Quantcast
4S Ranch Allied Gardens Alpine Baja Balboa Park Bankers Hill Barrio Logan Bay Ho Bay Park Black Mountain Ranch Blossom Valley Bonita Bonsall Borrego Springs Boulevard Campo Cardiff-by-the-Sea Carlsbad Carmel Mountain Carmel Valley Chollas View Chula Vista City College City Heights Clairemont College Area Coronado CSU San Marcos Cuyamaca College Del Cerro Del Mar Descanso Downtown San Diego Eastlake East Village El Cajon Emerald Hills Encanto Encinitas Escondido Fallbrook Fletcher Hills Golden Hill Grant Hill Grantville Grossmont College Guatay Harbor Island Hillcrest Imperial Beach Imperial Valley Jacumba Jamacha-Lomita Jamul Julian Kearny Mesa Kensington La Jolla Lakeside La Mesa Lemon Grove Leucadia Liberty Station Lincoln Acres Lincoln Park Linda Vista Little Italy Logan Heights Mesa College Midway District MiraCosta College Miramar Miramar College Mira Mesa Mission Beach Mission Hills Mission Valley Mountain View Mount Hope Mount Laguna National City Nestor Normal Heights North Park Oak Park Ocean Beach Oceanside Old Town Otay Mesa Pacific Beach Pala Palomar College Palomar Mountain Paradise Hills Pauma Valley Pine Valley Point Loma Point Loma Nazarene Potrero Poway Rainbow Ramona Rancho Bernardo Rancho Penasquitos Rancho San Diego Rancho Santa Fe Rolando San Carlos San Marcos San Onofre Santa Ysabel Santee San Ysidro Scripps Ranch SDSU Serra Mesa Shelltown Shelter Island Sherman Heights Skyline Solana Beach Sorrento Valley Southcrest South Park Southwestern College Spring Valley Stockton Talmadge Temecula Tierrasanta Tijuana UCSD University City University Heights USD Valencia Park Valley Center Vista Warner Springs

Downtown windfall on the down low

City and Civic San Diego sit on $23.5 million in developer impact fees

Surely downtown residents would be thrilled to discover the city kept a secret stash totaling $23.5 million that could only be spent filling downtown's potholed streets, building parks, leveling uneven sidewalks, or funding public safety projects. Some won't be thrilled to find out that there is such a stash — there has been since 2005 — but councilmembers who served on the redevelopment agency now known as the Successor Agency and executives from Centre City Development Corporation (now named Civic San Diego) so far have refused to touch it.

Beginning in 2005, officials at the former redevelopment agency have been holding on to $2.7 million a year in development impact fees, money that goes to pay for infrastructure improvements. The reason for the stockpile of cash: in 2004, city councilmembers, at the request of Civic San Diego staff, agreed to combine developer fees with revenues from redevelopment tax increment.

That decision, according to a March 4, 2014, report from Civic San Diego, now prevents the city from accessing $13 million of that $23.5 for at least another year because the State of California's Department of Finance can choose to audit the Successor Agency's reserves.

Since "2005, the City has collected approximately $23 .5 million from new developments," reads a March staff report from Civic San Diego. "However, over $13 million of these funds are subject to a State of California audit before becoming available for expenditure, as the funds were exchanged between the former Redevelopment Agency and the City. It is anticipated that the status of these funds should be resolved sometime during FY2015; however, in order to be conservative, this report does not assume the use of these funds…. At this time, $9.96 million in [development impact fees] are available for expenditure."

And while Civic San Diego and the city have a valid reason to withhold the $13 million, nowhere in the report does it state why the remaining $9.96 million will be hidden away for another year. In fact, during this coming fiscal year, only $174,470 will go toward fixing downtown's infrastructure and $673,896 will be spent on ADA compliance, leaving a total of $22 million locked away in the Successor Agency's coffers.

"Civic San Diego admitted they commingled private downtown Development Impact Fee revenue with the Successor Agency (former Redevelopment Agency), and that is illegal. They hoarded the $23.5 million in private impact fees for nine years, and is now trying to blame the State Department of Finance and the end of redevelopment for their shady accounting practices," says Katheryn Rhodes, homeless advocate and longtime Centre City critic.

Rhodes points to Government Code 66006, a state law that makes it clear the local agency in control of developer impact fees "shall deposit it with the other fees for the improvement in a separate capital facilities account or fund in a manner to avoid any commingling of the fees with other revenues and funds of the local agency, except for temporary investments, and expend those fees solely for the purpose for which the fee was collected."

Section (e) goes on to say that "untimely or improper allocation of development fees hinders economic growth and is, therefore, a matter of statewide interest and concern. It is, therefore, the intent of the Legislature that this section shall supersede all conflicting local laws and shall apply in charter cities."

