Mello-Roos Community Facilities District
Revised: August 2014
- State Law
- General Guidelines
- Yearly Fiscal Status Report
- Draw on the Reserve Fund, Non-Payment of Principal and Interest (Default), or Replenishment of Draw on Reserve (Voluntary Disclosure)
The California Debt and Investment Advisory Commission (CDIAC) is providing the following guidelines to assist local agencies in the implementation of Section 53359.5 of the Government Code, which section is part of the Mello-Roos Community Facilities Act of 1982, amended (Sections 53311 et. seq.).
All issuers selling community facilities district (CFD) bonds after January 1, 1993 are covered by this law and are required to report certain information about the bond issues through the completion of the Yearly Fiscal Status Report and/or the Draw on the Reserve Fund or Default Report. Issuers are required to file a Yearly Fiscal Status Report if they have sold bonds on or before June 30th of each year and each year thereafter until the bonds are no longer outstanding. All issuers, regardless of when bonds are sold, are required to report any draw on reserve or default that occurs throughout the calendar year.
Section 53359.5 was amended by Senate Bill 1464 (Chapter 772, Statutes of 1992) to add subsections (b), (c), and (d).
Section 53359.5(b) and (c) was amended by SB 331 (Chapter 1193, Statutes of 1993).
Section 53359.5(b) of the Government Code requires all agencies issuing Mello-Roos Community Facilities District bonds, including refunding bonds, after January 1, 1993, to report specific information to the Commission by October 30th of each year. The information items required by Section 53359.5 include, but are not limited to:
- the principal amount of bonds outstanding;
- the balance in the bond reserve fund;
- the balance in the capitalized interest fund, if any;
- the number of parcels which are delinquent with respect to their special tax payments, the amount that each parcel is delinquent, the length of time that each has been delinquent, and when foreclosure was commenced for the delinquent parcels;
- the balance in any construction funds; and
- the assessed value of all parcels subject to special tax to repay the bonds as shown on the most recent equalized roll.
The agency is to report on these items until the bonds have been retired. To facilitate and ensure consistency in reporting, CDIAC has developed the Mello-Roos Community Facilities District (CFD) Yearly Fiscal Status Report (YFSR).
Section 53359.5(c) of the Government Code requires that all agencies issuing Mello-Roos Community Facilities District bonds, regardless of when sold, notify the Commission by mail, postage prepaid, within 10 days if any of the following events occur:
- the local agency or its trustee fails to pay principal and interest due on any scheduled payment date; or
- funds are withdrawn from a reserve fund to pay principal and interest on the bonds.
In 2012, CDIAC added the ability for agencies to voluntarily report the replenishment of a previous draw on reserve. To facilitate and provide consistency in reporting CDIAC has developed the Draw on Reserves/Default/Replenishment Form for Mello-Roos/Marks-Roos Issue (DFD).
Section 53359.5(d) of the Government Code provides that the legislative body and CDIAC are immune from liability for inadvertent errors in reporting under Section 53359.5.
- A Mello-Roos Community Facilities District agency is the city council, county board of supervisors, board of directors of a special district, school district or joint powers authority that created the CFD and is responsible for complying with Section 53359.5 of the Government Code.
- All CFD agencies selling bonds after January 1, 1993, must file Yearly Fiscal Status reports with the Commission.
- All CFD agencies which issue bonds, regardless of when sold, must report any default (non-payment of principal or interest) or draw on the reserve fund.
- Bonds shall mean any evidence of debt paid from Mello-Roos special taxes including limited tax obligation bonds, special tax bonds, certificates of participation and bond anticipation notes.
- A courtesy reminder is sent to all CFD agencies affected by this law annually on or about August 1st of each year. Non receipt of this courtesy reminder does not absolve the agency of this reporting requirement. A YFSR must be submitted to the Commission by October 30th of each year until all bonds are retired. Issuers selling bonds after June 30th of each year will not be required to file a YFSR for that year, but will be required to file a YFSR annually thereafter.
- Issuer-Agency: Name of CFD that issued the debt.
- Project Name: Specific area within the CFD that the bond issue will address.
- Name/Title/Series of Bond Issue – Title of debt issue, if known.
- Date of Bond Issue: The date the bond purchase agreement is signed on a negotiated financing or the date the bid was accepted on a competitive bid.
- Original Principal Amount of Bonds: The principal amount of the bond.
- Reserve Fund Minimum Balance: The minimum reserve fund balance if required.
- Fund Balances: The principal amount of the bonds outstanding and the fund balances for the bond reserve fund, capitalized interest fund and construction funds should be reported as of June 30th.
- Assessed Value: Issuers should report the total assessed value of parcels (land and improvements), which are subject to or may be subject to the special tax, shown on the most recent tax roll at the county assessor’s office. Include the date of the tax roll used on the report. Indicate either the Equalized Tax Roll or Appraisal of Property. The appraisal value of the property should only be used in the first year of the bond issue or before annual tax billing commences. For issuers selling prior to June 30th of the year or those issuers that have 12 months of capitalized interest available and for which no annual tax roll billing will be required, the most recent appraisal value of the property may be reported as the assessed value.
- Tax Collection Information: Issuers should report the total amount of special taxes due and unpaid for the district in the fiscal year.
- Teeter Plan: Note if the district is covered under its county's Teeter Plan.
- Delinquencies: Report delinquencies as of the current tax roll. Report the total number of delinquent parcels and the total dollar amount of delinquent taxes.
- Foreclosure Information: Foreclosure commences on the date the CFD agency notifies the property owner of the foreclosure. Issuers should report the date foreclosure commenced on any parcel(s), the number of foreclosed parcels and the total dollar amount of taxes due for foreclosures for that date. Report all foreclosures by date for the fiscal year.
- Retiring an Issue: If this issue is no longer subject to the requirements of the law, indicate the reason (i.e. Issue redeemed entirely, issue fully matured, etc.) within the current reporting fiscal year. Please include the CDIAC number and issue date of the new refunding bond(s).
- Contact Information: The name, title, and contact information of the person completing the YFSR. The e-mail address is required.
- Additional Comments: Please include any additional comments that relate to this filing.
Draw on the Reserve Fund, Non-Payment of Principal and Interest (Default), or Replenishment of Draw on Reserve (Voluntary Disclosure)
All CFD agencies which issue bonds, regardless of when sold, are covered by this requirement.
- Draw on the Reserve Fund: Statute defines this as any withdrawals from the reserve fund to pay principal and/or interest payments that reduce the fund to less than the reserve requirement.
- Default: Statute defines this as when an agency fails to pay principal and interest due on any scheduled payment date.
- Replenishment (voluntary disclosure): The replenishment of monies previously drawn from the reserve fund.
- The report shall consist of a letter to the Commission stating:
- the community facilities district's name,
- the bond issue title and original date of issue,
- the type of event [draw on the reserve fund, non-payment of principal and interest (default) or replenishment],
- the date the draw on the reserve fund, non-payment or replenishment occurred, and
- the amount of the draw on reserve fund, non-payment or replenishment to the reserve.
Issuers may include a statement of explanation containing information pertinent to the draw on reserve fund, default or replenishment (i.e., how the agency expects to address the issue, how the replenishment was accomplished, etc.).
Note: Guidelines and Yearly Fiscal Status Forms may be downloaded from the CDIAC website.
For further information or questions, please contact CDIAC.