Good morning and welcome to the audit committee meeting of February eleventh, twenty twenty-six.

Our committee liaison, Natalie Kessler, will go over uh 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 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 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.

Committee member Tap Shuri.

Here.

And Chair Council Member Moreno.

Also attending the meeting today is Andy Hanao, the city auditor, Jeff Peel, Chief Accountant with the Department of Finance.

David Carlin with the City Attorney's Office.

David Carlin with the City Attorney's Office, Aaron Noel with the IBA's office, Robert Bloomfield, our committee consultant, and Natalie Kessler, our committee liaison.

Natalie, please continue with public comment instructions.

If you're in person, please complete a speaker slip located at the entrance of chambers and place it in the box near the public comment microphone.

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 join the webinar by computer, tablet, or smartphone by accessing the link listed online in the preamble language of the agenda on the city's webpage.

If you need to dial by phone, please dial 1669-2545252.

The webinar ID is 1612, 1114 pound.

Members of the public who wish to provide virtual testimony must enter the virtual queue by raising their hand before the virtual queue closes, and that 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 TV or computer when it is your turn to speak.

And if you wish to speak on a particular item, please 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 for reviewing those instructions for the benefit of the of the public.

A quorum is now present, and we are going to take non-agenda public comment.

The council members respect and appreciate the public's input and are fully committed to protecting every participant's free speech rights at council and committee meeting.

Natalie, please proceed with non-agenda public comment.

Per rule 2.7, non-agenda public comment is an opportunity for members of the public to comment on items that are not on the agenda, but within the subject matter jurisdiction of the committee.

Each speaker will have two minutes.

And chair, we have not received any speaker slips from individuals in chambers, but we do have six hands raised in the virtual queue.

I will start the five-minute timer for all those in the virtual queue to indicate that they have non-agenda public comment.

And we will begin with Catherine Rhodes.

Catherine, please unmute and provide your comments.

Hello, this is Catherine Rhodes.

And at the end of this, I would um I would request that someone there um put forward my idea to the IBA like they were supposed to do a few years ago, and they never never did, and to get back to me because I have an idea to solve your 120 million dollar um budget crisis.

And what it is is um by um putting forth ballot language, which people vote on to um change hotel operators to include online travel agents and third party agents by just um um putting these six little words onto the municipal code section 35.0102 for the definition of hotel operators.

If you just put online travel agency and third party agents there, you could make um over a hundred million dollars in money from the existing transit occupancy tax that you are letting slip through your fingers to go to out of state online travel uh agencies.

And so um, you know, you you literally still have time to try to try to put this on to the June ballot.

I I believe you have until um like March 3rd for it to go through this.

You actually have time to look into this wonderful easy solution.

And what's good about this is that this is not a tax increase.

This is only a tax clarification.

And then also um the tourism board already said that they were positive toward this.

They want you to get all your TOT.

They don't want you to gift away the um your full um transit occupancy tax right to out of state travel agents, and you guys are not listening.

Um, so when you guys have budget problems, you're literally putting it on yourself.

There's such an easy solution.

Thank you.

Thank you.

The next speaker is Madison.

Please unmute and begin.

Again.

Hi, thank you.

Good morning, audit committee.

I'm here today to urge you to prioritize a comprehensive audit of our local cannabis industry over site.

California's cannabis market generates roughly four billion dollars annually.

Yet only about 40% of the cannabis consumed in our state is purchased through the regulated system.

That means for every gram sold in a permitted store, one and a half grams are sold through the illicit market, untaxed, untested, and outside regulatory oversight.

Even after nearly a decade of voter approval, state regulators admit the market is still in transition.

Law enforcement seized record amounts of illegal cannabis in 2025, nearly 18 times more than earlier in the decade.

That does not signal a stable or well contained system.

An audit could help with accountability.

And here are some questions we could be asking.

Are local enforcement efforts reducing illicit activity?

Are tax revenues meeting projections?

Are compliance systems actually protecting public health and youth?

Are we measuring outcomes or simply expanding access and hoping for the best?

As policymakers consider growth in this industry, we must ensure transparency and fiscal responsibility here locally.

We owe it to our communities and especially to our children to know whether the current system is working as promised.

Thank you for your time.

Thank you.

The next speaker is Becky Rapp.

Please begin.

Good morning, audit committee.

My name is Becky Rapp, and I'm here regarding the mid-year budget deficit.

It's been partially attributed to lower than expected marijuana tax revenues.

When projected marijuana revenue falls short, the public deserves more than a brief explanation.

We deserve transparency and accountability.

We'd like a comprehensive public audit of marijuana tax collection.

That audit should include detailed reporting on gross sales, taxes owed, taxes collected, delinquencies, penalty assessments, interests charged, and the actual collecting collection of those penalties and fees.

This is especially important because marijuana remains largely a cash-based industry that relies heavily on self-reporting.

And if we're gonna base budget projections on this industry, then we must ensure compliance is real and enforced.

In addition, I urge this committee to consider auditing the enforcement of AB8.

Across our communities, many tobacco and smoke shops continue selling intoxicating hemp derived products that are now illegal.

Strengthening enforcement, increasing fines for violations, and revoking licenses for repeat offenders not only provides revenue, but it sends a message to the public that you value public health and enforcement of the law.

When a product is banned, such as intoxicating hemp, tobacco and smoke shops shouldn't hesitate to remove those products from the shelves.

Instead, what we're seeing is tobacco and smoke business owners continuing to sell these products as they're willing to take the risk.

Knowing enforcement is a ways off.

When balancing the budget, this committee should consider collecting revenue based on what is already owed.

Thank you.

Thank you.

The five-minute timer has concluded.

We have four hands remaining in the virtual queue.

We will take no additional callers after these four.

Peggy Walker, please unmute and begin.

Thank you.

Good morning, Chair and Committee members.

As a public health legislative analyst, I review reporting on marijuana policy daily, and the emerging picture is deeply concerning.

Just this week, the New York Times highlighted the growing gap between legalization promises and real world consequences, stating the outcomes of marijuana legalization are quote worse than expected.

The New York Post and others recently have cited peer-reviewed research in the Journal of the American Medical Association, finding no evidence of medical benefits from dispensary weed while documenting significant adverse mental health impacts.

Economic analysis also raised red flags.

Experts estimate social costs are $5 for every single dollar of tax generated.

San Diego medical professionals continue to report increases in cannabis hypermesis syndrome, accidental pediatric poisoning, addiction, and marijuana-related DUIs.

So I'm here today also to request a transparent comprehensive accounting of the city's true fiscal and social exposure related to the marijuana industry.

That would include regulatory and administrative costs, public health expenditures, treatment and emergency services, impacts on housing and homelessness systems, lost productivity, and other downstream costs borne by taxpayers who are already overtaxed.

A full audit would allow policymakers and the public to evaluate whether the current trajectory is sound policy or carries greater social and economic consequences than anticipated.

Thank you.

Thank you.

Our next speaker is Francine Maxwell.

Please unmute and begin.

Okay.

Thank you.

