By: Libi Uremovic, May 28, 2014 | Original Article at Patch.com
The Judge’s ruling on the Western Riverside Council of Government’s is 12 pages long. Below is a shortened version:
AS DEMONSTRATED BY EXHIBITS 1003 AND 1004, THE CITY OF BEAUMONT ADOPTED THE TUMF MODEL ORDINANCE. ITS LEGISLATIVE BODY, THE CITY COUNCIL, THEREBY PROVIDING CLEAR POLICY DIRECTION, REQUIRED THAT THE CITY COMPLY WITH THE REQUISITES OF THE TUMF PROGRAM. THE PROBLEM APPEARS TO BE THE INCONSISTENCY, OR THE APPARENT INCOMPATIBILITY, OF THE C.F.D. CREATED BY THE CITY IN 1993 TO BUILD INFRASTRUCTURE WITHIN THE CITY LIMITS, INCLUDING TRANSPORTATION INFRASTRUCTURE. AFTER THE PASSAGE BY THE BEAUMONT CITY COUNCIL OF THE ORIGINAL TUMF ORDINANCE IN 2003, CITY STAFF, FROM THE CITY MANAGER ON DOWN, ADOPTED A POSITION THAT THE CITY’S TUMF OBLIGATIONS WERE SATISFIED BY THE CITY TRANSPORTATION PROJECTS, LARGELY FUNDED AND CONSTRUCTED THROUGH C.F.D. 93-1. THEIR ARGUMENT, SIMPLY STATED, IS THAT ANY WORK DONE ON A CITY ROADWAY IDENTIFIED BY THE TUMF NEXUS STUDY, AS INCLUDED WITHIN THE TUMF NETWORK, WAS A QUALIFIED TUMF PROJECT, FOR WHICH THE CITY SHOULD BE CREDITED AS HAVING CONSTRUCTED AS ITS OWN, OR AS PART OF ITS TUMF OBLIGATION. THE COURT IS SATISFIED AND FINDS THAT THE POSITION OF CITY STAFF WAS MOTIVATED BY CERTAIN COMMITMENTS TO BEAUMONT AREA DEVELOPERS, AS WELL AS AN IMPERATIVE TO HELP FUEL FURTHER AND GREATER DEVELOPMENT WITHIN BEAUMONT CITY LIMITS. SIMPLE ECONOMICS EXPLAIN WHY CITY STAFF WOULD TAKE SUCH A POSITION.
UNDER THE C.F.D., THE CITY ISSUED BONDS THAT PAID FOR THE TRANSPORTATION PROJECTS. THE BONDS WERE SECURED BY LIENS ON THE INDIVIDUAL PARCELS WITHIN THE CITY’S LIMITS.
THE BONDS, PAID BY A SUPPLEMENTAL — OR A SUPPLEMENTAL BILL ADDED TO THE ANNUAL PROPERTY TAX LEVY. NO UP FRONT MONEY WAS REQUIRED TO BE PAID BY ANY DEVELOPER WHO OPTED FOR THIS FORM OF FINANCING. THE DEVELOPERS THEREBY HAD NO CARRYING CHARGES FOR THE COST OF BORROWED MONEY TO PAY UP FRONT FOR CONSTRUCTION OF THESE TRANSPORTATION PROJECTS. MOREOVER, THE COSTS ARE EFFECTIVELY HIDDEN FROM THE PROPERTY BUYERS,WHO DO NOT SEE PRICE INCREASES TO COVER DEVELOPER OUT-OF-POCKET DEVELOPMENT COSTS. INSTEAD, THE BUYER PAYS FOR THE PROJECT INCREMENTALLY OVER THE LIFE OF THE BOND THROUGH THOSE TAX ASSESSMENTS OR ADDITIONS TO THE TAX BILLS.
CONTRA RIWISE, TUMF REQUIRES UP-FRONT PAYMENTS OUT OF POCKET FROM DEVELOPERS. OF COURSE, IT IS EXPECTED THAT THESE COSTS WILL BE RECOUPED BY AN INCREASE IN SALES PRICE OF THE PROPERTIES THAT ARE CONTAINED WITHIN THE DEVELOPER’S PROJECT. THIS SOMETIMES RESULTS IN A RISK OR GAMBLE THAT CERTAIN DEVELOPERS ARE UNWILLING TO ASSUME. THE NET EFFECT OF THIS DICHOTOMY IS, FOLLOWING THE BEAUMONT PREFERENCE, TO GIVE BEAUMONT THE EDGE IN ATTRACTING DEVELOPERS AND GREATER DEVELOPMENT AS AGAINST ALL OTHER WESTERN RIVERSIDE JURISDICTIONS THAT IMPOSE THE MANDATED TUMF FEE UP FRONT.
SMALL WONDER THEN THAT THE BEAUMONT IMPERATIVE WAS ALSO TO KEEP ALL MONEY COLLECTED VIA C.F.D. 93-1 IN TOWN AND SPENT ONLY ON LOCAL IMPROVEMENTS AND FACILITIES. ALL OF THIS LEADS INESCAPABLY TO THE COURT’S FINDING THAT CITY MANAGEMENT AND STAFF CONTRACTORS VIOLATED THE DIRECTIVES OF THE CITY’S TUMF ORDINANCES TO SATISFY THIS IMPERATIVE. IN THE END, IT APPEARS THAT THE CITY EXPECTED TO BE TREATED DIFFERENTLY IN THE TUMF PROGRAM THAN ALL OTHER MEMBERS OF THAT PROGRAM. MOREOVER, IT IS CLEAR THAT CITY STAFF CHOSE TO OVERLOOK THE CLEAR MANDATE OF THE CITY COUNCIL REVEALED BY ITS ADOPTED TUMF ORDINANCES, INCLUDING THE DIRECTION TO COMPLY WITH THE TUMF PLAN. OF PARTICULAR NOTE IS THE TUMF REQUIREMENT THAT POST-2003 FINANCING MECHANISMS, SUCH AS C.F.D. 93-1, BE MADE TO CONFORM TO THE TUMF PROGRAM, AND THE REQUIREMENT THAT NEW FINANCING PLANS OR BOND ISSUES FOR TRANSPORTATION, OR FOR THAT MATTER, CREDIT OR DEVELOPMENT AGREEMENTS, HAVE PRE-APPROVAL FROM W.R.C.O.G.
