Real Estate

September 9, 2010

Village I residents 'mad as hell' over taxes

Village I residents demanded school officials stop finding excuses to collect and spend extra Mello-Roos property taxes, but no decisions were made Wednesday night during a lively public hearing.

"At what point are you going to say, 'Enough is enough. Let's quit bleeding these people' ?" asked Wally Delgado, a homeowner in the northeast Modesto community known as Village I.

Village I houses are charged extra property taxes every year to pay for school construction. This year most homeowners will be billed an additional $390.30.

But an agreement signed in 1994 was supposed to limit those tax collections and eliminate the extra taxes if state construction funds were received. That has not happened.

Since details of the tax conflict were made public in The Modesto Bee last month, homeowners have been riled. About 20 community members attended Wednesday's meeting of the Schools Infrastructure Financing Agency.

"We homeowners need to get an attorney," Harvey Edwards told the agency's governing board. "We're mad as hell, and we're not going to take it anymore."

Last month SIFA board members indicated they were looking for an exit strategy to eliminate the extra Village I taxes as soon as possible.

But Modesto City Schools' trustees balked at that during their last meeting. Rather than agree that Enochs High School has collected all it was supposed to from Village I property owners, Modesto's trustees asked staff members to provide them spending options for additional construction projects, such as a swimming pool and veterinary science facility.

"They're finding capital expenditures so they can spend this money," Edwards charged. "That's wrong."

The main dispute is over the way the Village I Mello-Roos school tax district has been run since 1994. A mitigation agreement signed that year capped school construction spending at $52.7 million, and it required Village I's special school taxes to be reduced if construction funds were received from the state.

But school officials instead determined that legal wording allowed them to spend $103.5 million because of inflation and higher construction costs. They also decided it was OK for them to spend state construction funds in addition to, rather than instead of, Village I's Mello-Roos taxes. That inflated how much Village I homeowners were expected to pay in extra taxes.

"Why are you looking for loopholes? Why can't you honor what you agreed to in the first place?" asked homeowner Claudia Parra. "Where's the ethical behavior?"

"I believe an independent legal analysis is needed to determine whether the mitigation agreement was violated," said Dave Cogdill Jr., another Village I homeowner. "We need to have some resolution to this."

The SIFA board also has started asking questions. That board is made up of two trustees each from Modesto City Schools, the Sylvan district and the Stanislaus Union School District. One independent community member also is on the board.

But what power does the SIFA board actually have?

That's what SIFA board President George Rawe wants to know. Rawe also is a member of Sylvan's school board, which voted last month to eliminate plans to build another elementary school in Village I. Sylvan's decision reduced the Mello-Roos district's tax burden.

If Modesto City Schools' governing board continues to press Village I to pay for additional facilities at Enoch High, can the SIFA board overrule it?

"Who has the actual, final authority?" Rawe asked. The SIFA staff is supposed to research that.

Modesto City Schools isn't expected to decide for at least another month about how much more it wants Village I homeowners to pay for Enoch High.

Back in 1994, the estimated cost of that high school was $45 million. But by the time Enochs opened in 2006, more than $101.4 million had been spent.

The SIFA board's next meeting will be Oct. 13, and the Village I Mello-Roos taxes will be discussed again then.

Bee staff writer J.N. Sbranti can be reached at or 578-2196.

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