To Mello-Roos or Not to Mello-Roos – That is the Question!

By Connie Conley The Elk Grove City Council is considering a Mello-Roos special tax district for the Southeast Policy Area, known a...

By Connie Conley

The Elk Grove City Council is considering a Mello-Roos special tax district for the Southeast Policy Area, known as the SEPA.

For people who don’t know, Mello-Roos, named after former State Senators Henry Mello and Mike Roos, is an extra tax imposed on property owners who buy into an area that has public improvements financed through special Mello-Roos tax districts.

Although California State law, the actual Mello-Roos tax is not imposed on communities by the State Legislature. Instead, local areas are empowered to set one up. In our case, it is the Elk Grove City Council.

According to Bruce Walters, who gave an outstanding Mello-Roos presentation before the Elk Grove Planning Commission at their July 16th meeting, he stated that the Mello-Roos tax came about as a result of Proposition 13 and the inability of government to finance public improvements. 

How long does the tax usually last? Typically 20 years! It is shown as an extra line on the home buyers’ annual tax bill.  And here is the kicker, it goes up every year as much as 10% annually. The only advantage to the home buyer is that Mello-Roos payments are tax deductible.

The income from Mello-Roos bonds can be used to build and maintain all sorts of public facilities.  As we have heard, the Council has a long wish list of proposed public facilities, and there is no money to fund the tens of millions of dollars needed to build them.  

In the case of the SEPA, if the Elk Grove City Council passes a Mello-Roos tax, the developer will have to explain to the home buyer why the extra taxes and what they will used for.

Will the developers have to tell their prospective home buyers that the 20-year special taxation is going to build the Senior Center, Animal Shelter, Veterans' Hall and/or even the youth sports complex as well as maintain their housing development's infrastructure?  Will these home buyers be told that they may be financing projects outside of the district?  In order words, they will be paying for projects the entire city will use.  Is that fair?  No, it is not!

Those of us watching closely believe the homes in the SEPA will be geared towards the first-time home buyers. Do you remember when you bought your first home?  Weren’t you stretching yourself with that first important purchase towards the American Dream?  What if you were strapped with a Mello-Roos tax as well?  Would you have been able to afford that home?  Probably not. Or would you have been forced to buy a cheaper home because the monthly payment was too much because of that special taxation?

If the Elk Grove City Council does vote to institute a Mello-Roos tax in the SEPA, because I believe home buyers are more educated these days, I think some will enter the showroom at the new housing development, and ask the question, “Is this development in a Mello Roos District?” And if the answer is, “Yes,” they will turn around and walk out. 

And could you blame them?

Copyright © 2015 by Connie Conley. All rights reserved.

Note: I urge others to write and submit an Op Ed to Elk Grove News on this subject so that we may read other viewpoints.

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Anonymous said...

Elk Grove is starting to look like a steaming dumpster fire of a suburban ghetto in the making.

Look at the more established neighborhoods.

Brown lawns, graffiti, old cars, boats in the driveway....



Can anyone say "Mack Road" or "Power Inn Road?

We don't need more subdivisions filled with cheaply built tract homes sited on postage stamp sized lots.


WE NEED BUSINESS PARKS and good paying jobs.

Not more retail and fast food jobs.

Based on the article, looks like:

More sprawl.

Less water for current residents during a horrendous drought.

More traffic.

More crime.

More fast food joints and strip centers.

Might as well become the sister city of some city in Pakistan.

Elk Grove is becoming such a dump that no city in Japan, South Korea, Australia, Taiwan, New Zealand, etc. would want to become a sister city of Elk Grove.​

Anonymous said...

"We keep building houses on top of the aquifers and paving over the wetlands that help recharge the aquifers.

With more people, we need more potable water.

Unless we discover ways to artificially recharge the aquifers, we are going to be in constant drought mode.

Anonymous said...

Great article Ms. Conley and I would further recommend that everyone listen to the EG Planning Meeting of July 16th plus the Special EG City Council Meeting of July 22nd. Tonight there is also a Special EG City Council Meeting at 6 P.M. regarding the Souza Dairy Project (SDP)that for some reason they're (EGCC) trying to rush through the process. The SDP is the first project in the city's Southeast Policy Area (SEPA). I would imagine there will also be a follow up on the Mello Roos at this meeting.

As to buyers being informed when purchasing a home...depends on the seller and if you as a buyer ask. You're most likely told your property taxes are in the range of 1.5%, but not likely told they increase 2-3% each year. Will those taxes be a problem for SEPA homebuyers? Would have been for me when purchasing our first home. Only time will tell, but will it be when those first time homebuyers choose to resell? Those taxes could be hugh in 8-10 years.

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