Francine Maxwell, I want to um again thank the staff from the city auditors department for the police department internal affairs.

We've had some staffing changes that the city um residents are concerned about that may impact your work, given um that the CPP just was able to secure our new executive director.

We do not have outside council.

And so with the city council being responsible with HR doing an RFP so that we can get outside council.

There's a little bit of a disconnect.

And um the language at the last CPP meeting as it pertains to category ones, um, search, and it doesn't have the word search and seizure.

A lot of that may impact um the internal the audit.

So again, we know that your staff is going to have over 2200 hours on this particular audit of internal affairs.

We are absolutely looking forward, but we just want to make sure that the things um are not being shifted and that um you go way back.

I mean, I'm I'm hoping that you pull some of the CRB minutes because a lot of things that were agreed upon as we became CPP has decided to go by the wayside, but it was absolutely voted on, and again, giving the shift, which is normal within the San Diego police department.

Um we have a new captain of internal affairs, and so um as community, we're we're we're watching, and um again, we really appreciate this audit um that made the cut of the 21 audits that your team is gonna do.

Thank you for allowing me to speak.

Thank you.

Thank you.

Our next speaker is Terry Ann Skelly, please begin.

Good morning, audit committee.

My name is Terry Ann Skelly.

I'm a planning group member, a parent, and a community volunteer with school programs that serve youth, especially those in need.

As the audit committee looks at our budget, one source of revenue is a reduction of overtime paid to our first responders in the police department, lifeguards, EMTs, and the fire department.

Perhaps we need a better understanding of these types of costs that dominate the need for the very important services and focus our resources and staff time on prevention, reducing the need, even in a small measure for the expertise in costly overtime.

We need to improve the type of choices our residents make regarding alcohol, tobacco, and drug use, and look carefully at the city policies are enabling regarding their use.

We need enforcement of our laws against tobacco stores, vape shops, and marijuana storefronts who selling flavored products, which is against your laws and the state's laws.

We need clear messages from all levels of city government regarding how best to handle problems that are not short-term solutions.

An example of such a message: drugs are never the answer, not alcohol, not tobacco, not vaping, not marijuana or abuse of prescription drugs.

Over time, San Diego could be known as a healthy city, and residents would begin to respond to the clear messages and their accompanying policies.

And let's remove marijuana billboards, as we have tobacco billboards already.

It's definitely time for them to go.

Thank you for hearing my concerns this morning.

Thank you.

Our final speaker in the queue, Blair Beekman, please begin.

All right, thank you.

Uh Blair Beekman.

Um thanks for the meeting this morning.

Uh thanks for the words of Francine Maxwell a lot uh today.

Of course, we're nice.

Uh I wanted to thank uh that uh Council President Foster is now uh a member of the audit committee.

I think he'll provide an interesting voice to the process.

My concern uh for public comment time non-agenda public comment is uh somewhat similar to Francine Maxwell's in that um the police, it sounds like in the police union of San Diego have uh are making agreements at this time that um in an idea called lateral recruitment of officers where they can bring in officers from different uh cities and different uh regions.

Uh it's a concept that I think we have to be very mindful of in how are we hiring new officers.

Um we're at a really uh delicate time in the in this upcoming year uh in talking about concepts of peace and not war.

And I think we have a really uh important obligation to work at the local level to develop concepts of peace and that our community persons are not harmed, and that we practice uh ways of peace in order, you know, an open democracy as how to uh continue best practices here at the local level, and that gives good examples to the world how to practice peace and not war.

So it's incumbent that we that the uh police, you know, do their part and and and and don't overreact to situations and and have a good you know foundation.

And it's things like the audit committees and our council that can hold our police accountable at this time.

Good luck how we we do that.

Thank you.

Thank you.

And Chair, this concludes non-agenda public comment.

Thank you.

We're gonna move over to committee members, my oral staff, city attorney, and the IBA for comments.

Uh, my understanding is that Aaron Noel with the IBA's office has comments.

Thank you.

And good morning, Chair Moreno and members of the committee.

I'm a noel with the office of the IBA.

Um providing a reminder that the city continues to have an ongoing open recruitment for a public member seat on the audit committee for anyone who may be interested in serving eligible applicants must have at least 10 years of experience as a certified public accountant, a certified internal auditor, or other professional financial or legal experience in audit management.

There is a link on the audit committee website with information and an application.

And anyone interested can reach out to the office of the IBA.

Um if you have questions or would like additional information.

This concludes my comments.

Thank you.

Thank you.

Uh do we have any requests for continuance?

Okay, hearing none, we're now going to take up our consent agenda.

Do we have any requests to pull uh the item of the consent agenda?

Hearing none, we're gonna uh now move forward with public comment on the consent agenda.

Natalie, please proceed.

Thank you, Chair.

The public comment for the consent agenda is now open.

The consent agenda includes item one approval of the committee minutes from January 21st, 2026.

Each speaker will have one minute, and we have not received any slips here in chambers.

We do have one hand raised in the virtual queue.

Blair Beekman, please unmute and begin.

Hi, uh Blair Beekman again.

Hello.

Um, it's working together cooperatively at is how we uh address you know de-escalation and demilitarization, I think.

And it's you know, we we have ICE issues of concern.

Police are separate from that, but we work together towards de-escalation and demilitarization.

Good luck how we do that cooperatively together at this time uh for all of us.

Um from that, uh you had a really good uh uh meeting here last time uh on on dealing with budget issues.

Um I've tried to create uh a sense uh that you can have choices.

We don't have to do everything all at once in one year to fix our budget deficit issues, is my feeling.

It hurts uh creative solutions out of that may hurt, uh, but uh serving public services and social services, I think is really the first important step in however we address our upcoming budget issues.

Good luck how we work on this tough situation together.

Thank you.

Thank you.

And Chair, this concludes public comment on the consent agenda.

Thank you.

I'm gonna turn it over to committee members for questions or comments and also to entertain a motion on the consent.

Uh move the consent agenda.

Thank you.

We have a motion by council member Foster.

All second.

And a second by committee member Mafia.

Natalie, please call the roll.

Thank you.

And the motion passes unanimously.

Um we are now gonna take up our disc uh discussion agenda.

Natalie, please introduce item two.

Item two, performance audit of the city's management of its leased golf property portfolio.

And if you're watching on City TV or the live stream and want to call in to speak to item two, please call 1669 2545252.

The webinar ID is 1612, 1114 pound.

Chair.

Thank you.

And now um if staff can introduce themselves and let us know how much time they need, and please begin when you're ready.

Good morning, Chair Marino Committee members.

Uh, Andy Henoff City Auditor, we're here to present our performance audit of the city's management of its leased golf property portfolio.

And can we have about 10 minutes, please?

Thanks.

As we get started, uh, definitely want to thank uh the economic development department, parks and recreation uh golf division and the office of the city of the city treasurer for all the assistance and perspective uh they provided our team on this audit.

Really appreciate it, and we'll have some uh I'll have some comments on progress already made here in just a moment.

Uh, first to give you a quick overview of our presentation today.

Our audit had two findings.

