Audit Committee Meeting of November 20, 2024: Mission Bay, Boat Storage, and More
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Audit Committee Meeting of November 20, 2024
The San Diego Audit Committee convened on November 20, 2024, at 5:00 PM UTC (9:00 AM local) under the chairmanship of Councilmember Moreno. The meeting included approval of consent items, public comments, discussion of several audit reports, and informational updates. A notable discrepancy occurred when the chair called the meeting to order as "Wednesday, November 24th, 2024," despite the official date being November 20, 2024. All votes were unanimous.
Consent Calendar
- Item 1 (Approval of Committee Minutes – September 18, 2024) and Item 2 (Request to Use Outside Auditor for Additional Services) were approved unanimously after public comment. A speaker (Cesar Javier) commented on the need for better process coordination across districts.
Public Comments & Testimony
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Non-Agenda Public Comment:
- Parita Javier and Cesar Javier (in person) expressed concerns about ceramic toxicity in their residential neighborhood, alleging health impacts and seeking compensation from the city since 1997 and 2012 respectively.
- Becky Rapp (virtual) expressed concern about unpaid cannabis business taxes, noting the city auditor’s earlier report that less than 50% of marijuana businesses paid taxes. She urged prioritization of collections and reporting of penalty fees.
- Diane Grace (virtual) highlighted a lawsuit against the marijuana company “Cookies” for alleged mismanagement and kickbacks, and questioned the industry’s economic viability.
- Madison (virtual) referenced a grand jury report finding that the city does not provide detailed cannabis revenue reporting, making it difficult to track funds directed to the general fund. She noted that $3 is spent in the unregulated market for every $1 in the legal market.
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On Consent Agenda Items: Cesar Javier spoke on both items, emphasizing the need for improved process and cross-district coordination.
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On Item 3 (Mission Bay Audit): Cesar Javier opposed hiring an independent agency, arguing the city should use its own resources.
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On Item 4 (Boat Storage Permits): Cesar Javier asked about the identities of violators and their district representation.
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On Item 5 (Central Stores Inventory): Cesar Javier urged the auditor to dig deeper and learn from past reports, emphasizing priorities for the Tijuana River and homelessness.
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On Item 6 (Fraud Hotline Report): Cesar Javier asked the hotline to investigate his long-standing complaint about toxic gas emissions and municipal code violations. Kathleen Lippett (virtual) raised concerns about fraudulent smoke shop activities, including tax evasion and sales of child-friendly cannabis products.
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On Item 7 (Monthly Activity Report): Cesar Javier again described being abused by the city government and sought justice.
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On Item 8 (Closed Session – City Auditor Performance Evaluation): Cesar Javier spoke about discrimination and lack of service from city employees.
Discussion Items
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Item 3: Performance Audit of Mission Bay and San Diego Regional Parks Improvement Funds, FY2023
- Presented by City Auditor Andy Henous and Principal Auditor Kyle Elser. The audit found no findings: all $38.9 million in lease revenue was properly recorded and allocated ($20M to general fund, $6.6M to Regional Parks Improvement Fund, $12.3M to Mission Bay Improvement Fund). Ending balances: $41.2M (Mission Bay) and $18.2M (Regional). Forty-two capital projects have been completed; 15 are under construction, 36 in planning, and 5 canceled. Two of four prior recommendations remain open (lease language for in-water improvements and appointment of committee members). The committee accepted the report unanimously.
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Item 4: Hotline Investigation of Boat Storage Permits
- Presented by Senior Fraud Investigator Andy Harida. The investigation substantiated allegations of mismanagement: 139 of 270 total permits were missing from records due to clerical errors, leaving over 400 people on a waitlist (some since 2002). Fees are lower than other jurisdictions and not based on benchmarking. Many storage racks need repair. Ten recommendations were made, and management agreed to all. The committee discussed the long implementation timeline (2028 for fee updates) and the use of Mission Bay Improvement Funds vs. general fund for repairs. A motion was passed unanimously to accept the report with an amendment: (1) request the auditor present the report to the Mission Bay Oversight Committee, (2) request Parks and Recreation staff to convey the audit committee’s request to the oversight committee to reconsider allocating funds for rack repairs, and (3) consider recommendation 3.3 not implemented until further consideration by the oversight committee.
