A three-month funding standoff prompted Temecula to file a lawsuit last week that has splintered the city’s once-close relationship with the Pechanga Indian tribe.

The decision came after a meeting failed to resolve a dispute over a precedent-setting agreement that was reached about eight months ago. The pact was intended to funnel more than $52 million to Temecula over the next 21 years for police patrols, traffic improvements and work to relocate freeway exit and entrance ramps.

City officials said they regret taking legal action, which they described as necessary to protect residents’ financial interests.

"It’s sad," Mayor Jeff Comerchero said in a telephone interview. "I really don’t take any pleasure in it."

The tribe’s leader countered that the city decision "has done a great disservice to the people of Temecula."

"This absurd lawsuit shows poor judgment by the city’s elected officials," Tribal Chairman Mark Macarro said in a statement released to newspapers. "Although the City Council commonly uses litigation as a tool to conduct business, for Pechanga it is a very serious matter that is not taken lightly. It is not our tradition to solve issues through litigation. This approach has enabled us to become Temecula’s top employer and largest economic contributor."

The rift marks a deterioration of relations between the fast-growing city and its sovereign neighbor that opened its first casino in temporary buildings in July 1995. The gaming facility’s growth has mirrored the city’s as the tribe built a sprawling permanent casino and added a convenience store, recreational vehicle park, hotel, golf course, parking structures and administrative and operations buildings.

The city approved its agreement with the tribe earlier this year after a process that unfolded over several years. The agreement is aimed at offsetting costs incurred by the city as a result of having a gaming resort on its doorstep. A similar agreement would offset Riverside County’s costs.

The agreements are an outgrowth of the rapidly-evolving state gaming compact process. Such agreements are expected to stabilize the flow of gaming impact funds that, in recent years, have been diverted to state programs in times of soaring budget deficits.

In return, the pacts could ease difficulties that the Pechanga tribe could face in increasing the size of its vast facility and the number of slot machines that it can legally operate under state law.

Those agreements and others that are being enacted across the state mark a new chapter in – but not the advent of – tribal funding for cities and unincorporated communities that have been impacted by casinos and gaming resorts.

Terms of the Temecula agreement called for the tribe to allocate $2 million a year to the city over the next 21 years to help offset the casino’s traffic, public safety or other potential impacts. Beginning in year six, that annual payment would be adjusted in relation to the consumer price index.

About $10 million from the gaming mitigation agreement had been identified as future funding to relocate choked exit and entrance ramps at Interstate 15 and Temecula Parkway on the city’s south side.

 
Improvements have been planned for years at that interchange, where traffic frequently backs up with vehicles driven by casino patrons, area residents and travelers.

In a unanimous vote, the City Council decided in August to sue the tribe over a breakdown in the agreement process. In a related action, the council agreed to tap a reserve account to cover what a city staff report called the tribe’s "failure" to make a $2 million payment as anticipated on June 30.

In a written statement, Mayor Comerchero said the city delayed filing the lawsuit pending the outcome of a Sept. 30 meeting between the two sides.
"They weren’t interested in reaching an agreement," Comerchero said afterward.
In his statement, Macarro said the casino funds "are intended to mitigate reasonable off-reservation impacts, not solve City Hall’s budget deficit."
City Councilman Ron Roberts, who has served for years as Temecula’s liaison to the tribe, said on Monday that the tribal funds are not needed to balance the city’s operations budget.

"He knows that is not true," Roberts said in a telephone interview. "I regret that it has come to this, but there had to be a time when a decision had to be made to do what we did."