3 Big Questions That Need Answering Before We Pass the CivicSD Torch

Many of our city’s neighborhoods need investment.

They need infrastructure, development and projects that respect their communities and reverse decades of neglect. They need community benefits like good jobs, affordable housing and neighborhood amenities. One organization touted to fill this role is Civic San Diego, a nonprofit that was previously known in its downtown-centric role, as Centre City Development Corporation.

This corporation, whose president just resigned, is in the midst of transition. It has coincided with the election of a new mayor. The selection of the next president, however, is not just an internal matter for the organization. It’s a public one that will shape major projects and have a defining role in the future redevelopment in this city. And the first and foundational step must be transparency and accountability.

I have three simple questions, which should be an easy ask for any job.

Who appoints the president?

The answer depends on what document you look at. In my own review of the bylaws, I have noticed a significant discrepancy.

First, there’s the version of the CivicSD bylaws posted on its own website. The city attorney backs this version, based on then-Mayor Jerry Sanders’ staff recommendation at the City Council hearing on June 25, 2012. It reads (emphasis mine):

8.3.1 (b) Selection.

Subject to confirmation by the Mayor and Council with a two-thirds (2/3) vote in favor thereof, the Mayor shall appoint a qualified candidate to the position of President.

Then there’s the version of the bylaws that was actually approved by the City Council on July 31, 2012, and signed by Sanders. That one reads (emphasis mine):

8.3.1 (b) Selection.
Subject to confirmation by the Mayor and Council with a two-thirds (2/3) vote in favor thereof, the Board shall appoint a qualified candidate to the position of President.

This was also the version of the bylaws that was posted publicly prior to the public hearings in June 2012 at both CivicSD and City Council. From the public record, it appears that the board wanted greater autonomy from the city, after being subject to an onerous selection process that did not work for several years.

If either of these versions of the bylaws is correct, the certification that the posted version represents the action of the City Council on July 31, 2012, is incorrect. This may be a simple clerical error resulting from a quickly changing document that was difficult to keep track of.

Since there are two competing versions, the City Council should weigh in on its intent – and it should do so before the selection process for a new president gets under way. The process for selecting the president should be open and transparent and involve the communities affected.

What is the authority of the president?

With the demise of redevelopment, the role of the president, and of CivicSD itself, is in flux. There have been talks of the organization steering specific plans in certain neighborhoods. But there are two clear lines of authority that need to be defined: financial and land-use permitting.

On the financial front, the mayor used to serve as the executive director of the redevelopment agency, and was responsible for executing financial deals. The city’s nonprofit entities were thus advisory to the redevelopment agency, which made final decisions about appropriating taxpayer dollars.

Now we have consulting agreements that give the corporation far more autonomy. The corporation can execute land purchases, subsidies and sales using tax credits without city approval on specific projects. With tax credits, the corporation acts as a sole-sourced nonprofit developer-consultant that expends taxpayer subsidies under federal guidelines. This process is quite different from redevelopment agreements, which had to be approved by the mayor and City Council on a project-by-project basis, and were governed by the state’s redevelopment law.

There is no formal mechanism currently in place for the city to direct the president on these very complex tax credit transactions. Authority is indirectly exercised by the city, by virtue of approving the administrative budget and appointing board members.

The land-use permitting authority delegated to CivicSD over downtown may be extended over future areas. There are two issues that arise there. First, whether there is a conflict in the approval of a development permit for a project that the corporation is financially interested in. This is a real issue, because the president can hypothetically be permitting projects from which the corporation derives income. Erstwhile there is no firewall between the regulatory and investment arms of the corporation.

Second, whether the corporation is responsive to community needs , and offers benefits the regular planning process can’t. The corporation has not held any board hearings in the neighborhoods outside downtown where it wants to expand.

Who oversees the president?

One of the glaring omissions of the online job posting for the president is that it is unclear who the boss is: the board, chair, council or mayor? Since the president is not elected by the people, there is no direct accountability to voters. Since there are no shareholders, and the sole member of the corporation is the city of San Diego, no other person has supervisory authority over the President. After the Nancy Graham controversy, in 2009, an independent audit criticized CivicSD for lack of clear lines of authority and over-reliance on a volunteer board chair.

In response, the City Council adopted a new set of bylaws in 2010, which authorized the mayor to evaluate the president’s performance, and to suspend or terminate the president. The mayor also sets the president’s pay. The redevelopment operating agreement required the president to report directly to the mayor on all redevelopment projects. The buck stopped with the mayor.

The only problem: The new bylaws violated a state nonprofit law. The responsibility for the president’s performance review and compensation lies with the board of directors. So, the bylaws were changed again in June 2012, and the president’s review and compensation went back under the board’s control.

A new consulting agreement relegated the mayor’s role in land use and economic development to being a contract administrator for the city. In two years, the oversight measures spurred by the scandal came unwound.

So the buck has been passed back to the board. But in my short tenure there, we have yet to review the president or other top executives, nor have we made any decisions on presidential pay. The annual budget includes organization-wide performance and broad salary ranges.

I can only speak for myself and not on behalf of the board, but this is not adequate board oversight of the president.

As a board member of CivicSD, it is my obligation to raise these questions. The public has a right to a transparent and accountable process. It is reasonable to expect that these three simple, important questions be discussed openly and in public, so that we all know what the answers are.

Murtaza Baxamusa is an adjunct lecturer at the University of Southern California’s Sol Price School of Public Policy, and a Civic San Diego board member. Baxamusa’s commentary has been edited for style and clarity. See anything in there we should fact check? Tell us what to check out here.