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Subcommittee to evaluate finance options

DEL MAR — In an effort to increase revenues, reduce costs and possibly finance major capital projects, City Council at the Oct. 21 meeting authorized the formation of a subcommittee within the citizen volunteer Finance Committee. 

The three- to four-member group will analyze the long-term financial structure of the city over the next 20 years and make recommendations to council members.

The first step will be to review the city’s bonding assumptions, capacity and recommendations from outside bond counsel.

Subcommittee members will then review the 20-year capital improvement program, bonding capacity, revenue options and cost-reduction opportunities.

The group will also be tasked with evaluating proposals for new City Hall offices, as well as the best options to pay for them.

With this review, the Finance Committee can better advise council on the timing of projects and how best to pay for them.

Bonding capacity information is scheduled to be reported to council by January. A report on City Hall options is due by February. Other tasks must be completed by May.

Del Mar has traditionally been cautious and conservative, using a “pay-as-you-go” financial philosophy. While this approach has kept the city financially healthy, it limits the ability to save for needed projects.

Council members have discussed using municipal financing on a limited basis to help fund some projects that are critical to the community, such as a new City Hall.

In September a financial advisor reported to council members the city could afford to bond up to $7.5 million, close to the estimated cost of that project.

Councilman Don Mosier said he supports the subcommittee formation, but with two reservations.

“Some of the projects that involve bonding or long-term financing need to move forward with due speed,” he said. “I’m worried that interest rates are going to shoot up.

“Our borrowing costs are going to escalate rapidly and that means that if we want to do something that involves financing we need to do it sooner rather than later,” Mosier added.

He also said any results must be reported to council first.

“The Finance Committee is advisory to the whole council and they need to come to us with their advice before they start talking to the public about actions,” Mosier said.

“My concern is staff time,” Councilwoman Lee Haydu said. “If we want staff to do other things we can’t use all their time just to study things.”

“Most of what we anticipate that this subcommittee charge would involve would be to take an additional look at what already is being produced,” said Mayor Terry Sinnott, who recommended forming the group. “It’s really a second set of eyes. It shouldn’t be a burden of additional work for the staff.”

He also addressed Mosier’s concerns.

“The group that we’ve had some preliminary discussions with recognizes that this bonding issue is the priority and is working quickly and they’ve already started to do some analysis,” Sinnott said. “These target dates are very flexible. The work they do must be in sync with what the council and the city is doing on particular decisions or it wouldn’t be valuable.”

Councilman Al Corti, who also recommended forming the subcommittee, said his goal is to involve residents.

“As we move forward I think it’s important to bring the public along with us,” he said. “It’s a matter of bringing them up to speed. … I think it will help speed the process along. At least that’s the intent.”