Agenda, first session — Del Mar City Council, April 7, 2026

Del Mar City Council Meeting Agenda
Del Mar Town Hall
1050 Camino del Mar, Del Mar, California
April 7, 2026 City Council Meeting

INFORMATION RECEIVED

AFTER THE COUNCIL AGENDA

WAS DISTRIBUTED
(“Red Dots”)
1 Leslie Carrillo
From: Laura DeMarco <[email protected]>
Sent: Tuesday, April 7, 2026 12:27 PM
To: Tracy Martinez; John Spelich-private; Terry Gaasterland; Dan Quirk Cc: Ashley Jones; City Clerk Mail Box
Subject: Item 4: Omit landscaping of road obstructions in High Wildfire Risk Hazard Zones Follow Up Flag: Follow up
Flag Status: Flagged
CAUTION: This email originated from outside of the organizaƟon. Do not click links or open aƩachments unless you recognize the sender and know the content is safe.

Dear Council Members and Staff,
As noted in the city’s upcoming road survey, many of the streets in Del Mar’s High Wildfire Risk Hazard Zones do not meet meet the state’s fire code requiring minimum road width of 20 Ō (excluding parking area).

Thus, all road obstrucƟons in this area, especially the chicanes on Crest Road that narrows this criƟcal artery for firefighters and evacuees to a single lane and blocks oncoming traffic, should be removed instead of landscaped (see page 116).

This will reduce the cost of the city’s landscaping contract as well as reduce the city’s liability for maintaining a road hazard in a high wildfire hazard zone.

Thanks for your consideraƟon.

Laura
April 7, 2026 Item 4
1 Robert Silva
From: Robert Silva
Sent: Friday, April 3, 2026 9:01 AM
To: Robert Silva
Subject: FW: Red Dot - Encroachment Permit EP26-01
From: Janet Wilson <[email protected]>
Sent: Thursday, April 2, 2026 4:52 PM
To: City Manager Mail Box <[email protected]>
Cc: Tracy Martinez <[email protected]>; Dan Quirk <[email protected]>; Terry Gaasterland <[email protected]>; John Spelich <[email protected]>; Ashley Jones <[email protected]> Subject: Red Dot - Encroachment Permit EP26-01
CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

Dear Mayor Martinez and City Councilmembers,
The majority of Del Mar, including 1215 Cuchara Drive, is now in the Very High Fire Hazard Severity Zone.

There are two points of concern about this encroachment application. First, it approves a condition that allows dense vegetation to remain in or next to the public right-of-way despite the existing wildfire risk. Second, the covenant and indemnification provisions do not eliminate the City’s continuing responsibility to protect public safety.

Dense Vegetation in a Very High Fire Hazard Severity Zone The staff report addresses sight lines, but not wildfire risks. Dense vegetation affects more than sight lines. It is also fuel for fires.

The report states that this area has had dense, overgrown vegetation for many years, and it treats that vegetation as a benefit because it screens the wall from view and acts as a natural barrier. The report says the vegetation will remain in place and be trimmed only to improve sight distance at the intersection.

Notifying the Fire Department before a road closure is not the same thing as analyzing fire hazard. That is a traffic-control condition, not a safety finding.

The staff report acknowledges this dense vegetation in a Very High Fire Hazard Severity Zone, leaves that fuel in place, and then concludes there are no significant environmental impacts. That skips over the obvious point:
in a wildfire-risk area, fuel load is itself an environmental concern.

Because the report treats dense vegetation mainly as a sight-line issue and a natural barrier, rather than as fuel in a wildfire-risk area, it appears that the City’s public-safety analysis for encroachment permits has not yet caught up with the City’s changed fire hazard classification.

Covenant and Indemnification Requirement
April 7, 2026 Item 9
2 The recorded covenant is a run-with-the-land document that records maintenance responsibility and removal upon demand by the City. The staff report also describes it as requiring indemnification.

Separate from the covenant, the City retains broad control through revocation, removal upon notice, vegetation maintenance to the City’s satisfaction, change of conditions, retention of the City’s ownership interest in the public right-of-way, and Public Works inspection and approval of right-of-way work.

The covenant does not say that the public right-of-way is now entirely the owner’s problem and risk. Quite the opposite. The City keeps substantial control.

Under California Government Code section 835, the issue is not whether the owner promised to maintain the vegetation or indemnify the City. The issue is whether public property is in a dangerous condition and whether the City had notice and the ability to act. If the City approves this encroachment and keeps the power to control it, the covenant and indemnification language do not eliminate the City’s potential exposure.

