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City Attorney Says Obscure Recreation Councils Are Collecting and Spending the City’s Money

For nearly 40 years, San Diego has empowered independent groups known as recreation councils to run programs, collect revenue and pay for some improvements at the city’s parks and recreation centers. City Attorney Mara Elliott has now decided that is inappropriate.

A playing field at the Golden Hill Recreation Center / Photo by Adriana Heldiz

For nearly 40 years, San Diego has empowered independent groups known as recreation councils to run programs, collect revenue and pay for some improvements at the city’s parks and recreation centers.

City Attorney Mara Elliott has now decided that is inappropriate. Since it’s the city’s money, the city attorney’s office says the city needs to control it. Now the city is in a mad dash to restructure the system before the end of the year to make it right.

The first run at making that fix is coming to the City Council on Tuesday. Dozens of the Park and Recreation council members and volunteers – in other words, some of the most vocal and involved constituents in each Council district – are expected to pack Council chambers to voice opposition.

For the Council, there may not be an easy solution. The city attorney has said the current structure opens the door for unchecked ethics conflicts and skirts legal requirements for spending city funds.

Yet that’s cold comfort to the volunteers, who see a city that has cut library hours and parks and rec center hours in lean budget times now coming to reclaim its money once and for all.

When an adult basketball league uses a city facility, it pays the recreation council associated with that facility. But those recreation councils can also hold special classes like karate or yoga, in which it will contract directly with an instructor, and the recreation council will split the registration fees with the instructor. Plus, many recreation councils also seek out donations to subsidize their parks, offerings and facilities.

The city’s recreation centers began the year with nearly $4.5 million in their accounts, but it’s hardly split evenly from one community to the next. Carmel Valley’s group began the year with over $400,000 in its account, while Stockton had just $51.

Nonetheless, the city attorney now says all that money belongs to the city, and should be diverted into the city’s treasury but split into individual community accounts where it would continue to be spent.

But it’s not simply a matter of transferring money from one account to another. The City Charter and Municipal Code spell out a bunch of rules the city must follow when it spends money. Recreation councils hadn’t been following those rules.

For instance, recreation councils weren’t following competitive procurement rules when they bought new equipment or contracted for maintenance or repair services.

“I don’t know how we got into the position that private citizens are in charge of public money and our budgetary process,” said City Councilman Scott Sherman, who supports the city’s proposed changes. “It also isn’t fair to put these financial liabilities on these people. It’s just a good government thing – having unelected people in charge of taxpayer dollars is a problem.”

Oversight and accountability concerns aren’t just hypothetical.

In 2012, the city auditor’s office confirmed that $100,998 had gone missing from a recreation council.

And earlier this year, La Jolla Village News reported that $80,000 was missing from the La Jolla Recreation Council, and printed emails in which the council’s chair took responsibility for the issue and pledged to pay it back. She later resigned.

Recreation council members aren’t required to file Form 700 statements that would outline their economic interests. That raised concerns that they could use their positions on the boards to contract with businesses to which they were connected.

The new proposal outlines that the city would not reauthorize all the special permits that let these councils manage the recreation centers, as of the end of this year. That means time is running out on passing a fix.

The money would then be put into a unique fund for each recreation center area to be used on the same types of projects and services it’s already used for. Recreation councils would be able to keep fundraising independently as nonprofits to bring in more money for their rec centers.

They’d essentially become advisory boards – telling the city what their priorities are, in hopes that the city will budget the funds to cover them – with the option of raising more money to get more done.

In a memo last week, Councilman David Alvarez asked the mayor to pump the brakes.

Community members had voiced concern over the changes, he said, and the city hadn’t done enough to talk to them about how the changes would work.

He asked the city to hold public meetings on the issue in the northern and southern parts of his district, and to send the item through the City Council’s committee process, instead of just bringing it to a final Council vote, which is the current plan.

Councilwoman Lorie Zapf went quite a bit further. The city shouldn’t slow down, she said. It should abandon the idea.

“Recreation councils have been able to create programming and take on much needed repair and maintenance costs when the city would not,” she said in a statement. “They have been able to complete projects much faster than going through a lengthy, bureaucratic, expensive process.  We should support local control of our recreation councils.”

Longtime recreation council volunteers are even more unhappy.

Susan Mournian, a member of the Tecolote Recreation Council, said it’s been nearly impossible to get answers from the city and the city attorney’s office. She expects, if the change passes, all new revenue to go to the city, and for a big fight over the unspent money that’s sitting in council accounts today.

“The city has a long and ugly history of mismanaging money,” she said. “And every time we talk to them, the facts in the proposal keep changing. You have 52 councils and a lot of volunteers who don’t know where they stand. It’s not that we want the burden of managing the money, but we think you’re going to get stuck in a bureaucracy and it’s all going to be middle-managed and we aren’t sure how that’ll work. What it boils down to is: We’re being phased out.”

Mournian also noticed that when Elliott said short-term vacation rentals were illegal, the city didn’t start enforcing or feel hurried to change any policies. Yet Elliott’s determination on recreation councils has sprung the city into action. She’s also worried the councils will face new legal liabilities over deals they’ve inked with independent contractors once a new system is in place.

Margarita Castro has been volunteering on her Linda Vista recreation council, she said, for 25 years off and on.

She said at a recent parks and rec meeting about the changes, she found herself feeling sorry for the five city staffers there to explain the changes.

“I thought, in this short amount of time, they need to come up with a solution, and make people accept and feel good about it?” she said. “The way it’s going right now, no one is going to come out of it feeling good. And the city will suffer, because they are going to lose all the volunteers who have given of their time.”

Ray Bernal, a member of the Memorial recreation council, said he’s more concerned with the city’s attempt to create a standard fee structure to use recreation facilities across the city.

The Memorial recreation center – which serves disproportionally low-income residents in the Logan Heights and Memorial neighborhoods – has used what money it has to keep fees as low as possible. Last year, when it tried to raise prices by $15 to buy flag football jerseys, sign-ups dropped. The new citywide fee level would increase costs.

“We saw what happened when you try to raise the fee,” he said. “It really was a big deal. It impacted these kids. Some of this kids come to the rec center with holes in their shoes. Any raise in the price is going to impact what they’re doing.”

Bernal isn’t thrilled with giving the city control of recreation center accounts. Whoever has the money has the control, he said, and next time there’s a recession he expects the city to use the money how it sees fit.

But the memo from the city attorney’s office doesn’t say anything about the need to have a flat fee across the city, he argues.

“Why are we rushing to do this, with this doom and gloom situation that if you don’t fix it by December 31, it’s over?” he said. If that’s the law, and they have to take the money, so be it. But if they’re going to approve this, amend out the new fee structure and let rec councils set the fees for their areas.”

But not everyone in the recreation council community thinks the system needs to be preserved.

Barbara Culver is on the Allied Gardens Recreation Council, and it hasn’t been a good experience. She said the group is run like a mini-fiefdom, with everyone deferring to a chair who rams through selected items.

She said she got into a confrontation over his desire to pass new bylaws for the group despite not making them available to her for review ahead of the vote.

“I think taking back the money would be the best thing,” she said. “I sincerely believe that the council at times thinks city staff works for them, and they don’t. They work for the taxpayers. It’s a bullying force, and it’s wrong.”

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