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Item 5: Central Stores Inventory Agreed Upon Procedures Review, FY2024
- Presented by Kyle Elser. A statistical sample of 232 items (valued at $257,703) showed a net difference of $4,132 (1.6% of sample value) – slightly higher than prior years. Prior recommendations to implement handheld barcode scanners are in progress. The committee accepted the report unanimously.
Key Outcomes
- Votes: All reports and consent items were approved unanimously.
- Amendments to Item 4: The committee directed the auditor to present the boat storage report to the Mission Bay Oversight Committee, and requested Parks and Recreation staff to convey the committee’s request for reconsideration of funding for rack repairs. Recommendation 3.3 is considered not implemented until further consideration.
- Next Steps: The next regularly scheduled audit committee meeting is set for January 22, 2025, at 9:00 AM. The meeting adjourned after closed session, with no reportable actions.
Meeting Transcript
Good morning and welcome to the audit committee meeting of November 20th, 2024. Our committee liaison, Natalie Kessler, will go over instructions for today's meeting. Thank you, Chair. While members of the public are able to attend the meetings in person, this meeting is being televised and live streamed on the city's website, and the council administration will continue to make arrangements for the public to comment using the Zoom webinar platform. Members of the public who wish to provide public virtual testimony must enter the virtual queue by raising their hand before the virtual queue closes. The queue will close when the last virtual speaker finishes speaking or five minutes after in-person testimony ends, whichever occurs first. This will allow for better meeting management between the two platforms and ensure the committee is able to manage and conduct city business. We appreciate the public's cooperation. Chair. Thank you. I will now call the audit committee meeting of Wednesday, November 24th, 2024 to order. Natalie, please call roll. Vice Chair Whitburn. Committee member Halburn. Here. Committee member Mafia. Here. Committee member Tab Shuri. Here. And Chair, Councilmember Moreno. Present. Also at oh, I'm sorry. No, go ahead. Also attending the meeting today is Annie Hanow, City Auditor. Christiana Gauger, Chief Compliance Officer. Baku Patel with the independent budget analyst office. Kevin Smith, committee consultant, and myself, Natalie Kessler, Committee liaison. And if you are in person, please complete a speaker slip located at the entrance of the committee room and place it on top of the box indicated at the speaker's lecture and at the front of the room. Please do so in a timely manner to ensure proper meeting management. In-person testimony will conclude before virtual testimony begins. Members of the public can also join the webinar by computer, tablet, or smartphone by accessing the link, which is listed online in the preamble language of the agenda on the city's webpage. If you need to participate by phone, you may dial 16692545252. The webinar ID is 160717-8861 pound. This information is also available on the agenda and will appear on the screen during the public comment period for the each agenda item. Members of the public who wish to provide virtual testimony must enter the virtual queue by raising their hand before the queue closes. The queue will close when the last virtual speaker finishes speaking or five minutes after in-person testimony ends, whichever occurs first. Please note that if you're watching via City TV 24 or online, there may be a delay. Please participate via the audio on your phone and mute your computer or computer or TV when it is your turn to speak. If you wish to speak on a particular item, wait for that item to be called. And then raise your hand to speak by tapping the raise your hand icon, or if you're a calling participant, press star nine on your phone. If you raise your hand during a non-comment period, your hand will be lowered. Chair. Thank you, Natalie, for reviewing those instructions for the benefit of the public. Each speaker will have two minutes. If you have already joined the Zoom webinar online or by phone, please raise your hand at this time if you wish to speak on non-agenda public comment. And Chair, we have received two speaker slips from individuals in the committee room. We will begin with those in the committee room before we move to virtual comment. Parita Javier and Caesar Javier, please approach the lector, and you'll have two minutes each morning. I am Purita Javier. Potentially impacted victim of ceramics of toxicity, located, constructed, and operated with business tax permit at residential zone community.
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