On October 15, 2013 a Public Records Request was submitted to the City of Beaumont for copies of the 2010, 2011, and 2012 Internal Controls Reports prepared by GAAP Auditing Firm Moss, Levy, Harzheim. The City required $50 advance payment which would pay for 200 pages of documentation.
The records were released on November 25, 2013. The City took 40 days to fill the request at a cost of $8.75. The City had to issue a refund $41.25.
The 2010 Internal Controls Report consists of copies of pages 82 & 83 from the 2010 GAAP Audit. Apparently the Auditing Firm of Moss, Levy, Hartzheim did not produce a separate Internal Controls Report as claimed in the Audit Report.
The 2011 Internal Controls Report consists of 12 pages. The Report list as a Material Weakness a $10,871.054 General Fund Deficit.
There are Five Significant Deficiencies listed on the 2011 Internal Controls Report:
- Deficit Fund Balances In Major Governmental Funds
- Deficit Cash Balance in General Fund
- Deficiencies in Internal Controls over Cash Receipts
- Deficiencies in Internal Control over Cash Disbursements
- Deficiencies in the Employee Advances & Employee Computer Loan Program
All of the above deficiencies have been problematic for years, but the 2011 Internal Controls Report Status of Prior Year's Recommendations is 'None Reported'.
The 2012 Internal Controls Report is 16 pages long. The Report list as a Material Weakness a $4,162,062 General Fund Deficit. This total over $15 Million General Fund Deficit in two years.
There are Six Significant Deficiencies listed on the 2012 Internal Controls Report:
- Deficit Cash Balance in General Fund
- Deficiencies in Internal Control over Cash Receipts
- Deficiencies in Internal Control over Cash Disbursements
- Deficiencies in Cash Disbursements Test of Control
- Deficiencies in the Internal Control over Payroll.
- Bank Reconciliation Not Prepared & Reviewed Timely
Page 3 of both the 2011 and 2012 Internal Controls Reports states the most sensitive estimates affecting the financial statements were:
Management's estimate of the funding progress of CALPERS is based on CALPERS's estimate, the funding progress of OPEB is based on an actuarial report prepared by a third party, the collectibility of receivables (including accounts, notes, & loans receivables, and advances to RDA), the estimated historical costs of capital assets and the estimated useful life of the capital assets were based on historical data and industry guidelines.
The financial security of CalPERS is based in part on the ability of the City to collect debt. Notes & Loans Receivable refer to the Personal Loans and loans such as the $70,000 funding of the Beaumont Shooting Range; RDA Advances from 'somewhere'. There are no options to recoup these funds and they will have to be charged-off.
Page 12 of the 2012 Report lists 2012-9 PERS Not Paid Timely and states:
During the review of PERS payments in fiscal year 2011-2012, we noted that ALL payments were completed in fiscal year 2012-2013.
The City was already behind in CalPERS payments when they overdrew the General Fund Bank Account in November 2011. CalPERS payments did not resume until December 2012. The City made $2 Million in CalPERS payments in April 2013.
The City of Beaumont offers wonderful benefits, but those benefits are based on the City's solvency and ability to pay.
The Financial Transactions & Compensation Report is a yearly requirement of the State Controller's Office. It is a basic recording of all the City's Revenue and Expenses for the fiscal year. Below is a comparison of the City of Beaumont's Financial Transaction Reports for the years ending 2011, 2012, & 2013. This audit collected data from the Schedule of General & Functional Revenues 'Taxes' page.
The Reports are three consecutive years, but all three Reports were prepared in within an 8-month period in 2013. The 2012 Report was the 1st one submitted on 02/14/13, then 2011 Report was submitted on 10/22/13, followed by the 2013 Report submitted on 11/04/13.
The City of Beaumont records total taxes collected in the last three fiscal years at:
2011 = $12,806,374
2012 = $10,151,029
2013 = $14,161,268
The main reason why fiscal year 2012 is so much lower than the other two years is because the City neglected to account for the In-Lieu Vehicle License Tax and the In-Lieu Sales & Use Tax. This would account for approximately $2.5 million.
The City records the In-Lieu Vehicle License Tax at $2.8 million in 2011, nothing listed in 2012, and $2.6 million in 2013. Based on the theory that the larger the population the more taxes collected; it is highly unlikely that there was $200,000 less Vehicles License Taxes collected in 2013 than in 2011.
