Economic Downturn Hits City Revenue
October 2008 | by Bettina Experto

The City Hall property could be a source of revenue for Del Mar.

It was springtime when the City took the bold step of issuing a $3.5 million promissory note to allow the acquisition of the Shores property, when fundraising fell almost half way short of its goal.  

With Fall, reality is now before us when the City makes its first $500,000 monthly payment on that note. Because these payments are way beyond the means of our small community, the City had to secure a new multi-million dollar commercial line of credit. The City will also draw from that credit line to pay for the very large capital expenditures we are now facing with the needed replacement of an aging infrastructure.

“Faced with this new and major financial risk occurring at a time of an economic downturn, our small and financially stressed community needs more than ever bold leadership and fiscal discipline from its Council, and with it, wide support from the community” These were my words in the Sandpiper in May), but the time is now beyond words and for immediate action, as facts and figures will hopefully convince the incredulous.

Increased parking revenues may be key to the city's financial health.

Indeed, from the collapse of the nation’s financial system to the distress of the State budget, our small town is, by itself, posting more than ever weakening revenues. Here are the City latest estimates regarding our three largest revenue sources (final end of fiscal year revenues will not be available until mid-December):

• Sales taxes are 15% down from last fiscal year.
• Transient Occupancy Tax (TOT) is 28 percent lower, and the losses are  $200K over what had been estimated as a result of the closing of l'Auberge.
• Property taxes remain steady.

Exercising our civic duties in the upcoming elections - and beyond - we all can indeed help reverse the trend by:

• Authorizing the City Council to increase the TOT up to the surrounding communities’ TOT level; then direct the increased revenue to address the fiscal priorities of the town, such as building its downtown infrastructure (streetscape, etc…)
• Immediately supporting necessary zoning changes (e.g., FAR, height limit) in the commercial zone to support a vibrant downtown and secure the independence of our small city. Our community cannot afford, and will not survive, a 3-year specific plan process with endless public meetings.
• Leasing the City Hall site ($1M+ annual revenue) that will allow the needed development of the South gateway of our town with a resident-serving mixed-use project
• Supporting the Finance Committee recommended parking program (potential $2M+ revenue) with its public parking permit program, which could be made available right away for everyone’s convenience and the City’s fiscal health.       

Now is indeed the time to act. Let’s all seize today’s crisis as the opportunity of our time.
 
Dr. Bettina Experton is Chair of the Del Mar Finance Committee.