Number one, the city should collect and report performance and lease information on its leased golf courses to assess lessee performance and maximize city revenue and public benefit.

For example, by reviewing performance and lease information, we identified an opportunity for the city to generate potentially millions of dollars in additional general fund revenue from a golf lease and economic development indicates uh that they are working to pursue this opportunity.

And number two, lack of regular site inspections and ongoing holdovers put the city's leased golf course properties at risk of property deterioration, reduced public benefit, and lost financial value.

We made seven recommendations, uh, all of which management agreed to implement.

And as noted in the management response, uh management states they recognize the value in enhancing performance monitoring, reporting, and inspections of golf course properties.

Uh they have been working to renew uh several expired golf course leases, and they have taken several other steps towards implementing the recommendations.

Uh, with that, I'll turn it over to the audit team, which is principal of performance auditor Megan Jaffery and performance auditors Kayla Edwards and Germaine Brooks to go over the details of what we found and recommended.

Thank you, Andy.

My name is Megan Jaffery, Principal Performance Auditor on this project.

We conducted this audit because the city's golf course leases bring in significant revenue for the city, approximately $3.7 million in 2024.

Golf demand has increased industry wide, and four of the city's golf course leases are expired, which provide opportunities for the city to increase rent to current fair market value.

Therefore, our audit focused on whether the city is appropriately managing its leased golf property portfolio to maximize financial return and public benefit.

For context, the city owns 11 golf courses.

Three courses, Tory Pines, Mission Bay, and Balboa Park are operated by the Parks and Recreation Department's golf division.

Revenues from these courses go to the city's golf enterprise fund, which supports their operations.

The remaining eight courses are leased to third-party operators.

Four courses are owned by the public utilities department.

Revenues go to the water fund, helping offset repairs water bills.

In calendar year 24, the lease course is generated 2.1 million for the water fund.

Four courses, the other four courses are owned by the Parks and Recreations Department.

Revenues go to the city's general fund, which supports services like libraries, streets, and parks.

In calendar year 24, these courses generated 1.6 million for the city's general fund.

The economic development department is responsible for managing the city's least golf courses.

Although our audit focused on the city's least golf courses, we used the city operated courses as points of comparison.

Now we'll turn it over to Kayla to cover our first finding.

Thanks, Megan.

In finding one, we found that although the city's least golf courses are valuable properties that bring in over $3 million per year.

Their lease agreements do not include standard performance reporting requirements, and the city does not report lease terms or performance of the leased golf courses publicly through the real estate portfolio management plan or the golf plan.

This means that city management, the city council, and the public are unaware of how the city's leased golf courses are performing and whether there are opportunities to increase revenue and public benefit.

In fact, some stakeholders may not even realize that the city owns these courses.

Other jurisdictions, golf course leases have performance reporting requirements, and the golf division collects and publicly reports performance on city operated golf courses.

Public reporting increases transparency and accountability, which helps drive improvements.

This approach has worked well for city operated courses.

When subsidized by Tory Pines, all three city operated courses are now all self-sustaining due to strategic management based on performance data.

As shown on the graphic on this slide, we found that the financial return to the city varies significantly across lessees.

And higher revenues for lessees don't always mean higher returns for the city in rent.

The percentage of total revenue that lessees pay to the city in rent varies widely, ranging from 1% to 25%.

On the next slides, we'll show examples of how performance data could help the city increase its share of revenue and public benefit.

Performance reporting can help the city identify and quickly pursue opportunities to increase the city's share of revenue and adjust lease terms.

The Fairbanks Ranch Country Club earns about 17 million dollars in revenue annually, but only pays approximately 864,000 in rent.

This is because the lease for Fairbanks is structured in a way that results in the operator paying only 5% of its gross revenue in rent.

Meanwhile, as shown on this slide, another course that makes significantly less pays more in rent, about 22% of its gross revenue.

In reviewing lease provisions, we found that the Fairbanks lease allows for the city to adjust the rent later this year.

We notified EDD in December, and they have since sent the required notice to Fairbanks and stated they intend to pursue this opportunity.

If percentage rent were set at 20%, which is around the rate that several other city courses pay, the city could gain approximately 2.5 million more for the general fund annually.

For example, Kalina Park and Presidio Hills are similar in size, but Kleena Park had nearly had three times of rounds played in FY 2025.

If rounds data were consistently reported, the city could identify underperforming courses and investigate the underlying causes.

For instance, as discussed later in finding two, the Presidio Hills lease has been in holdover for years, and the course requires significant capital improvements.

According to the operator, they were reluctant to invest in improvements without the security of a new lease, an issue that could have been flagged and addressed earlier through performance monitoring.

Collecting and analyzing performance information could also be used by city management and policymakers to determine the highest and best use of lease golf course properties, assess whether the public is receiving fair value, and verify the accuracy of revenues reported by lessees.

As shown on the exhibit on this slide, we found that city revenue per acre varies across city operated and lessee operated golf courses.

For its three city operated courses, the city receives an average of $9,097 per acre.

For its eight lessee operated courses, city revenue per acre is an average of $4,736.

Without performance monitoring, the public and policymakers do not have information about what drives these differences, whether it's lease terms, course conditions, or operator performance.

We made six recommendations for finding one.

These include that EDD should work with the golf division to ensure new leases include performance reporting requirements.

The golf division and EDD should report lease golf performance information in the annual golf business plan update, and a cost reimbursement mechanism for the golf fund should be established for work performed for these lease courses.

EDD should conduct an appraisal for Fairbanks Ranch Country Club and adjust the rent as soon as allowed by the lease, which is July 18, 2026.

We notified EDD of the findings prior to issuing the report, and the department has started working towards implementing these recommendations.

Now I'll turn it over to Jermaine for finding two.

Thanks, Kayla.

Our second finding is that economic development does not annually conduct site inspections on its lease golf course properties and has instead conducted inspections at an average interval of 3.4 years for its eight lease properties.

However, the golf division stated that the inspection should be conducted at least every six months.

Without regular inspections, the value of the city's lease golf courses could degrade rapidly, which increases repair costs, weakens the city's position during lease negotiations, and negatively impacts playability and revenue earning potential.

The golf division's city operated golf courses are well maintained, while maintenance conditions for lessee operated golf courses vary.

EDD uses a general inspection form to inspect all city lease properties, including its golf course.

However, using a golf-specific inspection form will assess golf-specific property conditions that affect a course's condition and playability.

The city currently has four golf leases and holdover, which may lead the city to forgo revenue by allowing lessees to pay less than fair market rent.

We made one recommendation in finding two, which is that EDD and the golf division conduct site inspections of the city's lease golf courses properties at least annually and report the overall conditions of these properties in its annual golf business plan update.

And we request to accept the report and forward it to the city council as an informational item, and we are available for any questions you may have.

Thank you.

Aaron Noel with the IBA's office has comments.

Thank you, Chair Marino and members of the committee.

Our office would like to thank the audit Office of the City Auditor for conducting this audit, as well as to thank EDD and Parks and Recreation for their agreement to implement all seven audit recommendations.

