What is Mello-Roos?
(California Property Tax Information)
In 1978 Californians enacted Proposition 13, which limited the ability of local public agencies to increase property taxes based on a property's assessed value. In 1982, the Mello-Roos Community Facilities Act of 1982 was created to provide an alternate method of financing needed improvements and services.
The Act allows any county, city, special district, school district or joint powers authority to establish a Mello-Roos Community Facilities District (a "CFD") which allows for financing of public improvements and services. The services and improvements that Mello-Roos CFD's can finance include streets, sewer systems and other basic infrastructure, police protection, fire protection, ambulance services, schools, parks, libraries, museums and other cultural facilities.
You will find a lot of "mello-roos communities" in Eastlake, Otay Ranch, Rolling Hills Ranch and San Miguel Ranch, which are all located in Chula Vista. By law, the CFD is also entitled to recover expenses needed to form the CFD and administer the annual special taxes and bonded debt. Another way to say it is....Mello-Roos is a form of financing that can be used by cities, counties and special districts (such as school districts). Mello-Roos Community Facilities Districts (referred to as "CFD's") raise money through special taxes that must be approved by 2/3rds of the voters within the district. A CFD is formed to finance major improvements and services within the district which might include schools, roads, libraries, police and fire protection services or ambulance services. The taxes are secured by a continuing lien and are levied annually against property within the district.
Why is a Mello-Roos CFD Needed?
A CFD is created to finance public improvements and services when no other source of money is available. CFD's are normally formed in undeveloped areas and are used to build roads and install water and sewer systems so that new homes or commercial space can be built. CFD's are also used in older areas to finance new schools or other additions to the community.
How is the Annual Charge Determined?
By law (Prop. 13), the Special Tax cannot be directly based on the value of the property. Special Taxes instead are based on mathematical formulas that take into account property characteristics such as use of the property, square footage of the structure and lot size. The formula is defined at the time of formation, and will include a maximum special tax amount and a percentage maximum annual increase.
How do I pay my Mello-Roos Special Taxes?
In almost all cases Mello-Roos special taxes are levied as part of the annual property tax bill. You should be able to find your Mello-Roos special tax as a line item on that bill. In rare cases, a Mello-Roos district will send out its own bill. To find out more about this bill, you will need to contact the agency directly.