The covenant may shift costs, but it does not shift responsibility for public safety in the public right-of-way.

Request
I respectfully ask that the Council decline to make Findings 1, 2, and 5 unless and until staff reassesses them in light of wildfire risk in this Very High Fire Hazard Severity Zone.

Finding 1 goes directly to whether the permit will endanger public health, safety, or welfare.

Findings 2 and 5 should also be reexamined because it is in the public interest to reduce fire risk in the public right-of-way, not approve a permit that leaves that risk in place.

Respectfully,
Janet Wilson
https://experience.arcgis.com/experience/6a9cb66bb1824cd98756812af41292a0 April 7, 2026 Item 9
3 April 7, 2026 Item 9
1 Leslie Carrillo
From: City Clerk Mail Box
Sent: Thursday, April 2, 2026 11:18 AM
To: Leslie Carrillo
Subject: FW: Item 13: EP25-049 (Rael) -- LETTERS OF SUPPORT Attachments: 20260319_114606.PDF
From: Robert Scott <[email protected]>
Sent: Wednesday, April 1, 2026 8:23 PM
To: Sarah Krietor <[email protected]>
Cc: Nestor Machado <[email protected]>; Paul Rael <[email protected]>; Dean Meredith <[email protected]>
Subject: Item 13: EP25-049 (Rael) -- LETTERS OF SUPPORT CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

Hello Sarah,
Please share the attached letter of support with the City Council for EP25-049 (Rael). The letter was a red-dot at the previously-scheduled March 17 hearing but I did not see it in the current April 7 CC packet.

We have overwhelming support from the surrounding Stratford Way neighborhood and will have additional neighbor support letters prior to next Tuesday night's hearing.

Thanks,
Bob
--
Robert J. Scott, AICP, LEED AP
RJS Planning + Land Use Solutions, Inc.
1155 Camino del Mar #119
Del Mar, CA 92014
Tel. 858.692.8832
April 7, 2026 Item 13
April 7, 2026 Item 13
April 7, 2026 Item 13
1 Leslie Carrillo
From: City Clerk Mail Box
Sent: Thursday, April 2, 2026 1:46 PM
To: Leslie Carrillo
Subject: FW: Item 13: EP25-049 (Rael) Drawings
Attachments: EP25-049_Drawings_(Rael).pdf
Follow Up Flag: Follow up
Flag Status: Flagged
From: Robert Scott <[email protected]>
Sent: Wednesday, April 1, 2026 8:14 PM
To: Sarah Krietor <[email protected]>
Cc: Nestor Machado <[email protected]>; Paul Rael <[email protected]>; Dean Meredith <[email protected]>
Subject: Item 13: EP25-049 (Rael) Drawings
CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

Hello Sarah,
Please forward the attached drawings to the City Council for the above item.

The item was continued from the March 17 City Council hearing and I want to be sure the Council has the most current set of drawings for consideration.

Thanks so much,
Bob
--
Robert J. Scott, AICP, LEED AP
RJS Planning + Land Use Solutions, Inc.
1155 Camino del Mar #119
Del Mar, CA 92014
Tel. 858.692.8832
April 7, 2026 Item 13

NEW ENTRY WALKWAY TO

REPLACE DEMO WALKWAY
NEW RAILING 42"
HIGH ABOVE FIN.

GRADE
(EXISTING HOUSE

EXISTING DRIVEWAY
134.00 ABOVE N.G.

STRATFORD WAY
N72029 W 117.44'

63.8'
135.8'
135
136
140.45'
135.8'
136.5'
F.G.

F.G.

F.G.
135.4' TW
F.G.

FSB
20' - 0"
SYSB
7' - 6"

DEMO-ED (E)
ENTRY

WALKWAY
-
---

LANDSCAPE

W/ BLACK
MULCH

EXISTING

ASPHALT
NEW
4" CONCRETE
CURB
(E) ROCKS
PL
wm
EXISTING 3'-4" CURB AT WEST

NEIGHBOR- SEE PHOTO BELOW
NEW 3'-4" CURB TO CONNECT TO EXISTING
CURB TO THE WEST - SEE DETAIL 5
3' - 4"
PL
PL
PL
3' - 4"

