2 College Districts Must Refund More Than $335,000 : Budget: Rancho Santiago and Saddleback assessed materials fees inappropriately, chancellor says.

Two financially strapped Orange County community college districts must refund more than $335,000 to students after state officials ruled that the money was collected improperly.

Top administrators for the Rancho Santiago and Saddleback community college districts said Tuesday that although they will return the money, they disagree with the state chancellor for community colleges that the fees were assessed inappropriately.

Earlier this year, both districts approved $1-per-unit fees to offset the cost of supplying materials for a wide range of classes, including, for example, art, ceramics and welding. The fees, which were charged to all students, went into effect at the beginning of this semester. Since then, Rancho Santiago has collected $135,000 and Saddleback about $200,000 from students, administrators said.

However, such materials fees are “clearly impermissible,” said David Mertes, chancellor for community colleges, in a Sept. 28 letter to community college districts statewide.

“A district must have explicit statutory authority to impose a mandatory fee,” Mertes stated in the letter.

Districts may charge students only for materials they use in certain classes, but “there is no such authority for charging an instructional materials fee” to all students, Mertes said.

However, that opinion contradicts legal advice offered by attorneys for Rancho Santiago and Saddleback before the fees were adopted, local administrators said.

“We thought we were on firm ground. We got legal advice that said we could do it, so naturally we’re disappointed,” said Bill Kelly, Saddleback’s executive vice chancellor.

Rancho Santiago Chancellor Vivian Blevins agreed, saying, “We thought we really had it wired.”

Although both administrators said they believe the fee is legal and appropriate, “we’re not interested in going to court,” Blevins said. “That’s obviously not a good use of taxpayer dollars to fight with the (state) chancellor.”

As a result of the ruling, Rancho Santiago must refund $135,000 that has already been collected. The cost of labor, computer time and other related expenses to refund the money will cost the district an additional $20,000, Blevins said.

Rancho Santiago will mail the checks, which will average about $15 for full-time students, within the next few weeks, she said.

The loss of potential revenue from the fee, which at Rancho Santiago was projected at $300,000 a year, is especially painful after years of plummeting state funding. In the past two years, the district’s spending plan has been cut dramatically, from $76 million to $64 million, Blevins said.

Saddleback has suffered similar losses in revenue. Over the past few years, its budget has dropped 10%, bringing it to about $61 million. Furthermore, projections call for a $2.8-million cut next year, Kelly said.

Although Saddleback must refund about $200,000 to students, how that will be accomplished has yet to be decided. District officials have sent a letter to state Chancellor Mertes asking him to reconsider his position, but Kelly said, “I’m not optimistic.”

For now, the district will return to its policy of charging students for the materials they use themselves in class, he said.

Saddleback could have received as much as $400,000 a year through the fee, and the loss of that potential revenue may mean that students get fewer hand-outs in class and fewer tangible instructional aids, Kelly said.

He added that the loss “is a big deal. We’ll have to do a little bit more with a little bit less.”