For the second year in a row, the city could threaten residents in a south Modesto subdivision if they remain delinquent on special property taxes that support public services in their neighborhood.
Nearly a fifth of the Mello-Roos property taxes owed in Fairview Village are late.
That's significant because those taxes pay for bonds that are tied to the subdivision's parks, sewers and roads.
Those bond agreements require the city to issue foreclosure notices immediately if more than 5 percent of what's owed in the special tax district is delinquent. Typically people have five years to catch up with standard property taxes before they face foreclosure.
Almost $63,000 in Mello-Roos taxes from 85 parcels in the 382-lot Fairview subdivision is late, though property owners have until June 30 to square up with the city, according to a report to the City Council's Economic Development Committee.
Those taxes are 17.8 percent of what's owed this year in the Fairview tax district, setting up probable foreclosure notices this summer.
"I anticipate that the district is going to be above 5 percent again," said Tina Rocha, who oversees special tax districts for Modesto.
Typically pay $900 a year
Despite the outstanding charges, Rocha said the city has issued one foreclosure notice because of late Mello-Roos taxes in two years.
More often, property owners catch up on the fees before the city reaches the point at which it would file for foreclosure. The landowner who received the foreclosure lawsuit, for example, kept his property by paying back taxes.
Fairview property owners typically pay about $900 a year in Mello-Roos taxes.
The city charges are a little more in east Modesto's Village I subdivision, which also has Mello-Roos taxes tied to public service bonds.
Rocha said the city likely would receive enough taxes from the Village I district to avoid the accelerated foreclosure process that Fairview homeowners could experi- ence.
Neither tax district has missed a debt service payment, according to the development committee's report.
The late taxes could represent homeowners juggling bills in a recession, people walking away from the properties or large landowners holding on to multiple parcels to develop later.
Bee staff writer Adam Ashton can be reached at email@example.com or 578-2366.