$5 Million Taken From Mello Roos Reserve Bond Fund Accounts to Pay 2001 Wastewater Bond.
By: Libi Uremovic| Original Article at Patch.com
The November General Ledger and Bank Statement show the transfer of Funds to pay off the 2001 Wastewater Bond. The transfers are located in Fund 12 on page 78/91 of the General Ledger and pages 13-16 on the Bank Statement.
We also requested the November Bond Fund Accounts, but the City wanted $400 in advance – which is a commonly used stalling tactic. It’s been requested that the documents are put on a disk or drive.
On November 18, 2014 the Beaumont Council Agenda included Item 6.a.16: $8.2 Million to pay off the 2001 Wastewater Treatment Bond.
November Bank Statements show that the City paid off the 2001 Wastewater Bond on 11/25/2014 with a $7,610,000 bank-to-bank transfer to Bond Trustee, Union Bank.
The November Bank Statements also show that Union Bank made 13 bank-to-bank transfers depositing a total of $5,069,508.87 into Beaumont’s General Fund Citibank Account.
State and Federal Law mandates that the Bond Trustee hold 10% of each Bond’s issuance in a Reserve Account. As Bond Trustee, Union Bank has the duty of care to ensure the Reserve Accounts are properly maintained. Beaumont has $320 Million in Bonds, so their Reserve Accounts should total $32 Million.
Past inspections of Beaumont’s Bond Fund Accounts revealed that Beaumont’s Reserve Accounts were at about 9%. The other bond fund accounts had a minimal amount or zero balances.
The General Ledger has the deposits from Union Bank coded to Mello Roos Bonds issued from 1994 thru 2007. It appears that Union Bank has transferred $5 Million from the Mello Roos Reserve Bond Fund Accounts to pay off the 2001 Wastewater Bond.