Fiscal Fitness
- Tom McGreal | Stratford Court
The City Council held a Budget Workshop on May 30 & May 31st to review the details of the FY 2024 & 2025 budget. The process of reviewing the departmental budgets, staffing, service levels and spending priorities was detailed and well done. If you watched any of the two-day meeting, you saw the significant level of scrutiny that goes into the financial management of a small City like Del Mar.
If you step back from the Workshop details and assess Del Mar’s overall financial condition, the City’s General Fund is in excellent shape. The two-year Budget shows that Revenues are back to pre-pandemic levels, departmental budgets are fully funded, service capabilities are restored and Reserves are at the target levels.
Based on feedback provided by the City Council the final proposed budget scheduled to be adopted on June 19, 2023 reflect the following results.
It’s important to note that the General Fund Reserves include a Contingency Reserve for the two-year Budget period that totals approximately $5 million or 27% of Expenditures, which represents 97 days of operating costs. The other large Reserve component is the Pension Reserve which will total $4 million in FY 2025 and keeps the City on track toward its policy goal of having a fully funded Pension Liability by 2032.
Measure Q Reserves (not included above), which represent the 1% District Sales Tax approved by the voters in 2016, are part of the General Fund, but are reported separately and set aside to fund Del Mar’s Citywide Undergrounding and Shores Park development. Measure Q Reserves for FY 2023 are projected to total $7.4 million. Measure Q Revenues are Budgeted to total $3.4 million in FY 2024 and $3.5 million in FY 2025. With the small Tewa undergrounding project now completed, undergrounding for the two top priority large scale projects along South Stratford (project 1A) and Crest Canyon (project X1A) are underway. These two projects are projected to cost $5.6 million in FY 2024 and $6.7 million in FY 2025. The ending FY 2025 Measure Q Reserves balance will be $1.9 million. Based upon the cost and timing data gathered thus far, the Underground Project Advisory Committee will be preparing a long-term Cash Flow model that will provide the City with a clear picture of the timing of revenues and costs for citywide undergrounding.
Ongoing discussion and debate about specific spending in the Budget is essential to good fiscal management. However it’s ultimately up to the City Council to control spending to ensure that cash flow is positive and reserve levels are maintained. This two-year Budget shows that we should feel very good about the overall financial condition of the City.