.
>> Good afternoon will call
the city council meeting of
Monday APRIL 2nd APRIL 13th,
2026 to order.
Clerk Please call the roll.
Thank you.
Council PRESIDENT Pro Tem and
Council member Campbell
Councilmember Whitburn
Councilmember Foster
Councilmember Van Wilpert
Councilmember Kemp You hear
Councilmember Moreno present
Council Member Ella Rivera.
Council PRESIDENT LaCava and
Council PRESIDENT Pro Tem Lee.
They're also taking
the meeting.
Our assistant city Attorney
Michelle Garland Independent
budget Analyst Charles Monica.
Council Affairs Advisor in
the Mayor's office Curtis Iser
and myself for City Clerk Diana
Fuentes Thank you Council
PRESIDENT Pro Tem Thank you.
A quorum is now present.
We will begin this afternoon
with an invocation by Clark
Pointis.
Followed by the Land
acknowledgment and the Pledge
of Allegiance led by Council
member Campo Grant.
Those who hold office in this
city the spirit of wisdom,
charity and justice that with
steadfast purpose they MAY
faithfully serve in their
offices to promote
the well-being of all people We
respectfully acknowledge that
the Committee.
Nation are the original
inhabitants of the Unceded land
now known as San Diego.
Despite enduring the horrors of
genocide and colonization,
the spirit remains unbroken.
We honor the resilience of
their ancestors who fought to
protect their culture and land.
Today they carry their legacy
forward ensuring that their
traditions continue to thrive
in gratitude and strength.
We stand with the culmination.
Connected to our past and
committed to a thriving future.
Please stand Face the flag and
over your heart Ready Begin.
I pledge allegiance to the flag
of the United States of America
and to the Republic for which
it stands One nation under GOD
,indivisible with liberty and
justice for all.
>> Now are there any mayor,
council, city attorney and
independent budget analyst or
city Clerk Comments Seeing
none, the clerk will now go
over how the public can offer
their public testimony.
Please proceed.
Thank you Council PRESIDENT For
a time I'd like to highlight
there was a slight.
There it is again the site on
the screen that reviews how
the public can offer their
public testimony during this
afternoon's meeting.
The order can be found on
the agenda summaries found
online or at the table in
the back of the room here in
council chambers.
If you are in person please
complete the speaker slip
looking at the entrance of
chambers and bring it to
the front of the room in
the clear box.
Council ambassadors are
available near the entrance and
can assist with questions and
speakers Lips no further
in-person testimony will be
taken once the council begins
Virtual Testimony Thank you
Council PRESIDENT Pro Tem Thank
you.
>> We'll go ahead and get
started with our afternoon's
informational agenda.
Quickly please introduce item
200.
>> Item 200 is the performance
audit of the mission Bay and
San Diego Regional Parks
Improvement Funds for fiscal
year 2024.
If you'd like to speak on this
item now's the time to raise
your hand by pressing Star nine
or the raise your hand icon or
by submitting a speaker slip as
noted.
To the front of the room in
the clear box.
Thank you.
Council PRESIDENT Pro Tem Thank
you.
We'll go ahead and turn it over
to our office of the City
Auditor If you all introduce
yourselves for the record and
let us know how much time
you'll need.
>> Good afternoon.
Council Members Andy Hanauer
City Auditor We are here to
present our audit of
the Mission Bay and San Diego
Regional Park Improvement Funds
for fiscal year 2024 And can we
have about ten minutes please?
Thank you.
Thanks.
As we get started, this audit
involves the cooperation of
many departments as you can see
on this slide as was
the Oversight Committee.
So we really appreciate all of
their cooperation and
assistance.
>> The city charter requires
that our office report annually
the extent and nature of
the Mission Bay and San Diego
Regional Park Improvement funds
revenues, expenses and
improvements Our objectives
were to verify the collection
allocation and use of
the mission Bay Park lease
revenues from fiscal year 2024
complied with charter
requirements as well as
determine if the improvement
fund oversight committees are
properly informed to fulfill
their responsibilities.
We found that expenses were in
compliance with charter
requirements and as far as
revenues we could not verify
that all revenues were
collected and deposited into
the funds as required due to a
management imposed moratorium
on the City Treasurer's lease
revenue audits and issues with
the application of lease
payments management has taken
substantial steps to resolve
those issues and agreed to all
five recommendations and we
will continue to monitor
progress towards fully
implementing
the recommendations as part of
this year's Mission Bay audit.
By way of background, a City
Council ordinance established
the Mission Bay Park and San
Diego Regional Park Improvement
Funds in 2002 and since then
voters have added these funds
to the city Charter mission Bay
Park lease revenue is deposited
into a general fund account
throughout the fiscal year and
allocated to the improvement
funds after the fiscal year
end.
The allocation to the funds is
based on a formula that has
changed over the years and
we'll describe the current
formula here on the next slide.
With me today is principal
performance auditor Nathan Otto
and senior performance auditor
Daniel Kish and I'll hand it
over to them for the details of
what we found and recommended.
>> Thanks Andy.
Good afternoon everyone.
So City Charter specifies how
to allocate the revenue so
the first $20 million goes to
the general fund and then 35%
of the revenues in excess of
that is transferred to the San
Diego Regional Parks
Improvement Fund And
the remainder of that excess
goes to the mission Bay
Improvement Fund.
We found that the total
adjusted mission bay lease
revenues were approximately $37
million which is about a 7%
decrease from the previous year
in fiscal year 23.
And that first $20 million did
go to the general fund timely
and appropriately so That's a
good news story as part of this
audit.
And then a total of 16.9
million that spillover amount
was distributed to
the improvement funds As you
can see in the exhibit on this
slide And that followed
the formula that it was
supposed to do.
So that's more good news There
.
One of the wrinkles in this
year's audit was the question
of how accurate that that total
lease revenue figure was.
>> So about a year ago
the city's annual report on
internal controls which is also
being discussed this afternoon
but the one a year ago stated
there were issues with eads
lease management as well as
invoicing and payment
processing and that resulted in
a large backlog of unreconciled
lease payment discrepancies and
an understatement of city lease
revenue.
Andy noted this but over
the course of us completing
this audit edi did appear to
have taken steps to make a lot
of progress on this issue.
And since we do the audit every
year it's something we'll be
checking on our next go around.
However, for this iteration due
to this understatement of lease
revenue we could not confirm
that all the mission bay lease
revenue payments in fiscal year
24 were applied appropriately.
So we have four findings here.
Our first finding we note that
due to a lease audit moratorium
that began in JULY of 2020 for
the office of the City
Treasurer could not complete
and formally close all of its
planned audit which include
examining lease revenue.
And the audit moratorium was
noted in that city's annual
report I mentioned But it was
not until eight months until
after the moratorium had been
implemented.
It stated the moratorium was
implemented to improve business
practices and perform accurate
financial reporting.
But we just note as internal
controls aficionados you know,
limiting the Treasurer's
revenue auditing role weakens
an important financial control
for the city and it can result
in lost revenue to the city as
well as even as not identifying
money that we MAY show as a
city to tenants.
And so our recommendation on
this one was to the cfo or
other city executive leadership
to issue a memo or other
written guidance that laid out
in discourage future audit
moratoria like that and which
required promptly informing
the office of the City Auditor
and the chair of the Audit
committee If the ability to
perform these revenue audit
functions is restricted in
the future.
And to their credit we we did
get buy in from the cfo and
they actually have issued that
that guidance.
So that's something that's
already been done.
Our second finding we found
that the city did not assess
late penalty fees for fiscal
year 24 and due to a large
backlog of on applied payments
including Mission Bay lease
revenue for fiscal year 24.
So Eadie shared that when
unless he makes a rental
payment the that rental payment
must note the accurate contract
invoice number to ensure that
payments are applied to
the correct account.
So as you can see in
the exhibit on this slide when
basically when the information
doesn't match up the payments
post to a credit account and
both the Office of the City
Treasurer and E.D. Review this
credit list to apply payments
to the correct accounts easily
stated due to this large
backlog of on applied payments
no fee penalties were assessed
for fiscal year 2024 or 2024.
So we just point out in
assessing late fees when they
are warranted results in a
potential loss in revenue for
the city and it undermines
the importance of timely
payment.
So we included a couple of
recommendations in this finding
about strengthening internal
processes including
verification of lease terms,
quality control checks of
revenue received and
reconciling payment data and
indeed has shared some updated
policies and procedures with us
And it is something we'll look
at in our next iteration of
this audit Further for our
third finding we found that 35%
of the city's mission bay
rental agreements are in
holdover status some for
multiple years which MAY be
leading to foregone revenue for
the city as well as perceived
favoritism amongst lessees Most
of the lease and permit
agreements require appraisals
to be conducted while
the agreements are in holdover
status.
Most agreements also require
city council approval to extend
the lease beyond the agreement
terms.
However, during the course of
our audit we found that edt had
not renewed the expired leases
so council approval or
conducted site appraisals to
ensure the expired lease
agreements have provided
revenue to the city at fair
market rate With leases in
holdover the city MAY be losing
out on potential revenue.
Also the city MAY potentially
confer an unfair benefit to
the current tenant which could
be perceived as favoritism
amongst lessees.
Therefore we recommended that
adt should ensure that
agreements should ensure that
the agreements which have
extended beyond lease agreement
terms receive the required
Council approval and appraisal
to ensure agreements are
binding and that fair market
rental rate is received.
Edt stated efforts have been
done to ensure Mission Bay
agreements are currently leased
at fair market rate that it
monitors tenants in holdover
and that it seeks to renew
lease agreements and come in
annual audit of mission
Belize's We will verify these
updates and ensure that leases
lease renewals go to council
when required providing for we
review the project information
shared with the Improvement
Fund Oversight committees.
We found that city departments
provided several high level
project status updates to
the Mission Bay Park and San
Diego Regional Parks
Improvement Fund Oversight
committees.
However, these presentations
did not include the detailed
expenditure information
The Oversight Committee stated
they need to oversee funding
and project status.
We found that no guidance
exists that states which
project information city
departments should provide to
ensure the committees can
effectively oversee project
expenditures and outcomes.
We also found that historically
the information requested by
the oversight committees
regularly changed with changes
in committee board membership.
Therefore we recommend that
Parks and Recreation and ea and
work with both improvement fund
oversight committees to reach
an agreement on which specific
project elements should be
provided and the frequency that
departments should generate and
share the reports During
the course of this audit we
also reviewed the two
outstanding recommendations
from the fiscal year 2021
Mission Bay performance Audit.
We found that both of these
recommendations have been
implemented.
As previously stated, city
management agreed to implement
all five recommendations.
We're happy to answer any
questions.
Thank you for the presentation.
We will now turn to see if
we've got any public comment on
item 200.
>> Thank you.
Council PRESIDENT Pro Tem We
have no speakers here in
council chambers I'm sorry
The five minute timer to go to
those participating remotely.
We currently have four speakers
in the queue two minutes each
8700 if you can please read one
second
.
Sorry for the redirect if
the original if you can please
unmute.
>> Yes.
