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After a recent city audit concluded the city attorney’s office could have done more to help the city avoid disastrous real estate deals, City Attorney Mara Elliott had a proposal for how to avoid similar outcomes in the future: Give her office more power. Other city officials aren’t rushing to act on her idea.
The report reviewed by the city’s audit committee this week concluded that lacking internal controls and confusion over responsibilities, insufficient due diligence and misrepresentations and omissions by former city officials contributed to five city real estate debacles since 2015. It urged the city to consider bolstering city code to allow enforcement against city officials who present inaccurate information to the City Council. It also faulted city attorneys for not consistently flagging legal risks as the city pursued past real estate acquisitions, including the 101 Ash St. lease-to-own deal that lawyers for the city are now seeking to void.
Elliott pushed back on the findings. Among her arguments were that City Council members have a duty to carefully review and raise questions about proposed contracts and that city attorneys weren’t aware of alleged conflict of interests that have since led her office to try to kill the 101 Ash and Civic Center Plaza deals. Then she posited a potential solution.
Elliott noted that the city attorney’s office doesn’t have authority under the city charter to force city staff who report to the mayor to share their work, to oversee those staffers’ work, to ensure they conduct proper due diligence or that those staffers are transparent about what they find. What, she asked, if it did?
“If, as implied by the audit, the Auditor’s Office expects the City Attorney’s Office to carry out a vastly expanded role with respect to proposed city transactions, then the Auditor’s Office should amend the audit to include a new recommendation (such as a proposed charter amendment) that would equip the City Attorney’s Office with additional power needed to effectively perform that outsized role,” Elliott wrote in a formal audit response.
Elliott’s interpretation of the audit differed from that of the auditor and at least one City Council member. She wrote that doing more to help prevent future disastrous deals would require “a vastly expanded role” while others concluded that’s squarely within her office’s existing role. The city auditor’s office and audit committee members who got a presentation on the report on Wednesday didn’t recommend taking Elliott up on her proposition to expand her office’s role. Mayor Todd Gloria’s office and city Chief Operating Officer Jay Goldstone, who have committed to implement various audit recommendations, also didn’t touch Elliott’s recommendation in their public comments.
In its formal response to Elliott, the city auditor’s office – which has battled with Elliott’s office over whether it can hire its own legal counsel – did not suggest adding the charter amendment Elliott pitched. The office countered that city attorneys do have the authority to let city decision-makers know when city officials don’t provide information they request.
“If the City Attorney’s Office was denied access to information and reports used by the city administration to support their statements related to the condition of the building, the City Attorney’s Office also could have raised this issue as an item of note to City Council, as the City Attorney’s Office is responsible for providing legal counsel to City Council — a role it would be unable to adequately perform without such documentation,” City Auditor Andy Hanau’s office wrote, alluding to the city’s failures to seek independent inspections of 101 Ash.
Hanau separately told Voice of San Diego his office believes due diligence checklists it recommended the city use for future real estate transactions and the disclosure of various supporting documents will ensure all city officials involved in overseeing such deals including city attorneys “have sufficient information to evaluate the transaction and fulfill their respective responsibilities.”
City Councilwoman Vivian Moreno, who chairs the audit committee, was among the committee members who criticized Elliott’s response to the audit on Wednesday. She later told VOSD that she won’t recommend that the city attorney be granted more powers.
“Charter Section 40 states: ‘the City Attorney shall be the chief legal adviser and attorney for the City and all departments and offices thereof in matters relating to their official powers and duties … ’ This section gives the City Attorney all the authority necessary to alert the Council of legal risks,” Moreno wrote in a statement. “Therefore, the suggestion that the city auditor should include a new recommendation to amend the charter is simply unnecessary.”
In response to questions from VOSD, Elliott spokeswoman Hilary Nemchik wrote that the city attorney’s proposal was an earnest response to address the fact that the city charter doesn’t make Elliott “with respect to City transactions, the mayor, City Council, and city attorney rolled into one, which is not what voters intended.”
“The logical implication of the auditor’s recommendation is that our office should assess the condition and lifespan of a building’s air conditioning, plumbing, and elevator systems (to use just three examples among dozens) and translate those physical risks into the language of legal risks,” Nemchik wrote. “We noted that our attorneys are not engineers, appraisers, or building inspectors and do not have their expertise. Our response to the auditor was simple: If you want us to do a deep dive into the risks inherent in the physical condition of a building, we need expanded charter authority over the mayoral employees who do that work. Otherwise, our analysis is only as good as the information we are provided.”
City officials are set to return to the audit committee in September to discuss next steps in implementing its recommendations.