With two major residential projects scheduled for development within the next 18 months, city officials are considering requiring homeowners in all future housing tracts to pay higher property taxes as a way of offsetting the costs of new public facilities and additional police and fire services.
The City Council will take the first step toward that end today as it looks into establishing the city's first Mello-Roos special tax district.
A housing development on the 36-acre area bracketed by Ellis Avenue, Golden West Street, Edwards Street and Garfield Avenue is under consideration. Deeming it a Mello-Roos Community Facilities District would set future homeowners' total annual property tax at 1.41%. First-year taxes would average about $2,366 in the 113-home tract, according to a report prepared by Deputy City Administrator Robert J. Franz.
Current city residents would not be affected.
Officials say the tax-district debate may represent the first step in creating a citywide policy to mandate that future homeowners in new developments pay higher taxes for city services. After council members decide whether to approve this week's Mello-Roos proposal, city planners are expected to turn their attention to devising guidelines for similar special tax districts in the massive Bolsa Chica and Holly Seacliff developments.
Under the state's Mello-Roos Community Facilities Act of 1982, a city may levy a special property tax in a specified area--exceeding the 1% limitation set by Proposition 13--to pay for improvements such as gutters and storm drains, as well as additional police and fire services.
The Mello-Roos tax revenue would repay a $2.5-million bond over the next 20 years to widen and improve Ellis Avenue, now a two-lane farm road west of Golden West Street. Money from the bond will also pay for installing gutters, sewers and other public amenities, and it will provide $40,000 to $50,000 worth of additional police and fire services each year.
If the council approves creation of the Mello-Roos district, it would be implemented upon approval of the majority of the area's seven landowners.