By: Libi Uremovic, March 13, 2014 | Original Article at Patch.com
The City of Beaumont has divided Area 14 into three divisions; 14, 14A, and 14B. However, to analyze the bonds the Areas must be examined as a whole because their property taxes and bond debt are combined. There are four bonds referencing the Area 14 property:
$14,725,000 Bond Issued June 2000 Area 14 Allocation = $10,885,000
Area 14 was owned by Westbrook Oak Valley Properties LLC when 1st bond was issued in 2000. A profile of Westbrook Investments states: “Westbrook Oak Valley Properties, LLC filed as a Foreign in the State of California on Friday, August 28, 1998. This corporation is no longer active according to documents filed with California Secretary of State.”
The 06/21/00 bond allocated $10,885,000 debt to Area 14. EMMA page 41 (47/262) states that only $1,595,474 of the funds was allocated to be used in Area
14. The remaining of the bond funds was allocated to be used for city-wide improvements, but the Area 14 land was remained untouched.
$21,420,000 Bond Issues March 2003 Area 14A Allocation = $17,415,000
On 03/19/03 a $21,420,000 bond is issued with $17,415,000 of the bond allocated to Area 14A, which is identified as ‘Oak Valley Greens AR’. The bond
states that Area 14A is now owned by Pulte Homes and Temecula Valley LLC, the latter of which no longer exists.
EMMA Page 50 (56/340) lists $3,355,749 allocated to Area 14A improvements. The remaining was used on City-wide improvements, which violates the
provisions of Mello Roos.
$21,175,000 Bond Issued on January 2007
Area 14 Allocation = $12,835,000 Area 14B Allocation = $5,000,000
This bond allocates funds to both Area 14 and Area 14B. The bond specifies that Area 14 includes both 14A and 14B.
EMMA Page 18 (26/226) states that at the time of sale Area 14 had $16,905,000 outstanding debt from past bonds. Page 18 lists 1,888 individual property owners, 20 homes under construction, and 14.5 acres of undeveloped commercial property.
Page 21 (29/226) states that of the $12,726,000 debt issued to Area 14 $12,726,000 was allocated to be used to pay past bonds and $109,000 used for the ‘Cost of Issuance’.
Of the $5,000,000 allocated to Area 14B $4,505,884 was allocated to a Construction Fund and $150,000 allocated to Cost of Issuance. At the time of bond sale Area 14B had 291 individual property owners , so it is unknown how the funds were utilized.
$22,490,000 and $1,105,000 Bonds Issued May 2007 Area 14A Allocated $20,958,000
EMMA page 22 (30/222) states at the time of bond sale Area 14A had 1,261 Property owners and 20 homes completed but not yet sold.
Of the $20,958,000 bond debt allocated to Area 14A; $20,908,000 was to pay the 2003 bond debt allocated to Area 14A and $50,000 allocated to ‘Cost of Issuance’.
Let’s Review:
June 2000: $10,885,000 debt attached to Area 14, but land remained unaltered.
March 2003: $17,415,000 debt attached to Area 14A with $3,355,749 allocated to improvements
January 2007: $12,835,000 debt attached to Area 14 to pay past debt
January 2007: $5,000,000 debt attached to Area B for construction
May 2007: $20,958,000 to pay past debt
The City refinanced Area 14’s bond debt increasing the debt from $28,300,000 to $33,793,000.
January 2007 bond debt yearly interest and premium payments are $1,562,525 and $50,267.50. The June 2007 bond debt yearly interest and premium payments in 2014 is $1,386,862.50 for a total of $3 million. The property owners of Area 14 pay an average of $3,153 in additional Mello Roos property taxes for a total of over $6 million yearly in additional taxes.
The City makes $3 million/year profit from special property taxes charged to Area 14. In 30 years the property owners of Area 14 will each pay over $96,000 in additional property taxes. The City of Beaumont will collect over $180 million for $3 million worth of improvements.