Beaumont Continues to Waste Money on an Assets the City Will Never Own.
Beaumont City Council Agenda dated February 7, 2017, lists the following two Agenda Items:
Closed Session Item 4. Conference with Real Property Negotiators pursuant to Government Code Section 54956.8: Properties APN 424-010-003 and 424-010-005; Agency Negotiator: City Manager, Todd Parton or his designee. Negotiating Parties: City of Beaumont and ASM Beaumont Investors, LLC and Lands of Carmen Hall. Under Negotiation: Price and terms of potential purchase.
Agenda Item 14 Freeway Agreement with Caltrans for SR-60 at Potrero Blvd between Jackrabbit Trail and I-10.
Article 16.
CITY will hear and adopt Resolutions of Necessity when authorized to do so by law or will work with local agencies having jurisdiction and authorized under the law to hear and adopt Resolutions of Necessity.
CITY will conduct and document Condemnation Evaluation and Condemnation Panel Review meetings as required in accordance with STATE policy and guidance. STATE will be notified in advance of any Condemnation Panel Review meetings.
Article 19.
If CITY acquires any right-of-way to be incorporated into the State Highway System, CITY will first acquire in its own name. Title to the State Highway System right-of-way will ultimately be vested in the State. STATE’s acceptance of title will occur after the Right of Way Closeout activities are complete.
STATE’s acceptance of right-of-way title is subject of review of an Updated Preliminary Title Report provided by CITY verifying that the title is free of all encumbrances and liens. Upon acceptance, CITY will provide STATE with a Policy of Title Insurance in STATE’s name.
TRANSLATION: All Assets paid for by Beaumont Taxpayers for the Potrero Interchange will become the Assets of the State.
Also on the Agenda is Item 24: the City’s 2015 Audit. The City received a Disclaimer of Opinion for a multitude of reasons including # 3 “ The City has not recorded general capital assets and general infrastructure assets in the governmental activities in accordance with GASB No. 34. GAAP requires local governments to account for and record capital assets and depreciation expenses as well as accumulated depreciation. The amount by which this departure would affect the assets, expenses, and net position of the governmental activities is not reasonably determined.”
After allowing Urban Logic Consultants to embezzle over $13 Million under the Potrero Interchange scam and promising not to spend any more Taxpayers’ money on Potrero; the Beaumont City Council continues to waste Taxpayer money to build an Asset the City will never be allowed to claim on their Financial Statements.
However, the Potrero Interchange scam is a perfect example of why the City of Beaumont does not claim Assets on the Financial Statements; the City has no Assets to claim.
Aside from being illegal; the result of trading Bond Debt for Mitigation Fees is that the Developers retain the receipts for all the Construction.
The proper accounting for Mitigation Fees is to charge the fees, collect the fees, deposit the fees into separate accounts, use the fees to build the infrastructure, submit the receipts to be accounted for as an Asset for the City.
In Beaumontville the City collects Mitigation Fees with the agreement that the City will reimburse the Developers’ Mitigation Fees with Bond Debt. The City then deposits the Mitigation Fees collected into the General Fund where they are paid out to Lawyers and Consultants.
The Developer holds the Receipts for the Infrastructure and claims the Assets on their owns Financial Statements even through the actual Payer of the Assets is the ‘future’ Property Owner that will pay for the Assets three times over in the form of Mello Roos Taxes, but does not add any value to their property.
So who ‘wins’ ?
The Developer wins because they are claiming Assets that, in actuality, they don’t even pay for. And of course the Lawyers and Consultants that sell the scam win.
In the case of the Potrero Interchange the only winner will be the State of Cali that will get all of the Assets without expending any money. And of course the Lawyers and Consultants that sell the scam win.
The Lawyers and Consultants are paid well, worshipped at every given moment, and never held accountable, so they always ‘win’.
Will Pass Area Developers pay $50 Million for an Asset they can’t claim on their Financial Statements?
Noooo. That’s bad business.
No one in their right mind would waste $50 million or any fraction of that without any ability to receive a return on their investment. All those phony warehouse revenue projections were for the Council; the Developers know that there’s no money in warehouses. The Developers can’t sell or lease warehouse land at a high enough price to recoup the money spent on Potrero.
And it’s already been disclosed that the ‘$5 Million Developer Contribution’ was actually Bond Debt that the City can not acquire. The Developers are not willing to put up any money to construct an Asset that will only be listed as a waste of money on their Financial Statements.
So why is the Beaumont City Council continuing to waste the Taxpayer’s Money ?
Because there is no one in the City of Beaumont working for the People.
A real Finance Director would tell the Council that the City received a Disclaimer of Opinion on the 2015 Audit that’s a full year overdue in violation of State Laws, the General Fund has $100 Million in Debt, and spending money to build Infrastructure that the City will never own is reckless and a gross misuse of resources.
But Beaumont doesn’t have a real Finance Director, nor do they want a real finance director, nor is the Council wiling to hire an Attorney thru a Public Bid as required by State Law as ‘promised’ repeatedly on the Financial Statement’s response. What Beaumont City Council wants is the Finance Director they want, just like with Aylward.
Beaumont Finance Director Melana Taylor signed off on the Potrero Agenda Item 14’s Fiscal Impact with a ‘No Impact’.
A City Attorney that was representing the Citizens would advise the Council that continuation of Potrero will only waste money and cause additional liability to the City.
But the City of Beaumont doesn’t have a real City Attorney, nor do they want one, nor is the Council wiling to hire an Attorney thru a Public Bid as required by State Law as ‘promised’ repeatedly on the Financial Statement’s response.