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Politics & Government

Ka-Ching! City Says It's Entitled to $700K from County

After auditing Mello Roos districts in Rancho Santa Margarita, staffers say money spent for a number of traffic improvement projects could be reimbursed.

It’s not often you find $700,000 just lying around.

But city staffers say that’s exactly what they discovered while auditing Rancho Santa Margarita's Mello Roos districts.

Last night the City Council voted to have staff take steps to secure $669,879.69 that officials say the county owes RSM.

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According to staffers, an audit uncovered that a handful of city traffic improvement projects, which had been paid for with city funds, should have been paid out of Mello Roos bond proceeds.

Mello Roos taxes are taxes levied on property owners in Community Facilities Districts—districts formed by a two-thirds vote of local residents to allow government agencies to sell tax-exempt bonds for public improvement projects.

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The taxes can appear on the property tax bill for as many as 25 to 30 years, according to a staff report. The City does not levy Mello Roos taxes.

Providing comprehensive information on Mello Roos taxes has been a longtime goal of the council, according to Mayor Tony Beall.

According to the staff report on the item, in 2010, the County reviewed one of the CFDs in the city and found that RSM was entitled to reimbursement for certain transportation projects. 

Then city staff, working with a consultant, found that other projects in two of the seven county CFDs in RSM also could have been paid out of Mello Roos bond proceeds, according to Paul Boyer, city director of administrative services.

Boyer says the search for the reimbursements "serves as an example of how we mind the store and make sure that these CFDs are used for the purpose they were intended for."

If all the steps line up, Boyer said, staff expects to receive the money in October or November.

“This is an example where collectively, as a city, we have proved our record of being pretty diligent when dealing with precious taxpayer dollars,” said Mayor Tony Beall.

In an email to Patch, Beall said the city believes they may also be “entitled to receive hundreds of thousands (of dollars) of additional reimbursements and we continue to work on that analysis and negotiations.”

In 2011, the city unveiled a program on the city website to help people learn more about their Mello Roos districts

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