But according to former chief of staff for councilmember Mark Kersey and new deputy chief operating officer for neighborhood services David Graham, the $848,374 does not represent the entire expenditure. Instead, he says, the amount goes into a larger set of capital improvement projects, to be considered by the Capital Improvements Program Review and Advisory Committee, in the mayor's budget, as later approved by the city council.

"Before the end of [the Redevelopment Agency]," says Graham, "up until last year, the [agency] possessed the Developer Impact Fees. The reason and rationale for allowing the [Redevelopment Agency] to hold onto the impact fees was [the agency] was already doing infrastructure projects downtown. When it ended, the developer impact fees got caught up in the quagmire or the wind down of redevelopment. Because of that, the State Controller has the authority to audit any successor agency. The state controller could audit and determine, wrongly so, that the $13 million of the overall DIF was part of redevelopment, which Successor Agency could have to pay that back.

"The $848,374 is not the expenditure of developer impact fees, it’s a list of projects that go into the [overall] basis calculation."

Andrew Phillips, president of Civic San Diego, declined to comment for this article.

Here's something you might be interested in.
Submit a free classified
or view all

Previous article

Music follows nature – the Moldau, Central Asia's steppes, the Alps, the Appian Way , cliffs of Cornwall

We find Siegfried resting under a linden tree
Next Article

“I Come From the Andromeda Galaxy”

Alfred Howard, James Brady, Me, Myself and Eye, Orchid Mantis, Puttin’ on the Fritz

Surely downtown residents would be thrilled to discover the city kept a secret stash totaling $23.5 million that could only be spent filling downtown's potholed streets, building parks, leveling uneven sidewalks, or funding public safety projects. Some won't be thrilled to find out that there is such a stash — there has been since 2005 — but councilmembers who served on the redevelopment agency now known as the Successor Agency and executives from Centre City Development Corporation (now named Civic San Diego) so far have refused to touch it.

Beginning in 2005, officials at the former redevelopment agency have been holding on to $2.7 million a year in development impact fees, money that goes to pay for infrastructure improvements. The reason for the stockpile of cash: in 2004, city councilmembers, at the request of Civic San Diego staff, agreed to combine developer fees with revenues from redevelopment tax increment.

That decision, according to a March 4, 2014, report from Civic San Diego, now prevents the city from accessing $13 million of that $23.5 for at least another year because the State of California's Department of Finance can choose to audit the Successor Agency's reserves.

Since "2005, the City has collected approximately $23 .5 million from new developments," reads a March staff report from Civic San Diego. "However, over $13 million of these funds are subject to a State of California audit before becoming available for expenditure, as the funds were exchanged between the former Redevelopment Agency and the City. It is anticipated that the status of these funds should be resolved sometime during FY2015; however, in order to be conservative, this report does not assume the use of these funds…. At this time, $9.96 million in [development impact fees] are available for expenditure."

And while Civic San Diego and the city have a valid reason to withhold the $13 million, nowhere in the report does it state why the remaining $9.96 million will be hidden away for another year. In fact, during this coming fiscal year, only $174,470 will go toward fixing downtown's infrastructure and $673,896 will be spent on ADA compliance, leaving a total of $22 million locked away in the Successor Agency's coffers.

"Civic San Diego admitted they commingled private downtown Development Impact Fee revenue with the Successor Agency (former Redevelopment Agency), and that is illegal. They hoarded the $23.5 million in private impact fees for nine years, and is now trying to blame the State Department of Finance and the end of redevelopment for their shady accounting practices," says Katheryn Rhodes, homeless advocate and longtime Centre City critic.

Rhodes points to Government Code 66006, a state law that makes it clear the local agency in control of developer impact fees "shall deposit it with the other fees for the improvement in a separate capital facilities account or fund in a manner to avoid any commingling of the fees with other revenues and funds of the local agency, except for temporary investments, and expend those fees solely for the purpose for which the fee was collected."

Section (e) goes on to say that "untimely or improper allocation of development fees hinders economic growth and is, therefore, a matter of statewide interest and concern. It is, therefore, the intent of the Legislature that this section shall supersede all conflicting local laws and shall apply in charter cities."

But according to former chief of staff for councilmember Mark Kersey and new deputy chief operating officer for neighborhood services David Graham, the $848,374 does not represent the entire expenditure. Instead, he says, the amount goes into a larger set of capital improvement projects, to be considered by the Capital Improvements Program Review and Advisory Committee, in the mayor's budget, as later approved by the city council.

"Before the end of [the Redevelopment Agency]," says Graham, "up until last year, the [agency] possessed the Developer Impact Fees. The reason and rationale for allowing the [Redevelopment Agency] to hold onto the impact fees was [the agency] was already doing infrastructure projects downtown. When it ended, the developer impact fees got caught up in the quagmire or the wind down of redevelopment. Because of that, the State Controller has the authority to audit any successor agency. The state controller could audit and determine, wrongly so, that the $13 million of the overall DIF was part of redevelopment, which Successor Agency could have to pay that back.