The audit is particularly timing given that the city council has indicated the importance of better capitalizing the city's lease portfolio to generate additional general fund revenue and mitigate future budget cuts.

We would like to note that the estimated additional revenue that could be generated from golf course leases is likely to vary due to the negotiation process for the various golf courses.

For example, each have different amenities.

In addition, the timing of when that revenue would come to the city may also vary due to the appraisal process, which, for example, allows these to contest the appraisal.

We believe the recommendations offer opportunities for additional revenue for the city.

But we would caution against heavily relying on these figures as potential budget mitigation opportunities until EDD has completed appraisals and negotiations, and our office has had time to evaluate them.

I want to note that my colleague Noah Fleischmann who covers EDD for our office is on the webinar, and we are both available to address any questions.

This concludes my comments.

Thank you.

Thank you.

Natalie, please proceed with public comment on item number two.

Thank you, Chair.

We have received two speakers from two individuals in chambers.

Mandy Havlik, please approach the electron, and you've been seated time by Angela Vetter.

If you could raise your hand, Angela, thank you.

So each speaker will have four minutes, uh, two minutes, so you'll have four minutes.

Thank you.

Good morning, committee members.

Um, thank you for the city staff for that presentation.

It was very informative today.

I've been approached by several members who um utilize this golf course, and um I want to just voice their concerns about the maintenance of the grain space while the construction and the closure is in place.

Um I understand that the city has about a million dollars plus for maintaining the 19 holes.

There's 18 holes plus of a putting uh green there currently, and um the one million dollar budget is something that they believe is not enough.

Um, the cost to repair a green back to its you know uh usable space is a lot of money, and they're concerned that the one million dollar budget and the impact to the greens without maintaining and watering that will increase the costs and potentially deter a future RFP bidder from taking that property because they're gonna have to take it as is and return the green back to its usable space.

So, just again reminding you that TechLodia is more than a golf course, it's a place for our neighbors to utilize open space, get recreation at very cost-effective prices.

You know, they don't have to go to Tory Pines or a riverwalk, some of these private golf courses.

And so while you've talked about increasing revenue for our city, please be mindful that these are very cost-effective places for our seniors to be uh able to get exercise and be connected to community so that those increases will not deter future participation or people utilizing our city spaces.

Um again, thank you for hearing us and addressing these concerns and for all the work you do for our city.

Thank you.

Thank you.

This concludes in-person public testimony on item two.

We will now move to the virtual queue.

There are two hands raised in the virtual queue.

I've started the five-minute timer.

Catherine Rhodes, please unmute and begin.

Um, wonderful.

Thank you.

This is Catherine Rhodes.

First, I want to say um that I very much enjoyed reading the audit report.

It was a very fine report.

But I'm calling regarding Tech Loading Canyon and why you guys are um closing down the whole golf course, including the putting range and the driving range.

Um, you know, right now the driving range brings in 45,000 a month in membership dues.

And you're closing it down.

I was there yesterday, and there must have been at least about 60 people there.

Um enjoying this public park.

And for some reason you guys are closing it down because you said it's not economically feasible.

You guys don't pay any money for it.

So it is economically feasible just to let it keep on going in its existing um month-to-month lease that you have right now.

You know, um specifically, let's just say um similar to mission trails.

Mission trails golf course has not had the lease for four years.

You did an RFP last year, but nobody's um it seems like there's no um action on that.

I'm not sure if anybody um put forward anything for that.

And um I believe that for Techlode Canyon, you should not close it.

Um if you close it.

Uh you know, I I would think that it's a high fire zone, and um, you know, homeless people might be going there.

You're gonna have to pay for a lot of um security when you can just keep it open as is, and you could bring in uh um, you know, 25 and also they pay the highest percentage, 25 percent of their revenue to the city's general fund.

So you're literally losing money by closing Tecalodi Canyon for no reason.

So please um discuss that.

Thank you.

Thank you.

Our final speaker in the queue, Blair Beekman, please begin.

Blair Beekman.

I wish I played golf more.

Um it's really meditative, it can be a really meditative sport to just you know walk 18 holes and and just hit a ball and just walk each distance.

You know, you think and sit.

And uh I I wish it was more than just considered a rich man's game.

Um I I don't play golf because of that actually.

And I wish uh, you know, I I kind of uh inhibited myself from playing it more because of that and uh that image.

Um obviously I guess it can be a reason why it's been cut.

The City of San Jose a few years ago.

Um they were in the same predicament you guys are in now.

And I felt, you know, it the golf course would easily be the first thing to cut in budget tough tough budget times.

Uh San Jose figured out a system to keep their golf courses going.

And um they figured out something kind of I think interesting.

I don't know uh but I I felt important to bring that up here as options for yourselves to and how to budget golf courses in the future.

Um good luck with this item uh and what you can do.

Thank you.

Thank you.

And Chair with no additional hands in the queue, this concludes the comments on item two.

Thank you to all the members of the public for participating.

Um I'm gonna turn it over to our committee members uh for any questions or comments, um, starting with uh committee member Halbert.

Um thank you, Chair.

Um first I'd like to uh commend the auditors for what I thought was really an excellent use of graphics to portray the critical information in a very digestible user-friendly form.

Um also want to applaud EDD for agreeing with the recommendations and particular um 1.5 relating to the fair view target date, uh July 18, 2026 to implement a fee adjustment.

And uh so I'm curious in the management's response, they use the words the new percentage rent rates will be set in accordance with the applicable lease clause.

Is that referencing the fact that there's gonna be an appraisal and then the adjustment will be based on the appraisal for higher rates, hopefully directionally at least in the range where the auditors are saying it's possible, or is that some other adjustment mechanism like inflation or something that would likely achieve a lower somebody's nodding?

So could somebody just speak to that?

Yeah, thanks for that question, committee um committee member Halburn.

The um well, I can't remember if it was the former or the latter, but it is negotiated.

So it's um it's based on our first own internal appraisal, then it's by mutual consent.

So that's when it talks of when it references the lease provision.

Um it's by mutual consent between us and the tenant.

If we can't reach mutual consent, then we go to a third-party appraiser to to settle it.

Got it.

So do the lease specifically um refers to uh the city's own appraisal before going to that outside appraisal.

That's an approved part of the process.

Um it doesn't specifically refer to our own internal appraisal.

That's just our it it specifically refers to mutual consent.

Okay.

But our own internal process.

We have an we have a valuations team that is part of the economic development department's real estate division.

So we we have three in-house appraisers.

So before we go quote a price to them, we our internal appraisers do their work to determine what we believe is the value.

Then we'll we will go present that to them.

And if we agree, that's what we ink.

If they don't agree, then we will turn to a mutually agreeable third party appraiser to do they have the ability to kind of run out the clock by not agreeing and then push the process past the target in the agreement.

No.

No, there's there's mechanisms within the lease.

Okay.

So then I just have a follow-up, and this may be something that you would speak to.

Um our June 6th meeting, may it may this part of it, maybe not another part of it, maybe.

Um in our June 6th meeting, we um were talking about the uh third party trash haulers franchise agreements.

