September 2013 home page

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Funding the Future

See also:  Revenue Resources, Dave Druker | 10th Street


Year after year Del Mar enjoys a balanced budget and healthy reserves. Kudos to city councils and city staff for keeping us in better financial health than most California cities. We 4,000+ citizens receive a high level of service paid for in this budget. Visitors numbering in the hundreds of thousands also benefit from these services, especially safe clean beaches, clean streets, well maintained parks, police and fire protection.

Our small city also has a healthy, ambitious appetite for future community improvements such as a city hall/community center and a well planned new Shores Park. The city also faces a huge challenge catching up with a promised pension liability that was not adequately funded by previous councils and generations. Previous councils funded the pension based on numbers from CALPERS which turned out to be based upon inadequate projections of investment returns, especially during the recessions of 2001 and 2008.
We urge the Council and community to begin a long range process of fiscal planning that will enable us to not only continue to be solvent, but to identify revenue sources to meet our ambitions and challenges for decades to come.
All potential revenue sources should be put on the table for analysis and consideration. Special attention should be given to how visitors can be asked to contribute their “fair share” for the services they enjoy.

On the list should be a local sales tax, a tax on real estate transfers, and fees from a city-wide parking plan. Perhaps fees from an underground parking lot in cooperation with St. Peters church.

Voters approved an increase in the TOT (hotel tax) a few years ago. There is 1/2 percent still available from that vote that could be imposed by the Council. One percent of that tax was given to a newly formed Business Improvement District that may need to be reconsidered. Let’s take a fresh look at the possibility of a TOT tax on short term Vacation Rental by Owner (VRBO) rentals that was defeated in 2010 (there are currently 192 Del Mar listings on VRBO ranging from $200 to $5,000 per night). Many cities already impose these taxes so we would not be at a competitive disadvantage.

Del Mar enjoys an excellent bond rating if we want to consider borrowing money on a long term basis at today’s low rates.

We are not necessarily advocating all of these revenue sources. What is needed is a strategic 20-30 year analysis of what we can and cannot afford. Look at everything. Calculate the potential return. Look at the politics. If the City Council is to raise any revenue source that requires a vote, they will need to make the case for the revenue increase prior to putting the tax on the ballot, like the Council did before adding a clean water tax. If there is any strong organized opposition or well funded advertising campaign against a tax, the possibility of the tax increase passing is vastly diminished.

Ask the community what we should do. If we do it right, we can create a smart, affordable roadmap for our generation and the next.



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