The Transportation Taxes for Transit also fluctuate unnaturally. The City of Beaumont records $1.7 million in 2011, $1.2 million in 2012, and $1.8 million in 2013.
Business License Taxes was also lower in 2012. The City recorded $178,000 in 2011; $153,000 in 2012; and $206,000 in 2013.
Utility Users Taxes were recorded at $1,320,000 in 2011; $1,272,000 in 2012; and $1,284,000 in 2013. I don't know why there be a $1/2 million drop in utility taxes after 2011.
In Fiscal Year 2013 the City of Beaumont collected a total of $14,161,268 in taxes but the City's Bond Premium and Interest payment to Union Bank totaled $15,870,344.55.
City Manager Kapanicas encourages homeowners to pay off their CFD taxes to: “save the interest”. And many homeowners are paying off their CFD debt so they can sell their homes. But when the homeowner pays the total amount the City spends the money instead of applying the payment to the bond debt.
The Financial Transactions & Compensation Report is a yearly requirement of the State Controller's Office. It is a basic recording of all the City's Revenue and Expenses for the fiscal year. Below is a comparison of the City of Beaumont's Financial Transaction Reports for the years ending 2011, 2012, & 2013 for the Sewer Fund.
In the last three years the population of the City of Beaumont has grown and sewer fees have increased, yet the Reports show that revenue has declined in the past three years: 2011 = $4,181,310; 2012 = $4,151,811; and 2013 = $4,036,740.
Sewer Connection fees increased from $74,124 in 2011 to $433,096 in 2012 and $384,050 in 2013. $400,000 in connection fees in 2012 should have produced an increase in sewer service charges in 2013.
Treatment and Disposal Plant Expenses fluctuated: $2,322,268 in 2011; $3,289,382 in 2012; and $2,4022,944 in 2013.
Administrative Expenses steadily increased $100,000/year for the past three years: 2011 = $400,000; 2012 = $500,000; and 2013 = $600,000.
The sewer would operate at a surplus if the City wasn't grossly overstating Depreciation Expenses. 2011 = $2,337,527; 2012 = $2,341,482; and 2013 = $2,457,649.
The City has a Sewer Fund #10 which records expenses, but sewer revenues are recorded under '01-0000', which is the General Fund with no department listing.
While reviewing the Beaumont Bank Statements I found a couple unusual entries; the City was paying the California Board of Accountancy large sums of money. $37,613.00 was transferred back to the State on July 31st and $24,044.00 was transferred back on August 26th.
I found the transactions on the General Ledger located under Fund 85, which is a Ghost Fund - not listed on the Budget. The memo for the transactions is 'BFA Sales Tax Liability' for all but the last four entries. The account numbers stay the same, but the 'Use' Name is changed to 'Federal Withholding Tax'. I found the 300 individual transactions located under the accounting code 01-0000-1100-0000. This is the General Fund 'No Man's Land' where the City cleverly hides the personal loans and insurance payments for private citizens. The City used 65 different companies to inflate the costs of goods/services in order to hide the tax payments.
Company Date Check Amount G/L Trans # Amount
Aramark 07/11/13 EFT 1026 $218.91 238793 $235.35
Aramark 08/30/13 EFT 1071 $253.84 242714 $273.02
Avid ID 07/03/13 83002 $1,201.28 238157 $1,296.48
Designer Concrete 07/03/13 83018 $178.20 238187 $191.40
Evident 06/20/13 82922 $286.00 241649 $207.67
Hach Company 07/31/13 83259 $42.54 240493 $43.70
Hach Company 09/18/13 84016 $224.00 243906 $241.92
In Gear Tech 08/02/13 83295 $215.00 240903 $222.69
Iprint Tech 07/18/13 83145 $206.10 239460 $222.60
Inprint Tech 09/03/13 83909 $206.10 243140 $222.58
Pepperball Tech 07/11/13 83109 $290.00 238899 $312.00
Quick Series 07/11/13 83113 $5,285.89 238941 $5,665.21
Sportstuff 07/18/13 83157 $98.00 239501 $105.84
The Sash Co. 08/20/13 83407 $246.46 241744 $265.34
The difference between the amount plugged into the General Ledger and the actual amount of the Checks is the 'BFA Sales Tax Liability'. The discrepancies total over $70,000 with Walter's Wholesale Electric totaling $47,764.89. It is unclear why the City is paying sales tax back to the State, but it could be that the city is paying the taxes for Beauont Electric.
