The city's new "Street Czar" pleaded not guilty Monday to molesting a child under the age of 14.
The prosecutor in the case claims Mario Sierra, 47, had the female victim put her hand on his penis and says there is independent evidence that confirms the alleged victim's story.
Prosecutors say the girl was younger than 14 when the alleged crime happened, about seven years ago.
Sierra will not be jailed while he awaiting future hearings in his case.
The judge issued a protective order, prohibiting Sierra from having any contact with the alleged victim.
Sierra's lawyer, Tom Warwick, declined to comment on the charges.
Sierra was recently appointed to Director of Transportation and Storm Water for the city of San Diego. Earlier this month, the city consolidated its street operations into one department.
The site says a memo from the city's Chief Operating Officer, Jay Goldstone, says Sierra has been placed on unpaid administrative leave.
The American Federation of State, County and Municipal Employees Local 127 president Joan Raymond called the arrest surprising.
"But, he's innocent until proven guilty and the courts will have to do its process," Raymond said.
The union represents nearly 2,000 of the city's blue-collar workers.
Sierra's felony charge carries a maximum prison sentence of eight years.