Solana Beach makes more COVID-related budget adjustments

Solana Beach City Hall
(File photo)

The Solana Beach City Council updated the city budget for the 2020-21 fiscal year, which has been in flux due to the COVID-19 pandemic, to show an additional $354,000 in general fund revenue and $355,000 in expenses.

In June 2019, when the council approved budgets for the 2019-20 and 2020-21 fiscal years, the city projected a budget surplus of $74,000 for 2020-21. After the impacts of the pandemic, that projected surplus is down to $19,000.

Solana Beach City Manager Greg Wade said during the council’s Feb. 24 meeting that the city’s budget has “fared fairly well” amid the complications caused by the pandemic, including business closures and limits on their operations.

In revenue, the city is now projecting an additional $115,000 in property tax, for a total of approximately $8.67 million for the current fiscal year. The city is also anticipating an additional $220,000 in taxes from short-term rentals, bringing that total to $490,000.

“Short-term vacation rentals have really exceeded what the projections have been,” City Treasurer Ryan Smith said. “It seems that vacationers are opting for this type of accommodation as opposed to a more traditional hotel.”

City revenue from short-term rental taxes has grown from $166,558 in 2012-13 to a little over $377,000 in 2017-18, rising each year in between, according to city budgets.

In sales tax revenue, the city is projecting a decline of $160,000, which would reduce it from approximately $3.49 million to $3.33 million for the year. Sales tax revenue has averaged about $3.2 million from the 2015-16 to 2017-18 fiscal years.

“Brick-and-mortar sales tax revenues continue to be affected by the COVID restrictions, the city’s declines in particular are related to restaurants, home furnishings and fuel sectors,” Smith said. “But these decreases have been partially offset by increases in the statewide sales tax pool that is generated largely by online sales.”

The city is also projecting another $200,000 in revenue combined for building permits and building plan check fees, bringing those totals to $234,000 and $270,200, respectively. There is also a corresponding $150,000 increase in expenses for building services.

“This has to do with an increase in activity, as well as one large project with Santa Fe Christian that has been submitted for building plan check this year,” Smith said.

In payroll, there was also an added $90,000 expense for an interim finance director.

Overall, the city has calculated a total of approximately $920,000 in expenditures caused by the COVID-19 pandemic, and it has received a little more than $400,000 in aid from the county and state.