On October 11th, 2013 the City of Beaumont released the 2012 GAAP Audit that was performed by the Auditing firm of Moss, Levy, Hartzheim. The 2012 Audit is dated September 25, 2013.
Auditor's Report: The first three paragraphs of the Auditor's Report are exactly the same as the 2011 Audit. The 2011 Audit does state that the City has not recorded Capital Assets and Depreciation, but what is contained in the 2012 Audit that was omitted in the 2011 Audit is the following paragraph:
“In our opinion, because of the effect of the matter discussed in the preceding paragraph, the financial statements of the government mental activities do not present fairly, in conformity with accounting principles generally accepted in the United States of America, the financial position of the governmental activities of the City of Beaumont as of June 30, 2012, and the respective changes in financial position for the fiscal year then ended.”
The City of Beaumont flunked the 2012 Audit and flunked the 2011 Audit for the same reason. The only question is: Will the auditing firm of Moss, Levy, & Hartzheim confirm that they omitted the 4th paragraph from the 2011 Auditor's Report, or does the Auditing Firm have a copy of the 2011 GAAP Audit Report that contains the 4th paragraph?
The 2011 and 2012 Auditors Report also state that the Auditors submitted an Internal Controls Audit as required, but these Audits have not been disclosed to the Public.
Both Audits also state that the City has omitted Management's Discussion and Analysis Report that is required by law.
The last sentence of the 2012 Auditors' Report states: “In our opinion, the information is fairly stated in all material respects in relations to the basic financial statements taken as a whole.”
In accounting terms; 'material' relates to the significance of transactions, balances, and errors contained in the financial statements. Materiality is relative to the size and particular circumstances of the entity.
The 'opinion' of the Auditing firm of Moss, Levy, Hartzheim is incorrect.
The State of California requires every City to submit a Financial Transactions Report within 120 days from the close of the fiscal year. The Financial Transactions Report lists all Revenue and Expenses. The GAAP Audit should reflect the same revenue and expenses as the State Financial Transactions Report, yet I have found the following discrepancies:
Sewer Fund – The Financial Transactions Reports states Sewer Fund Revenue at $4,584,907 and Expenses at $6,160,064 leaving a $1,545,957 Net Loss. The 2012 Audit lists Revenues at $ 4,297,011 and Expenses at $5,906,651. This leaves an unexplained $1/4 Million decrease in both revenues and expenses.
Transit Fund – The 2012 Audit states the Transit Fund had a net loss of $1,467,901, but the Transaction Report lists the loss at only $71,600 because the City included a ¼ cent sales tax raising revenue to $1,260,000. Why this sales tax revenue was omitted from the Audit in unknown.
The Bond Fund Accounts are the Bank Accounts listed on the Bonds and held by the Bond Trustee – which is Union Bank in L.A. The Trustee sets up the bond fund accounts for each bond to ensure the funds are distributed legally. This audit focuses on the last six bonds received by the City of Beaumont.
The bond fund accounts are set up with 10-digit account numbers. The 1st four digits on all the bonds are the same: '6711'. The next three digits identify the individual bonds and the last three digits identify the individual account. The bond fund accounts I've received from the City all make numerous references to money transfers to 'xx07' accounts, but the City has not disclosed these accounts. The following is an audit of selected bond fund accounts in the last six bonds received by the City.
December 2011 Bond Area 17B $12,145,000: This bond is broken into two section for Series A and Series B, so it has two xx07 accounts – 6711966807 and 6711966907.
6711966801 = 2011 Revenue Bond Fund Account. In February, 2012 this account was used to funnel $144,000 from 6771966807 to 6771966802. In August, 2012 $375,768.76 was transferred into this account from the 6807 account. In September, 2012 $375,740 was transferred to account 6802 and in February, 2013 another $375,000 was transferred from 6807 to 6802 through this account.
6711966802 = 2011 Bond Interest Account. This account is started with $749,273.88 transferred from account 6807 and $109,052.12 from the City. February does show a transfer of $144,000 from the 6801 account, but the $375,740.39 transfer from 6801 in September, 2012 AND the $375,749.33 transferred in February 2013 are NOT recorded on the 6802 fund account. This leaves a discrepancy of $751,489.72.