So this further shows the fraud
waste and abuse and
the negligence of the city when
you can't even you know make
sure that all of these programs
and things are running in a
manner where you can track
things, be transparent, not get
in your own way because that's
what you guys tend to do is get
in your own way by you know,
not having something in place
or you know, hiding information
or not being able to complete
things which is now going to
make you know, people think
that you're favoring some over
others and that leads me to,
you know, talk about the what's
actually happening in these
parts which would also be
the negligence that is, you
know, happening in the city
that would prove that if this
kind of stuff is going on, that
stuff is also I mean is
the money being spent wisely
anyway when you know, just in
Linda Vista skate park and by
the recreation center I mean
there's been four murders this
year.
Two of them were within two
days And it doesn't seem like
anything is being done to
implement some kind of security
measures or lighting that would
ensure safety for the children
that are going to be enjoying
the park.
You know, when things like that
happen and nobody's kind of in
a working in that manner to fix
it like real campy Oh like this
is your community and you're
like How many more murders need
to happen before something
takes place And you guys ensure
that if there is that there's
some kind of security cameras
and lighting that would
potentially deter people from
going to that park and doing
it.
But if there isn't that kind of
stuff at these parks then those
are the perfect, you know,
place to go and engage in a
crime because you're not going
to be caught because there is
no lighting for people to see
it And you know that you can
just go do it and get away with
it.
So you know, when we're talking
about the negligence with your
money, it also bleeds over into
how you're handling the parks
And it's very sad because you
know, people shouldn't have to
be put in dangerous situations
because of your guys's
negligence.
Your time has concluded.
Our next speaker is 8700.
After that is Blair Beakman
8700 star six to unmute Thank
you so much Joyce And you see
these three okay.
City of San Diego Strategic
plan Operating Principles Trust
and Transparency Physical
Considerations The audit
evaluated several issues
relating to lease revenue and
the accounting of revenue and
expenditures from me We are
where are these issues Were
these issues presented from 12
excuse me were issues present
from 2010 to 2023 and
the Oversight Committee to two
of them They were held back
from doing their necessary work
last night.
Okay.
And I'm not comfortable with
the leasing with the reason
given for the lease audit more
and more the moratorium I'm not
providing access to
the software Excuse me papers.
Okay.
So how do all these issues
impact the credibility of our
expert or are they hidden away
from auditors like ngo and cro
because we don't want to have
to do the internal audit report
The internal control report.
So this feels like a big trust
and transparency issue.
These audit reports are so
important and needed, so
valuable and so valuable in
the oversight in
the implementation.
So who's really following up on
the project implementation?
I'm hurrying on this.
Okay.
Your city auditor panel buried
in the 46 pages of this five it
clues red flags guiding cost to
our structural budget deficit.
In my opinion all past audits
would give us an eagle eye.
>> Your time has started.
My apologies.
The five minute timer has also
concluded We have three
speakers in the queue.
No additional speakers will be
taken after that Where Beekman
If you complain unmute please
and mute after that is
Katherine Rhodes and Judy
Strang our final speaker.
>> Hi Thank you and thanks for
this item.
I wish Council PRESIDENT Lacob
was here today for this item.
It's really important in
talking about accountability I
guess for myself to begin.
Thank you that you have caught
this accounting error and you
corrected it and you're making
it public.
That's a really important first
step.
Thank you.
Thank you guys for doing that.
So it's important to proceed
darkly.
i think consciously at this
time and to be able to ask
questions.
For instance, we were all
around in 2024 when this first
happened.
Why exactly did we allow it?
Can we go into a bit of detail
more why exactly This was
allowed by ourselves and
the mayor's office promoted
this idea in the first place.
I know what you with a bit of a
nip and tuck in saving dollars.
I mean that's basic Some formal
explanations of their initial
reasoning could be helpful in
clarity Overall and how we
don't let this happen again.
Basically with that said, I
also wanted to note
the importance of really trying
to work on accountability
issues with park funding
overall the current questions
about the park funding
allocations I think is a
question we're haven't fully
answered yet.
I can be in agreement that a
lot is going to be going to a
special public park fund But
memos have been stated here in
Council that some money has
been slated to go for
the general fund.
Can that be more be made more
clear at this time and we can
have an over or understanding
of park accountability
Budgeting issues at this time
is a good time to practice that
accountability and to conclude
this really ask the question of
a strong mayor city council and
city council is trying to work
towards administrative
organization at this time.
Do we need to be aggressive a
good good idea at this time?
>> I hope we can.
Thank you.
Kathryn Roberts, if you can
please on the third this is
Katherine Rhodes and just what
everybody else said you know, I
don't understand why you had
eight or why our strong mayor
Todd Gloria put a moratorium on
the lease revenue audit.
Why would he have that ability
to do that?
And then of course, you know,
the fix for that is what
Council PRESIDENT Pro Tem Kit
Lee came out with his fiscal
accountability and transparency
reform ballot measure where
instead of just having a strong
mayor form of government who
can just make up things like
let's not let's put a
moratorium on these revenue
audits, you could have an
actual strong mayor strong city
council form of government.
So he can't go around and just,
you know, delete these audits
that are actually needed.
And then of course this is only
for fiscal year 2024.
You know, where's a one for
2025?
Should we be getting that soon?
I don't know.
So thank you for the audit
committee for doing as much as
you can but I think this is a
problem with the mayor saying
that they can't do the job or
he's not going to give them
the funding to do the job And
you the city council not having
enough power over him to you
know, to force the issue.
And so you guys really need to
change that And hopefully if
you put something into the city
charter to take the power away
from the mayor and then during
that discussion also at
the Rules Committee,
the mayor's office said
basically he'll give you
everything you want.
You don't have to go through a
city charter change for
the city council to get things
you want like not having this
moratorium on the revenue
audits So he said that you can
have basically everything you
want So I would see if if
somebody from the mayor's
office was there and if they
could tell us that they're not
going to do these moratoriums
any more that when your time
has concluded really strong if
you can please I'm Good
afternoon San Diego City
Council mayor of San Diego in
person.
He's always live by the coast
and he knows the mission Bay
Area well as does my family.
I was a little stunned by
the audit report but to start
with the good news there was an
audit report and the eBay took
the job responsibly to take a
hard look at past lease
arrangements whether the money
came in as it was expected and
whether it was more importantly
allocated like we all would
have expected it to.
I was very surprised about
the lack of oversight with
lease leasing.
I think the comment made by
the ipa that when some leases
are not followed up with to get
the lease agreement signed or
an appropriately negotiated it
implies favoritism.
Let me just say that again It
implies favoritism and that I
think has concerned all of us
as residents of the city of San
Diego when we have leases and
we have a lot of them with our
gorgeous public lands that go
out to private entities
sometimes masquerading as
nonprofits but nevertheless
they are private entities and
they make a lot of money off
our public lands.
We are concerned when we're not
getting our fair share of what
they take in and it does imply
favoritism.
The question is is that really
favoritism and how would we
know?
So the good news in this
conversation as you have begun
the conversation you're sharing
this information with us.
You've given us a five point
plan of how to get back on
track regarding the city's
revenue so that we can have
more faith going forward that
we as citizens will be
protected from abuse and that
the money will come in as
expected and be spent As I
said, thank you.
Let us include public comment
on this item.
Thank you.
Thank you Will now take
Councilmember questions
comments starting with
the chair of our audit
committee Councilmember Raina
Thank you.
Thank you for the presentation
and thank you to the city
Auditor for your work on this
audit.
This is an annual audit so we
will be hearing on this matter
again.
>> When will it come back to
the audit committee?
We are just about to start this
year's version of the audit.
It's been delayed a little bit
due to budget reductions.
We had to hold some positions
vacant for the last six months
but those have been filled and
so we'll be starting to see
that probably in the fall In
the fall.
>> Okay, wonderful.
Well thank you for that.
The issue of the city not being
able to properly distribute
these payments to the correct
accounts was something that
the audit committee first
learned of at the MARCH meeting
when it was disclosed in
the internal controls report
which was apparently eight
months after the issue
happened.
The audit committee did review
this item item last NOVEMBER
and today is the first time
it's come before us.
The city Council at that time
staff indicated that
the problem was being addressed
and expected it to be resolved
by the end of the fiscal year.
Now as the auditor noted,
the problem of the problem
resulted in a large backlog of
unresolved lease payment
discrepancies In MARCH I had a
great concern not just about
the actual dollar amount that
had not been distributed to
the right account but more
importantly whether this issue
was a symptom of something
larger and might need a higher
level of disclosure.
My concern did increase when it
was revealed that a moratorium
had been placed on the city
Treasurer's ability to continue
auditing the situation.
The office of the City
Treasurer is required per
council policy 700 Dash ten to
conduct an audit of each
percentage lease for the first
year of operation and at least
once every five years.
Now restricting their ability
to do this is a significant
action.
On page seven of the audit it
states the following edi
limited re portfolio access to
only its staff and removed
access from the audit office of
the City Treasurer.
He believed it was
counterproductive to allow
access to leasing management
software containing inaccurate
information while it was
actively working to reconcile
accounts so that accurate
payments could be applied and
correct revenue could be
realized according to edi
provided all data and
information to the City
Treasurer upon request to
continue revenue audits despite
not providing access to
the software.
However, the City Treasurer
indicated that its ability to
complete revenue audits was
limited by the moratorium which
explicitly instructs the city
Treasurer to pause audits and
restrict contact with a leader
Goes on to say that the audit
and Treasurer that auditor and
Treasurer had to instead rely
on data from sap and reports
provided by edi to support
their analysis.
No direct access to the actual
data for two top officials in
the city for an extended period
of extended period of time.
I find this to be very
concerning and I think
everybody on the dais should
feel the same way As
the auditor states, these
actions weaken an important
internal financial control,
hinders oversight and
transparency and could
potentially damage the city's
reputation and credibility for
billing practices and financial
reporting.
Now I do appreciate
the auditor's first
recommendation which speaks to
discouraging future moratoriums
and which requires promptly
informing the city auditor and
the chair of the audit
committee If the ability to
perform these revenue audit
functions is restricted in
the future.
This is absolutely critical and
I'm glad to see that management
agreed to provided provided
provide the direction to
the department staff in
compliance with Council policy
700 Dash ten The audit states
that the Economic Development
Department appears to have
taken steps to subsequently
resolve this issue and I would
ask staff to expand upon
exactly what steps have been
taken to resolve this issue and
also can the auditor expound on
what you need to see done for
this issue to be resolved in
your eyes?
Good afternoon.
Monica Hardman Assistant
Director I'm taking a seat
because I realize there'll be
numerous questions So thank you
for the opportunity to expound
upon what the department is
doing to resolve these issues.
So the first thing that we did
is that we took an internal
look at improving our system
processes.
So in this we made sure that we
created processes to ensure
that an applied payments were
reviewed in a timely manner and
researched and matched to
the corresponding invoices.
We also have been improving our
internal tracking of lease
obligations and our escalation
provisions and strengthening
the oversight of the agreements
that include the percentage
rent.
Secondly, we launched a very
intensive tenant outreach
campaign to encourage our
tenants to use the city's
online payment portal.
So this portal it requires
the tenants to supply all of
the necessary invoicing
accounting information upfront
which really eliminates
the primary source of
the payment matching issue.
And then third that we've
discussed before we are
currently modernizing
modernizing our software
system.
So we are upgrading our real
estate management portfolio
system who are currently in
version six.
We are upgrading to version 11
that will be complete at
the beginning of f y 27 So in
JULY of 2026 we will be
upgraded to version 11.
