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The Downtown San Diego Partnership set to receive another $5.8 million in taxpayer subsidies to manage the Clean and Safe Program

The council will consider approving the budget for this coming fiscal year, despite complaints of mismanagement and lack of oversight.

On Monday, city councilmembers will once again sign off on the annual budget for the Downtown Clean and Safe program, releasing an estimated $5.8 million dollars in assessments to the Downtown San Diego Partnership to manage the Property and Business Improvement District.

It's a good chunk of change for the downtown member-based non-profit organization. It's much needed cash for the organization which over the years has turned to taxpayer assessments to fund pet projects and get closer to making their vision of Downtown a reality.

Each year the non-profit is paid $72,000 a year, excluding the $1.6 million in overhead, in assessments to manage the Clean and Safe program.

Since 2009, the organization has been accused of mismanaging the district and of awarding sweetheart deals to consultants with little oversight.

Some residents as well as local attorney Cory Briggs question the expenditures and claim the use of assessments for anything other than specific benefits violates Proposition 26, the state law that prohibits the imposition of taxes without voter approval.

And there are plenty of examples of questionable expenditures to go around. In 2011, CEO Kris Michell approved a $160,000 contract with assessment district-guru Marco Li Mandri to be a "key advisor" to the district. The contract, as previously reported here, was approved without input from the advisory board.

But there's more. The non-profit has also turned to assessments to achieve their vision for downtown. That included paying a Denver-based firm nearly $20,000 in PBID funds to "restructure the Downtown Partnership." Clean and Safe funds accounted for 73 percent of the $28,000 contract. The Partnership and Business Improvement District picked up the remainder.

The Clean and Safe program also chipped in 38 percent of the total cost for the non-profits flashy new website and shiny logo.

Executives at Downtown Partnership justified the breakdown in a recent response to a public records request.

"The costs were allocated to [Downtown San Diego Partnership], PBID, and BID based on their portion of the total [Downtown Partnership] budget as well as the anticipated amount of work spent on each program."

Of course, the PBID brings in the vast majority of revenues for the Partnership. By their own accounting, the Partnership earns $927,250 a year. The PBID brings in $5.8 million. And, the BID accounts for $87,000.

In keeping with that math, property-based assessment will pay for the lion's share of the Partnership's pet projects as seen when the non-profit created a new $110,000 a year Homeless Outreach Director position, all paid for by assessments.

Executives at the Downtown Partnership say the new position and the expanded list of enhanced services were in response to concerns from residents who pay into the district.

"Compared to downtown PBIDs found in major urban centers throughout North America, the Downtown San Diego PBID is unique in it's one-dimensional focus on clean and safe services," was the justification in a response to a public records request about the new services and restructuring effort.

"Most PBIDs offer a variety of programming, including marketing, economic development, parking management, transportation, etc. The limited scope of the Downtown PBID is creating a fragmented assessment structure in downtown..."

Of course, not all agree with the use of funds.

"I am in favor of the services mandated in the contract between the City of San Diego and the Partnership adopted on April 4, 2005," is the statement that downtown resident and outspoken critic of the Partnership, Kathy Casey plans to read at Monday's hearing.

"Unfortunately, the Partnership is using assessment dollars for items that primarily benefit themselves and are not included in the contract."

"The Partnership claims that they and the Clean and Safe (PBID) program are the same. The Partnership is a private club. They receive $72,000 per year to operate and manage the PBID. If the Partnership is to continue to have oversight of the PBID, they must quit using assessment dollars for their own agenda. These abuses are not fair to the citizens that pay the assessments."

But the non-profit isn't the only entity making a profit on downtown property owners. The City of San Diego has done pretty well too.

From 2005 to 2009, due to an errant engineer's report, the City pocketed an extra $269,000 in taxes.

As of May 1, 41 residents have received refunds, totaling only $14,585.

But the City of San Diego wasn't done making money off the the assessment district. Earlier this year, City Attorney Jan Goldsmith agreed to settle with the firm responsible for drafting the engineer's report for $120,000.

And, because of the four-year statute of limitations, many of the residents who overpaid are not eligible for refunds.

The city council will discuss the annual budget during Monday's council hearing.

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On Monday, city councilmembers will once again sign off on the annual budget for the Downtown Clean and Safe program, releasing an estimated $5.8 million dollars in assessments to the Downtown San Diego Partnership to manage the Property and Business Improvement District.

It's a good chunk of change for the downtown member-based non-profit organization. It's much needed cash for the organization which over the years has turned to taxpayer assessments to fund pet projects and get closer to making their vision of Downtown a reality.

