On April 22, 2015, the City of Beaumont was raided by the FBI and Riverside County District Attorney.
On April 22, 2015, the City of Beaumont was raided by the FBI and Riverside County District Attorney. Seven members of Beaumont’s Executive Staff were Indicted:
Alan Kapanicas: City Manager
Joseph Aklufi: City Attorney
Bill Aylward: Finance Director
Frank Coe: Chief of Police
Dave Dillon: Economic Development Director
Ernie Egger: Planning Director
Deepak Moorjani: Public Works Director
All but Aklufi have Plead Guilty to a fraction of the crimes committed and received a slap on the wrist from the Riverside County D.A. Mike Hestrin. Aklufi refuses to Plead out, so the D.A. has continued to push Aklufi’s Trial down the road. Aklufi’s next Trial date is May 18, 2018.
There is $400 Million missing from the City of Beaumont, $300 Million of which was embezzled out of Federal Bonds. But the D.A. only charged Beaumont’s Executive Staff with Fraud and Embezzlement of the $42 Million TUMF money stolen from the Western Riverside Council of Governments (WRCOG).
The Councilmen that ‘Approved’ their Staffs’ illegal activity were never Indicted. The $42 Million TUMF money was transferred out of Beaumont’s CFD Bonds, but D.A. never charged anyone with stealing the other $260 Million.
The D.A. knew of Beaumont’s bond and construction scam because the State Controller’s Office issued an Investigative Report that outlined and detailed the illegal activity just six months after the Raids on November 3, 2016: https://www.sco.ca.gov/Files-A…
After the Raids everyone had hope that Beaumont would ‘change’. After all; the Council had to hire an entirely new executive staff. This was the Council’s opportunity to hire the most honest and qualified staff to right the City. Here’s what Beaumont City Council Hired:
City Attorney: John Pinkney from the Law Firm of Slovak Baron Empey Murphy Pinkney (SBEMP) magically appeared and was hired on April 28, 2015. Pinkney’s only previous experience as a City Attorney is for Needles, population of 5,000. Pinkney nor anyone in the SBEMP Law Firm has any knowledge or experience in municipal bonds. To this day the City has never issued a Public Bid Contract for the position of City Attorney. The Law Firm of SBEMP has been paid $2.3 Million in the last three years.
Financial Advisor: Mike Busch of Urban Futures magically appeared and was hired on June 15, 2015, replacing Rod Gunn, who fled the State. The Council knew that Urban Futures was an associate of Alan Kapanicas. Urban Futures is listed on municipal bonds with Alan Kapanicas’ company General Government Management Services (GGMS).
Together Pinkney and Busch destroyed government documents and covered up the past illegal activity.
On April 22, 2016, the Securities and Exchange Commission Issued Subpoenas against the City of Beaumont, the Beaumont Finance Authority, and the Community Facilities District (CFD) specifically naming Urban Futures: http://beaumontgate.org/news/sec-subpoenas-city-amid-investigation-into-its-finances/
On June 3, 2016, ‘Council Approved’ paying $75,000 in legal fees for City Attorney Pinkney: http://www.ci.beaumont.ca.us/D…
On August 16, 2016, ‘Council Approved’ paying $75,000 in legal fees for Urban Futures: http://www.ci.beaumont.ca.us/DocumentCenter/View/28041
Instead of firing the City Attorney and Financial Advisor for incompetence and gross negligence that resulted in the S.E.C. Subpoenas; ‘Council Approved’ paying the Crooks’ legal fees.
Beaumont’s Executive Staff includes Finance Director Melana Taylor, who has no previous experience as a Finance Director, no experience in government accounting, and no experience with federal municipal bonds.
City Manager Todd Parton who has no knowledge of California State Laws and who’s only experience as a city manager is in a Texas town of 20,000 where he ran up millions in ‘Tax and Revenue Certificates of Obligations’ bond debt to build ‘walking trails’ in Kerrville, Texas.
On August 23, 2017 the S.E.C. Issued a Cease and Desist Order to the Beaumont Financing Authority to stop Forging Government Documents: https://www.sec.gov/litigation…
In December, 2017, ‘Council Approved’ hiring Assistant City Manager Christine Day who just happens to come from the same little Texas town as Parton. Parton and Day both just happen to leave Kerrville, Texas around the same time in 2016. Day is paid $1/4 Million/year.