"The $848,374 is not the expenditure of developer impact fees, it’s a list of projects that go into the [overall] basis calculation."

Andrew Phillips, president of Civic San Diego, declined to comment for this article.

Sponsored
Here's something you might be interested in.
Submit a free classified
or view all
Previous article

Kahlee310’s snitch rapper reactions

“He’d literally do anything for the money or fame”
Next Article

Customer complaint chases bullying Starbucks barista from corona-crazed coffee collective

Star-BUCKS
Comments
2

And meanwhile isn't Civic San Diego spending this co-mingled cache of money on consultant/friends of its director? Or wait, am I confusing this organization with the San Diego Downtown Partnership headed by ex-Mayor Sanders' crony Kris Michel?

Either way, maybe this is where lawyer Cory Briggs could ride to the rescue by suing the City to free up this money for needed community improvements.

June 9, 2014

I find it difficult to see many degrees of separation between CSD and DtSDP. Cronies and abettors, all.

June 9, 2014

Sign in to comment

Sign in

Art Reviews — W.S. Di Piero's eye on exhibits Ask a Hipster — Advice you didn't know you needed Best Buys — San Diego shopping Big Screen — Movie commentary Blurt — Music's inside track Booze News — San Diego spirits City Lights — News and politics Classical Music — Immortal beauty Classifieds — Free and easy Cover Stories — Front-page features Excerpts — Literary and spiritual excerpts Famous Former Neighbors — Next-door celebs Feast! — Food & drink reviews Feature Stories — Local news & stories From the Archives — Spotlight on the past Golden Dreams — Talk of the town Here's the Deal — Chad Deal's watering holes Just Announced — The scoop on shows Letters — Our inbox [email protected] — Local movie buffs share favorites Movie Reviews — Our critics' picks and pans Musician Interviews — Up close with local artists Neighborhood News from Stringers — Hyperlocal news News Ticker — News & politics Obermeyer — San Diego politics illustrated Of Note — Concert picks Out & About — What's Happening Overheard in San Diego — Eavesdropping illustrated Poetry — The old and the new Pour Over — Grab a cup Reader Travel — Travel section built by travelers Reading — The hunt for intellectuals Roam-O-Rama — SoCal's best hiking/biking trails San Diego Beer News — Inside San Diego suds SD on the QT — Almost factual news Set 'em Up Joe — Bartenders' drink recipes Sheep and Goats — Places of worship Special Issues — The best of Sports — Athletics without gush Street Style — San Diego streets have style Suit Up — Fashion tips for dudes Theater Reviews — Local productions Theater antireviews — Narrow your search Tin Fork — Silver spoon alternative Under the Radar — Matt Potter's undercover work Unforgettable — Long-ago San Diego Unreal Estate — San Diego's priciest pads Waterfront — All things ocean Your Week — Daily event picks
4S Ranch Allied Gardens Alpine Baja Balboa Park Bankers Hill Barrio Logan Bay Ho Bay Park Black Mountain Ranch Blossom Valley Bonita Bonsall Borrego Springs Boulevard Campo Cardiff-by-the-Sea Carlsbad Carmel Mountain Carmel Valley Chollas View Chula Vista City College City Heights Clairemont College Area Coronado CSU San Marcos Cuyamaca College Del Cerro Del Mar Descanso Downtown San Diego Eastlake East Village El Cajon Emerald Hills Encanto Encinitas Escondido Fallbrook Fletcher Hills Golden Hill Grant Hill Grantville Grossmont College Guatay Harbor Island Hillcrest Imperial Beach Imperial Valley Jacumba Jamacha-Lomita Jamul Julian Kearny Mesa Kensington La Jolla Lakeside La Mesa Lemon Grove Leucadia Liberty Station Lincoln Acres Lincoln Park Linda Vista Little Italy Logan Heights Mesa College Midway District MiraCosta College Miramar Miramar College Mira Mesa Mission Beach Mission Hills Mission Valley Mountain View Mount Hope Mount Laguna National City Nestor Normal Heights North Park Oak Park Ocean Beach Oceanside Old Town Otay Mesa Pacific Beach Pala Palomar College Palomar Mountain Paradise Hills Pauma Valley Pine Valley Point Loma Point Loma Nazarene Potrero Poway Rainbow Ramona Rancho Bernardo Rancho Penasquitos Rancho San Diego Rancho Santa Fe Rolando San Carlos San Marcos San Onofre Santa Ysabel Santee San Ysidro Scripps Ranch SDSU Serra Mesa Shelltown Shelter Island Sherman Heights Skyline Solana Beach Sorrento Valley Southcrest South Park Southwestern College Spring Valley Stockton Talmadge Temecula Tierrasanta Tijuana UCSD University City University Heights USD Valencia Park Valley Center Vista Warner Springs
Close