EXISTING PREVIOUSLY APPROVED BLACK MULCH AREA
GRASSCRETE

NEW GRASSCRETE INFILL PER CITY SPECS
-
NEW CONC. CURB 4" WIDE PER CITY
STANDARDS (B-1/G-06 STD DWG)

RAELS PROPERTY

CITY PROPERTY

NEW GRASSCRETE

NEW CONCRETE SWALE

TO MATCH AND ALIGN

WITH NEIGHBOR'S CURB

TO THE WEST

EXISTNG ASPHALT PAVING
4"
2"
4"
3' - 4"
1' - 5"

PROPERTYLINE
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P.O. B
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4 2
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LIF
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9 2
0 1
4 R
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Copyright 2023 W. Dean Meredith Architecture and Planning, Inc. 1 6
1 2
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9 2
0 1
4 3/29/2026 3:34:58 PM
A-1
1/4" = 1'-0" 1

SITEPLAN
N

NEW CURB PER
DETAIL 5 ABOVE

EXISTING CURB AT WEST

NEIGHBOR

GRASSCRETE

GRASSCRETE, SEE PHOTO
BELOW. CONTRACTOR TO

MATCH EXISTING

GRASSCRETE AND GRAVEL
SAMPLE ON SITE.

CONTRACTOR TO MATCH

EXISTING GRASSCRETE
AND GRAVEL.

EXISTING 3'-4" CURB
AT WEST NEIGHBOR.

NEW CURB TO EXTEND
TO PROPOSED SITE.

PROPOSED CURB

EXTENSION TO THE
EAST
1 1/2" = 1'-0" 2

SECTION
2 VISUALS THAT DEPICT PRIVATE PROPERTY VS PUBLIC PROPERTY DEL MAR -3'-6” FENCE
-LANDSCAPE ALONG FENCE AND PROPERTY LINE
-CONCRETE CURB - NORMALLY SEEN AT THE EDGE OF A STREET
SAMPLE ON SITE.

April 7, 2026 Item 13

NEW ENTRY WALKWAY TO

REPLACE DEMO WALKWAY
NEW RAILING 42"
HIGH ABOVE FIN.

GRADE
(EXISTING
HOUSE

EXISTING DRIVEWAY
134.00 ABOVE N.G.

STRATFORD WAY
N72029 W 117.44'

63.8'
135.8'
135
136
135.8'
F.G.

F.G.
135.4'
F.G.

FSB
20' - 0"
SYSB
7' - 6"

DEMO-ED (E)
ENTRY

WALKWAY
-
---

LANDSCAPE

W/ BLACK
MULCH
NEW
(E) ROCKS
PL
wm
EXISTING 3'-4" CURB AT WEST

NEIGHBOR- SEE PHOTO BELOW
NEW 3'-4" CURB TO CONNECT TO EXISTING
CURB TO THE WEST - SEE DETAIL 5
3' - 4"
PL
PL
PL
C. SWALE
3' - 4"

EXISTING PREVIOUSLY APPROVED BLACK MULCH AREA
SAFETY
ZONE
5' - 0"
EXIST.

ASPHALT
GRASSCRETE

SAFETY ZONE
5' - 0"

NEW GRASSCRETE INFILL PER CITY SPECS
-
NEW CONC. CURB
4" WIDE PER CITY
STANDARDS (B-1/G06 STD DWG)

LANDSCAPE W/

BLACK MULCH
RAEL'S

PROPERTY

CITY PROPERTY

NEW PAVING

NEW CONCRETE

CURB TO MATCH AND

ALIGN WITH

NEIGHBOR'S CURB

TO THE WEST

EXISTNG ASPHALT PAVING
4"
2"
4"
3' - 4"
1' - 5"

SAFETY ZONE
5' - 0"

SECTION
-PROPOSED CONCRETE ENTRY PAVERS. WE ARE PROPOSING

TO RELOCATE THE EXISTING ENTRY PAVERS EAST TO THE
NEW ENTRY STRUCTURES AND GATES.

