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Del Mar considers 1% sales tax increase

DEL MAR — Council members are considering a 1 percent sales tax hike to fund some high-priority projects such as undergrounding all remaining utility poles and lines throughout the city.

At the April 18 meeting they directed staff to begin the process to create a ballot for the Nov. 8 general election.

Sales tax in Del Mar is currently 8 percent. Seven percent goes to the county.

The rest goes back to the city. Del Mar could keep all revenue — approximately $1.6 million annually — generated from the potential increase.

It is estimated that about 60 percent to 70 percent of the sales tax is paid by nonresidents who visit the beach community or attend events at the Del Mar Fairgrounds.

“So they’re joining in with us to help us pay for stuff that they enjoy,” said Bud Emerson, a member of the Finance Committee, which was tasked with finding ways to pay for undergrounding.

“We think that adding 1 percent to the sales tax would be a smart way to go,” he added.

“I think the timing is awful,” said Councilman Don Mosier, noting that the San Diego Association of Governments is working on a ballot measure that calls for a half-cent regional sales tax increase to fund projects such as infrastructure, new trolley lines and a better bus network.

Mosier said he supports the Del Mar increase but “it’s just the wrong election to do it.”

“I don’t necessarily concur with that,” Councilman Al Corti said. “I would rather go to the public on that. I think there are some more issues with undergrounding that need to be vetted. …  But I’m in support of doing it and doing it sooner.”

The cost of the project is currently estimated to be $25 million to $30 million. Consultants were hired to determine the exact scope and price tag.

Their report is due May 23.

The Finance Committee presented the tax increase proposal now because a sequence of steps must be started to meet election deadlines. The cost to get the measure on the ballot is between $8,000 and $15,000.

The sales tax revenues could be used to amortize $30 million in bond debt payable over 30 years at 3.25 percent interest, the staff report states.

“It’s no secret that undergrounding is something that would be extremely desirable and very profitable if you’re thinking of it as an enhancement to your property,” Emerson said. “If we undergrounded the entire community all boats would rise.”

Council members unanimously supported continuing the process at the next meeting May 2.

Councilman Terry Sinnott said based on past surveys “undergrounding is a strong desire by the community.”

“I’m assuming it still is,” he said. “I think it still is a good thing to be pursuing.”

“Walking through a line-free Del Mar is something that the entire community would benefit from,” Councilman Dwight Worden said. “I’m generally in support.”