A New Beginning?

At this week's Beaumont City Council meeting I saw something different. I saw a willingness by our Council Members and City Manager to exhibit a level of transparency and cooperation I haven't seen from them before. We still have a long way to go but I think we need to welcome their actions and see if we can help them to rebuild the trust many of us have lost in them.

There were a number of positive reports from the city and many of our fellow citizens addressing the City Council had a lot of positive things to say. Even those of us who have become known as "frequent council critics", made an effort to stay positive and try to work for more cooperative transparency.

We need to continue to press the council to order an audit of the Finance Department's Internal Controls. We need to demand more cooperative and productive responses to our public records request from the City Manager. I wasn't happy with all the answers, but the effort put forth by Mr. Kapanicas and his staff to answer my questions and provide specific responses to issues raised by the public in the last council meeting, gave me some hope.

I was disappointed to hear that the Council has authorized $105,000 this year for 3 Project Engineering Reports in which the only thing Urban Logic engineer was required to deliver was a signature; that's $35,000 per signature. But, believe it or not, I'm a half full cup guy. They could have tried to ignore my concerns and bury my public records request with irrelevant reports. Instead Mr. Kapanicas explained that the City was only expecting a signature from an engineer to fulfill legal or regulatory requirements. I think $35,000 is too much per signature but at least we know that our council is aware of what they are paying $35,000 for and we know they are all ok with that, by a vote of 5-0.

In the last two council meetings I've watched a change in the environment by both the City and its critics. I want to build on this momentum and Mr. Kapanicas gave me an idea on how we can move forward.

During the public hearing regarding the new Mello-Roos funding for the Pardee completion of the Tournament Hills Development, Mr. Kapanicas educated us on the CFD authorization process. He reminded us that the property owner(s) of the areas in the CFD are responsible for voting to establish an improvement area and to determine the terms of the financing. According to Mr. Kapanicas, "The City is the bank."

The new funding approved last night, was approved in a special election last year by the property owner, Pardee Homes. Home buyers are disclosed the terms of their Mello-Roos obligations during escrow and must agree or buy somewhere else. A representative from Pardee told us they had invested $14,000,000 in up-front infrastructure and the $6.7 million the bonds will generate go to Pardee to recoup some of their costs. Mr. Kapanicas indicated he planned another $344 million in infrastructure and this $6.7 million is just a start. It was interesting to hear both Pardee and the City already making plans for the same $6.7 million.

In response to my question about the original $20 million authorized by Pardee and whether or not the remaining $13.3 million will be generated in future bond issues, Mr. Kapanicas told us that the terms in the CFD authorization won't support the full $20 million and that the Area 17c bonds may only be refinanced to improve interest rates. There will be no new bonds for Area 17c. Knowing Mr. Kapanicas' plans, I find it hard to believe he will leave money on the table.

Then Mr. Kapanicas' next comment gave me an idea on how we can hold him to his word and at the same time take some control of our future. He said that the current homeowners could hold a new special election to change the terms of the authorization. He said homeowners could approve higher payments but would be prohibited by law to approve lower payments that would violate the terms with the bond holders.

I believe current property owners in the CFD Areas could also vote to amend some of the other terms of the Beaumont Financing Authority agreement. They could vote to prohibit any future refunding or extensions to existing repayment terms unless the property owners benefit from any interest rate savings. As, Mr. Kapanicas told us the city doesn't make the rules, the property owners do.

Property owners living in all the improvement areas could vote to amend their reporting terms and require the BFA to provide access via the internet to the reports they are already required to generate for their financial partners and government regulators. 

I know from my research, the City helped the original property owners, the developers, with the legal documentation and the elections which established the original agreements. The City Council should be willing to help current property owners, their constituents, to refine and "modernize" the agreements. They should be willing to instruct our City Attorney and consultants to help us draw up new agreements and hold the election by mail. After all, the attorneys and consultants work for us. 

This isn't something that will happen just because we want it to, it is going to require a lot of work. Even citizens who aren't a home owner in the district can help with the planning and organization a project like this is going to require to be successful. It would be easier if we had support from our Council Members, or at least two that will be able help with getting the necessary items on the agenda, but right now, I don't see the support is there.

If I get enough positive response to this idea, I would be willing to lead this effort. I may be a lone voice chasing windmills and there is no way I could take this on by myself. Let me know what you think and if you want to help.

Thank you,