PUBLIC AND CITY OF DEL MAR BENEFITS
-OUR DESIGN CREATES 5' SAFETY BUFFER FOR PEDESTRIANS
TO EXIT STREET, PER DEL MAR REQUIREMENTS.
-PROPOSE A GRASSCRETE BASE WITH CHARCOAL GRAY

DECOMPOSED GRANITE (COLOR TO MATCH THE EXISTING

ASPHALT), APPEARS AS STREET EXTENSION FOR PARKING (NOT
AS PART OF PRIVATE PROPERTY); SUPPORTS VEHICLE LOADS,

STABILIZES GRANITE, ALLOWS WATER PERCOLATION, MORE
AESTHETIC THAN ASPHALT; ECO-FRIENDLY WITH LESS NEGATIVE ENVIRONMENTAL IMPACT.
-PROPOSED NEW CONCRETE CURB AND GUTTER

IMPROVEMENTS ALONG FRONTAGE, MATCHING WEST PROPERTY
AND CORNER LOTS; AT RAEL’S EXPENSE, RESOLVES CITY'S
DRAINAGE/RUNOFF ISSUES.
-TWO OFF STREET PARKING SPACES
2 -PREVIOUSLY APPROVED BLACK MULCH AREA
April 7, 2026 Item 13
W Dean Meredith ARCHITECT AIA
P.O. BOX 2142 DEL MAR CALIFORNIA 92014

RAEL RESIDENCE
Copyright 2023 W. Dean Meredith Architecture and Planning, Inc. 1612 Stratford Way DEL MAR CALIFORNIA 92014
3/29/2026 3:35:07 PM
A-3

ASPHALT GRASSCRETE W/ CHARCOAL GRANITE BASE
FOR SAMPLE OF ASPHALT SEE 355 BEL AIR STREET, FOR SAMPLE OF GRASSCRETE SEE RAEL RESIDENCE DEL MAR, CA.

April 7, 2026 Item 13
W Dean Meredith ARCHITECT AIA
P.O. BOX 2142 DEL MAR CALIFORNIA 92014

RAEL RESIDENCE
Copyright 2023 W. Dean Meredith Architecture and Planning, Inc. 1612 Stratford Way DEL MAR CALIFORNIA 92014
3/29/2026 3:35:07 PM
A-4
April 7, 2026 Item 13
1 Robert Silva
From: Janet Wilson <[email protected]>
Sent: Thursday, April 2, 2026 5:05 PM
To: City Clerk Mail Box
Cc: Tracy Martinez; Terry Gaasterland; John Spelich; Dan Quirk; Ashley Jones Subject: Red Dot - Initial Consideration of an Appeal of Encroachment Permit (EP) 25-049 CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

Dear Mayor Martinez and City Councilmembers,

I am writing in support of Encroachment Permit 25-049 and respectfully request that the Council approve the permit.

Staff could not make two of the six required findings for this encroachment permit application.

Finding 2: The proposed encroachments would not unreasonably interfere with the intended use of the City right-of-way.

Finding 5: The proposed encroachments would not be detrimental to the interests of the general public.

Staff explained that unless the shoulder is asphalted, the public may be discouraged from parking within the area because other surface improvements might create the impression that the space is private property, potentially resulting in a loss of public parking.

In other words, the concern is not about safety or a physical obstruction, but the possibility that the area could appear private unless the shoulder is asphalted. Asphalt is not an attractive solution, and I am not aware of any requirement that public parking surfaces must be asphalt.

In this case, the property’s physical condition makes it especially difficult to understand the concern. A fence separates the private yard from the area outside it. Everything inside the fence is clearly private property, and the natural assumption would be that the parking area outside the fence is not private property.

The proposed improvement is not decorative. It is a parking surface specifically intended to accommodate vehicles.

Because the fence creates a visually obvious boundary between private and public use, and because the surface outside the fence is designed specifically for parking, it should be clear that the area is for public parking.

If there is still concern about public perception, the solution is straightforward. The City could install a “Public Parking” sign with the Del Mar logo to make it clear that the space remains available to everyone.

So the real issue here is not whether the area is public space, but whether someone might mistakenly perceive it as private.

And the real question is whether improving the surface of that public space with something other than asphalt actually interferes with public parking.

April 7, 2026 Item 13
2 This issue has been ongoing for quite some time. It is difficult to think about the number of hours Mr. Rael has spent trying to resolve this matter, as well as the unnecessary expense involved. Architects and consultants are not inexpensive, and the time, energy, and money invested to reach this point must be significant.

In this case, a private citizen is willing to improve the curb appeal of his property by upgrading the surface of the adjacent parking area within the right-of-way. That type of investment should be viewed as a benefit to the community. A maintained surface is more usable and more attractive than a dirt shoulder where people park or walk.

For these reasons, approving Encroachment Permit 25-049 is a reasonable outcome. The right-of-way clearly remains public, and the proposed improvement does not interfere with its use.

