Rebuild Beaumont

In 1993, the City of Beaumont was in serious financial trouble, and considering bankruptcy. The City Council hired Urban Logic, a consulting firm from Temecula, to take over control. UL's 3 principals, Dave Dillon, Ernie Eggers and Deepak Moorjani assumed the roles as directors of Planning, Public Works and Economic Development. They hired the City Manager of Calimesa, Alan Kapanicas, to serve as a consultant City Manager for Beaumont.

Beaumont's leaders told the 8,000 plus citizens they were going to grow Beaumont out of its financial crisis by building homes. The council created a city-wide Community Facilities District, CFD 93-1, made possible by the State's Mello-Roos law. The plan was to enable developers to build infrastructure for housing projects and be reimbursed by bond proceeds paid for by future homeowners' fees. This meant developers enjoyed lower investment risk and higher return on their investment than they could achieve in neighboring cities. Home development in Beaumont boomed until the housing crisis and recession of 2008.

UL's contract guaranteed the principals could charge the city up to 9% of the cost of each public project in Beaumont for "Plan Checking", "Construction Inspection" and "Public Works Construction Management". Developers would build their projects, UL would charge their fees, and once new homeowners were paying their Mello Roos taxes, proceeds from bonds would reimburse developers. This was all approved by the City Council.

The city wide CFD 93-1 was a first of its kind and may still be the only one in the State. Not only did it allow for low risk investment for developers, it provided access to funding for regional type transportation projects not specific to individual housing projects without voter approval.

UL and Kapanicas promised to provide infrastructure, sewer service, recycled water, fire and police service financed with development impact fees (DIF) and CFD taxes. UL's and Kapanicas' greed led to overpriced, non-competitive bid projects and directed millions of dollars in business to their private companies. Recycled water wasn't a priority; fire stations weren't built; and no fees were established for police services. However, UL still received inflated design and management fees for the infrastructure that was built.

In 2002, the voters of Riverside County approved an extension of the Measure A .5% sales tax for Transportation, passed in 1988 and set to expire in 2009. Along with extending the ½ percent sales tax, voters also approved a new program, the Transportation Uniform Mitigation Fee (TUMF). In order for a city to receive the additional ½ percent sales tax, it would have to participate in TUMF. Beaumont's city council agreed to participate and directed staff (Kapanicas and UL) to comply.

The WRCOG (Western Riverside Council of Governments) is charged with the administration of the TUMF program. A fee on new development, residential as well as non-residential is collected to assist in the building and improvement of the County’s regional arterial system to deal with the increased traffic from new development. Cities are responsible for collecting the TUMF fees from the developers and passing the revenue on to WRCOG.

UL and Kapanicas decided not to follow the council's direction; they did not collect the TUMF fees. UL retained local control of the transportation projects and continued to receive their fees. This lead to the WRCOG lawsuit resulting in a $43 million-dollar judgement against the city, about $60 million with interest.

The judgement was the catalyst leading voters to replace 3 incumbents in the 2014 election. The new council ordered independent audits which revealed the city had depleted its reserves and had been running multimillion dollar deficits for several years. The raids by the District Attorney's office soon followed and a year later Kapanicas, Dillon, Eggers and Moorjani, along with the former Finance Director and former City Attorney, were arrested.

In the two years following the raids, the City Council has hired a new City Attorney and new City Manager; reached a termination settlement with Kapanicas; settled the WRCOG lawsuit; resolved an SEC investigation; and referred one of its own members to the DA for illegal activities. This council has cleaned up corruption in Beaumont.

We still have many challenges facing us. Our sewer plant has reached 75% of its daily capacity and the Water Board has required a $100 million-dollar expansion to be completed and producing recycled water in less than 5 years. Our roads desperately need repair and our transportation networks are not able to handle the needs of the residents in what is still one of the fastest growing cities in California.

The actions of the previous administration under the oversight of previous councils left the city with no reserves and monumental challenges. Over the last two years we have started rebuilding financial reserves and working on needed transportation projects.

Many in our community are angry, I am too. They believe their hard-earned tax dollars have been wasted, misappropriated and embezzled. The recent plea deals by the criminals responsible prove they are right. So, what do we do now? We know what we need to do, we need to continue to rebuild Beaumont. Rebuild its infrastructure, its finances and its community's trust in its elected officials.

We recognize that the only way we move forward is by using the tools available to us to finance the projects our community needs to continue to move forward. We need to protect our city from stagnation. Our citizens moved to Beaumont because they believed in its potential. They made the largest investment most Americans make in their lifetimes, purchasing a home. Without sufficient infrastructure and responsible management of our resources, property values will evaporate and so will our families' futures.

Some voices on social media and on internet bulletin boards claim rebuilding Beaumont by asking its citizens to continue to invest in infrastructure that its city leadership should have already built makes us criminals. Is it criminal to recognize what needs to be done and finding solutions to get it done? I believe it would be more criminal to give up.

This council will continue to move forward despite being called corrupt, dishonest and criminals. Every one of us knew what we were getting into when we volunteered to serve. We know it isn't going to get any easier but we know what we need to do. We will rebuild Beaumont.

