Paying off Mello Roos early (San Diego, Temecula: homes, buy, high school)

[shmoov_groovzsd]

Originally Posted by earlyretirement

Just an update for those interested in prepaying off their Mello Roos. I went ahead and paid off both CFD's. It will be a good feeling not to have to worry about paying Mello Roos anymore in the future.

I realize it might not make sense for many families that don't know if they will be in their homes for the long haul but I definitely know we'll be here until the kids are out of high school so it seems like a no brainer to pay it off early.

I contacted David Taussig and Associates and sent them the $500 check and they were very quick to email me out a payoff quote breakdown a few days later. They had the name and address of the person to send the check to with the City of San Diego. The CFD #2 (Santaluz) came out to around $46,000. My CFD #4 (Poway Unified) came to around $15,000. Both entities emailed me to confirm they got the payment and won't have to deal with this again in the future.

Thanks for sharing that valuable info. Thats the way do it in areas with MR for the long run, if you can afford it.

[earlyretirement]

hitman and Shmoov,

Thanks guys. I always believe knowledge is power and the more information you can share the better. (Especially as it pertains to taxes and finances). That's what these boards are all about.

In speaking to both companies that administer the bonds and handle the pre payments for both CFD #2 and CFD #4 they both said it is rarely done. In fact, I don't think they even want people pre-paying these Mello Roos off. And I was reading some documentation online that said in some situations they won't allow it. I figured it was better to prepay it off now while they still allowed it.

While reading wording like this below, it didn't give me a good feeling.

"PREPAYMENT OF ANNUAL SPECIAL TAXES

Notwithstanding the foregoing, no prepayment will be allowed unless the amount of
Annual Special Taxes that may be levied on Taxable Property, net of Administrative
Expenses, shall be at least 1.1 times the regularly scheduled annual interest and
principal payments on all currently outstanding Bonds in each future Fiscal Year and
such prepayment will not impair the security of all currently outstanding Bonds, as
reasonably determined by the Board. Such determination shall include identifying all
Assessor's Parcels that are expected to become Exempt Property".

But I LOVED this part,

"With respect to any Assessor's Parcel that is prepaid, the Board shall indicate in the
records of IA No. 1 of CFD No. 2 that there has been a prepayment of the Annual
Special Tax obligation and shall cause a suitable notice to be recorded in compliance
with the Act to indicate the prepayment of the Annual Special Tax obligation and the
release of the Annual Special Tax lien on such Assessor's Parcel, and the obligation of
such Assessor's Parcel to pay such Annual Special Tax shall cease."



It was a big financial hit to pay all at once but I didn't feel good seeing all the shenanigans with tax and bond issues involved with the PUSD and felt that this is really the way to go.

Happy holidays guys.

[SanDiegoKauai]

Thank you for all the valuable information on this blog. I'm also getting ready to pay off the Santaluz CFD 2 bond and the PUSD CFD 4 bond. What's unclear to me is if once the CFD 4 bond is paid off, my parcel will be exempt from any further new PUSD bonds. Can anyone clarify that?

[earlyretirement]

Originally Posted by SanDiegoKauai

Thank you for all the valuable information on this blog. I'm also getting ready to pay off the Santaluz CFD 2 bond and the PUSD CFD 4 bond. What's unclear to me is if once the CFD 4 bond is paid off, my parcel will be exempt from any further new PUSD bonds. Can anyone clarify that?

Yep. Once you pay off your CFD (Mello Roos) you are done with them forever. They notify the City and the school district and you're forever released from the CFD's you are paying off. Even if they end up increasing or extending the term of the bond, you're still exempted from paying anything further. (At least that is what the administrator of the CFD #4 told me).

They say it takes a few weeks but eventually on your updated property tax bill you get from the City each year will see $0.00 next to the CFD #2 and CFD#4 ) or whichever you are paying. It's a great feeling paying them off and not having to think about it.

It probably doesn't make sense for everyone but if you know you will be in your home for the long-term it makes sense.

[kettlepot]

Originally Posted by SanDiegoKauai

What's unclear to me is if once the CFD 4 bond is paid off, my parcel will be exempt from any further new PUSD bonds. Can anyone clarify that?

Originally Posted by earlyretirement

Yep. Once you pay off your CFD (Mello Roos) you are done with them forever. They notify the City and the school district and you're forever released from the CFD's you are paying off.

But just to clarify, Kaui you would be free from the original Mello-Roos bonds, but the voters of PUSD could by a 55% margin at any time vote in new bonds which would be financed by a straight-up assessment on your property tax bill.

SDUSD voters approved Proposition Z this November 2012 which will add a tax on our bill to finance a new school bond in addition to our two outstanding bonds for Props MM and S.