More importantly, this situation highlights the need to modernize the City’s approach to encroachments. Asking Planning staff to revisit and clarify the framework used to evaluate these applications would help reduce the number of encroachment applications that need Council review and would allow staff to resolve more of them administratively.

Thank you for your consideration.

Janet Wilson
635 Hoska Dr.

This is now the fourth encroachment matter to come before the Council in recent months. Why do these situations keep coming up?

One reason may be that the framework staff must use when evaluating encroachment applications is too limited, leaving staff with little flexibility when applying the required findings. At the November 17, 2025 City Council meeting, Planning and Community Development Director Karen Brindley explained that when staff evaluates encroachment permits, they must apply the findings strictly and do not have discretion, but the Council does. That rigid framework may be part of the reason these applications keep coming before the Council for resolution. During the 2026 Goals and Priorities Workshop, Councilmember Spelich suggested that the city should have a more holistic review of encroachment policies. Clarifying the framework staff can use when evaluating these permits could reduce appeals, save staff time, and make the process more efficient.

April 7, 2026 Item 13
1 Leslie Carrillo
From: Sarah Krietor
Sent: Monday, April 6, 2026 9:25 AM
To: City Clerk Mail Box
Subject: FW: NEIGHBOR SUPPORT: EP25-049 (RAEL)
Attachments: Ausmus Supprt Letter_(EP25-049).pdf; Cohen Support Letter_(EP25-049).PDF Follow Up Flag: Follow up
Flag Status: Flagged
From: Robert Scott <[email protected]>
Sent: Friday, April 3, 2026 10:31 AM
To: Sarah Krietor <[email protected]>
Cc: Nestor Machado <[email protected]>; Paul Rael <[email protected]>; Dean Meredith <[email protected]>
Subject: NEIGHBOR SUPPORT: EP25-049 (RAEL)
CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

Good morning Sarah,
Please forward the attached neighbor support letters to the City Council as red-dots for Tuesday night.

Thanks so much,
Bob
--
Robert J. Scott, AICP, LEED AP
RJS Planning + Land Use Solutions, Inc.
1155 Camino del Mar #119
Del Mar, CA 92014
Tel. 858.692.8832
April 7, 2026 Item 13
April 7, 2026 Item 13
April 7, 2026 Item 13
April 7, 2026 Item 13
1 Leslie Carrillo
From: Sarah Krietor
Sent: Monday, April 6, 2026 9:30 AM
To: City Clerk Mail Box
Subject: FW: NEIGHBOR SUPPORT LETTERS: EP25-049 (Rael)
Attachments: Bruderer-Schwab Support Letter_(EP25-049).pdf; Scheele Support Letter_(EP25-049).pdf; Zeylin Support Letter_(EP25-049).pdf
Follow Up Flag: Follow up
Flag Status: Flagged
From: Robert Scott <[email protected]>
Sent: Friday, April 3, 2026 2:09 PM
To: Sarah Krietor <[email protected]>
Cc: Nestor Machado <[email protected]>; Paul Rael <[email protected]>; Dean Meredith <[email protected]>
Subject: NEIGHBOR SUPPORT LETTERS: EP25-049 (Rael)
CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

Hello Sarah,
Please see attached for additional red-dot letters of support for Item #13: EP25-049 (Rael).

Thanks, have a nice weekend,
Bob
--
Robert J. Scott, AICP, LEED AP
RJS Planning + Land Use Solutions, Inc.
1155 Camino del Mar #119
Del Mar, CA 92014
Tel. 858.692.8832
April 7, 2026 Item 13
April 7, 2026 Item 13
April 7, 2026 Item 13
April 7, 2026 Item 13
1 Leslie Carrillo
From: Sarah Krietor
Sent: Monday, April 6, 2026 9:35 AM
To: City Clerk Mail Box
Subject: FW: Letter of support for Paul Rael’s Encroachment Permit Follow Up Flag: Follow up
Flag Status: Flagged
From: Terri Pavelko <[email protected]>
Sent: Saturday, April 4, 2026 8:33 AM
To: Sarah Krietor <[email protected]>
Subject: Letter of support for Paul Rael’s Encroachment Permit CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

I am writing to support Paul Rael’s Encroachment Permit (EP25-049). He has done a beautiful job on the re-landscaping of his front entry and has provided a functional, aesthetic landscape design for the street-side strip to complete the projects function and image. I reject the 100% asphalt solution currently proposed by City staff as unattractive and diminishing to the overall aesthetics of the finished project.

