San Diego homeowners overcharged thousands in special property taxes

Interactive map helps owner see how much they pay

SAN DIEGO - The city of San Diego is examining the property tax bills of an entire neighborhood after an inewsource investigation found at least two homeowners are being overcharged thousands of dollars -- one paying almost twice what he should.

The area includes 346 properties, 344 of them homes, in a new upscale development in the northeastern section of the city called Del Sur.

The mistakes came to light after inewsource made public its interactive Mello-Roos map -- a tool property owners can use to see what they and their neighbors pay in Mello-Roos taxes.

Mello-Roos, named after two legislators, is an extra property tax levied on homes in many new developments to pay for new roads, schools and other infrastructure. It can range from $35 a year to several thousands.

inewsource discovered one home that particularly stood out, paying thousands more in Mello-Roos compared to its neighbors.

The homeowner, Larry -- who prefers to be mentioned by only his first name due to the confidentiality of his work -- pays almost $12,900 a year to just one Mello-Roos district. He was surprised when inewsource uncovered he is paying almost double the amount he should be paying in this extra tax.

“Holy cow!” he said, calling it a “miraculous discovery.” According to city tax documents, Larry should be paying $6,601 a year to this Mello-Roos district.

Larry is not alone.

“Your report really raised my eyebrows,” another Del Sur homeowner tweeted after using the inewsource map.

That homeowner noticed so many of the homes in his neighborhood, even on his street, paid dramatically different amounts in Mello-Roos.

The homes are in a city Mello-Roos tax district called Black Mountain Ranch Villages. Their Mello-Roos taxes are based on the square footage of their homes -- the bigger the house, the higher the tax.

One house in the neighborhood was paying $2,000 more in Mello-Roos than everyone else. inewsource tracked down the homeowners, who didn’t want to be quoted by name, and confirmed they had been paying $8,687 in a Mello-Roos fee while homes of the same size in their development only paid $6,601 a year.

inewsource obtained the building permits for both homes. In Larry’s case, the square footage used to calculate his Mello-Roos payment included his home’s garage, covered patio and pool cabana -- almost doubling the square footage of his actual house. The Black Mountain Ranch Villages district specifies that its Mello-Roos tax is only to be calculated based on the square footage of the house -- not including the garage or other buildings.

In the case of the other Del Sur home, there were two different numbers recorded for square footage on the building permit -- one was accurate, the other 2,000 square feet larger. The homeowner has been paying this Mello-Roos tax based on the larger square footage.

Within days of contacting the city of San Diego about the inconsistencies, the city’s Debt Coordinator Chuck Wilcox confirmed both homeowners were being overcharged -- in one case because the garage and other structures were mistakenly included in square footage, and in the other case -- the extra 2,000 square feet -- that was a typo.

“(We) appreciate you bringing this to our attention,” Wilcox said.

Prompted by inewsource’s discoveries, the city says it will refund the two Del Sur homeowners with interest for the years the mistakes were made and fix their tax bills going forward. A third party, David Taussig & Associates, handles the city’s special tax work, and Wilcox said it will also examine the other 344 properties in the Black Mountain Ranch Villages Mello-Roos district to ensure everyone is paying the correct amount.

If property owners believe they are paying the wrong amount of Mello-Roos tax, typically an appeals process can be pursued through the Mello-Roos district’s legislative body -- often a city or school board.

Take a minute and check out inewsource’s interactive Mello-Roos map. If you see something fishy in your neighborhood, contact us at taxes@inewsource.org.

inewsource data journalist Ryann Grochowski contributed to this report.