Audit Committee Meeting - February 11, 2026: Leased Golf Portfolio & Public Comments
Audit Committee Meeting – February 11, 2026
The San Diego Audit Committee met on February 11, 2026, to discuss the performance audit of the city's leased golf property portfolio, along with non-agenda public comments, consent agenda items, and informational updates. Key findings revealed opportunities to generate millions in additional general fund revenue from a golf lease and highlighted deficiencies in performance monitoring and site inspections.
Consent Calendar
- Approval of the committee minutes from January 21, 2026, was moved by Councilmember Foster, seconded by Committee Member Mafia, and passed unanimously.
Public Comments & Testimony
- Non-Agenda Public Comments: Catherine Rhodes proposed a tax clarification (adding "online travel agency" and "third party agents" to municipal code definition of hotel operators) to generate over $100 million without a tax increase. Madison urged a comprehensive audit of the local cannabis industry, noting that only about 40% of cannabis consumed in California is purchased through the regulated system, and illicit market sales are 1.5 times higher than legal ones. Becky Rapp requested a detailed public audit of marijuana tax collection (gross sales, taxes owed, delinquencies, penalties), citing the mid-year budget deficit partially attributed to lower than expected marijuana tax revenues. Peggy Walker (public health legislative analyst) requested a full accounting of social costs of the marijuana industry, citing estimates that social costs are $5 for every $1 of tax generated. Francine Maxwell commented on the police internal affairs audit and staffing changes within the Community Police Partnership (CPP), requesting that the audit go "way back" and review CRB minutes. Terry Ann Skelly urged reducing overtime for first responders through prevention and enforcing laws against flavored tobacco/vape shops and marijuana storefronts, and removing marijuana billboards. Blair Beekman raised concerns about police lateral recruitment and emphasized the need for peace-oriented policing and accountability.
- Consent Agenda Public Comment: Blair Beekman spoke on cooperation and budget issues, suggesting spreading solutions over time to protect services.
- Item 2 – Golf Audit Public Comment: Mandy Havlik (in-person) voiced concerns from users about maintenance of Tecolote Canyon during closure, noting a $1 million budget may be insufficient to keep greens usable and could deter future bidders. Catherine Rhodes (virtual) opposed closing Tecolote Canyon, stating it brings in $45,000/month in memberships, pays 25% of revenue to the general fund, and closure could lead to fire hazards and homeless issues. Blair Beekman suggested looking at San Jose's approach to keeping golf courses open.
Discussion Items
- Performance Audit of the City's Management of Its Leased Golf Property Portfolio: City Auditor Andy Henoff and team presented findings. The city owns 11 golf courses; eight are leased to third-party operators. In calendar year 2024, leased courses generated $3.7 million total ($2.1 million for the water fund and $1.6 million for the general fund). Finding 1: The city lacks standard performance reporting requirements, and lease terms vary widely—rent ranges from 1% to 25% of gross revenue. Fairbanks Ranch Country Club earns approximately $17 million annually but pays only 5% in rent ($864,000); adjusting to 20% could generate an estimated $2.5 million additional general fund revenue per year. The lease allows a rent adjustment in July 2026, and EDD sent the required notice in December 2025. Finding 2: Site inspections are not conducted regularly (average 3.4 years), and four leases are in holdover, risking property deterioration. The audit made seven recommendations, all accepted by management. EDD is working to include performance reporting in new leases, and the golf division will conduct joint inspections. The IBA cautioned that revenue estimates depend on appraisals and negotiations, which may take time.
- Committee Deliberation: Committee Member Halpern praised the use of graphics and asked about the appraisal process; staff explained it involves mutual consent, then third-party appraisal. He also questioned the difference between the six-month timeline for lease fee adjustments vs. the typical three-year timeline for other fee studies. Committee Member Tapsri asked about the policy goal (revenue vs. affordable recreation) and inspection frequency; staff noted inspections are annual but staffing vacancies had caused delays. Councilmember Foster criticized past management and requested quarterly written updates, emphasizing the need to manage assets responsibly during a structural deficit. Chair Moreno stressed that Fairbanks Ranch is an affluent gated community not accessible to most San Diegans, and the potential $2.5 million could restore Monday hours at approximately 14 libraries. He asked staff to set a clear response deadline for the appraisal negotiation.
- Informational Item – City Auditor's Monthly Activity Report: The City Auditor reported three audits in report writing, three in fieldwork, two in planning, and a recruitment update (400+ applications for two vacant positions). No action required.
Key Outcomes
- Motion to accept the audit report and forward it to the City Council as an informational item passed unanimously.
- EDD will provide an update to the committee in April 2026 on progress of implementing recommendations, particularly the Fairbanks Ranch rent adjustment (target July 18, 2026).
- A written response from the City Attorney's office was requested to clarify the differences in timelines between lease fee adjustments and other fee studies (e.g., Prop 26 processes).
- EDD and Parks and Recreation will formalize collaboration on site inspections and performance reporting; the Presidio golf lease (with performance reporting requirements) will be brought to the City Council in spring 2026.
- The meeting was adjourned; the next regularly scheduled meeting is March 11, 2026, at 9 a.m.
Meeting Transcript
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.
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