I ask you to approve the Rael’s encroachment permit as submitted.

Sincerely,
Terri Pavelko
April 7, 2026 Item 13
1 Leslie Carrillo
From: Lisa Knight <[email protected]>
Sent: Monday, April 6, 2026 11:45 AM
To: City Clerk Mail Box
Subject: Medians?
Follow Up Flag: Follow up
Flag Status: Flagged
CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

Good morning council members,
Although the plans for the medians look lovely, perhaps is makes sense to prioritize funds to complete much needed paving projects and traffic control plans?
For example, the parking area in front of the library is designed for handicapped parking, but the pavement is damaged and uneven.

Also, there are no stop signs or warnings at the 3 way intersection of 13th and Maiden lane. (See the photos below of a near collision.)
Would you please consider addressing these infrastructure/ safety measures before spending city funds on the medians?
Lisa P. Knight
610-212-2373
348 13th St
Del Mar, CA 92014
April 7, 2026 Item 14
2 Thank you,
April 7, 2026 Item 14
3 April 7, 2026 Item 14
4 April 7, 2026 Item 14
5 Facing east, library is on the left
One of many near collisions we have seen on our walks.

April 7, 2026 Item 14
6 April 7, 2026 Item 14
1 Leslie Carrillo
From: Tate Scott <[email protected]>
Sent: Wednesday, April 1, 2026 8:24 PM
To: City Clerk Mail Box; Tracy Martinez ([email protected]); John Spelich; Terry Gaasterland; Dan Quirk
Subject: Red Dot Item 15 – Additional Pension Fund Transfer (FY 2025-26) Follow Up Flag: Follow up
Flag Status: Flagged
CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

Honorable Mayor and Councilmembers,
I am writing to urge your support for the proposed $425,000 additional pension transfer. As a former member of the Finance Committee and the Pension Subcommittee that specifically designed the Section 115 Trust, I find the current 2-2 stalemate on this item to be a concerning departure from the fiscal discipline we established in 2023.

When we built the Section 115 Trust, our intent was clear: to create a protected, City-controlled vehicle to systematically buy down our at a minimum $19.3 million unfunded liability. The 2032 target wasn't a suggestion; it was a calculated strategy to insulate future taxpayers from compounding debt. By authorizing only $250,000 of what should be a $1.1 million transfer per policy guidelines, the Council is effectively dismantling the very architecture designed to ensure Del Mar’s long-term solvency.

There is a common "wait and see" argument—that we should hold onto this cash or wait for a better market year. As a former CEO, I can tell you that ignoring a debt while you have a surplus is not a "savings strategy"—it is a compounding error. Every dollar we fail to transfer today is a dollar that isn't earning market returns to offset the high interest CalPERS charges us on that $19.3M debt. Waiting for a "better year" is mathematically no different than taking out a high-interest loan to pay for current expenses.

Furthermore, we must consider the impact on our workforce. If you’ve ever run an organization that depends on retaining top-tier professionals, you know that pensions are core to total compensation. When the Council ignores its own 2023 policy, it signals to City staff that our commitments are subject to political whims. In a competitive market for municipal talent, this foolish approach, an unforced error, makes it harder to keep the high-level staff we need to manage massive capital projects, like the $121.8 million Undergrounding Program and its associated 42% forecast volatility.

The Finance Committee has unanimously recommended this transfer because it aligns with the policy and the current revenue surplus. If Councilmembers wish to move the goalposts on the 2032 funding target, they should bring that as a separate, transparent agenda item. Until then, I urge you April 7, 2026 Item 15
2 to honor the policy, follow the expert recommendation of your Committee, and approve the $425,000 transfer.

Respectfully,
Tate Scott
Del Mar, CA
/wts
April 7, 2026 Item 15
JGS
150 6th St. • Del Mar, CA. • 92014
Honorable Mayor & Councilmembers
City of Del Mar
1050 Camino Del Mar
Del Mar, CA 92014
Re: City Council Agenda Item 15 - Reconsideration of Additional Pension Fund Transfer for FY 2025-26
April 6, 2026
Honorable Mayor & Councilmembers,
Unfortunately, I am not able to attend the April 7th meeting, so I am respectfully submitting this letter to you regarding City pension funding.

The City’s Pension Reserve Fund was designed to achieve a fully funded pension plan, where the fair value of the plan assets was sufficient to match the plan obligations, and thereby eliminating the persistently unfunded liability. It was also understood that the 115 Trust funds were invested with a risk return profile that provided downside risk.

