MELLO ROOS, AKA CFD-community facilits districts

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When PROPOSITION 13 (The Howard Jarvis property tax initiative) was passed in 1982, a situation developed where it was no longer possible for taxes to be raised for funds to provide new facilities such as fire and police stations, parks, libraries etc.

Mr Mello and Mr Roos, California State Legislators co-authored a bill to provide a mechanism whereby funds could be raised for these projects. The fees, which are a lien against your home, became known as MELLO-ROOS or CFD's and appear on the tax bill sent to you by the county assessors office. There was much spirited debate about the implementation of these fees as an end run around PROPOSITION 13, but the legislation eventually passed.

Some of the earlier fees were about $300 per year and not a major factor in your house payment although they typically increase 2% annually during the term of the lien. They typically run for 15 to 25 years at which time they were to expire. Many of these fees today run around $1700+ annually and can mean as much as $200 per month in your house payment. WHEN A HOME SELLS, THE BALANCE OF THIS FEE IS PASSED ON TO THE NEW OWNER AND THEY CONTINUE TO PAY UNTIL ITS PLANNED EXPIRATION.