The Morning Report
San Diego news and info
you need to take on the day.

Wednesday, July 16, 2008|I want to commend the few members (though sadly not yet the majority) on the current Southeastern Economic Development board who take their fiduciary duty seriously by asking questions to make informed and responsible decisions. I experienced the same non-response to legitimate budget questions when I addressed the SEDC Board two years ago.

Here is a condensed version of a few highlights of my written statement on April 26, 2006:

The first obstacle was getting a copy of the budget. SEDC’s apparent policy is to release nothing until information is made public at the Board meeting. I protested, got it two days before the meeting and reminded the Board of its fiduciary duty to assure staff doesn’t unintentionally violate the public’s rights to open government.

SEDC’s 2006-07 budget isn’t transparent or explanatory. It’s woefully inadequate, thereby inviting suspicion and inquiry. Important back-up schedules are omitted altogether and accountability is not apparent with respect to loans, re-loans, transfers among funds, tax allocation bonds and other schemes to pay off debt. Staff insisted that the culprit for this obfuscation is the Redevelopment Agency, which mandates the format.

Each real estate project should stand alone (full disclosure of expenses, revenues, debt, staff-years, etc.) so taxpayers can weigh in on their Tax Increment Fund (TIF) investments like private investors in real estate investment products can.

SEDC leases space from Pacific Development Partners LLC at its Imperial Marketplace project site, which removes office space from the tax rolls that a for-profit business would otherwise pay. The proposed office space line item of $196,000 was not justified in terms of area and rate per square foot so who knows whether the developer charges the Redevelopment Agency more than market rate (to reap yet another subsidy). I wondered how its $15,000 cost per budgeted position compared with the City’s and Centre City Development Corp.’s office space costs that year.

The City’s expenses on behalf of the Redevelopment Agency are not identified, totaled or itemized by project. For example, PDP sued the Redevelopment Agency but the City Attorney’s litigation costs were not charged to the Imperial Marketplace budget.

The budget narrative claimed, “all of the housing proposed or under construction in SEDC’s area of influence has provided its affordable housing on-site”. This is not consistent with developer response to the community planning group or feedback from professionals who collect in-lieu fees.

There are no deliverables for the economic development component of Redevelopment. The quarterly jobs report lacks criteria to measure the extent to which Redevelopment is moving folks into a sustainable or living wage.

The public’s return on investment (TIF) is not reported by project. For instance, County tax collector records show that about $342,000 was spent by PDP/Home Depot in property taxes, while the TIF budget at Imperial Marketplace shows a mere $52,000 for the 2007 fiscal year. A prudent citizen is likely to question why its $10 million in public investment is generating only $52,000 per year! Instead of budgeting the amount reported by the County Treasurer/Tax Collector, TIF is allocated based on an undefined formula.

There is no Schedule of Disposition and Development Agreements (DDAs) that discloses the costs and benefits of Redevelopment projects over time. For example, PDP negotiated for the City to lease a City sales-tax funded Park and Ride lot at Imperial Marketplace. This additional subsidy is not reported as a cost on the Imperial Marketplace project budget.

Since I never received a reply to my statement, I wonder if the reason the current SEDC Board members haven’t gotten responses to their requests for information is because Artie Owen chairs the SEDC Budget subcommittee?

Leave a comment

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.