I encourage the Council to adopt a budget that maintains the adopted pension policy. Should staff, the Finance Committee, or Council wish to research and revisit the funding plan, I am happy to make myself available to provide any assistance I can.

Sincerely,
Jeffrey G. Sturgis
April 7, 2026 Item 15
1 Leslie Carrillo
From: Laura DeMarco <[email protected]>
Sent: Tuesday, April 7, 2026 10:57 AM
To: Terry Gaasterland; Dan Quirk; John Spelich; Tracy Martinez Cc: Ashley Jones; City Clerk Mail Box
Subject: Item 15: Follow Finance Committee’s recommendation to increase pension reserve funding
Follow Up Flag: Follow up
Flag Status: Flagged
CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.

Dear Council Members and Staff,
As chair of the city’s finance committee, I urge you to follow the unanimous recommendation of the finance committee to allocate $425,000 to the city’s pension reserve fund.

This added contribution is fiscally responsible as the city’s defined benefit plans’ actuarial funded ratio is

80.7%, which is below the 90% benchmark for a resilient, well-funded plan. It is also far below the 100% target previously set by the city council to be achieved in FY 2031-32, only 6 years away.

Notably, Del Mar’s current $10M.9M unfunded liability is likely understated so that the city’s annual contribution jumps when CalPERS revises critical actuarial assumptions such as increasing the inflation rate which is set to rise from 2.30% to 2.50%; lowers the interest assumption from 6.8% to 6.7%, the pension fund’s return over the trailing 20 years (the fund’s amortization period); and revises mortality tables to reflect longer life expectancy.

Del Mar is also exposed to substantial market risk when CalPERS marks-to-market the stale inflated valuations of its private assets, which are over 30% of the pension fund, and another market shock hits like the Great Financial Crisis in 2007-8 when CalPERS returns plunged -23%.

This market risk is made even more apparent since the outbreak of the war against Iran on February 28 with no end in sight as major oil and gas fields needed to sustain the global economy are damaged, destroyed, and threatened.

The pension reserve 115 plan is designed to insulate the city from these market and budgetary shocks. It is also highly valued by credit rating agencies which look favorably on governments that increase contributions to bolster their funding level and provide a clear, consistent plan, like that previously adopted by the city council, to be 100% funded.

It is important to note that Moody’s and other credit rating agencies often recalculate a city’s pension liabilities using a lower, market-based discount rate (3-4%) rather than the higher 6.8% rate currently used by public plans like CalPERS.

April 7, 2026 Item 15
2 Remember that when voting on pension-related matters, city council members are legally and ethically obligated to act as fiduciaries in the best interest of the pension plan and its beneficiaries.

Thanks for your consideration,
Laura
April 7, 2026 Item 15
City Council April 7, 2026 Agenda Questions
Item 15 - Reconsideration of Additional Pension Fund Transfer for FY 2025-26

1. How did we wind up with a gap in the first place? What led to the gap? Why does it exist?
A pension funding gap or “unfunded liability” can exist for various reasons, including plan changes, assumption changes, or methodology changes. For Del Mar, the largest impact has been related to CalPERS investment performance. Council direction and additional staff time to research and address would be needed if more detailed information is desired.

2. How does Del Mar’s status compare to other cities?
Del Mar is in a pooled CalPERS plan with other small cities who have less than 100 full-time employees. All agencies included in the same pooled plan have similar funding status for CalPERS reporting purposes. Council direction to conduct additional research would be needed in order to provide a more detailed response.

3. The City has always contributed the required amount each year and is also contributing the mandatory amount toward the unfunded liability. Those are paid regularly. Why contribute more in addition? What are the benefits of contributing more?
The City is not making additional payments to CalPERS beyond the annual required payment, nor is that proposed. Per the Pension Reserve Policy, additional funds are being set aside in a 115 Trust for pension purposes and to pay off the City’s unfunded liability once enough funds are available to do so.

4. What is the rationale for setting aside additional funds on top of the mandatory extra contribution that the city is already making?
The rationale for setting aside additional pension funds is to get as close to 100% funded status as possible and decrease the City’s unfunded liability, therefore reducing or eliminating the City’s annual payment to CalPERS.

5. What are the risks due to the gap?
Risks increase as the gap increases. Although the City continues to make its required Unfunded Annual Liability (UAL) annual payments to CalPERS, these payments can grow substantially when, for example, CalPERS investment return targets are not met.