I don't know if folks remember that.

And then further in the past, there was a um a boat storage hotline report about fees.

And in both occasions, we had discussion of committee that to make adjustments in fees, there'd need to be an RFP process hiring a consultant to do an assessment that combined with the bureaucratic processes.

Some people are nodding, so I'm not the only one who remembers this, thank you.

Um, that the total time required to implement new fees would be approximately three years, was what I think the staff um referenced.

And so, you know, first of all, you know, kudos again to EDD for responding quickly so that Fairview was given the um required notice on a timely basis.

But I've got so two questions.

Um, you know, given that other staff testimony, and I don't think that was yours, but there were other members of the city staff that said it's typically like a three-year time frame to implement fee adjustments, having to do this RFP process, et cetera.

Um it's curious to me that you're referencing an internal capacity to do these kinds of studies.

And so uh it'll be great that you guys get to do this within six months, but it sort of makes me wonder why it is the rest of the city seems to be saying it takes them three years to do something that you're saying you can get done in six months.

And um again, that may not be something that you can speak to because we're talking about other departments, but I just wanted to throw that out there as a curiosity that um, you know, because people remember the trash roller report, we're talking about like I don't know if it was tens of millions of dollars of potential increased fees.

And so again, kudos to you guys for being able to get this done in a six-month time frame.

Thank you.

Different processes.

So I won't comment on that.

Okay, well then I don't know, maybe it's at another time or if there's somebody here who can talk to the different processes.

I can respond to that.

Christina Bibler, Director of Economic Development.

The fee studies that you're um referring to have to do with the city's fee study and then responsiveness related to fees that are collected on behalf of the Department of Finance process.

That is different than the lease negotiation period by which we are referring to collecting the rent associated with an appraisal.

So our in-house appraisers and that whole process is a very different process and not subject to the fee study process, which is what you're referring to.

Um I guess this speaks to my naivete and understanding about city processes, but it just strikes me that ultimately you're talking about um market rate studies in both instances, and so it's a bit of a curiosity to me that we have the capacity to do an acceptable market rate study in the context of a lease, but not in the context of a franchise fee.

But if that's the reality of it, I guess that's the reality of it.

Thanks.

Thank you.

Um committee member Tapsri?

Thank you.

Thank you, Chair.

Uh great audit as usual.

I don't even need to say that anymore.

I have a couple of questions.

The first is um about the inspections.

Why haven't they been more frequent?

I mean, it seems like on average three something years is a little bit too long.

And I don't know if the auditors know if you ever got the calls or if the department would want to speak to that.

So let me clarify first that we do annual inspections.

That is part of the lease.

But there are 13 property agents for the entire portfolio.

So in a lot of cases, that may lapse by a few months or so, but we do conduct annual um property inspections with our property agents.

It's just uh a staffing capacity issue, then in some cases when it goes over.

Um being in this role now for a little over two years.

When I first took over, just that section had a 38% vacancy.

So at the end of when we're looking at the audit period, it is possible that they weren't being conducted, but they are conducted, and the department division is fully staffed with our 13 property agents depart uh citywide that they conduct annual property um inspections.

Okay.

Thank you.

And my second question is about you know what's the overall policy goal here?

Is it really to just use these properties to maximize revenue to sort of defray some other costs, you know, for the city, or is it to provide maybe some of the residents with more affordable recreational opportunities?

Because they seem a little bit kind of you know, two goals that might be working uh at odds or incompatible.

I'm just trying to understand, yeah, where we're you know, if there even is an overarching policy framework.

Sure.

Well, the city's real property portfolio is diverse, and per the council policy, there are a lot of different reasons why we can strike an arrangement with an operator that can do a multitude of things that can provide a low-cost solution for our residents.

It can provide maintenance and operations for a property that otherwise we don't have the capacity to do or don't have the expertise to do in-house.

In this case, for our golf, we are looking for ways across the portfolio to continue to improve.

We have a wonderful golf division within the parks and rec department that I think you know, our team now that we are fully staffed, is learning from and benefiting from some of the operations they have in order to continually improve.

So just to generally answer your question, the department follows the council policy since it was approved last February in terms of meeting multiple goals.

Right now, as part of what we put forward to the mayor early last year, we identify golf courses as an opportunity to maximize revenue to the various funding sources and asset owning departments to which the revenue belongs to.

Uh technically, we we drafted many RFPs for our golf courses last year, and they're coming to fruition this year, and that's just the length of the process.

So you'll see in the management report, you know, we already had um Mission Hills, we have um Presidio and Techolode.

We had Techalote drafted, and and because of the CIP shelves.

So there's a lot of things in play that thankfully, to um the auditor's credit, you know, we were able to get some of the things we were already doing in the report so that when you see these audit recommendations, that's a coordination between the departments because we're meeting multiple goals.

We want operators to take good care of our properties on our behalf.

We want courses to be affordable and accessible to the public in San Diego.

So meeting multiple goals at once.

Okay.

Thank you.

Thanks.

Thank you.

I don't see any other members on the lights.

Uh so well council member Foster.

Thank you, Chair.

My apologies.

Um thank you, Andy, to you and your team for this audit.

I think this is um how can I say this?

I hate that the auditor is is carrying the brunt of bringing certain efficiencies and certain items to the table.

Um I have said this since I've joined this council that the operations should be doing everything that it can do to find efficiencies to ensure that we are doing what needs to be done in regards to our assets, our leases, and so forth.

And we do go into conversations when we talk about access things to that nature, but I think those do um we we need to make sure that we are having public conversations as we are trying to determine as we talk about policies of that nature.

But I think there has been a general um census that um the city has not been doing a good job at managing its access assets, um, which is why I think you over the years and I think uh miss uh Mrs.

Bibler, um, how long have you had real estate assets under your um department now?

Just about two years and a month or two.

Right.

So you know, a lot of this is not necessarily happening under your watch, but I think you would agree that there is a lot of work to be done in regards to our 800 leases.

But more so doing our due diligence and public funds in a responsible manner.

And I think that's an expect expectation that we can all agree on as we are having the conversations that we are having and the public sentiment that you see today, and especially as we are looking to address a structural deficit.

If we are not managing our assets appropriately, I think we are doing more of a disservice to the public, and when we talk about good governance responsibility and ensuring that we are putting our best foot forward to manage tax dollars appropriately.

But I am the you know, I guess want to make this statement, and I think we have found that there is a need to prioritize this.

Um I think I would ask, and hopefully, if you can confirm this, um, I hope the IBA has um asked for a full um a full report in regards to your organizational charts as your department um just so we can look at how things are being prioritized and when we need to make a shift as we see opportunity that we are the that the operations department is making the the appropriate um I guess adjustments internally um to maximize um these efforts.

Um the other thing I'll say I just think it's a shame that once again as we go through the details that we find Fairbanks Ranch is yet again receiving a very very good deal, and yet my community district four tends to suffer, and I think that speaks volumes, and so I think that's something that I think the mayor really needs to dive into as we talk about equity because um these dollars would help quite a bit if we were able to level set and and write the ship um in the appropriate manner.

