Olive Grove Charter School wants a judge to order a Santa Ynez Valley school district to pay up in the latest salvo over property tax payments.

The charter school filed the petition for a writ of mandate and complaint for declaratory relief against the Santa Ynez Valley Union High School District on March 14 in Santa Barbara County Superior Court.


The lawsuit, filed by attorney Gregory Bordo from the Los Angeles-based firm of Blank Rome LLP, seeks more than $428,119 in in-lieu property tax payments. 

Only the Santa Barbara Unified School District and the Santa Ynez high school district were ordered to pay in-lieu property taxes. 

The spat stems from how the state classifies the two districts, setting the stage for a hefty debt that Santa Ynez Superintendent Scott Cory said has said could lead to insolvency.

The civil lawsuit only includes the plaintiffs’ allegations, with the school district expected to file its response in the future. 

Unlike their counterparts in Santa Barbara County, the Santa Barbara and Santa Ynez districts have been ordered to hand over some of their property tax proceeds because both are “basic-aid” districts, meaning their revenue from local property taxes exceeds their entitlement under the Local Control Funding Formula (LCFF).

The California Education Code requires school districts to transfer to charter schools an in-lieu amount of property taxes, essentially lowering the district’s local revenue amount, according to the Department of Education. 

For non-basic aid districts, or those where property taxes add up to less than the entitlement under the state formula, state aid covers the payment they otherwise would have to hand over.

Olive Grove Charter School, with an enrollment now of approximately 750 students, gained approval to operate from the state after rejections from multiple local school districts.

While both districts have balked at paying, Santa Barbara ultimately sent a payment to the state, but Santa Ynez has held off, citing financial concerns. 

“Despite being fully cognizant of its statutorily mandated funding obligation and having the ability to perform its duties under the Education Code, SYVUHSD has willfully failed and refused to transfer any of the required funding in lieu of property taxes to Olive Grove for fiscal year 2018-2019,” the legal complaint said. 

Olive Grove has asked a judge to intervene by issuing a peremptory writ of mandate directing Santa Ynez district to make the payment, claiming the lack of funding is harming the charter school

“Indeed, absent issuance of the writ, Olive Grove’s ability to operate will be materially and adversely impacted,” the complaint says.

In addition to asking for the property tax payment, Olive Grove’s lawsuit also seek “other and further relief as the court deems just and proper.”

Both school districts also are asking the state to waive the payment requirement, and have questioned the Olive Grove enrollment numbers used to calculate in-lieu property tax debts. 

Santa Ynez also is hoping to get a state-aid district to take on Olive Grove so California would cover the payment. 

A third option, for a longer-term solution, seeks legislative change so state-aid districts don’t face the payments in the future.

— Noozhawk North County editor Janene Scully can be reached at jscully@noozhawk.com