The Del Mar City Council approved budgetary updates June 2 with new numbers for the 2025-26 and 2026-27 budgets for “continuity of high-level services to the public, and the advancement of critical capital improvement and special projects,” according to city staff.
The updates include a total net revenue increase of $167,530 and net expenditure decrease of approximately $1.93 million for the 2025-26 fiscal year, based on a review of city finances through the third quarter of the fiscal year.
The revised third quarter general fund revenues for the 2025-26 fiscal year include increases in property taxes, transient occupancy taxes, sales tax, parking violations, parking meters, planning services, licenses and permits, and other revenue, according to a council agenda report.
Increased revenue from parking violations and meters is “due to favorable weather conditions continuing to draw more usage and activity,” according to the report.
For the 2026-27 fiscal year, there is a total net increase of $1.46 million to projected revenues and $1.56 million in expenditures.
“Property tax is the City’s largest source of revenue and accounts for approximately 34% of total amended General Fund revenues,” according to a council agenda report. “Del Mar’s property valuations have consistently increased over the years and that trend is forecasted to continue into the next fiscal year. The revised projection reflects a nominal increase over the original budget for a new total of $8,840,000.”
The sales tax, which accounts for approximately 9% of general fund revenue, is decreasing about 1% from the original budget. The council agenda report says that factors reasons such as “tariff policies, inflation, weak consumer confidence, and ongoing geopolitical events.”
The updated transient occupancy tax revenue is estimated to be $37,000 higher. TOT from hotels is estimated to increase 7% from the originally budgeted amount, but down 35% from short-term rental activity due in part to fewer permitted STR properties than anticipated.
“The City remains in a healthy financial position,” according to the agenda report. “Regular transfers to City reserves are a testament to responsible governance and fiscal discipline intended to ensure stability against unforeseen expenditures or revenue shortfalls. City reserves also provide the City a financial buffer to manage multiple competing priorities while still adhering to the Contingency Reserve Policy.”