City of Beaumont Financial Reports for Fiscal Year Ending June 30, 2016
California Government Code 53890 et seq. requires local agencies to submit financial reports to the State Controller by October 1st.
The City of Beaumont has yet to close their Books for Fiscal Year End June 30, 2016, but on April 29, 2016 the City complied with State Law and submitted Reports, albeit six months past the deadline. Thales Consulting Inc prepared the Reports. Neither the Documents nor the Consulting Service Contract were presented to Council.
Cali Govt. Code 538901 States: “the Officer of each local agency who has charge of the financial records shall furnish to the Controller a report of all financial transactions..”
The City has no Finance Director. Elizabeth Gibbs-Urtiaga signed the Reports when she was Interim City Manager. Her Job Title is now ‘Transit Director’. The Reports and all Audits can be found on the City’s website by clicking ‘Your Government’ at the top of homepage/City Offices/Finance/Audits & Reports: http://www.ci.beaumont.ca.us/index.aspx?nid=921
1. Annual Street Report: http://www.ci.beaumont.ca.us/documentcenter/view/27526
2. City Financial Transactions and Compensation Report: http://www.ci.beaumont.ca.us/documentcenter/view/27527
3. Special District Beaumont Utility Authority: http://www.ci.beaumont.ca.us/DocumentCenter/View/27528
4. Transit Operators Financial Transactions: http://www.ci.beaumont.ca.us/DocumentCenter/View/27529
The City of Beaumont is infamous for their ‘creative accounting’. Below is a summary of the glaring irregularities:
CITY FINANCIAL TRANSACTIONS AND COMPENSATION REPORT: http://www.ci.beaumont.ca.us/documentcenter/view/27527
Transit Activity/Enterprise
Retained Earnings, Beginning $1.1 Million.
The Transit Authority has operated at a loss since its inception.
Detailed Summary of Functional Revenue for Fiscal Year 2015
Contributions from Non-Govt. Sources
Streets/Highways/Storm Drains: $23,429,878
The City did NOT collect $23 Million from magical sources for streets and storm drains
This is the Mello Roos Property Taxes collected to pay the Bonds’ Principal and Interest plus an additional $6 Million illegally charged to property owners because Beaumont defines ‘the maximum’ as the most they can gouge the property owner.
Schedule of General and Functional Revenues – Other Revenues:
Contributions from Non-Govt Sources: $23,429,868
Other Sources of Revenue: $4,481,362
City Claims Revenue charged for Bond Administration, Insurance Recovery, and Overhead Allocation, which is a joke considering the City does not maintain records or have staff.
Other Financing Sources and Grand Total Revenues:
General Obligation Bond Proceeds: $0
The City acquired four (4) Bonds in this Period.
Total Revenue claimed by City: $58,983,018
Total Expenses claimed by City: $38,098,977
Although the City claims the $25 Million Revenue collected to pay Mello Roos Bond Payments, they have neglected to include the $15 Million Premium and Interest Payments due September 1st as an Expense or the $200 Million still owed on the Bonds.
Schedules of Net Expenditures – General Government and Public Safety
Management and Support Revenue $4,755,255
There is no ‘Revenue’ in management and support and the City has little staff. Beaumont spent $11 Million on Lawyers and Consultants.
Transportation Street/Highway Storm Drain Revenue $25,152,83
Again; this is the Property Taxes collected to pay the Bond Debt. It will not be used for roadways.
Operating Expenditures Police: $10,571,166
Operating Expenditures
Salaries and Wages: $10,819,358
Retirement: $3,230,874
Other Employee Benefits: $6,247,553
City refuses to release Payroll or an Employee Roster, so it is unknown who the City is paying, but yes, the police department contains most of the City’s employees.
Contract Services $12,673,442
City spends more money on lawyers and consultants than employee wages.
Check List of Services Provided:
Fire: Provided wholly or in part through Contract with County
Emergency Medical: Provided wholly or in part without Contract with County.
Sewers: Provided wholly or in part through Contract with Private Sector
The City of Beaumont has grown from 2,500 houses to 15,000 houses without building any Fire Stations. There is no ‘regional fire station’, neighboring towns must use their resources to help provide Beaumont with fire protection. At the November 5, 2015, Council Meeting it was announced that the City’s only two (2) Fire Trucks were so old they were put out of commission. The City now leases fire engines from the County, but the responsibility for fire and safety protection still belong to the City.
