Really??? Worst Transparency Ever
Posted by Former Blogger Chris Emami on April 8, 2013
I am going to put about as much effort into this post as these two governmental agencies put into transparency. During a project I was working on for a client comparing the transparency of certain special district I ran across a couple of interesting finds.
We will start with the Emerald Bay Community Services District which requires a password to be able to access their website. Take a look at the screen shot of their website:
But hey, at least they give you a phone number to call. Oh, you think I am joking? Let’s take a look next at the Three-Arch Bay Community Services District who not only requires a password to get into their website but does not even provide a phone number. Here is a screen shot of their website.
I personally think that we should eliminate the majority of the special districts and after seeing this I think our readers might know of a good place to start.
OC Political 
Steve Waechter said
Chris,
When I was a property tax analyst I analyzed these type CSDs. I don’t remember this one, I may not have worked on it.
They are sometimes (maybe often) shadowy agencies funded by very expensive mello roos taxes. When I say shadowy what I mean is they were funded by a line item on your tax bill but they really didn’t want to talk about it, at least not to me when I would call. I suspect they often have very highly paid executive directors and employees and they don’t much want anyone to know. The payers have no alternative but to pay. They have an elected board often with the same 5 people serving for 25 years.
These paid for things like streets, curbs & gutters, landscaping and lighting, sewer, drainage, water infrastructure, maybe a clubhouse and pool for the community.
Many years ago a developer would be required to put those in as part of the approvals of his development. But then he had to put the cost on the price of the houses he was selling which made them more expensive.
Then along came mello roos, a very expensive bill that made it possible to fund those amenities over time with often dazzlingly high interest.
So the developer would divide the land into parcels, form the district, have an election as to the taxes for which he was the only voter since he owned all the land at the time, and then he could build his development.
The buyers would get their tax bills with this often $1000 or more charge on it! I saw some districts in the state with $3000+ mello roos taxes on their bills, $1000 for the city, $1000 for the school district for capital expenditures, and $1000+ for the school district for maintenance. Can you imagine? Tax bills totaling $11,000 or more with the ad valorum taxes.
So the reason these are not transparent is they are hiding. If you live in that district you should have a phone number on your tax bill about the line item.
http://tax.ocgov.com/acledger/report_eGov.asp
That’s the gist of mello roos.
Chris Emami said
Appreciate the link.
OC Insider #29 (aka Greg Diamond) said
From Wikipedia:
“When California Proposition 13 passed in 1978, it restricted the ability of local governments to raise property taxes by more than an inflation factor. The budget for services and for the construction of public facilities therefore could not continue unabated. As a result, new ways to fund public improvements in respective locales were considered.[1] The Mello-Roos fees are generally considered an end-run around Prop 13, which caps property taxes while Mello-Roos are not capped.”
One would think that, if this were a problem, both major parties (plus whoever) could sit down and figure out a better way to deal with Prop 13 than this, one that for example might focus the benefits where the voters thought they were putting them, rather than on gigantic commercial real estate leases. Then maybe we’d see fewer of these sort of “end-runs.”
Steve Waechter said
Greg Diamond,
I disagree with the wikipedia article’s conclusions.
Mello roos are invariably put on new developments, not old ones. You never had the opportunity to vote one way or the other on a mello roos and neither did I.
Cities and other jurisdictions never had to worry about how to raise taxes to pay for that new development’s amenities, they just put on developer fees. Lacking that the developer does a mello roos district. Developers and cities liked mello roos because they can get essentially an unlimited amount of money with any escalator they want and there is never any opposition.
Why, it’s as awful as those prop 215 post card ballots, where if they don’t actually send you a post card, your vote is a yes!
It’s the way I said, they put the mello roos on the district while the developer owns all the parcels. He votes yes, naturally. Then after he sells his development he is gone and will *never* have to pay any exorbitant mello roos taxes.
As to a problem, it was only a problem if you buy property with mello roos on your bill that you don’t know about until after, which is why SB20 was passed. That requires a disclosure to be made to buyers. “You are going to be paying taxes for this, this, this, this and this in this amount, and that may increase annually up to this amount.”
Mello roos got a very bad reputation because of how darned expensive it was. Some cities tried to make their own mello roos and call it something else to avoid controversy. I seem to remember Newport Beach had one of those. But it’s been a while since I worked on that stuff.
I guess now you know that I have been involved in lots of government documents. Why I applied for clerk-recorder.
Richard Gardner said
Thanks for pointing out the secretive nature of some of these special districts. I assume that the members of the special district have the password and can access the information. They also have access to the regular business meetings and of course are aware of the costs imposed on them for various district functions and projects.
These districts are transparent to their members and that is what is important.
A more meaningful study would find the special districts that do not have websites, whose meetings are not noticed to the members (except by posting in a post office), the minutes are not available except by written request, and whose budgets, business and salaries are not available on line. These are the organizations that have a propensity for “knowing what’s best for their members” without getting any real input from those who are affected.
Chris Emami said
I don’t know who all has the passwords but it does appear that they re hiding something whether or not they really are.
Steve Waechter said
The OC Grand Jury did a report on how secretive many of these districts are. I didn’t read it but I got the impression they found it improper.
Personally, I think mello roos is a high cost financing method and should be done away with.
Developer fees can be negotiated. There is no reason the proponents of mello roos would have an interest in negotiating lower fees, they won’t be paying it after all. So they don’t care.
Chris Emami said
I do recall hearing about the OC Grand Jury report.
Steve Waechter said
An article:
http://www.lagunabeachindy.com/2012/05/06/throwing-light-shadows-special/
Grand jury report recommending abolishing these districts:
Click to access LetThereBeLight.pdf
The districts response
Click to access EmeraldBayServiceDistrict071812.pdf
Cynthia Ward said
That was the worst Grand Jury in memory. Completely useless recommendations, some of which were illegal.
Richard Gardner said
One comment from the Grand Jury report that made sense to me was that Water and Wastewater special districts should not be subsidized by property taxes and the service should be paid for by fees only. In this way different districts could try to compare rates and improve efficiencies.
See, “Past recommendations should be reconsidered for implementation. Sewer and water districts (often considered “enterprise” districts) should be weaned from the tax rolls and become solely fee based, and possibly privatized.”
Districts have not even considered this recommendation because they see it as a reduction in their operating revenue. The key is to consider the word “weaned” and how the change would occur.