Um I do appreciate um your um agreement to um in regards to the findings and recommendations.

Um I must say, you know, I would like things to move faster.

Um I think our you know time is our most precious asset at the end of the day, um, and we are um you know going through our budget process and and hopefully can get this uh moving um faster so that we can uh receive the funds that we need to receive.

Um with that, I don't know if anyone's here is from the mayor's office.

Um I don't want to put any more stress or strain on you because I know you you have a lot to do, a lot to work on, but I do I think I would like to receive um some quarterly written report or something from the operation side so we can see and maintain and make sure this is moving um forward in a timely manner.

Um and that's something as a council puts together the budget, some things that we can look at if we need to prioritize some things and have those conversations with the mayor's office and the executive team that we can move appropriately.

So that would be a request that I would have that we receive some more frequent updates as to how this is progressing and moving forward.

And um I think it's there's things that um you guys do as far as follow-up to make sure things are moving.

Um, but also I think this speaks to a bigger picture, and I don't want to isolate it just to um the the response of this audit um, but um I think that it would be a good tool for the council to have as we move forward and go and go into our discussions.

Um so thank you.

Um I will um that concludes my comments, Chair, and I will um turn it over to you.

Thank you.

Um and thank you for the presentation.

Um thank you to the audit team for this audit.

Um, yet another example of um the value you guys bring to the city of San Diego.

Um also thank you to the economic development department for being here and also for uh your partnership with working with the office of the city auditor and park and rack department.

I do want to note for the record that I heard from city staff and from the city auditor that this audit has been a great collaboration between independent departments and operations.

So thank you for that.

Ms.

Havlik, your comments regarding Tecolote Canyon, I think are very much warranted.

I don't have an answer for you, but my understanding, and I might get this wrong, but my understanding is Council members Campbell and Campillo both oversee Tecalota Canyon.

So we will are my staff will be reaching out to them to get in contact with you, and I also will be reaching out to the mayor's office so you can get a response.

While reading the audit, I was struck at how much revenue Fairbanks Ranch was bringing in, but how little in pay the city was obtaining.

Fairbanks Ranch, I looked it up as an affluent gated community known for luxurious homes, equestrian facilities, and a golf club, a golf course.

It's an exclusive residential community.

And I believe you can't access, I can't go up there and drive into that community unless a resident invited me in.

What's his name?

The Chargers Quarterback, Phillips Rivers, I think resided in Fairbanks Ranch, just to give you guys kind of a sense of the community we're talking about.

So as was mentioned, Fairbanks Ranch Country Club is making close to 17 million dollars.

The golf industry has seen an increase of participation of 38% six since 2019.

The audit states that reappraising the Fairbanks ranch lease at the earliest possible opportunity could bring in approximately 2.5 million in additional general fund revenue in fiscal year 27.

I do appreciate the IBA making the statements that you made, Miss Noel, but even if they were off by plus or 5%, it just it would be a game changer.

If the revenue funding would be achieved, it would be enough to restore Monday hours at approximately 14 libraries that were closed in fiscal year 26.

So let's just let that sit for a moment because it makes my blood boil.

Apparently, we we can't.

We have to be a member.

These are prices that regular San Diegans and I will say my residents in District 8 cannot afford.

Essentially, my residents do not get a benefit from Fairbanks Ranch being so low.

Now with the current fiscal environment, the city is facing it's important that the city act as soon as possible to implement the audit recommendations so that the city and residents city so that they benefit.

The audit says you sent the notice of intent for reappraisal for reappraising the rent at Fairbanks Ranch.

Thank you very much for doing that.

Getting the rent adjusted by July 18th as allowed by the lease.

Let me repeat myself, as allowed by the lease is very important to make sure we're getting fair value and have every resource possible to fund critical general fund priorities, like rec centers, like libraries, police officers, fire, maybe even throw in some streets in there, right?

Um what is the process city staff will follow to make sure the appraisal is complete and the rent can be adjusted by July 18th, 2026?

So similar to uh what was described earlier, the tenant was noticed.

Um that's the start of the process.

We are now currently with our internal valuations team coming up with our opinion of what the structure, the the percent rent rate should be.

We will then approach the tenant with that and hopefully they agree.

Um the first mechanism for changing the rent is simply mutual consent.

Should they counter or not agree?

Then uh the lease provision calls for a mutually agreed upon third party appraiser to come up with the percentage rent.

Okay, and when will your opinion be completed?

They will have um their own internal robust report.

Your you said first.

Our appraisers, yes.

When will your appeal by the end of April?

By the end of April.

Um so by the end of April, you will approach Fairbanks Ranch Country Club or take.

Okay.

And how much time do you give them for their opinion?

Um well, we'll expect a timely response to um to the negotiation.

Okay.

I'm at um what is a time because a timely response for me is certainly different than a timely response to another individual.

Is there a set date that we put in in the um opinion?

Is it 10 days?

Is it two weeks?

Is it a month?

Is it three months?

Um there is not a set date.

Okay.

So I would highly recommend.

I don't I don't do operations for a living, but I would highly recommend and also given uh the city to a city attorney's um uh recommendation.

I would highly recommend that we put a set date for them to respond to us.

Um thank you though, thank you for responding.

Just to get a clearer picture, I think this goes to uh committee member Halprince, you know, trying to dissect uh some of the information that we're being that we're receiving.

Chair Marino, can I just clarify?

While there it's not specified in the lease or the council policy, whenever we send evaluation or reevaluation, there is a request back to the lessee for a response within that email within that contact.

So I just want to clarify.

So there is a time set.

There is, but it's not a uh a defined by a policy.

Got you.

Once we receive it, we could receive it earlier from our valuations team in all honesty.

So then we would roll it out explaining here is the document, this is the attachment, please review.

We would like a response by such date.

So it's responsive to when we receive it, and then we pass it along.

Yeah, I think it's important that I I certainly don't want to do a council policy that stipulates when we have, you know, when we should get a response back, and the fact that it should be very, very clear to the entity that we are conducting business with.

So I think it would be prudent for us to have that information very clear for our lessees.

Um but thank you for responding to that.

You uh your response to the audit notes that you see the value in the recommendations and have been working to include performance reporting requirements in the golf leases that are currently being uh renewed.

Um has city staff been successful in negotiating uh performance reporting into the lessee into the leases, and when does city staff plan to bring those to council we have been successful?

So the first one that we had an opportunity to well the lease was um already fully negotiated, but we did reopen it um with the tenant in order to add those specific requests in.

I also just want to be clear a lot of the information already was being supplied by the tenants, but there were a couple specific categories that the auditors called out that were they were not obligated to provide, so it is a good call out by the audit report.

Um we did successfully negotiate that into the Presidio Golf Lease, which will be coming in the coming months to council for approval.

Um it will be going into the mission trails lease, which is in process now, um, and then all future leases as well using the same template that was just created.

Wonderful.

So the Presidio one will be coming to council.

We'll see it for the first time in the spring.

That was my question.

Um my last question is um will you include um the performance and lease information uh for the city's leased uh golf courses in the golf business plan?

