Response to Beaumont Comments at June 22, 2017 LAFCO Meeting
Beaumont City Manager Todd Parton didn’t lie, he just didn’t tell them the Whole Truth. Kyle Warsinski Lied to the Commissioner’s Faces.
Riverside LAFCO Staff and Commission
July 10, 2017
Re: Comments made by City of Beaumont Representatives on June 22, 2017
Below is the Transcript from the June 22, 2017 Riverside LAFCO Meeting regarding the Annexation of the Sunny Cal Project into the Beaumont City Limits. Attached are documents explaining Beaumont’s fiscal condition.
Beaumont City Manager Todd Parton didn’t lie to the Commission, he just didn’t tell them the whole truth. Kyle Warsinski lied to the LAFCO Commissioners’ faces.
Beaumont can not obtain city-wide Insurance because they have no Fire Protection and their past insurance provider is involved in the City’s illegal bond activity. Private Citizens’ are having trouble getting Homeowners’ Insurance.
The Banks, Comptroller of Currency, and the S.E.C. have been notified that the City of Beaumont is submitting Forged Financial Documents to acquire Debt and Refinance Bonds. The City received a ‘Disclaimer of Opinion’ on their YE 2015 Audit because although they removed $350 Million in Forged Assets, they refused to remove the Forged $60 Million in Sewer & Machinery: http://www.ci.beaumont.ca.us/D…
The Citizens’ lives are already at risk by living in a City that has no city-wide Insurance or Fire Protection. Adding more City Limits will only make it harder for Beaumont to get insurance. Beaumont is in a disastrous condition and should be required to provide for the current Citizens before adding more liabilities.
Commissioner Williams commented that “he’s sure the ladies will let LAFCO know when there’s a problem.”
The Citizens of the Pass Area have been notifying LAFCO and the Riverside Board of Supervisors of ‘the problem’ for over a decade, but they have been ignored. It is reckless endangerment for the Commission to Approve further Annexations into the City of Beaumont.
LAFCO June 22, 2017 Meeting Transcript: http://riversidecountyca.iqm2….
29:30: “Kyle Warsinski, I work for the City of Beaumont.”
Kyle Warsinski is a former Employee of Urban Logic Consultants. In the last three years has held the Job titles of Economic Development Director, Public Works Director, and Assistant City Planner.
“We had one-time Revenues.”
The ‘one-time Revenues’ are listed on the 2017/2018 Budget. The $5 Million CFD Transfer was ridiculously illegal and created the Forged ‘Certificate of Completion’ Documents.
The $3 Million in Mitigation Fees that were paid by the Heartland Area 5 Development to mitigate 988 Low-Income Tract Houses that are scheduled to be installed at the end of 2017 without any Infrastructure to mitigate the houses. Fire Protection will be 15 to 20 minutes away from this Development.
Instead of charging $12,000 per house for Mitigation Fees; the City only charged $3,000 per house. And then instead of depositing the $3 Million Mitigation Fees into a Interest-Bearing Account to use for Fire Stations, Roads, and Sewer Capacity; the City deposited the money into the General Fund and labeled it a ‘one-time revenue’. This is why Beaumont has no Infrastructure and the General Fund has a $100 Million Deficit.
“We currently sit with a balanced budget.”
The city has had a ‘balanced budget’ for the last 23 years, they just don’t properly allocate their funds or stick to the budget. For example; on May 16, 2017 the Beaumont City Council passed the 2017/2018 Budget. On June 20, 2017, ‘Council Approved’ Amending the 2017/2018 Budget to pay $70,000 for ‘Smashmouth’ to play in Beaumont on a Wednesday Night. The City plans to sell tickets for $5.00/each to pay for the band, but the City never considered the cost for advertising, police protection, or cleanup.
“..increasing our employees by 26 full-time.”
A City the size of Beaumont with over $300 Million in Bond Debt should have a Finance Department that staffs a Director, three (3) more Accountants, and 1/2 dozen Accounting Technicians. The City of Beaumont removed the Finance Department from the Budget in 2012 and refuses to hire an adequate Accounting Staff.
“We’re sitting on $4.6 Million in Revenue, Un-obligated General Fund Revenue.”
The City of Beaumont’s General Fund has a $100 Million Deficit. The City has been spending Mitigation Fees for General Fund Purposes for over a decade.
“$1.5 Million on Insurance Revenue.”
This is a reference to the City’s Workman’s Comp Insurance. The City of Beaumont 2015 Financial Statements show that Beaumont owes over $11 Million in Net Pension Liability.
