If you own property downtown, the city of San Diego might owe you money. But it says you’re not going to be getting it back anytime soon.
Since 2000, property owners in San Diego’s downtown have been paying extra money for services like sidewalk cleaning, tree trimming and security guards on Segways. But many have been paying more than they should.
Starting at least in 2005, some of the square footage measurements used to calculate how much each owner should pay for these special services were too big. A comparison of the city’s records shows 2,747 properties were listed as bigger in 2005 than in 2010, which is unusual since properties don’t often grow smaller.
Some of these decreasing sizes could be due to things like updates in the county’s record books, but Luis Ojeda, the program manager of San Diego’s Economic Development Division, said some shrinkages reflect mistakes where the city overcharged owners. If all 2,747 properties were mistakenly listed as too large, that would mean the city collected $340,353 more than it should.
The overages could have cost individual property owners thousands of dollars.
When a few downtown residents first realized the problem a year and a half ago, they contacted Ojeda, who assured them they would be refunded.
Eighteen months later, nothing has happened.
These residents have been passed from branch to branch in a thicket of bureaucracy and still have not been reimbursed. And because the city has not publicly acknowledged this problem, many of the property owners who have been overcharged don’t know it.
Ojeda now says the overcharges are the fault of the independent engineering firm hired by the city to calculate these fees and owners will have to wait for litigation against that firm to have a chance at getting their money back. That litigation could take years to be resolved.
When Lesslie Keller heard a homeless shelter she operates downtown might have been overcharged by $7,645 for these maintenance fees, she was not pleased.
The shelter, Safe Haven, houses people with mental illnesses while helping them get on medication, find jobs and secure permanent housing. In 2009, all 40 residents found a way to bring in some income and 33 moved into permanent housing, Keller said.
For residents like Tony Bantum, Safe Haven is life altering. Before Bantum moved in, he was living off and on in his car and couldn’t hold down a job. Eleven months later, he is on medication to treat his bipolar disorder and has successfully applied for low-income housing, found a job and plans to start his own T-shirt company.
But turnarounds like Bantum’s come at a price: It takes about $30,000 to provide housing, food, medical care and counseling to one resident for one year, Keller said.
“With the bad economy the last few years, it’s been even more difficult to raise the money we need,” she said. “We try to be so frugal, to be as efficient as possible, so to hear that we may have had extra money taken away is upsetting.”
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Downtown property owners’ hopes for reimbursement looked bright in the summer of 2009.
When Rita Collier, the head of a Cortez neighborhood association, first noticed her condo’s size was listed as too large in June 2009, she sent an email to Ojeda, who quickly responded with promising words.
“Typically under this type of circumstances [sic] we either issue a refund check to the property owners or apply a credit toward the following assessment year,” he wrote to her in an email. “I will also try to ensure that the other property owners need not file an appeal as we will work making any corrections.”
Ojeda also wrote the property size issues would be fixed in that year’s assessment and “we will also correct the previous years if they were incorrectly assessed.”
Collier told neighbors Kathy Casey and Kay DiFrancesca to check if their condo sizes were wrong.
They were.
As a board member for Episcopal Community Services, the nonprofit that runs Safe Haven, DiFrancesa checked the shelter’s square footage. It was listed at 33,324 square feet, four times its actual size. The mistake was costing an extra $1,529.14 a year.
Three months after Ojeda’s email promised the city would issue refunds, nothing had happened, so Casey checked in with him again. Ojeda wrote back and blamed the city’s new financial system for the delay in the refunds. But he also changed his tune slightly, writing he would “honor my word,” but would only refund the owners in Casey’s building, and only for the last year, not for the four years’ worth of overcharges.
Casey felt all overcharged property owners should be reimbursed for every year. But her fight to get any of the money these owners are owed — including the reimbursement Ojeda promised — led her into a bureaucratic maze from which she still has not emerged.
Since September 2009, Casey has been passed from Ojeda to the City Attorney’s Office to the Risk Management department back to the City Attorney’s Office to City Councilman Kevin Faulconer.
In January 2010 she was told to file a claim with the Risk Management department, but that claim was then rejected because it had not been filed within six months of the error. Casey said she would have happily filed the claim back in June, if only Ojeda had told her about it.
“We kept asking what to do,” she said. “Everyone told us something different.”
When the San Diego Reader wrote a story about Casey in April, her claim had been handed off once again to the insurance carrier of SCI Consulting Group, the independent investment firm hired to determine the maintenance fees. Not much has changed since then.
Ojeda now says he never should have told Collier and Casey they would be refunded, because it was not his decision to make. He said he thought they were asking only for a refund for that year, but when he realized they meant the past four years, he contacted the City Attorney’s Office. (Ojeda’s story conflicts somewhat with his email to Collier, which said his office would correct the previous years as well.)
Ojeda blames the property size calculation mistakes on SCI. He also said not every property size decrease between 2005 and 2010 means there was a mistake in 2005.
For example, he said in some condo complexes with multiple units, SCI took the entire square footage of the building and divided it equally between each condo, producing wrong numbers for individual condos from 2005 to 2009.
But some entire buildings were assessed differently. In 2005, Kathy Casey’s building was listed as 71,006 square feet, and in 2010, that number dropped to 52,902 square feet. Safe Haven’s size dropped from 33,324 square feet in 2005 to 8,325 square feet in 2010.
In the case of Safe Haven, “if this mistake was done under SCI, it’s something they would have to explain,” Ojeda said.
The square footages of many downtown properties were corrected in SCI’s 2009 report, and the city chose not to renew its contract with SCI that same year. Ojeda said the mistakes were a factor in that decision.
Beth Murray, the deputy director of the city’s Economic Development Division, said the city is considering litigation against SCI, but Carmen Brock, the deputy city attorney, said no lawsuits have yet been filed. Murray wouldn’t say if a lawsuit will definitely be filed or what exactly the city would charge. John Bliss, the SCI engineer in charge of the property assessments, didn’t return repeated calls or emails asking for comment.
If a lawsuit is filed, it will mean more waiting for property owners like Casey, Collier and Safe Haven. No one will get refunds until the SCI case is resolved, Ojeda said.
That resolution does not hold much promise for Safe Haven getting its $7,645 back any time soon.
But on a sunny morning at the shelter, the residents weren’t concerned with bureaucracy. They had more important things to worry about, like their doctor appointments, counseling sessions and finding jobs and housing.
Bantum sat with a few friends on couches outside the shelter’s sunny kitchen and talked about their plans for his company, which makes T-shirts inscribed with the logo, “Turning a Negative Into a Positive.”
He then returned to his room to finish packing. Although the room was a mess — the desk, bed, dresser and floor were blanketed with a layer of papers, half-filled boxes and wrappers from PayDay candy bars — Bantum stood like a proud bird in the middle of that nest. And with good reason: It was his moving day, and the mess around him is just part of the process of moving on.
“During my time here, I’ve learned to take all of my past and work with it,” he said. “I don’t know where I’d be without this program.”
Please contact Claire Trageser directly at claire.trageser@gmail.com or follow her on Twitter at twitter.com/clairetrageser.