California State Auditor

Report 2012-109 Summary - April 2013

City of San Diego:

Although It Generally Followed Requirements for Reviewing Permits, It Could Do More to Protect Historical Resources and to Notify the Public Properly About Its Actions

HIGHLIGHTS

Our review of the permit review process for the City of San Diego (San Diego) found that its Development Services Department (Development Services):

  • Generally followed San Diego's permit review process.
  • Did not collect sufficient information to ensure that all appropriate projects underwent reviews to determine whether the project sites possess historical resources. Specifically, of the 19 applications for projects in San Diego that we examined, five had incomplete information on historical resources, and in 10 the information provided conflicted with the records of the County of San Diego's assessor/recorder/county clerk.
  • Did not consistently adhere to the City of San Diego Municipal Code when approving four of the 10 construction changes we reviewed.
  • Did not make certain that the public receives mandatory notices about environmental determinations for approved projects.
    • For three of the six projects we reviewed that were subject to the California Environmental Quality Act, Development Services filed the Notice of Determination between 12 business days and more than 90 business days late.
    • Development Services does not post a Notice of Right to Appeal Environmental Determination for projects that have been reviewed by hearing officers because it believes it is not required to do so.
  • Did not verify that each employee required to complete a Statement of Economic Interests, commonly known as Form 700, submits the form at the appropriate time. Specifically, four of the 15 Development Services designated employees we selected for review submitted their Form 700, required upon assuming or leaving office, between one month and more than 12 months late.
  • Our review of the City of San Diego's Ethics Commission found that it does not ensure employees who must attend ethics training do so biennially by March 31, as the policy of the San Diego City Council requires. Six of the seven employees we selected for review attended the required ethics training between four and 18 months after the March 31 deadline.

RESULTS IN BRIEF

In reviewing permits applicable to construction and development projects for the City of San Diego (San Diego), its Development Services Department (Development Services) generally followed applicable requirements. However, Development Services did not collect sufficient information to ensure that all appropriate projects underwent reviews to determine whether the project sites possess historical resources, make certain that the public receives mandatory notices about environmental determinations for approved projects, or verify that each employee required to complete a Statement of Economic Interests, commonly known as Form 700, submits the form at the appropriate time. As a result, Development Services did not consistently meet state and municipal requirements imposed upon it.

Development Services is responsible for managing the majority of San Diego's review of development projects, and it issues permits that allow construction or development within the city. The City of San Diego Municipal Code (municipal code) defines development generally as any act dividing a parcel, adding or altering existing facilities, or changing the layout or vegetation of the land. Each development project requires either an approval or a permit. In addition, the municipal code specifies that construction permits, which constitute one category of permits, must undergo a ministerial review process, which involves determining whether the project meets a series of predetermined requirements and involves little or no personal judgment by the public official. The other category of permits, development permits, is subject to discretionary review processes, which require decision makers to exercise judgment and deliberation when deciding to approve or disapprove a project.

Although Development Services generally followed San Diego's permit review processes, it cannot be certain that all project sites that require historical resource reviews are receiving those evaluations. The U.S. Secretary of the Interior establishes standards for rehabilitation of historical resources, and Development Services reviews permit applications for projects that involve designated and potential historical resources to ensure that the projects comply with those standards.1 The municipal code requires Development Services to review all projects that include modification to structures that are 45 or more years old for potential designation as a historical resource. Development Services relies on the applicants seeking permits to provide information about the historical resources at the project sites, but it does not require applicants to supply documentation that supports the information on the applications. In fact, of the 19 applications for projects in San Diego that we examined, five had incomplete information on historical resources, and in 10 the information provided conflicted with the records of the County of San Diego's assessor/recorder/county clerk (county). Consequently, Development Services risks not identifying project sites with potential historical resources.

In the case of the five projects with incomplete information about potential historical resources, the projects' general applications lacked the year of construction for the structures on the project sites. Of these five projects, only two received a historical resource review by Development Services, because its staff had prior knowledge of the project sites. The historical resource reviews that Development Services performed appear to comply with processes outlined in the municipal code and San Diego's Land Development Manual.

Our review of 10 construction changes to building permits found that Development Services did not consistently adhere to the municipal code when approving four of these changes. One project involved adding a chain-link fence that was taller than allowed without a building permit, and the second involved adding a retaining wall that similarly should have had a building permit due to its height. Although Development Services referred us to its Information Bulletin 118, issued in June 2011, which describes its process for construction changes to approved plans, it did not specifically address our concern that the height of the structures did not conform to the municipal code requirements. Two other construction change applications that should have received a historical resource review did not. For one of these projects, Development Services staff indicated that the changes were minor and did not require a historical resource review in accordance with Information Bulletin 118. However, this decision is inconsistent with the municipal code. Further, Development Services' information bulletins, which are free publications that provide the public with certain information, cannot supersede the municipal code requirements. For the second, Development Services staff were unable to explain why a historical resource review was not conducted.

Development Services is also responsible for assessing projects in accordance with the California Environmental Quality Act (CEQA). Among other objectives, the purpose of CEQA is to inform governmental decision makers and the public about projects' potentially significant environmental impacts. Of the 19 projects we reviewed, nine related to development permits. Three of the nine projects were exempt from CEQA. For these three projects, Development Services generally complied with the applicable CEQA public notice requirements for exempt projects.

