A funding standoff between Temecula and the Pechanga Indian tribe is expected to trigger a lawsuit soon that could fracture a close relationship between the pair of neighboring jurisdictions.

In a unanimous vote, the City Council decided to sue the tribe over a precedent-setting agreement that was reached five months ago. The pact is intended to funnel more than $52 million to Temecula over the next 21 years for police patrols, traffic improvements and work to relocate four exit and entrance freeway ramps.

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.

The council decisions drew a sharply-worded response from the tribe’s spokesman.

"At a time when real leaders work together to solve problems, the Temecula City council chooses a path of conflict, litigation, and uncertainty," Mark Macarro, who was elected last month to his eighth consecutive term as Pechanga tribal chairman, said in a statement subsequently released to area newspapers.   

"The absurdity of their action is beyond comprehension and jeopardizes millions (of dollars) for services that benefit the entire community," Macarro continued. "We will consider our options and proceed accordingly."

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

For much of this period, Councilman Ron Roberts has served as the city’s liaison to the tribe. Over the years, the city and the tribe have worked closely on bridge replacement and road widening projects.

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 with vehicles driven by casino patrons, area residents and travelers.

The council did not publicly debate the merits of a lawsuit Tuesday night. The public vote came after a closed session review of the issues. A pair of council members remained afterward to field reporters’ questions, and said an out-of-court settlement might be  possible if the differences are resolved.

"Obviously, we disagree," Mayor Jeff Comerchero said as a reporter cited the tribe’s position in the dispute.

As spelled out in a report by City Attorney Peter M. Thorson, much of the breakdown revolves around separate negotiations between the tribe and Riverside County.

The city approved its agreement with the tribe 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 county 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 sprawling facility and the number of slot machines that it can legally operate under state law.

Those agreement 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 call 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 will be adjusted in relation to the consumer price index.

In his report, Thorson said the tribe and county had reached an impasse in their agreement, which would help fund gambling addiction and casino-related criminal prosecution and defense programs.

The county is seeking $852,000 a year from the tribe, Thorson said in his report. The tribe had instead offered $500,000 a year, and the two sides had not met since July 13 to resolve their differences.

City officials had hoped to include language in its agreement that would have allowed the two pacts to be implemented independently of each other. But the Pechanga Tribal Council would not agree to that condition, Thorson said.

As a result of those conditions and the continuing impasse between the county and tribe, "the city has no alternative but to file litigation to preserve its rights," Thorson said in his report.