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City to create committee to oversee tax increase funds

DEL MAR — With money from a voter-approved 1 percent sales tax increase being collected as of April 1, the process to track the funds has been started.

City Council agreed at the April 17 meeting that a required citizens oversight committee will be made up of two people from the Finance Committee, two at-large residents and one person from the business community.

Members will serve a maximum of two four-year terms. Mayor Terry Sinnott and Councilwoman Sherryl Parks were appointed council liaisons.

The committee is expected to meet semi-annually or as needed to review the revenue and expenditures related to the use of funds from Measure Q, as the November ballot measure was called.

According to the staff report, the group’s primary responsibility will be to verify that the money is properly set aside for projects approved by City Council and related expenditures are accurately tracked.

“I would encourage us to keep the decisions of how we’re going to use the money separate from an oversight committee that watches how well the money is used,” Sinnott said.

Councilman Dave Druker agreed.

“Unless we really are directive about that they will try to determine how to spend the money,” he said.

The recommendation to increase the sales tax came from the Finance Committee as a way to fund a proposed citywide utility pole undergrounding project.

As the idea evolved, the scope was expanded to include using the funds for general city services and infrastructure projects such as improving streets, sidewalks, parks, trails and recreation facilities, public landscaping, beach maintenance, crime prevention and fire protection.

The new sales tax rate in Del Mar is 8.75 percent. About 4 percent goes to the state. Another 3 percent is claimed by the county.

The increase could add an estimated $1.5 million to $2 million to city coffers. All money from the 1 percent hike must be kept in a designated account separate from the general fund.

Forming the committee is the first step in developing a process driven by City Council and residents for managing Measure Q funds.

While the initial thought was to appoint Finance Committee members to the oversight committee, City Manager Scott Huth said before the measure was voted on “there was kind of a mixed feeling” that there should be additional representation from the community.

Parks recommended including someone from the business community.

The Finance Committee will name its two representatives. The city will advertise for the other members, who will then be selected by council.

After the committee is formed there will be a council discussion about how to select the projects that will be funded by revenue from the increase.

Huth said money should start coming into the city from the state Board of Equalization in June.

Council members will also decide if some of that should be used to pay the $170,000 that agency charged to implement        the initiative.