San Diego City Council Meeting: Audit of Park Funds & Internal Controls - April 13, 2026

The San Diego City Council met on April 13, 2026, in the afternoon to discuss two informational agenda items: a performance audit of the Mission Bay and San Diego Regional Parks Improvement Funds for fiscal year 2024, and the city's 2025 annual report on internal financial controls. Councilmembers raised concerns about lease revenue collection, audit moratoriums, and oversight. The meeting also included public comments on non-agenda topics.

Public Comments & Testimony

• Item 200 (Park Funds Audit): Multiple speakers criticized the city for fraud, waste, and abuse, and cited negligence in managing park safety. One speaker highlighted four murders in a year at Linda Vista Skate Park, calling for security measures. Another noted that the audit revealed a lease audit moratorium and lack of transparency, urging stronger council oversight. A speaker from Joyce Behr stressed that the issues impact the credibility of the city's financial reports. Another praised the audit for catching accounting errors but questioned why the moratorium was allowed and asked for clearer park funding allocation. Catherine Rhodes said the moratorium shows the need for a balanced city charter to prevent mayoral overreach. Judy String commented that the audit implies favoritism toward lessees and urged the city to regain public trust.
• Item 201 (Internal Controls Report): Several speakers expressed frustration that the report claimed effective controls despite the prior audit showing failures. One speaker said the report felt like a "slap in the face" and that internal controls failed to catch long-standing issues. Another speaker (Joy Sanyata) pointed to the staff report's use of "materiality" and "appeared" as weakening accountability. Blair Beekman acknowledged past mistakes and called for better governance. Kathleen Lippett questioned why the city receives awards when it is in fiscal deficit. Judy String asked councilmembers to know their districts' leases. Tony highlighted the 20-year issue of the Glider Port lease paying only $5,000–$10,000 annually.
• Non-Agenda Public Comment: Topics included homelessness, the proposed "empty home" (vacancy tax) law, marijuana-related health risks (youth ER visits, impairment detection), police oversight (CPP independence), and concerns about city employee raises amid a budget deficit.

Discussion Items

• Item 200: Performance Audit of Mission Bay & San Diego Regional Parks Improvement Funds (FY2024)

  • The City Auditor (Andy Hanao) and staff presented: total adjusted Mission Bay lease revenues were approximately $37 million, a 7% decrease from FY2023. The first $20 million went correctly to the general fund. However, due to a management-imposed moratorium on lease revenue audits (beginning July 2024) and a backlog of unapplied payments, the auditor could not verify that all revenues were collected and deposited. Four findings were noted: (1) The moratorium weakened internal controls and limited the City Treasurer's access to software; the CFO has since issued guidance to discourage future moratoriums. (2) City did not assess late penalties due to payment backlog. (3) 35% of Mission Bay rental agreements are in holdover status (some for 12+ years), potentially losing revenue. (4) Oversight committees lacked detailed expenditure information. City management agreed to all five recommendations.
  • Councilmember Moreno expressed concern about restricting access for the City Treasurer and Auditor, calling it a weakening of financial controls. She noted the city's $120 million budget deficit and emphasized need for follow-up.
  • Councilmember Von Wolpert questioned why lease revenue decreased 7% when transient occupancy tax (TOT) rose. She found it "perplexing" that city management said "we're not going to tell you" how much revenue was collected. She also noted only 13 property agents (10 filled) oversee 900 leases, leading to 178 holdover agreements citywide.
  • Councilmember Foster asked for a detailed plan with timelines to resolve the 178 holdovers and for software upgrades.
  • Councilmember Ila Rivera noted that longstanding problems may have benefited "friends of folks who served on this dais in the past." She tied lost revenue to inability to fund libraries, parks, and subsidies for low-income residents.
  • Councilmember Campbell clarified that the moratorium was a collective decision by department heads to reconcile inaccurate data, not a secretive effort. She supported hiring more real estate experts.
  • Council President Pro Tem Lee noted that holdovers also impact nonprofits' ability to invest in public-serving facilities.

• Item 201: Annual Report on Internal Financial Controls (2025)

  • Director of Finance Ben Vitalia and Chief Accountant Jeff Peel presented the city's evaluation based on COSO framework. They highlighted a clean audit opinion for FY2025, no material weaknesses or significant deficiencies, and several awards for financial reporting. They also reported that the lease audit moratorium ended in April 2025, and that EDD has made progress on backlog and software upgrades.
  • Councilmember Ila Rivera acknowledged the technical nature of the report but noted the disconnect between positive findings and the city's budget deficit. Others expressed frustration that operational issues like expired contracts and under-collected lease revenue were not captured in this narrow report scope.
  • Councilmember Von Wolpert questioned why software upgrades took so long, and asked about the city's IT strategic plan.
  • Management reiterated that the report is focused on the integrity of financial reporting for external users, not operational effectiveness.

Key Outcomes

• Both items were informational only; no votes were taken.
• The council directed Economic Development Department staff to provide a detailed plan with timelines for resolving the 178 holdover leases and software upgrades, to inform budget discussions.
• The City Auditor will continue to monitor implementation of the five recommendations from the FY2024 audit, and will perform the FY2025 audit in fall 2026.
• Councilmembers emphasized that the city must invest in more property agents (currently 13 FTEs) and modernize leasing software to prevent revenue loss.
• Several councilmembers called for greater transparency and accountability in lease management, and for avoiding future audit moratoriums.