The City Council June 17 approved $4.1 million in budget reductions to close a projected funding gap tied to business losses brought by COVID-19.
Since stay-at-home orders began in March, City income plummeted as hotels, restaurants, retailers, and the Del Mar Fairgrounds went dark.
Approved on a unanimous vote, revisions to the spending plan for the 2020-21 fiscal year, which begins July 1, assume only modest recoveries in those sectors.
In a city without big box stores or automobile dealerships, Del Mar depends upon hotel taxes and sales taxes from the Del Mar Fairgrounds and downtown businesses to fund operations and capital programs. COVID-19’s crippling of events and tourism has left Del Mar especially vulnerable to economic hardship.
To compensate, City Council members approved staff recommendations to slash $1 million from the payroll. A 10 percent workforce reduction will take the form of layoffs, furloughs and salary cuts. Most consultant services will be eliminated. Reductions in service levels and staff capacity are expected to be felt across the community.
The spending plan maintains all essential health and safety services.
Most capital improvement and infrastructure rehabilitation projects will be tabled, including work on the Utility Undergrounding Project.
All advisory committee meetings are cancelled through at least August -- with the exception of those of the Planning Commission, Design Review Board and Finance Committee -- as officials assess costs and staff capacity for them to continue.
On Fridays, City Hall and Public Work headquarters will be closed to the public, although employees will continue to report to work.
Closing the budget gap required borrowing a small portion -- less than 15 percent -- from reserves. Council members agreed that reimbursing those funds is a top priority.
The June 17 budget cuts came on top of $3 million in prior reductions approved by the council in April to compensate for shortfalls from March through June 2020.