If the 1993 Sewer Bond Was Paid Off in 1996, Why Does the City Still Pay on the Bond?
By: Libi Uremovic | Original Article at patch.com
The City of Beaumont Acquired the 1993 Sewer Bond for $8,500,000 in order to expand and provide Title 22 Compliant Recycled Water.
Union Bank became the Bond Trustee to the City in 2002.
In 1996 the 1993 Sewer Bond was refinanced/refunded. The Amount of the1996 Bond was $7,510,000. Page 3 of the 1996 Bond states:
The Refunding Program: “Pursuant to the indenture of trust dated as of August, 1, 1993, the Authority issued its 1993 Revenue Bonds, Series A in the aggregate principal amount of $8,500,000 of which $5,000,000 remains outstanding.”
In 2001 the City acquired the 2001 Wastewater Bond for $9,790,000. Although not stated on the Bond, this Bond was a refinance/refund of the 1996 Sewer Bond. Page 3 states:
The Refunding Program: “The Financing Authority has previously issued its Local Agency Revenue Refunding Bonds 1996 Series A in the aggregate principal of $7,510,000, ALL OF WHICH REMAINS OUTSTANDING.”
The 2001 Wastewater Bond was Called in December, 2014.
Union Bank has released a Transaction Report for FYE 2015. Union Bank holds a Bond Fund Account for the 1993 Sewer Bond. Last year the City of Beaumont paid $225,000 for a Principal Payment, $244,432.50 in Interest, and $52,066.26 in Fees to Union Bank for a Bond that was paid off or should have been paid off in 1996.
Let’s Review:
1993: $8,500,000 in Bond Debt was acquired without Voter Approval.
1996: Additional $2.51 Million Bond Debt acquired without Voter Approval, 1993 Bond should be paid off
1996-2001: City of Beaumont never pays or Union Bank never records an Interest or Premium Payment.
2001: Additional $2.280 Million in Bond Debt acquired without voter approval, 1996 Bond should be paid off.
2010-2013: Union Bank funnels $4 Million to Urban Logic
2014: Union Bank Calls 2001 Wastewater Bond.
2015: Union Bank collects over $500,000 from City for 1993 Sewer Bond.
The 1993 Sewer Bond Fund Accounts state that there is $3,424,643.76 worth of bonds in the accounts, but no interest is incurred.
Would Union Bank like to explain this?