Del Mar voters to decide on sales tax increase

Del Mar voters will voice their opinions on a variety of issues this November.

Three City Council seats are available in the coming election. Driven by opponents of the controversial Watermark project, an initiative that could require voter approval for certain developments citywide will also be on the ballot.

Additionally, Del Mar voters will decide whether to approve a one-cent sales tax increase this November, following the council’s decision on July 18 to move forward with the measure this election season. If approved, sales tax revenues would help pay for various city services and infrastructure projects.

“I normally don’t like taxes or fees, this is not my thing,” Deputy Mayor Terry Sinnott said prior to the vote. “But if you look back, this city has been struggling for many, many years with the idea that we have a ton of visitors. They take advantage and enjoy the community and enjoy our infrastructure. There has always been a question as to what extent those visitors can help us, the residents, pay for those features and infrastructure, so I think it’s such a key opportunity for the residents to vote on whether or not to encourage and get visitors to participate.”

With a unanimous vote, even Councilman Don Mosier, who has expressed his concerns with moving forward with the measure during an election with a busy ballot, agreed to add the tax increase initiative to the ballot.

“As you know, I had reservations about this measure because it wasn’t tied to any specific project, and also, it’s going to be a really noisy election, and I was afraid that we couldn’t effectively communicate the need for this measure,” Mosier said. “I take a lot of solace from the survey results, which are more positive than I thought.”

A one-cent sales tax increase would generate about $2 million annually for the general fund.

Del Mar’s Finance Committee initially proposed the sales tax increase earlier this year as a way to help pay to underground utility poles throughout the city. The council later decided that revenues could also help pay for other projects, such as implementing the Shores Park master plan and improving streetscapes. After all, a general purpose tax would require approval by a simple majority, whereas a tax used for a specific purpose, such as the undergrounding project, must be approved by two-thirds of the voters.

According to a survey conducted by True North Research, 71 percent of the 583 registered voters who responded said they would vote for the sales tax increase. Only 23 percent of the people polled said they would vote against the measure, according to the poll, which has a margin of error of 3.5 percent, said Timothy McLarney, president of True North Research, an Encinitas-based survey research firm. Additionally, about 6 percent of those polled said they weren’t sure whether they would vote yes or no.

The city paid $21,725 for the poll, plus additional costs for printing and postage for a mailing to all registered voters. The poll was conducted July 1-13 using a combination of phone and online methods.

No one spoke against the sales tax increase during the meeting, but business owner KC Vafiadis submitted a petition with signatures from about 30 local business owners opposed to moving forward with the measure.

Councilman Dwight Worden said he appreciated the input from the business community, but was not persuaded by their arguments.

“I understand their concern about all taxes have a negative impact, but I think that, really, they’re overreacting,” Worden said. “I think that it’s kind of minor. If you’re shopping or dining in Del Mar and spending a hundred bucks and it’s an extra dollar on the tax, how many people actually look at that in making decisions on whether or not they’re going to come here?”

Council members debated whether to include a sunset date with the tax increase, but decided against such a clause. Del Mar City Attorney Leslie Devaney confirmed that citizens would have to vote on a sunset clause in the future, if one is not included in the ballot measure.

Although Finance Committee members suggested that the city end the tax increase after 30 years, the city’s consultant advised against such a long date away. McLarney said Del Mar could include a clause with a shorter sunset and later extend it or not include one at all.

Finance Committee Chairman Tom McGreal said the advisory committee initially suggested a 30-year sunset clause because some of the projects, such as undergrounding utility poles, could require bonds that would take a long time to pay off. After hearing the consultant’s recommendation, however, he agreed with the consultant’s suggestion to not include a sunset clause.

“Rightly or wrongly, our view at the time was that voters would want to see an end date to this,” McGreal said. “Now we’re hearing a different story about how it might impact voters, so I’m going to defer to the expert.”

The council also discussed whether to exclude language about requiring citizen oversight and independent audits, but ultimately, decided to keep the wording for the resolution similar to the wording in the survey.

“After hearing the poll results and the fact that we tested this ballot language, I don’t think we should change anything,” Mosier said. “This tested really well.”

Thus, the ballot measure will read:

“To provide funding for general city services and infrastructure projects, such as improvement of streets and sidewalks, utility undergrounding, public landscapes, improvement of community parks, trails and recreation facilities; police, crime prevention, fire protection and other public safety services, shall an ordinance that establishes an ongoing one-cent sales tax be adopted, providing an estimated $2 million dollars annually for the city of Del Mar, requiring citizen oversight and independent audits, and all funds controlled locally?”

If approved by voters, the one-cent sales tax increase would go into effect on April 1, 2017, according to the staff report.