Each year the non-profit is paid $72,000 a year, excluding the $1.6 million in overhead, in assessments to manage the Clean and Safe program.

Since 2009, the organization has been accused of mismanaging the district and of awarding sweetheart deals to consultants with little oversight.

Some residents as well as local attorney Cory Briggs question the expenditures and claim the use of assessments for anything other than specific benefits violates Proposition 26, the state law that prohibits the imposition of taxes without voter approval.

And there are plenty of examples of questionable expenditures to go around. In 2011, CEO Kris Michell approved a $160,000 contract with assessment district-guru Marco Li Mandri to be a "key advisor" to the district. The contract, as previously reported here, was approved without input from the advisory board.

But there's more. The non-profit has also turned to assessments to achieve their vision for downtown. That included paying a Denver-based firm nearly $20,000 in PBID funds to "restructure the Downtown Partnership." Clean and Safe funds accounted for 73 percent of the $28,000 contract. The Partnership and Business Improvement District picked up the remainder.

The Clean and Safe program also chipped in 38 percent of the total cost for the non-profits flashy new website and shiny logo.

Executives at Downtown Partnership justified the breakdown in a recent response to a public records request.

"The costs were allocated to [Downtown San Diego Partnership], PBID, and BID based on their portion of the total [Downtown Partnership] budget as well as the anticipated amount of work spent on each program."

Of course, the PBID brings in the vast majority of revenues for the Partnership. By their own accounting, the Partnership earns $927,250 a year. The PBID brings in $5.8 million. And, the BID accounts for $87,000.

In keeping with that math, property-based assessment will pay for the lion's share of the Partnership's pet projects as seen when the non-profit created a new $110,000 a year Homeless Outreach Director position, all paid for by assessments.

Executives at the Downtown Partnership say the new position and the expanded list of enhanced services were in response to concerns from residents who pay into the district.

"Compared to downtown PBIDs found in major urban centers throughout North America, the Downtown San Diego PBID is unique in it's one-dimensional focus on clean and safe services," was the justification in a response to a public records request about the new services and restructuring effort.

"Most PBIDs offer a variety of programming, including marketing, economic development, parking management, transportation, etc. The limited scope of the Downtown PBID is creating a fragmented assessment structure in downtown..."

Of course, not all agree with the use of funds.

"I am in favor of the services mandated in the contract between the City of San Diego and the Partnership adopted on April 4, 2005," is the statement that downtown resident and outspoken critic of the Partnership, Kathy Casey plans to read at Monday's hearing.

"Unfortunately, the Partnership is using assessment dollars for items that primarily benefit themselves and are not included in the contract."

"The Partnership claims that they and the Clean and Safe (PBID) program are the same. The Partnership is a private club. They receive $72,000 per year to operate and manage the PBID. If the Partnership is to continue to have oversight of the PBID, they must quit using assessment dollars for their own agenda. These abuses are not fair to the citizens that pay the assessments."

But the non-profit isn't the only entity making a profit on downtown property owners. The City of San Diego has done pretty well too.

From 2005 to 2009, due to an errant engineer's report, the City pocketed an extra $269,000 in taxes.

As of May 1, 41 residents have received refunds, totaling only $14,585.

But the City of San Diego wasn't done making money off the the assessment district. Earlier this year, City Attorney Jan Goldsmith agreed to settle with the firm responsible for drafting the engineer's report for $120,000.

And, because of the four-year statute of limitations, many of the residents who overpaid are not eligible for refunds.

The city council will discuss the annual budget during Monday's council hearing.

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Comments
4

Excellent piece, Dorian; well researched and sourced. You obviously were working while most other journos were chasing each other's latest rumor. The PBID issue is unfortunately eclipsed by the current swirl, but this article will serve as good background in the weeks and months to come. You are the only reporter who has documented the DtSDP's power expansion and the general misuse of state BID, PBID, and MAD laws. Don't stop.

July 13, 2013

The city has learned that they can authorize an assessment district, operate outside the law, and pocket the profits, by not providing information on how to apply for refunds. Doing the honorable thing, the honest thing..... well this is San Diego.

July 13, 2013

Fraud, simple fraud.

July 13, 2013

Thanks for bringing these types of issues to the forefront. We are held accountable to pay our taxes or loose our properties, yet it appears the people who spend our funds have no repurcussions if they don't follow the contractual agreements. Why is it that business law and ethics hold in civilian world but not in government. You are our tool to try to hold them accountable.

July 14, 2013

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