However, for the six projects subject to CEQA, Development Services did not always provide the public with proper notice. The CEQA guidelines—the state regulations that implement CEQA—specify that within five days of the final approval of a project, an agency must prepare and file with the county clerk a Notice of Determination (determination notice), which remains posted for 30 days.2 The determination notice describes the project, states that the determination was made pursuant to CEQA, and indicates whether any mitigation measures must be undertaken as a condition of approval. For one of the six projects we reviewed that was subject to CEQA, Development Services did not file a determination notice. For three other projects we reviewed that were subject to CEQA, Development Services filed the determination notices between 12 business days and more than 90 business days late.

Each of the project managers for these three projects believes that the delays occurred because the applicants did not submit the filing fee for their determination notice in a timely manner. According to the assistant deputy director for project management, Development Services requires applicants to submit a check made payable to the county clerk to cover the filing fees for the determination notice. However, the CEQA guidelines do not provide exceptions, including late payment of the filing fee, to the requirement that the determination notice be filed within five days of the final approval of a project. When a determination notice is not filed or filed significantly late, the public may be unaware that a determination has been made, and therefore it may not exercise its right to challenge the decision.

In addition, the municipal code requires Development Services to post a Notice of Right to Appeal Environmental Determination (appeal notice) for projects following certain discretionary permit review processes. However, Development Services does not post these appeal notices for projects that have been reviewed by hearing officers, because it believes it is not required to do so. We disagree with this conclusion because it is inconsistent with the municipal code. Although the assistant deputy director stated that Development Services intends to clarify the municipal code to align with its practice, Development Services is not complying with the municipal code as currently written. As a result, the public is not receiving proper notice of its ability to appeal environmental determinations made by the hearing officers.

Development Services is also subject to certain state and municipal code requirements regarding conflicts of interest. Specifically, certain Development Services employees—whose positions are designated in Development Services' conflict-of-interest code—must disclose their financial interests on Form 700 in accordance with California's Political Reform Act of 1974 (Political Reform Act). The Political Reform Act requires public employees to file a Form 700 within 30 days of assuming or leaving a designated position. However, four of the 15 Development Services designated employees we selected for review submitted their Form 700 required upon assuming or leaving office between one month and more than 12 months late. These delays occurred because Development Services' filing liaisons consistently failed to notify the Office of the City Clerk (city clerk) about employees who were leaving or assuming designated positions. One of the filing liaisons stated that they are not always aware of employees who assume or leave a designated position because they rely on Development Services' payroll staff to provide them with this information. The filing liaison also stated that the liaisons are working with the payroll staff to develop procedures to ensure that they effectively communicate information on employees who assume or leave a designated position. Until Development Services implements these procedures, the city clerk cannot ensure that it collects the Form 700S required upon assuming and leaving office from all designated employees in a timely manner.

Finally, the City of San Diego Ethics Commission (commission) does not ensure that employees who must attend ethics training do so biennially by March 31, as the policy of the San Diego City Council (city council) requires. San Diego's municipal code states that the commission is responsible for providing training and education on governmental ethics laws, such as local laws that govern conflicts of interest and financial disclosure. However, six of the seven employees we selected for review attended ethics training between four and 18 months after the March 31 deadline. The program manager believes the commission maintains the spirit of the policy by providing the training shortly after an employee becomes subject to the commission's jurisdiction and every two years thereafter. However, until the commission seeks and obtains changes to the city council's policy to align the policy with its current practice, it is not complying with the policy and is not meeting the city council's expectations for enforcement of its ethics training requirement.

RECOMMENDATIONS

To ensure that it properly identifies potential historical resources for the structures on project sites and conducts reviews in accordance with the municipal code, Development Services should require applicants to submit documentation, such as the county's property records, with their applications or it should obtain the information directly from the county so that it can determine whether the project requires a historical resource review.

To comply with the municipal code requirements for construction permits such as building permits, Development Services should align Information Bulletin 118, issued in June 2011, which describes its process for construction changes to approved plans, with the municipal code requirements for issuing permits and conducting historical resource reviews.

To provide the public proper notice of San Diego's environmental determinations within five days of the final approval of a project in accordance with the CEQA guidelines, Development Services should develop procedures to ensure that its staff file the determination notices in a timely manner. For example, to avoid delays, Development Services should require its staff to collect and submit to the county the filing fee for each determination notice within five days of the final approval of the project.

To provide the public proper notice of San Diego's environmental determinations in accordance with the municipal code, Development Services should seek an amendment to the municipal code to clarify its belief that environmental determinations made by a hearing officer are not subject to the appeal notice requirement. In the interim, Development Services should post appeal notices for projects subject to review and approval by the hearing officer.

To ensure that its designated employees disclose their financial interests in a timely manner, Development Services should do the following:

  • Make certain that its filing liaisons and payroll staff develop and implement procedures for notifying the filing liaisons when designated employees assume or leave their positions.
  • Ensure that the filing liaisons promptly notify the city clerk when designated employees assume or leave their positions.

To make sure that certain employees attend ethics training as required by the city council, the commission should either follow the city council's policy or seek a change to align the policy with its current practice.

AGENCY COMMENTS

San Diego's mayor believes all of our recommendations are reasonable and appropriate and states that San Diego will implement them.

Although the commission disagrees with our conclusion that it is not meeting the city council's expectations, it agrees with our conclusion that its training program does not align with the city council's policy for providing ethics training to employees biennially by March 31. The commission states that it will ask the city council to amend its policy and remove the language concerning the March 31 deadline.


1 The City of San Diego's Historical Resources Board designates certain sites and districts as historical resources.

2 Because CEQA guidelines refer to each jurisdiction's county clerk, this discussion uses the title county clerk to refer to the county.















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