June 7, 2016 Beaumont City Council Meeting contained Agenda Item 3.C. Approval of Quarterly CFD Reports: http://www.ci.beaumont.ca.us/DocumentCenter/View/27644
Transcribed from the Council Meeting:
1:17:00 Warne: Councilman Condon has requested this Item be placed on the Agenda. What she’s asking is because of all the confusion and controversy over the CFD’s that we prepare for the Public and post online quarterly CFD Reports. She has spent a lot of time and effort researching the kinds of things and the kinds of information that should be included in that Report. So we’re here tonight to get authorization to Approve a Report. I think it will be very helpful for people to understand what the status of each one of these CFDs. Believe it or not, as I was doing the Budget, there are 59 Areas and Sub-Areas. So it’s a very complete issue and very controversial issue in the community.
1:18:00 Warne: Councilmen; do you have anything else you’d like to add to that? We recommend Approval.
1:18:05 Councilman Condon: This is something I think the entire Council has been talking about for some time and I just wanted to give us a jumpstart and this is already in an Excel Spreadsheet and now we have the information with the Bond Reconciliation. I think it will give the community confidence in our ‘transparency’.
The CFD Reports that City Manager Warne claimed to have ‘prepared’ are the old forms from the California Debt and Investment website. The City has been required to submit the Forms to the CDIAC as required by California Government Code 53359.5 for over a decade, but apparently no one on Council was aware of the State Requirement or acknowledged any familiarity of the forms.
On June 21, 2016 Beaumont City Council Agenda Item 3.F. Authorizes Urban Futures and Webb and Associates to ‘Gather Information for These Reports’. The Agenda Item states: “The cost to prepare the initial report is unknown.”
City Manager the 3rd Warne, Urban Futures, and Webb and Associates know that the Forms they presented to Council are the old forms used by the State.
On June 21, 2016 the CDIAC is presenting a new set of Regulations for Bonds: http://www.treasurer.ca.gov/cdiac/meeting/staff/20160621/6.pdf
The new Regs will require a new Form to include the additional Requirements which includes online submission of the documents. The most telling additions are the requirements that every profiteer is named individually and the amount received from the bond:
Article 2 Section 5010
(u) Purpose(s) to which the money, assets, or rights transferred to the Issuer under the Debt contract are put, and the percentage of Principal applied to the purposes indicated.
Article 3 Section 6020
(q) If any amount of the Principal is used to refund, redeem, or refinance other Debt, or there Debt type was revenue bonds as defined under Govt. Code 54313, and a Private Sale method was used instead of a Public Sale method, the reasons why the Issuer decided to use the selected Private Sale method.
(u) If the services of an Underwriter were used in the Debt Issue, the fees and expenses paid to the Underwriter for these services, including expenses to be itemized as Management Fee, Total Takedown, and other expenses.
(v) If the Creditor in the Debt Issue was a Purchaser, the fees and expenses paid to the Purchaser.
(w) If the Creditor in the Debt Issue was a Lender, the fees and expenses paid to the Lender.
(x) If the services of a Bond Counsel were used in the Debt Issue, the fees and expenses paid to the Bond Counsel for these services.
(y) If the services of a Co-Bond Counsel were used in the Debt Issue, the fees and expenses paid to the Co-Bond Counsel for these services.
(z) If the services of a Borrower’s Counsel were used in the Debt Issue, the fees and expenses paid to the Borrower’s Counsel for these services.
(aa) If the services of a Disclosure Counsel were used in the Debt Issue, the fees and expenses paid to the Disclosure Counsel for these services.
(bb) If the services of a Financial Advisor were used in the Debt Issue, the fees and expenses paid to the Financial Advisor for these services.
(cc) If the Debt Issue was assigned a Rating, the fees and expenses paid to the agency that provided the Rating.
(dd) If the Debt Issue was structured with Credit Enhancement, the fees and expenses paid for the Credit Enhancement.
(ee) If the services of a Trustee were used in the Debt Issue, the fees and expenses paid to the Trustee for these services.
(ff) If the services of a Placement Agent were used in the Debt Issue, the fees and expenses paid to the Placement Agent for these services.
(gg) Any other fees and expenses paid to Issue the Debt that were not elsewhere listed in this Section.