Del Mar continues COVID-19 budgetary adjustments

The Del Mar City Council made additional budgetary adjustments this week in response to the novel coronavirus pandemic that has hindered the city’s key sources of revenue, including sales and hotel taxes.

Council members unanimously voted April 20 to reduce operational expenditures by $159,610, capital improvement projects by $750,000, special project expenditures by $65,720 and Measure Q fund expenditures by $229,940.

Among the projects that will be postponed are the Powerhouse Deck Expansion, storm drain repairs and improvements, 29th Street seawall and beach access, and Los Penasquitos Lagoon Repairs.

City staff is projecting a loss of $2.3 million in revenue for the 2019-20 fiscal year, a 12.3% drop.

“I think it’s really important, as we are making cuts, that we have some type of model, paradigm that we can be talking to our residents about,” said Councilman Dave Druker, so residents can “know what to expect from the city if our revenues continue to be hammered by the fairgrounds being not opened, restaurants being not opened.”

The City Council will host a budget workshop on May 16 to review the modifications that will have to be made in the 2020-21 fiscal year.

Following the council’s approval earlier this week, the city will also transfer $122,628 to a new COVID-19 economic contingency reserve, transfer $502,160 from Measure Q to the general fund to reimburse Downtown Streetscape Project expenses, and cancel the annual transfer of approximately $536,000 from the general fund to the pension reserve.

The city is also limiting the hours of part-time employees and has put a freeze on hiring. Previous measures the council has taken include placing a moratorium on commercial evictions.

Further cost-saving measures could require Del Mar to use $2.2 million in a general fund contingency reserve, equal to 53 days of city operations, according to city staff. There could also be furloughs or other types of staff reductions.

With City Hall still closed, council meetings have been held remotely and livestreamed on the city’s website.

Residents throughout the state have been adjusting to shelter-in-place orders and the closures of beaches, parks and other public facilities. The city of San Diego began reopening parks on a limited basis, part of a measured approach to restoring everyday life. City Manager C.J. Johnson said Del Mar has been receiving complaints from residents who want the beaches opened.

“Our intention is to open up as soon as it’s safe to do so,” Johnson said, noting it will involve a coordinated effort among coastal communities.

She also said the city is monitoring opportunities for Del Mar to receive county, state or federal aid. The Coronavirus Aid, Relief and Economic Recovery (CARES) Act approved by Congress provided direct payments to cities with populations of at least 500,000, excluding Del Mar and its North County neighbors.

“We’re keeping on top of it,” Johnson said of possible relief funds. “I don’t feel comfortable including any projected revenue, we just simply don’t know what we’re going to get.”