Governor of the State of California
California Attorney General's Office
I am requesting the Attorney General and Governor intervene in the City of Beaumont as I have exhausted all means on the local level. The County of Riverside is corrupt and refuses to do their jobs.
The Riverside County Grand Jury has closed their ninth (9th) investigation of Beaumont. Beaumont City Officials bragged to me that the Grand Jury closed the case a month before I received a letter in the mail and the information was made public.
The Riverside District Attorney's Office has a new District Attorney, but he can not break the 'old guard'. His own office attorneys have turned against him.
The City Manager, Alan Kapanicas has taken over the local government in Beaumont. Below are the main issues with the City of Beaumont.
Office of the City Clerk: The Office of the City Clerk is staged in Beaumont. Kapanicas personally controls all Records Requests. Attached is a copy of a reply sent from Kapanicas mocking the citizens request and delaying the process. To receive the March 2013 Bank Statement Mrs. Bingham had to wait 19 days, go into City Hall three (3) times, and request both the State Assemblyman & State Senators Office to intervene before he would release of the records. 2013-2014 Budget shows there is only $6,000 allocated to the Office of the City Clerk.
Debt: The City of Beaumont is $300 Million in debt. The Interest and Premiums are $15 Million/year and the City revenue is only $14 Million For the last two years the City has taken out additional Bond Debt every few months just to make the payments on the old debt. It's a twisted form of a Ponzi Scheme that can not sustain itself any longer.
Forging the Financial Reports: The Budget and Financial Statements do not match the General Ledger. Ten month after the close of books FYE 2011 the City plugged over 300 transactions into the 2011. Some entries were duplicates of earlier transactions and some were completely fabricated numbers.
The 2013-2014 Budget lists $11,275,000 in 'budget reserves', but there is no reserves. The City has drained their LAIF account to $1.8 Million and has overdrawn their General Fund checking account several times. The budget also lists $23,309,000 in Revenues, but the Consolidated Financial Transactions Report printed in the Record Gazette on 02/22/13 listed revenues at $13.8 Million.
Page 63 from the 2011 GAAP Audit states: “ The City's General Fund had a deficit unassigned fund balance of $10,871,054 at June 30,2011. It is uncertain whether the $22,380,000 advances to the Beaumont Redevelopment Agency will be collectible due to the dissolution of the Redevelopment Agency. The City's general fund continue to rely on overhead reimbursement and services payments from various CFDs within the City to balance its budget. The City, in its 2012-2013 budget, also used a one-time transfer of $2 million from its Equipment Replacement Fund to help balance the budget. It is uncertain if the City will be able to; 1) balance its general fund budget if such revenues are no longer available, and 2) reduce the deficit without additional revenue sources or expenditure cuts.”
I have made repeated request for the 2012 GAAP Audit. On May 2nd, 2013 Craig Hartzheim from the Auditing firm Moss, Levy, Hartzheim told me that they have not started the GAAP Audit for 2012 because the City has not completed the General Ledger for that year.
On February 5, 2013 the Check Warrant Report is forged to the extent that the Finance Director refused to sign it, so the City Manager signed it himself. When other Officials in Beaumont refuse his request Kapanicas takes over the position.
Private Companies: The City of Beaumont has private companies set up within the government to funnel money out and to provide government health care to the private sector.
Urban Logic – This company has been paid $14 Million in the last two year for 'consulting services'. This company does not exist. The address in Temecula is an empty building and when I called the telephone number provided on the website the man answered: “Public Works”. The company is operating out of the City and the 'owners' are given government health care benefits. Deepak Moorjani's wife has her own health care account on the City General Ledger.
General Government Management Services – This company is in the name of the City Manager's wife. In the last two years there have been over $600,000 in checks issued, but there is no evidence of any work being performed.
Beaumont Electric – In the last two years Beaumont Electric has been paid $962,000 for parts and services, but the City has purchased $2.5 Million worth of wholesale materials for Beaumont Electric. Before the audits started Beaumont Electric owed up to $1/2 Million to the City for wholesale parts and still have over $300,000 debt on the books.
I am requesting immediate intervention from the Office of California Attorney General and Governor to stop the City of Beaumont from further deterioration. The City is 115% underwater and their home values are ½ that of the rest of the State. Please feel free to contact me if you have any questions or would like additional documentation.
Riverside FBI Supervisory Special Agent Colin Schmitt is still working on the case. You can contact him at 951-248-6515.
P.O. Box 1905
Imperial Beach, CA 91932