WRCOG, TUMF, CFDs And Beaumont’s Future - Part 3

Where was the city council?

After reading a number of articles, posts and reports, I’ve come to the conclusion that neither side of the WRCOG v. Beaumont lawsuit really believed they were going to lose. I know from people I spoke to, on both sides, both teams of attorneys were telling their clients they had a strong case and they would prevail; that’s what attorneys do.

I have no doubt that Beaumont’s city council members believed from the beginning they were doing the right thing. From the beginning, the city manager, a CFD special tax expert, was telling the council they were doing the financing right. All three major department heads, Urban Logic principals, were telling the Council they could build the TUMF qualified projects and add “true roadway capacity”. They believed them. These were their experts. This is what we were paying them for.

Kapanicas told WRCOG their CFD bonds met the grandfather qualifications and the TUMF projects they were building were going to add roadway capacity. Later, when Kapanicas was unable to prove the CFDs met the requirements, he began to argue that they had agreements from their developers to build specific transportation projects. They believed these agreements made the CFD funds, and the projects they built, TUMF qualified. After a number of years of back and forth, WRCOG audited the City’s fees documentation and reviewed the projects and were not satisfied. Eventually WRCOG decided to pursue legal action.

Three of the current five council members – Fox, Berg, and DeForge – have been serving on the council before Measure A and TUMF. I can’t fault them for trusting their advisors. But at some point in the process, I would think you need to start asking questions. The day after losing the lawsuit would have been a good time to start; especially after the judge throws you a number of large bones.

Judge Chaffee’s statement made it clear who he thought was at fault, City staff, more particularly, Urban Logic consultants, he implied that UL and the staff had gone rogue of the council.

Here are Chaffee’s bones:


  • City management and staff contractors violated the directives of the city's TUMF ordinances to satisfy this imperative. 
  • Moreover, it is clear that city staff chose to overlook the clear mandate of the city council revealed by its adopted TUMF ordinances, including the direction to comply with the TUMF plan. 



What about the projects?

There were 15 projects totaling between $42 million and $60 million, depending on who you are asking. In 2012, City staff brought a document they titled “Engineer’s Determination of TUMF Eligible Credits”. This was at least a couple years after the lawsuit was filed but long before the case came to trial. This document was probably the exhibit Beaumont’s legal team presented in court to prove the projects should be TUMF approved.

This document was prepared by City staff and approved by the Council. In Court this was likely the document Mr. Kapanicas referred to when he was asked to review each project while on cross examination. Since he presented himself as the Mello-Roos tax expert, he was asked about the funding source for each project. Urban Logic’s principals, because of their roles as Engineers and department heads, were asked, to testify how the projects added true road capacity.

Here is the judge’s impression of WRCOG’s case and the Urban Logic high priced experts:


  • Mr. Zimmerman's (WRCOG) analysis of the city's road projects allegedly on the TUMF network, provided an encyclopedic view of the deficiencies in the city's claims to have meaningfully participated in and contributed to the TUMF Program. 
  • Similarly, Mr. Chylinski's (WRCOG) review and analysis of the financial and compliance issues of the city's claimed compliance with TUMF were revealing; indeed, they were startling. Respondent's (Urban Logic) witnesses, particularly, Messrs. Dillon, Hughes, and Moorjani either lacked specific knowledge or were not credible in their testimony regarding Compliance with the TUMF contribution requirements.


 And… the final nail:

 The evidence and testimony reveals that city management and staff engaged in a pattern and practice of deception that transcends the typical give and take of dispute negotiation. Had this been a typical civil trial containing allegations of fraud, I would have found fraud by clear and convincing evidence as against the city.


What was the response from our City Council?

They took a couple hours in a closed session meeting to consider an appeal. They had the judge’s powerfully persuasive and damning statement yet didn’t hesitate to appeal.

At the regularly Council meeting the next day, Mayor, Brenda Knight, read a press statement. The Press Enterprise’s Craig Schulz wrote about it the next day in an article titled “BEAUMONT: The price of road to independence hits $43 million

Here is an excerpt from the article summarizing Knight’s statement:

Knight said at Tuesday’s council meeting that no matter the ultimate outcome of the case, Beaumont residents will not foot the bill. 

“There will be no new taxes on any existing residents and businesses,” she told a crowded chambers. “This is a fee program, to be paid by developers.”

Knight said the appeal will be made because there are 22 boxes of evidence and 18 legal issues that were not analyzed by the court.

“While we would have liked to have won this round, it is just the first round and we are confident that the next round will be won, as Beaumont has built $62 million in TUMF roads,” she said.

Later, Council Member David Castaldo read a statement with a list of ten discussion items he’d like to see on a future agenda. Click here for a link to Castaldo's statement:

The rest of the council appeared to be in verbal agreement for considering Castaldo’s discussion items. The July 15th council meeting (next Tuesday) was positioned as the time to address the discussion items. The agenda comes out Friday, it will be interesting to see what, if any action is taken. It will also be interesting to see how far Mr. Castaldo is willing to push and if he will demand more than just discussion.

Next, in the final post in this series…

My plan