And concurrently we're also in
the process of engaging upon a
request for proposal for
the long term leasing solution
and we're working with various
departments to ensure that we
can have that completed in a
timely fashion.
>> Thank you for that update.
According to the audit which
looks at fiscal year 24, only
of the 11 leases that are in
holdover status six of them
have been in holdover for more
than eight years.
And an audit committee it was
stated that one was terminated
when were the other leases in
mission be updated.
>> Thank you for the question.
So of the ten minus the one
that was terminated, they're
actively being addressed.
They're either currently going
through lease negotiations or
through an active competitive
rfp process.
So for example we currently
have Sportsman's Seafood
Indiana landing that rfp was
just issued in FEBRUARY of
2026.
So they are all actively
negotiating being negotiated
and we're working to get those
done as quickly as possible.
Got you.
I think at this rate I think
this council should have a list
of those and also when they are
going to be not when they're
going to be renegotiated
because that's what's happening
right now When the it's
determined that they should be
closed, there is an end date,
right?
Yes.
Happy to provide that.
We can give a status update for
those two and where they're at
in the process and
the anticipated timeline where
either the rfp will be done or
will be back before council for
consideration for the new
lease.
Thank you.
What is the current backlog
backlog of leases in the city
and how long will it take to
work through it and catch up?
>> So currently we have 178
agreements that are in hold
over and we're actively working
through those.
Of course they have to be
prioritized based on staff
capacity.
We currently have 13 property
agents for the city's entire
portfolio of over 900 leases.
We have three vacancies.
Only ten of those are filled at
the moment and we've actively
been working with consultants
and other assistance just to
help us get through this
backlog.
>> Thank you for that response
and thank you for being here.
This administration has known
about these lease revenue
issues for years and we still
have leases.
>> We just specifically look at
Mission Bay that have not been
updated for 12 years now.
Obviously this issue applies to
leases throughout the city
which makes as you mentioned
the problem 178 times more
egregious than the tenant in
Mission Bay.
Not only are we likely losing
out on revenue which once again
I always point this out if we
look at what rents were 12
years ago alone just in an
apartment it's it's night and
day.
>> The issue you know comparing
that now to prime land that
the city holds in this specific
case to Mission Bay it just it
makes me sick to my stomach.
The auditor states that
the city MAY potentially be
conferring an unfair benefit to
the current tenant creating
unnecessarily unnecessary
uncertainty for both the city
and the lessee and limiting
the city's ability to enact and
enforce updated contract
provisions.
This also can lead to perceive
favoritism from other lessees.
The auditor also states that in
reviewing the annual mission be
revenue allocation the auditor
identified $933,834 in deferred
revenue to the city for fiscal
year 24.
Can the auditor speak to this
finding and explain for
the public what deferred
revenue is in this case?
>> Yes, I can I can say a few
things about that.
Right.
So the deferred revenue is just
money that was expected but
it's not received or recognized
in that period.
So yeah, about a little less
than $1 million.
So it's possible he was on that
that credit list that
the report talks about where it
just hadn't been been matched.
At the time we did this audit
in the scope period we looked
at.
So we'll be seeing how that
amount changes on the next go
round.
But we flagged it for purposes
here because that that is a
notable amount of money that.
>> So is it expected that this
deferred revenue for fiscal
year 20 for the 933 million
that you mentioned, will that
ever be received?
I think yeah, I wouldn't I
wouldn't assume that it won't
be received.
It could have already been paid
and just not recognized in that
accounting period.
We got to close the books at
some point so it could be that
fate or it MAY not have been
received at all yet Maybe
the tenant did not send in
the check for that month so we
don't know when next time we go
around will compare the figure
that we received with that
$933,000 figure you just
mentioned And Councilmember
Moreno, if I MAY, we have
confirmed that that nine 33,000
it has been received.
Thank you.
Thank you for that.
And if I MAY have my extra
three minutes pro tem we give
you this I'm gonna give you my
three minutes as well.
Oh, I've already been okay,
well, if I MAY have a thank you
from my colleagues if I MAY
have some time.
Thank you.
I also share the concern of
the oversight committee that
expressed that they weren't
getting sufficient information
on projects and expenditures
that we're supposed to monitor
.
The role is oversight and
the city has a duty to get them
all the relevant information
that they required to fulfill
their duty.
I am glad to see in the audit
that in mid-year fiscal year 24
both committees began to get
expanded project information
but implementing recommendation
4.1 to reach an agreement and
mechanisms to specify which
specific project elements
should be provided and
the frequency that
the department should generate
and share.
The report is critical to
implement by the end of
the fiscal year.
I will end by saying that when
the city cannot properly keep
track of lease revenues and
associated late fees there is
great potential for the wrong
amount to be deposited into
the Mission Bay Improvement
Fund.
When that happens we're
potentially running afoul of
the charter requirement that
was approved by voters to fund
the Mission Bay improvement
Fund at a specific, specific
and prescribed level hearing
that steps have been taken to
resolve This issue is good but
I don't think I'm going to be
satisfied until the city
auditor can fully confirm this.
Additionally, even if it is
resolved as far as refining
the process by which we collect
and distribute these revenues,
I do not think it was proper to
restrict the city Treasurer's
access to the data they need to
do the least revenue audits
they were specifically tasked
to doing.
Nor was it appropriate to
restrict the auditor from
seeing that data firsthand for
the purpose of performing this
audit.
Neither of those things should
ever happen again.
And additionally just for
the body I will be leaving this
body in DECEMBER.
So with that being known I have
asked that our outside auditor
Crowe keep tabs on this issue
for their external audits.
I know I keep on reiterating
this as the chair of the audit
committee The purpose of
the audit committee is to see
issues that are that we're
doing wrong and the purpose of
management accepting that what
we're doing is wrong is to fix
those issues.
It's just you know, I'm at a
loss of words as to why these
issues are not being fixed
especially when we are looking
down $120 million budget
deficit.
So with that I move that we
approve staff's recommendation
.
>> Thank you.
Thank you guys.
Remember I know it is an
informational item only so no
motion will be required with
it.
We'll turn next to
Councilmember Ravenwood.
I thank you very much and thank
you to our auditor for
the presentation and the work
on this And I have a couple of
questions.
Thank you to Council Moreno for
all of your thorough questions
here on audit.
Slide five is as a total
adjusted revenues for Mission
Bay lease revenues was
approximate 37,000,087%
decrease from f y 2023 So why
is least revenue going down in
Mission Bay?
That was just one of
the indicators that potentially
the fall revenues weren't
recognized because of
the backlog because you would
expect it to go up but it went
up that year and they should
kind of track together at that
Both percentages of the revenue
that they received.
So that's just one indicator
that perhaps some of this
revenue got caught up in
the accounting issues and
wasn't recognized for Mission
Bay.
So that's why you know, we
noted we couldn't verify that
the amount was right that year
and we're going to check it
again during this year's audit.
>> Okay.
Mark, if you have any comment
on that one.
Again, as the city auditor
mentioned, it was a snapshot in
time.
We have since reconciled and
have received all that.
Nine 33,000 So I don't know if
that could have been the issue
or something else I would say
globally, you know there have
been some situations where
revenue has been down but we
would expect that you know
those would remain at a certain
level.
So I think looking at it in
this new year will really
provide us the data points that
we need now that we have
reconciled and we're receiving
revenue and getting through
those payment issues to see if
there's any global trends.
But that's about all that I
could really mention at this
time.
Okay.
Yes we are for a $120 million
budget deficit.
We're not tracking why we're
not getting this revenue from
one of our most popular parks.
Can someone from the mayor's
office please explain how an
audit can be refused If
the Treasurer is being asked
how much money did you bring in
for the city?
How can city management say
We're not going to tell you
I've never heard of this.
Yeah.
Thank you for that question,
Councilmember I, I don't think
it was in an effort to hide
the ball or refuse the audit or
not participate in that
process.
I do think when Eden formerly
Dream consolidated there was a
lot of cleanup work that needed
to take place And so I think to
get your arms around kind of
the back end mess that we were
trying to get through and
the backlog I think that is
the intent of that moratorium.
I don't think it was anything
beyond that that has since
obviously been lifted.
The commitment is on the table
as seen in the management
response and that's that's what
we there.
Okay.
>> And we're not going to do
that in the future.
No.
And then if there is ever a
situation where things are not
able to be met or delivered,
there is the accountability
process, the notification to
the city auditor as well as
the audit committee in the rare
event that some type of action
needs to be taken.
But as in the management
response the commitment is
there.
Okay.
I find it very perplexing and
really frustrating that we do
ask how much money even can
account manager is going to say
well we're not going to tell
you.
So I mean I'm glad it has been
resolved since but I cannot
believe that was one of
the responses.
I do have a question about how
we can help a council So like
you said, there's only 13
property agents employed by
the city of San Diego to
oversee how many leases.
That is correct.
So we currently have 13 fte for
our entire lease portfolio
which is over 910 of those are
filled came came in during
the financial year.
So the general fund positions
are those 13 of these general
fund I'm getting that they are
why this seems to be an
enterprise fund type of I mean
if we're getting lease revenue
is that not a money making fund
How are these not shifted from
the general fund to be paid for
by the leases?
Maybe we could hire more
property agents to enforce
the leases and get more money
into the city with an
improvement on the general fund
.
Good afternoon Ben.
Battalion Director of Finance.
So yes those 13 positions are
in the general fund but
the revenue from those leases
are also deposited into
the general fund as well.
So they do support those
positions But couldn't we hire
more people to are didn't take
a burden on the general fund.
We made it into a separate
enterprise fund and we need
more than 30 people to manage
900 properties which is why we
have 170 hold or releases I
mean gotten to my former leases
in San Pasquale been waiting 15
years to get their leases done.
So I just we obviously need
more people to manage our
leases but we don't hire people
under general fund positions
right now because the budget
deficit in the general fund So
have we thought about moving
them over into an enterprise
funded source so we could have
more property agents to bring
in more revenue So the majority
of these leases are general
fund leases That revenue comes
into the general fund and it's
significant It's like it's tens
of millions of dollars.
So if we were to move that all
into an enterprise fund with
the additional 13 positions
plus maybe a few more we would
really just be transferring
that revenue back to
the general fund to support
general fund operations.
Okay.
That kind of is why we only
have 13 property agents for 900
properties I think probably not
your department That's really
just yeah, I mean that's a
policy call that that's a
budgetary decision.
Okay.
I follow it from the mayor's
office on you know we need to
bring in money for the city and
we know Mission Bay is making
money at the beautiful place to
go.
So I just totally would hope
that you're there's absolutely
no reason that the city
shouldn't be getting lease
revenue from our lessees And if
the issue is we don't have
enough employees to go out and
manage our properties then we
should have more employees
using our properties.
Okay.
Well thank you for
the information about it.
Hopefully we can right the ship
and I appreciate the audit.
Thank you.
We'll turn off to Councilmember
Foster.
All right.
Thank you for the presentation
and for clearly we have more
work to do.
But I just wanted to kind of
pick up off of where my
colleague was at and I can
appreciate the discussion on
the number of funds I guess
what I'm struggling with is I'm
not necessarily hearing a plan
to resolve these outstanding
issues And so I would ask
the mayor's office do we have a
plan on these 178 holdovers and
things that we are doing on how
we are going to resolve them?
