Advertisement
 
YOU ARE HERE: LAT HomeCollections

Construction Bonds to Be Repaid With Property Tax Boost : Six Developers Will Join School Assessment District : CORONA NORCO

February 10, 1985|BARRY S. SURMAN | Times Staff Writer

Six developers have told the Corona-Norco Unified School District they will join a special assessment district to finance about $6 million in new school construction, school officials said.

Establishment of a Mello-Roos community facilities district before the houses are built will enable the school district to sell bonds to pay for schools for future residents, said Joseph Holder, assistant district superintendent for business services.

The bonds are to be repaid later, out of higher property taxes on the new houses.

That way, the developers do not have to put up from $2,100 to $5,800 in school district fees for each dwelling before they begin to build, and wait to sell the units to recoup that money from home buyers.

But the unusual school-construction financing plan--used in only one other California school district and just once before in Corona-Norco--has other advantages for both the home buyer and the school district, Holder said.

Deductible Taxes

While the new residents still end up paying for their new schools, the bite will come in the form of increased property taxes, which are deductible from their taxable income, rather than a higher buying price and higher payments.

District Supt. Don Helms said the school district will come out a winner because it will get its construction money all at once, before a single house is built, giving the district more time to plan and build the schools before a flood of new pupils arrives at the gates.

The first time Corona-Norco created a community-facilities district, last year, about a dozen developers building 3,600 houses took part, Holder said.

Holder had expected greater numbers for the second district, but the developers planning to participate in the second district say they will include only about 1,600 dwellings in the Mello-Roos District, said Jim Troxel, administrative director of business services.

Cost-Effective Plan

Those 1,600 housing units are still enough to make the plan cost-effective for the school district, Helms said. They will generate about $6 million in bond sales, based on per-unit averages from the last sale, he said.

"I am surprised" that more developers did not ask to take part in forming a second district, Helms said, " . . . but I'm glad there are enough who are ready to build to make another Mello-Roos district possible."

The community facilities districts, which are not necessarily contiguous, are also called Mello-Roos districts after two state legislators who sponsored the plan in 1982.

After California voters in 1978 overwhelmingly passed Proposition 13, prohibiting the raising of property taxes to provide for public services, most communities began charging fees to developers, to cover the costs of services--from schools to sewage--made necessary by their new construction.

Alternative Financing

But the state Legislature, at the urging of Sen. Henry J. Mello (D-Watsonville) and Assemblyman Mike Roos (D-Los Angeles), also created an alternative way of paying for public facilities: bond sales for improvements in specially designated community-facilities districts.

Developers in the Corona-Norco district--which stretches from the San Bernardino County line in the north to Glen Ivy Hot Springs in the south and past Lake Matthews to the east--still have the option of paying the fees up front.

The district is more than willing to oblige with the plan, said Helms and Holder, because its schools are already overcrowded and the district projects at least 3% annual growth in its student population.

Advertisement
Los Angeles Times Articles
|
|
|