The Elephant in the Room on Balboa Park Funding - Voice of San Diego

Government UNVEILING THE UNSEEN

The Elephant in the Room on Balboa Park Funding

The San Diego Zoo has long been the beneficiary of a property tax that’s pulled in more than $10 million annually in recent years. The zoo has managed to hold onto that pot of money despite proposals that would spread the wealth around other portions of Balboa Park.

Within Balboa Park sits a little financial oasis, where a steady stream of taxpayer money helps pay for maintenance and upkeep. It’s the San Diego Zoo, the park’s largest tenant.

Outside its gates, Balboa Park’s maintenance and infrastructure needs total more than $300 million, and there’s no dedicated funding stream to address them. But the zoo has long been the beneficiary of a property tax that’s pulled in more than $10 million annually in recent years.

The zoo has managed to hold onto that pot of money despite proposals that would spread the wealth around the park.

Both the unique history of the property tax and the zoo’s lack of interest have contributed to the stalled conversations.

The zoo’s received a share of property tax collections in the city since a public vote in 1934. The zoo was fighting to remain open and pushed for a permanent tax measure that could help sustain it. The tax passed overwhelmingly and was added to the city’s charter, which means any effort to change or stop the tax would require another public vote. The passage of Proposition 13, which limits property-tax rates and requires a two-thirds vote, placed further constraints on the money, and the likelihood of changing the arrangement.

The zoo, which now operates as a nonprofit called San Diego Zoo Global, has come a long way since 1934. It’s developed a worldwide reach and opened a Safari Park and research institute in Escondido. It’s also flourishing financially. The nonprofit pulled in $295 million in revenue in 2014, about $69 million more than its expenses. It hails itself as the largest zoological membership association in the world and claims more than 250,000 member households, meaning it’s got a potential army of political supporters.

City attorneys have repeatedly concluded it’s not possible to direct the zoo tax to other parts of Balboa Park. But the zoo’s role in helping address the park’s challenges came up again this winter as the city weighed charter amendments for voters to consider this June.

Two City Council members, Republican Councilman Mark Kersey and Democratic Councilwoman Marti Emerald, questioned whether there might be a novel way for the zoo to help Balboa Park.

Kersey wanted the zoo to voluntarily partner with the city on a solution.

“We have a lot of deferred maintenance in Balboa Park and I would like to see the zoo work with the city as well as the various Balboa Park committees and figure out if there’s not a way to leverage some of this money,” City Councilman Mark Kersey said at a December meeting.

Emerald agreed and made another suggestion.

“I think that Mr. Kersey raises a very sound point that, if we keep this, is there a way to leverage that $12 million to help fund other infrastructure in the park,” Emerald said, referring to the zoo’s annual property tax haul. “I think that that’s a legitimate question. And how much could we generate potentially? Then we have that information going in to sit down with the zoo.”

Otherwise, Emerald said, voters should get the chance to say whether they’d like to keep paying the zoo tax.

The zoo didn’t participate in the public discussion.

The City Council’s charter review committee directed the mayor and the city’s independent budget analyst to draft a plan to partner with the zoo on a bond for Balboa Park. That didn’t happen, and appears unlikely to anytime soon.

A mayor’s office spokesman last week declined to comment, saying it was premature to weigh in without more legal research.

Jeff Kawar, deputy director of the budget analyst’s office, was more direct about where the proposal stands.

“There doesn’t appear to be immediate interest in docketing this for further discussion,” Kawar said.

The San Diego Zoo made clear it isn’t interested in discussing the idea, either.

Zoo spokeswoman Christina Simmons told me comments by Kersey and other members of the city’s charter review committee in December were made “without knowledge of applicable law in this case.”

Simmons would not answer my questions about whether the zoo might support a Balboa Park bond, how it spends the tax money it receives or how crucial that cash is to its budget.

“We do not have any additional information to offer you on this subject,” Simmons wrote in an email.

Multiple current and former San Diego Zoo board members also declined to comment or did not respond to messages left by VOSD.

City documents obtained in response to a records request show the zoo has in recent years funneled property tax money to a fund that supports its animals and facilities.

Those filings show the zoo has annually reported $35 million to $45 million in spending on zoological exhibits and facilities the past four years and used taxpayer money to cover about $10 million each year.

The city hasn’t always gotten that much detail on how the zoo spends the money it gets from the tax.

A 2013 city audit found city officials weren’t monitoring whether the zoo was spending the money on zoological exhibits, as the city charter requires. At the time, the zoo couldn’t verify that, either.

Before the audit was released, the zoo’s chief financial officer penned a letter to the city auditor pledging to establish a separate fund to track zoo tax spending. She also promised the money had been properly spent in the past.

“We emphasize that no improper expenditures of funds have been made and at all times the zoo has used the funds strictly for the ‘maintenance of zoological exhibits’ as provided for under Charter Section 77a, including only expenditures required to maintain the plant and animal collections and exhibition facilities,” CFO Paula Brock wrote.

In the years since that audit, city officials have at least twice brought up the zoo tax as either a funding source for Balboa Park, or at least a potential deal sweetener for another funding engine.

Last year, the city’s independent budget analyst flagged the tax on its list of potential city charter passages worth amending – and specifically noted the city could “consider amending this provision to provide for other maintenance needs in Balboa Park – but noted just weeks later that wouldn’t be legally feasible.

City Councilman Todd Gloria, who represents the district that includes Balboa Park, hasn’t been among those advocating for a change to the tax. He cited the budget analyst’s conclusion in a statement to VOSD.

“Given the legal issues, this question is somewhat moot,” he said.

When asked whether the zoo should be expected to aid the park as a whole given its prominence and years of taxpayer support, Gloria and a handful of Balboa Park stakeholders said the zoo already delivers as a major tourism driver and caretaker of zoological collections technically owned by the city.

Gloria and Tomas Herrera-Mishler, CEO of Balboa Park Conservancy, noted the zoo’s recent investment in upgrades to Old Globe Way and the Centennial Walkway when it built its new employee parking garage last year.

Herrera-Mishler, whose organization was created to help fund the park’s many needs, believes the zoo tax should remain on the books.

“I think that it’s very important that there be dedicated revenue sources for sustaining and enhancing Balboa Park, and this is one way that the taxpayers help to support the visitor experience in Balboa Park, at the zoo, and I certainly hope that not only it’ll continue but that we’ll find ways to create new dedicated revenue streams into the park,” Herrera-Mishler said.

In other words, the city should look elsewhere for Balboa Park funding.

The zoo seems to thinks so, too.

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