And I'm going to ask from a
project management perspective
meaning do we have a schedule
on identify leases, how you are
approaching them due date
timelines to where staff
understands what they should be
working on clear directives
what the expectations are and
systematically making our way
through this backlog?
>> Thank you for the question,
Councilmember Foster I'm going
to start and then I'll let
the mayor's office add anything
that they would like to as I
mentioned early in terms of
the plan to resolve the issue,
a huge component of that is
the upgrade and future rfp for
our leasing management
software.
So number one we need to reduce
the human error.
Number two, we need to automate
workflows and the number three
we need to provide visibility
into our lease compliance.
So those are all things that we
are currently struggling with
with a system that is very much
out of date.
So those issues will be
resolved partially with
the upgrade to version 11 As I
mentioned that would be
implemented in JULY of 2026 And
then again looking long term
for how we can continue to
improve efficiencies there with
another potential system.
Secondly in regards to your
question on what is the plan,
how are we looking at that?
We do have a work plan that we
prioritize based on council in
my oral priorities that we are
utilizing our existing staff
and also looking at ways in
which we can utilize any type
of assistance through
consultants to help make us as
efficient as possible.
So sorry COUNCILMAN.
Can I just add some detail?
Yeah.
This is the audit mission Bay
only for fiscal 24 but we did
do an audit of all city lease
management and I think it was
2022 so four years ago that was
one of the recommendations have
a plan to work down the backlog
to prioritize and work it down
And so we're still following up
on that.
I can appreciate that.
But even if we just simply
isolate the discussion we're
having here today I guess for
for my own understand and again
I'm looking for a plan and it's
really troubling if we don't
have an overall plan and
outline so that we can system
adequacy which leases up first
which leases up today what that
date is in for in order for us
to update it, it's it's no
different than what engineering
and capital projects does as
they make their way through a
project a step by step schedule
that shows the activities what
those expectations are, what
the due dates are so that we
can bring some accountability
and bring some professionalism
and some management to
systematically work through
this process.
Even if we went through and put
together an assembly contract
to supplement staff, what will
we hold those contractors to?
How do we convey what those
needs are?
What the expectations are,
what's due on day one, two,
three, four and five?
That's where I'm that's where
I'm going with this And I think
that would answer a lot of
questions of the council and
also our auditor's office.
So we have a clear line of what
we are monitoring and what our
needs are.
Is there a way we can Yeah or
Councilmember especially as we
go through the next few weeks
of budget discussion I think
that information and what is
coming down the pipeline
awareness is especially
critical so we can have
economic development staff.
I'm work with city auditor and
others and provide you kind of
what the next few months look
like opportunities for our city
to contracts timelines for you
know additional software
upgrade procurement just we
have a better idea of what's
coming down the pipeline and to
better inform the budget
discussions.
>> What about that?
Okay.
I appreciate that and I think
that would be a useful tool so
we can make sure we're all
marching to the same accord
especially as we are looking at
competing priorities.
When you talk about the mayor's
priorities versus the council's
priorities.
Right.
So I think that would be a good
useful tool.
So that we are all clear on
where we are headed and how we
are going to attack this.
So thank you.
That concludes conclude my
comments.
Thank you.
Next up is Councilmember
Gilbert Harold.
Thank you Carl.
PRESIDENT Pro-Tem thanks to any
of you and your team for
the work here.
I appreciate the questions my
colleagues.
We've got someone operating
counter bluster really digging
in and obviously everybody
knows leadership on
the committee.
I, I too am frustrated with
the number of Holder releases
and I think the questions about
what the plan is and why things
are the way they are and it is
important.
I also do think that it's
important to note that this is
a long standing problem and
this is not a defense of
the way that responded to
the problem Has been responded
to since 2020 or 2021.
But I'll I'll draw an analogy
to streetlights where we were
far behind that even doing
work at a regular pace meant
that we were unacceptably
behind and that staff was
underwater in a way where they
could never see themselves
getting up getting their head
above the surface.
I think that some of that was
the failure to invest in in our
city staff in such a way that
to equip them But also in this
instance I really do think that
it's important for us to ask
who benefited from the status
quo, who benefited from so many
leases being held in holdover
status, who who benefited from
not paying fair market value
for incredibly valuable
properties?
I think it was the friends of
folks who served on this dais
in the past and who served in
the mayor's office in the past
And I want to say that out loud
because these things did not
happen by accident And for sure
we need to do better to get to
a place where every single
property that the city has is
owns The city is being fairly
compensated for.
But in a moment where the city
is being attacked for
mismanagement and and we are
we're trying to get to a better
place.
It is important to note who who
drove the car into the ditch
and especially on this front
because there are there are
people who benefit greatly from
their leases being held and
hold all of our status for as
long as they have.
Now to COUNCILMAN Foster's
point because we were in
the hole that we are in,
there's got to be a plan not
only the number of leases and
all over status but the city's
overall budget situation.
And so when we're making
the difficult decisions about
what should be cut, what should
be maintained and how and who
we seek revenue from to fill
the gap that plan becomes
incredibly important.
And so could I know you answer
a number of questions already
but it's it's one of those
things that I think the council
has been pretty consistent in
in wanting to make sure that
there is there is whether it's
from enterprise funds or
the general fund that
the leases are up to date
there's been a willingness to
partner from from Labor to see
that a willingness to allow
some that work to be contracted
out because they recognize
the big picture, the importance
of making sure that we're
getting fair market value for
all these leases So this is a
is I think a really important
issue on the on the beauty
front we've talked about how
every dollar we don't collect
in fair market value for those
leases that are in all of
the status is a dollar that we
were not allowed we're not able
to then reinvest into providing
subsidies and discounts to
seniors and people who can
barely pay their water bill.
Every dollar that we don't get
in for free market value for
leases that are that support
the point of the general fund
is a dollar that we're not able
to to keep library libraries
open parks and rec centers
properly funded and even you
know have difficult
conversations about public
safety.
And so this is just an
incredibly important issue.
I know that it's pretty narrow
is being presented today but as
Andy said, that is an issue
that was brought to our
attention a few years back and
I think the consistency from
the council has been there.
And so that plan that three of
us were talking about is
incredibly important and then
the action is incredibly
important as well.
So again thank you to our
colleagues for asking
questions.
They did also let's not let
those folks off the hook who
who got us into this situation
and we should think about who
benefited and who and who their
friends are because I do think
it's a coincidence.
>> Thank you.
We'll turn next to
Councilmember Kimball.
>> Thank you.
Council PRESIDENT Pro Tem.
I just like first to ask is my
understanding that as of APRIL
of 25 in other words one year
ago this moratorium was lifted?
Is that correct?
I think it was technically
lifted around that time.
I believe it was around
SEPTEMBER that the Treasurer
got back the system access that
they needed right?
That is correct.
So it was lifted in APRIL.
However it took the Treasurer
several months to get back over
to work on it.
Also I'd just like to remind
everyone that the real estate
division was a department of it
on its own for a while a good
long while under various
administrations but was moved
into economic Development
department only in 2024 I
forget which month but it was
not at the beginning of 2024 as
I recall and I wanted to just
recall that the software being
used by real estate division
was then if this is correct was
then five years out of date at
that time And wasn't that one
of the reasons then put
the moratorium because they
couldn't get the correct
numbers out of that old system?
Thank you for the question,
Councilmember Campbell.
So yes, in terms of
the software for our portfolio
at the time we knew that there
were errors in that system and
that sap is a financial system
of record in which this a
challenges with reconciliation
and knowing that what was
currently in our portfolio was
not correct and that's when we
had the collective decision
regarding the moratorium and
just working to get information
outside of the system to be as
efficient with people's time.
So there was not a silo attempt
to keep the auditor away from
the money answers It was
actually a series of department
heads who got together and
realized that the numbers
coming out were not right.
We had to get that straightened
out so we could have the proper
numbers correct.
And you know, just to clarify,
during the moratorium revenues
were still being collected even
with the holdover leases that
we've discussed cpi adjustments
were still being done.
So there was never any point
where revenue was you know,
just totally stopped.
It was just really
the reconciliation of it with
errors as to, you know, what
accounts it went to where we
had to go through a larger
process to get that all
reconciled.
>> Thank you And I and I
appreciate my colleague's
questions, many of which were
ones I was going to ask Of
the 900 leases that we have on
city property, we evidently
have budgeted 13 full time
equivalent to watch over those
leases but only of ten of those
positions filled, is that
correct?
That is correct.
Now of those ten people there
each responsible for at least
90 leases, is that correct?
You know, it depends on each
person's portfolio.
We have a range of, you know,
associate to property to
supervising.
So it depends on
the classification, what
workload that they have.
But if you were to make a
general average that would be
correct.
It sounds like a large load to
me.
I would ask Andy do we have any
ideas generally or you want to
put in the real estate world
how many portfolios can one
real estate expert manage at a
time and do an excellent job
And I do not recall for sure We
MAY have benchmarked that in
our 2022 audit of citywide
lease management looking at all
900 leases.
This is just looking at Mission
Bay only So we didn't look at
that on this audit So I don't
have any information on that at
this moment for you.
>> Okay.
Well these 900 for the whole
city is not just Mission Bay
but on the Mission Bay ones,
the ten that were not being
followed up on and updated are
now currently being dealt with,
is that correct?
That is correct.
Okay.
So pretty soon we will we will
see what the outcome is of
those that work.
But I would just like to say
that it seems to me
the Department which took in
the real estate division MAY
need more help with its real
estate problems And if it does
I would like to hear as a
council member how many full
time equivalents more of real
estate experts are needed so
that the city can prioritize
and make a high priority
getting as much bang for
the buck as we can on releases
that we're putting out.
Do you have any ideas at this
time of how many you would like
to have if you had a wish and
you could make a wish for as
many as you need it?
>> I appreciate the question.
So as I just want to mention
looking at the leasing software
was really one of our
priorities because you know
the software will help us do
more with less staffing and
understanding just you know,
dire needs that we're in with
the budget.
I don't have a number off
the top of my head because
we're always looking at ways we
can be more efficient with what
we do have.
I can confirm though that
industry standards outside of
you know, city government that
you know approximately 90
leases per person is is pretty
high.
>> Okay.
It reminds me of the code
enforcers trying to spec 130
entities each every week which
is obviously humanly
impossible.
So I think what we need to do
as a council is realize that
when we need to hire more
expertise as a city or contract
out for more expertise we have
to spend money to do that.
If we spend money to do that
then we have to cut the budget
somewhere else because we're
not in it in a plush situation
in terms of how much revenue
the city is getting these past
year or two years and how bad
it was under covid as well and
how we really haven't totally
recovered after that.
So these are tough decisions
that we're going to have to be
making in the next several
weeks And I hope that we all
realize that sometimes getting
more expertise is actually a
savings than a cost and that
sometimes we have to give some
things up in order to pay for
other things.
And at any rate I really
appreciate all the work I went
into this and I know Andy you
will soon be coming back to us
with the correct numbers for
2025 as well as for 2026 of
that fiscal year will be over
JULY first, 2026.
So I appreciate that.
i appreciate all your work in
Oversight.
