Manteca Unified Mello-Roos taxes have become a hot topic.

Trustee Sam Fant wants to put an eventual end to the specific Weston Ranch Mello Roos tax — the only   area in the school district where the tax on a home doesn’t end after 30 years.

Former trustee Dale Fritchen is questioning the legality of a board move  to use the Mello-Roos tax in Weston Ranch to pay for the $3 million worth of football stadium upgrades covering artificial turf and all-weather track.

Mello-Roos districts — also known as Community Facilities Districts — are on Tuesday’s board agenda as a consider and discuss item. The board meets at 7 p.m. at the district office, 2271 W. Louise Ave. 

All of Weston Ranch is part of one of three Mello-Roos districts within the Manteca Unified School District to pay for new school construction.   The other two CFDs are Lathrop primarily west of Interstate 5 and Manteca for much — but not all — of the property within the East Union and Sierra high school attendance boundaries.

Mello-Roos came into being after Proposition 13 limited local school districts’ ability to raise money for new construction to accommodate growth. The CFD mechanism is also used by cites for services such as streets, water, sewage and drainage, electricity, infrastructure, schools, parks and police protection to newly developing areas. The tax paid is used to make the payments of principal and interest on the bonds.

Mello-Roos taxes are one of four sources to build new school facilities. The others are state bond money, local bond money and developer fees for new homes that are collected upfront when building permits are issued.

The Mello-Roos tax is levied on top of basic Manteca Unified property taxes and — in most cases — taxes to repay general obligation bonds.

The Mello-Roos caps on the amount that can be assessed per year on property fluctuates based on square footage and can range from $344 to $1,200 a year depending upon the CFD district and individual home

The Weston Ranch Mello-Roos tax is different from the district’s other two CFDs as there is no sunset on the assessment. The Lathrop and Sierra/East Union CFDs’ property tax obligation runs for 30 years from the day a newly constructed home is added to the tax rolls.

Buyers of homes are made aware of any Mello-Roos property obligation assessed against the property. Mortgage lenders take it into account to determine a buyer’s ability to handle monthly housing costs.

Weston Ranch

Mello-Roos tax

The Weston Ranch CFD was formed on Jan. 24, 1989 by landowners that authorized up to $30 million in bonds.

The bond proceeds were part of the funding used to build Weston Ranch High, Great Valley School, and George Komure School. 

The district collected $3,041,900 from Weston Ranch homeowners in 2014-15 to help pay principal and interest on the CFD bonds.

The CFD tax receipts that don’t go each year to cover bond repayments are what would fund improvements to the Weston Ranch High athletic fields. Whether it would cover the entire tab depends upon how much the improvements cost and what cushion the district needs to retain as a cushion for payments so as not to jeopardize their creditt rating and ability to borrow money in the future.

The current amount of the outstanding bonds is $21,455,866

East Union/Sierra

Mello-Roos tax

The CFD for East Union and Sierra was also formed in 1989 but with a larger maximum bond funding authorization of $90 million. There were $45,350,000 in bonds issued that have a current outstanding balance of $33,820,000. Homeowners within the CFD paid $1,412,699 during the fiscal year ending June 30, 2015.

The bonds paid for the East Union High stadium upgrade plus helped pay for Woodward School, McParland School, and Stella Brockman Annex, the Woodward Annex property purchase, and Lathrop High.

There is $44,650,000 in bonds that can still be issued that’s based on future homes yet to be built.

Lathrop Mello-Roos

The Lathrop CFD was formed in 2004 and is authorized for up to $400 million in bonds although none have been issued.

Eligible projects that can be funded with the bonds proceeds when they are sold include Mossdale School, Ethan Allen School, 10 new elementary schools, district renovation, as well as highs school swimming pools and stadiums.

The school district collected $589,563 from the Lathrop CFD last fiscal year.

The money collected so far can go toward projects or be used to leverage bonds.

As part of the Measure M general obligation bond measure passed in 2004, the district agreed to reduce the Mello-Roos tax in all of the CFDs by approximately $54 a year to offset the increased tax rate. It was designed at the time to avoid losing votes among CFD homeowners who viewed it from their perspective as double taxation and had told a polling firm they would vote against the bond because of that belief.

There was no such offset included in the Measure G bonds passed in 2014.

To contact Dennis Wyatt, email dwyatt@mantecabulletin.com