This November Del Mar voters won’t be asked to approve a one-cent sales tax increase to help cover the costs of undergrounding utilities throughout the city.
Although the City Council on May 2 did not officially vote on the matter, they decided to continue studying the potential measure rather than place it on the ballot this year.
“This is an important community discussion and we ought to take the time and get it right,” Councilman Don Mosier said. “I think this is moving too fast.”
The city’s Finance Committee originally presented the proposal during a presentation to the council in April.
A one-cent sales tax increase would generate an estimated $2 million in annual revenue that could help cover the cost of the undergrounding project, which is expected to cost between $25 million and $30 million, according to committee members.
The community has long identified undergrounding utility poles as a top priority, but the last undergrounding project along a portion of Camino del Mar was completed almost four years ago. At the request of council liaisons Deputy Mayor Terry Sinnott and Councilman Al Corti, the committee began researching a long-term project about a year ago.
In February, the council approved a $25,000 study to better estimate the costs of a citywide undergrounding project. While the study by Utility Specialists Southwest, Inc. is due late May, a preliminary estimate from the consultant is about $36 million.
“You don’t have your report back, so we don’t have facts,” said Bud Emerson, a member of the Finance Committee. “We don’t know how much this is going to cost.”
Several cities in San Diego County have local sales taxes. The cities of El Cajon and Vista have a 50 percent sales tax, La Mesa has a .75 percent sales tax, and National City has a 1 percent sales tax rate. The city of Chula Vista is also currently considering a half-cent sales tax for the November ballot.
“The logic of the sales tax is that it’s a fair share tax,” Emerson said. “Most people in Del Mar are not paying the sales tax. Most of the sales tax is covered by people who are visiting here, which has some virtue.”
Del Mar resident Greg Glassman, owner of the local restaurant Zel’s Del Mar and a member of the city’s Business Support Advisory Committee, said he is against raising taxes. Small businesses, he said, are still trying to figure out how to meet the state’s mandate to raise the minimum wage to $15 an hour by 2022.
“It’s almost like a double whammy,” he said.
Additionally, undergrounding would only benefit some in the community, he said, while the tax increase would be a burden to others.
“It might benefit the people whose views are improved,” he said.
When the Finance Committee initially made its presentation to the council in April, some council members supported moving forward with the proposal, but others said the community could reject the measure because voters will be asked to approve another sales tax hike in November. The San Diego Association of Governments has proposed a half-cent regional sales tax increase to fund various projects.
“Everyone else is trying to grab our dollar,” said Del Mar resident Bill Michalsky. “Why don’t we grab some of it for ourselves? … I think I’d rather have us take the money than SANDAG.”
Acknowledging that timing is an issue, Emerson cautioned council members before they made their decision.
“This is a crowded election. There’s a lot of noise,” Emerson said. “SANDAG has already aroused some anti-tax voices.
“Once it loses, it’s a long time before it can recover,” he added. “I think timing and outreach are critical parts of the decision that you guys make as the leaders in the community.”
Though the tax was initially proposed as a way to help finance the undergrounding project, city staff suggested that the sales tax increase could also help fund other projects, making the measure easier to pass.
If the proposed tax increase is tied to a specific purpose, such as the undergrounding project, it would require a two-thirds vote of the council and a two-thirds majority of the voters. A general purpose tax, however, would require a two-thirds vote of the council and only a simple majority of the voters, or 50 percent plus one voter.
Other projects could include implementing the Del Mar Shore Park master plan; improving Camino del Mar pedestrian and streetscapes; expanding and improving public walkways, trails, view vistas, parklands and open space; expanding recreational services; adding or improving tennis, pickleball and basketball courts and senior programs; replacing older public buildings; and adding a lifeguard tower and restroom facility at North Beach.
“We have a number of projects in the community plan, and the sales tax, if implemented, could do wonders in terms of helping bring us along in that,” Assistant City Manager Mark Delin said.
With SANDAG’s measure on the ballot, Councilman Don Mosier supported delaying the matter.
“The idea of collecting an extra $2 million a year is, of course, attractive,” Mosier said. “As an ultimate goal, I think it is a worthwhile goal.
“I have significant concerns that this is the wrong ballot to put this tax increase on,” he added. “We already know there’s a lot of opposition to the half-percent proposed TransNet tax increase. My guess, at the moment, is that that tax increase will fail. If we have a 1 percent or a half-percent Del Mar tax on the ballot at the same time, I think it will be collateral damage.”
In addition to the other ballot measure, Mosier and his colleagues, Mayor Sherryl Parks and Councilman Dwight Worden, said city staff members currently have a full schedule, from overseeing the upcoming construction of the new civic center complex to drafting an ordinance for short-term rentals in the community.
They also agreed that the city needs time to build community consensus on the matter, and residents need opportunities to discuss the issue and determine the city’s top priorities.
“I’d like to slow this down and lighten it up for the staff,” Parks said.
“We shouldn’t do this unless we’re prepared to make a full 100 percent effort to see it succeed, and I don’t see that happening between now and November,” said Worden, noting that such efforts include a committee, community outreach program, advertising and more.
Only Corti was in favor of moving forward with the proposal. Sinnott was absent from the meeting.
“I’m in support of putting a sales tax in Del Mar and doing it as a general fund, and then determining with the public at the right time with vetting as to where to spend the money,” said Corti, adding that the Finance Committee was tasked with researching revenue-generating ideas for the city two years ago.
“Every election there’s a crowded ballot issue,” Corti said. “I’ve not seen an election in the last 10 years where there’s not some TransNet, county tax, pension reserve fund tax, whatever it is. I believe that the fuse is going to run and we’re not going to be able to capitalize on it. We’ll be funding trolley rides in Chula Vista, and not necessarily undergrounding or Shores or whatever we want in Del Mar.”