It's so important that we have
these audits and it's so
important that the public
realize that the city is in
financial straits and we cannot
do everything for everybody
that they want without paying.
And so these are tough
decisions that have to be made
and we need to have
the public's help in this and
understanding in this.
So thank you so much for
everyone's comments and
questions and thank you for all
your hard work and thank you
Chair Pro-Tem Thank you.
So we're Campbell I think that
concludes the speakers for my
colleagues so I'll close off by
noting that my colleagues to
ask me the questions that I
think I would have and I
appreciate them their
directness and trying to get
information about where we
stand.
I certainly agree with them all
about not just getting our
processes correct.
I think this is why the Office
of the City Auditor played such
an important role for us here
at the city because you're
hoping to unpeel layers of what
we MAY not be looking at from a
day to day process given
the amount of workload that a
department MAY have.
And I think Thank you,
Councilmember Campbell for just
simply pointing out how
tremendous that workload is.
And so I think for us this is
an opportunity to understand
where we've lost out as a city
on potential revenue and beyond
just the revenue as a dollar
figure.
I also think of the fact that
our our lessees are not all
just commercial businesses or
institutions that are running
different facilities.
Maybe a better question for you
or whoever knows the answer but
up to 31 leases that we have in
Mission Bay I assume at least a
number of those are nonprofit
organizations that are
operating facilities that are
serving the public that
the city would otherwise not be
able to do.
Do we have a sense of what it
looks like?
I don't have the list in front
of me but it would be accurate
that there would be a
combination of nonprofit and
for profit and I presume that
some of those are also in
holdover status.
And so I think when when we
point out that the holdovers
are not just impacting our
opportunities to adjust leases
to match up that there are also
organizations, entities that
are operating facilities where
the holder of status means that
they're not putting anything
into those facilities And that
is frankly at the end the day a
lost opportunity for the public
if any of them have been in
long hold of status Typically
with each of these lease
updates this council will see
them as an opportunity for
the city to also require
capital investment in some of
these facilities that would
again serve the public
the longer term sort of
agreements with organizations
allow them to execute financial
agreements that would allow
them to meet capital
commitments of or collect from
private dollars.
That is an impact that MAY not
be a direct fiscal impact of
the city but actually has a
direct correlation to what
the public benefits from.
And so to me I see this not
just the discussion of how can
the city get more revenue, it's
also thinking about how do we
adequately serve the public
with the resources that we've
got knowing that the land and
the organizations that are
running programs from that also
have an impact on that front.
So that is only a thing I would
add to the discussion that
we've had and look forward to
perhaps some further
discussions on how we evaluate
leases across them the city.
So I think that concludes our
speakers for this item.
Again it was an informational
items in the motion was
unnecessary.
>> With that we'll turn clerk
to item two one item 2a1 is
the 2025 annual report on
internal financial control.
If you'd like to speak on this
item please be sure to submit
your speaker.
So if this is also an
informational item you can
submit your speakership by
submitting it to the clear box
at the front of the room or if
you are participating remotely
now's the time to raise your
hand by pressing Star nine or
the raise your hand icon.
Thank you Council PRESIDENT
Adam Thank you.
We'll turn it over to the team
once we're ready If you'll
introduce yourselves for
the record and most optionally
good afternoon Council
PRESIDENT Pro Tem Lee and
council members I'm Ben Italian
director of finance.
With me today is Jeff Peel,
chief accountant in
the Department of Finance.
Today we're here to present
the city's annual report on
internal financial controls for
calendar year 2025 And today
I'll need about ten minutes.
The final report is issued
pursuant to the city's
municipal code which was
amended by the City Council in
2004.
It requires a high standard of
quality in and efficacy of
the city's financial reporting
and disclosure practices.
The municipal code requires
that management perform an
annual evaluation of the city's
internal financial controls
submit a written annual report
to the audit committee and
the City Council and submit a
certification by city
management regarding
the design, maintenance and
effectiveness of the city's
internal financial controls.
I'll now turn it over to Jeff
to discuss the highlights of
the report.
>> The focus of this report is
to provide an overview of
management's approach to
developing a maintaining a
strong and effective system of
internal controls over
financial reporting and to
highlight some of
the accomplishments of the past
year that support those
objectives.
The objectives of the financial
reporting are to produce
financial information that is
reliable, relevant and timely.
Management's ability to meet
these objectives depends in
part on the design and
effectiveness of the processes,
policies and procedures and
safeguards it has in place to
reduce or mitigate risks over
financial reporting.
>> Internal controls are
important because without such
controls it would be
challenging to prepare reliable
financial reports that utilized
to be utilized by management
investors, rating agencies and
other interested parties.
The city's internal control
program is based on the best
practices established by coso
Kosovo's The committee of
sponsoring Organizations of
the Treadway Commission because
it was developed a conceptual
framework to guide businesses
and government entities in
areas of risk management,
internal controls and fraud
deterrence.
The framework includes five
interrelated components control
environment risk assessment
control activities, information
and communication and
monitoring activities within
each of the components.
Another layer of 17 principles
helps guide as well.
I will describe each one of
the components briefly.
Control environment is
the organizational attitude
toward internal controls.
It starts with the tone at
the top.
Management creates an
environment where everyone in
the organization believes
internal controls are important
and each person has a role.
Secondly is risk assessment
which is how management
identifies, assesses evaluates
and manages the amount of risk.
And it's always important to
note that risk can never be
completely eliminated.
Thirdly is control activities.
These are the policies and
procedures that help ensure
management's objectives are
carried out and the necessary
actions are taken to address
risks.
This includes segregation of
duties, reviews and approvals
within the processes.
The fourth component is
information and communication.
This is the distribution of
information needed to perform
control activities and to
understand internal control
responsibilities throughout
the organization.
And the last component is
monitoring activities which is
the evaluation of each of
the other four components to
ensure that they are
functioning effectively and
organizational objectives are
being met.
The Department of Finance used
a management assessment
template to help assess
the effectiveness of the city's
system of internal financial
controls as it relates to
the five components and 17
principles of the coso
framework.
This tool helps management to
analyze and provide
the structure of this report.
The assessment can be found in
Attachment one.
I want to highlight a few
highlights from that from
the report.
First, the city received a
clean audit opinion for
the fiscal year 2025 annual
Comprehensive Financial Report
with no significant
deficiencies and no material
weaknesses in internal
controls.
Next the city received a
certificate of Achievement for
Excellence in financial
reporting from the Government
Finance Officers Association
gfa.
This is the 11th consecutive
year that the city has received
this award.
The city also received
the Budget Presentation Award
from g f a way for the fy 25
adopted budget and the budget
Excellence Award from
the California Society of
Municipalities Finance Officers
csf and more for the f y 2425
Capital and operating budgets.
>> In last year's internal
Financial controls report a
risk was identified for
the revenue Compliance program
.
As you recall, the program
identified opportunities for
enhanced internal controls over
and over economic development
departments, real estate
divisions, invoicing and
payment processing as well as
the lease audit management.
We wanted to provide a brief
update on addressing that risk.
The moratorium usually agreed
upon by economic development
and the City Treasurer for
lease audits concluded in APRIL
of 2025.
The revenue compliance has
since return resumed audit
auditing of leases which has
now allowed City Treasurer to
work in tandem with
the economic Development
Department to maintain strong
internal controls and ensure
that there are any potential
risk are identified and
mitigated.
The Economic Development
Department has also formalized
internal processes and
significant processes have
the need to address
the backlog.
The Department has continued to
make improvements to ensure
revenue is accurately captured
and reported in compliance with
the current city policy and
documented internal processes.
The Economic Development
Department is also upgrading
its aging software system.
Technology enhancements are
intended to reduce human
errors, automate workflows and
provide visibility into these
compliance.
We also wanted to provide a
brief update on a couple
outstanding audit items related
to the Human Capital Management
.
One is the uncompetitive
compensation which is being
resolved with the total
compensation strategy.
The other is improving
the employee performance
process which is also being
addressed with a series of
implementations focused on
trends and completion rates.
The Human Resources Department
and personnel department are
working with the city Auditor
to close these recommendations
based on our evaluation we have
concluded that the internal
financial controls are
effective.
That concludes our presentation
and we are happy to answer any
questions.
>> Thank you.
Do we have any public comment
relative to the Common Hearing
Council chambers We have
several people with their hands
raised.
Starting with Katherine Rhodes
you have four people.
If you can please unmute.
I've started the five minute
timer.
>> Wonderful.
First you know everything you
have here and your five
components of internal controls
.
They weren't done for
the mission Bay Park So
the item 200 that you just had
you know the risk assessment of
of of knowing you know which
leases are not outstanding.
I mean every single one of
these components of your of
your you know, internal
financial controls wasn't being
met.
So you know so the mayor's
basically saying we're doing
everything great.
They're not the city council is
it?
It's not a strong city council
.
You guys really do need to put
forward a ballot proposition so
that we can have a strong city
council to counter the strong
mayor right now because he's
doing everything he just wants
and then he's coming to you in
this report here telling you
everything's fine.
Don't worry about it.
We've got your back.
They don't have your back.
They don't have the public's
back.
You know, How about
the internal controls over
the budget coming up?
You know there was a
Union-Tribune article today
that says that you know there's
I forgot the 400 and something
percent increase in the amount
of middle managers that came
about And all these middle
managers started coming about
in in 2013 when Todd Gloria was
the mayor and he want to get
around the five year
pensionable pay freeze and
the way to get around that is
to make people be nonunion
members and become middle
managers And then they're paid
sometimes doubled, sometimes
tripled.
I don't see you have controls
And then of course I always
have my big problem with
the with the fund balance that
you don't have all the fund
balances you're included next
to the original if you can
please unmute after that will
be 8700 and I mean obviously I
don't and you guys have an item
prior to this that shows that
this is not working as
Katherine was pointing out and
it's like I don't understand
how you could be getting awards
for this when just the item
before showing that for years
nearly a decade there has been
issues that this internal
controls didn't catch didn't do
anything about.
I mean it constantly there are
issues showing
the mismanagement, fraud, waste
and abuse that it's taking
place in the city.
So for you guys to sit here and
give a presentation like this
as though you know, this is
working really well obviously
it is not from the prior item.
I don't know if you guys don't
think about those things or if
you're kind of just like
throwing it in our face to be
like Oh yeah, everything is
fine.
Just don't pay attention to
the prior item that we had in
question How the internal
controls were working there and
why they didn't stop these
things for years Like it's for
years this has been going on
and for years you guys have
been in debt and mismanaging
the money So it's like weird
that you can sit here and bring
forward an item and act like
your internal controls are
working Really well.
Are they working well to hide
that stuff?
Because if that's the case then
sure yeah they're working
extremely well because they're
making sure that you know
business as usual goes on with
the you know, intentional
willful negligence and and
mismanagement of the people's
money who work very, very hard.
So it is a slap in the face to
sit here and tell that
everything is going well when
you just proved prior to this
that it wasn't And so I think
you need to rethink the way
that you're presenting this
item and not claim that it
works really well and you know,
be all excited because you're
getting awards because
the people you're probably
getting awards from are people
that are also hiding things and
just wanting to make it seem
like things are hunky dory when
in fact they aren't But
everything is inverted and so
we get an inversion inverted.
