Where the City’s Extra $43 Million Came From

Where the City’s Extra $43 Million Came From

Photo by Jamie Scott Lytle

This spring, city leaders were dealt a budget deficit, or so they thought.

Former Mayor Bob Filner and his staff worked through May to close a $38.4 million gap in the city’s day-to-day budget.

Fast-forward about six months and the city has come across about $43 million in cash it hadn’t factored into its budget for this fiscal year. Now it’s projecting a similarly sized surplus for the year – at least for now.

A first-quarter budget-monitoring report the City Council is set to review next week includes an extra $35 million in property taxes and another $8 million from the disintegration of the city’s former information technology provider.

These aren’t cash cows the city will ever access again. Both are actually the byproducts of city entities that are now defunct.

The extra influx in property taxes comes as a result of the end of the city’s redevelopment agency. State legislation ended the program that once funded urban renewal projects in the city.

The state collected nearly $170 million from the city’s former redevelopment agency and then doled it to the county, which then gave roughly $35 million back to the city.

But the state quickly swept away some of that extra cash, meaning the city will only see about $14 million of the money from the county. The city previously relied on redevelopment funds to cover annual debt payments on Petco Park upgrades, the second Convention Center expansion and more. State officials recently sought about $21 million from the city to cover past debt payments covered by redevelopment money and it’s expected to do so again within the next couple years.

The extra $8 million comes from the end of another program.

For years, the city relied on the San Diego Data Processing Corp. for its IT services. In May, the City Council opted to do away with the arrangement and thus, the pseudo city-nonprofit agency dissolved.

As part of the arrangement, all the cash the corporation had on hand flowed to the city.

City budget wonks take a cautious tone in explaining the influx.

“The positive year-end projection is based on three months of activity and unforeseen events may impact expenditure and revenue projections,” the city’s financial management department wrote in the report.

The city’s longer-term financial outlook looks less rosy.

Last month, interim mayor Todd Gloria released five-year budget projections that show as much as a $78 million deficit for next year if the City Council commits to new programs it’s approved in the past couple years.

The City Council is also set to review those numbers next Monday.

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Lisa Halverstadt

Lisa Halverstadt

Lisa Halverstadt is a reporter at Voice of San Diego. Know of something she should check out? You can contact her directly at lisa@vosd.org or 619.325.0528.

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La Playa Heritage
La Playa Heritage

http://tinyurl.com/20131121c

As part of the $616 Million Non-Housing Due Diligence Review (DDR) they Successor Agency had to remit $167 Million, to get back 21% or $34.9 Million of the $43 Million windfall. The General Fund is receiving 21 cents on the dollar.

The City Council has already Gifted up to $14.9 million of the $34.9 million RDA Distribution for extra Civic San Diego Administrative costs over the 3% Allowance. Resulting in $20 million for the City of San Diego’s General Fund. After the $21.1 Million General Fund Reserve Loan created on November 21, 2013, the City of San Diego would be left with negative $1 Million due to incompetence and secrecy. For the ROPS-1 Time Period (January 1, 2012 through June 30, 2012).
$21,012,466 Was not used and has to be returned for Distribution to the Taxing Entity.

For the ROPS-2 Time Period (July 1, 2012 through December 31, 2012).
$54,376,861 Was not used and has to be returned for Distribution to the Taxing Entity.

Instead of payment to payees, due to irresponsible management practices the City of San Diego's Successor Agency will give the County-Auditor-Controller (CAC) $167 million in hoarded and rehearsed Cash and Loans, instead of the goal of Zero dollars. The windfall in the City and County of San Diego’s General Funds is at the direct expense of social and economic justice to negate the ongoing discrimination and violations of the Fair Housing Act and HEARTH Act.

For example Civic San Diego, the former CCDC hid $1.88 million in their Reserves by hoarding undistributed assets from the poor, as documented in the July 31, 1999 NTC Homeless Agreement for Liberty Station Naval Training Center (NTC) redevelopment. Including 14 year-old outstanding balances of $350,000 for Catholic Charities, $380,000 to St. Vincent de Paul, and $1,150,000 to
Volunteers of America. The City Council as the Successor Agency to the former Redevelopment Agency (RDA) approved the release of these funds on the approved ROPS-1 and 2 hearings.

Instead of distributing payments, Civic San Diego staff tried to hoard the cash assets belonging to the poor. Civic San Diego did not release the funds as required by law and instead tried to keep the approved funds into new Reserve accounts. This lack of financial judgment and good faith by Civic San Diego staff is resulting in the $1.88 million not being distributed to the poor to finalize the 1999 NTC Homeless Agreement, but instead is divided between the City of San Diego’s and County of San Diego’s and General Funds.

The poor and homeless are out $1.88 Million due to failure by Civic San Diego staff to analyze solutions from former Mayor Filner to add to the ROPS spreadsheets to keep all $166 million in the hands of our City Council. By law, the DOF will not discuss solutions during Meet and Confer negotiation unless line items are added to the ROPS.

http://tinyurl.com/20131121b

La Playa Heritage
La Playa Heritage subscribermember

http://tinyurl.com/20131121c

As part of the $616 Million Non-Housing Due Diligence Review (DDR) they Successor Agency had to remit $167 Million, to get back 21% or $34.9 Million of the $43 Million windfall. The General Fund is receiving 21 cents on the dollar.

