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A report released by the San Diego’s Office of the City Auditor concerning the city’s Economic Development Program finds fault with actions taken by the city in several areas.

The Program, adopted in 1992 with the aim of growing the economic base of San Diego and increasing the quality of life for all residents, calls for “annual review and a biennial submission to the city council of a comprehensive economic development strategy.” A draft of the latest plan was presented in January, but has yet to be approved by the Economic Development and Strategies Committee or presented to the full council for consideration. The plan was last formally updated in 2001.

Prior to July, economic development was funded through two separate entities: the Mayor’s Office of Economic Growth Services and the Economic Development Division, combining for more than $57 million in annual funding since fiscal year 2010. Both groups now fall under the city’s Development Services Department.

According to the city audit, “The proposed strategy lacks several key elements of a general strategic plan, including clearly stated mission, goals, objectives, and actions to achieve that mission, relevant economic indicators, and robust performance measures to assess program progress.”

By contrast, nine other similar documents produced by cities such as San Francisco, San Jose, Denver, and Atlanta met the criteria the city auditor suggests for San Diego: specific measures of the current economic climate are provided, as are systems by which to measure progress on any goals set for economic expansion.

Economic development officials in other cities reported that their comprehensive plans provided them a tangible benefit. “For example, officials from Los Angeles County, Seattle, and Portland indicated that their economic development strategic plans had been an important tool for recruiting and retaining businesses in their regions,” the report states.

Economic indicators specific to the city are difficult to track, the report says, though an effort was made in this regard until a reorganization of the economic development departments in 2009, at which point such work appears to have been abandoned.

Recommendations from the audit include a review of policy to ensure the city council takes up economic development issues in a timely manner, that action immediately be taken “to develop a clear and comprehensive statement of economic development mission and associated goals, objectives, actions, and measures,” and that stronger coordination efforts among city government agencies be put into place related to economic development strategy.

A response from Kelly Broughton, the city’s development services director, takes issue with the recommendations. Broughton disagrees with “the idea that the City, acting by and through its economic development units, has (or should take on) a central coordinating role for the entire region,” a premise of the report and a point that draws skepticism from Dr. Murtaza Baxamusa, an urban planning and economic development expert.

“Having taught economic development to graduate students, I am quite surprised by the city management's clueless response to the Independent Auditor. The auditor is absolutely correct in that there needs to be a roadmap with specific, achievable goals on jobs and business within the city,” Baxamusa tells the Reader. “Millions of dollars are apparently being disbursed to industries with little accountability in terms of how many jobs are being created. It is unclear whether creating self-sufficiency wage jobs, an objective of the Economic Prosperity Element of the General Plan, is even being implemented.”

Baxamusa goes on to suggest that by continuing to focus on tourism and its attendant jobs, primarily low-wage and lacking in benefits, the city is positioning itself for an economic future in which taxpayers will have to subsidize those industries by offering their workers access to housing, health care, and other social service benefits.

A complete copy of the report and city response can be found here.

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