Council’s Concerns Rise as City Managers Seek Retroactive Approval for Millions in Unapproved Contract Spending
In a troubling turn of events, San Diego city officials are addressing a significant financial oversight involving more than $6.7 million in rental equipment expenses that were incurred without prior approval from the City Council. The matter has sparked frustration among council members, with calls for greater accountability and transparency following revelations from city auditors last October.
Unapproved Spending and Contract Adjustments
City employees adjusted a contract with Herc Rentals on two separate occasions in 2023, once in October for $4 million and again in December for $2.7 million. Such changes should have required prior approval from the City Council, as stipulated by local laws governing contract adjustments that exceed $200,000 and new contracts over $3 million. The adjustments have raised serious questions about oversight and adherence to governmental protocols.
During a City Council meeting on January 13, 2025, Councilmember Marni von Wilpert voiced her frustration over the incident. “That’s against the law,” she stated emphatically, underlining the importance of the Council's role in overseeing financial decisions. “The reason is we [the City Council] need to know where our money is going.”
Justification for Unauthorized Changes
According to Nicole Darling, a spokesperson for the city, the adjustments were made to avoid breaching contractual agreements with vendors, which could have placed the city's operations at risk. In an email statement sent to Voice of San Diego, she emphasized that the services funded by the unapproved spending were essential for city operations, particularly in reaction to critical situations such as the floods experienced in 2024.
The adjustments were implemented in Ariba, the city’s procurement system, with the understanding that upper management would request retroactive approval from the City Council. "The services included rental equipment that was necessary for critical operations and to address emergency situations," Darling asserted.
Lack of Accountability
Despite the significant breach of protocol, city officials revealed that no disciplinary actions were taken against the employees who processed the unauthorized contract adjustments. Claudia Abarca, the director of purchasing and contracting, noted that her staff had acted under the direction of superiors. “My staff did that, we own that,” Abarca explained. “And again, it was because we owed the vendor several millions of dollars without having the appropriate purchase orders in place.”
When pressed by von Wilpert on who was ultimately responsible for the adjustments, Abarca indicated uncertainty about whether the decision reached the mayor's office but did mention discussions with the deputy chief operating officer.
Financial Oversight and Implications
Despite the unauthorized spending, Chief Financial Officer Rolando Charvel reported that the city had managed to close the fiscal year 2024 with a balanced budget. He further indicated that while certain departments incurred overspending through unapproved contracts, this was offset by savings in other areas, resulting in no detrimental impact on city services.
A memo was sent to Councilmember von Wilpert on October 28, 2025, detailing departmental expenditures related to Herc Rentals and reaffirming that the adjustments were authorized under the current framework of departmental discretion in non-personnel expenditures. However, the acknowledgment of unauthorized spending has left council members grappling with concerns about governance and fiscal responsibility.
Community Engagement and Future Actions
As the City Council navigates this complex situation, community members are being called to express their opinions and hold local leaders accountable. Discussions surrounding transparency, oversight, and the appropriate use of taxpayer dollars will likely be at the forefront of forthcoming meetings.
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This article was written by Mariana Martínez Barba, city hall reporter at Voice of San Diego. For more local updates, visit Voice of San Diego.
