What is a Mello-Roos Community Facilities District?
History of CFDs & the Mello-Roos Community Facilities District Act of 1982:
In 1978, Proposition 13 was enacted by Californians, which limited the ability of many public agencies to finance new projects by limiting the tax rate on real estate to 1%, changing the value on property to their 1975 value and limiting the annual increase in value to 2% except for a change in ownership. This created a hardship for school districts, which at the time, relied heavily on property taxes for income.
In 1982, Senator Henry Mello and Assemblyman Mike Roos spearheaded the passage of the “Mello-Roos Community Facilities District Act of 1982.” This Act authorized local governments and developers to create Community Facilities Districts (CFDs) for the purpose of selling tax exempt bonds to fund public improvements and collect revenues to pay for public improvements. It also authorized the collection of revenue to fund services and maintenance and allows any county, city, school district, special district or joint powers authority to establish a
CFD. A CFD can fund or finance public facilities such as schools, streets, sewers, storm drains, and services
such as the maintenance of parks, storm drains, landscaping, and street lighting.
A CFD must be approved by a 2/3rds margin of the qualified voters in the CFD. If less than 12 voters, the vote is held by acre owned. A Notice of Special Tax Lien is recorded once the CFD is formed. Such Notice appears on the title report of all property within the CFD. CFD Special Taxes are collected on the property tax bill with payment due December 10th and April 10th. The Special Tax appears as a separate line item clearly identified by the CFD name
and public entity which has formed the CFD. The Special Tax is subject to the same penalties that apply to property taxes.
California Civil Code Section 1102.6 requires a seller of real property with a CFD to provide a “Notice of Special Tax” to the buyer. The Notice of Special Tax provides the following information about the CFD:
• The name of the CFD in which the property is located
• How much the Special Tax is for the current fiscal year
• If and to what extent the Special Tax may increase annually
• The number of years the Special Tax will be levied
• The name and number of the public agency to inquire with additional questions
Information regarding Moreno Valley Unified School District’s Community Facilities Districts
Moreno Valley Unified currently has the following Community Facilities Districts. They are reflected below noting the date of formation, Developer, Term of the tax, and the amount of increase, if applicable, each year.
If you have any questions regarding Community Facilities Districts, please reach out to Amy Esquibel, MPA, Administrative Assistant. 951.571.7844 or [email protected]