2018-2019 Grand Jury Report: Community Facilities District Bond Funding in Riverside County Perpetual Debt Under CFD*

Conclusions 1

• CL1
  Four of Beaumont's five City Council members are subject to "CFD" tax assessments. As a body they fully appreciate the impacts of the program and how it impacts their fellow citizens and the community as a whole. These sitting members are change agents that have implemented the "CFD" program modifications that have provided significant tax payer relief, community sustainability, and accountability. "CFD" programs are complex and no two "CFDs" or "IAs" are exactly alike. This can be confusing, and every effort must be made by local agencies to inform the general public of the existence and impact of "CFDs." These programs can be effective tools to manage growth, but they must be implemented with the utmost care to ensure that the public interest is protected, and the tax dollars are used to the maximum public benefit. The negative aspects of Beaumont's past experience with its "CFD" program is well documented. However, the program was established in a manner that fully complied with all applicable statutes. Quite a few of the issues mentioned in the RCCGJ report had already been recognized and addressed by the City of Beaumont, with many of them being implemented as early as 2016 and 2017. All local government programs must be carefully managed with full public oversight of their governing bodies and "CFD" programs are no different. There is little said about the manner in which "CFD" programs may be implemented to the benefit of a community. They can help offset the purchase price of a home through a more advantageous financing vehicle that can help control housing prices, reduce property taxes, and provide for a more equitable distribution of costs among citizens. They can also be used to facilitate large-scale infrastructure improvements to mitigate development impacts and help ensure that services are better able to keep pace with growth. This is extremely critical due to the impacts of Proposition 13 and the property tax apportionment agreement with Riverside County. Beaumont is a community that continues to evolve as a regional economic hub. Evidence can be seen with the addition of new major employers (Amazon and CJ Foods) as well as the construction of regionally significant retail, service, and commercial projects (San Gorgonio Village Marketplace and Sundance Corporate Center). This evolution will further elevate all segments of the community; however, it will also create tangible impacts that must be mitigated. Impacts may be more quickly mitigated through the cooperative efforts of the public and private sectors. "CFDs" provide an effective vehicle to facilitate cooperation and help the community grow in a sustainable way. However, the City must adhere to higher standards and must continue to deploy strategies that protect existing and future residents. Strides made thus far are only the beginning and the City's leadership continues to find ways to raise the bar higher. Bibliography (2019). Understanding Mell-Roos. California Land Title Association. (2019). What is Mello-Roos?. California Tax Data. (2018). CDIAC FY2018-19 Annual Report. California Debt and Investment Advisory Commission. (2006). An Introduction to California Mell-Roos Community Facilities. Daniel C. Bort. (April 30, 2002). Pricing Opens the Door to Profit. Professioal Builder. (1995). Structuring and Sizing the Bond Issue - How to Develop an Optimal Financing Approach. Government Finance Officers Association. (April 2019). Understanding land-secured municipal bonds. Nuveen. (October 1991). Guidelines for Mell-Roos Financing. Kathleen Brown, California State Treasurer and Chair, California Debt Advisory Commission. (February 2008). Fundamentals of Land Secured Financing. California Debt and Investment Advisory Commission.