November 2009 home page


Privatizing City Council?
Bud Emerson | Klish Way

Photo Art Olson

The Del Mar City Council will soon consider approving a proposal from local hotels to establish a Business Improvement District (BID). BIDs, used in many cities locally and throughout the country, are receiving mixed reviews. Some see them as creative public-private partnerships; others see them as misguided attempts to privatize what should be government responsibilities and public funds.

The Del Mar BID proposal is being developed by local hotels in cooperation with the Del Mar Village Association. The idea would be to assess hotel visitors a "fee" of 1% of their room cost. These fees would amount to about $130,000 per year to be spent promoting Del Mar as a visitor destination. Typically a BID would establish a governing board to make decisions about how to allocate the funds. In this case, DMVA would presumably be one recipient of funds and also be responsible for fiscal management. The specifics of the proposal are being discussed between the DMVA and local hotels.
Their intent is to unveil the proposal for City Council review within the near future. Establishment of a Business Improvement District would require Council authorization. Presumably Del Mar citizens will have an opportunity to ask questions and express their views after the proposal is finalized.

This proposal comes on the heals of a ballot measure in last year's election that was approved by Del Mar voters authorizing our Council to approve up to a 3% increase in taxes (TOT) on hotel room rates. The argument for the ballot measure was predicated on our city's tight financial situation and the suggestion that visitors should be asked to pay their fair share of city services that they receive. During the election campaign voters were assured that this TOT vote was not a vote for a Business Improvement District (BID).

The current TOT rate in Del Mar is 11.5%. The TOT in many cities in the county and the state is currently 13%. The Council has voter authorization to raise the TOT if the city's fiscal situation continues to deteriorate. If there is to be a community conversation about the merits of a BID, some questions should inform our deliberations:

Who will sit on the BID board. How will they be selected? What decisions will they be empowered to make?

How will residential interests be represented?

Will the BID be accountable to voters as are City Council members?

Will BID "fees" be allocated to supplement resident taxes that pay for city services such as beach cleaning, park maintenance, lifeguarding, fire protection, street cleaning, and law enforcement all of which are visitor serving?

Do knowledgeable marketing experts think this is enough money to effectuate an increase in Del Mar's visitor count?

Will this BID "fee" make it difficult for Del Mar to raise its TOT rate if it becomes necessary?

What recourse will the Council and the community have if the BID makes decisions we disagree with?



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