The San Diego city attorney is suing Promote La Jolla and three of its former board members for allegedly misusing parking funds and submitting false claims to the city. The city is seeking $112,070 in damages plus attorney fees. The city began investigating Promote La Jolla — the manager of the Village’s business improvement district (BID) — last June after someone complained to the city’s fraud hotline. The lawsuit names former executive director Tiffany Sherer, former president Deborah Marengo and former secretary Reza Ghasemi for negligent and intentional breach of fiduciary duty. Promote La Jolla President Rick Wildman, who joined the reformed board last year, is confident that Promote La Jolla and the city can settle the issue out of court. Wildman characterizes the situation as “problem solving” rather than a legal battle. It’s unclear whether Sherer, Marengo and Ghasemi will be protected by insurance from the monetary damages the lawsuit specifies. Promote La Jolla does carry an insurance policy to protect its board members in such situations, but it’s unclear how the coverage will play out, said Promote La Jolla Secretary Glen Rasmussen. Parking money Marengo and Ghasemi took out a $150,000 loan for Promote La Jolla activities from First Republic in 2005. As a condition of the loan, Promote La Jolla had to transfer its bank accounts from Citibank to First Republic, according to the lawsuit. The trouble began when Promote La Jolla transferred its parking and coastal access funds, set aside in a separate account at Citibank, to a CD at First Republic Bank. According to the lawsuit, Marengo and Ghasemi “knowingly and intentionally” failed to place the $65,323 into a separate, interest-bearing account earmarked for parking and coastal access as required. In 2009, Promote La Jolla defaulted on its loan and First Republic seized the money in the CD, according to the City Attorney’s Office. The city now wants the $65,323 back to restore to the parking and coastal access fund. During the 1980s, developers had paid fees into the parking fund to help offset the burden of more density. Half of the money must go toward creating a remote parking lot and shuttle service into the Village, and the other half of the fund is meant to create parking solutions and help traffic circulation, according to the memorandum of agreement reached between the city and the California Coastal Commission in 2002. Over-billing claim The city attorney also claims that Sherer, the former Promote La Jolla executive director, “intentionally, recklessly and/or negligently” asked the city to reimburse Promote La Jolla for $46,747 in expenses that were “not eligible for reimbursement.” Sherer is now the executive director for the city’s BID Council, a government-funded nonprofit charged with supporting San Diego’s business improvement districts.