Martino has concluded Next is
8700 After that will be Blair
Beekman 8700 star six To unmute
Joy Sonata pd three from
the staff report rather
the controls are intended to
mitigate the risks of financial
reporting errors to a level
that is acceptable based on
conditions of materiality and
to quote I study materiality in
this context and believe me I
was not reassured in any way
Also expenditure errors
appeared to be in compliance
Look up the word appeared in
this context I was not
reassured I am leaning on this
in this way That risk is more
discretionary and subjective
And I'm sorry to have to say
that because I love our
Department of Finance.
They know that and the people
that are in there they're great
people But something's wrong
here.
Do you see what is calling to
us?
It's a red flag of opportunity.
Let us be except what happens
if you look at it Go with an
Eagles.
I let us seize the opportunity
to change to grow and to become
a better city for all.
When are we going to truly
truly be willing to have
the courage and the greatness
to do that step?
We're not there yet but let's
try to do it together.
>> Look to all Thank you.
Next is Blair Beckman If you
can please unmute The five
minute timer also concluded
that there were four speakers
in the queue No additional
speakers will be taken.
>> Blair Beckman After that is
Kathleen Lippert.
All right, thank you.
Beakman Thanks for this item.
Thanks for the public comment
on this item.
I feel similar really nice work
on the previous item.
I think everyone is involved on
the previous item and I think
it relates to what you're
talking about overall for this
item Overall accounting and
auditing issues for our city
concerns.
So a good history was presented
on previous problems and what
we need to do to address this
is issues that stem far back
before Mayor Gloria.
We I good luck that we really
can be addressing the previous
item and how it relates to this
item and I think we really can
do it as a city These are
the one of the projects that we
work as a community at this
time So I hope we don't get
caught up in you know people
get lost in the process and we
really develop something really
good with this going on for
good ideas.
Good luck with that and for for
this type of thing, you know, I
think we still have to
acknowledge that we made
mistakes in 2024.
I mean why did that happen?
At least we're holding
ourselves accountable now.
But what did we do wrong in
2024?
And as much as I think
the mayor's office and I had a
part in bringing this to
accountability at this time, i
think it suggests the overall
idea that, you know, council
has been asking how do we
create a better set of
governance at this time There's
something lacking in our
governance policies that
the strong mayor position is is
is it lacks something in
creating a better governance.
I really hope and the strong
mayor position because learn to
take suggestions from our
current city council on what
can be better organizational
practices and better governance
practices and learn to be
flexible in that thinking And I
hope that can develop our
future plan has concluded.
>> Kathleen Lippert, if you can
please join me after that is
Judy Strang.
Kathleen, I can hear me before
you if it takes a minute to
find the unmute button.
>> Thank you.
>> My name is Kathleen Letter
in Good afternoon.
The public is really served so
well by individuals such as
Katherine Rhodes in order for
their candor I am also confused
as to why the city receives so
many accolades for audits when
they are clearly in deficit
when they clearly are sending
there they are doing fit
fiscally in responsible things
like spending out all of their
reserves, finding everywhere to
look under overturning every
rock to find taxpayer money,
not taking the money out of
the city budget card San Diego
has the worst fiscal health of
any city in the county.
That's hardly something to brag
about and they while serving in
the California Senate and one
of the senators decided to
prepare a fiscal ranking of
the cities when cities are
delinquent paying real property
tax I'm sorry when taxpayers
are delinquent in paying real
property tax on their homes
Even one day the county
treasurer taxes them a 10%
penalty of the amount that
they're due.
So why the Sacramento allow
cities to be so complacent in
their fiscal reporting
responsibilities?
Having due dates and penalties
should at least be a two way
street.
Also the city is not served by
one party or the other having a
total say without having
alternative opinions because
clearly you all need to get out
of your echo chambers and
listen to alternative opinions
which typically prove to have
some merit.
The last thing is strong public
employee unions tend to
influence the outcome of who is
elected to the city councils
and when they control who
becomes their bosses they tend
to get a little greedy as time
has concluded to a string.
Good afternoon San Diego City
Council I just have kind of an
a comment or an observation
that I've been making because I
think everyone on city council
has some of the same concern
about receiving the revenue
that we need and what are
the internal financial controls
that can make that happen.
But I noticed on the last item
that my own city council person
Joe LaCava was missing and we
were talking about Mission Bay
and it made me wonder about all
the city council people Are
they missing in action?
Do you know in your city
council district which are
the city leased public
properties?
Do you know what's been going
on and have those leases been
negotiated And recently do you
know what sort of loss of
funding has happened because of
those leases not being
negotiated?
Are you aware that they might
be presenting the visual
the optic if you will, of
preferential treatment Because
perhaps that's the problem is
that you all don't have a good
handle on who it is within your
city council district that hold
leases of public property And
we in the public of course very
difficult for us to understand
who in our neighborhoods might
want public land in our
neighborhoods might be under
lease And so hard for us to
know whether we're receiving
the funding we need.
So maybe the buck doesn't stop
at the mayor's office.
Maybe the buck doesn't stop
with middle management.
Maybe it stops at the city
council or at least it's
something for us all to
consider And this is our
opportunity that this report is
providing us to take a look at
our our own 90 our own nine
city council districts and ask
ourselves if we've got a good
handle on it.
>> Thank you.
Thank you.
Next And our final speaker is
Tony, if you can please unmute
.
Yes, Hello City Council.
Good afternoon.
I just wanted to speak and
comment on the this audit issue
that's going on with these
parks right now, these issues
that we're having being under
budget on the whole about $120
million And I wanted to speak
to an issue that Bob Kaye has
been coming to city council for
for the last 20 years.
He's been talking about how in
Joe the Culver's district,
the La Hoya Glider Port Park is
getting away with paying off.
I think it's only 5000 or
$10,000 a year is what their
leases and they're making
millions of dollars off of a
public park and they're paying
a super tiny minimal lease that
they've been locked into for
the last 20 years And it's
really depressing.
I go to city council chambers
and Bob tells me that he's been
raising this issue for over 20
years and I was there in person
when he asked you all to play
the video of him speaking
before this city council and
bringing this issue to the city
council's attention back then.
This was back in 2006 and he
played this video in front of
you And still I'm not seeing a
single one of you taking this
issue by the reins and
investigating this issue.
It's really depressing as
somebody that tries to weigh in
and tries to make a difference
in city council understanding
that y'all are supposedly
listening to our inputs and our
opinions and y'all are supposed
to take what we say seriously
and then I see somebody who's
been working on this same issue
of corruption of the city not
getting paid its its due fair
share for a park that it
publicly owns And he's been
raising the alarm on this issue
for over 20 years and it still
hasn't been addressed.
It's like if this issue doesn't
get addressed, how many other
issues you know get swept under
the rug that people have to
continue fighting for and
coming to city council meetings
for?
It's not an easy thing to do to
clock out of work to go to city
council in person.
I've gotten four parking
tickets in the last five months
from my involvement in these
city Council meetings and still
these issues aren't being
addressed.
>> So your time has concluded
and that does conclude public
comment on item 2a1 Thank you
Council PRESIDENT Pro Tem Thank
you.
Thank you for the presentation
and see no other comments.
Well I'll turn first to
COUNCILMAN Realer Rivera Thank
you council PRESIDENT Pro tem I
just want to say thank you for
the report here the public
comment here I was very
predictable.
>> I spoke with my team about
this last week when we were
going through the agenda and it
completely understand why in a
moment like this one where
we're going through the budget
challenges we are that this
conversation can feel detached
from reality But it's also it's
a technical response to a
technical question And I just
want to kind of ask for you all
to reiterate that the report
out that we heard is not a
declaration that everything is
being done perfectly or that
every decision it's been made
has been ideal but instead a
answer to the question as to
whether or not specific
internal financial controls are
in place and best practices are
being adhered to.
It is that correct?
>> That is that is correct.
Council member Sheila Rivera
intent of the report is to
basically say do we have a
strong enough system control to
be able to produce financial
statements that are reliable
that that investors can look at
and are properly following
the accounting standards and
the rules of accounting that
the auditor goes through and
verifies that that's the that
there is still of course
there's materiality It's never
perfection will never be
the goal because to get a
perfect financial statements
would be extremely expensive.
But is it materially accurate
enough?
Do we have a strong system of
internal controls that that's
really the question to
answering.
>> Okay.
I I appreciate that and I'm
glad that we're doing things in
such a way that ensures that
investors see us in the way
that you just mentioned and
that we're doing the things
that we need to be that need to
be done on that front.
And at the same time I just
think it's important to
acknowledge that just because
we are saying that we are we
are checking those boxes and I
don't mean that in a in a
flippant way but again in a
technical way just because
we're checking checking those
boxes does mean that we think
that everything's perfect and
we don't need to do things
differently when it comes to
the city's finances and we have
different opinions as to
the best way to do that.
But again, I want to say thank
you And then I just wanted to
kind of acknowledge disconnect
here between having a
conversation where we say we're
we're doing things right and
then two days from now we're
going to be presented with a
budget.
It's going to be telling us all
the ways that things aren't
okay And and while that can
feel incongruent in this
instance, it's just because
we're answering kind of two
different questions.
>> Thank you.
Council PRESIDENT Pro Tem.
Thank you.
Next up is council member
Yvonne Wilbert from Thank you
And thank you Councilor Rivera
because I was going to make
the same comment about how we
saw that earlier item that
we're not collecting revenue
from leases that we should be
and now we're going to say
we're doing a good job with
financial controls but it's I
understand it's a very
technical question.
I mean I've also been very
upset by the lack of city
staff's ability to conform to
budgeted contracting items and
allowing contracts to expire
And we're still spending money
that's not been authorized by
the city council And I know we
had an audit about it.
We're going to have an audit of
the herc rental contract which
is one of the ones that
spiraled out of control.
I am glad that we do have a new
improvements to Ariba and
contracting processes.
It's still it's it's really
hard for us to get our heads
around this when one of the big
biggest budget items we're
going to see next week or in
the few days is you know,
external contracts or outside
contracts with hundreds of
millions of dollars And it's
very hard for us to dig into
it.
And now that I'm seeing so many
contracts come through that are
overdue that are past due and
we're just expected to rubber
stamp them, it has made me very
frustrated.
And so something on on
the PowerPoint slide is that
highlights of c y 2025 revenue
compliance program process
improvement in system upgrades
Can you tell me more about what
those are?
I think it's Slide seven in
the PowerPoint.
I think that relates to
the deck economic development
the leases and we can have we
could have our liaison from
economic development speak to
that.
Thank you for the question
Councilmember Belmore Pert This
is the least system upgrade
that I spoke to on the previous
four item So we're currently in
version six for upgrading now
to version 11 and the more in
the process of doing an rfp for
a future system.
Okay.
And can I ask what is the plan
going forward to upgrade city
software?
I know that is a budget issue
but when I was first elected
the water department wasn't
billing residents for water and
I went over to Pudi and was
given a presentation of
the system.
They had to go through
the software system and it
honestly looked similar to what
I used the Oregon Trail as a
video game in middle school and
finally it has been upgraded
and they hired new staff who
understand how to do billing
and it's working and we're
getting more revenue into
the city.
But why is it that our economic
development department is still
using software from its 11 that
was six It could be you know,
ten, 15 years ago.
You know what is our internal
processes to make sure we're
updating software.
