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San Diego’s City Auditor is out with an audit report on Qualcomm Stadium concluding that if the Chargers leave town, as is widely expected, taxpayers will have to shoulder $21.4 million in remaining debt.

The report also concludes that the stadium operates at a loss, is being grossly mismanaged, lacks “administrative policies and procedures,” and that the city is literally letting the place fall apart: “the current condition of the Stadium facilities will continue to deteriorate without adequate and continuous maintenance and improvements.”

“The Qualcomm Stadium Manager (Stadium Manager) admits that there is no formalized business plan for the Stadium; however, he contends that a formalized business plan is not necessary for the Stadium to operate effectively,” according to the report.

Financial record keeping is so bad, the auditor says, that nobody can say for sure how much revenue the stadium is really generating.

“Our analysis of the accounting records maintained by Stadium staff do not reconcile to the reported amounts within the City’s centralized accounting records. In particular, Stadium records for special event revenue for Fiscal Year 2006 and 2007 do not contain the supporting detail necessary to verify reported revenue amounts. Without an accurate reconciliation of Stadium accounts on a periodic basis, the Stadium cannot guarantee the accuracy of revenues earned when monitoring and assessing revenue agreements.”

“A review of Stadium revenue audits performed by the City Treasurer’s Office shows that audits of certain Stadium events, including Chargers games, are completed at the individual tenant level years after most events have taken place.”

Auditors discovered that important financial records had gone missing:

“During our review of the special event revenue files, we found instances of event files that were not adequately maintained or complete. Our review noted that several event files from fiscal year 2006 through 2008 could not be located or were incomplete. In March 2008, the City Treasurer’s Office Revenue Audit division also noted this deficiency when it completed a special review of the Racelegal organization.”

“Of the 24 use agreement files that were available for review, 11 had rental rates that were lower than the established Stadium rental rates (discounted events). Of these 11 discounted events, four were not charged any rent (non-charged events).”

“Three of the discounted events were noted as being granted by the former Stadium Manager, with one of these three events given a 95% discount off of the established rate for commercial filming. This event featured Chargers players and was produced by Real World Productions, a producer of reality television shows for MTV Networks.”

“The Stadium does not have an accountant on staff with the responsibility of reconciling Stadium revenue and expense accounts on a periodic basis.”

On the question of the Chargers' departure:

“Should the Chargers exercise their early termination right during any termination window after 2010, the termination fee that the Charges are obligated to pay would not be sufficient to cover the outstanding balance of the City’s Stadium Renovation Bond obligation,” the report says.

“In the case of an early termination by the Chargers, the City would retain the balance of the Stadium Renovation Bond reserve account which is currently $5.8 million.

“However, should the City apply the entire termination fee and debt reserve account balance toward the redemption of Stadium Renovation Bond principal, the City would be left obligated to pay approximately $21.4 million in Stadium Renovation Bond principal outstanding without retaining collection rights on future Chargers game revenues.”

The audit says that “annual Stadium expenses are budgeted to outpace revenues in fiscal year 2009. Our analysis of Stadium financial reports revealed that significant amounts of Stadium revenue is either paid back to the Chargers Football Company, LLC in cash, or is offset by agreed-upon rent credits.”

Comments
10

We can only hope that Anon92107 was being satirical in Post #2. Don isn't due back for another day or two. That Matt Potter is on the same wavelength--and has been for a long time--must have confused poor Anon. But one feature missing from Anon's post is his/her standard rant that everything in the world that is wrong is due to the rotten, nasty, corrupt, evil Republicans. Especially the local ones.

Hey Anon, you feeling OK? If you need help, there's plenty out there. Call 911 if you're really in a bad way.

May 9, 2009

Can anyone who has followed the mismanagement of city government be surprised at this? Successive city administrations have rolled over for the Chargers. Now we see that the stadium is totally politicized to the point of allowing events that pay nearly nothing.

May 9, 2009

No one can replace the erudite and inimitable Don Bauder -- unless it is the non-pareil Matt Potter who has been filling in for Bauder while he trips the light fantastic on a two-week vacation.

May 9, 2009

Response to post #3: Monaghan you are right that Matt is nonpareil with his own style of journalism, but Don is unique in that he interacts with his readers to give much more value to his individual blogs for his readers who are really interested in more information on what he reports.

I know that Don said he would be back midday today, and I was just anticipating that event because he is most truly erudite and inimitable in his style of journalism.

May 10, 2009

I thought Don was going to be gone longer....with him AND Fumbler gone this place has been deadsville,

Is today the day he gets back?? We need his input on this stadium nonsense and the Copley sale!

BTW what does "erudite and inimitable" mean?

May 10, 2009

Can anyone who has followed the mismanagement of city government be surprised at this

In a word, NO.

These buffons couldn't run a popsycle stand on their own.

May 9, 2009

Welcome back Don, we learned once again that no one can replace the erudite and inimitable Don Bauder.

Unfortunately, the era of corrupt Mayors committing grand larceny against the taxpayers and families of San Diego with corrupt court granted impunity continues without end, so nothing changed while you were away.

Hopefully the new U-T owners will purge the editorial board whose deranged rants have been believed by far too many gullible San Diegans who allowed the creation and perpetuation of the era of corruption in the first place.

There is still plenty of work for you to do to save San Diegans from themselves.

May 9, 2009

Why is this a surprise? Fast and loose Stadium management has been going on for years at the Q. All with tacit approval from City Management who looked the other way for years.

The two previous Stadium Managers were deal makers. Their bosses, assistant city managers, city attorneys, Mayors and Councilmembers didn't want to deal with problems or costs. No the marching orders were just get on with the show.

At times it was so bad, one assistant city manager, Bruce Herring was a ga-ga over sports celebrities. Combine that with former City Attorney, Casey Gwinn wasn't good with contract law or negotiations and you have all the makings of this mess.

So once again another mess has come to light of day. Now lets see if our CURRENT City CEO, Mayor Jerry Sanders, has the backbone to stand up to Alex and Dean Spanos to fix it. Here a simple starting point... how about collecting the FULL COST of providing public safety services, Police, Fire and EMS to Charger games. The sweetheart deal, less than 50% now has to end.

May 9, 2009

Now lets see if our CURRENT City CEO, Mayor Jerry Sanders, has the backbone to stand up to Alex and Dean Spanos to fix it. Here a simple starting point... how about collecting the FULL COST of providing public safety services, Police, Fire and EMS to Charger games. The sweetheart deal, less than 50% now has to end.

Errrr...if you think KFC Sanders is going to fix the mess/es, I have big news for you-it ain't going to happen.

KFC Sanders hasn't fixed jacksheet since he was elected to office and at this point I have a C-note that says nothing will change.

May 9, 2009

Johnny your previous wagers on this blog and others have been just about as risky as this one.

I agree, Jerry is just waiting it out his final term. His real interest is making sure nothing goes drastically wrong so he can wash his hands of San Diego and move on to bigger and better opportunities. Sadly, the appethetic voters will be none the wiser, deeply in debt with an unresolved structural deficit.

I looking forward to his State of City address in January. No doubt they'll be alot of smoke and mirrors talk about the little he has accomplished. But in the long run, REAL substantial change to San Diego's financial problems will not be addressed.

So lets see if we really have a strong mayor or straw man running this city.

May 10, 2009

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