Once again, instead of firing their incompetent staff that is obviously violating Federal Laws; the corrupt staff is rewarded and more incompetent staff is hired.
It’s been three years since the City of Beaumont has been raided. Not one civil or criminal complaint has been filed by the City of Beaumont. Not one person has been fired for their participation in past or current illegal activity.
Everyone hoped that after the Raids Beaumont would change.
Citizens of Beaumont petitioned the Council to stop flooding the housing market and provide basic infrastructure for the current Residents of Beaumont. Instead Council ignored the Citizens requests and ignored ongoing State and Federal Investigations and continued to ‘approved’ trading bonds for mitigation fees.
In response to the Citizens’ pleas to stop overcharging the CFD Property Owners $6 Million/year in Taxes, Beaumont City Council hired Albert A Webb & Associates to overcharge $8 Million/year in CFD Taxes.
The Beaumont-Cherry Valley Parks and Recreation District went to the ‘new staff and council’ and asked for the $12 Million in Mitigation Fees collected by the City that was owed to the Parks and Rec District. Instead of working with the District to recoup the money; the City Council and Staff refuse to pay the District; instead choosing to force the District to waste Taxpayers’ money fighting the City in Court to recoup the money. The Parks and Rec District gave up because they knew the City would drag it through court for years.
Everyone in the Pass Area knows that Beaumont’s Sewer Plant is deteriorated beyond repair. After the Raids the Yucaipa Valley Water District and the Beaumont-Cherry Valley Water District approached the City to release the Sewer Plant to the Water Districts so the Water Districts could hook up Beaumont to Yucaipa and close down Beaumont’s Sewer Plant.
Instead of releasing the Sewer Plant the City Council hired Albert A Webb & Associates to proclaim that it would be much cheaper for the Citizens of Beaumont to ‘go it alone’ and attempt to rebuild the Sewer Plant after 25 years of neglect instead of joining Yucaipa, that already constructed a ‘state of the art’ Wastewater Facility with Recycled Water.
Now the City of Beaumont needs an estimated $110 Million in order to have the Sewer Plant up to Compliance by December 30, 2019. $50 Million is needed to Expand the Sewer Plant to accommodate the houses constructed in Beaumont within the last three years.
The entire point of mitigation fees is to pay for the public infrastructure and services that will be needed by the construction. Beaumont should have collected the $50 Million needed for the Expansion of the Sewer Plant from the Developers and deposited the money into an Interest-bearing Savings Account. Instead deals were made and any Sewer Mitigation Fees collected from the Developers was deposited into the General Fund and used to pay outrageous salaries to Lawyers, Consultants, and incompetent Staff.
And the other $60 Million of the $110 Million is the estimated cost for the City to construct their own Brine Line to dispose of ‘Salt’, which is the byproduct of Recycled Water. ‘Council Approved’ constructing a $60 Million Brine Line even though the City has no Recycled Water Facility and a facility to create salt blocks that are sold as fertilizer would only cost $25 Million to construct.
On April 17, 2018, at 10:00 pm ‘Council Approved’ increasing Sewer Fees in order to acquire Bond Debt for Beaumont’s Sewer Plant. Beaumont’s 2001 Wastewater Bond was canceled after it was discovered that the money was stolen and the Bond was being used to funnel money out of the CFD Bonds.
Last month City Manager Todd Parton presented his 2018/2019 Budget to the City Council. The City receives $16 Million in ‘legal’ Sales and Property Taxes. Parton’s Budget is $28 Million, a $12 Million Deficit. We know the City will overcharge $8 Million in CFD Taxes, which still leaves a $4 Million Deficit.
For the past quarter century the City of Beaumont has operating a General Fund Deficit of $6-10 Million/year. For the past quarter century the City of Beaumont has spent Mitigation Fees for general fund purposes leaving the City without Fire Stations, Roadways, a Recycled Water Facility, or Regional Parks.
Everyone hoped that after the Raids Beaumont would change, but as Councilman Lloyd White was told to his face; The New Beaumont is just like the Old Beaumont.
I do not even want to hear the word ‘re-elect’ in 2018.