I know it comes at a cost but
do we have any kind of
management plan for this for
software for our city?
We we do.
Councilmember And there is a
strategic plan especially when
you have legacy systems like
the one that we're referring to
and where you can actually
cause vulnerabilities in terms
of cyber security and things
like that.
But absolutely this scenario
that I know the Christina
Biller had flagged for us a few
years back and we're moving
forward with the rfp for this
particular software in MAY Just
to redirect a little bit
the discussion here with this
particular report is the scope
is very narrow.
It's is about any time that we
are producing financial
information for external use
for example financial
statements, official statements
when we issue bonds.
So this is really something
that was added to the municipal
code after all the issues that
we saw in the early 2000 to
make sure that if there was an
issue in internal internal
controls for financial
reporting that we would be
presenting that to the city
council.
So we recognize that there are
issues operational issues in
other financial problems
throughout the city.
But the scope at least for this
particular report is is very
narrow.
It's that we are actually
reporting the fiscal condition
of the city to the investors.
But I understand that that's
why this is accurate this
statement.
But it is a sad state of
affairs that we do have to
report So things to the city
that they're not running so
well.
So but I do understand
the difference and thank you
for your work.
You guys are always keeping us
early.
I appreciate you know, Rolando,
since you've taken over you've
been completely accessible and
transparent.
I know the employee groups are
enjoying working with with you
as well.
So I know that you know
the Department of Finance is
not responsible for all
the operational needs of
the city and often you have to
and try and answer questions
about them when your job is
just to properly make sure
they're funded.
So I just I appreciate what you
do and thank you for continuing
to work with us.
Okay.
Thank you.
Seeing no other speakers that
will conclude this item.
Thank you for the presentation.
Once again as a reminder that
was an informational item only
so no motion was required.
We will now take up non agenda
public comment.
The council members respect and
appreciate the public's input
and are fully committed to
protecting every participant's
free speech rights at council
and committee meetings quickly
please proceed with public
comment.
>> Thank you.
Council PRESIDENT Pro Tem We do
have a couple of speakers here
in council chambers Pearl 2.7
and Agenda Public comment is an
opportunity for members of
the public to comment on items
that are not on the agenda but
within the subject matter
jurisdiction of the city
Council.
Each speaker will have two
minutes.
Please note there are eight or
more speakers on a single topic
.
The maximum time for the topic
will be 16 minutes.
If you're in chambers please be
sure to submit your speaker
slip now or if you are joining
us virtually press the raise
your hand icon or star nine if
I can have Jabali Gutierrez
please come up to
the microphone after that out
Del Mastro and Alan Benson
Please come up to the first
row.
If I've already called your
name you should come up to
the first row Now.
>> Good afternoon.
My name is Julie Gutierrez.
Thank you.
Council PRESIDENT Council
members I am a resident of this
community.
I'm here today since we're
seeing in our downtown area
it's not just a policy issue.
It's a human one.
Every day more individuals are
living without stable shelter.
We see people sleeping on
sidewalks and doorways and in
places never meant for rest or
safety.
This is not because they chose
to live this way or it's just a
factor that's pushed them.
Many factors have pushed them
to live this way but also
there's not enough accessible
and adequate shelter options
available to them Long waitlist
and long waitlist and denied
requests remain common leaving
many individuals without
immediate help Despite a
population of about 1.4 million
residents, the 2025 point in
time count report in 9905
people experiencing
homelessness county wide
including 5714 unsheltered 4191
in shelters, according to
the University of San Diego,
which conducted a research as
of MAY of 2025 nearly 994% of
unhoused individuals seeking
shelter were denied primarily
due to lack of space.
This crisis also reaches
diverse groups such as seniors
families struggling to make
ends meet and students who
cannot find housing they can
afford the people we see
experiencing homelessness are
not statistics.
They are individuals with
families hard emotions and
human needs which is why I am
speaking about their dignity as
well.
The contrast is especially
striking in downtown San Diego
yet alongside this prosperity
is visible human suffering When
homelessness becomes just
another part of the scenery,
indifference takes root Which
is why I am asking and I'm also
bringing awareness to this
issue demands both urgent
action and long term solutions
grounded in empathy.
I urge the Council to expand
shelter capacity in
the downtown area, invest in
transitional housing and
partner with local
organizations.
>> Thank you Domestic Mastro
Hi, my name is Aldo Mastro and
ex blue collar worker.
I'm a disabled veteran.
I'm a senior and yes, I'm a
small mom and pop landlord.
I've been a landlord for over
20 years.
I've destroyed my body through
my hard work and my service to
this country and the community.
I live in a five plex in
Claremont.
I never bought a house because
I wanted to be a responsible
senior.
This new law that the city
council is putting on
the ballot in JUNE is extremely
misleading.
I guess even a judge has made
them reworded it from a
vacation home to an empty home
law because how misleading that
was The true ugliness for me is
this law would pardon me if it
takes me longer to renovate an
apartment than six months or
183 days I'm going to be fined
$8000 to $10,000.
The deal is 90% of all mom and
pop landlords are over the age
of 55 to 80.
So if one of us gets cancer or
wife dies or anything like that
happens, we're going to get a
fine on top of it.
This is about as ugly a law
that you guys are.
I know you guys aren't that bad
of people that would anybody
would put forth I think since
the judge even changed about it
the first time when I saw this
being presented was it was for
millionaires who own houses and
mansions and a lawyer But it
affect anybody that has an open
property no matter unless I go
into a nursing home.
If you read the details, if I
don't go into an immersion home
and I have a heart attack or my
spouse dies, I'm getting an 8
or $10,000 fine on top of it
and margins are real slim with
us Now we still I my wife and I
both still have parents who are
alive and we still take care of
them.
And so this is this is a little
cruel.
>> I don't know if I should be
doing this to handicapped
people disabled.
That concludes your Thank you.
Thank you.
Dylan Benson Hello.
>> You can excuse the customs
and courtesies just talking
about some things today
Councilmember Ella Rivera your
super quick to talk about how
investors view us I think now
is the wrong time to like look
at those kind of things
especially when our huge
margins are just missing money
And then when we're looking at
like you guys are already
getting paid more than
congressman Congresswoman all
of you Todd Gloria is getting
you are actually And MISS
Campbell, when the people were
having the comments on agendas,
you got up and started clipping
your toenails behind You
haven't cared about what anyone
has said today.
I've watched you We're talking
about Councilmember Campbell.
You also said sometimes we need
to give things up to get other
things done.
Is that including your personal
salary which once again is more
than the congressmen and women
?
Probably not.
So you guys will be hearing
from me.
We're talking about these money
problems.
It's long standing You guys
have been this money problem
for what, two decades now?
I'm not a big money guy but
I'll be coming back with more
facts next time and they'll be
customs and courtesies next
time.
But I just want to I appreciate
the time for letting me speak
today.
So thank you.
Thank you.
I started the five minute timer
going to those participating
remotely.
We currently have nine people
in the queue with their hands
raised starting with
the original.
If you can please unmute I love
when people come in and you
know really hold you guys
accountable because there's
more accolades a lot of times
and people are misled thinking
that what you guys are doing is
actually beneficial to their
lives.
But you know what Dylan was
saying It's like you guys get
paid exorbitant amounts of
money and you're never willing
to cut back on that but you're
willing to make cuts to
the people And it's sad because
there's so much fraud waste and
abuse.
And Shawn, as you guys are
sitting here trying to explain
away those last two items, I
don't think it's really fair
because it's like if you're in
terminal controls were working
then they would be working in
this kind of stuff wouldn't be
taking place.
But it's like I mean people
will come in as has been stated
before about you know from
the Glide report and talking
about that lease for 20 years.
>> So imagine how much money is
actually being lost due to
the you know, quid pro quo
that's going on here And these
people are, you know,
benefiting from making, you
know, millions of dollars off
of that site while the city
isn't.
So who's getting the kickbacks
for that Because it makes you
wonder like when things aren't
being addressed when it's
decades long issues and you
guys have this all the time
where it's like people will
come in and tell you they're
really egregious things that
are taking place that you guys
should be mitigating.
I mean it's even like Tent City
and we know that you know, if
Stephen Whitburn is friends
with Theresa Smith then
obviously you guys aren't going
to do anything about making
sure that the people in Tent
City are actually, you know, be
being provided the services
that they're supposed to that
they're getting into housing.
So it's like you guys sit here
and you virtue signal and you
gaslight the people as if we
can't see through what you're
doing And it's like and you
literally sit up there and act
like everything is fine when
time and time again it does all
you have to do is come to a
meeting and you can see that
things are and that you're
mismanaging money and that
there's missing money or that
money's going from here to
there and this project can't be
completed because of this or
we're not going to shut this
down because I'm getting
kickbacks from it.
It's very transparent what
you're going do you're doing
and that's the only thing
you're transparent about
everything else you're not Your
time has concluded Khaya if you
can please unmute.
Hello?
>> Yes we can hear me okay.
Hi.
Actually my name is Sue Taylor.
This is my daughter's computer.
i just wanted to talk about
some general information about
leases.
I did listen to the item on
the performance audit and I
wanted to know that as of
today.
Background I worked in the real
estate department for 41 years
and retired a couple of years
ago.
As of today there's 825 total
leases.
Of those 164 are at
the airports.
And of those a good portion of
those like over 100 are
probably airport Titan
agreements, airplane tie down
agreements which don't require
a whole lot of work.
And that leaves there's about
60 that are where the city is a
lessee.
So that would be like your
office space buildings or it
could even be the bridge kiosks
And on and over the 15 things
like that.
So that leaves about 600
agreements that would have to
be handled by those 13 people.
Then also regarding holdovers
in general, there's 180
holdovers.
Probably the most egregious are
the samba school where there's
22 of those.
Now the reason why I say that
is because, you know, a couple
of years ago there was a
program coordinator added just
to work on those leases But
that has not been done.
But a lot of the other
holdovers like Mission Bay
Yeah, there's 11 two of those
went out to rfp.
Those are the big ones.
Six of them are storage.
So they're like canoe storage
for the different rowing clubs
which bring in 200 to 300 a
month.
So those are permits like three
year permits to get renewed,
not major leases.
Two of our telecommunication
sites which do get yearly
increases even though they're
on hold over.
And one of them is the Boy
Scouts on Fiesta Island.
So whatever you guys want to do
with that, I just wanted to say
that sometimes the holdovers
are non-revenue and there's no
value there.
But the high value ones are
the ones that should be worked
on.
Thank you.
Next is Peggy Walker if you can
please.
>> On you.
Thank you.
Good afternoon.
I'm a public health
professional and if you are
people are a priority and they
should be.
I ask you to look at
the science and data to
consider real consequences of
adding more marijuana
businesses a c program
proffering more high potency
products will only increase
adverse health and economic
outcomes.
Economic downsides include
increased need for health care
treatment and access especially
for young people.
You know there's already a
problem when 40% of San Diego
County's marijuana related er
admissions are aged 12 to 17
and those 15 to 24 have
the highest number of cannabis
related er visits of all ages.
You know there's a problem when
Rudy's Children's Hospital
reports 600 child admissions
for cannabis related treatment
last year and the county
predicts a 129% increase is in
use substance treatment needs
in the future.
