GIVE ME $1 AND I'LL GIVE YOU $10

 From the Press Enterprise 1/28/13

SCHOOL BOND WARNING

State schools Superintendent Tom Torlakson and State Treasurer Bill Lockyer
recently issued a statement to school and school district leaders to caution them against using costly Capital Appreciation Bonds to pay for school facility projects.
  The bonds have drawn alot of scrutiny the past few months because the cost to borrow using them is very high and the repayment terms often exceed the expected life of the projects for which they pay.
  In many cases the CAB deals have forced taxpayers to PAY MORE THAN 10 TIMES THE PRINCIPAL TO RETIRE THE BONDS!......
  ......Also the transactionshave been structured with 40 year terms that delay interest and principal payments for decades. resulting in huge ballon payments and burdens on future taxpayers that cannot be justified.
   
(For the rest of the article please reference the PE 1/28/13, Local Extra Section)

  My point is this (Mr Ferrel and Mr White AND all others concerned) as honestly stated by 2 State officials in the know, this type of financing is ridiculous and unsustainable.
  Mr White has more knowledge of the School Districts uses (and abuses) of such financing methods and their consequences.  My astonishment has been primarily with the City and, in my opinion, reckless endeavors with Bond Sales.  

  As an example, in relation to the Beaumont Utility Authority, it is no coincidence that the ballon payments of principal and interest occur at the same time our City Managers 6 yr contract expires.  Who is left holding the bag?  I urge you to see this City document and decide for yourself.  This is a TINY fraction of debt incurred.  Our "Bond Agent and/or Advisor and/or Consultant", whatever Title he chooses to call himself, apparently has made choices and benefitted financially in transactions that are not in the best interest of the future of our City.

http://www.ci.beaumont.ca.us/DocumentCenter/View/2463
(Scroll to Note 5)

  This is but one example of countless Bonds being sold to refund existing Bonds.  Obviously this is ONLY done when it is in the best interest of the City as to their obligations.  Of course the Bond Agent AGAIN is paid for his Administrator/Consultant/Advisor role. Yes it appears everytime a new Bond is issued to retire an existing one, someone (Administrator/Consultant/Advisor) gets paid again.  How about your CFD and why is it not reissued?  CFD payments are on a regularly scheduled time and amount.  The City is already running on CFD payment to finance its every day operation.  You have no relief.  As the last Audit said "the Audit clearly states “material misstatements' and 'do not present fairly'  The City obligations".

I know in my minds eye that WE ALL want a better Beaumont.  I just cant reconcile some of the actions and directives that seemingly leave us all with future obligations of/or a community constructed only to meet debt obligations rather than OUR family obligations.  I dont want to be another "Moreno Valley or Hemet" it is not who and what we are. 

  I hope I am wrong in all these matters.  Time will tell.  If I am wrong I will, acknowledge that I was and make ammends.  In the same light, if concerned citizens have only the rallying point of "apparent excesses", what harm is there in exploring these questions?  It IS OUR obligations as members of a society of our making to ask these difficult questions.
 
  We need not be "the blind" being led by "the wise".  Look at the benefits we bestow on JUST our local government.  Give an erasable pen to the ones that craft City policies and directions and keep in your pocket an ERASER.  Use it often and wisely