There are houses in the City of Beaumont that are 15 minutes from EMT Services. Federal Guidelines require response times within 5 minutes. The City collects Mitigation Fees for Fire Stations, but spends the money on lawyers and consultants.
The City of Beaumont owns the Sewer Plant and Sewer Lines, but Urban Logic Consultants has maintained control of the sewer plant for over 20 years. The City’s claim of $70 Million in Machinery and Equipment purchases for the sewer plant is actually money funneled to Urban Logic.
Worksheet for Completing Balance Sheet:
Assets: $70,677,461 – Forged Number
General Fund (7,120,010)
Special Fund: $1,433,374
Capital Projects: $51,442,072 – The City is including the $35 Million held in Reserve on the Mello Roos Bonds, but is NOT claiming the $200 Million Debt included with the Bonds.
Other Assets: $26,128,979: This amount is the Bond Premium and Interest Payments plus ‘IOU Funds’ listed at the end of the City’s Financial Statements. IOU’s include $5.7 Million owed to Employee Benefits and $2.1 Million owed to State program AB109.
The City collects Mitigation Fees for Fire Stations, Regional Parks, Recycled Water, etc, but the City absorbs the mitigation fees in the general revenue. There should be $25 Million in a Fire Station Fund, but there is nothing.
Liabilities: $6,968,205
City neglected to declare the following Liabilities:
WRCOG Judgement: $60 Million
Mello Roos September Bond Payment: $15 Million
PASIS (Employee Pension) $7 Million
Also not included in the Liabilities are the Mitigation Fees for Fire Station, Regional Park, Recycled Water, and Roads that were collected, but stolen.
Consolidated Statement of Revenues, Expenditures, and Changes in Fund Balance/Working Capital
Transportation Revenues: $27,000,921 – forged number
Revenues Over Expenditures: $20,884,041 – forged number
Beginning Fund Balance/Working Capital: $41,101,749 – forged number
BEAUMONT UTILITY AUTHORITY: http://www.ci.beaumont.ca.us/DocumentCenter/View/27528
Consolidation of Fund Equities and Transfers:
Waste Disposal: $54,069,993 – forged number
The City of Beaumont falsely claims $76.2 Million in Sewer Plant Machinery and Equipment. Records show that virtually all the money was paid to Urban Logic Consultants.
General Obligation Bonds, Revenue Bonds, Certificates of Participation
Principal Amount Matured During Fiscal Year: $8,430,000
Bond was Called in December, 2014 after it was discovered that money was funneled to Urban Logic Consultants and ‘state of the art’ Recycled Water Facility was never built.
Special Districts Financial Transactions Report – Consolidated Balance Sheet
Assets:
Cash and Cash Equivalents: $2,478,606 – forged number
The Sewer Enterprise Fund has operated at a loss for at least the last decade.
Equipment: $76,260,772 – forged number
Records show that money was funneled to Urban Logic Consultants
Accumulated Depreciation: $25,546,563 – forged number
There is no $76 Million in equipment to depreciate.
Special Districts Financial Transactions Report – Consolidated Balance Sheet
Liabilities:
Retained Earnings Unreserved: $54,069,993 – forged number
The Sewer Plant is so deteriorated it’s worthless.
The Water District offered to purchase Beaumont’s Sewer Plant for $1.00, but only to shut it down.
State requires $60 Million upgrades to be completed by 2020.
State Water Quality Control Board issued Notice of Violation for over-capacity in November, 2015. City threw Notice of Violation in trash.
City can not produce Title 22 Compliant Recycled Water because they stole all the bond money, mitigation fees, and taxes collected to build the facility.
Detained Summary of Footnotes for Fiscal Year 2014-2015:
Other Operating Expenses: “Everything was reported in Sewage Treatment previously.”
They previous reports were forged as City Staff and Council are aware.
Other: Developer Contributions. This is the Mello Roos Taxes that are charged to the Property Owners. The City Illegally uses Mello Roos Property Taxes to reimburse Developer Mitigation Fees.