6771966905 = 2011 Bond Construction Fund Series A. This account received $25,735.21 from the 6807 account in December, 2011. In January, 2013 $24,736.21 was transferred to 'PNC Bank Pittsburgh' with the memo 'Payment Tournament Hills'. In June, 2012 $1,237.74 was transferred in from 6808 and $1,500 was transferred out to the 6907 fund account.
6711966906 = 2011 Bond Construction Fund Series B. The Bond states this fund should have $2,563,861.31 in its account to be used for construction. In December, 2011 $2,092,110.83 was transferred from the 6807 account and transferred to 'PNC Bank Pittsburgh' with the memo: 'Tournament Hills'. In June, 2012 $5,489.12 was transferred in from 6808 and $3,010 was transferred in from 6908.
In November, 2012 $2,365,875.44 was transferred from fund account 6911. $1,182,937.72 was transferred to 'PNC Bank' with the memo 'Pardee Homes San Timateo Sewer-Desert Lawn Drive' and $147, 555 was paid to Urban Logic in three separate transactions.
Urban Logic is paid every month through the 6906 account: December 2012 = $396,418; January 2013 = $112,126; February 2013 = $91,951; March 2013 = $83,350; April 2013 = $44,163; May = $75,366; June 2013 = 143,165. Urban Logic was paid over $1 Million through this account. Balance of 2011 Bond Construction Fund Account as of August 2013 = $66.75.
6711966911 = Special Escrow Fund Account. This account should have $5,510,000 and that amount was transferred in from the 6807 account in December 2011. In November 2012 $2,365,875.44 was transferred to the 6906 account. There is no other activity in the account. Page 38 (46/286) states the use of the Special Escrow Fund.
March 2012 Bond Area 8C $5,650,000:
6711978601 = Revenue Bond Fund Account. August 2012 $136,190 transferred in from 8607 account. September 2012 $136,182 transferred to 8602 account. February 2013 $161,270 transferred from 8607 account to 8602 account.
6711978706 = Construction Fund Account. March 2012 $1,459,817 transferred in from 8607 account. May 2012 $1,127,827 transferred to 'PNC Bank' with memo 'Highland Springs Ave Acquisition: Pardee Homes' and $287,894 to CitiBank with memo 'Wastewater Headworks Upgrades: City of Beaumont'.
August 2012 $44,058 paid to Urban Logic. August 2012 lists $9,544 transferred in from 8608 and $2,635 transferred in from 8707.
April 2012 Bond Area 20 $3,265,000:
67119799901 = Revenue Fund Account. August 2012 $67,878 transferred in from 9907 account. September 2012 $62,874 transferred to 9902 account. February 2013 $91,000 funneled from 9907 to 9902 account.
6711980002 = Interest Account. April 2012 $207,301 transferred in from 9907. August 2012 $62,878 transferred to 9907. February 2013 $91,333 transferred to 9907.
6711980007 = Special Escrow Fund: April 2012 $1,665,000 transferred from 9907. November 2012 $650,390 transferred to 0005. July 2013 $1,014,609 transferred to 0005
June 2012 Bond Area 7C $3,655,000:
6711988401 = Revenue Bond Fund. August 2012 $41,915 transferred in from 8407 account. September 2012 $41,915 transferred to 8402. February 2013 $31,687 from 8407, $15,378 from 8409, $14,500 from 8410, $28,253 from 8411 and $89,810 transferred to 8402. As of June 2013 the 8402 account balance was $8.74.
6711988505 = Interest Account. June 2012 $51,956 transferred in from 8407 account. August 2012 $41,915 transferred to 8407 account. February 2013 $32,703 transferred from 8504 account. $14,500 transferred to 8410 and $26,253 to 8411.
6711988509 = Construction Fund Account. June 2012 $350,451 transferred from 8407 account. $54,200 transferred to Urban Logic and $296,249 to City with memo: 'Transportation Facilities'. December 2012 $1,825 transferred from 8508, $9,825 from 8507, and $2,383 from 8408 fund account.
6711988513 = Series F Construction Fund. June 2012 $759,788 from 8407 account to City with memo 'Potrero Blvd'. December 2012 $1,825 from 8512, $8,964 from 8511, and $4,585 from 8408.
