COTO DE CAZA : Tax Measure Fails to Get Enough Votes

Voters in this planned community rejected a ballot measure this week that would have restructured a special tax assessed on their properties to pay for community improvements such as roads and facilities.

In the special election held Tuesday, residents voted 222 to 174 for the ballot measure, but the 56% majority fell short of the two-thirds required.

The developer of the planned community, Coto de Caza Ltd., said it proposed the tax plan to improve the sale of future homes. But opponents said the plan--called Measure A--benefited the developer more than the current property owners.

“There was a lot of hidden agenda,” said David Kirkey, who led opposition to Measure A. “We’re just ecstatic.”

Coto de Caza Ltd. issued a brief statement Wednesday thanking “the majority of the residents in the district for their support for Measure A.”

The issue centers on a special tax district--called a community facilities district--established by the county to pay for roads and other improvements needed to serve the planned community, which is in an unincorporated area.

Homes within the district were assessed a special tax to help pay for improvements such as roads and facilities. When the planned community and its tax district were formed, the developer and the county agreed to issue $46.3 million worth of bonds, to be paid off by revenues from the special property taxes.

To date, bonds worth $11.3 million have been issued.

But now the county, which is building new roads to serve the community and surrounding areas, seeks to issue more bonds. The developer is also planning another phase of its project called South Ranch.

Coto officials said they found out, however, that because the community has had a high number of property tax delinquencies, financing for future bonds would carry prohibitively high interest rates.

Rather than passing those higher payments on to residents in the form of higher property taxes, Coto officials said, they proposed the ballot measure. At the developer’s request, the County Board of Supervisors agreed to put the issue on the ballot.

Measure A proposed that current residents would continue to pay the existing $11.3-million debt through the special tax district. But the builders of future homes would be responsible for paying the additional bonds. Those costs would likely be included in the purchase price of new homes.

The developer’s parent company, Chevron, would have used its credit to guarantee the bonds, rather than the assessments currently levied against the homeowners.

The measure would have reduced the maximum allowable property tax rate by 38% and reduced the annual escalation rate from 3.5% to 2%.

Kirkey said many residents did not like the fact that the measure would leave the existing 671 homes as the only ones out of the 5,000 planned for the community to have the district’s special tax attached to their properties. That arrangement would make it harder for them to sell their homes, he said.