By: Libi Uremovic , November 19, 2013 | Original Article at Patch.com
The November 19, 2013 Beaumont City Council Agenda Item 6.c is a Resolution approving a $6,750,000 Bond for which Union Bank is once again listed as ‘Trustee’. The documents provided by the City to the Citizenry are incomplete, missing, or blank. View the information provided to the Public here: http://www.ci.beaumont.ca.us/DocumentCenter/View/17691
In 1994 the City of Beaumont began a housing development project with 12 improvement areas containing 2,012 parcels. The City has continued to acquire additional
improvement areas and bond debt without voter approval and without considering the effects of market saturation or the increasing debt. Some of the original developments are still unfinished or in the case of Area 5; never developed. Page 59 (93/185) states the City now administers 39 improvement areas containing 13,955 parcels. Because the City flooded the housing market; there are over 350 foreclosures in Beaumont and property is ½ the value of homes in the rest of California.
Area 17C was added to the CFD
(Community Facility District) at the July 3, 2012 Beaumont City
Council Meeting. At that time there was one owner: Pardee Homes.
Page 48 (82/185) Value-Lien Ratio lists
67 Individual Homeowners. If there are now 67 individual property
owners they must be allowed to vote on attaching a lien to their
property. Notice of the bond was first advertised in the Riverside
Record Gazette on November 8, 2013.
Page 3 (35/185) of the Bond states the
Financing Purpose of the Bonds:
-
To provide funds to acquire the
2014 District Bonds on the date of delivery of the Bonds. -
To fund the Reserve Fund
$634,646.12. -
To pay the expenses of the
Authority in connection with the issuance of the Bonds.
This bond will serve no purpose other
than to pay commissions to profiteers and to be used as collateral
for a total of $20 million additional bond debt. The Bond does not
state the amount of funds that will be held by Union Bank or paid to
the City of Beaumont.
In November, 2011 the City of Beaumont
twice overdrew their General Fund Checking Account. Union Bank has
documentation of these events because Union Bank wired the City of
Beaumont $300,000 on 11/04/11 which was repaid on 11/07/11 and
$100,000 was transferred from Union Bank to the City of Beaumont when
the City overdrew their checking account again on 11/21/11 which was
repaid on 11/29/11.
Instead of being the 4th
California City to file bankruptcy; the financial ‘solution’ for the
City of Beaumont was to borrow their way out of debt. In December,
2011 the City of Beaumont acquired a $12,145,000 bond. In the last
two years the City has obtained $54,190,000 in bond debt without
voter approval, without using the funds for their intended use, and
without the ability to repaid the loans. Now the City’s bond
interest and premium payments are more than the City’s total property
and sales tax revenue. The Developers have a deal with the City
which relieves them from paying their portion of the special taxes
needed to pay the bond premium and principle and the City can’t
charge additional taxes to existing property owners because the debt
was incurred without voter approval.
Exhibit C contains a letter from
Beaumont City Attorney Joseph S. Aklufi stating at paragraph 8: To
the best of my knowledge, there is no action, suit, proceeding,
inquire or investigation, at law or in equity, before or by any
court, governmental agency, public board or body, pending or
threatened against the Authority, the District, or the City…”
The November 19th City
Council Agenda list eight (8) lawsuits pending. The 2012 Audit
estimated the Western Riverside
Council of Governments (WRCOG) v Beaumont award for damages at
$55 Million. Trial date is 12-02-2013 at the Orange Co Superior
Court Case #30-2010-00357976. Hernandez
v Beaumont is in regards to the Police Officer blinding the
woman with a JPZ device . The award for damages: “…will exceed
$10 Million.”
There are investigations regarding the
City of Beaumont and all participants in the bond scam by the F.B.I.,
State Controller’s Office, State Attorney General’s Office, State
Department of Business Oversight, the California Board of
Accountancy, and the S.E.C.
California Financial Code Section 1322
allows the Banking industry to engage in real estate development
because of their ‘expertise’. The ‘expertise’ would be for the bank
to know the amount of debt a local government agency can legally
acquire, the regulations & requirements for bond debt, and the
common sense to know when documents contain misleading or contain
incorrect information.
The City of Beaumont and Union Bank
both still refuse to release the hidden Bond Fund Accounts. The 2012
GAAP Audit was not prepared until September 2013. The City refuses
to release the Internal Controls Reports for 2010, 2011, or 2012.
The City refuses to allow an outside auditing firm to review their
internal controls.
The City of Beaumont needs another bond
to cover employee payroll and the City’s daily expenses through the
end of the year. The only reserves remaining are $1.8 million in
the State LAIF Account and the $30 million held by Union Bank as
Trustee to secure the current $300 million bond debt.
Union Bank has a duty of care to their
customers and stock holders not to engage in high risk or illegal
activity. Enabling the City of Beaumont to continue to acquire bond
debt is both high risk and illegal.