Solana Beach — Financial Storm Clouds Ahead

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“…small cities such as Solana Beach are considered today on the “endangered list.” There is a real and rational concern throughout the county, among city management and civic leaders, as to whether or not small cities will be able to survive the competition for finances, resources, and the lure of the “large pockets” found among large cities and counties.”

Mayor David Powell, State of the City Address, June 21, 2006

Key Findings  

• In general, the City is currently in average to good financial condition
  
  
• However, the City is facing projected revenue shortfalls by 2010
  
  
• In the future, the City must increase revenue sources or make cuts in services
  
  
• The City faces two significant legal issues which could have significant financial impacts on future budgets: the settlement requiring the replacement of 13 low/moderate income housing units and the City’s Clean Water fee litigation filed by the Howard Jarvis Taxpayers Association, which could impact approximately $190,000 in annual funds. A mail vote to determine the fate of this fee will be held in September. 
  
  
• General Fund debt is low.
  
  
• Existing Redevelopment Agency Revenues are already allocated, so additional development projects are needed to generate new revenues. 
  
  
• Future capital needs are significant, and for the most part have identified funding sources.  However, a shortfall of approximately $2.5 million can be adequately handled only with new general and redevelopment funds. In addition, construction funding for the Highway 101 Street Scaping/Traffic Calming project, estimated at $10 to $12 million has not yet been identified.
  
  
• The City of Solana Beach has historically been remarkably successful at generating outside grant funding for large capital projects, primarily in the rail corridor/rail station. Given current state and federal funding constraints, it is apparent that Solana Beach must use mostly local funding sources for future needs.

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