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This is in contrast to the breakdown of a benefit assessment (annual revenues) based on a flat amount per parcel: T e of Pro er Amount per Parcel er Year Amount % # of Parcels Commercial $200 $233,000 5.1% 1,165 Residential $200 $4,298,400 94.9% 21,492 Total $4,531,400 100.00% 22,657 Therefore, by issuing a general obligation bond, commercial property will pay approximately 26% of the tax levy associated with the financing of the Program. Whereas, by using the benefit assessment or parcel tax to include funding capital costs through the issuance of certificates of participation, commercial properties would pay approximately 5% of the capital cost of the Program. There are, of course, many different alternatives in structuring the tax rate. For example, the tax could differ on a parcel by parcel basis between residential and commercial use, as well as, within those classifications on a zone by zone basis as to proximity to the project's location. Also, the cost of administering a program with a complicated tax structure increases accordingly. However, if the Council determines that the levying of a parcel tax or benefit assessment is the way in which they would like to proceed in financing the Program costs, then the actual structure of the tax rate or benefit assessment would need to be studied further. Mello-Roos Community Facilities District The Mello-Roos Community Facilities Act was enacted by the California Legislature in 1982 to provide all cities, counties or districts, an alternative method of financing essential public facilities and services. The Act allows cities to create separate public agencies, known as community facilities districts, within their boundaries for the purpose of financing certain public facilities and services. Among the facilities and services that may be provided through the Act are: ^ Police protection facilities and services ^ Fire protection facilities and services ^ Local park, recreation and parkway facilities and services and the operation and maintenance of the facilities ^ Elementary and secondary school sites and structures ^ Libraries ^ Other governmental facilities and public works improvements However, a community facilities district may provide only the levels of services mentioned above to the extent that they are in addition to those services provided before the district was created and may not supplant those services already available within the district. The Mello-Roos financing mechanism uses a special tax to repay the annual debt service and operating costs. The special tax may or may not be based upon benefit to the parcels of land in the district or it may be based on the cost of making the facilities or services available or on any other reasonable basis. The tax must not be ad valorem or related to the value of the property. 11