January 2013 Bond Area 19C $8,810,000:
6712022310 = Expense Fund Account. February 2013 $56,025 to McFarlin & Anderson, $59,050 to Ron Gunn, $28,000 To Fulbright, $1,202 to Samuel Norber, $3,749 to Financial Printing, $3,750 to Trustee. April 2013 $30,000 to City for 'Authority Administrative Expense'. This amount has its own account – 2408.
6712022408 = Administrative Expense Fund. Page 16 (24/136) lists the amount of this fund at $30,000. February 2013 $35,000 paid to Urban Logic, $25,000 paid for 'Administrative Expense', and $25,000 to 'Special Tax Administrative Services'.
6712022409 = Cost of Issuance Fund. January 2013 $40,500 transferred in from 2308. February 2013 $15,000 paid to McFarlin, $15,000 to Ron Gunn, $7,500 to Fulbright, and $375 to Trustee.
April 2013 Bond Area 17A $10,875,000
6712027011 = Expense Fund Account. April 2013 $4,250 to Trustee Fees, $87,187 to Ron Gunn, $58,687 to McFarlin, $28,593 to Fulbright, $1,267 to Sam Norber, and $4,258 to Printing.
6712027108 = Administrative Expense Fund. April 2013 $85,000 transferred in from 7009 account. May 2013 $50,000 to City for 'Special Tax Administration' and $35,000 to Urban Logic.
6712027109 = Cost of Issuance Fund Account. April 2013 $45,500 transferred in from 7009 and $375 paid to Trustee, $15,000 to Ron Gunn, $15,000 to McFarlin, and $7,500 to Fulbright.
Records Request: Bond Fund Account Monthly Statements for Accounts:
6711966807 and 6711966907 from December 2011 to Present.
6711978607 from March 2012 to Present.
6711979907 from April 2012 to Present.
6711988407, 6711988409, 6711988410, and 677988411 from June 2012 to Present.
6712022307, 66712022308, & 712022310 from January 2013 to Present.
6712027007 & 6712027009 from April 2013 to Present.
This is not a new records request as this information was requested over a month ago. The total amount for copies is under $95.00.
Produce the Records.
The City of Beaumont has $322 Million Bond Debt – all obtained without voter approval through the use of Mello Roos. Below is an analysis of the last six (6) bonds issued from December, 2011 through April, 2013.
2011 Series A 17b = Oak Valley Tournament Hills Bond $12,145,000
Disbursements of this bond include $768,461.71 additional funds from the City and pays a total of $2,356,532.60 in fees.
The Bond states Property Ownership at the date of issuance consisted of:
163 Private Home Owners
94 Parcels Owned by Richmond American Homes
127 Parcels Owned by Pardee Homes
Uses for the bond include paying 2009 bond debt on Area 17b. Original debt on 2009 bond for Area 17b was $1,616,705.61. The 2011 bond lists the 2009 bond debt at $1,915,000. The 2011 bond states that $5,510,000 will be put in an escrow fund to pay the 2009. As of June 30,2013 the Escrow Fund holds $3,144,124.56. There is a $2,365,875.44 difference in the bond statement and Escrow Fund, yet the 2009 bond debt was never paid.
2012 Series A 8c $5,650,000 Bond
The Bond states Property Ownership at the date of issuance consisted of:
318 Private Home Owners
971 Parcels Owned by Richmond American Homes
300 Parcels Owned by Pardee Homes
$297,718.12 is added to the bond as additional funds from the City. A total of $1,300,562.60 in fee charges.
2012 Series B Area 20 = $3,265,000 Bond
The Bond states Property Ownership at the date of issuance consisted of:
29 Private Home Owners
77 Parcels Owned by RDI Development
$51,650.63 is added from the City General Fund. $828,337.70 in fees is paid.
2012 Series C 7b & 7c $3,655,000 Bond
The Bond states Property Ownership at the date of issuance consisted of:
140 Private Home Owners
151 Parcels Owned by K. Hovnanian's Four Seasons at Beaumont LLC
City adds $197,155.38 to bond fund and charges $1,205,222.83 in fees.
2013 Series A 19c $8,810,000 Bond
All 669 Parcels are Private Home Owners
The Bond charges $1,434,887.61 in fees and list no purpose for the $7.7 Million Construction Fund. Area 19c still has bond debt from 2006 and 2008.
2013 Series B Area 17a $10,875,000
All 488 parcels in Area 17a are Private Home Owners.
