Libi Uremovic
P.O. Box 2894
Rancho Cordova, CA 95741
(702) 503-2022
li**@li********.net
March 8, 2016
IRS – Department of Treasury
501 W. Ocean Blvd. 2nd Floor
Long Beach, CA 90802
Internal Revenue Service
1160 W. 1200 S
Ogden, Utah 84201
RE: City of Beaumont Mello Roos Bonds
From 1993 – 2015 the City of Beaumont has acquired $350 Million worth of Mello Roos Municipal Bonds. The FBI raided the City of Beaumont on April 22, 2015 after fraud, embezzlement, misuse of public funds, and conflicts of interests were uncovered.
The City has released 60% of the Bond Requisitions, a value of $200 Million. The Requisitions show that most of the Bonds’ Funds were either paid to City Staff’s private companies or were used to pay Developer Mitigation Fees. The Requisitions are a jumbled mess, but can be viewed on the City’s website laser fiche under CFD 93-1: http://www.ci.beaumont.ca.us/index.aspx?nid=935
The State Controllers’ Investigative Report released on November 3, 2015, details the City’s negligence in accounting for the Mello Roos Bonds: http://www.sco.ca.gov/Files-AUD/11_2015beaumont_internal_acct_control.pdf
The Bond’s Trustee, Union Bank, refuses to release any documentation regarding Beaumont’s Bonds. The City has issued a Legislative Subpoena to compel Union Bank to release the Bond Requisitions and other Documents: http://www.ci.beaumont.ca.us/DocumentCenter/View/27162
ARBITRAGE REPORTS
On September 23, 2015, Ann Pelij from Willdan Financing stated to the Beaumont City Council that the Arbitrage Reports on the City’s 34 Bonds acquired since 1993 had never been submitted to the IRS.
Bond Requisitions show that David Taussig & Associates, Inc. was paid for Arbitrage Services in 1995 and General Government Management Services (GGMS) was paid $56,000 for Bond Arbitrage Services from 1996 thru 2008.
Pelij stated that the Arbitrage Reports would be completed and submitted to the IRS by December 31, 2015, but Pelij never returned to Council. Public Records Request for the Documents has gone unanswered, so it is unknown if Arbitrage Reports for the City’s Bonds were ever submitted to the IRS
BONDS PRIVATE SECTOR, NOT TAX EXEMPT MUNICIPAL BONDS.
The Law Firm of McFarlin Anderson has filed 8038-G Forms with the IRS declaring the City of Beaumont’s Bonds as ‘Tax-Exempt’ since 1993.
Beaumont’s Bonds are registered as Mello Roos Bonds, but a large portion of the Bonds’ Funds were used to pay Developer Mitigation Fees, which classifies the Bonds as Private-Sector Bonds, not Tax-Exempt.
California Govt. Code 53313 et seq. list what can be done with Mello Roos Bond Funds, which implies what can NOT be done with the Funds. There is no provision in Mello Roos laws that allows the bonds’ funds to be used to pay developer mitigation fees.
In September, 2014, the City of Beaumont lost a $42 Million Lawsuit to the Western Riverside Council of Governments (WRCOG). The City collected Transportation Uniform Mitigation Fees (TUMF) from Mello Roos Bonds, but never submitted the TUMF money to the WRCOG. Judge Chaffee wrote in his summary: “Fraud by clear and convincing evidence.”
CITY OF BEAUMONT DOCUMENTS ENCLOSED:
- California State Controller’s Investigate Report Dated November 3, 2015
- September 23, 2015 Beaumont City Council Meeting Transcript of Ann Pelij of Willdan
- Invoices from Tausing and GGMS Charging for Arbitrage Services
- Letter to IRS From McFarlin Anderson declaring Beaumont Bonds Tax-Exempt
- Developer Mitigation Fees Paid with Mello Roos Tax-Exempt Bonds
- Summary of Bond Fund Accounts that Exceeded the 3-Year Timeframe for Expenditure