Beaumont settles lawsuit that could have cost the city millions
The city of Beaumont announced settlement of a 2014 lawsuit filed by a regional government organization on Tuesday, April 4, that could have cost the city millions of dollars and potential bankruptcy that officials blamed on bad decisions made by prior city leaders.
The city had appealed a $43 million judgment imposed in 2014 after an Orange County Superior Court judge ruled that the city had shirked obligations to collect millions of dollars in fees from developers for regional transportation projects.
The Beaumont City Council and the Western Riverside Council of Governments board have both approved complex settlement terms.
The total amount the city must pay in the settlement was unclear Tuesday night as the council continued meeting.
City Manager Todd Parton said none of the settlement dollars would come from the city’s general fund, but through funds for development and other sources.
The city will partner with WRCOG in civil court action against unspecified individuals blamed for the city’s legal predicament in recent years.
“We are really pleased with the settlement moving forward,” WRCOG Executive Director Rick Bishop told the council.
The civil case filed by the Western Riverside Council of Governments focused on transportation uniform mitigation fees, TUMF for short, that developers normally pay before they build. The fees raise money for regional road projects to serve development.
Half the money goes toward regional projects and half to local areas where collected. The Beaumont “zone,” also includes the cities of Banning and Calimesa, and nearby unincorporated areas.
Instead between 2003 and 2009, Beaumont didn’t provide its share of such fees to regional authorities, the lawsuit filed by WRCOG alleged.
The city financed projects with bonds paid off by property assessments on people who bought homes in new developments.
The Orange County judge said Beaumont officials at the time “engaged in a pattern and practice of deception” tantamount to fraud.
The city contended projects completed exceeded any perceived regional obligation and appealed the judgment to the Fourth District Court of Appeals. Justices put deadlines for moving forward on appeal on hold so the parties could spend time in mediation. With interest, the debt has exceeded $67 million.
In the meantime in 2015 raids on city hall and subsequent filing a year later of misappropriation and embezzlement of public funds criminal charges were filed against now former city administrators and consultants. They have denied wrongdoing.