The City of Del Mar begins a new fiscal year on Monday with a balanced budget that increases reserves and limits expenditures while supporting senior citizens, downtown revitalization and economic development.
The City Council approved a two-year budget for the 2019-20 and 2020-21 fiscal years on June 17. Revenues for 2019-20 are budgeted at $22.1 million; the budget for 2020-21 is $22.7 million.
The spending plan meets the three requirements of Del Mar’s financial policies: the budget is balanced, it increases reserves, and it observes the Finnell plan – an internal policy that sets caps on spending growth as it relates to income.
The budget includes allocations for Del Mar Community Connections to run programs for seniors and Del Mar Village Association to support economic development, marketing and downtown revitalization. The budget also funds partnerships with Community Resource Center, St. Peters Episcopal Church, Kitchens for Good, and the Regional Task Force for the Homeless to provide meals for seniors and assistance for homeless people.
In response to recommendations from its Finance Committee, the City Council approved a 1 percent increase to its rainy-day account – the General Fund Contingency -- as part of a five-year program to grow that fund from 20 to 25 percent of annual expenditures. A contingency fund of 25 percent would cover 90 days of operations.
Budgets for the next two years grow the contingency fund to $3.2 million, or 21 percent of expenditures, for 2019-20 and $3.4 million, or 22 percent of expenditures, for 2020-21. During the two fiscal years, that translates as 76 and 80 days of operations, respectively.
Spending plans for the next two years also align with a financial policy authored by the late Jerry Finnell, a former City Council member and accounting executive. For 2019-20, the Finnell Plan would cap spending growth at 3.5 percent; the adopted budget envisions a spending increase of 1.1 percent. For 2020-21, the Finnell Plan would cap expenditure increases at 2.3 percent of spending; as budgeted, expenditure growth would increase by 2.1 percent that fiscal year.
Property taxes are Del Mar’s largest single source of income. Other major income sources include sales tax, transient occupancy taxes and receipts from Measure Q, a citywide 1 percent sales tax approved by voters in 2016.
Combined revenues from these and other funds will cover operations and capital projects and are budgeted at $29.9 million in 2019-20 and $35.1 million in 2020-21.
For day-to-day operations in 2019-20, expenditures are budgeted at $13.5 million. Also in the expenditure column, public safety – law enforcement, lifeguards and fire protection – represents $6.7 million or 33 percent of expenditures. Much of the remaining outlay covers the costs of the city’s administration-related, public works and planning departments.
During 2020-21, $300,000 is budgeted to be set aside in the Housing Fund to pay for future affordable housing programs. Council members agreed that future years’ budgets should send $120,000 per year to that fund.
The pension reserve is budgeted to receive $825,000 both years and $50,000 is budgeted for the equipment replacement reserve for both fiscal years.
The City Council tabled plans to launch a $60,000 fiber optic connectivity project and approved transfers totaling $448,000 over the next two years to cover costs related to the Jimmy Durante Boulevard bluff failure.
The two-year budget shows $330,000 in capital projects, including: Jimmy Durante Boulevard striping; Powerhouse Community Center deck expansion; Pubic Works building improvements; and 20th Street lifeguard tower improvements.
Funding budgeted for special projects during the next two fiscal years totals $655,930 and includes: planning work for the SCOUP sand replenishment program; start-up funding for a Community Choice Energy program; Short Term Rental Ordinance and Local Coastal Plan amendment; railroad pedestrian crossing on bluff; and a development impact fee study.
Review a summary of the budget (PDF).