At the August 18th Council Meeting Jim Love of Beaumont Electric Claims to Repaid City Sales Tax
By: Libi Uremovic | Original Article at patch.com
The City of Beaumont has been purchasing all of the Supplies for Beaumont Electric since September, 2009. At the August 18, 2015 Beaumont City Council Meeting Jim Love spoke until Stacy Love stopped him declaring that they were not prepared to “be bombarded with questions” and requested all questions in writing.
Council only asked one (1) question: Who in the City arranged to pay for all of Beaumont Electric Supplies?
What we did learn from Jim Love:
“But the payment, when the payment was made, we made the payment back with the sales tax on it to bring the sale to Beaumont.”
The procedure was for the Beaumont Financing Authority to purchase wholesale supplies then ‘sell’ the wholesale supplies to the City with sales tax included. Of course since there was no actual ‘sale’, the sales tax was recorded on the General Ledger, but there was no money exchanged.
However; if Beaumont Electric paid sales tax to the City it would/should be recorded on the General Ledger, but there is no record of Beaumont Electric ever paying sales tax.
“..One of the points that your City Attorney pointed out is that we paid $12 Million. In that same 10 year time frame we did $70 Million in sales and worked in four (4) different States…”
Which makes is an Inter-State crime, which makes it Federal.
Why does Libi love federal crime?
Because there is no liberal-socialist time out for good behavior in federal prisons. When convicted for federal crimes they have to serve every day of their sentence.
“..All the Contracts were publicly bid…”
We all know that’s a lie. The Closest Beaumont has come to a public bid in the last 20 years have all be proven to be phony bid scams – and that’s Council’s fault for having a corrupt Staff.
“…We turned over 7,000 pages of documents…”
Big deal – I’ve got over 7,000 documents just on the Old Town Street Lighting Scam.
White: “ We don’t pay them for materials,..”
Pinkney: “ I’d be surprised if that occurred, but I can’t say. That seems like it would be difficult to conceive of happening..”
Surprise!!
Yes, Beaumont Electric charged the City for Materials, but there is no sales tax listed on the Invoice. If Beaumont Electric is repaying the sales tax to the BFA then Beaumont Electric should be charging sales tax to the City.
Beaumont City Council Meeting Transcript August 18, 2015
70:00 Jim Love: 14490 Green Acres Drive. The Beaumont Financing Authority, as buying city materials, was also buying Beaumont Electric materials at a wholesale rate with no sales tax. That brought the sale into the City of Beaumont at which when we repaid it we added sales tax to it. I’m surprised this didn’t come up by the City Attorney, or maybe this wasn’t explained well. But the payment, when the payment was made, we made the payment back with the sales tax on it to bring the sale to Beaumont. All sales in the City of Beaumont bring in 1% sales tax to the City. This all started back, it’s explained very clearly in our letter of June 10th, the City was basically a wholesale entity that would buy. It was all one account. The City didn’t have any liability. The City would pay for the materials at a wholesale rate. We would turn around and pay the sales tax. The City would result in getting a penny out of it back in the City coffers of General Fund money. Over the term of what we did the City collected $90 or $100,000 off this arrangement. It was an income producing arrangement that Approved by the City Council and all the other entities involved.
71:00 Jim Love: It wasn’t just a random act of anything, it was all done by the City. We were invited, which we did. At which we produced income for the City of 1% of from every dollar, so a penny on every dollar. The one total is like $6 Million since 2011. That would have been $60,000 money into the City coffers. One of the arrangements was that it actually produced a higher interest rate because you turn the money five or six times a year verses different investment. That’s how it was explained to me by other people. It was not an absolute blanket deal the way it was described to you. It was not properly described as the way it actually worked.
72:00 Orozco: Where you aware that you were the only company making an arrangement that way?
Jim Love: Actually I was first told there were other companies involved. I never asked.
Orozco: Who told you?
Jim Love: I was told by Staff or Council, I really don’t know, it’s been going on a long time. I’m old and my memory is not as good as it used to be. I tried.
Pinkney: I’d like to know who approached Beaumont Electric to propose this arrangement.
White: Who approached you to do this?
Jim Love: Well, it would have been Mr. Kapanicas and City Council. Different City Council Members brought up that they were helping to bring sales tax into the City, to help revenue into the City.
73:00 White: Which Council Members?
Jim Love: I don’t remember. It’s been a long time.
Stacy Love: We were just told that this would be on the Agenda on Friday afternoon. We’re not prepared to stand up here and answer questions. We think that any questions you have we will be happy to answer them, but we’d like them in writing. To stand here and be bombarded with questions; we are not prepared for this. We didn’t even know this was happening. I happen to be in City Hall turning documents and was told that this was on the Agenda, but no one could even tell me what was on the Agenda.
Jim Love: We have crosschecked with suppliers, which is the 3rd party involved. We have delivered 7,000 pages of documents.
74:00 Jim Love: One of the points that your City Attorney pointed out is that we paid $12 Million. In that same 10 year time frame we did $70 Million in sales and worked in four (4) different States. All the Contracts were publicly bid.
76:00 Jim Love: There is no balance owed. We turned over 7,000 pages of documents.
Knight: According to your records; there is no balance.
Jim Love: No. And we have crossed-checked with suppliers, which is a 3rd party that’s involved, for rebuttals, but …
95:00 White: Page 16 Section 5.1 In every one of these Contracts, almost the exact same wording, it says: “Contractor will provide all personnel, materials, and equipment.” That’s on every one of these contracts. Nowhere does it say that the City would help or create this process.
96:00 White: The first page of the Staff Report where you list Fiscal Year payments to Beaumont then you compare that to the $6 Million that was spent for the materials. $6 Million verses $2 Million that we paid Beaumont, so I’m assuming that the majority of that $6 Million was for work other than City-related contract?
Pinkney: I don’t know the percentages, my understanding is that purchases were made for inventory that was not used on City projects.
97:00 White: We don’t pay them for materials, I don’t see that in any of the contracts. We paid a bid price and we paid the price, right? If we used $50,000 of materials on a city job we wouldn’t also pay them $50,000 for materials on top of their bid contract.
Pinkney: I’d be surprised if that occurred, but I can’t say. That seems like it would be difficult to conceive of happening. I think the way that it worked was, and remember the Beaumont Financing Authority arrangement didn’t start until 2009. The transactions that we show began September 22nd, 2009 through June, 2015.
98:00 Pinkney: The entity, Beaumont Financing Authority, was purchasing the inventory and providing it to Beaumont Electric. Separately and distinct from that; the Beaumont Electric Entity, was providing services to the City, bidding on a project, being awarded the bid, then providing the services for that bid amount, subject to any change orders that were entered into.
White: The documents here are all the public record documents that the City has, correct?