Studies show teens living
within ten minutes of
dispensaries Those on Medicaid
and those from lower income
neighborhoods are more likely
to use marijuana and have
higher psychosis rates.
Ironically this worsens
existing mental health
inequities right and seats
target targeted communities.
Remember the pot industry's
business model is to keep
existing users dependent and to
hook future generations.
And no reparation or tax
revenue justifies the resulting
child poisonings Addiction
cannabis hyperemesis psychosis
drops out suicide dui injuries
or death.
Now a young person's future is
worth that tradeoff.
We don't need more marijuana
businesses.
We need drug free kids.
Thank you for listening.
Thank you.
Blair Beckman If you can please
unmute me.
>> All right.
Thank you.
Very.
Thanks for the meeting today.
It was an important meeting on
ideas of accountability.
We need it.
I like accountability ideas.
Good luck what we could be
doing.
i was councilperson LaCava was
here today.
Good luck How he can be
returning to upcoming city
council meetings.
Um I wanted to comment a thank
you from public comment today.
I'm also interested in the idea
that we continue dialog on not
just council but the mayor can
take a slight reduction in pay
and how that can be good faith
efforts and ideas to really
address the budget in
the future.
Good luck in really considering
that issue.
I think it's worth considering
.
I also wanted to comment at
this time you know I'm trying
my best to learn how to balance
that.
The fact that we're in a
current war in Iran and how
that connects to our lives here
at the local level do we have
to be in deep fear or do we
have to be in slight fear or I
mean unbelievably we don't seem
to have to be in fear.
Things seem to be in check.
I think GOD's really lucky on
our end.
>> What are we doing?
I hope we can be continuing to
address important matters from
that and that you know in
noting how things are going
around the world we we then can
balance best practices and best
ideals And when we do that
stuff here I keep saying at
the local level openly and
clearly it simply gives
everyone around the world ideas
of better reasoning and peace
And so it's working towards our
best selves that it's how to
address war and not to
continuously hide and be
secretive because of war.
It's an important lesson we're
learning and I hope we practice
it well and I hope we practice
dialog instead of harm in
the future and trust luck how
we can do that.
>> Thank you.
Thank you.
Next is Madison After that
Francine Maxwell in Madison
Please unmute.
>> Hi, good afternoon.
I'm a mother of young children
and I'm here today to speak
about the public safety risks
associated with high thc
cannabis and what that means
for our roads.
A recent federally funded study
highlighted something important
We still do not have a reliable
practical way to measure
marijuana impairment at
the roadside like we do with
alcohol.
Researchers are now working on
a new thc breathalyzer using 3d
printed technology.
But they do acknowledge it's
only a proof of concept and
requires significant further
validation while marijuana use
becomes more normalized and
accessible.
Our ability to keep impaired
drivers off the road has not
kept pace.
The study makes clear that
there is a growing need for
fast reliable roadside tools
due to the increase in cannabis
use and that the current lack
of such tools raises the risk
of accidents and fatalities
caused by intoxicated drivers.
Even more concerning, federal
researchers and agencies have
acknowledged that thc levels in
the body do not reliably
correlate with impairment
the way alcohol does.
That means law enforcement is
left without clear objective
standards making it much harder
to identify and prevent
impaired driving in real time.
At the same time we know thc
affects reaction time, motor
coordination and judgment all
of which are critical for safe
driving.
When you combine increased
access to high potency products
with limited enforcement tools
you create a real and growing
public safety gap.
>> This is especially relevant
as the city considers expanding
marijuana storefronts more
retail access means more use
and more inevitably increases
the risk of impaired driving on
our roads.
We should not be expanding
access to an intoxicating
substance faster than we can
responsibly manage its
consequences.
I urge you to take a cautious
approach and prioritize road
safety for this issue.
Thank you.
>> Francine Maxwell If you can
please unmute.
>> Good afternoon Francine
Maxwell.
Thank you for allowing me to
speak.
I'm asking for the City Council
to reimagine the cpp, reimagine
you engaging in getting more
involved especially since for
the last five years so many
things have been classified as
miscellaneous.
You should have the police
department give you an
explanation in of why they're
labeling so much miscellaneous
and not telling the cpp.
When we used to get a
spreadsheet of all complaints
made to the San Diego Police
Department that's what
the measure be calls for.
I would also like the City
Council to have some bold
leadership and demand that Joan
Dawson be interviewed with you
guys in closed session and ask
why a city attorney is
rewriting the policies and
procedures for an independent
commission.
The cpp is independent.
The city attorney's office is
the sdp.
These attorneys we're supposed
to have our own attorney an
independent attorney.
Can you guys ask your colleague
Marni when she takes a break
from running for Congress, when
she's going to get us our
independent attorney?
We have a new executive
director that absolutely needs
help.
We need a legal voice on our
independent commission.
Where's the Help City Council?
You are in charge of c p for
those of you that are running
for reelection.
>> Those of you that are
looking for your next office
out of city council think about
how we're going to attach this
to your leg that you did not do
what Measure b has called for
you to do.
We respect, meet and confer.
They can take as long as they
want to but to have the city
attorney butting in to the cpp
to have a city council person
chair of public safety not
secure as our own attorney you
should be ashamed of
yourselves.
>> Our next speaker is Kathleen
Lippert.
If you can please unmute
Kathleen Lippert.
>> I can't I mean for you I
will need to move on to
the next speaker.
>> I know.
There you are.
Sorry.
I'm trying.
Okay.
Thank you.
Good afternoon.
The earlier comment on
the glide report that is making
millions while it enjoys
the benefit of profiting by a
sweetheart lease is really
troubling.
There are a number of similar
issues where either on going
support the city's ongoing
support of a failed policy or
the absence of a policy that
really should be in place.
Both are critical to look at
city policy should be evaluated
for their costs versus benefits
and the city policies that have
led to higher city costs in
terms of low law enforcement
diverted limited resources,
emergency etc..
Those are where your policies
are either absent or they're
not working.
The failure to regulate and
audit city smoke shops is a
good example.
They continue to sell products
that have been banned by
the state.
These products harm.
Are youth and their futures as
well as undermine the profits
of permitted shops that are
operating according to city
regulations.
The city has allowed alcohol
retailers that unfairly draw
limited long foresman resources
resources over serve customers
that lead to customers leaving
and getting into crashes.
Do you or are hitting
pedestrian injuries or death or
getting into fights or
committing rapes?
The city needs an on sale
conditional use permit to hold
them accountable.
And last please stop with all
the euphemisms.
The public is tired of ballot
measures, initiatives etc. That
say one thing but when you read
the fine print means something
totally different.
The Inflation Reduction Act
Perfect example.
Drug dealers became caregivers
Federal schedule one being
called medicine Marijuana.
Sorry your time is patient Your
time is concluded Catherine
wrote If you can please on meal
.
Hello Catherine wrote You know
the 1998 Torrey Pines glider
Port sweetheart lease was given
to retired city of San Diego
employee who's making so much
private money for themselves
and paying the city very little
in lease revenue.
Why don't you have it be a
percentage of the lease
instead?
Right now it's a gift to public
funds.
In fact there was a 2022 San
Diego County Grand jury report
on the Torrey Pines quite
important lease.
So far nothing has happened.
You know that It's pathetic.
So anyway, your new budget
comes out next Wednesday.
Why is everybody going to get
10% at least in the nba going
to get 10% raises.
And the management analysts are
going to get like 18.8% raises.
How could they possibly get
raises when we have a
structural budget deficit?
Plus since 2023 they already
got a 23% rate.
So they've gotten 23% in
the last three years.
Now they're going to get
another 10% more.
And remember in 2013 is when
I'm mayor or inner mayor todd
Gloria started using the league
legal loophole in the city
charter to violate the five
year pitch double pay freeze by
creating the middle managers at
that point there were 70
million middle managers.
Now the another u-t report came
out and the San Diego County
Taxpayers Association came out
that the middle managers that
are nonunion workers have
exploded by 461% over 15 years.
And then also during closed
session last week you guys
didn't report.
You didn't report out that you
had all these tentative
agreements with all the unions
.
In fact, you didn't say you you
you didn't say anything about
any tentative agreement.
So I don't know why I think
that the city attorney should
talk about that.
And so I don't see how you
could possibly be giving
anybody any raise More time has
concluded if you're raising
your hand after the five minute
timer has concluded already.
So you MAY take any additional
comments.
The city clerk at San diego.Gov
and those will be distributed.
Becky up.
Please proceed.
>> Good afternoon.
My name is Anne Burghoff and I
come here to ask you to please
prioritize public health in
relation to marijuana
consumption.
It's more important than ever
before that accurate science
speak for me is presented to
this Council and to the public
serves.
A recent report from
the National Academies of
Sciences Our nation's leading
scientific advisory board is
recommending federal action to
address the serious health
risks associated with marijuana
consumption.
This is a clear warning from
the science community that it
is not aligned with serious
public health risks.
The report highlights some
critical turns dramatically.
It is apparently in doubt and
the abundance of toxic sulfate
phc being sold at our local
tobacco and smoke shops These
pot.
Hello.
We lost you.
Barbara Gordon your final
speaker.
Thank you.
Good afternoon.
I am concerned as a public
health advocate that nearly
every week a new intoxicating
mind altering product emerges
often unnoticed and until
reports surfaced as people
being harmed and the physical
and mental health of our youth
is in jeopardy.
Products like intoxicating thc
hemp and create them are
dangerous and addictive
Intoxicating compounds like
Delta eight, Delta ten and many
others.
The products are available in
convenience stores, vape shops
online without any oversight
and in many places without any
age restriction.
Potent kratom compounds become
especially dangerous when it is
concentrated in products like
dummies, drinks, powders,
Capsules are also sold in smoke
shops, gas stations,
convenience stores and online
marketed as natural.
These products can be just as
harmful as synthetic opiates
posing serious danger.
The fda warns that kratom
products like 708 is not
approved.
It's not lawful and unsafe with
risk including seizures,
depression, anxiety, addiction
withdrawals and overdose like
symptoms.
I am urging the city Council to
treat intoxicating products as
a public health issue not as a
product that is in the gray
area as it could be.
As a community we need to
insist that any mind altering
substance that are manufactured
packaging marketed should not
be allowed to be sold in in
the marketplace.
Public safety is the city's
primary responsibility.
Thank you for letting me speak.
>> Thank you.
Big wrap.
I am coming back to you.
I'm not sure if the issue was
on my end or not.
Thank you And I appreciate had
one minute left.
Great.
Thank you.
I was just reading about
the National Academies of
Sciences and their
recommendations and I just
wanted to add that here in San
Diego our emergency departments
and pediatric specialists are
seeing these real impacts youth
experiencing psychosis, severe
anxiety and cannabinoid
hyperemesis syndrome.
I urge this council to invite
physicians from Rady Children's
Hospital and doctors from our
local emergency departments to
come and speak directly to you.
Let them share what they're
seeing firsthand.
Let this Council hear directly
from the medical community
about these products and how
they're affecting our youth and
our families.
The National Academies report
is clear We need better public
education, better data and
policies grounded in public
health not just access and
revenue.
>> Thank you.
Thank you.
That does conclude the agenda
Public comment for today's
meeting.
Thank you.
And with that we will now
adjourn Council to
the regularly scheduled council
meeting on Tuesday, APRIL 14th,
2026 at 10:00 am.