Are we changing the business plan?

So, Chair Moreno, that's um I'll speak to it a little bit.

It's really more of a question for the golf division of of parks and rec.

It's their business plan, so it's the annual business plan that talks about the three city-owned city operated courses, Tory Pines, Balboa, uh, Mission Bay.

They did agree in this audit report to include information from the non-city operated courses, the ones that are are the subject of this report that we're talking about today.

Um, so yes.

Do we have anybody here from Park and Rec?

Do you mind I don't want somebody else speaking for you?

So good morning.

Uh my name's John Howard, golf operations deputy director.

Uh as Jim said, we are going to be including that into our annual golf division business plan.

Um currently we report that out to the parks and recreation board uh as well as a municipal golf committee on an annual basis.

Um every three years we do come to the uh environment committee as well.

Um so uh if there are future plans that do come to council, we'll be sure to share that with you.

Thank you.

Um thank you.

That was the that was my last question.

Um just overall, uh thank you to City Staff uh for accepting all 17 recommendations.

Um it's a important to reappraise uh the leases of golf property as this is an opportunity to get more revenue for the water enterprise fund, the general fund, and um the golf enterprise as well, and also uh to making uh making sure that our golf courses are accessible, right?

Whether uh if if it's um a golf course that the city is running, if it's on city land, um just making them more accessible to all of our uh constituencies.

Um I know it's not just the rich that golf, um, there are many people that golf and and we do have uh those opportunities available for our residents, and I want to make sure that um they continue to be um so um I um I really uh committee member halpern uh your question I think was a valid one, um, and I think that it warrants uh the city attorney.

If I could ask for a um a written response um and let me see if I got it here so that it we're all clear and committee member halper and you could uh clarify um the difference between an RFP and a lessee fee timeline.

Um I'm curious about the reason behind the significant differences in these timelines.

Um I too remember uh some of staff's responses about three years for an RFP.

Um I you know raise my eyebrow, but if if we can get a written response um as to what the differences are.

Certainly be happy to.

I I think if I for clarification's sake, and maybe city staff can we're talking about fees that would be dictated by Prop 26 in the process there, if if I'm understanding what yes, okay.

Okay.

Then I understand the question and I'll happily put something in writing for you.

Thank you for that.

Um to conclude, um in regards uh to Fairbanks ranch golf course, uh, the city should not be subsidizing the rich in any way.

Um I want to stress, as my colleague mentioned, it should not take the audit committee to bring this issue up for that administration uh to do the right thing.

Um Director Bibler, you've been there two and a half years now.

Um I think two that's if if our auditor is correct, we're talking about roughly four million dollars that we have just it's gone down the drain.

And I care because I was elected uh to represent district eight and to make sure that district eight gets its fair share, and it's not getting its fair share based on this.

Um I have a problem with subsidizing the rich, and um I think two and a half years is enough for you to have um for this to have bubbled up.

Um but I do think the auditor for bringing this audit forward.

Uh you don't know what you don't know, right?

I'm not in operations.

I don't know what leases, what lessees we have.

So I thank you for bringing this uh to light for the council and also for this committee.

Um and I will make a motion that we move to accept the report and that um economic development department touch base in April uh just to see how everything is going.

We normally don't have a May meeting because of the budget.

Uh if not, I would have said a May, uh, but I think April um does April suffice for you, uh, Councilmember Foster to touch base.

Uh yes, that's fine.

I would still like um as we go through this process some written memorandums just coming into um the council offices so we can make sure we're monitoring um these um outside golf type scenarios, I guess managed by others, whatever you want to call it.

Okay.

Um for this motion, I'll keep just the April and then we'll make sure that we're following up and if we need to change that um just because of the uh July 18th deadline, that's very important.

Um I see committee member oh, so that's a motion.

Um I see committee member halburn on the lights.

Did you want to speak again?

I'm sorry, uh Chairman.

I could I just make a quick clarification.

So the issue we brought to their attention regarding Fairbanks Ranch, according to the lease, that they they couldn't have acted on that two and a half years ago.

This is a new opportunity that we brought to their attention, sending the notice um last month, which they did, and then they they couldn't have adjusted the rent before July 18th, 2026.

So I just want to thank you, but this lease is overdue since 2015, hasn't been reappraised since 2015.

Did I get it?

It has not, but the lease doesn't allow for them to do it per prior to now.

Got you.

Okay.

So I just wanted to clarify that.

Okay, thank you.

And that's correct.

The lease has a reopener clause, and so many of our leases do that are long-term leases, and so that's the reopener clause is what allowed us to go ahead and send the notice, which is what we're referring to.

Thank you.

Timely.

Thank you.

Committee member Halpern.

Thank you, Chair.

So uh first I'll second the motion.

But I just had a follow-up related to your question about the timing.

Um the provisions of the agreement or are the provisions of the agreement such that regardless of how long the process for the adjustment might take, because perhaps you know there's disagreement, and then you need to go to the outside.

Would would any increase fee be retroactive to the July 18th?

Okay, people are nodding yes.

Great.

Okay, thank you.

That's important.

Appreciate it.

Thank you.

So we have a motion on the floor with the second, and I see council member Foster on the lights.

Uh yes, thank you.

Just one quick follow-up question.

Can you help me to understand with these um outside golf courses?

Why are they with realist aid assets versus if we have a golf division and subject matter experts that understand that understand what the the operations of a golf course fees, um things that have come up regarding um range balls, where they're sold, how they're sold, those type of operational type items.

Why is it not um being managed by the golf division?

So, committee member Foster, I'll start and then I ask John to come up to um talk a little bit about his operations.

So a lot of these leases are long-term leases, and it had been historically the city's practice that ultimately these were lease properties.

And so as time has gone on, some of those have come back in-house.

Why you see long-term leases with reopeners, et cetera, is due to the negotiations that happened in the 80s, et cetera.

So these are these are long-term leaseholds that we manage per the contractual obligations of real property.

Yeah, and to add on to that, um obviously right now with the the golf courses that we have, uh, we have significant capital improvements that we are looking to make.

Um right now it's it wouldn't be prudent for us to be bringing on additional golf courses.

Um right now the lease money that you saw uh in the report goes obviously directly to the general fund, uh the water department as well as the parks and recreation department.

So that money continues to flow exactly to the general fund and benefit those areas.

I can appreciate that response, but I don't know if it's for as you look at the conditions of the golf courses, as you look at the operational and efficiencies of the golf courses.

I'm not sure I understand.

I'm not sure I'm in agreement in regards to that.

Do you guys have SLAs in place with golf division to provide any type of guidance, any type of expertise as you guys are having the issues that you are having?

Yeah, actually, um, sorry.

But did you want to okay?

So uh the team does work collectively.

I mean, parks and recreation is our client, right?

As along with all the other asset owning departments.

And so we work on their behalf and work in coordination.

One of the things that this audit was looking to strengthen, which we are exploring with DOF, is the opportunity for them to actually spend some time on the course with us during these evaluations using their expertise and also changing the checklist, which we have already done to that point.