It Has Been My Honor

Serving as Beaumont’s Mayor in 2017 has been a great honor and brought with it a responsibility that I will never forget. 2015 was a year of discovery for Beaumont, 2016 was a year of accountability and 2017 has become, as I hoped it would, a year of healing and resolution.

Our small town has faced many big issues the last couple of years.  As I reflect back on 2017, I am proud of our City staff and fellow council members for their dedication to resolving the issues created by those before them. Their tenacity has placed Beaumont in a position of growth and prosperity. Highlighted below are the major accomplishments from 2017:

  • Fiscally responsible budget                                                    ADOPTED
  • 5 year Capital Improvement Plan                                           APPROVED
  • General Fund Deficit ($11 Million)                                           ELIMINATED
  • WRCOG Judgement ($67 Million)                                           SETTLED
  • Pardee Claim ($23 Million)                                                      SETTLED
  • BCVRPD Claim ($2.4 Million)                                                  SETTLED
  • Community Facilities District Fund Reconciliation               COMPLETED
  • Refinance for CFD/Mello-Roos Property Taxes (Phase 1)    COMPLETED
  • RDA Reimbursement ($4 Million)                                            DISMISSED
  • SEC Investigation                                                                       RESOLVED
  • Fiscal Sustainability Study                                                        COMPLETED

 

I hope 2018 is a year of continued rebuilding, leading to years of growth and prosperity in all industries and across all sectors of our local economy. On behalf of the City of Beaumont, I extend my warmest regards and best wishes to everyone. May the spirit of this wonderful season be with you and your loved ones throughout the holidays and many blessings in the New Year.

Q & A With Lloyd White

This was published as a political ad in the Record Gazette on 10/23/14

Why do you believe the Beaumont City Council race is so hotly contested this year?

I am feeling good about my part in this. I’m not an incumbent, so I’ve had no involvement in the budget deficits our city has created over the last four years. I’ve not been responsible for the potentially devastating $43 million judgment against Beaumont in the WRCOG lawsuit. I haven’t been sitting on the Council and just letting City staff run the show and make the decisions that affect all of us. It’s common sense that you can’t run your home on credit card debt. Well, we can’t continue to run our city on deficits either. It’s time for a change.

Do you feel the community is strongly behind you?

Yes.  I may not have the support of Marion Ashley and some of the others that have influenced Beaumont elections for years. I have the support of the people, the police officers association, the homes and neighbors that I visit. It is their support I value, not the politicians. Many of my friends and neighbors have suggested that I am the “people’s candidate not the politicians’ candidate” and I don’t disagree with that.

What do you believe you have to offer Beaumont?

Beaumont is a city with great potential, we have plans to grow to sixty thousand people or more in the next decade. Running our city will become more and more like running a business. I have a degree in economics from UCLA and an MBA. I’ve worked for 16 years for the “best-run company” in the Pass—Esri. My wife, Marti, my children, Caitlin and Riley, and I love this community and are committed to serving it. I will bring to the City Council a fresh perspective and the new ideas we need. We can no longer afford the same old “feel good” decision-making that may have worked in the past. I have the integrity, intelligence and “no special interests” perspective we need now for decision making.

Your opponents claim all you do is complain, what would you do differently if elected?

Recognizing the problems we face and criticizing the status quo is not “complaining.” You can’t fix problems and do things better unless you acknowledge what the problems are. You can find my common-sense six-point plan for Beaumont on my website:LloydWhite4Beaumont.com. But let me suggest some critical areas in which we need to do better:

First, we need to stop approving City budgets that the City Council says are balanced but that our own auditors warn are running at dangerous deficit levels. We need to stop ignoring our own auditors when they tell us we are not making good financial choices.

Second, the City Council steers the ship. Right now we are sailing toward significant financial risks like the WRCOG judgment and other pending lawsuits. This is not “gloom and doom”; it is reality. And we wouldn’t even be talking about it now if we had the kind of knowledgeable leadership that took these risks more seriously and were more business and finance knowledgeable.

Beaumont is appealing the WRCOG decision, so why should we worry?

There is always the possibility that we could lose the appeal; there is no guarantee we will win. If we lose, Beaumont would owe $43 million (that’s more than $1,000 for every man, woman and child in our city) plus $8,000 a day in interest. What is our contingency plan if we should lose the appeal?  How will we protect our taxpayers from this potential calamity?  The appeal has provided the duck and cover the incumbents wanted in order to avoid having to talk about an issue that makes it clear we need a new direction and new leaders. We need a contingency plan. That’s what leaders do. Kicking the can down the road is not acceptable strategy.

You mention having strong support, who is aligning to support you?

I have been blessed with a family and friends who are providing financial and other support. The college friends I met some 30 years ago at UCLA when earning my economics degree have pitched in today because they recognize my integrity and honesty and my commitment to serving the public. Many other Beaumont citizens and small business owners understand that we need to improve the way our city does business if we hope to thrive and grow in the years to come. Most important, I am NOT being funded by the special interest PACS who have dominated Beaumont politics for years. I will serve the entire community. That’s the kind of City Councilman you deserve.

