Firm Finds Discrepancy in Tunnel Project

An examination of the community's $13.5 million tunnel project study found a discrepancy in payroll costs charged to the project, and officials said they have altered procedures to prevent it from happening again.

The report examined costs of a study of options for the city's aborted tunnel project and looked at seven areas of spending. An issue was found in one category:  

Based on the sample tested, there were incorrect ratios used to allocate payroll costs (to the project) from fiscal year 2005 through fiscal year 2007 for one employee.  The approved allocation was 85% of the employee’s salary and the actual allocation was 75%. As a result, the total payroll cost charged (to the project) was understated by $30,166.72. 

The city did not challenge the findings, which focused on what portion of a staff member's time was dedicated to the study.

“We recognized the problem and have corrected the procedures, so that allocation percentages approved during the budget process for personnel are verified at the beginning of the fiscal year,” said Leslie Suelter, the city’s director of administrative services.  

She argued the issue “did not cost the city more or less money” as funds for staff time on the project came out of the city’s general fund. 

“There was a matching fund component and the city contributed staff time,” she said. 

The look at the figures, which fell short of a full audit, was approved in February 2011 at the request of Councilwoman Barbara Denny.

“It was not to find fraud, waste or abuse,” she said on her website at the time. “But to advise the people on exactly how much of their public funds were spent.” 

Denny did not return calls or emails seeking comment.

Councilwoman Carrie Downey, however, said the report verifies that the funds “were spent on exactly what the Coronado records show they were spent on,” studying the costs and environmental effects of three options for tunnel or overpass projects.

The 10-year study, known as the State Route 75/282 Transportation Corridor Project, was funded mostly through San Diego Association of Government (SANDAG) grants. 

In June 2010, Proposition H asked voters if they wanted to continue the study. Some 70% of voters said no and it was halted. That so much money was spent on a project that many residents opposed caused critics to charge that funds may have been misused.

To address these concerns, the City Council gave the go-ahead to take a look at the numbers. Mayor Casey Tanaka said at the time that he wanted to prove there “has been no funny business and that money has not been spent inappropriately.” 

Tanaka also did not return calls or emails seeking comment.

The council budgeted $30,000 and hired the accounting firm of Lance, Soll & Lunghard to perform the examination. Suelter said the final cost it will be less than the total allocated.