FW: High Mello Roos tax in San Elijio Hills
From: Kiss, Lisa ([email protected])
Sent: Wed 3/12/08 11:23 AM
To: farbet
—–Original Message—–
From: Chiriboga, Roque
Sent: Tuesday, March 11, 2008 4:20 PM
To: Kiss, Lisa
Cc: Malone, Paul; Backoff, Jerry; Romero, Lydia; Serio, Liliane
Subject: RE: High Mello Roos tax in San Elijio Hills
Lisa,
Per Paul’s direction, the following information is in response to Mr. Bulkowski’s e-mail.
Members of the Planning Commission:
As you may know, San Elijo is a project that began development in 2000. And though foreclosures are on the rise, it is attributable not to the amount of the Mello-Roos taxes but rather the timing of the purchases and the types of financing used to purchase these properties. The majority of defaults and foreclosures are occurring on properties that were sold/purchased starting late 2003. Many of these purchases were financed using adjustable rate mortgages that started locking into fixed rates in 2006. As interest rates increased, property owners were finding themselves unable to pay the higher monthly mortgage payments after their loans reset. A combination of decreasing property values and the credit crisis that started in September 2007 has reduced if not eliminated many of the options homeowners had to safe their homes.
The highest “Mello-Roos” taxes are for Community Facilities District No. 99-01 (“CFD 99-01”). CFD 99-01 is an infrastructure CFD in which tax-exempt bonds were issued to finance the construction and acquisition of various backbone and in tract infrastructure needs required to develop San Elijo. The CFD 99-01 Special Taxes are collected each year to repay the principal and interest on the bonds. When the CFD bonds were issued the investors were told what the anticipated annual Special Tax revenues would be and the investors purchased these bonds based upon the security offered by the amount of Special Tax Revenues that could be generated. Any form of reduction in the CFD Special Taxes would jeopardize CFD 99-01’s ability to make its scheduled principal and interest payments to the bondholders.
In 2004 and 2007 the CFD 99-01 has refunded (refinanced) bonds for 22 of the 29 Improvement Area located within CFD 99-01. Much like refinancing a mortgage, refunding the bonds for the 22 Improvement Areas, resulted in a reduction in the annual debt service payments on the bonds thus effectively reducing the amount of CFD 99-01 Special Taxes levied against properties in the 22 Improvement Areas.
It’s good to see buyers such as Mr. Bulkowski doing their homework before purchasing properties. The best purchases are those in which a buyer is well informed and takes the time to understand exactly what they are buying, before they sign on the dotted line.
Roque Chiriboga
Manager of Financial Analysis and Debt Administration
—–Original Message—–
From: Malone, Paul
Sent: Tuesday, March 11, 2008 11:44 AM
To: Chiriboga, Roque
Subject: FW: High Mello Roos tax in San Elijio Hills
Roque-
Please reply and cc me. Thx.
Paul
—–Original Message—–
From: Farbet Corp
Sent: Tuesday, March 11, 2008 10:00 AM
To: Planning Commission
Subject: Re: High Mello Roos tax in San Elijio Hills
To Whom It May Concern in the City Govt.
03/11/2008
Dear Sirs/Madam
My wife and I are retired. House prices in San Elijio Hills are finally coming down to an affordable
level and still dropping due to foreclosures and short sales.
However,The mello roos tax is astronomical.This is affecting our decision to buy here
Has anybody at city hall addressing the amount of foreclosures here? I have asked a few of the sellers and they claim that this piggyback tax is like a mini mtge. Some are paying 500-600 dollars in additional mello roos tax.
You tout this as a good place to live.Don’t you think that some one should pay attention as SEH is now becoming a ghost town as people walk away from the houses. The NOD are increasing daily.
Will someone please look into this.
Thank you,
farbet…..
cc North County Times
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1. Mello-Roos are required to pay for the bonds, which funded the infrastructure of SEH.
2. If we reduce the amount of Mello-Roos charged to each household, we can’t make the scheduled payments to bond holders
3. The Committee already reduced the Mello-Roos tax by refinancing the bond contract twice (2004, 2007)
So in essence:
1. Here’s why we charge so much for Mello Roos
2. Homeowners will continue to pay Mello Roos to pay off the debt created to build SEH
3. No, the committee will not be reducing the amount anytime soon.
4. Thanks for asking, though.
1. Mello-Roos are required to pay for the bonds, which funded the infrastructure of SEH.
2. If we reduce the amount of Mello-Roos charged to each household, we can’t make the scheduled payments to bond holders
3. The Committee already reduced the Mello-Roos tax by refinancing the bond contract twice (2004, 2007)
So in essence:
1. Here’s why we charge so much for Mello Roos
2. Homeowners will continue to pay Mello Roos to pay off the debt created to build SEH
3. No, the committee will not be reducing the amount anytime soon.
4. Thanks for asking, though.
1. Mello-Roos are required to pay for the bonds, which funded the infrastructure of SEH.
2. If we reduce the amount of Mello-Roos charged to each household, we can’t make the scheduled payments to bond holders
3. The Committee already reduced the Mello-Roos tax by refinancing the bond contract twice (2004, 2007)
So in essence:
1. Here’s why we charge so much for Mello Roos
2. Homeowners will continue to pay Mello Roos to pay off the debt created to build SEH
3. No, the committee will not be reducing the amount anytime soon.
4. Thanks for asking, though.
1. Mello-Roos are required to pay for the bonds, which funded the infrastructure of SEH.
2. If we reduce the amount of Mello-Roos charged to each household, we can’t make the scheduled payments to bond holders
3. The Committee already reduced the Mello-Roos tax by refinancing the bond contract twice (2004, 2007)
So in essence:
1. Here’s why we charge so much for Mello Roos
2. Homeowners will continue to pay Mello Roos to pay off the debt created to build SEH
3. No, the committee will not be reducing the amount anytime soon.
4. Thanks for asking, though.
1. Mello-Roos are required to pay for the bonds, which funded the infrastructure of SEH.
2. If we reduce the amount of Mello-Roos charged to each household, we can’t make the scheduled payments to bond holders
3. The Committee already reduced the Mello-Roos tax by refinancing the bond contract twice (2004, 2007)
So in essence:
1. Here’s why we charge so much for Mello Roos
2. Homeowners will continue to pay Mello Roos to pay off the debt created to build SEH
3. No, the committee will not be reducing the amount anytime soon.
4. Thanks for asking, though.
.
