SAN DIEGO –
Trustees of the city-funded Southeastern Economic Development Corp. are worried about the agency's ability to function after San Diego Mayor Jerry Sanders cut all but essential spending.
An SEDC board committee met last night, without agency President Carolyn Smith. A staff member said Smith was at another meeting.
Smith is facing growing pressure to explain budget and compensation irregularities at the nonprofit, which uses tax money to spur growth in 7.2 square miles east of downtown.
“What do we do for today, for tomorrow?” trustee Derryl Williams asked at the meeting.
Trustees Richard Geisler and Cruz Gonzalez also expressed concerns.
“We need a good feel on how we will weather this,” Gonzalez said.
“The question is: 'Are we still functioning?' ” Geisler said.
Staff members had no answers for the Intergovernmental Committee members. SEDC spokesman Alexis Dixon told trustees that Smith and Chip Owen, the board chairman, will address the questions at the agency's meeting Wednesday.
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Overview
Background: The nonprofit Southeastern Economic Development Corp. handles redevelopment in 7.2 square miles east of downtown. City officials are asking questions about why its executives are paid more than budgeted salaries.
What's changing: The city has cut all nonessential spending by the agency, and the board is wondering what that means for its projects.
The future: The agency has until tomorrow to answer an initial set of questions from city finance officers and is expected to discuss these matters at its board meeting Wednesday.
Online: Read a series of city letters to SEDC at uniontrib.com/more/documents.
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City finance officers are reviewing agency books, generating almost daily memos asking more questions. A new city analysis shows that Smith was paid $261,393 last fiscal year, more than her city-approved salary of $172,000.
The larger salary figure does not include benefits such as health insurance, said Fred Sainz, Sanders' spokesman.
On Tuesday, City Comptroller Greg Levin asked SEDC to explain high overhead costs on projects and large fluctuations in pay from pay period to pay period.
Charts included in Tuesday's letter show that biweekly pay for Smith and the agency's director of finance, Dante Dayacap, was inconsistent.
In the first pay period of fiscal 2008, Smith received less than $15,000, but in the 21st and 23rd pay periods, her pay reached nearly $35,000. Dayacap received less than $10,000 in the first pay period, but more than $25,000 in the 21st and 23rd pay periods.
Dixon said the agency is responding to the mayor's requests for information.
Levin's letter included charts showing compensation fluctuations. He asked the SEDC to explain whether extra pay was given for “longevity,” “acknowledgment” or other reasons. He also asked who authorized the increases and what “legitimate public purpose” they serve.
That letter also questions the agency's administrative overhead costs, which reached as high as 39 percent in 2006 for the project areas managed by SEDC.
Generally, Levin noted major discrepancies between SEDC's actual expenditures and its budgeted expenditures, saying city staff members were “unable to reconcile amounts listed in the budget document to our accounting records.” He asked for a response to his July 15 letter no later than Aug. 1.
Helen Gao: (619) 718-5181; helen.gao@uniontrib.com
