Paying off Mello Roos

[Anonymous]

I was told about the new bonds coming by Dolinka Group who handles all the payoff info for PUSD. For those who are interested they also confirmed that once you make the payoff you are out from under the Mello Roos even if they do issue new debt. However in my case 9/21 is the cutoff date and after that I was told the payoff amount would increase. I guess that would be the result of extending the period for the MR beyond the current 2034.

[earlyretirement]

[quote=sdseeker]I was told about the new bonds coming by Dolinka Group who handles all the payoff info for PUSD. For those who are interested they also confirmed that once you make the payoff you are out from under the Mello Roos even if they do issue new debt. However in my case 9/21 is the cutoff date and after that I was told the payoff amount would increase. I guess that would be the result of extending the period for the MR beyond the current 2034.[/quote]

I wasn’t too impressed with this Dolinka Group. They are the entity whose phone number is on the property tax bill. I called them several times over several days and no one ever answered the phone. It always went to voicemail.

Finally about 4 days later someone called me back and said he would email me the details to pay it off.

He did email me this below which I’m cut and pasting. (He also gave me a general pay off quote of $15,000 to $20,000 for the CFD #4 Poway Unified). I get charged about $1,000 a year on my annual property taxes.

And he said that as it stands now the CFD #4 for PUSD doesn’t end until 2041 and might get extended for further into the future. I imagine they will do the maximum % increase each year as well.

They did confirm once you pay it off it releases you from further obligation if they extend the bond. I’m leaving on a business trip but once I get back I’m planning on paying this off.

I also called to pay off my CFD#2 which is the main Mello Roos for Santaluz. That quote is $400 if you want to get the exact quote.

They gave me an estimate of $45,000 to $50,000 to pay it off completely but said once I want an exact quote to call back and then I need to pay the $400 and then they will apply it towards the pay off. (I get charged $4,600 per year on my annual taxes). And that bond isn’t set to finish until 2030. It wasn’t clear with me if they were able to extend this bond.

Again, I assume they will raise it the maximum % they are allowed to each year. But even without any % annual increase, it seems like a no brainer to pay this off as we plan to stay in our house 15 years until the kids are at least out of high school.

This is what they sent me below:

_______________________________________________

Prepayment of Annual Special Tax Lien Procedure

1. All requests for prepayment amounts must be received by the Poway Unified School District (“School District”) in writing no less than 30 days prior to the date in which the party wishes to prepay and must include the following information:

a. The name of the party wishing to prepay;
b. The address of the property;
c. The development the property is within;
d. The valid Assessor’s Parcel Number;
e. The Tract and Lot number; and
f. The Annual Special Tax the party is wishing to prepay (i.e. infrastructure or schools).
g. A payment of $100.00 for each prepayment to be calculated. The check(s) are to be made payable to “Poway Unified School District” and
is/are to be included with the written request.

All prepayment requests are to be sent to:
Poway Unified School District
c/o Kari Zipp
13626 Twin Peaks Road
Poway, CA 92064

2. The School District will forward the request for prepayment to Dolinka Group, LLC. Dolinka Group will provide the requesting party with the prepayment
amount within thirty (30) days and send a letter informing the requesting party of such amount. A copy of the response will also be sent to the School District.

3. All parties wishing to prepay must send a check in the prepayment amount made payable to “Poway Unified School District” in writing and send to the School District at the address listed above. The prepayment should include a copy of the letter requesting the prepayment and a copy of Dolinka Group’s response to the request.

4. When the School District receives the prepayment, the School District will send a copy of the prepayment check and accompanying paperwork to Dolinka Group so the parcel can be removed from the Special Tax levy for the following Fiscal Year. The School District will then send the prepayment to the Fiscal Agent to be deposited for the purpose of calling bonds or to be used by the School District at a later date to construct facilities. The School District will also record a “Notice of Cancellation of Special Tax Lien” on the property at the County of San Diego Recorder’s Office.

[ocrenter]

ER, Dolinka’s estimates is pretty much on target with my MR. So doubt you’ll get any surprises going with the estimate until you are ready to do the payoff.

I agree, the more I look into it, especially given PUSD’s recent funny business with bonds, the MR payoff makes a lot of sense for long term home owners.

