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Who Says We Have a City Budget Shortfall?

Item 203 on today's San Diego City Council agenda includes a provision that the City Council no longer charges interest on tens of millions of loans to its subordinate redevelopment agencies. The loans, originally made on HUD block grant funds, were the subject of a blistering HUD inspector general report that required the City to properly document plans for repaying the massive redevelopment loans (see HUD OIG Audit below).

City staffers recommend that the City Council adopt Item 203 "Declaring that, commencing on July 1, 2009 and continuing thereafter, no interest shall accrue on behalf of the City on any outstanding Long-Term Debt of the [Redevelopment] Agency to the City."


See Don Bauder's Scam Diego series on the Scott Kessler wrongful termination lawsuit against the City of San Diego, mentioning the HUD OIG audit in the filed civil action.


Forgive $288 Million Loan Balance Today?

City staffers further recommend the City Council's adoption of the rule "Declaring that the Agency shall extinguish all outstanding CDBG and HUD Section 108 Debt owed to the City totaling approximately $228,432,499, as follows: (a) the Agency's scheduled repayments of CDBG Debt to the City in the total amount of $78,787,000; (b) the Agency's continued payments to the City according to the established debt repayment schedule for the Naval Training Center CDBG HUD Section 108 Loan with an outstanding approximate balance of $5,431,000 as of June 30, 2009, payable from the Naval Training Center Redevelopment Project Area; and (c) the City's forgiveness of the remaining CDBG and HUD Section 108 Debt, including all principal and interest accrued through June 30, 2009, totaling approximately $144,214,499 upon the expiration of the ten-year period on June 30, 2019, set forth in the Repayment Agreement, provided the Agency makes the required payments pursuant to the Repayment Agreement" (see City Council agenda below).

There is a recommendation that $77 million in loans be repaid by the redevelopment agencies, where such payments would be used to settle financial obligations such as those incurred at the Southeastern Economic Development Corporation's Valencia Business Park project. That SEDC project was begun during the corporate presidency of Carolyn Smith, later ousted for redirecting unused accountant hiring money for lucrative staff bonuses.

It is only the opinion of this blogger, but the prompt payment of the soon-to-be forgiven $228 million would go a long way to decreasing the mayor's proposed budget shortfall for the next fiscal year.

Who says sweetheart deals for grant-funded developer lobbies are dead?


June 22, 2010 San Diego City Council Agenda

HUD Office of Inspector General Audit - City of San Diego Block Grants

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NB: For the 2PM afternoon session that includes Item 203, see the agenda with meetid=715.

The 10AM morning agenda which does not include Item 203 is meetid=716. Unfortunately, this is the agenda that is available for public viewing, not the afternoon session with meetid=715.

June 22, 2010

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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
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