Legal Battle Keeps Education Funds in Limbo : Schools: District money was raised with a fee levied on property owners. Opponents say the tax is illegal, so the funds remain in a bank account until a Superior Court judge rules on the case.

In the middle of a school funding crisis, the Whittier Union High School District expects to reap about $1.4 million in new income this year. But the funds sit unused in a bank account, hostage in a legal battle over whether the district has a right to the money.

The income is from a fee levied last July on property owners to maintain and improve tennis courts, stadiums, fields and auditoriums. School officials argue that the public should share the cost of upkeep on facilities it uses.

Opponents call the fee an illegal property tax. “It’s an end run around Proposition 13,” said attorney Trevor Grimm, referring to the 1978 measure that limited property tax increases.

The fee added $20 a year to property tax bills for homeowners, $15.76 per apartment, condominium or mobile home, and $50 an acre for owners of commercial properties. Fees also increased for owners of mines, farms and undeveloped land.

State law allows school systems to levy property taxes only with a two-thirds margin of approval from district voters. The Howard Jarvis Taxpayers Assn., the Apartment Assn. of Greater Los Angeles and three area residents filed suit in August to rescind the fee.

If the district wants to raise taxes, “put a proposal on the ballot and let the people vote on it,” said Grimm, who represents the taxpayers association.

Until a Los Angeles Superior Court judge rules on the case, Whittier Union won’t spend a penny of the money, which is earmarked to renovate football stadiums at California and Pioneer high schools.

But district staff members already are preparing a proposal that would enable board members to renew the fee for another year.

Until last year, such fees had not been imposed by school districts, but they “have been a part of law in California for many years,” Assistant Supt. Lowell Shira said. “They have been used dozens and dozens of times by cities and counties to maintain all kinds of facilities they have.

“In the days when school districts had ample money in their general funds to maintain these facilities, that was fine. This is no longer the case.”

The nearby Whittier City School District, which is not being sued, is already using its levy of $22.50 per parcel. The elementary district’s board has unanimously approved spending $11,000 for a lawn mower, Assistant Supt. Carrie Sarnicky said. And the district is getting estimates on tree-trimming services, plants for school grounds, railings around sandboxes, new baseball diamonds and basketball court repairs. Long-term plans include improving lawn sprinkler systems.

The funds “are helping us to upgrade the equipment and not affect the general educational process,” Sarnicky said. “If we had to spend this money from the general fund, other things would have to be cut.”

In all, the Whittier City School District expects to pull in $400,000 from this year’s fee. The school system, which feeds children into the Whittier Union High School District, has overlapping boundaries with the high school district. As a result, some property owners had to pay two school fees.

As for potential legal problems facing the Whittier City district, “we keep our ears and eyes open, but we haven’t heard anything affecting us,” Sarnicky said. Her school board already has authorized spending $29,000 needed to generate next year’s fees.

At least one Whittier Union trustee is more cautious. Board President Eve Burnett said she worries that her district could be forced to return the money. Whittier Union has spent more than $114,000 on consulting services and faces additional legal expenses to defend its fee.

If it were not for the lawsuit, Burnett said, she would support the fee. But “how much will it cost if we go ahead and do this? If we lose our court case, how much will that cost us?”

The case could determine the fate of such fees statewide, said Kris Vosburgh, executive director of the Jarvis organization. “If you prove it illegal in one venue, you can go back to another district and say, ‘Do you want to be next?’

“I can’t guarantee that money would be refunded,” Vosburgh said. “But we could use a successful outcome to make sure other districts don’t do the same thing.”

Dozens of school systems considered levying such fees last year, but nearly all backed off when taxpayer groups threatened legal action. Whittier Union and Bonita Unified, in the San Gabriel Valley, stuck by their fees, and both became targets for lawsuits from the Jarvis group. The districts plan a joint defense.

A decision is expected within the next few months, and the losing side is likely to appeal. Whittier Union trustee Octavio Chavez said he was ready to vote for the fee despite the uncertainty.

“Last year, I felt there was a need for it,” he said. “I still do.”

Community correspondents Julia A. Wilson and John Pope contributed to this story.