[earlyretirement]

[quote=ocrenter]ER, Dolinka’s estimates is pretty much on target with my MR. So doubt you’ll get any surprises going with the estimate until you are ready to do the payoff.

I agree, the more I look into it, especially given PUSD’s recent funny business with bonds, the MR payoff makes a lot of sense for long term home owners.[/quote]

Thanks ocrenter. Hopefully it’s on the lower end of their estimate rather than the higher end. 🙂

I just sent off the letter to PUSD this morning requesting the pay off quote and mailed the $100 so looking forward to getting that.

Yes, I just figured this totally makes sense for any homeowners that are confident they will be in their house long-term. We definitely won’t be moving, already did the renovations on the house and have it perfect how we want to live in it for the foreseeable future.

The only wildcard I can think of is if we have twins or triplets when we go for our 3rd child next year. LOL. In that case I guess I’d have to turn my home office into another bedroom. 😉

[ocrenter]

[quote=earlyretirement][quote=ocrenter]ER, Dolinka’s estimates is pretty much on target with my MR. So doubt you’ll get any surprises going with the estimate until you are ready to do the payoff.

I agree, the more I look into it, especially given PUSD’s recent funny business with bonds, the MR payoff makes a lot of sense for long term home owners.[/quote]

Thanks ocrenter. Hopefully it’s on the lower end of their estimate rather than the higher end. 🙂

I just sent off the letter to PUSD this morning requesting the pay off quote and mailed the $100 so looking forward to getting that.

Yes, I just figured this totally makes sense for any homeowners that are confident they will be in their house long-term. We definitely won’t be moving, already did the renovations on the house and have it perfect how we want to live in it for the foreseeable future.

The only wildcard I can think of is if we have twins or triplets when we go for our 3rd child next year. LOL. In that case I guess I’d have to turn my home office into another bedroom. ;)[/quote]

btw, they should have told you the interest rate on the MR as well. for mine we were looking at 5% and 7.5%. Which again makes the decision to pay it off a relatively easy one as well.

[earlyretirement]

[quote=ocrenter]

btw, they should have told you the interest rate on the MR as well. for mine we were looking at 5% and 7.5%. Which again makes the decision to pay it off a relatively easy one as well.[/quote]

I didn’t ask them the rate but I recall seeing it online on some website before and yes the interest rates were high.

I’m sure the % of people that pre-pay these off is very very low. But I also think many people only have the mentality about worrying about today and not thinking about 10+ years from now. I’ve always been the type that likes to think further down the road into the future.

I can’t imagine a scenario where the taxes and fees are going to get any lower or better for the PUSD.

I’m not one of these people that don’t think you don’t get some value out of these Mello Roos taxes. If I didn’t have any kids then I’d feel differently I’m sure but having kids, I feel it’s well worth it being in the PUSD.

I’d be spending a whole lot more sending my kids to a private school vs. PUSD schools. If I lived in another area within the SDUSD, I’d definitely have to send my kids to private school which would cost a fortune.

[ocrenter]

[quote=earlyretirement]

I’d be spending a whole lot more sending my kids to a private school vs. PUSD schools. If I lived in another area within the SDUSD, I’d definitely have to send my kids to private school which would cost a fortune.[/quote]

average private school would be approx $6k per year, x 12 = $72k.

I’ll just pay the MR, thank you very much… =)

[Essbee]

I honestly thought that private schools are more like $30K per year. (I guess I’m thinking Francis Parker, La Jolla Country Day, and Bishops).

Where exactly are these $6K per year private schools? Because I’m spending almost that much on 3 hours per day of preschool!!

[earlyretirement]

[quote=Essbee]I honestly thought that private schools are more like $30K per year. (I guess I’m thinking Francis Parker, La Jolla Country Day, and Bishops).

Where exactly are these $6K per year private schools? Because I’m spending almost that much on 3 hours per day of preschool!![/quote]

Yeah, some of them can be astronomical. I think ocrenter was referring to some Christian schools like Maranatha near 4SRanch – http://www.maranathachristianschools.org/Admissions_Tuition-Fees.php?SubSection=Admissions_Elementary

That seems to be between $7,300 to $9,000 per year for Elementary through high school. I don’t know much about that school but it looks beautiful from the outside.

