SCHOOL FUNDING WOBBLY LOSS OF DEVELOPER DOLLARS COULD UPSET FINANCE SYSTEM.

Byline: Eugene Tong Staff Writer

SANTA CLARITA - Local school districts have been tethered to developer dollars to offset the rising costs of building new campuses, but the funding system designed to temper the state's financial burden has left districts entangled in environmental fights like the one brewing in the Newhall County Water District.

Water officials want to reduce official data on water availability, saying supply is overstated because it counted polluted wells and unreliable state allocations. But a lower water number would likely stump local development.

Caught in this fracas between resources and growth are the Castaic and Hart school districts. They fear the loss of developer fees will upset the delicate three-legged stool that has come to symbolize financing for public school construction in California.

Both districts have building projects that hinge on the completion of the 1,500-home Northlake development along Castaic Lake - one of Newhall Water's service areas. Officials have said the proposed high school and two elementary campuses are needed to relieve existing overcrowding.

``California has one of the worst mechanisms for building schools,'' Hart High School District board President Steve Sturgeon said. ``In other states, when a county or city is planned, there is already land set aside - the state includes those things on a budget. In our case, we're working upside down.''

In 1986, state law granted local school districts the right to collect fees or property from residential and commercial developers, under the assumption that builders should help provide basic infrastructure. The fees, combined with state and district funds, form the basic financing formula.

`'It's more of a team approach,'' said Bill McDermott, Castaic's assistant superintendent of business. ``You have to keep working all these different agencies and make sure everybody is communicating with everybody.''

Obtaining state funds - such as shares of the $13 billion state bond voters approved in 2002 - has its own hurdles. School districts are required to shoulder up to half of the cost before Sacramento will match the rest.

But bringing that 50 percent to the table has become increasingly difficult, with costs for high schools hovering at $70 million and elementary schools at roughly $17 million.

``The idea that any school district in California would have the excess funds available to put up for school construction - it's make-believe,'' Sturgeon said.

In the William S. Hart Union High School District, officials scraped together money from a $158 million local bond approved in 2001 and aggressive negotiations with builders such as The Newhall Land & Farming Company and SunCal Cos., building Castaic's Northlake.

The three-pronged strategy has bankrolled construction of five junior high and high school campuses that officials believe will absorb enrollment projected to hit about 24,000 by 2007.

``We've been fortunate because of growth,'' Sturgeon said. ``All the school districts have been able to engage with the Newhall Lands and the SunCals and the Pardees, and we've been able to come out of the darkness with new campuses.''

Developers eager to build in Santa Clarita stood ready to deal. At the 1,500-home Tesoro Del Valle subdivision in Saugus, SunCal contributed $5 million - $1 million more than earlier agreements - toward the construction of an elementary campus for Saugus Union School District.

``We not only did what the law required us to do; we did more,'' SunCal regional vice President Frank Faye said. ``That speaks louder than any other action.''

These apparent acts of charity are driven by simple marketing rather than an attempt by builders to recruit allies against possible opponents, Faye said.

``Most of the people that are moving into the area are looking to be part of a community,'' he said. ``Schools are a vital part of a planned community. It creates a higher-quality product, and that's a great thing for everyone.''

Without SunCal's offer of 60 acres of land and infrastructure at Northlake, Sturgeon said, the $5 million Hart budgeted for Castaic High would explode to $100 million in order to cover grading, sewers, utility lines and even a road to the remote site.

``We would have to seek 100 percent of the funds from the taxpayers, or at least a full 50 percent of the load before we can go to the state,'' he said.

School districts could become their own developer. Hart Superintendent Bob Lee and local attorney Richard Patterson formed the Santa Clarita Valley Facilities Foundation, a nonprofit dealing in local real estate benefiting the district.

The group had purchased land in 1998 for the planned Golden Valley High School, but the project was held back by bureaucratic and environmental red tape until construction finally began in late 2002.

``You add more responsibility, more burden and more expenses,'' McDermott said of the strategy. ``It seems more appropriate to have (developers) come in than to have the school district do all the work by themselves. A high school site requires 50 to 60 acres of flat land. Where are we going to find that around here?''

For Sturgeon, being caught in the occasional developer dispute is an unavoidable part of public school governance.

``In terms of creating controversy, there's nothing we can do,'' he said. ``We have to constantly negotiate both sides of the table - with the two legs of the stool.''

Eugene Tong, [phone]

eugene.tong(at)dailynews.com