By: Libi Uremovic | Original Article at patch.com
The WRCOG Judgment and the State Controller’s Office Report both reference the Mello Roos fraud perpetrated against property owners that have purchased homes in Beaumont.
Beaumont’s Mello Roos Scam is referenced in the WRCOG Judgement because the City included TUMF into the Mello Roos Bonds instead of charging the Developers.
From WRCOG vs CITY of BEAUMONT Judge Chaffee’s Summary: http://beaumontgate.org/news/wrcog-vs-beaumont-summary-judgment/
Page 6: 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.
Page 8: 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.
Page 10: 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.
The California State Controller’s Office issued an Investigate Audit Report on November, 3, 2015. Finding 1 reported Lack of proper accounting and records of bond issuance, fixed assets, and inventory. The State documents how the City of Beaumont’s Elected and Appointed Officials “failed to exercise its fiduciary responsibilities in protecting taxpayer dollars” and personally profited from the acquisition of $626 Million in municipal bonds.
State Controller’s Report: http://beaumontgate.org/news/ca-controller-finds-widespread-deficiencies…
Page 9: “It appears that the former Finance Director was responsible for the accounting of the bonds, as evidenced by payments the former Finance Director received directly from the bond proceeds.”
“The former City Manager and Former City Public Works Director, Principals of General Government Management Services (GGMS) and Urban Logic Consultants, Inc. (ULC), respectively, both provided professional services in several of the bond issuance as Special Ta Consultant and Project Engineer, and received fees from the bond proceeds for the services provided.”
Page 10: “It is difficult to understand why the City Council would ever approve or condone having the City’s executive management team’s personal businesses enter into such agreements with the City. Basically, the City Management and the City Council failed to exercise its fiduciary responsibilities in protecting taxpayer dollars.”
Page 11: “If the City determines that these payments were not appropriate, it should seek legal recourse against these individuals and their businesses.”