Del Mar reports on COVID-modified budget

Revenue sources for the city of Del Mar met or exceeded expectations for the 2020-21 fiscal year, relative to tempered budgetary projections that accounted for the effects of the COVID-19 pandemic, city officials said during a Nov. 1 council meeting.

In June 2020, as the economy came to a near standstill due to public health orders, the City Council reduced General Fund revenues by $3.5 million and expenditures by $2.8 million, according to a report from Monica Molina, city treasurer. For that fiscal year, the council eliminated more than $500,000 in reserve transfers to the city’s pension reserve and $300,000 for the housing reserve, among other measures.

Revenue property taxes remained strong, according to the report. Transient occupancy taxes (TOT), or hotel taxes, reached “an all-time low” from November 2020 through that winter, but rebounded in the spring.

“Beginning in March 2021, TOT results were positive, and this trend continued through the end of the fiscal year, resulting in revenues coming in $292,090 higher than projected,” the report stated. “If this trend continues, staff anticipates a full recovery of TOT revenue during the current fiscal year.”

The report noted that “downtown activity and warm summer days also resulted in increased parking meter and parking violations revenue collections which together came in $246,678 higher than projected.”

But council members said it will still take time for the city to regain its full financial health.

“Even though things are looking better than we projected, we’re still constrained,” Del Mar Deputy Mayor Dwight Worden said.

Sales tax was $159,970 higher than projected, according to the report. But council members have said over the last year and a half that sales tax wouldn’t return to full strength until the Del Mar Fairgrounds returns to its typically full agenda of large, revenue-generating events. Fairgrounds officials were able to hold a scaled-down version of the annual county fair, which generates revenue for the city and provides a boost for local businesses.

“We’re going in the right direction, it is good, but we’re still way behind what our original 2019-2020 budget was.”