By: Libi Uremovic| Original Article at Patch.com
At the November 18, 2014 Beaumont City Council Meeting Mike White of SunnyCal stated:
138:15 Mike White: “Right now the City has a ‘policy’ for CFDs, so we’ll follow whatever policy the other developers have.”
In a normal Project the developers pay the city/county mitigation fees to offset the project’s impact on the rest of the community/county. The developers are responsible to finance and build all of the infrastructure within the development; roads, parks, and sewer lines up to the main roads. The city/county uses the mitigation fees paid by the Developers for the specific infrastructure projects listed in the Mitigation Fee Invoice.
The City of Beaumont’s ‘CFD Policy’ : Developers agree to pay the city-wide mitigation fees AND agree to allow the City to build and maintain the project’s infrastructure using Mello Roos Bond Debt. Aside from the mitigation fees paid to the city; the developer’s only investment in the project is building a few model homes, so it’s a great deal for developers.
As Beaumont City Manager Alan Kapanicas has stated several times; The City charges each home owner the maximum Mello Roos property taxes regardless of the amount of bond debt. But the Mello Roos taxes don’t start until there is an occupancy permit issued on each house, so the Developers are never liable for the Bond Debt regardless of the outcome of the project.
Instead of turning over the TUMF fees to the WRCOG, Beaumont City Staff and Council stole the money. Instead of building the infrastructure with the city-wide mitigation fees collected from the Developers the City stole the money.
Instead of properly building the development’s infrastructure as promised the City did subpar work and never completed the parks.
The theory that because the Developers subcontracted the work to the City they are not responsible for the development’s infrastructure is incorrect. The Developers are just as responsible for the construction of the developments as if they’d paid private contractors to do the work.
Mike White is being told by Beaumont’s Corrupt City Staff & Council that if he agrees to pay city-wide mitigation fees for SunnyCal the City will acquire Bond Debt to build the infrastructure inside of the development and burden the future property owners with Mello Roos Bond Debt.
What Kapanias is not telling Mike White is that the City can not get any more bond debt and the last bonds the City acquired were completely Junk.
On Page 16 of Beaumont’s last Bond acquired, 2013 Series B, clearly shows a Junk Bond:
Principal Amount of 2013 District Bond $10,875,000
Bond Purchase Discount ($10,744,500)
Net Bond Proceeds $130,500
Because of the high interest rate on junk bonds the Taxpayers of Beaumont will pay a total of $30 Million so that $130,000 could be divided between Beaumont’s corrupt Staff in the guise of Administration, Bond Counsel, Financing Consultant, Disclosure Counsel, District Trustee, and ‘other costs’ related to the issuance of the Bond.
The City just had their 2001 Wastewater Bond revoked. The last Mello Roos Bond acquired was Junk. The State will not allow the City of Beaumont to acquire any more Bond Debt.
Council approved SunnyCal’s tentative map, which allows the SunnyCal development to move forward. The City knows that they can’t get any more Bond Debt, but they will lie and make promises to Mike White in order to collect mitigation fees.