But more importantly; The City of Beaumont was Self Insured through the Exclusive Risk Management Authority (ERMAC). The Principal of ERMAC, James Gregg, also received a salary as Beaumont’s Risk Manager. James Gregg was removed from ERMAC on January 1, 2017. The City of Beaumont has also been removed from ERMAC. Beaumont’s Insurance Policy from ERMAC expired on July 1, 2017. There was no Agenda Item on the June 20, 2017 Council Meeting to approve another Insurance Policy.
31:00 “In terms of the Fire Station; We currently collected about $2.8 Million so far, so that’s almost enough to build one (1).”
The City has collected over $25 Million in Mitigation Fees and Bond Funds from the past 20,000 houses built. There is no separate Interest-Bearing Bank Account established for the Fire Station Mitigation Fees; they are still deposited into the General Fund. The 2017/2018 Budget has no Fire Station Infrastructure planned.
“West Side Fire Station.”
The Sunny Cal Development is in the northern portion of Beaumont. A West Side Fire Station would offer no protection to the north side of the City, but it does highlight the fact that the City has no plans to construct the three (3) needed Fire Stations to protect the Current Citizens and not plans to protect another 2,000 Citizens.
“So every new CFD within the City since 2016 has included a pubic safety services portion of the CFD and that’s an Annual Tax Levy that’s based to pay for police and fire services. We weren’t doing that previously.”
The City is currently Illegally Overcharging the current CFD Mello Roos Property Owners $8 Million to provide ‘Services’ for the Infrastructure that the City never built and has been illegally overcharging the Property Owners since 2002.
“$8 Million Liability … set aside Measure A Funds starting Fiscal Year 2018/2019.”
The WRCOG Judgement is a $67 Million Liability. $42 Million is TUMF money Embezzled from the County, the Interest is $25 Million and will accumulate until the debt is paid. The Agreement states that if within five years the County is unable to recover at least $8 Million of the money stolen then the City will have to start making payments. WRCOG will also retain Measure A Taxes in five years to help pay the debt, so there will be no Measure A Funds for the City to set aside: https://beaumont.civicweb.net/…
35:00 “A couple different financing mechanisms …State Revolving Funds… Infrastructure Banks.”
The City must produce three years of Audited Financial Statements to qualify for a State Revolving Fund Loan. Beaumont’s FYE 2014 Audit was not Approved by Council and never submitted to another Auditing Firm; the FYE 2015 Audit received a Disclaimer of Opinion because the City refused to remove $60 Million in Forged Sewer Machinery & Equipment; and the City has no FYE 2016 Audit.
38:00 “40% increase in Sewer Rates”
This will be the second Sewer Increase in four years. On March 5, 2013 the City of Beaumont increased Sewer Fees without allowing the Citizens the Right to Vote in violation of Prop 2018. The Fees were used in the $5 Million Transfer: http://www.ci.beaumont.ca.us/DocumentCenter/View/16764
“So as we look at developing CFDs we have a policy in place that – refunding back to the Developers really are there to cover Capital Cost.”
This is what Judge Chaffee described in the TUMF Judgement as “an unfair competitive advantage.” The reason Developers flock to Beaumont is because the City trades Mitigation Fees for Bond Debt. The City then deposits the Mitigation Fees in the General Fund instead of into a Interest-Bearing Account.
53:00 “Our Project will be part of the CFD for fire and police and emergency services, and for maintenance.”
‘CFD’ means ‘Community Facilities District’. It’s only a title, it is not a Bond. The City of Beaumont promised Mike White a Bond, but the City is locked out of the Bond Market and can not acquire Bonds because the City is Illegally Trading Bond Debt for Mitigation Fees then spending the money instead of building the Infrastructure as required by the Bonds. State Law prohibits the City from charging additional property taxes for basic services. The City charges additional property taxes, but doesn’t provide even basic services.
54:00 “$25 Million that will be generated to the City through building permits, through mitigation fees, through inspection fees.”
Mike White has been promised a $25 Million Bond to pay for all his construction expenses. The General Ledger shows the permit money recorded in the General Fund Administration Department and not into a Special Fund. The City has also promised Pardee Homes millions in bonds to pay for their Mitigation Fees and has until September 1, 2017 to acquire money for Pardee Homes or Pardee will file a $12 Million Lawsuit against the City for Breach of Contract.
LAFCO June 22, 2017 Meeting Transcript: http://riversidecountyca.iqm2….