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Environment Committee requests independent audit of Balboa Park Celebration Inc.

San Diego City Council’s Environment Committee requested independent financial and performance audits of the recently disbanded nonprofit in charge of the Balboa Park centennial celebration.

The city is attempting to move forward with its planning of Balboa Park’s centennial celebration by terminating agreements with Balboa Park Celebration Inc. and looking back at what caused the demise of the nonprofit.

Balboa Park Celebration Inc. announced it was disbanding in March after U-T Watchdog reported that it refused to release documents related to spending of $2.8 million authorized so far.

“A large amount of money -- a large amount of money -- was spent, and some would say wasted, because we don’t have a lot to show for it,” said David Alvarez, chairman of the Environment Committee.

He added that there are lessons to be learned and more will be learned from the audit going forward, but the priority is to celebrate 2015.

On March 5, City Attorney Jan Goldsmith was informed that there is $273,763 in city funds remaining at BPCI.

He said he believes strongly that an independent auditor should do a complete review, including a performance review of BPCI, as to how the money was spent and the circumstances under which it was spent.

He also recommended a review of the level of oversight for outside activity with city money.

The dissolution of BPCI could take between two and five months, according to Gerry Braun, BPCI’s transition director.

The city can complete the termination of the agreements before BPCI is dissolved, so it won’t be tied to that timeline, Goldsmith said.

When asked about his monthly salary increase from $8,000 to $13,000, Braun said his position changed from BPCI’s communications director to transition director, and that he also assumed the roles of the CEO.

“My job is to put BPCI and myself out of business as quickly and efficiently as possible,” Braun said.

His salary is being paid by private funds and will not reduce the remaining $273,763 in city funds, he said.

His goals include to protect the assets of the corporation and transfer as much money and property to the city as possible, he said.

He’s leading a staff of one to collect and organize records for transfer and placement on the website. He said there are about 115 different documents on the website with more to come -- and he plans to put every document up that he legally can. He anticipates completing the transfer of documents within a matter of weeks.

“If the best thing we can do for the city is to go away and never speak again, then that’s definitely what we will do,” Braun said.

Goldsmith said the city needs to negotiate the termination of two agreements with BPCI: the memorandum of understanding and the funding agreement.

Once the City Council terminates the memorandum and BCPI is dissolved, the city will have the authority to organize the celebration, said Mike Hansen, director of land use and environmental policy and Mayor Kevin Faulconer’s representative to the committee.

The San Diego mayor’s office will make an announcement soon regarding the preliminary scope of the Balboa Park Centennial Celebration, Hansen said.

The public and stakeholders will be involved in the process and anything the mayor announces will have a local focus and be a community-driven event that celebrates the history of the park.

Goldsmith said it’s important to preserve the rights of the city and maintain separateness in the event of any improprieties, which up to this point have not been found, he said.

“We are not assuming their liabilities or commitments,” Goldsmith said.

The Environmental Committee also requested on Wednesday a confidential memo from Goldsmith regarding the obligation of parties in the memorandum of understanding and potential liabilities.

Goldsmith recommended questioning Julie Dubick, the group’s CEO who was hired in May 2013 and stepped down in February to join Gafcon Inc. He said she hasn’t been involved in this discussion and “we all want to know what happened.”

Councilmember Marti Emerald asked about the money spent on Loma Media Partners -- about a half-million dollars -- and what that company did that was above and beyond what Braun could offer.

In his response, Braun said Loma Media Partners’ main talent is video marketing.

Loma Media Partners had been used in the past by the San Diego Tax Payers Association, which Emerald said was one example of how the companies paid by BPCI appeared to be part of an “insiders club.”

“It seems like a lot of very close friends with long-term ties were given this opportunity and were entrusted with money with no accountability, no oversight to speak of,” Emerald said.

Higgs, Fletcher and Mack was also paid by BPCI.

Dubick’s husband works at the firm, but she wasn’t BPCI’s CEO at the time the firm was hired, Braun said.

About $2.8 million was spent. “What do we have to show for it?” Emerald asked Braun.

Braun said the nonprofit worked to develop a plan in response to the directives within the memorandum of understanding with the city, which were “very ambitious.” The plans were for a $30 million to $40 million celebration, which may not be applicable to a scaled-back celebration that the city might plan.

About $389,000 was raised through private donations from June 2011 through January 2013, Emerald said, and Braun said the private donors have not made a request to have the money returned. In pitching to corporations, BPCI found that most wanted to alter Balboa Park with something permanent, which would go against the memorandum of understanding with the city.

The BPCI’s board was made up of volunteers who are “heartbroken at this outcome,” Braun said.

He called it a “well-intentioned” effort by people who have given a lot to this community over the years. The goals for the board may have been more than a nonprofit led by volunteers could take on: to raise about $35 million in private funding, to plan a year-long celebration to attract the world’s attention, and to bring hundreds of thousands of visitors to the area, Braun said.

David Lundin, who introduced himself as “just a guy” at the Wednesday meeting, said he has been trying to attain BPCI’s documents since the get-go and the group only engaged in dialogue when he threatened to sue. He said the documents now on the BPCI’s website all appeared within the last few days.

“Don’t listen to the words [over] the next several weeks -- look at what they did over the last four years before you make any decisions on how to terminate the existing (memorandum of understanding),” Lundin said.

Alvarez scheduled another public hearing for April 23 to “figure out where we are and where we’re going.”

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