The City of Beaumont has released a list of Excuses for Charging/Overcharging Mello Roos Bond and Service Taxes.
By: Libi Uremovic | Original Article at patch.com
CFD 93-1 FAQ Sheet – Fiscal Year 2015-2016: http://www.ci.beaumont.ca.us/DocumentCenter/View/26587
- What do my tax dollars pay for – Facilities (Bonded) improvement area?
Answer: Tax dollars collected are used to pay the debt service on bonds issued. These bonds were issued to fund certain public facilities required to build the community you live in. These facilities include but are not limited to planning, design, permitting and construction of streets, sewer systems, water systems, and storm drains.
CORRECT. The larger tax lien is to pay the Premium and Interest payments for the Mello Roos bonds that were issued to each Development Area. “Planning, Design, Permitting, and Construction” is Urban Logic’s Resume.
2. What do my tax dollars pay for – Services Improvement Area?
Answer: Tax dollars collected are used to pay for the maintenance and replacement of items associated with the community you live in. There items include but are not limited to landscaping in public rights-of-way, street lights, drainage, parks, and street maintenance.
Illegal. The funds to provide Services is included in the Bond. All the Property Owner can/should be charged is the amount needed to pay the Premium and Interest Payments on the Bond Liens attached to their homes.
3. When do the bond(s) mature?
Answer: See attached Exhibit A – Bond Maturity Date. You will need to obtain the improvement area (IA) which can be found on your property tax bill.
Note: Some improvement areas have more than one bond outstanding.
NO ATTACHMENT ONLINE. Some improvement areas have more than one bond outstanding, but not one property owner voted for the bonds.
4. How long will I have to pay this tax?
Answer:
a. Varies by improvement area.
b. A bonded improvement area has stated termination date in the Rate and Method of Apportionment (RMA)
i. See Attached Exhibit A – RMA Maturity Date for the specific improvement area. NO ATTACHMENT
ii. Note – The RMA Maturity Date represents the date for which a tax can be levied up to. It does not require a tax to be levied.
INCORRECT. The City can not charge 30 years of Mello Roos Taxes to every Property Owner that moves into a development in the next 50 years. The Property Taxes are only to pay off the bonds
c. A Services improvement area lasts as long as the City is providing maintenance services.
INCORRECT/ILLEGAL. The city can not charge an additional property tax. Services are included in the bond and are paid off when the bonds are paid off/declared illegal.
5. Can my tax ever increase?
Answer: Yes, the CFD maximum tax is subject to an annual escalator.
NOT THE PROBLEM. Mello Roos taxes are going to skyrocket in the next five years because the bonds have payments escalating from the hundred thousands to the millions.
i. Facilities (Bonded) improvement areas – Escalate 2% per year but are often levied at less than the maximum.
i. Services improvement areas – Escalate at CPI. FY 2015-2016 was 1.35%
MISLEADING AND ILLEGAL. The property owner can only be charged a reasonable administrative fee to process the bonds’ Interest and Premium payment. State law caps the administration fees at 2%, but that doesn’t mean the City gets a 2% ‘raise’ every year. City can’t collect additional funds to process Services as it is included in the bond.
6. Can my tax ever decrease.
Answer: Yes, each year the taxes are calculated based on a budgeted need. Should that need decrease the tax will be reduced to each of the property owners.
FANTASY. Because of the way the bonds have been structured the bond Interest and Premium payments are going to drastically increase for all property owners. The Premium and Interest Payments are clearly listed on the bonds.
7. Why are there more line items on my tax bill this year?
Answer. An effort was made to apply best practices for the CFD taxes accounting process. Through this exercise, we separated the Facilities (Bonded) and Services portions of each improvement area. This is not a new tax as you will notice the total amour between the two line items is roughly the same as the one line item from last year’s tax bill.
TRUE. Property Owners have been and continue to be charged ‘the maximum’ which the Kapanicas and City of Beaumont define as the most they feel they can squeeze from the property owner regardless of the amount of the bond debt. The Bonded CFD amount represents the actual amount to pay the bonds. The Services what the City continues to illegally charge the property owners. And yes, it is roughly the same as last year because the City is continuing the same illegal practices.
8. Why is there a “Services” line item on my tax bill this year?
Answer: See #7 Above
WRONG/LLEGAL. There is a Services charge because the City is attempting to continue the illegal practices of Kapanicas. The City can only charge enough taxes to cover the cost of the bond plus realistic administrative fees.
9. Why did my tax go up this year?
Answer: Contact our Special Tax Consultant directly for more detail. Webb and Associates – (800) 439-6553
EVASIVE. Because the City is continuing to overcharge the taxpayer. ‘Fairly overcharging’ doesn’t make it right. In the past Kapanicas improperly/illegally calculated Mello Roos property taxes based on square footage, charging people in larger houses more than people in smaller houses. Taxes are calculated by dividing the amount of the Interest and Premium payments with the number of property owners. Every tax bill should have been equal. The property owners in Solera Area 14A with larger square footage were charged more Mello Roos than their neighbors in smaller houses.
10. Why did my tax go down this year?
Answer: Contact our Special Tax Consultant directly for more detail. Webb and Associates – (800) 439-6553
EVASIVE. See #9. Property taxes when down for those in larger houses within your development area. Translation; In past years you were gouged more than your neighbors in smaller houses.
11. I’ve lived here several years and this is the first time my property is being taxed.
Answer: Contact our Special Tax Consultant directly for more detail. Webb and Associates – (800) 439-6553
EVASIVE/ILLEGAL. There are laws in this State regulating debt and attaching liens on private property. Yes, everything is a mess. There were property owners in developments that haven’t been paying bond debt and property owners in Area 13, 15, 17C, and 23 that have been paying Mello Roos without any bonds attached to their property.
12. I was never told I had to pay a CFD or Mello-Roos tax.
Answer: Your agent or broker should have disclosed this information to you at the time of purchase. It is recommended you contact your escrow or title company for additional information.
CORRECT/UNACCOUNTABLE. Disclosure is a requirement, but it was documented in the WRCOG Lawsuit that the fees were hidden from the prospective property owners. Furthermore; many of the bonds were acquired/increased debt after the home was purchased, which is illegal.