CARLSBAD — A flier stating low-income housing, commercial centers, apartments or industrial parks could be built on a vacant lot in La Costa Valley originally slated for a middle school drew more than 125 homeowners and a handful of Carlsbad city officials to a neighborhood meeting March 26 at Coastline Community Church.

The approximately 22-acre site on Calle Barcelona is owned by the San Dieguito Union High School District, or SDUHSD, which serves middle- and high-school students who live in the area. A few days before the meeting, former Superintendent Peggy Lynch, who retired April 4, used the district’s all-call system to draw parents’ attention to a letter she posted on the district Web site. The letter called the plan “a flight of fantasy.”

“In order for anything like what is suggested (in the flier) to happen, there are several steps that would have to take place,” Lynch stated. To change the current zoning, Carlsbad “would require the school district to go through a very public and protracted process that could never occur without complete transparency.”

“The district has made it crystal clear that there is no transparency,” said Leonard Steinberg, a La Costa Valley homeowner and father of two elementary school children. Steinberg, who led the meeting, is president of Friends of North County, a nonprofit organization whose primary goals are “to protect our children’s educational rights and do research into how the district is spending taxpayer money.”

Steinberg said he and other Friends of North County members have spent almost three years attending meetings and searching through documents to determine if the district is misleading the community about the need for a middle school and its plans for the site. He also said the district may “have violated several codes by misspending Mello-Roos funds” (see sidebar).

In an October 2006 North County Times article, Steinberg accused the district of “using faulty enrollment projections to justify buying the property,” an allegation he made again at the March 26 meeting. He also displayed an e-mail from Steve Ma, associate superintendent of business services for SDUHSD, stating that the district was obligated to buy the property. Steinberg then presented the purchase agreement, which stated there was no obligation. “The district loses when you learn the facts,” he said.

According to Ma, “The state has a prescribed method of enrollment projections.” In the mid-1990s, with development under way in La Costa Valley, SDUHSD contracted Davis Demographics & Planning to project district enrollment from 1998 to 2005.

“At the time we agreed to purchase the site … back in the early ’90s, we entered into a mitigation agreement with Fieldstone (the developer) … to identify a site within the community for a potential junior high school. At the time, our enrollment projections suggested we did need a third middle school.”

The district bought the land in September 1999 for approximately $5.8 million. “When we bought the property, the sign was on it,” Ma said, referring to a sign that was posted on the lot for several years identifying the site as a “future middle school.”

Within a few years, enrollment figures began to flatten, Lynch and Ma said. According to figures from Encinitas Union School District, the feeder district for SDUHSD middle and high schools, enrollment at its nine elementary schools decreased by 109 students from 2006 to 2007.

Shortly after opening in 2000, the numbers spiked at El Camino Creek Elementary in La Costa Valley. But since 2002, enrollment has remained at about 900 students, with a high of 920 in 2005, to a current enrollment of 895. By 2005, SDUHSD officials determined that a third middle school was no longer needed, and they removed the sign.

In October 2006, Ma made a presentation to about 100 La Costa Valley homeowners, explaining why a middle school was no longer needed. Following the presentation, when asked about future plans for the site, school board members denied a meeting had taken place between district officials and Carlsbad City Council members.

But according to city records, Lynch and two school board members met with the City/School Committee on Dec. 20, 2005. Councilman Mark Packard and former Councilwoman Norine Sigafoose — who made up the committee — were there, as was former city manager Ray Patchett.

“The meeting was at their request,” Packard said. “They outlined the history of the property. All indications were they were not going to need it as a school site.” Packard described the meeting as “informal” and “exploratory.” He said notes or minutes are “hardly ever” taken at those types of meetings.

“They were asking general questions,” such as whether the city would be interested in the property and what type of zoning would be available if it were deemed surplus. When school board members denied the meeting had taken place, Packard said it “really caught me by surprise.”

“They called me a liar. The school district attorney called me a liar … and they have refused to talk to me since. It’s unfortunate,” Packard said.

