Contact Us


Rancho Ortega Blog discusses matters of public interest in South Orange County, including the communities of San Juan Capistrano, Ladera Ranch and Rancho Mission Viejo.

The writings of Don Juan Ortega on the Rancho Ortega Blog are the personal views of the author. This blog is not authored by nor does it have any affiliation whatsoever with any other person, place or entity using the name "Rancho Ortega" (or any similar name).

We have installed some new anti-spam software, and we are going to try again with open registration. Registration and sign-in information are available at the bottom of the far right column. As always, if you have any questions or concerns, you may email us at



OC Weekly Article on Talega Mello Roos Refund Dispute

The OC Weekly published an article — one admittedly written with a distinct viewpoint — about whether Capistrano Unified School District ought to refund a portion of Talega’s Mello Roos tax assessments.  We wrote extensively about Mello Roos in this article, wherein we cited the Franchise Tax Board on Mello Roos as follows:

In 1982, the California Legislature enacted the Mello-Roos Community Facilities Act. The Act allows any county, city, special district, school district or joint powers authority to establish a “Community Facilities District” (CFD) which allows for the financing of public services and facilities. Among the services and facilities CFDs can provide are police and fire protection, streets, schools, parks, and libraries. A CFD is authorized to sell tax-exempt bonds to fund such local improvements and then assess a special tax (Mello-Roos tax) against property within the CFD to repay the bonds. Typically the property that is assessed is one of the properties that receive the benefits, either through use of services and facilities or increases in property value. This type of tax is distinguished from regular real property taxes where such taxes are levied for the general public welfare and at the same rates on all properties within the jurisdiction. The Mello-Roos tax is usually included on the annual County property tax bill sent to taxpayers.

Read the whole article at the Weekly, but the key paragraph seems to be this one:

According to a 2006 CUSD resolution, “The board has determined that it has now funded all projects intended to be funded with bond proceeds,” which Ferguson argues means all the roads, schools and parks have been built in accordance with the initial Mello-Roos agreement, so tax savings should be passed on to residents. She understands the Mello-Roos fees can go to future projects, but she thinks those fees should not come disproportionately from Talega. “Taxpayers everywhere are overtaxed,” said Ferguson. “Everybody wants their tax money back.”

We are reluctant to rely on the Weekly article as gospel and we don’t have a lot of insight into this dispute, so there are likely more facts than the Weekly story presents.  After all, the Weekly clearly sides with those who want to keep and reallocate the tax money.  But from what we can gather after reading the article, it seems that the Talega residents believe all of the “local improvements” that required funding as a result of the Talega development have been complete and the excess bond money ought to be refunded to the taxpayers.  On the other hand, it seems that at least certain members of the Board, believe that the excess money can be properly reallocated to other “local improvements” from which the Talega taxpayers will derive a benefit, including for example, much need renovations to San Clemente High School.  The counterpoint to that, of course, is that the residents of Talega would be solely funding those improvements which are not exclusively or directly related to the Talega development, and which (although they may be worthwhile improvements) might equitably be paid for by all of the residents — either all of the residents within Capistrano Unified School District, or at least all of the residents within the school district boundaries for San Clemente High School.  Ironically, once the La Pata Gap Closure is complete, many of the residents of Talega will have the option of sending their children to San Juan Hills High School instead of San Clemente High School.

Our view is that special purpose tax revenue — such as Mello Roos — is not a slush fund for politicians to use as they want.  If taxes are approved for a specific purpose, such as constructing the local infrastructure necessary to support a new development, then once those improvements are built, any remaining money ought to be returned.  If the Talega community facilities bond contemplated using the money to improve San Clemente city schools, then the use of funds would be proper.  If not, then the District will need to find the money to repair the High School somewhere else.  Keep in mind, if the question was posed in a vacuum — should the residents of Talega solely pay for improvements to a high school that students attend from all over the city? — we suspect the answer would be a resounding no.  Just because some local officials already have that money in their possession, shouldn’t change the outcome.

2 comments to OC Weekly Article on Talega Mello Roos Refund Dispute

  • Jim Reardon

    DJO, you have captured the essence of the problem facing the CUSD board, though the issue isn’t limited to high schools. In fact, there are older schools all over San Clemente that are in need of upgrades.

    Compounding the problem is obvious confusion between what is an upgrade or improvement to a school vs. ordinary maintenance, or “deferred maintenance” in the arcane vocabulary of school districts. CUSD’s “deferred maintenance” account is also its financial reserve. So when budgets are tight there is a natural tendency to spend state funds on teachers and not on upkeep of buildings. When you do this for too many years, you end up with at least three problems, 1.) unsustainable wages, 2.) a complacent Legislature, and 3.) buildings in serious need of repair. And so, here we find ourselves.

    Naturally, we want to sustain wages AND fix our buildings. Our message to the Legislature is not suitable for this family-oriented blog. Suffice to say that they are busy redesigning education while there is a hole in our bucket. And the wise owl in the Governor’s mansion has just proposed to fix the teacher’s retirement fund out of this same bucket, putting further stress on wages, deferred maintenance (=financial reserves) and all the rest.

    But your article was about Mello-Roos districts. Those who pay Mello-Roos in Ladera, Talega and Mission Viejo, are the other side of this equation. To the extent that a school district can use Mello-Roos to offset reductions elsewhere, there are strong political forces (the teacher and staff unions, the League of Women Voters, and even some board members) who will be tempted to shift the cost on to the ONLY OTHER SOURCE OF FUNDS within control of the district. They view this as necessary to keep the “dollars in the classroom”.

    Except, the classrooms are falling down from neglect of maintenance. And the Legislature is still free to spend money on toy trains and prison hospitals, and whatever. And the school upgrades never materialize (unless you think that replacement of a 25 year old HVAC system or a roof are upgrades).

    Unfortunately, the only way to put a stop to this is to cut-off the source of easy money and heal our relationship with all of the communities that comprise CUSD. One day in the not too distant future, the district may need to turn to these communities for support and that won’t be forthcoming if Talega is pitted against Ladera against Mission Viejo, against all those other areas with no Mello-Roos. The Legislature and our past school district boards have Balkanized CUSD, assisted by our unions who funded Measure H to elect board members from separate and distinct areas.

    Given what has transpired and what will come, the Talega community is wise to object to being used as a piggy-bank for district projects.

  • Don Juan Ortega

    Thank you, Jim, for a very informative and insightful comment. I do not envy the tough decisions you have to make, particularly when Sacramento seems intent on undermining your efforts at every turn.