By David Garrick / San Diego Union-Tribune / August 1, 2025
A county watchdog panel is raising new concerns about how San Diego spends and keeps track of the many millions of dollars that developers contribute to help the city pay for parks, libraries, fire stations and other infrastructure projects.
The grand jury says San Diego has chronically violated the California law that allows cities to collect those developer impact fees — including with its longstanding practice of keeping fees beyond a five-year state limit.
In a 43-page report, the grand jury says San Diego should quickly refund $179 million it has kept beyond five years and make it a practice of refunding such fees in the future when it can’t justify holding money beyond that limit.
The report also says the city should be more transparent about how much money it has collected, how much it spends, which projects money is assigned to and how close those projects are to being fully funded.
In a tone that borders on exasperated, the report says city officials have been made aware their practices violate state law several times but have repeatedly ignored those warnings.
“The grand jury hopes that this report serves as the last of the red flags the city needs to prompt action, and the findings and recommendations made herein are finally taken seriously by the city, including the mayor and City Council, and all elected and appointed city officials, including the city attorney, management staff and employees,” the report says.
The report stresses that courts have forced other cities that it says have similarly violated the state’s Mitigation Fee Act to refund millions in developer money.
Because San Diego’s practices have apparently never prompted litigation from developers or other critics, the grand jury titled its report “Never Been Challenged.”
City officials said Wednesday that they are working on a formal response to the report and wouldn’t be making any substantive comment until that response is complete. The formal response is due by Sept. 30.
The grand jury report says San Diego residents should be frustrated by what the report calls the city’s “informed mismanagement” of more than $1 billion in developer impact fees collected since the state law took effect in 1989.
“Failure to appropriately collect and expend millions of dollars in DIF collected by the city, in accordance with the developers’ expectations and the communities’ entitlement to local amenities such as libraries, parks, fire stations, and transportation facilities, runs afoul of the law and injures the residents it is intended to protect,” the report says.
The report, however, doesn’t mention that its recommendation that the city immediately refund $179 million of the $508 million now in project accounts would prevent completion of many long-promised projects.
The report focuses significant attention on a lack of transparency, criticizing the city for filing its annual reports on developers fees many months late, year after year.
It also notes that the city doesn’t update project lists for individual neighborhoods in a timely fashion, despite warnings from the city attorney.
“The city’s community plans and financing plans are outdated — some in excess of 10 years, or more,” the report says. “The city attorney has advised on two separate occasions the requirement for community plans and financing plans to be updated annually.”
Another concern raised is misuse of funds, particularly the city practice of spending developer fees on administrative work.
The report notes that the city spent $720,000 in developer fees coordinating a recent change in how the fees get spent, with money from wealthy neighborhoods getting shifted to projects in low-income areas.
The report says coordinating that change, which the city calls Build Better San Diego, should have been covered by the city’s general fund — not developer fees.
In addition, the report says other administrative fees charged by the city are too high, leaving less money for the actual projects.
The city says 5% to 8% of a project’s budget should be spent on administration, but the report says administrative charges often exceed that amount, including one account that was charged 18%.
The report stresses that city officials have been warned previously about these problems — including in a confidential memo sent to city leaders in 2018 by then-City Auditor Eduardo Luna.
The formerly confidential memo, which the grand jury obtained, says the city’s riskiest practices included collecting money for projects that can’t happen due to land unavailability, breaking the five-year rule and illegally devoting money to existing infrastructure.
State law says developer fees must be devoted to adding new amenities, not renovating or maintaining existing ones.
The confidential memo should have been a major wake-up call that prompted quick and decisive action, but instead, essentially nothing happened, the grand jury contends.
“The grand jury found no evidence that ‘profound changes’ had been recommended or implemented, or even that the Confidential Audit Memorandum had been received and reviewed,” the report says. “The grand jury interviewed city staff from the 2018-2019 timeframe, and all interviewees either did not recall the report, could not remember what actions were recommended or taken by management or were not involved in any actions taken.”
I can already hear Lisa Mortensen asking sarcastically, ‘Which of Todd Gloria’s 400 managers was supposed to keep track of all these monies?’
How do San Diegans get a copy of the 43 page Grand Jury Report?
If the UT honestly had any remaining sense of obligation or responsibility to the public, then David Garrick should post a link to the Grand Jury Report in it’s entirety for public consumption. California taxpayers fund Grand Jury investigations and pay for these Grand Jury reports.
And this comes as a surprise to exactly who? Anyone? Anyone?
It gets worse and worse. How low can we go?
