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Commentary:
Getting on Top of Undergrounding
Dan Quirk | 23rd Street

It’s an election year and partisan politics are heavy in the air, but I think most Del Mar residents can agree on at least one thing—utility poles and powerlines are unsightly and potentially dangerous. The City has hired consultant Utility Specialists to provide an updated cost estimate of the cost to underground virtually all of the lines in the City limits—approximately 10 miles of lines, 370 poles, and 1,000 residences. The current ballpark estimate for the project is $25 million and a completion time of as little as three years.

City Council had previously considered undergrounding the powerlines back in 2000, but ultimately declined to pursue the project because it was assumed the only way to finance the cost was through an increase in resident property taxes. This time around, the City is considering a temporary increase in the sales tax as the means to finance the project. Currently, the sales tax in Del Mar is 8%. Of this 8%, Del Mar keeps 1% while the other 7% goes to the state and county. This 1% generates approximately $1.6 million per year in annual tax revenue to the City. If Del Mar residents pass a potential November ballot measure to raise the sales tax to 9%, Del Mar would keep 100% of the increase and raise its annual sales tax revenue from $1.6 million to $3.2 million. The additional $1.6 million would be an ideal source of funds to pay the $1.3 million annual debt servicing cost on a 30-year, $25 million bond. Additionally, if project costs come at or under budget, there could be an opportunity to finance other worthy projects, notably the Shores Park project at the south end of town.

One of the attractive features about this sales tax proposal versus a property tax is that visitors and tourists, particularly to the fairgrounds, pay the vast majority of the sales tax (as much as 90%), not residents. So if you are in favor of this idea to make Del Mar a more beautiful, safer, and valuable city while only paying 10% of the bill, please register your opinion by reaching out to your favorite City Council member or participating in future public opinion surveys and workshops. Let’s make Del Mar beautiful!

 

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