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Del Mar reconsiders 1 cent sales tax hike

DEL MAR — After receiving a report outlining the costs and restrictions of how and when a sales tax increase can be voted on, council members at the May 16 meeting changed course and are moving forward with plans to place the measure on the November ballot.

City officials first considered raising the sales tax by 1 percent based on a recommendation from the Finance Committee that it was the best way to fund a proposed citywide utility pole undergrounding project.

But following a discussion earlier this month they decided this may not be the best year because the November election is already crowded with nearly 20 initiatives, including a proposed ½ cent county sales tax increase.

Council members like the idea of the increase, which would add about $1.6 million annually to city coffers, because it would be paid primarily by visitors to the beach community and the Del Mar Fairgrounds.

At the May 2 meeting they asked staff to look into the costs and processes for a mail ballot and special election.

The city clerk reported that a special election can only include a sales tax increase for a specific purpose and it must be approved by two-thirds of the city’s 2,855 registered voters.

The costs range from $35,000 to $60,000 for a mail ballot and $180,000 to $200,000 for a poll.

If the increase is considered a general tax for multiple projects it can be included in the general election for an estimated cost of $8,000 to $15,000 and requires a simple majority of 50 percent plus one to pass.

The half dozen residents who spoke at the May 16 meeting said they support trying to get the measure on the November ballot as a general tax increase.

Council members agreed, but with some hesitation.

“The question in my mind is the timing,” Councilman Terry Sinnott said. “I would want to see some assurance that it’s got a good chance of succeeding in November.”

“There needs to be a package of community improvements that would be funded by the increase,” Councilman Don Mosier added. “Building community support for any kind of election issue takes some time and the time is relatively short.”

He said most people support utility pole undergrounding until they see the price tag. He also noted the city has other pending projects, including downtown streetscape improvements, more pedestrian amenities and the Shores Park master plan implementation.

“Each of those has a constituency and building a general support for a sales tax increase is going to take bringing those two or three constituencies together in a relatively short time and in a very noisy election season and at a time when three council members are running for re-election,” Mosier said.

“That seems to me to present some real obstacles,” he added.

While residents generally support the increase, members of the business community said raising the sales tax would be a “double whammy” as they must comply with a state law to raise the minimum wage to $15 an hour within the next few years.

“They’re struggling and … we need to keep doing what we can to make them healthy,” Mayor Sherryl Parks said, adding that time must be spent “incentivizing the business community.”

Staff will return next month with language for the ballot measure. Meanwhile, a citizens group will work on public outreach.

“From my experience … I think this is going to be received very well,” resident Dan Quirk said. “I think it’s a pretty basic idea for people to understand and embrace. “

He suggested the increase be temporary.

“This is for identified projects,” he said. “This is not a money grab by the government.”

He said the tax should expire in 30 years “to give people confidence that this is for identified projects.”

Council has until summer to make a final decision on adding the increase to the general election.

Councilman Al Corti said the city should just go for it.

“Let them vote,” he said. “Fifty percent plus one you do it. If not, so be it.”

Sales tax in Del Mar is currently 8 percent. About 4 percent goes to the state. Another 3 percent funds county coffers, and Del Mar gets the remaining 1 percent. The city could keep all revenue generated from the proposed increase.