San Diego said it plans to withdraw from the California Statewide Communities Development Authority after federal regulators raised concerns about the organization’s oversight. The authority, which handles billions of dollars in municipal bonds for local governments, nonprofits, and housing projects, is one of several joint powers authorities facing scrutiny by the Securities and Exchange Commission.
In a letter to the CSCDA obtained by Bloomberg News, city officials said federal regulators had contacted San Diego about its membership. The city plans to leave when pending deals are complete. City spokesperson Kelly Terry confirmed the withdrawal, referencing a Sept. 14 letter stating continued involvement “was not tenable.”
San Diego Chief Financial Officer Rolando Charvel wrote that remaining involved in the controversy was not in the city’s best interests, especially as SEC actions increasingly focused attention on the city. He said the city cannot disregard any matter that has drawn the SEC’s attention and must take actions to protect its interests.
Meanwhile, CSCDA Executive Director Felicia Williams said the organization interpreted the letter as directing it to meet with the SEC and resolve concerns. The CSCDA planned to meet with the SEC on Friday and reported $24 billion in bonds issued and outstanding at the end of fiscal year 2025.
San Diego is the latest member to plan withdrawal after SEC contact. The Contra Costa County Board of Supervisors voted in September to pull out of the CSCDA and the California Municipal Finance Authority. SEC Municipal Securities head David A. Sanchez warned that undisclosed fees could constitute materially misleading statements under antifraud rules.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing