Auditor: San Diego has failed to collect $4M in fees

The cash-strapped city of San Diego has failed to collect more than $4 million in fees owed by private companies and public agencies that sought development approvals, it was reported Friday.

A recent report by City Auditor Eduardo Luna found San Diego’s Development Services Department is doing a poor job of collecting past-due accounts because it uses a decentralized and mostly manual collection process, according to The San Diego Union-Tribune.

Some accounts are overdue by as much as five years, the newspaper reported.

San Diego is facing a budget deficit estimated at $179 million, according to Mayor Jerry Sanders’ office. Other officials have pegged the spending shortfall at $200 million.

As of June, 40 percent of 6,797 Development Services’ accounts owed money to the city. In 89 percent of the cases, staff members did not refer the accounts to the department that handles collections, the Union-Tribune reported.

The accounts were opened when applicants sought permits or inspections for various projects. Applicants start the process by putting down a deposit to cover labor costs. When the deposits run out, city staffers continue to charge the accounts, creating a negative balance.

The auditor’s report found the practice amounts to the city extending credit, which would be a violation of the city charter, the Union-Tribune reported.

The mayor’s office recently proposed spending cuts that include the elimination of 500 positions, about 200 of which now are filled. Additionally, police and fire budgets would be reduced by a total of $44.6 million, and library hours would be shortened from 41 to 36 hours per week at each of San Diego’s 35 branches.