A Clear Conflict of Interest

UPDATE: After years of refusing to make public Urban Logic’s contracts, pressure created by BeaumontGate.org has forced the City to finally share these documents…but only after these contracts were posted on BeaumontGate.org. Why did the City withhold the contracts for so many years until they were exposed by BeaumontGate.org? Because Urban Logic’s contracts create a clear conflict of interest and are in violation of Government Code Section 1090. See below for a sequence of events.

Urban Logic has an exclusive agreement with the City to provide planning, economic development and public works services on a contract basis, which provides Urban Logic principals $15,000 per month to serve as the City’s Planning Director, Public Works Director and Economic Development Director. Under their contract with the City, Urban Logic is paid a commission of up to 4.5% of the construction costs of both public and private development and public improvements. In addition, under a separate contract, Urban Logic is paid another 4.5% to provide construction management services for all public projects. Thus, Urban Logic is making commissions of 4.5% of the cost of all private development projects and 9% of the cost of all public projects. As such, they have personally profited from the City’s growth, and continue to profit every time a new development or public improvement is approved. They advise the City Council on which projects to approve, and then cash in when the Council takes action based on their recommendations. Per their contract with the City, Urban Logic has hired itself, and bills the City on an hourly basis as an independent contractor, to provide other key services such as General Plan revisions, preparation of EIRs and planning documents, development agreement processing and other services “beyond those available from City staff.” Urban Logic’s contract with the City of Beaumont has been in place since 1994, and has never been reviewed or put out to bid since that time.

Urban Logic Contracts

Dated March 22, 1993

Dated September 27, 1993

Dated April 11, 1994

Dated April 12, 1994

A Sequence of Events:

January 22, 2005

A public records request was submitted by members of Beaumont Citizens for Responsible Growth for copies of Urban Logic’s contracts. The City provides Urban Logic’s original contract but withholds the September 27, 1993 amended contract, which is the document that creates the blatant conflict of interest. Withholding this public document is not only an example of the City’s intentional lack of transparency, but is a violation of the California Public Records Act (Government Code Sections 6250-6276.48).

August 17, 2010

A citizen asked why the contracts still weren’t up on the City’s web site. Mayor De Forge told City Manager Alan Kapanicas to post the information for the second time. His request is again ignored.

September 5, 2010

BeaumontGate.org goes live, exposing the City’s lack of transparency, blatant conflicts of interest and illegal contracting practices.

September 16, 2010

BeaumontGate.org posts all of Urban Logic’s contracts with the City. For the first time the residents of Beaumont can view these public documents and see for themselves how the City has been operating.

October 1, 2010

Giving in to increasing public pressure created by BeaumontGate.org and outraged citizens, the City finally posts Urban Logic’s contracts on its website.

Transparency in Government? California League of Cities web site shows Alan Kapanicas is the only city manager in California who does not get a W2 showing his yearly salary, but instead is a 1099 contract employee who reports no salary information. Download PDF Press Enterprise article reports Manger Kapanicas’ salary was $176,000.00 per year. View Press Enterprise – Inland elected officials’ salaries examined or download PDF. The City Manager position is contracted with General Government Management Services, Alan Kapanicas’ own company. Mr. Kapanicas is also paid for managing the City’s Community Facilities District’s Mello- Roos. See Mr. Kapanicas’ August invoices totaling over $25,000 for one month. Download pdf file of Kapanicas’ August 2010 Invoices and Checks. Since 2000 Urban Logic has been paid over $23.8 million off public funds on top of their salaries as commission for approved development projects and public improvements. Per their unusual contract with the City, which has not been reviewed or put out to bid since it was adopted in 1994, Urban Logic receives a commission on every development and public improvement project approved by the City.

Urban Logic has made millions by personally profiting from the advice they give to the City Council. This conflict of interest must end.