Solana Beach approves budgets for 2021-22 and 2022-23

Bolstered by funding from the most recent round of federal aid, the Solana Beach City Council approved budgets for the next two fiscal years that show a gradual return to normal following the COVID-19 pandemic.

“We do expect some recovery growth over the next couple years and hope that by the time we get to fiscal year 2024, we’re going to be closer to where we should have been,” City Treasurer Ryan Smith said during a presentation to council members on June 23.

Solana Beach is expecting to receive approximately $3.18 million from the American Rescue Plan, approved by Congress shortly after President Joe Biden took office. The city’s original estimated allocation was about $2.5 million.

Smith told the council that the federal aid helped the city avoid making additional cuts to the budget.

With American Rescue Plan funds, the city will have an expected $1.55 million General Fund surplus for the 2021-22 fiscal year, and an approximately $800,000 surplus in the 2022-23 fiscal year.

Key sources of revenue that are expected to climb in the post-pandemic economy include transient occupancy taxes from short-term rentals, which are projected to be approximately $490,000 in the 2020-21 fiscal year. As public health restrictions took effect in spring 2020 and tourism came to a halt, the city thought it might dip as low as $270,000. Taxes from short-term rentals are projected to reach $475,000 and $485,000 in fiscal years 2021-22 and 2022-23, respectively.

Sales tax, which is projected to be about $3.33 million in the current fiscal year, is estimated to be $3.56 million and $3.71 million over the next two fiscal years. Bans on large events at the Del Mar Fairgrounds have contributed to the decline in business activity for the surrounding area.

Hotel taxes are projected to be $733,000 for the 2020-21 fiscal year, which would be the lowest they’ve been since 2011-12. They’re estimated to reach $900,000 in 2021-22 and $1.05 million in 2022-23.

Property taxes, which provide the most money to the city’s General Fund, are projected to be $8.7 million, an increase from the $8.58 million that was originally budgeted two years ago. Property taxes are budgeted at approximately $8.97 million and $9.23 million in the next two fiscal years.

“We’re doing what we can given what we were handed with the COVID downturn, and it looks like we’re, thanks to ARPA, doing better than I anticipated,” Solana Beach Mayor Lesa Heebner said.