[earlyretirement]

Originally Posted by kettlepot

But just to clarify, Kaui you would be free from the original Mello-Roos bonds, but the voters of PUSD could by a 55% margin at any time vote in new bonds which would be financed by a straight-up assessment on your property tax bill.

SDUSD voters approved Proposition Z this November 2012 which will add a tax on our bill to finance a new school bond in addition to our two outstanding bonds for Props MM and S.

Oh yeah that goes without saying that voters can vote for NEW bonds. Nothing you can do about new bonds but these have nothing to do with the original Mello Roos (CFD) taxes.

[kinabalu]

Nice to see you on this board too EarlyRetirement. I was just actually looking into paying off our two CFD taxes for mello-roos and PUSD. What is upsetting to me is I was just told by Willow Grove Elementary when I tried calling them about Kindergarten enrollment for my daughter is, "we are at capacity and the district may send you to a nearby school". I am thinking, we paid all these fees including the mello roos for this school in particular, the WG elementary school is literally right outside of SL and now they are telling me we can't go?!?

I now have to go and petition with the PUSD just so we can go to our local elementary school. What is wrong with this picture?

[earlyretirement]

Originally Posted by kinabalu

Nice to see you on this board too EarlyRetirement. I was just actually looking into paying off our two CFD taxes for mello-roos and PUSD. What is upsetting to me is I was just told by Willow Grove Elementary when I tried calling them about Kindergarten enrollment for my daughter is, "we are at capacity and the district may send you to a nearby school". I am thinking, we paid all these fees including the mello roos for this school in particular, the WG elementary school is literally right outside of SL and now they are telling me we can't go?!?

I now have to go and petition with the PUSD just so we can go to our local elementary school. What is wrong with this picture?

Hi Kinabalu! Nice to see you on CityData. Yep, if you KNOW you will stay in the house for the long haul the ROI is very compelling on prepaying off your Mello Roos. I don't regret it for a second and love seeing that $0.00 on my property tax bill for the CFD.

Oh yeah it can be VERY frustrating but I wouldn't worry just yet. They tell me that so far no parents were denied entry to Kindergarten at Willow Grove. Last year they had something like 8 Kindergarten classes! But I am hearing there is so much more demand now from new families. So many families with young kids that moved to the area in the past 2 years. Santaluz is FULL of parents with young kids.

I wouldn't stress too much yet. I had a BIG fear like you did. In fact, last year our daughter tried to go to pre-school at Willow Grove and she was turned away. While I realize that preschool isn't yet elementary school and you pay to enter, it was still frustrating being sent to another school in the district.

Our son just got confirmed for a preschool spot next year at Willow Grove. Fortunately he was guaranteed a spot because he was taking the spot of our daughter that will move to Kindergarten there. But get this..... we did NOT want to enroll him for summer school preschool classes. They initially told us last year that he could wait until the Fall to start when the normal school starts. But there was SO MUCH demand for a spot that they told us if he doesn't start in June then they couldn't guarantee him a spot. So naturally we jumped into enrolling him.

It is terribly frustrating, especially when you spend the kind of money on a home in the area and also on massive Mello Roos taxes. But I wouldn't lose hope yet. They said the same thing last year to all the parents and they made a few extra Kindergarten classes and they tell me no parent that tried to enroll was turned away.

Definitely keep trying and don't get too discouraged yet. Willow Grove is an amazing school full of wonderful and talented teachers and teachers aides. I couldn't be happier that our kids will go here for the next several years for elementary school. It's highly rated with an excellent reputation for good reason.

Ok..good luck and don't hesitate to PM me. You have my email address.

[Recycledlettuce]

Very old post, but relevant to me....I thought MR was based on home age (newer home has longer to pay.). Is that not correct?

Originally Posted by earlyretirement

Someone else posted this on another board but it is VERY informative so I thought I'd repost the link to the file here:

http://www.orrick.com/fileupload/1180.pdf

My feeling is there is a clear lack of transparency regarding Mello Roos taxes. Plus, it's very clear to me they will definitely increase the Mello Roos taxes the maximum amount each year as allowed by law. It's also disturbing that these entities can extend the bonds from the original finish dates. So you can think you are done paying in 2041 but then the bond can get extended it sounds like. The entire thing sounds very hazy.

Paying off the Mellow Roos (CFD) ahead of time seems to eliminate all of these potential headaches and ever increasing tax burden in the future.

[1AngryTaxPayer]

Originally Posted by earlyretirement

Oh yeah that goes without saying that voters can vote for NEW bonds. Nothing you can do about new bonds but these have nothing to do with the original Mello Roos (CFD) taxes.

Whoa, I just caught this. SO, you can pay off your MR and then they can hit you with another one?