The City of Beaumont acquired the $4,735,000 Area 18 Stetson Bond on April 15, 2004. The Area 18 Bond is a 30 year bond with yearly premium payments and bi-yearly interest payments and over 50% of the bond amount due in a balloon payment of $2,545,000 in 2034.
EMMA page ii (2/282) and page 84 (88/282) lists Alan Kapanicas as City Manager and Finance Director. Kapanicas' company, General Government Management Services, is listed as Special Tax Consultant.
EMMA page ii and 84 also lists David Dillon as Director of Economic Development and his company, Urban Logic Consultants, is listed as Project Engineer. This is a clear violation of the California Administrative Code Title 2 Section 18700 et seq.
At the time the bond was issued Harris Real Estate appraised the 75 acres of undeveloped land with an 'as is' market value of $6,300,000. The one owner, Beaumont 194 LLC - which is now a defective company, given 'the vote' to acquire bond debt on the land.
The current 194 property owners of Area 18 petitioned the City of Beaumont for an open forum to discuss their Mello Roos debt. The property owners requested an official resolution from the City to prevent their bond from being refinanced and an accounting of how their property taxes are being utilized.
The Area 18 residences received no open forum and no assurance their bond would not be refunded. The Beaumont City Council sent a letter explaining that the City does not follow the laws and regulations of Mello Roos, they invented their own rules that they call: 'Fair Share Costs'. The City stated that only 2% of the Area 18 Mello Roos bond fund was used in their district. The Bond confirms that very little of the funds were intended to be used in accordance to the provisions of the law. California Govt. Code 53311 et seq mandates that funds must be used within the district.
The bonds seem to be written with the theory that disclosure absolves the participants from the letter and intent of the law. This is incorrect. Violations of the law are still applicable. Disclosure simply makes it clear that all parties involved were informed of the violations of the law.
EMMA Page 53 (57/282) lists the 2014 Interest and Premium payments for Area 18 at $342,906.26.
Riverside County Tax Assessor lists the total Special Taxes collected in Area 18 at $513,213.50. This leaves a profit of $170,307.24 per year or almost $900 per home more than needed to pay the bond debt.
The City's letter to Area 18 states that the total debt each homeowner pays is $36,592 but this is incorrect. The average Mello Roos property tax payment in Area 18 is $2,645 per year for 30 years which would bring the total amount paid by each homeowner to $79,350 and bring the total amount collected for the $4.7 million bond to $15.4 million. The residences of Stetson will pay almost 100 times the cost of the improvements they received for their district.
When the bond was written in 1994 the expected price range of the home values in Area 18 ranged from $240,000 - $295,000. Current home prices range from $160,000 - $200,000 with numerous vacant and foreclosed homes.
Read about Mello Roos and California Government Corruption at http://www.libionline.net/