Doubt if it would be published, but progressive fools here (San Diego) keep rubber stamping these clowns that run the city. A bit of self examination wouldn’t hurt bc apparently local and state Dems don’t have any need to be accountable to voters any more than Dumpy’s side. Party control with special interest money on either side rendering the common person neutered. Toni Adkins the next albatross for the state with the competition not much better. For all of our state and local leadership these past 4 years, you have to ask yourself, are we really better off? Look in the mirror guys. For all the progressive tendencies, there’s a bit of conservatism balance being called for. Something I’ve advocated for awhile. A political balance to neuter the extremes and restore accountability.
I think actual progressives stopped voting for Gloria a few years ago.
Progressives=BernieCrats. California Democrats=Corporate Real Estate Kleptocrats. Chris, you lay the blame at the feet of those that deserve it, the California Democratic Party including Atkins, but all the self serving sycophants we hate, are all anything BUT Progressives.
These policies are about as far, far, far removed from Progressive policies as they can be.
Progressives engage with the residents in their communities’ to adopt the best ideas and suggestions to tackling major issues because a Progressive understands the latin concept of E. Pluribus Unum. From many we are one. Solutions to local community issues are always best solved by working together. There’s no money that strategy for “the Party.”
No Progressive candidates for our local, county, state senate, and assembly representative races can get past the coercive power of the oppressive money machine that is “the Party” and they get snuffed out and suppressed by the corporate media.
Time and time, and time again, quality candidates reflecting real world Community Leadership get whacked by the California Democratic Party. “The Party” has recklessy taken out real leadership intended to hold these offices out at the knees going into every primary, by any means necessary.
What I believe in general is, progressives will be vilified as communists or socialists on a national stage moving forward. But yet on a local and state level still will vote the “D” after the progressive candidate(s) are squeezed out. Where is the niche per se? Representing everyone without class warfare a la Ego-Rivera.
Nothing Progressive about the public trust violating Corporate Kleptocratic Party. Progressives engage with the residents in their communities’ to adopt the best ideas and suggestions to tackling major issues because a Progressive understands the latin concept of E. Pluribus Unum. From many we are one. Solutions to local community issues are always best solved by listening and working together to solve problems, not profit from them. There’s no money that strategy for “the Party.”
No Progressive candidates for our local, county, state senate, and assembly representative races can get past the coercive power of the oppressive money machine that is “the Party” and they get snuffed out and suppressed by the corporate media that replaced our “local news”. (Save the OB Rag)
Time and time, and time again, quality candidates reflecting real world Community Leadership get whacked by the California Democratic Party. “The Party” has recklessly taken out real leadership intended to hold these offices out at the knees going into every primary, by any means necessary.
I am a progressive and sometimes a fool but I voted for Barbara Bry. Sadly it takes mega buck$ to win elections. The politicized conservatives on SCOTUS legalized bribery long ago. He or she who makes promises to and kisses the butts of the biggest wallets wins. There is a glimmer of hope though. NYC.
Who manages the long term outcomes of these decisions?
This smacks of what has ultimately been allowed for developers to postpone building and completion of required affordable housing at the same time the main project completion. Let me try to rephrase.
City Council is allowing the developers with an extension of 5 years and a different location to build the required affordable housing for any specific construction project. No wonder we don’t have enough housing.
By delaying, who knows… The developers could go out of business or claim bankruptcy.
By changing the original required location…. How many empty lots do we have in San Diego that could accommodate building new housing affordable or not?
By modifying the original requirements for affordable housing, the city has shot itself in the foot.
The requirements placed on developers and owners are there to enable a well planned, cohesive , and managed neighborhood.
Instead, our town is becoming a helter skelter, patched up, disjointed neighborhood that doesn’t meet the needs of our citizens. Libraries, fire stations, community parks, and affordable housing non-existent. But, City manages to hang onto the money.
These aren’t loopholes they are Gloria Holes: There are no laws that require the building of any city permit issued affordable housing. and developers don’t build it, never have and never will. THEY DON’T HAVE TO BULID AFFORDABLE HOUSING THANKS TO THE MAYOR, THE MAYORS LEGISLATION HE WROTE AS AN ASSEMBLYMEMBER, SEAN ELO RIVERA AND THE CITY COUNCIL.
Developers provide plans offering a seemingly generous, albeit moderate, percentage of affordable units; because that gets the projects fast-tracked through our corrupted planning commission.
Once the Soviet Bloc Stye Human Warehousing projects have been approved, almost EVERY developer eliminates most, if not all, of the permitted affordable units from ever becoming reality. There is a name for this “Paid Facilitated Legislative Incompetence.”
For those interest here’s where you can find the report:
https://www.sandiegocounty.gov/content/sdc/grandjury/reports/2024-2025.html
It’s titled Never Been Challenged: City of San Diego Development Impact Fee Program Redux (Pub. 5/30/2025)
Thank you for the link to the Grand Jury findings on City Malfeasance & Mismanagement. I would encourage everyone to read this in it’s entirety.