San Diego is lagging behind other cities in the financing of subsidies and needs a new strategy, Audit Finds – San Diego Union -Tribune

A new city audit finds that San Diego is far behind the other major cities of California to provide subsidies – a key factor in important budget deficits that the city is confronted.

The other major cities of California obtain two thirds of more money per resident than San Diego in the annual funding of state subsidies, federal and others. San Diego costs an average of $ 337 per resident, while other large cities on average $ 558.

The gap is even wider with regard to the granting of financing infrastructure projects, San Diego on average $ 97 per resident, against an average of $ 180 in other major cities of California – 85% more than San Diego.

The funding for grants represented only 11.5% of San Diego’s total income during the 2023 financial year, much less than the average of 19.7% among the other major state cities.

According to city listeners, a key challenge for San Diego in obtaining certain subsidies is the lack of required local counterpart funds – that the city would be better placed to provide voters that voters offered tax increases proposed in recent years.

In 2020, voters of the city rejected an housing obligation of $ 900 million which would have made the city eligible for several million state subsidies to build subsidized rental housing and housing for people who were previously sheltered.

And last year, the city’s voters rejected an increase in sales tax to a hundred which would have generated around $ 400 million a year. City leaders said they planned to use a large part of the money for infrastructure, including counterpart funds.

Last year, city leaders also decided not to continue a flood prevention tax which, if adopted, would have collected millions – including possible counterpart funds – for rainwater projects in San Diego.

The member of the municipal council Vivian Moreno, president of the audit committee of the council, said that it was particularly frustrating that San Diego was late on federal subsidies when the city is home to multiple military bases and the most popular international crossing in North America.

The 74 -page audit raises concerns concerning the city’s government department of the city, which oversees subsidy requests, pressure on other city services to opt for subsidies which, according to the leaders of these agencies, may not have meaning.

“The ministries fear that government affairs will start to ask for subsidies that they do not have the capacity to manage, while government affairs seek to ensure that these departments require as many subsidies as possible to complete the limited resources of the city,” said audit.

The leaders of the Department of Government Affairs disagreed with this characterization in a long response to the audit, the staff members of the other departments are not confused as for their roles and were not in a hurry.

The audit recommends that San Diego provides more than a dozen modifications to the way he manages subsidies, in particular by establishing his first strategic plan of subsidies to help seek subsidies that approach key priorities and that the city can secure realistically.

“The effective planning of subsidies is essential to ensure that an organization is well placed to submit requests for timely and persuasive grants that align with its priorities,” says the audit.

A strategic plan could help proactive planning, improve collaboration between city services and solve any problem of lack of personnel or financing, says the audit.

Such a plan could reduce quarrels between the departments by clearly fixing the priorities in advance, the audit said. The plan would also give the city leaders a look earlier on the planned grant activity and would allow them to be more selective on the subsidies that the city is looking for.

The audit notes that the association of governments of San Diego, the port of San Diego, the transit district of the county of North and the city of Oceanside are all engaged in the strategic planning of subsidies.

The other audit recommendations include subscription to a service that alerts cities when subsidies are available and the creation of a city resource library to preserve institutional knowledge.

The Department of Government Affairs has agreed with the 13 proposed changes, but the director of the Walt Bishop department said that some should be delayed until it can add enough staff.

Andy Hanau, the city auditor, said that he included the concerns in terms of endowment in the light of the budget deficit of $ 250 million with which the city is faced for the next fiscal year.

But Hanau said that Bishop should consider the potential return on investment, noting that a more effective subsidy program could give tens of millions of dollars for the city.

The audit includes some praise for the city’s grant program, noting that there has been a significant improvement since a 2018 audit has caused several changes.

During the year 2023, the city obtained $ 491 million in grants – 81% more than four years earlier, with $ 271 million during the 2019 financial year.

The subsidies were even higher during the 2021 and financial year 2022, but these are considered aberrant years because the city has received hundreds of millions of people in the federal pandemic.

The city’s 2018 audit found shortcomings in the identification and request for subsidies and inadequate surveillance of the grant administration. Since then, he has instituted new policies and a new examination process and has hired two grant specialists.

“The city has implemented many positive changes to its subsidy program in the past five years, whose government affairs is an annual internal examination of the program to assess progress and the areas to be improved,” said the audit.

Bishop said the city’s subsidy program improves.

“While nobody here claims victory, there has been undeniable progress,” said Bishop when the audit committee examined the audit on March 12.

However, he said that the problem of counterpart funds is significant.

Recent or future projects financed by subsidies include the New West Mission Bay Drive Bridge, subsidized housing projects, free meals in the branches of the city library and a new interchange at the Interstate 805 and Palm Avenue.

The audit comparison cities are Los Angeles, San Jose, Oakland, Sacramento, Fresno, Bakersfield and Anaheim.

Long Beach and San Francisco have been excluded because these two cities also provide health services, the audit said.

Originally published: March 29, 2025 at 5:00 a.m.