Mission Viejo Weighs Schools Suit : Education: City leaders say millions of dollars in special tax assessments have been funneled to Capistrano Unified’s Aliso Viejo projects.

In an emergency meeting Wednesday, City Council members decided to give themselves a few days to decide whether to sue the Capistrano Unified School District, alleging misuse of special tax money collected from city property owners.

Just before the meeting, fuming council members had said millions of dollars in tax assessments from Mission Viejo have been funneled to school projects in Aliso Viejo.

“What’s happening is that we’re being asked to balance the Aliso Viejo checkbook on the backs of Mission Viejo taxpayers,” Councilman Robert D. Breton said. “We must move to protect our citizens from what is really a scandal.”

Although state law permits school districts to spend tax revenue outside the neighborhood where it’s collected, Mission Viejo officials say Capistrano Unified is not distributing money fairly.

The money is collected using Mello-Roos assessments, which pool money from property owners to pay for varied civic needs--street lights, landscaping or public buildings, such as schools.

Mayor Sharon Cody said 30% of the money collected by the district has come from taxpayers in northern Mission Viejo, yet just 10% of the money will be spent to build schools in the city.

“There’s an injustice here that needs to be made right,” Cody said. “Mello-Roos has run amok, and it needs fixing.”

The council emerged from the closed, 90-minute meeting Wednesday to announce that a decision about whether to sue had been postponed until Monday.

Cody declined to comment on the reason for the delay.

The lawsuit would ask a judge to halt the district’s Mello-Roos spending and return money to Mission Viejo taxpayers, Cody said.

For months, the city and the district have been haggling over imbalance allegations. The city has asked that the district use the tax assessments to build a school in northern Mission Viejo.

But talks collapsed. In a tersely worded report released at a meeting of district trustees Monday, school officials flatly refused to build another school and asked the city to mind its own business.

On Wednesday, both sides criticized the other’s conduct, accusing each other of unethical behavior.

District officials said the city used potential litigation as a threat and imposed an April 10 deadline for the district to agree to buy a 10-acre empty lot at Alicia Parkway and Olympiad Road for a future school.

At the last meeting between city and district negotiators, “they laid in front of us something they characterized as an ultimatum,” Supt. James A. Fleming said. “What they are saying to us is, ‘We demand you build there.’ ”

Fleming noted, however, that surrounding the Alicia Parkway site is the district’s only area where enrollment is declining.

“This is a site where we just do not need a school built,” he said. “It doesn’t make sense.”

Although the district confirmed that just 10% of school construction bonds have been spent in Mission Viejo, district officials said another 7% will build Aliso Viejo schools that will be used by Mission Viejo children.

The friction between the city and district can be traced back three years, when Cody--then a private citizen and PTA mother--began pursuing the district for information about school construction spending.

Cody said she was stonewalled by district officials at every opportunity.

“It was terrible,” she said. “Everything I asked for was public information, but the district flat out refused to give it out. Other times, I would ask for a report, and they would give me one sheet of it or hand me the wrong report. They felt they could get around the (public document) law like this.”

Their relationship did not improve when Cody was elected to the council in November, 1990. After threatening to use the city’s legal resources, Cody finally got her spending documentation.

The council was prepared to vote on taking legal action against the district in October but instead agreed to go to the bargaining table with the district in a bid to resolve the differences.