What is a Mello Roos?

Background:
In 1978 Californians enacted Proposition 13, which limited many local public agencies ability to finance new projects. In 1982, Senator Henry Mello and Assemblyman Mike Roos affected the passage of the Community Facilities District Act (CFD). This act authorized local governments and developers to create CFDs for the purpose of selling tax-exempt bonds to fund public improvements. Subsequently, property owners that participate in the CFDs pay a "special tax" to repay the bonds.

Mello-Roos Community Facilities District Act:
The Act allows any county, city, special district, school district or joint powers of authority to establish a "Community Facilities District" which allows for the financing of public services and facilities. The services and facilities Mello-Roos Districts can provide include streets, police protection, fire protection, ambulatory, elementary schools, parks, libraries, museums, cultural facilities, and water facilities. A requisite for the Mello-Roos districts' establishment is that it be approved by two- thirds margin of qualified voters in the district. If there are fewer than twelve registered voters within the proposed district, the vote may be passed by current landowners. At the close of legal proceedings, an established Mello-Roos District has all the legal privileges of a legally sanctioned governmental body.

Responsibilities of Property Owners in the Mello-Roos Districts:
Property owners in Mello Roos Districts are responsible for payment of the "special tax". The amount of the "special tax" is not (directly) based on the value of the property. Special taxes are based on mathematical formulas that take into account property characteristics such as square footage of the home and parcel size. The special tax is typically included in the annual County tax bill.

Legal Rights of the Community Facilities District:
A Mello-Roos District has the legal right to adopt stringent penalties and foreclosure priorities; in the event that the special tax payment is delinquent. Ergo, if the "special tax" is not paid, the District may exercise its legal right to foreclose and sell the property. Foreclosure rights can be initiated after 150-180 days in arrears.

SAFCA NORTH AREA LOCAL PROJECT CAPITAL FACILITIES DISTRICT NO. 1 (NALP CFD NO. 1)

PURPOSE
SAFCA NALP CFD No. 1 allows property owners within the boundaries of the district to pay, over the remaining years of the NALP AD No. 2 assessments what would be otherwise required as a lump sum payment of the additional Capital Investment Equalization Fee (CIEF) component. The Special Tax required by the NALP CFD No. 1 would be equivalent to the amount that similar parcels are assessed in NALP AD No. 2. When NALP AD No. 2 was formed, there were numerous parcels of property that were not included in the boundaries because they were agricultural lands not identified in designated urban areas by their current City and County General Plans. As these properties develop, however, they will benefit from the flood control improvements associated with the NALP. Such properties are required by the NALP CIEF to annex into NALP AD No. 2. However, due to Proposition 218, which was passed by voters in 1998 and which had the effect of changing the rules for forming an Assessment District, annexation into an Assessment District is extremely difficult to implement. In absence of annexing into the NALP AD No. 2, or other alternatives such as formation of a Mello Roos Community Facilities District, the property owners would be required to pay a lump sum additional CIEF component, when a building permit is issued, equivalent to the prepayment of the annual assessments that would have been levied in association with NALP AD No. 2. Because of the sizable amount of the lump sum payment in some cases, the property owners/developers have requested to pay the additional CIEF component in installments. In response to this request, SAFCA formed the Sacramento Area Flood Control Agency Community Facilities District No. 1 (NALP CFD No. 1).

PARTICIPATION IN THE NALP CFD NO. 1
Participation in the NALP CFD No. 1 is voluntary. To date, a small number of parcels, all located within Sutter County, have elected to form the NALP CFD No. 1. In the future, additional developing parcels which benefit from the NALP but are not participants in NALP AD No. 2 may join the NALP CFD No. 1 through annexation into the district.

BOUNDARY
Under Construction