Cambridge School – Kindergarten through 7th grade is $13,400 per year.

http://www.cambridgeclassical.org/files/admissions/TCS_2012-2013_Tuition_Schedule.pdf

La Jolla Country Day School ranges between $17,600 to $27,600 per year.

http://www.ljcds.org/page.cfm?p=1982

Francis Parker ranges from $20,500 to $26,000 per year.

http://www.francisparker.org/page.cfm?p=521

Bishop’s School is $28,900 per year.

http://www.bishops.com/admissions.aspx?id=1642

Absolutely ocrenter’s figures seem to be the most affordable private schools but absolutely some of them are as much as universities per year.

But I assume he was figuring a bit of a discount for multiple kids. I went to private schools growing up and I had siblings and I know these schools many times offer a multiple sibling discount.

Trust me…I looked at all the options when deciding where to live and how all the schools are. When it came down to it, that was a HUGE factor in where to live and what the schools were like in the various districts and public vs. private.

Private school would possibly be an option if I only had 1 child. But with 2 and most likely 3 after next year who in the world wants to spend up to $75,000 to $90,000 a year on private GRADE schools?

[earlyretirement]

[quote=ocrenter]

average private school would be approx $6k per year, x 12 = $72k.

I’ll just pay the MR, thank you very much… =)[/quote]

Exactly. And most private schools are much more than that. $72k X 3 kids = $216,000.

It’s getting obscene the University tuition rates now. I started saving up the day the kids were born. It’s a bit sickening thinking you will spend hundreds of thousands of dollars in 4 year degrees for a few kids.

My hope is that Poway Unified stays one of the top school districts. Personally I think they will always do well. I’ve been impressed with the amount of parent involvement, volunteerism, donations, etc. That makes all the difference in the world.

[ocrenter]

I was just looking at few parochial elementary schools. I figured that would be the base.

[DelSurBird]

Great discussion going here. With the funny PUSD bond business going on, is there a website or watchdog group I can follow and get more info? With the interest rates projected to drop further, I am wondering if there are plans for a CFD 14 and 14A bond refi in the near future? Would a refi reduce the amount for the total MR payoff?

My MR is approx $5700/yr and the total payoff is approx $100K ($50K each bond) for a $540K house on a 4000 sqft lot newly built in 2011 (info from SD Tax collector – havent paid the fee to get the actual amount for MR payoff). This seems high for a MR payoff compared to the other numbers I am seeing here….but may make sense since I am the first homeowner of this house. i would like to hear from other homeowners in my area how their MR payoff numbers compare. Thanks!

[ocrenter]

[quote=DelSurBird]Great discussion going here. With the funny PUSD bond business going on, is there a website or watchdog group I can follow and get more info? With the interest rates projected to drop further, I am wondering if there are plans for a CFD 14 and 14A bond refi in the near future? Would a refi reduce the amount for the total MR payoff?

My MR is approx $5700/yr and the total payoff is approx $100K ($50K each bond) for a $540K house on a 4000 sqft lot newly built in 2011 (info from SD Tax collector – havent paid the fee to get the actual amount for MR payoff). This seems high for a MR payoff compared to the other numbers I am seeing here….but may make sense since I am the first homeowner of this house. i would like to hear from other homeowners in my area how their MR payoff numbers compare. Thanks![/quote]

wow, that’s extremely high, so far seem like PQ, Stonebridge, and southside 4S are all around $50-60k. $100k is quite extreme…

[Anonymous]

I suspect that quote of $100k is in error. I purchased new in 2010 in Stonebridge and my MR was $5100. My payoff made 2 weeks ago was just about $57k.

[Anonymous]

The insiders guide to Mello Roos. Fascinating reading.
http://www.orrick.com/fileupload/1180.pdf

This is a bit technical but will really disclose the ugly underbelly of
MR. You will see how they are crafted to take advantage of a lack of transparency to the tax payer. If anyone doubts their MR will not increase the maximum 2% per year you should read this. You will also see how they have ability to issue new debt and extend the duration. I know I may not recoup my payoff if I sell anytime soon but I sleep pretty well having eliminated this crazy uncertain annual cost. YMMV.

[Author]

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