“To be very honest, I have no memory of that meeting. I know they said it occurred, and maybe it did,” said Lynch. “I wish I could tell you I remember it, but I don’t.”

Meanwhile, to document claims that the district was misleading the community, Steinberg began a records search which, he said, the district has purposefully made difficult. “They put up as many roadblocks as possible,” he said, noting that he had to use the California Public Records Act six times in the past year to obtain documents.

“We were given boxes and boxes of documents. Most have nothing to do with what we asked for,” said Steinberg, who obtained an e-mail from Ma to John Addleman, the district’s business services analyst, addressing a request from Steinberg. “John, can you follow up on this? Looks like Mr. Steinberg is still poking around,” it stated.

“We have spent hours upon hours providing Mr. Steinberg all the things he’s asked for for over two years,” Ma said. “My comment that he was poking around probably was my frustration that we spent so much time trying to accommodate Mr. Steinberg and his group that it takes me away … from the other things we should be doing.”

Ma said some of the requests were very broad. “But if they were very specific and they wanted X document, we got if for them,” Lynch added. “We’ve given them everything they ever asked for.”

Steinberg said he arranged a meeting in September 2007 at the school district offices “to work out an arrangement so we can be involved.” When he and members of Friends of North County arrived, they were met by district attorneys who said the meeting wouldn’t take place unless the group signed a document agreeing, among other things, that they would not go public with the discussions, distribute fliers or contact the press. The group refused and the meeting never took place.

“They came with their attorney also,” Lynch said. “We felt that frankly, the kinds of things that had been stated in the press by the group had been attacking this district and attacking the integrity of this district. We needed first to agree that we were both going to be confidential and try and work through some things,” she said.

“It’s very typical in a mediation process for both parties to sign an agreement like that,” Ma added. “It allows both parties to throw anything on the table, no matter how feasible or infeasible, and then have a discussion about it. What was ultimately decided at the end would have been made public.”

Steinberg said according to two specialty law firms retained by Friends of North County, there is a “possibility of misappropriation of bond proceeds, a violation of the Mello-Roos Act and gross misrepresentation and negligence.” Steinberg alleges the district spent part of the Mello-Roos money to pay unused-site fees to the state and “knowingly omitted disclosure” of those fees. He also said they used the funds to retain two law firms: one specializing in school district defense and another to provide advice on how to dispose of property.

And he claims the district may have used some of that money to pay for expenses at unauthorized facilities, including construction of Canyon Crest Academy in Carmel Valley. He said during his records search he came across a document that included a breakdown of expenses applied against Mello-Roos funds that listed $1.4 million for Canyon Crest.

Lynch said the district hired attorneys only after it felt it was being threatened with lawsuits based on a letter she received from Steinberg and an article in the San Diego Union-Tribune. The district hired another firm, Best Best & Krieger, to conduct a board workshop on the legalities of a 7/11 committee, which must be formed when a district is considering the sale of surplus property.

Ma said the district has, in fact, used the Mello-Roos funds since 2006 to pay the state an unused-site penalty fee of approximately $95,000 per year. An accounting of Mello-Roos expenditures listed on the SDUHSD Web site, as well as a frequently-asked-questions section, will be updated to include those assessments, he said.

As for spending those funds on projects in the south end of the district, Lynch said, “No. Absolutely not. That is so wrong.” Ma said a detailed accounting of all Mello-Roos expenditures and a breakdown of the money used to build Canyon Crest are available upon request from the district.

At the March 26 meeting, Steinberg also sought to dispel rumors about Friends of North County. Contrary to what’s been said, the group doesn’t want a school built at any cost. “We want the district to work with us to have a say in what is built,” he said. Steinberg also denied that their only intention is to sue the school district. “Our goal is to work with the district. Call us and have a transparent meeting.”

Lynch called the situation regrettable. “This is a phenomenal district with great people who have great integrity. To be attacked by our own residents who are going to send their kids to our schools, it seems unfortunate,” she said.