Waiting for tax answers

Newport Coast grows weary of 7-year query into how county spent money in ‘80s, ‘90s.Frustrated by a seven-year search for as much as $20 million in tax money they paid the county, Newport Coast residents are demanding answers and considering litigation.

Residents and Newport Beach officials have been trying to find out how Orange County officials spent tax money assessed to Newport Coast homeowners in the late 1980s and early 1990s. A final report on the spending is due out in January, but the Newport Coast Advisory Committee plans to press for legal action against the county if it isn’t satisfied.

The money was collected to pay for roads, police protection and other services and improvements the county was providing to Newport Coast before the city annexed it in 2002. Residents were confused by some of the spending -- for example, their taxes helped pay for a library in Laguna Beach and Sheriff’s Department facilities in Aliso Viejo -- and wanted a full accounting of where their money went.

But it’s taken years to find anything out, even with the city helping gather information, and residents have grown tired of waiting.

The Newport Coast Advisory Committee, a group that represents residents and homeowners’ associations in the area, has gotten a trickle of information from the county, but it doesn’t add up to a full accounting of how residents’ tax dollars were spent, said advisory committee chairman Jim McGee.

“One [issue] is that there are no records, according to the county, to support some of the expenditures, and secondly, with some of the records that do exist with regard to other expenditures, we’re not satisfied that the expenditures were properly handled,” McGee said.

One example is Newport Coast Drive. Residents apparently chipped in $13 million to help build part of the road, but when it later was sold to become part of the toll road, they were only reimbursed about $3 million, McGee said.

Although McGee said residents worked with Orange County Supervisor Tom Wilson’s office before the annexation, Tom Wilson said he hasn’t been involved with the issue and wasn’t familiar with it.

County internal services director Bob Wilson, who is working with the city on the issue, couldn’t be reached for comment.

City officials don’t think any money was misspent. The problem with tracking the spending is that some of the documents that explain what happened are hard to locate because they’re nearly 20 years old, said Newport Beach Assistant City Manager Dave Kiff.

Some of the spending may seem unfair, but that doesn’t mean it wasn’t legitimate, he said.

Kiff said homeowners in Newport Coast get charged basic property taxes as well as a number of other fees -- an annual assessment district fee; homeowners’ association dues; a Mello-Roos assessment that goes to local schools; and water and sewer district fees.

With so many line items on their tax bills, residents may be wondering why some of their tax money went to what’s now a toll road that they have to pay to use, and to facilities in other cities, Kiff said.

“Those are all good questions, but it was all perfectly legal,” he said.

He expects a final report on Newport Coast’s tax money to be finished in January -- perhaps in time to preempt the advisory committee from trying to recover the money in the courts.

McGee said if the committee doesn’t have the information it wants by its January meeting, it could ask the city to file suit. The annexation agreement obligates the city to either pursue litigation or “have a very good reason why not,” McGee said.

But Kiff doesn’t think it will have to come to that. He believes the committee will be satisfied with the report, and he doesn’t think the city can sue under the circumstances, he said.

“We have to find that there’s been some evidence of malfeasance on the county’s part and we haven’t done that, so to me there’s no good reason to litigate,” Kiff said.

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