Elk Grove Approves Higher Mello-Roos Taxes as City Relies on Growth to Fund Services
According to the report, the city anticipates the Laguna Ridge maintenance levy may eventually need to rise to the full allowable amount
The Elk Grove City Council approved the annual levy of special taxes and assessments Wednesday night for seven community facilities and maintenance districts, continuing the city’s long-standing reliance on Mello-Roos taxes to help fund infrastructure, police services, parks, and maintenance operations tied to newer development areas.
The council unanimously approved the fiscal year 2026-27 levies during its May 27 meeting with no public opposition.
Finance and Budget Analyst Cindy Tiffany told council members that the city administers seven special tax and assessment districts that help fund infrastructure projects, police services, landscape maintenance, street maintenance, and street lighting. During her presentation, Tiffany said the funding structure is designed to “maintain current service levels” while accounting for future growth and rising maintenance costs.
“The city has added new facilities, new parks, most notably District 56 and Nature Preserve, which are still building up our reserves,” Tiffany said. “As the city continues to add facilities and more parks, the maintenance cost will also increase.”
The staff report noted the city uses the districts to finance roads, sewer systems, drainage facilities, police services, landscaping, trails, parks, street maintenance, and lighting improvements.
Among the increases approved were annual Consumer Price Index-linked hikes for police service districts and maintenance districts, along with a recommendation to raise the Laguna Ridge maintenance levy from 90 percent to 95 percent of the legally allowable maximum. City staff said the increase is necessary as Elk Grove continues adding parks and recreational amenities that require ongoing maintenance.
According to the report, the city anticipates the Laguna Ridge maintenance levy may eventually need to rise to the full allowable amount “to offset the costs to operate and maintain amenities in the District.”
The districts include CFD 2002-1 East Franklin, CFD 2003-1 Poppy Ridge, CFD 2005-1 Laguna Ridge, CFD 2003-2 Police Services, CFD 2006-1 Maintenance Services, Street Maintenance District No. 1, and Street Lighting Maintenance District No. 1.
Unlike many older Elk Grove neighborhoods built before the city incorporated in 2000, newer developments annexed into the city’s community facilities districts pay Mello-Roos taxes and special assessments in addition to standard property taxes. Many pre-incorporation neighborhoods do not pay those CFD fees and therefore generally have substantially lower property tax bills.
The city’s financing structure increasingly ties ongoing municipal services and maintenance obligations to continued residential growth and the expansion of special tax districts into newly developed neighborhoods.