This bond lists $1,062,487.99 in additional funds added from the City and a total of $11,306,859.16 in fees. The bond lists 'Purchase Discount' at $10,744,500. Small wonder the State grabbed the money.
The six Bonds totaled $44.4 Million. Disregarding the last 'Purchase Discount' for $10.7 Million; the Total Fees Paid in the last 20 Months total $8.8 Million or 20% of the Bond Premium. Underwriter Discount paid to O'Connor & Company totaled $888,000. A Records Request has been submitted to track the remaining $8 Million.
The 'Cost of Issuance' is a term used in bonds to describe all administrative fees to process the bond. The Cost of Issuance is generally about 2% of the bond amount and include all expenses except the Underwriters' Discount.
The City of Beaumont uses a number of different classifications to hide expenses: Cost of Issuance, Authority Administrative Expense, and Expense Fund. The City also has a 'Program Fund'. Since the December 4th, 2003 Bond the City has listed most of the Cost of Issuance and added additional Expense and Administrative Expense Accounts. This allows the City to repeatedly charge administrative expenses to the same bond.
The City of Beaumont currently holds $321,890,000 worth of bond debt. There is $9.5 Million in expenses listed on the bond 'Uses' and another $5.4 Million in expenses listed under 'Program Fund'. This makes total expenses $15 Million or average of 5% of bond amounts.
The bond expenses started out at 2-3% of the bond amounts, but are up to 9% on the April, 2004 bond and are as high as 21% on the February, 2009 bond.
The $3,655,000 bond issued on June 7th, 2012 lists on page 25 (33/306) the Uses of Funds as:
$145,000 Expense Fund – which the City describes as: “Expenses include fees of Bond Counsel, the Financing Consultant, Disclosure Counsel, the Trustee, costs of printing Official Statement and other costs of issuance of the Bonds.”
$25,000 Authority Expense Fund – which the City describes as: “Expenses of the City.”
$51,309.38 Cash Flow Management Fund – which has no explanation as to where the money. A Cash Flow Management Fund appears on all five bonds issued from June 18th, 2009 through June 7th, 2012 and totals over $475,000.
The City also lists four 'Program Funds' on the June 7th, 2012 bond. Within the four program funds are four separate Cost of Issuance Expenses totaling $201,453.44. The Bond describes the Cost of Issuance as: “Fees of the Bond Counsel, Financing Consultant, Disclosure Counsel, Appraiser Project Engineer, District Trustee, and other costs related to the issuance of the District Bonds.”
The four Programs also charge another $170,000 in 'Administrative Expenses'. This totals $592,762 or 16% in expenses charged to the June 7th, 2012 Bond.
The 'District Trustee' is the Union Bank NA branch in Los Angeles. It appears that Union Bank is 'double dipping' on bond expenses, but it's highly unlikely it's the institution itself that is making the additional profit.
Of the 32 individual Bond Debts two (2) plan to be paid with Increased Rates & Fees, one (1) bond is the Original Agreement with 12 Developers, and the remaining 29 bonds are listed to be repaid with 'Special Taxes', but not one bond was approved by the Taxpayer.
The reason the State of California laws require Voter Approval to raise Taxes, Fees, or Acquire Debt is because the money comes out of the Taxpayer's pocket.
I submitted a Public Records Request to the City of Beaumont in an attempt to verify the $233 Million in Investments listed on Note 4 on Page 36 of the 2011 GAAP Audit. This audit has exposed another avenue in which the Beaumont City Manager and Finance Director are funneling money out of the City.
The City of Beaumont holds 150 different Fund Accounts on 33 Bonds with a Los Angeles branch of Union Bank NA, which is also the Trustee in all of the bond transactions. All of the accounts are listed under the same CUSIP account – 09248U718D. Each Bond has various subtitles; Reserve Fund, Administrative Services Fund, Costs of Issuance Funds, Cash Management Funds, etc...
The 33 Fund Accounts total $37 Million. There are 17 Fund Accounts titled: 'Reserve Fund' that total $12.6 Million. These are reserve amounts are held for the bond debt, but State and Federal law requires 10% held in bond reserve funds. Union Bank should be holding $30 Million in Reserve Funds.
