An Overview of Mello Roos

Mello-Roos refers to a special tax assessment paid by homeowners in a subdivision within a Community Facilities District (CFD). Also known as Mello Roos Districts, these CFDs allow new developments to receive public financing through the sale of bonds for the purpose of financing certain public improvements and services. These services may include streets, water, sewage and drainage, electricity, infrastructure, schools, parks and police protection to newly developing areas. The Mello Roos tax you pay is used to make the payments of principal and interest on the bonds. In East Chula Vista, annual Mello Roos taxes, which are added to your property tax bill, can range from several hundred dollars a year to several thousand.

The Reason for Mello Roos

When California’s Proposition 13 passed in 1978, local governments restricted annual increases of assessed value of real property to the rate of inflation, not to exceed 2% per year.

While this was a win for homeowners who now had a cap on their property taxes, local cities and schools, who receive a large percentage of property taxes, needed to find a new way to fund public improvements. In 1982, Senator Henry J. Mello and Assemblyman Mike Roos co-wrote the Community Facilities Act of 1982 which passed in the California State Legislature. The purpose was to establish Community Facilities Districts (CFDs) as a way to provide local governments with an additional financing tool.

Mello Roos Spurs East Chula Vista Development

In the early 1980s, shortly after the passage of Prop 13, East Chula Vista consisted of large swathes of vacant land ready for development. Because property taxes no longer provided sufficient funds, Mello-Roos became the preferred method of financing Chula Vista’s eastward expansion. Developers saw CFDs as a way to offset the high cost of development thereby providing them with money for infrastructure, funding of schools, and the creation of the many parks, trails and public facilities that would draw residents to Chula Vista.

Since the developers passed the cost of community infrastructure to the homeowners living in East Chula Vista’s CFDs, these homeowners must pay a special assessment each year in addition to property taxes.

The total Mello-Roos tax collected from a Chula Vista resident is shared between the agencies that administer the Mello-Roos districts, this may include the Sweetwater High School District, Sweetwater Water District. If you take a look at your property tax bill, it will outline the bonds associated with your Mello Roos taxes.

What Chula Vista Communities have Mello Roos?

According to an in-depth research study performed in 2011, the total median annual Mello-Roos tax paid by a resident of EastLake I was $970.64; Rancho del Rey, $1145.00; EastLake II, $1146.02; Otay Ranch, $3255.54; and EastLake III, $3487.82.

CFD SUBDIVISION YEAR FORMED
97-1 Otay Ranch & McMillin Otay Ranch 1998
98-1 Otay Ranch Villages 1,2,6,7, 12 1998
98-3 Sunbow II 1998
99-2 Otay Ranch Village 1 West 2000
07M Eastlake III – Woods & Vistas 2002
08M Village 6 McMillin and Otay Ranch 2002
09M Village 11 Brookfield and Shea 2003
11M Rolling Hills Ranch 2004
12M Village 7 McMillin and Otay Ranch 2005
13M Otay Ranch Village 2 2005
The City of Chula Vista has more detailed information about Chula Vista’s Community Facilities Districts on their website, found here.