Mello-Roos Districts

What is a Mello-Roos District?

A Mello-Roos District is an area, often a newly developed one, within a Community Facilities District that chooses to finance items such as streets, electricity, water, infrastructure, sewage and drainage, police protection, schools, parks, and other public improvements and services through bond sales. Residents in these districts pay a special tax to cover the principal and interest on such bonds.

Are the assessments governed by Proposition 13’s tax limits?

No. Local governments are severely restricted from financing public capital facilities and services by increasing real property taxes. The Mello-Roos Community Facility Act of 1982 provides local government with an alternative financing tool. Proposition 13 limits are on the value of the real
property, while Mello-Roos taxes are equally applied to all properties.

How long does the tax stay in effect?

The tax remains in effect until the principal, interest, and tax collection costs on the bonds are paid off, as long as needed to pay for necessary services, or at 40 years, whichever comes first.

What do Mello-Roos taxes pay for?

Mello-Roos taxes are generally used for facilities and services relating to new growth and ongoing community needs, such as police protection, fire protection, ambulance and paramedic services, library services, museums, cultural facilities, recreation program services, operating and maintaining parks, parkways and open spaces, floor and storm protection, and services for the removal of any hazardous substance. They may also be used for property with an estimated useful life of five years or longer, including parks, elementary and secondary school sites and structures, libraries, child care facilities, recreation facilities, parkway facilities, open-space facilities, natural gas pipeline facilities, telephone lines, facilities for transmitting and distributing electrical energy, and cable television.

If you have any questions, please get in touch with me; I’m always happy to speak with you.