Scott Huth and Mark Delin, City of Del Mar
City Council has reinforced the policy that no residential assessments or fees are proposed to implement the Village Specific Plan’s public improvements. But how are the new streetscape or parking projects funded?
The public investments to improve traffic safety, relieve congestion, reduce neighborhood cut-through traffic, increase public on-street parking, significantly improve pedestrian walkability and beautify our Village are estimated to cost $5.5 million. The addition of 200 off-street parking spaces in a parking structure(s) is estimated between $5 million and $7 million. The Public Financing component of the Specific Plan shows how this can be accomplished without depending on residential fees or assessments.
No residential fees or assessments are required to finance the public improvements. Instead, the improvements can be funded through a mix of grant funding, discounted debt financing programs and user fees. The Public Financing chapter also gives us a glimpse of the new revenues that could accrue to the City when development is realized. These new revenues could support increased public safety and services as well as new recreation and senior centers, improved parks, recreational paths and sidewalks.
There are many different sources of grant funding available to help fund our downtown public improvements, and the City will take advantage of all grant opportunities as a top priority. However, we cannot be certain that we will obtain grants, thus we have developed a plan that will work without grants as well. Similarly, the City’s capital reserve, which pays for scheduled and emergency projects, is identified as a possible source for bridge financing, but is not included in the long-range financing plan.
Debt financing is an excellent alternative for financing long-term capital improvements, because it matches payments over time to the long asset life and it allows the future users to contribute their fair share. The City’s General Fund traditionally accrues funds for capital as revenues typically exceed expenditures, and this capacity may also be tapped to help finance a portion of the debt service as appropriate.
The Public Financing component considers two fees related to development, the parking in-lieu fee (which is already authorized by the municipal code) and a new mobility impact fee. Development impact fees help improve cost equity, because they encourage “growth to pay for growth.”
The community can expect new revenues to accrue as the Village Specific Plan is implemented. At build-out, the plan could generate $800,000+ in new revenues on an annual basis. These new revenues can be used for extinguishing the debt, increasing community services or advancing other community benefits.
We have been waiting for 35 years to implement these Community Plan goals. The Financing Plan gives us the assurance that we can confidently construct these improvements and realize the long-awaited goals.