Temecula Valley Unified School District

A CFD or Mello Roos District is created by a local governmental agency. A two-thirds majority vote of registered voters living within the proposed boundaries is required to establish a CFD. Or, if there are fewer than 12 registered voters, the vote is instead by current landowners. In many cases, the landowner may be a single owner or developer. Once approved, a Special Tax Lien is recorded on the title of each property in the CFD to notify buyers of the CFD and to allow the Special Tax to be levied onto the County property tax bill. The Special Tax is levied onto the County property tax bill as detailed in the formation documents. These Special Taxes are an important funding source for new construction and facilities development.

The amount of the annual Special Tax is based on a mathematical formula that may take into account property characteristics such as the date of the building permit, use of the property, square footage of the structure or lot size, for example. The formula, defined at the time of formation, includes an annual maximum Special Tax and indicates if the Special Tax is subject to an annual increase. CFD Special Taxes cannot be directly based on the value of the property.

No, the amount of the CFD Special Tax is specific to each CFD and may vary based on property characteristics within a CFD.

The ability for a Special Tax to annually increase is set at the time of formation, the method of which is CFD specific. If an escalating Special Tax is created, the annual increase may be a set flat rate (i.e. 2%), tied to a defined index or a combination of the two. The ability to annually increase the Special Tax is detailed in the Rate and Method of Apportionment (“RMA”) available above for each CFD. The Special Tax will never be levied at more than the maximum allowed even if the CFD’s expenses are higher than the revenue generated by assessing the maximum Special Tax.

The length of time the Special Tax is levied is specific for each CFD and is defined in the Rate and Method of Apportionment (“RMA”) available above for each CFD. State wide, most CFDs which fund facilities are levied between 25 and 50 years. CFDs which fund ongoing maintenance and services (such as fire protection, landscape maintenance, lighting maintenance, etc.) may not have an expiration date. To determine the length of the Special Tax on a specific parcel, please refer to the Parcel Search tool above or the formation documents provided by CFD.

Information about developed property within a CFD can be found using the Parcel Search tool above. Also, the title report for the property within a CFD will show a recorded “Notice of Special Tax Lien”. The seller of real property must disclose the CFD per Government Code Section 53340.2 to the prospective buyer before entering into a contract to purchase a home. Do not hesitate to be in contact with the Special Tax Consultant for confirmation.