In 1978, Californians enacted Proposition 13, which said public agencies cannot increase your property taxes based on your property's assessed value.

So in 1982, the Mello Roos Act was created to provide an alternate method of financing needed improvements and services.

The Act allows any county, city, special distrct, or school district to establish their own district (called a "Community Facilities District") to finance public improvements and services.

These services can include streets, sewer and water systems, police and fire protection, ambulance services, schools, parks, libraries, and museums.

Why is mello roos needed? To finance public improvements when no other source of money is available.

These special districts are usually formed in undeveloped areas and are used to build roads and install water and sewer systems so that new homes or commercial spaces can be built, such as Ladera Ranch.

The special districts can also be established in older communities to finance new schools or other additions to the community.

What if you don't want mello roos in your community? A special district cannot be formed without 2/3 majority vote of residents. Once approved, the property owners then pay a special tax each year.

By law, this special tax cannot be directly based on the value of your property. The taxes are based on how the property is used, square footage, and lot size.

How long with the mello roos continue? Annually, until the tax bonds are paid off. But even when the bonds are paid off, a reduced fee may continue to be charged in order to continue maintaining the improvements.

Word of Warning: Your home can be foreclosed on within 90 days if you don't pay the mello roos tax!

For more information, visit www.californiataxdata.com

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