Del Mar continues making pandemic-related budgetary adjustments

The Del Mar City Council allocated $202,000 to its economic contingency fund during its Oct. 19 online meeting and made other budgetary adjustments in response to the novel coronavirus pandemic and its effects on the city’s finances.

The city is estimating that revenues for the 2019-20 fiscal year will be approximately $234,329 more than projected, relative to tempered projections made after the pandemic began, according to a presentation by city staff. The revised expenditures are within budget projections. The city-approved budget for the 2020-21 fiscal year includes $4 million in revenue reductions. Measure Q projects and other expenditures have also been put on hold.

The utility undergrounding project is among the expenditures that will be deferred while the city focuses on essential operations due to pandemic-related cutbacks.

“We’re going to have to look at our staffing resources and look at rehiring somebody in our public works department that can do all those staff-related functions,” Del Mar City Manager C.J. Johnson said.

City Councilman Dave Druker said going forward into the next fiscal year, the city needs to make sure pension reserves are fully funded.

“It’s going to be a two-year cycle for us to be able to get back on track, I think we just need to hunker down and understand that it’s going to be a tough ‘nother year after this year because of the amount of cuts that we’ve had to make this year,” Druker said. “We just have to hope right now that the fairgrounds is going to open up next spring and have a full fair, otherwise we’re going to continue to be in a world of hurt.”

The board of directors that oversees the state-owned Del Mar Fairgrounds will begin planning the 2021 San Diego County Fair next month, but they aren’t sure how closely it will resemble a typical version of the month-long event. A scaled down drive-thru fair could be in the offing, depending on the state of the COVID-19 pandemic.

City staff said that 2020-21 projections were made based on the assumption that fairgrounds revenue would be limited to 50% of its typical level, but the city is also preparing for the possibility that there will be little to no revenue coming from the fairgrounds.

When the pandemic began, the city braced for steep declines in hotel tax and sales tax revenue. According to a city staff presentation, hotel tax revenue is estimated to be approximately $2.3 million, compared to a pre-pandemic projection of $3.15 million. The updated sales tax revenue that the city anticipates is $1.4 million, compared to a projection of $2.2 million before the pandemic began.

For the 2019-20 fiscal year, the City Council initially approved a $50,000 COVID response fund allocation, reduced general fund revenues and expenditures by more than $2 million and nearly $1.5 million, respectively, and eliminated pension reserve fund transfer of more than $500,000, among other financial measures to weather the impact of the pandemic.