WRCOG, TUMF, CFDs And Beaumont’s Future - A Plan

My plan

To appeal or not to appeal? That is the first question.

Before anyone can begin to answer this question, we need to know more. There are three facts that need to be taken into account before considering any plan of action. First, it is safe to assume our legal fees for the appeal will be in excess of $500,000, probably closer to one million dollars. Second, a conservative estimate of the interest rate on the $43 million is 7% ($8,246 every day). Finally, as long as Beaumont is not participating in the TUMF program, the 1/2 % sales tax increase voters authorized to extend past 2009 is being withheld from the city, the latest estimate I’ve heard is about $640,000 every year.

In an appeal, the appellant, the City of Beaumont, files the first brief. A brief is a party's written description of the facts in the case, the relevant law, and the party’s argument. According to a document on the www.courts.ca.gov website (Information On Appeal Procedures For Unlimited Civil Cases), The brief must clearly explain, using references to the clerk’s and reporter’s transcripts (or other form of the record being used), the claimed legal errors in the superior court proceeding. 

A notice of appeal is the first document filed by the party making the appeal and it is filed within a required time limit. Beaumont should be filing this soon, if they haven’t already. But transcripts of the original trial must be available in order to file the brief. The transcripts won’t be available for a few months. We have time, we don’t need to rush into anything. There is no reason the public can’t become more informed about why the City is appealing and be able to provide input to the Council about whether or not we are willing to risk more of our resources. The Council can always chose to ignore the public’s wishes.

Our entire council, and most of our community leaders, believed a citizens review committee was warranted for the Gateway project. Our council had no jurisdiction over Gateway but believed the community was entitled to provide input. I believe the WRCOG appeal is at least as important as the Gateway warehouse issue and may be more appropriate because more Beaumontians will be directly affected and, nlike the Gateway warehouse committee, the council is responsible for taking action. I propose the council appoints a Citizens Review Committee for the WRCOG Appeal.

The City’s legal team, OUR legal team, should present an argument to the committee as to why the evidence that wasn’t “considered’ in the trial would be relevant in an appeal. It appears from the appeal procedures document I previously referenced, the only consideration for an appeal is a “legal error in the proceedings”. The 22 boxes of evidence and the 18 issues the city claims weren’t analyzed might never be considered in the appeals process, especially if it had been available during the trial,  but we have a right to know why our legal team believes it is the basis for an appeal.

The “claimed legal error in the superior court proceeding” should also be presented to the review committee. All of this would be part of the eventual brief to be presented to the respondent, WRCOG, and will become part of the public record. I don’t believe the legal argument, invariably to come from the City, that we don’t want to reveal our case to the respondent, will have any basis since the appeal will make this all public before the respondent has to respond and anything is presented to the court.

I think it would also benefit the citizens of Beaumont to have the City’s expert witnesses, OUR consultants, present the 15 transportation projects Judge Chaffee ruled showed “poor local transportation planning and execution, resulting in bottlenecks and delays that impair the necessary added capacity.” The public should hear why our staff and legal team still believe true road capacity had been added in the face of the judge’s harsh rebuke. This argument was already made in the trial and is public record. Since the appeal is based on errors in the Superior Court proceedings, bringing City’s official position on these projects to the public wouldn’t reveal anything that isn’t already in the public domain and it shouldn’t affect the appeal.

If the review committee, and the public, has all the facts before the Council makes their final determination, this process will lead to more public confidence in our elected leaders. It will ease public concerns about risking more of our resources.

What do we do about the $43 million judgment? 

Following is an outline of my plan for addressing the judgment.

I believe the probability that the council will endorse my review committee proposal or work to better inform the public is very low. Based on what I have been able to learn on my own, I believe the appeal is a bad idea with little chance of success. I have designed the following plan to benefit Beaumont’s citizen and provide us a brighter future regardless of which side wins the appeal.

My plan is based on my belief that we are in this mess because of a failed growth strategy. The Kapanicas CFD strategy, designed to increase population and to build and maintain the required infrastructure upgrades is unsustainable. We can’t build houses forever and continue to pass the debt and legal judgments on to our future neighbors. At some point, when families who are considering moving to Beaumont realize they will be paying for OUR mistakes for 30 years, families will no longer be moving to Beaumont.

Remember Mayor Knight’s promise?

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, this is a fee program, to be paid by developers.”

In my opinion, this statement is not only irresponsible, it has no basis in fact. The same night Mayor Knight made this promise, we heard from the Mayor and the City Manager that there is no intention to begin charging developers any transportation fees and asking them to pay their fair share.

Judge Chaffee’s statement guided me in developing a plan for a more sustainable strategy in the future. He said:

“CFD 93-1 could have been, and, indeed, should have been, Modified to exclude regional transportation projects, while Continuing to cover other local projects, including water, sewage, and local transportation.”

CFD Reform

The first step is to reform our CFD program and institute a fee program that begins charging developers their fair share. Don’t worry about the developers, they will be fine. They will just pass the fees on to future home buyers in a higher home price. This too is not a bad thing, it will benefit both new and existing homeowners. New homeowners will be paying the lower mortgage interest rate compared to paying the higher bond interest rates and maintenance fees. All homeowners will see upward movement in their home values with higher new home prices. All our families will benefit.

Here’s how I would reform the CFD program:

A portion of our CFD goes to pay public services (water, sewer, police, fire, etc.). In my case, this amounts to about $300 a year. I continue to pay this even if I prepay my CFD obligation. This fee should remain and using the CFD as a vehicle for financing public services makes sense. We are told the remaining amount of our “fair share” is about $30,000, I pay $2,500 annually with a 2% annual increase. This is in addition to my regular property taxes, school and hospital bonds.

We should start charging developers two fees totaling $30,000 per home, a regional transportation fee and a local infrastructure fee. The transportation fee will match the TUMF fee program and hopefully will facilitate and accelerate our return to the WRCOG TUMF program. The remaining approximately $22,000 will be used for the local projects the city council authorizes to remain under local control and which they are using our CFD proceeds for now.

Our freeway interchanges, specifically Oak Valley and Cherry Valley, are in desperate need of upgrading. The expected growth and inevitable increased usage of these interchanges over the next few years will definitely increase our need to address these interchanges which are critical to future growth. In my opinion, these should be a much higher priority than a new $80 million Hwy 60 logistics interchange. Whether or not Beaumont ever re-joins WRCOG, we need to find a way to address these interchanges.

Rebuild our relationships with our neighbors

After we reform the CFD and developers start paying their fair share we can then reach out to our neighbors and WRCOG to address the judgment. Following is a proposal I would make to WRCOG:

 

  • Forgive the accrued interest – This is more likely to happen without an appeal.
  • Establish a 20 year repayment plan
  • Reinstate Beaumont as a probationary member of WRCOG and TUMF and reinstate the sales tax revenue stream.
  • Beaumont will begin passing TUMF revenue to WRCOG and seek assurances from our Pass Zone members - Banning, Calimesa and Riverside County – they will work with us to begin addressing the I-10 interchanges.

 

These terms represent only a starting point in a sincere negotiation. In order to have a serious give and take, both sides have to respect and trust each other, right now they don’t. It will take some time for both sides to regain each other’s trust and respect. It may only get worse if we don’t have a plan.