The City Council has already Gifted up to $14.9 million of the $34.9 million RDA Distribution for extra Civic San Diego Administrative costs over the 3% Allowance. Resulting in $20 million for the City of San Diego’s General Fund. After the $21.1 Million General Fund Reserve Loan created on November 21, 2013, the City of San Diego would be left with negative $1 Million due to incompetence and secrecy. For the ROPS-1 Time Period (January 1, 2012 through June 30, 2012).
$21,012,466 Was not used and has to be returned for Distribution to the Taxing Entity.

For the ROPS-2 Time Period (July 1, 2012 through December 31, 2012).
$54,376,861 Was not used and has to be returned for Distribution to the Taxing Entity.

Instead of payment to payees, due to irresponsible management practices the City of San Diego's Successor Agency will give the County-Auditor-Controller (CAC) $167 million in hoarded and rehearsed Cash and Loans, instead of the goal of Zero dollars. The windfall in the City and County of San Diego’s General Funds is at the direct expense of social and economic justice to negate the ongoing discrimination and violations of the Fair Housing Act and HEARTH Act.

For example Civic San Diego, the former CCDC hid $1.88 million in their Reserves by hoarding undistributed assets from the poor, as documented in the July 31, 1999 NTC Homeless Agreement for Liberty Station Naval Training Center (NTC) redevelopment. Including 14 year-old outstanding balances of $350,000 for Catholic Charities, $380,000 to St. Vincent de Paul, and $1,150,000 to
Volunteers of America. The City Council as the Successor Agency to the former Redevelopment Agency (RDA) approved the release of these funds on the approved ROPS-1 and 2 hearings.

Instead of distributing payments, Civic San Diego staff tried to hoard the cash assets belonging to the poor. Civic San Diego did not release the funds as required by law and instead tried to keep the approved funds into new Reserve accounts. This lack of financial judgment and good faith by Civic San Diego staff is resulting in the $1.88 million not being distributed to the poor to finalize the 1999 NTC Homeless Agreement, but instead is divided between the City of San Diego’s and County of San Diego’s and General Funds.

The poor and homeless are out $1.88 Million due to failure by Civic San Diego staff to analyze solutions from former Mayor Filner to add to the ROPS spreadsheets to keep all $166 million in the hands of our City Council. By law, the DOF will not discuss solutions during Meet and Confer negotiation unless line items are added to the ROPS.

http://tinyurl.com/20131121b

La Playa Heritage
La Playa Heritage

http://tinyurl.com/20131209

According to the IBA, the City Comptroller, without the approval of the City Council has already written off $232.1 Million in Assets/Accounts Receivable.

The $232 Million includes the $21.1 Million Successor Agency Loan just created on November 21, 2013, and another unknown $20.4 Successor Agency Loan, Plus another $190.6 Million in the First Quarter of Fiscal Year 2014. Please investigate.

Page 11 IBA Report_13-095 states:
"$21.1 million of the total reserve was approved by City Council on November 21, 2013 for a loan to the City’s Successor Agency for the Non-Housing DDR “Clawback.”.
.. "The First Quarter Report General Fund reserve estimate also details $20.4 million in Successor Agency loans that do not impact total reserve levels. This represents miscellaneous loans from the City to the former Redevelopment Agency (RDA) for funding various projects from other City sources over several years prior to dissolution. We would note that these loans to the former RDA, along with an additional $190.6 million outside of the General Fund, were written off by the Office of the City Comptroller."



La Playa Heritage
La Playa Heritage subscribermember

http://tinyurl.com/20131209

According to the IBA, the City Comptroller, without the approval of the City Council has already written off $232.1 Million in Assets/Accounts Receivable.

The $232 Million includes the $21.1 Million Successor Agency Loan just created on November 21, 2013, and another unknown $20.4 Successor Agency Loan, Plus another $190.6 Million in the First Quarter of Fiscal Year 2014. Please investigate.

Page 11 IBA Report_13-095 states:
"$21.1 million of the total reserve was approved by City Council on November 21, 2013 for a loan to the City’s Successor Agency for the Non-Housing DDR “Clawback.”.
.. "The First Quarter Report General Fund reserve estimate also details $20.4 million in Successor Agency loans that do not impact total reserve levels. This represents miscellaneous loans from the City to the former Redevelopment Agency (RDA) for funding various projects from other City sources over several years prior to dissolution. We would note that these loans to the former RDA, along with an additional $190.6 million outside of the General Fund, were written off by the Office of the City Comptroller."



Jim Jones
Jim Jones subscriber

Burn a surplus, bond a shortfall, make sure it doesn't crash while you're in office and who cares what the next guy inherits.

It works until it doesn't.

Lee Datina
Lee Datina

it does not matter if they have a surplus, sooner or later a elected official will screw up and wind up costing the city again. kind of like they never learn from earlier mistakes , and seem to follow the same path time after time.

Jim Jones
Jim Jones

Burn a surplus, bond a shortfall, make sure it doesn't crash while you're in office and who cares what the next guy inherits.

It works until it doesn't.