That's a little bit different because we have to find a way to pay them as an enterprise fund.

That has not yet been established, and will we have a target date of by the beginning of the fiscal year to figure out how to get money over to the Gulf Enterprise Fund to then support a greater responsibility in the collaboration?

Um I can appreciate that, but I think hopefully it will just be a matter of how we prioritize and get it done.

Right?

There is a person that makes that ultimate decision on what your day is, what your day is, and and and I look to that person to move accordingly and get this done.

So thank you.

Yeah, I to add on to uh Christina's response there.

Um, you know, over the course of the last six to seven years, uh I myself has acted as a subject matter expert um with past representatives from uh the real estate assets department, now economic development.

Um this process has actually given us the opportunity to make that more formalized.

And um in the audit report, our staff, the golf division is going to be working directly um with the EDD to go on these site inspections.

We've worked on um specific agronomic practices that need to be put into place, uh, checklists that we would be utilizing internally that will be able to be used uh for that.

So we are going to be working in conjunction with them going forward, and uh I think we'll all see a lot of benefits from that.

Okay, thank you for that clarification.

I what I'm hearing is there will be some type of internal policy, a administrative reg, some type of process narrative, department instruction that will tie this together so each department knows who is doing what, who's on first base, second base, third base, and making sure that again this is about being responsible on how we are dealing with taxpayer dollars.

Thank you.

All right.

Well, we have a motion on the floor with the second, and I don't see anybody else on the lights, so uh let's take the roll.

That motion passes unanimously.

Uh thank you.

That concludes item number two, and we're now gonna take up our informational agenda.

Natalie, please introduce item three.

Item three is the city auditors monthly activity report.

Chair.

Chair.

Uh thank you.

And staff, uh, please introduce yourself for the record and let us know how much time you need.

Uh good morning again, Andy Henhouse City Auditor.

I'll just quickly go over our recent activities that need about two minutes, please.

Um the January report um activities report document includes items that we issued in January.

They were all discussed at the at the last meeting.

And there you go.

Uh next slide, please.

Uh and on this slide, the golf lease audit, uh, as you know, is just issued in early February.

And in addition to that, we have three audits in report writing, including audits of brush management on private property, fire rescue dispatch, and the unsafe camping ordinance.

Uh we have three audits in the field work stage, including audits of cybersecurity, uh, police internal affairs and arts and culture funding equity.

Uh and we have two audits in the planning stage, including audits of citywide vehicle rentals uh and street light uh repairs and equity.

And this slide lists uh the audits that we have not uh started yet, but we'll be starting a couple of them soon now that we've gotten the golf audit issued.

Um as far as other activities, there was a delay in the contract to provide independent legal counsel due to a new state law uh AB339.

Uh purchasing contracting has worked through that issue, and we expect to bring that contract to the audit committee uh very soon.

Also a quick recruitment update.

Uh we have held a performance auditor position and an operations uh assistant position vacant since October in order to achieve the uh budget cuts um that we had last year or this current year.

Uh so that has slowed our productivity a little bit.

Uh, but we recently advertised those two positions as they are essential, and we received over 400 applications uh total.

Um so we're expecting to be fully staffed again very soon.

And uh on that note, as far as OCA's budget, we presented our proposed budget uh to the mayor and his executive team last week.

Uh and as you know, the audit committee and a supermajority of the city council has supported maintaining funding for OCA so we can continue to help uh identify efficiencies, cost savings revenues and equity improvements in the coming year.

Overall, so far in FY26, um, we've issued nine reports that contain 27 recommendations to improve the efficiency effectiveness and equity of San Diego City government.

And that concludes my presentation.

Thank you.

Okay, thank you.

Um as a reminder, this is an informational item, so no motion is required.

Uh Natalie, please proceed with public comment for item number three.

Thank you, Chair.

We have not received any speakers' lips here in chambers.

We have one hand raised in the virtual queue.

I've started the five-minute timer.

You'll have two minutes.

All right, uh, Blair Beekman.

It takes a lot to maintain a golf course, but uh I it's my sincere hope that uh golf can be available to all levels of income in the future.

And working that out is difficult.

Uh good luck how you can be doing that.

Uh as I mentioned, San Jose has has some good examples for yourselves, how to uh budget as needed.

Uh for this item, um I um the the work on uh smart streetlight uh auditing uh is important.

I I can't stress enough that if you practice uh accountability with tech, make the tech that's being placed in street lights.

Notice how that's always a secretive conversation that we don't make clear at all because of what you're appearing what national security.

Uh the public does not have a right to know what what tech is placed in their neighborhood.

You have very deep dark reasons why you feel tech should not be a regular part of conversation in our community life, and we have to really change that model because when you do and you make that clear, then you could be talking about smart street light repair ten times easier.

And we can be having the conversations we need to have on how to how to get uh street lights replaced quicker and you know, more efficiently and and more simply with you know civil rights protections, we're all more clear steps that we need to go through.

Um we're really blocking things up by keeping things so dark, hidden and secretive.

I'm really upset by that when it can be so easy to be a lot more trusting of ourselves and how the process should be work openly and clearly.

And that the sharing of information is a good thing and not a harmful thing that we based our lives on because of war 9-11 and the overall need of government to keep away from the public.

Thank you.

This does conclude your time.

Our next speaker, Andrea Ebbing, please unmute and begin.

Good morning, it's Andrea Ebbing.

Um, thank you for this information.

It's uh eye-opening for sure.

And I saw some things um during the budget deficit that I had been emailing about.

It was like a bunch of bids for um look like a lot of golf courses.

Like I saw like five million dollars for the Balboa Park golf course, like several million dollars for like a lot of things that when I historically when I started to like look through and see what's been done in those um facilities before, like you know, it was it was naming the updates that were going to be made at each of these golf facilities, and when I looked up those same facilities for those same things, I found like multiple years of like the same improvements that were said to have uh been made or were going to be made.

I do have a concern that like there's a that would be a clever way to um obviously like launder money, but it's also a clever way to keep the information kind of hidden or off the table for people that aren't interested in golf or are out of that socioeconomic um place.

You know, like that's not their thing.

So they go, oh, you know what, the golf course, I guess it just needs a you know ball cleaner replacement.

I guess it needs a turf replacement.

I guess it needs that that just seems like something that people are gonna skip over because they're uninformed and they don't know.

So I do think that there it's just a kind of a strange little topic that uh caught my attention as you're speaking about it because it it's definitely looks like a place that money's being hidden and money's being misappropriated for.

Um, and these updates don't actually seem authentic or necessary if we're looking at rebuilding the community and recovering from this horrific crisis we've been in.

I just don't feel as though golf courses are the primary, should be the primary focus.

We can't even attract local tourism, let alone um high-end golf.

Thank you.

Thank you, and chair.

This concludes public comment.

Thank you.

And this concludes item number three, and this brings us to the end of today's agenda.

Thank you, members of the public and staff, for your participation.

I will now adjourn the meeting of the audit committee to our next regularly scheduled meeting, which is on Wednesday, March 11th, 2026 at 9 a.m.

And this we are officially adjourned.