A WORD ABOUT CONFORMANCE OF C.F.D. 93-1 WITH TUMF IS APPROPRIATE. THE COURT’S QUESTIONS OF MR. MC NEILL ABOUT C.F.D. 93-1 AND LIMITING ITS COVERAGE TO EXCLUDE REGIONAL TRANSPORTATION, THOSE QUESTIONS, THAT IS, WERE NOT SIMPLY IDLE THOUGHTS. IN THE COURT’S ESTIMATION, C.F.D. 93-1 COULD HAVE BEEN, AND, INDEED, SHOULD HAVE BEEN, MODIFIED TO EXCLUDE REGIONAL TRANSPORTATION PROJECTS, WHILE CONTINUING TO COVER OTHER LOCAL PROJECTS, INCLUDING WATER, SEWAGE, AND LOCAL TRANSPORTATION.
THE CITY COULD HAVE REDUCED THE LIMIT OF BONDED INDEBTEDNESS AUTHORIZED FROM THE 655-MILLION-DOLLAR AMOUNT INDICATED BY MR. MC NEILL, TO, FOR INSTANCE, 600 MILLION,OR FOR THAT MATTER, 550 MILLION, IF SO NECESSARY, TO REFLECT WHAT I WOULD CALL A TUMF INCREMENT, AND THEN COMPLIED WITH THE TUMF PROGRAM REQUIREMENTS TO IMPOSE A TUMF FEE UPON NEW DEVELOPMENT.
INSTEAD, THE CITY OPTED FOR WHAT ONE COULD CALL THE, QUOTE, WILLFUL CHILD, END QUOTE, SYNDROME. INDEED,THE EVIDENCE REFLECTS THAT CONTRARY TO TUMF ORDINANCES, CITY STAFF TRIED REPEATEDLY TO MAKE THE TUMF PROGRAM CONFORM TO THE C.F.D. 93-1 PROGRAM, RATHER THAN CONFORM THE C.F.D. 93-1 TO TUMF. IN MAKING ITS FINDINGS, THE COURT IS CONSTRAINED TO COMMENT IN SOME SMALL FASHION ON THE CREDIBILITY OF THE WITNESSES. HERE, THE COURT NOTES THAT IT WAS EXTREMELY IMPRESSED WITH THE CHARACTER, QUALITY, AND CREDIBILITY OF PETITIONER’S EXPERTS, MESSRS. CHYLINSKI AND ZIMMERMAN.
MR. ZIMMERMAN’S ANALYSIS OF THE CITY’S ROAD PROJECTS ALLEGEDLY ON THE TUMF NETWORK, PROVIDED AN ENCYCLOPEDIC VIEW OF THE DEFICIENCIES IN THE CITY’S CLAIMS TO HAVE MEANINGFULLY PARTICIPATED IN AND CONTRIBUTED TO THE TUMF PROGRAM. SIMILARLY, MR. CHYLINSKI’S REVIEW AND ANALYSIS OF THE FINANCIAL AND COMPLIANCE ISSUES OF THE CITY’S CLAIMED COMPLIANCE WITH TUMF WERE REVEALING; INDEED, THEY WERE STARTLING. RESPONDENT’S WITNESSES, PARTICULARLY, MESSRS. DILLON, HUGHES, AND MOORJANI EITHER LACKED SPECIFIC KNOWLEDGE OR WERE NOT CREDIBLE IN THEIR TESTIMONY REGARDING COMPLIANCE WITH THE TUMF CONTRIBUTION REQUIREMENTS.
AT BOTTOM, THE COURT FINDS THAT IN NO INSTANCE DID THE CITY’S CLAIMED CONSTRUCTION OF TRANSPORTATION IMPROVEMENTS SATISFY THE TUMF REQUIREMENTS TO ADD TRUE ROADWAY CAPACITY. IF ANYTHING, THE EVIDENCE SHOWS POOR LOCAL TRANSPORTATION PLANNING AND EXECUTION, RESULTING IN BOTTLENECKS AND DELAYS THAT IMPAIR THE NECESSARY ADDED CAPACITY. MOREOVER, THE COURT FINDS THAT THE CITY FAILED TO COMPLY WITH THE TUMF PLAN, REQUIRING PRE-APPROVAL FOR POST-2003 FINANCING OR DEVELOPER AGREEMENTS OR DEVELOPER CREDITS, AND GENERALLY FAILED AT EVERY TURN TO COMPLY WITH VIRTUALLY ANY OTHER TUMF PLAN REQUIREMENT.
THE EVIDENCE SADLY REVEALED SOMETHING MORE THAT THE COURT FEELS OBLIGED TO SPEAK TO. 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. HAD THIS BEEN A TYPICAL CIVIL TRIAL CONTAINING ALLEGATIONS OF FRAUD, I WOULD HAVE FOUND FRAUD BY CLEAR AND CONVINCING EVIDENCE AS AGAINST THE CITY.