Beaumont Illegally Charges a Services Tax to Most Mello Roos Property Owners

By: Libi Uremovic | Original Article at patch.com

2015-08-12j

Mello Roos Bonds were established to provide funding to selected sections of a community. There is also a provision to acquire a larger bond to pay for Services. For Example:

A neighborhood decides that it wants to build a recreation center in their local park. They can calculate the cost of construction and the cost to pay for staff and utilities over a 30-year period.

This allows for a larger bond. A community can decide that they will need $3 Million to build the facility and $2 Million to fund the facility over 30 years. This will allow for a $5 Million Bond.

The funds to build the facility are used immediately, but the funds to provide the services should remain in a Bond Fund Account to be administered over a 30-year period. The money remaining in the Bond fund Account should be accumulating Interest until used, so $2 Million would actually yield $3 Million over 30 years.

The cost of the Bond’s Interest and Premium payments is divided among the Property Owners. The Mello Roos Property Taxes should only be the cost to repay the bond plus Administrative Fees to process the paperwork.

Beaumont’s Mello Roos Bonds are written to include both Facilities and Services in order to acquire the largest Bonds possible. However; the City of Beaumont also charges an additional Mello Roos Property Tax for Services.

The City of Beaumont submits the additional taxes to the Riverside County Tax Assessors’ Office. It is the Tax Assessors’ duty of care to verify Tax Rolls submitted by the local agencies before attaching the taxes to the property owner, but since the Tax Assessor makes a profit from inflated tax rolls there is no incentive to protect the citizenry.

Beaumont City Council Agenda Item 8.m list the Contract with Webb Associates, the Company that will file the Mello Roos Property Tax Assessments with the Riverside County Tax Assessor: http://www.ci.beaumont.ca.us/DocumentCenter/View/25833

Page 15/20 lists the Beaumont Housing Developments that will be charged an additional Property Tax for Services. Webb Associates lists 22 Improvement Areas/Housing Developments that will receive additional Services Fees.

In the past the City of Beaumont has made $6 Million/year profit by charging Property Owners for Services that are provided in the cost of the Bond.

The Fact that ‘Services’ such as Fire Protection aren’t even provided just adds insult to injury.

Below is an excerpt from the 2012 Series B Mello Roos Bond. If it’s written in the bond does that make it legal?

No, it only means that the lawyers and consultants paid to verify the legality of the bonds were crooks that didn’t do their job.

Area 20 Bond: http://emma.msrb.org/ER586195-ER455654-ER858401.pdf
Pg 232/258: Exhibit D-1 Rate and Method of Apportionment for Area 20 “Special Tax Requirement for Services” means the amount determined in any Fiscal Year for IA No. 20 equal to:
the budgeted costs of the maintenance, utilities, repair, and replacement of the Service Area which have been accepted and maintained or are reasonably expected to be accepted and maintained during the current Fiscal Year,
Administrative Expenses, and
anticipated delinquent Special Taxes for Services based on the delinquency rate in IA No. 20 for the previous Fiscal Year, less the Operating Fund Balance.

Cali Govt Code 53330.5 Upon approval of a special tax pursuant to Article 2 (commencing with Section 53318), the special tax may be levied only at the rate and may be apportioned only in the manner specified in the resolution of formation, except as provided in this article, and except that the legislative body may levy the special tax at a rate lower than that specified in the resolution. In addition, the special tax may be levied only so long as it is needed to pay the principal and interest on debt incurred in order to construct facilities under authority of this chapter, or so long as it is needed to pay the costs and incidental expenses of services or of the construction of facilities authorized by this chapter.