert A. Curtis said he still planned to ask for a public referendum on the rebates, a majority of the council said public opposition displayed at a town meeting Wednesday night was the final blow to the plan.

“If you didn’t get the message from people (Wednesday), you weren’t listening,” Councilman Robert D. Breton said. “This rebate was a fanciful notion that will now be sent to oblivion.”

About 75 residents ignored heavy rains to show up at City Hall. Those speaking against the rebates--estimated to be about $500 per property owner--outnumbered supporters 18 to 15. The majority pointed out that the four-year-old city has too many needs to consider returning even a portion of its budget surplus.

“We have a developing city that needs new things,” Stuart Halpert said. “If we don’t have the money to do what we need, the city will deteriorate.”

Marcia Lewis implored the city: “Please, no rebate. Let’s save the money for what people really want and need, like land for the construction of a new library.”

Before being allowed to comment, the audience heard from city officials who explained how the surplus accumulated and detailed about $149 million in future capital improvement projects.

In the short term, said City Manager Fred Sorsabal, the city will need about $17.5 million for a new rail station, library, animal shelter and recreation center improvements--projects that have been supported by the council but not officially approved.

But, speaking in favor of the rebates, David Nolan that residents should be the ones to decide how their tax dollars are spent.

“The government wants to hold onto (the budget surplus) because they think it’s their money,” he said. “But it’s not the government’s money, it’s the people’s money. Let the people decide how to spend it.”

Donald Lantz said “there are a lot of us who don’t have jobs. This tax refund may not save homes, but it will help pay the bills.”

Curtis, who chaired the town meeting with Councilwoman Susan Withrow, said the turnout against the rebates was not strong enough to convince him that a public ballot isn’t still needed.

“I personally still advocate an advisory ballot,” he said. “The opinions (expressed at the meeting) were split, but I’d like to give people the opportunity to make an informed decision on how their tax money is spent.”

The rebate plan ignited controversy last December, when Councilman William S. Craycraft proposed using $10 million of the city’s cash reserves to give each property-owner a refund check. In a raucous press conference Dec. 24, Curtis accused Craycraft, a recent political foe, of stealing the idea.

Curtis is considering a run for the newly formed 71st Assembly District. Craycraft is supporting Mickey Conroy (R-Santa Ana), a tax reformer who is the incumbent in part of the area covered by the new district.

Although at odds over who should get credit for the proposal, Curtis and Craycraft backed the tax refunds as their fellow council members began to get leery of the rebate plans.

Although they initially backed the concept, Breton, Withrow and Mayor Sharon Cody later opposed the rebates after talking with city finance officials. On Thursday, all three denounced the rebate plans as ill-conceived and politically motivated by both Craycraft and Curtis.

Both men deny that their support of the tax rebate had political overtones.

But Breton said “voters in Mission Viejo are sophisticated enough to see this for what it is--an election year gimmick. And they’re knowledgeable enough to know that any rebate in this recession would only hurt the city.”

Cody said her main regret is that many residents will feel cheated over not getting a tax rebate.

“I think we’ve held out a false hope to people,” she said. “We’ll get letters, people will still ask us when the check is coming. That’s a real shame.”