Rio School District, Builders Fight Over High Mitigation Fees

Oxnard’s El Rio district is a close-knit community of fewer than 10 square blocks, rapidly being surrounded by high-rise offices and shopping centers.

From chain-link fences outside some of the homes in this dusty, blighted community hang handwritten signs advertising five avocados for a dollar, used clothing for sale and rooms for rent.

Property values here pale in comparison to neighboring communities, exacerbating an already anemic source of tax revenue.

The Rio School District is the lone agency of local government, save the county. It is made up of five small campuses, with their schoolyards and auditoriums, that double as community gathering places, hosting dances and Little League well after regular school hours.

There are 2,800 students today in the district, which operates on a $10-million budget. But the district says that increased development of the El Rio area promises to bring more.

Because of those increasing demands on limited resources, the Rio School District has come out swinging in an effort to force its developer neighbors to agree to large mitigation fees to help pay the district’s future bills.

The district secretly hammered out a $100,000 deal with Wal-Mart and a $25,000 donation with Shopping at the Rose, the retail center set to open within weeks that will house the nation’s largest retailer.

Earlier this year, lawyers hired by the district unsuccessfully sued powerful Oxnard developer Martin Smith in an effort to get him to pay $4 million in mitigation fees for a third high-rise he planned in downtown Oxnard.

And Rio negotiators said they are asking for at least $500,000 more from architects of the Northeast Community Specific Plan, a proposal under way for more than 700 acres of homes, parks and businesses in northeast Oxnard.

“They hadn’t paid much attention to us when we talked mitigation until we filed the lawsuit over the third tower,” said trustee Jean Mattson, who has served on the school board for 20 years.

“We’d never done this before, but with the growth we’re experiencing we had to do something,” she said.

State regulations call for builders to pay school districts $2.65 per square foot of the homes they build and 27 cents per square foot of commercial and industrial projects to compensate for extra students.

But the Rio School District has moved aggressively after larger payments.

“Our studies show that what it costs to house a student far exceeds what is laid out by the state Legislature,” said Supt. Peter Rogalsky, whose district’s enrollment increases by about 100 students each year.

While Rio school officials see their tactics as logical, builders are complaining bitterly that the school district is strong-arming them by threatening to hold up their projects unless they agree to pay more in mitigation fees than state law provides.

Dee Zinke of the Builders Industry Assn. in Calabasas said most developers cannot afford the time it takes to fend off legal challenges to their projects.

Typically, eager developers will pay to make the problem go away rather than jeopardize their multimillion-dollar investments, she said.

“It’s a form of extortion and it’s absolutely wrong, but it’s not an unusual circumstance,” Zinke said. “It’s probably the No. 1 reason for the increasing prices of homes and commercial space.”

The BIA is not the only group fed up with officials of the Rio School District, which includes four elementary schools and a junior high school.

Members of the teachers union complained to board members at their meeting last Wednesday night that school administrators never disclosed publicly the $125,000 they won from Wal-Mart and Shopping at the Rose.

“The district has a real credibility problem with the teachers union because every year they tell us there is no money for raises, but each year their reserves grow,” said John Cort, a teacher active in the union.

“The state gives money to school districts to spend on education, not to invest,” he said.

Gary Mortimer, Rio director of facilities, said the district had not acknowledged the donations because it had not yet received the money. As for cash reserves that hover around five times the state requirement: “We’re deficit-spending right now,” Mortimer said.

The district last month sold $3 million worth of bonds to pay for two future school sites the district needs, Mortimer said.

It already has bought a 10-acre parcel in the northwest corner of the school district, and is now negotiating for a like-sized lot inside the area covered by the Northeast Community Specific Plan, he said.

The district bases its facility needs assessment on a study it commissioned three years ago that concluded it could not pay for more schools without higher mitigation fees.

But the district’s position failed its first test. Ventura County Superior Court Judge Frederick A. Jones threw out the $4-million high-rise suit this past summer.

“That’s what the courts are for and that’s what we’re trying to clarify in the appeal,” Mortimer said. “The developers say there is no generation of kids (from their projects). We disagree and we can back it up with the study.”

Wal-Mart also was faced with putting off its opening or paying off the Rio School District. After some discussion, company officials promised to donate up to $100,000 of the sales tax revenue the city of Oxnard agreed to return to Wal-Mart in exchange for locating there.

“At that point, it was just an economic decision,” said Michael Nelson, a Wal-Mart director of real estate. “In looking at the budget, I could afford to contribute that much.”

More hardball negotiating is on deck for Rio School District officials, who will confer today with developers to further debate Northeast Community Specific Plan mitigation offers.