Please note that these are not the 'reserves in question' in regards to the City's reserves claim. The City's Reserves are monies that are unrestricted and accessible by the City if needed. Bond Reserves are similar to a 'down payment' – they're held by the Trustee as a security that the City will repay the Bonds.
Of the 150 accounts; 65 has less than $100.00 in the account, 36 has less than $1.00 in the account. The rate of return is the same on every account - .001%.
On June 4, 2013, the City of Beaumont transferred a total of $249,238.50 to an account held by Urban Logic Consultants through two transactions:
Account # 6711966906 2011 Series A & B Area 17B Construction Fund = $143,164.97 with memo No 12 Tournament Hills Engineering
Account # 6712022405 = $106,073.53 with memo No. 1 Suncal Engineering
I was aware that the City was paying the Administrative Expenses and Special Tax Consultant (General Government Management Services/Kapanicas) fees through Union Bank because I could see the transactions on the Bank Statement when the funds were transferred from the General Fund to Union Bank. The transfer of funds to Urban Logic are taken from the Union Bank Bond Funds, but there should still be an transaction on the General Ledger recording the transactions. There is no entry in the General Ledger to record the transactions.
This audit is for the month of June, 2013 only. Now that we know what to look for we can pull past months to see what other 'hidden treasures' we find.
The General Ledger shows Urban Logic Consultants was paid $147,032.78 on 05/02/13 and $180,318.00 on 05/21/13. The City also lists $215,973.75 under 'Accounts Payable' on 06/30/13. The City Council has canceled the last two meeting and has not ratified checks, so there is no way to verify the amounts.
The City of Beaumont paid Urban Logic Consultants a total of $792,563.03 for the Months of May & June.
The Citizens of Beaumont 1st filed a complaint against with the Riverside District Attorney's Office in August, 2007 in an attempt to stop the corruption in the city government. Over 500 petitions have been sent in the last few months. In the past six years the Riverside D.A.'s Office has received thousands of pages of documentation regarding the pillaging of their City.
In January, 2013 I filed a complaint with the Riverside District Attorney regarding the City of Beaumont and sent the D.A.'s Office a packet containing numerous examples of embezzlement, fraud, corruption, and misuse of taxpayer dollars. I explained the accounting irregularities found and supplied documentation from the City of Beaumont's General Ledger, Bank Statements, & Financial Reports. I also sent an email to Investigators Curtin and Jorge Chavez explaining the situation. I received a response from Investigator Chavez stating their office would review the materials.
A couple weeks later Senior Investigator Robert F. Curtin called me to state he was the investigator in charge of the case and asked me numerous questions. Over the past 8 months I have sent Investigator Curtin 20 emails containing further evidence regarding the corruption in Beaumont.
On August 5th the Riverside District Attorney's Office called to request that Judy Binghan and I meet with Investigator Curtin on August 12th to discuss the case.
We met with Investigator Curtin and another man that refused to identify himself or produce credentials. Investigator Curtin opened a new binder with a fresh paper and proceeded to 'open the case'.
Investigator Curtin and the Riverside District Attorney's Office had not one piece of information regarding the City of Beaumont. All of the documentation submitted by the Citizenry for the past six years had been destroyed and not one piece of information had been collected.
For six years the Taxpayers of Beaumont has been pleading with the Riverside District Attorney's Office to investigate the corruption in their local government and for six years the Riverside District Attorney's Office has been throwing the complaints and evidence in the trash.
It is unknown if Investigator Curtin was acting alone, if he was following orders from his Superiors, or if throwing away every investigation is common practice in the Riverside District Attorney's Office.
I am filing a complaint with the State Attorney General's Office against Investigator Robert F. Curtin and the Office of the Riverside District Attorney and requesting the State take the lead in prosecuting the corruption in Beaumont.
The California Office of Attorney General States: “The state Attorney General is authorized to undertake the role of a prosecuting officer only in specific cases when the county district attorney is disqualified from the case or when they clearly, without justification, fail to act.”
By destroying evidence for six years Investigator Curtin and the Riverside County Office of District Attorney have 'clearly' demonstrated their failure to act and blatant disregard for the law.
Investigator Curtin and the Mystery Man requested that all of the documentation from the last 6 years be re-submitted in disk form as if the Citizenry has nothing better to do with their time and money. I will turn in the information again, but only to Riverside District Attorney Paul Zellerbach, a Forensic Accountant, and the Supervisor of Investigator Curtin.