[xgliu128]

original principle is $18,000,000. after 8 years, the unpaid principle is $17,790,000. only $210,000 is paid down to principles. (annual mello roos collected for CFD #6 IAA is about $1,400,000).

check page 10 of the annual report for unpaid principle by 2010.

http://www.californiataxdata.us/docs/Poway6IAA_ContDisc_0910_10600-1309_Fn.pdf

[xgliu128]

Here is open statement for CFD #6 IAA

http://www.californiataxdata.us/DisplayTaxDetails.aspx?fundno=612217

Summary:
Community Facilities District No. 6, Improvement Area A was established pursuant to the Mello-Roos Community Facilities Act of 1982. Qualified electors authorized the district in 2002 along with the issuance of up to $18,000,000.00 in bonded indebtedness. Bonds were issued to pay for certain public facilities and/or services that benefit the district. A special tax is levied on properties in the district to pay the interest and principal on the bonds as well as administrative expenses.

[xgliu128]

do some research on mello roos, by taking PUSD CFD #6 IAA as example.

seems mello roos is not only used for paying the issued bonds which has clear maximum amount, it also pays for some accounts which I consider as an open ended fund. you may think in 25 years, you can pay off the original bond, but actually every year, there are quite certain amount is allocated for other purpose than paying off original bond.

i.e CFD #6 IAA original intention is to pay off $13,000,000 bond issued in 2002.

but from CFD #6 IAA annual report, page 11/12 of
http://www.californiataxdata.us/docs/AdmRpt_6%20IA%20A_Fn11-12.pdf

a large portion of annual mello roos collected is not only used to pay for interests and principles of the 2002 bond. it also pays for Improvement Area Surplus Account, Lease Revenue Bond Account etc.

now I know why 25 years could be extended, since the payment is not really paid to original bond principles.

[xgliu128]

by a simple calculation, i would think it is a mission impossible.

1 billion / 20 years = 50 M / year.

50 M / 55 * 100K = 100K * 1M

that needs 100K Million dollar home!

[xgliu128]

Is original 2002 bond ($55 per $100K = tax rate 0.055% ) for all properties in PUSD?

Will it be able to cover the Prop C-Ser B 2011 bond total payment 1 billion dollar by extending 11-14 years?

[xgliu128]

found an interesting presentation from PUSD about bonds issued.
http://www.powayusd.com/news/PDF_Files/2012-13/BondMeasurePresentation_Aug202012.pdf

slides page 49 contains might be the most controvercial bond

Prop C-Ser. B 2011

principle: $105,000,150 terms: 40-Years
total payment: $981,362,327 payment ratio:9.3463

anyone knows which item in tax bill is for this bond?

[xgliu128]

without hitting AMT, I might think paying off mello roos might not be good based on some simple calculation. say 6K annual payment, pay-off amount is 10x, that is 60K, interest rate is 4%. 60K can become about 120K in 20 years. 6K annual payment with tax benefit will become about 4K annual payment. in 20 years, i will pay 80K total, still less than 120K.

but i agree long term uncertainty is another big factor…

[xgliu128]

Thanks Ocrenter.

Then 2005 home owner still has to pay 25 more years, same as 2012 home owner, till 2037?

if 2005 home owner wants to pay off mello roos in 2013, will the pay-off amount count his already paid 8 years mello roos?

[xgliu128]

Hi, I have 2 questions related to 4s ranch mello roos. maybe general mello roos rules/considerations.

1. seems large portion of mello roos might be tax deductible now, at least CA FTB removed the section to enforce mello roos is not tax deductible.
http://www.sfgate.com/business/article/Calif-drops-property-tax-deduction-campaign-3486711.php#page-2

so will paying mello roos tax and getting tax benefits have a much better advantage than paying off mello roos upfront now?

2. how mello roos for the bond is calculated between homes built in 2012 and homes built in 2005?
say a bond issued in 2005, and the cost is split by 50 homes built before 2005; and after another 50 homes are built in 2012, is the cost now shared evenly across all 100 homes and be recalculated?

[Author]

Posts