A major Sacramento builder is delinquent on some $453,000 in Mello-Roos tax payments to Ione.

A Mello-Roos district assesses a special property tax, often to pay for streets, sewers and other essential residential services, as is the case in the Castle Oaks subdivision in Ione.

At a time when the housing market is crashed, prominent Sacramento firm JTS Communities retains ownership of 99 lots in Castle Oaks. In April, the company missed its Mello-Roos payment on the lots. Amador County tax officials notified Ione, said Michael Ryan, tax collector.

Kim Kerr, Ione city manager, said she believes it's likely that if Castle Oaks was still selling, the payment default would not have occurred. Ione wrote May 21 to JTS and a group of partner companies that share responsibility for the missed payment.

"Please take note that the restricted property ... is delinquent in the payment of the second installment of special taxes for fiscal year 2008-09," Kerr wrote.

On that date, a 45-day compliance window opened.

The company has ranked consistently in the top 10 Sacramento-area builders in recent years. Its houses average a sale price in excess of half a million dollars, according to research by housing analyst Greg Paquin. In Castle Oaks, JTS is partnering with two southern California companies and a Woodland company. In lieu of cash, JTS and partners have the option of surrendering to Ione the group's Mello-Roos bonds themselves in the amount of $453,000, Kerr said.

Kerr said a couple of other Castle Oaks areas may pose similar problems down the line for JTS and partners, with the difference that in those cases the group might have to surrender not only bonds but also property.

"JTS has been in discussions with the bondholders, and is confident that the outstanding bond issues will be completely resolved by the end of June," said Rob Aragon, director of community planning and entitlements for JTS.

Kerr said the lots in question are the site of a previous Mello-Roos default. JTS bought those defaulted-on Mello-Roos bonds, she said.

But as the housing boom roared in the early 2000s, JTS became troubled by a raft of Sacramento-area homebuyer lawsuits alleging shoddy foundation work in housing construction. A main locus of the ire was Folsom and El Dorado Hills. JTS owners Larry Carter and Jack Sweigart coped with the lawsuit cost by forming a captive insurance company, an entity that insures and is controlled by its owners, according to the Sacramento Business Journal. Many such companies are licensed offshore, and captive insurance companies are rare in general-liability insurance.

Carter and Sweigart previously had solved a construction-defect liability problem in El Dorado Hills for a company they ran before founding JTS. Their J&L Properties dissolved after selling off all of its assets and liabilities, including alleged shoddy construction-caused water leaks, toxic mold and illness to an El Dorado Hills resident, according to reports in the El Dorado Hills Telegraph.

The buyer and successor in interest to J&L Properties was the Blue Lake Housing Authority, a private company run by an American Indian nation, the Blue Lake Rancheria in Humboldt County. A high-profile Sacramento law firm took the homeowner's case, arguing that - as would be any other successor in interest - the tribe was responsible. The plaintiff lost in court as the principle of tribal sovereign immunity was held to govern, the Telegraph reported.