Beaumont/Pardee Settlement Agreement #5: Funding and Construction in Lieu of Fee Obligations

Agreement not only covers all currently charged Mitigation Fees but also explicitly includes TUMF.

Beaumont/Pardee Settlement Agreement #5: Funding and Construction in Lieu of Fee Obligations

Item #5 in the Settlement Agreement is the agreement to exchange ALL of Pardee Homes’ Mitigation Fees (DIF) for Bond Debt. The Agreement not only covers all currently charged Mitigation Fees but also explicitly includes TUMF if the City of Beaumont is allowed to rejoin the Western Riverside Council of Government.

Judge Chaffee spoke in lengths about Beaumont’s bond and construction scam in the $42 Million Western Riverside Council of Governments’ TUMF Judgement and how trading Bond Debt for Mitigation Fees gave the City an unfair competitive advantage. To date, with accumulating interest, the TUMF Judgement is now approximately $68 Million.

The Settlement Agreement lists the Mitigation Fees charged to Pardee Homes by the City of Beaumont in Exhibit A:

Traffic Signal: $180.10

RR X’ing: $203.64

Fire Station: $532.42

BRB (Roads): $10,946.39

Sewer Capacity: $3,194.39

Recycled Water: $786.64

Regional Park: $923.90

Upper Potrero Sewer: $251.66

South Trunk Main: $90.15

Total DIF per House: $17,109.35

‘Development Impact Fees’ is the subject of Beaumont 2015 Internal Controls Report Item 2015-10: “The City is using a manual system for issuing DIF Invoices. Also, it appears that one individual [Urban Logic Employee Kyle Warsinski] is responsible for calculating the DIF and applying applicable fee credits, if any, with little or no oversight. In addition, the Various DIF are restricted for certain purposes; however, the City has recorded all of these revenues in one fund over the years (comingled), without keeping track of the expenditures and remaining unspent balances of each type of DIF. It appears that former Finance Director [William Aylward] maintained Excel spreadsheets (separate accounting records) each year, and would then force DIF fund balances to match its spreadsheet.”

The City has charged and collected over $10 Million in Regional Park Mitigation Fees, but refuses to release any of the Funds to the Beaumont-Cherry Valley Regional Park and Recreation District. Beaumont 2015 Financial Audit page 15, Note 10, Paragraph 5 lists the Beaumont-Cherry Valley Parks and Rec District Claim:

“The City received a claim from the Beaumont-Cherry Valley Recreation and Park District seeking approximately $2 Million for what they believe is their portion of the [Regional] Park Fees the City has collected.”

Fire Station Mitigation Fees should be $1,000 per house. Beaumont’s population has increased from 8,000 to 45,000 without building any fire stations and ,of course, the money is gone. Beaumont 2015 Internal Control’s Report page 24, Item 2015-18 is titled: Lack of Detailed Accounting for Developer Impact Fees.

“City Ordinance No. 795 was established in September of 1999 for the purpose of establishing a fire station development fee. Section 6 of the Ordinance indicates the purpose of the fee is to finance the acquisition of three fire stations. In addition, Section 8 of the Ordinance states that the ‘Fire Station Development Impact Fees shall be deposited in a restricted account and accounted for in a manner that will ensure that the Fees shall be expended solely for the purposes for which the Fees were collected.”

TO THIS DAY the City of Beaumont refuses to build another fire station nor is there a restricted fund for Fire Station Mitigation Fees or any other Mitigation Fees collected. TO THIS DAY the City of Beaumont continues to deposit Mitigation Fees into the General Fund and spend the money instead of building Infrastructure.

Beaumont Staff and Council implied that the City will ‘get $31 Million’

Agreement #5 also includes an Acquisition Agreement and states: “The Acquisition Agreement will identify which DIF improvements will be constructed by Pardee and which will be constructed by the City with advances of funds from Pardee.”