What do you say when your supporters ask you who else they should vote for?

If you have three considerations and recognize we need change then you will make your vote stronger by not adding it to the count of those who have not stepped up and voiced the need for change. One vote, vote for change – Lloyd White for Beaumont City Council

Trucks for Seneca Springs and Four Seasons or Not?

At Wednesday night’s Beaumont Chamber of Commerce candidates’ forum, during my closing statement, I argued for putting the $80 million Potrero Interchange on hold while the City first concentrates on upgrading the I-10 interchanges we all use daily, Oak Valley, Cherry Valley, and Beaumont Ave. My stance on this isn’t new to anyone who has followed my writings. I think it is important to the future of our city for voters to take the time to do the necessary research to completely understand the project, what’s driving it and how it will impact our future. Just accepting the current leadership’s justification of more businesses and jobs to completely change the landscape and culture of our town without considering the alternatives I believe is irresponsible.

The plan at the time I wrote my post,  “Bridge From Nowhere To A Non-Existent Road?”  in May of 2013, was to industrialize the south-west side of Beaumont. The council expected to receive $1,000,000 for the interchange from Lehman Brothers who wanted to develop a 6.5 million square foot warehouse complex west of the new Potrero Bridge. This complex would have been more than 2 ½ times larger than the Gateway Warehouse Center and the largest warehouse site in the state. It would have been closer to residential developments and had as much, if not greater, an impact on nearby residents than the proposed Gateway Center. It was only a year and a half ago that the council was considering spot-zoning the City’s General plan, something they are all now condemning the County of Riverside for doing for the Gateway Center.

When about 200 citizens showed up at the city council meeting to show their unanimous opposition against the project, Council Members Castaldo and DeForge, both up for re-election in about 18 months, moved to put the spot-zoning on hold. Roger Berg fought for Lehman Brothers’ Heartland Warehouse Center to the very end. It was clear he didn’t want to be defeated on this issue. When he realized he would have been the lone vote in favor of the spot-zoning, he reluctantly joined in the 4-0 decision, Jeff Fox had left the meeting early. Now, Berg has made his opposition against Riverside County’s spot-zoning for Gateway his primary campaign issue.

I have spent many of my evenings the last few weeks knocking on doors in Seneca Springs. Many homes in Seneca Springs back up to Potrero and those residents, along with those in Four Season, are the communities that will be most affected by the council’s plans to re-route the truck traffic down a widened Potrero road to Highland Springs. There they will transition on to the I-10. Many of those I spoke to were aware of the plan and have been holding neighborhood meetings in opposition to a major change in their quality of life. Many more were not aware. Almost every Four Seasons resident I have spoken to are unaware of what is in the council’s plans for their future.

The success of the Council’s plan to industrialize this side of Beaumont is dependent on the County of Riverside connecting the bridge and road to nowhere from 4th street to Potrero. There are no funds in the City’s $80 million budget for this phase and the county has made not any such promise or set aside any funds either.

I argued last night that this project should be put on hold in favor of first upgrading the I-10 interchanges. In Roger Berg’s closing statement, he argued in favor of the Potrero Interchange saying we have already spent $20 million on the project and that this project would attract businesses and jobs to Beaumont. This claim leads hopeful members of the community to believe he is talking about the outdoor mall the City has been promising for more than a decade. Ask Mr. Berg where the $20 million was spent when they have yet to break ground on the interchange. It should also interest you to know that $11 million has already been paid to the City’s consulting firm, Urban Logic, for mitigation.

You may ask, “Don’t we want the outdoor mall?” I do and I have been arguing for the City to honor its promise for a number of years now. Ask a city consultant or staff member, or just go look at an earlier version of the City’s General Plan, before the spot-zoning attempt failed, and you will learn the plan was to put the mall between the Potrero Bridge and the I-10. Dig a little deeper and ask to see the engineering reports submitted with every bond issuance application since 2007 and you will find plans for an upgrade to the Oak Valley Interchange very similar to the Potrero Interchange

I believe the upgrade to the Oak Valley Interchange would be a smarter project for the City. It would provide sufficient access to the area west of the I-10 for the outdoor mall, but it would also provide the necessary access to the planned Oak Valley business project on the east side of the I-10; the area where we were told Lowes would be built. The Oak Valley Interchange, when completed, would directly and immediately improve the quality of life for thousands more daily commuters than the Potrero Interchange.

If you are just learning about this, please take another 5-10 minutes to read my May 2013 post “Bridge From Nowhere To A Non-Existent Road?” to get a complete understanding of the project. After fully understanding the Potrero project and the negative impact it will have on those in Seneca Springs and Four Seasons, compare it to how the Oak Valley Interchange could bring the same jobs and businesses Berg, DeForge and Castaldo are promising along with improved quality of life for thousands of Beaumontians. I think you will understand my position is not to stop growth or eliminate jobs. I just want a different future for our city than DeForge, Berg, and Castaldo want.