The Sylvan Union School District on Tuesday abandoned a property that had been designated for a future school site and pledged not to continue building with money from an existing Mello-Roos district in northeast Modesto.
The change reflects both a decline in enrollment projections and increased scrutiny on the terms of a 1994 agreement that was supposed to limit Mello-Roos taxes in the district.
Since homes started sprouting in Modesto's Village I subdivisions, Sylvan has built two elementary schools and a middle school.
The school board's decision Tuesday means a third elementary school won't be built from the same funding source relying on special property taxes.
Sylvan and the Modesto City Schools District reached an agreement to cap Mello-Roos tax collections in Village I at $52.7 million to build new campuses ahead of growth there, and to offset that sum with state funds if they could be acquired.
The districts have gathered $51.8 million through Mello-Roos fees, which are special property taxes designed to support services that benefit specific taxpayers. The districts have garnered an additional $37.2 million in state building funds and were on pace to collect millions of dollars more in property taxes for new schools.
Last week, a joint agency that oversees the tax voted against raising charges this year and to devise a strategy that would end the charges.
The vote to scrap the third Village I elementary school "saved about $14 million, which will help (the agency's) 'exit strategy,' " Superintendent John Halverson said. "We've done our part tonight to help."
It's not clear whether the school districts will set up a similar system when building begins on new subdivisions bordering Village I. Plans are in the works for as many as 3,200 homes north of Sylvan Avenue.
The district's next school is to be built in that area if development occurs. The district has a 13-acre site north of Sylvan, and it could use a Mello-Roos tax district to help pay for it.
Bee staff writer Nan Austin can be reached at email@example.com or 578-2339.