A July report from the San Diego Auditor’s Office examining the city’s Ash Street lease agreement and other city real estate transactions appears to have driven a wedge between the elected city attorney and the appointed auditor .
A new note from auditor Andy Hanau says city attorney Mara Elliott declined several invitations to participate in the months-long audit of real estate transactions and then criticized Hanau for not interviewing her before publish its report.
“We met with representatives of the city’s prosecutor’s office on at least seven occasions during the audit,” Hanau wrote in a note dated Thursday. “No one from the city attorney’s office indicated that we had reason to question the city attorney or that the city attorney wished to be questioned. “
The auditor’s note was a response to Elliott’s official rebuttal to the audit released two months ago, which strongly criticized the way city officials have handled a series of real estate transactions over the past several years.
In his rebuttal to the August 31 audit, Elliott reiterated his criticism of the July 22 audit as an incomplete review. She said her legal conclusions were incorrect and the assessment was based on speculation rather than facts.
“I have spent nearly two decades of my legal career advising auditors and government audit committees on their roles and responsibilities in San Diego County and the City of San Diego,” Elliott wrote. “This failure to seek complete information led to inaccuracies in the audit report.”
The city attorney’s office issued a similar response to the audit when it was first released.
The city council audit committee is due to consider Elliott’s rebuttal, as well as a subsequent response to Mayor Todd Gloria’s audit at its Wednesday meeting.
Gloria’s rebuttal indicated that the mayor’s office would implement any recommendations made by the auditor that are under its control, although many will take months, or even until 2023, to be put in place.
“The department intends to create a strong and lasting policy that governs real estate transactions of many types,” COO Jay Goldstone wrote in Hanau on September 7. “The revised policy will serve as a guideline and tool for city council and city management to adhere to even when specific transactions are not being considered today.
Hanau’s July 22 report revealed that former mayor Kevin Faulconer and his staff withheld information and misrepresented facts when they sought council approval in 2016 for the 20-year capital lease agreement for the former Sempra Energy headquarters at 101 Ash St.
“The previous city administration reduced the city council’s oversight capacity on major real estate acquisitions by failing to provide complete and accurate information,” the audit said.
Auditors also found fault with other real estate investments made under the Faulconer administration, including a broken down indoor parachuting facility the city bought for $ 7 million without the benefit of an appraisal, and a construction site. repair that needed $ 8 million more in upgrades than expected.
Elliott, who is now suing to try to cancel the Ash Street lease and an earlier deal for the nearby Civic Center Plaza, said the municipal auditor’s office had wrongly blamed her for the legal work the office did. of the municipal prosecutor before his election in 2016.
His rebuttal also slammed the audit for saying it was his office’s failure to recognize the “red flags” in the Ash Street deal that cost the city at least $ 60 million on a skyscraper. 19 story building which cannot be safely occupied due to asbestos and other issues.
“You have to rely on those who have the expertise. And those with expertise report to another branch of government – the executive branch, ”Elliott wrote. “Lawyers must rely on the facts presented by city staff.”
The auditor review dispute is not the first dispute between the municipal auditor’s office and the city attorney’s office.
Last year, then-Acting City Auditor Kyle Elser applied for permission to hire an independent lawyer for his office. Sometimes there are conflicts of interest between municipal auditors and municipal lawyers, he said at the time.
Elliott has resisted the request, which depends on both the city attorney’s office and the mayor’s human resources department to move forward.
The proposal will likely be reintroduced by the municipal auditor’s office later this year.