Jim Eckmann | Chair, Finance Committee
How Healthy are Del Mar’s Finances? In a word, solid! Some highlights:
For the 18th consecutive year the City’s financial processes and statements prepared annually by staff have received the prestigious Certificate for Achievement of Excellence awarded by the Government Finance Officers Association.
The recently audited Comprehensive Annual Financial Report for the fiscal year ended June 30, 2014 shows our three big dogs -- property tax, transient occupancy tax and sales tax revenues -- account (as usual) for 96% of our General Revenues of $10.3 million. These three components have shown nice increases, as the following chart shows.
| Transient Occupancy tax
|| + 5.9%
Further, that Report shows expenses were $321,000 below budget, the result of across-the-board economies in a wide variety of expense categories.
The City Council asked the Finance Committee to focus on three major areas: (1) employee pension underfunding; (2) law enforcement analysis and (3) long range planning. The Committee’s efforts yielded the following:
- (1)Pension underfunding has proven (and may prove) the undoing of many governmental entities. The Council adopted a Pension Reserve Fund where each year the pension reports are analyzed using conservative bond-linked market rates of return (not the CalPERS’ assumed rates of return) and one-fifteenth of the reported shortfall is set aside so that after fifteen years our pension obligations will be close to 100% funded. Del Mar stands virtually alone in attacking this problem head-on. The can is not kicked down the road, which is the near-universal approach, so generational equity is accomplished and the City will be in a much improved position to honor commitments to valued employees.
- (2)As for law enforcement, the City pays right at $2 Million to the County for the Sheriff’s services. For that we get roughly 4+ deputies. Response times, traffic enforcement and other aspects were studied. Response times are within guidelines for the more urgent categories (a good thing) although are unfavorable for the less urgent, such as loud parties and suspicious noises, plus traffic enforcement lags. The Council approved in January exploring with senior Sheriff representatives the concept of a small police department of up to four officers plus two Community Service Officers to augment the deputies, including operational and contractual aspects; in short, targeted solutions to the identified shortcomings.
- (3)As for long range, assistance was rendered to the Council concerning a new City Hall, including bonding capacity. Projections of revenues and expenses based on historical performance were made and yielded financial options the Council considered in fashioning the three City Hall choices recently put to an online survey of all residents.
We have seen and in the near future will see several capital improvements, e.g., sidewalks, street and drainage projects. These improvements are already funded either from City resources or other government programs. Future long range tasks for the Committee include addressing Citywide WiFi and Citywide utility undergrounding. The latter is a big ticket item and will be approached, as have the other challenges, with conservative fiscal analyses.