By: Craig Shultz, June 8, 2014 | Original Article at The Press Enterprise
Beaumont’s efforts to build roads on its own, ignoring a regional program its City Council agreed to embrace, appear to have backfired.
And the bill for independence is tens of millions of dollars, a judge has ruled.
City officials aren’t signing any checks just yet. Mayor Brenda Knight said Beaumont had lost “the first round” but will appeal the judge’s ruling that it must pay $43 million plus interest in a dispute over transportation fees.
Further complicating the case, the Western Riverside Council of Governments, which was victorious in its lawsuit against the city, will refer the court’s decision and related trial evidence to the Riverside County grand jury and district attorney for further investigation.
Translation: There’s a long road ahead in this battle.
Orange County Superior Court Judge David Chaffee accused the city of fraud in handing down his ruling.
“The evidence and testimony reveals that city management and staff engaged in a pattern and practice of deception that transcends the typical give-and-take of dispute negotiation,” Chaffee said May 22. “Had this been a typical civil trial containing allegations of fraud, I would have found fraud by clear and convincing evidence against the city.”
Knight said at Tuesday’s council meeting that no matter the ultimate outcome of the case, Beaumont residents will not foot the bill.
“There will be no new taxes on any existing residents and businesses,” she told a crowded chambers. “This is a fee program, to be paid by developers.”
Knight said the appeal will be made because there are 22 boxes of evidence and 18 legal issues that were not analyzed by the court.
“While we would have liked to have won this round, it is just the first round and we are confident that the next round will be won, as Beaumont has built $62 million in TUMF roads,” she said.
City Manager Alan Kapanicas said it always was expected there would be an appeal, no matter who won the case. That process could take up to three years.
WRCOG filed suit against Beaumont in 2009, claiming money the city collected from developers for road projects should have come to the agency.
The court found that Beaumont failed to comply with the Transportation Uniform Mitigation Fee Program administered by WRCOG. Referred to as TUMF, the fee is charged to developers in the region to cover the cost of roads and improvements needed as a result of their projects.
TUMF was created as houses were popping up all over the once sparsely populated county. Beaumont, and the rest of the region, joined the program in 2003. Developers would pay money to cities, which were to give the funds to WRCOG. The agency would distribute some of the money back to cities and use the rest toward regional roadways.
But Beaumont kept the money and built roads on its own, many of which did not meet TUMF criteria.
“In no instance did the city’s claimed construction of transportation improvements satisfy the TUMF requirements to add true roadway capacity,” the judge said in the court transcripts released Tuesday. “If anything, the evidence shows poor local transportation planning and execution.”
Knight on Tuesday pointed out that WRCOG praised Beaumont projects in its 2006 annual report and spotlighted a number of projects the city had completed.
Rick Bishop, executive director for WRCOG, said the program’s goal is to build or improve big-ticket regional roadways, not those that serve a particular municipalities.
“The idea is to take city boundaries out of the equation,” he said Wednesday. “The whole process was set up with teamwork in mind.”
The judge had more criticism for the city.
“In the end, it appears that the city expected to be treated differently in the TUMF program than all other members of that program,” Chaffee said. “Moreover, it is clear that the city staff chose to overlook the clear mandate of the City Council revealed by its adopted TUMF ordinance, including the direction to comply with the TUMF plan.”
Beaumont left WRCOG in December 2010, primarily over a dispute regarding the fees. The city had been grouped with Banning, Calimesa and unincorporated areas of the San Gorgoino Pass to work together to identify transportation priorities.
“It they had complied with the program, about half of the dollars Beaumont collected would have come back to them,” Bishop said.
When Beaumont built on its own, he said, other municipalities suffered.
Calimesa City Councilman Jim Hyatt, an WRCOG board member, said Beaumont should have contributed more money to pay for improvements to the Cherry Valley Boulevard interchange at Interstate 10, especially since many of the motorists who use it live on Beaumont’s west side.
“Beaumont hasn’t treated us fairly,” he said.
Bishop said it will be up to WRCOG’s executive board to decide how the money Beaumont has to pay will be spent.
While the city appeals the judge’s decision, interest on the $43 million will continue to accrue, as it has since 2009.