Grand jury report casts doubt on $20M in Ocean Beach development fees

A July county grand jury report saying the city of San Diego should refund $179 million in fees to developers cast a shadow over the Ocean Beach Planning Board’s list of recommended capital improvement projects it approved at its meeting last week.

The $179 million represents the total amount of development impact fees that have not been spent within the legally mandated five-year time limit from when they were collected. DIFs are assessed on new developments to pay for projects to help mitigate their impact on infrastructure and public services.

Planning Board Chairwoman Andrea Schlageter estimated that $20 million of the funds in question were derived from developments in Ocean Beach.

“If the grand jury report is correct about the missing $20 million, that would knock off half of the [CIP] list, big-ticket items not excluded,” Schlageter said at the board’s Aug. 5 meeting.

DIFs are deposited into the city’s capital improvements budget, which is separate from the general fund used primarily for day-to-day operations.

Though the city selects which CIPs to fund with development fees, state law establishes criteria for how DIF money can be spent. Aside from the five-year deadline, the law stipulates that DIFs must be used for new amenities costing more than $100,000.

“The grand jury report claimed that if we don’t use the DIF funds, we’re supposed to give them back to the developer,” Schlageter said. “So now we might get sued by developers.”

The city has until Sept. 30 to respond to the grand jury’s findings. City officials said they would have no substantive comment until the response is complete.

Originally, DIF funds could be spent on improvements only in the community in which they were collected. However, the city’s “Build Better SD” initiative approved in 2022 allows DIFs to fund capital projects in “communities of concern” — those without enough new developments to raise the necessary DIF money themselves.

“We’re not a community of concern because we’re by the beach, so we’re all stinking, dripping rich,” OBPB member Tracy Dezenzo said sarcastically. “We haven’t been a community of concern ever, except in the beginning. … So now all of that money actually doesn’t even touch us anymore.”

With seven of the 11 members present, OBPB unanimously approved a list of 14 desired capital improvement projects to send to the San Diego Planning Department, which draws on local planning group recommendations to develop the city’s CIP priorities.

The Ocean Beach board’s recommendations include infrastructure for electric bike charging at public beach lots; repaving the San Diego River bike path, with the addition of lighting; Recreation Center improvements including air conditioning; and creation of bike lanes and a separate right-turn lane at the intersection of Nimitz and West Point Loma boulevards, along with 10 others.

The list was virtually unchanged from last year, aside from removing a request for beach access stairs at Narragansett Avenue, which was since approved by the city.

“As long as I’ve been on the board, which is about seven years, we’ve had about the same priorities,” Schlageter said. “The only ones we’ve really gotten through are the coastal access stairs. Most of those have been done. So we just continue to bring up the same priorities and we replace the ones they’ve done with new ones.”

The board took stock of other items on the list, noting continuing deterioration of infrastructure such as the lifeguard station while awaiting city approval.

“It’s dangerous,” Schlageter said. “Have you ever been at that station? It’s sketchy. Someone is going to have to be seriously injured on the job and sue the city before we get a new one. The stairs are crumbling. The female lifeguards don’t even have their own separate changing room.”

The CIP list requests replacement of the public bathrooms at the lifeguard station, but the board bemoaned city plans to relocate them.

“Right now it’s not really next to anybody’s property,” Dezenzo said. “But when they move it over to the corner where that little grassy area is, it’s pretty much going to be in residents’ sight line and smell line.”

Because the current location contains public art, board member Chris Chalupsky said that may offer the best chance to keep the bathrooms where they are.

“Usually with public art, there’s a form on official policy that you can’t touch it,” he said. “Historically, that means big trouble when you try to destroy something that’s public art. That might be a way to save the [current location].”

Since relocation would be an expensive proposition during tight budgetary times, Schlageter suggested that public airing of the odor surrounding the bathrooms might be the best way to stop it.

“I feel like the bathroom thing is such a [mess], we should make noise about it in the media,” she said.

Other OBPB news

Alley paving? Resident Lynne Miller sought the board’s advice on how to navigate city bureaucracy to learn whether rumors are true that the alley on her block off Sunset Cliffs Boulevard would be paved.

“I’m sure those paved alleys are going to be just another street,” Miller said. “So I would not want that. We like the dirt alleys … they can’t speed down our dirt alley. It’s not possible.”

Board member Kevin Hastings noted that the Ocean Beach Community Plan calls for paving every alley, but he counseled that the best action is inaction.

“There’s probably an unfunded request somewhere in the log from 10 years ago,” Hastings said. “It hasn’t been something that’s been requested or specified since. … To your interests or in the interest of anyone that doesn’t want them paved, the best thing you can do is … [keep quiet].”

Still, Miller expressed worry that the city might pave the alley before her block could voice opposition.

“I would say that if it ever does come up, it’s probably going to appear as a CIP,” Hastings said. “I think they’re required to publicly notice everyone within a 300-foot radius.”

However, he added, “by the time it’s noticed, there’s not a lot to do about it.”

Next meeting: The Ocean Beach Planning Board next meets at 6 p.m. Tuesday, Sept. 2, at the Ocean Beach Recreation Center, 4726 Santa Monica Ave. Learn more at oceanbeachplanning.org/meetings.

— The San Diego Union-Tribune contributed to this report.