San Diego audit finds gaps in leased golf course oversight as budget pressures heighten revenue scrutiny

Audit targets city’s leased golf courses amid widening focus on recurring revenues

San Diego is leaving significant revenue potential unrealized from a portfolio of city-owned golf properties leased to outside operators, as fiscal pressures intensify and the City Council reviews options for strengthening recurring income. A performance audit of the city’s leased golf property portfolio was scheduled for discussion at the City Council’s Audit Committee meeting on February 11, 2026.

The city owns eight leased golf courses totaling more than 800 acres. In fiscal year 2025, the leased courses generated about $34 million in revenue for operators, while the city received about $3.5 million in rent tied to calendar year 2024. City records presented with the audit agenda show that rent revenue was split across funds, including approximately $1.5 million to the General Fund and about $2 million to the Water Fund.

The audit was framed against a multi-year structural gap: the city’s five-year outlook projects average annual General Fund shortfalls through fiscal year 2031, elevating the importance of fully capturing and managing existing revenue streams.

Inconsistent lease terms and limited monitoring cited as core weaknesses

The audit’s focus is whether the city is managing its leased golf properties to maximize either financial return or measurable public benefit. Among the central issues highlighted in reporting around the audit are uneven lease structures and limited routine oversight, both of which can affect the city’s negotiating position and long-term asset condition.

A key operational risk flagged is the presence of “holdover” arrangements—situations where an expired lease shifts to month-to-month operation. Auditors also raised concerns about limited regular site inspections, which can reduce the city’s ability to verify compliance with lease obligations and identify maintenance or capital needs early.

Revenue share varies widely across properties

Financial performance and the city’s share of returns vary by lease. For example, the Tecolote Canyon and Mission Trails golf properties were described as returning larger percentages of revenue to the city in certain periods, while other sites generated substantial operator revenue under lower percentage rent requirements.

The audit also highlighted a structural contributor to uneven outcomes: capital improvement provisions are not consistently included across leases, and it was not always clear whether capital needs were addressed in every negotiation. Over time, differences in how capital responsibilities are defined can shift financial and operational risk between the city and operators.

• Eight leased golf courses total more than 800 acres of city-owned land.
• Operators generated roughly $34 million in annual revenue, while the city received roughly $3.5 million in rent for the referenced period.
• Rent revenue was allocated across the General Fund and Water Fund, underscoring competing budget priorities.

How leased courses fit into the broader golf picture

The audit’s findings address leased properties, which differ from the city’s municipally operated golf courses. City-operated golf revenue is generally managed within a dedicated golf fund used to support operations and maintenance, while lease payments from outside operators are distributed across other city funds. The separation means policy choices affecting leases may not directly translate to the city-run system, but both intersect with the broader debate over how recreation assets should support municipal finances.

The Audit Committee’s review is expected to center on oversight practices, lease administration, and whether changes to inspections, lease terms, or renewal practices could improve financial return or public benefit without compromising long-term asset condition.