Having funds set aside in a Section 115 Trust can reduce the risk of one year not having sufficient funds to cover the required contribution by using funds in the Trust to help cover the required payment.

6. What other alternative approaches are there?
There are various alternatives including making Additional Discretionary Payment (ADP) to CalPERS, which can better accomplish the City’s specific objectives with April 7, 2026 Item 15
City Council April 7, 2026 Agenda Questions
regard to either smoothing out projected future payments or achieving a greater reduction in the UAL than would otherwise occur when making only the minimum required payment. However, with this approach the City will not have any control over the ADP fund once those funds are paid to CalPERS.

CalPERS also offers Amortization Schedule Alternatives that can provide a more stable pattern of payment or paying off the unfunded accrued liabilities more quickly than required. The disadvantage of this plan, which is not recommended by many financial professionals, is that the required annual contribution will be higher and would be required to be made each year, therefore reducing any Council discretion over the payment. Once established, there is no way to back out of the plan. In addition, as new UAL are calculated for current years, the required UAL payment will continue to grow. For these reasons, making the higher than required calculated annual contributions to the Section 115 Trust account gives the City the most flexibility and control over the funds.

7. Is there a policy document or resolution on this from 2023? The City’s Pension Reserve Policy was approved by City Council consensus on May 31, 2023, and is included as Attachment A to the April 7, 2026, agenda report.

8. Using the latest numbers, what would strict application of the 2023 policy call for as the FY 2025-26 transfer? How does the proposed amount for this year compare?
In compliance with the City’s Pension Reserve Policy, the annual Pension Reserve Fund transfer amount is recalculated each year based on the updated unfunded accrued liability (UAL) reported in the City’s Annual Comprehensive Financial Report (ACFR). Based on the current unfunded accrued liability (UAL) amount reported in the June 30, 2025, Annual Comprehensive Financial Report (ACFR), in order to fully fund 84% of the total UAL by June 30, 2032, the City would need to make an annual Pension Reserve Fund transfer of approximately $1.1 million beginning in FY2025-26.

The current recommendation would result in a total pension transfer of $675K in FY 2025-26, which is approximately $425K lower than the Pension Reserve Policy recommends.

9. What are the projected long-term General Fund savings from accelerating prefunding vs just paying the minimum CalPERS amount? This information is not readily available and would require Council direction and additional staff time to research and provide a response.

10. What are the benefits of holding the pre-funding in a city-controlled account rather than making the extra payments to CALPERS?
In the years that CalPERS does not meet their investment target, any extra payment to CalPERS would be affected by that loss. Once payments are made to CalPERS, the City no longer has any discretion/control over use of those funds. For example, if April 7, 2026 Item 15
City Council April 7, 2026 Agenda Questions
the City faces another economic downturn, the funds in the Section 115 trust fund can be used to pay all or a portion of the required annual CalPERS payment.

11. Does stronger pension funding help us recruit and retain good staff, especially for big projects like the Undergrounding Program?
Prospective employees who are considered “classic” members are typically most interested in the retirement formula provided in the City’s CalPERS contract (e.g., 2% at 60) and how that may compare to the agency they are coming from or other agencies they are considering for employment. Starting on January 1, 2013, all new CalPERS members are enrolled in the PEPRA plan upon start of employment. This CalPERS plan is the same for all municipal agencies.

12. If we skip the extra payment this year, what is the real opportunity cost to hitting the goal of closing the gap by 2032? (Is 2032 the correct year?) The current adopted budget includes a $250K contribution to the pension reserve for FY2025-26. If no additional payment is made this year, based on the UAL of $17.8M as of June 30, 2025, the City would need to contribute $1.2M for the next 6 years, to be fully funded by June 30, 2032. If the additional $425K contribution to the pension reserve is approved the annual contributed over the next 6 years would be approximately $1.1M.

13. What is CalPERS track record? Are they reliable?
The Actuarial Report provided in Chart A in the March 18, 2024, agenda report included as Attachment B to the April 7, 2026, agenda report, shows how CalPERS has performed in meeting its investment targets from 2016 to 2022. More detailed information responsive to this request is not readily available and would require Council direction and additional staff time to research and respond.

14. Is our contribution to the 115 Plan analogous to making an extra principal payment on a mortgage?
No, payments to the 115 Trust are really not analogous to making extra principal payments on a mortgage, because the payments are not submitted to CalPERS where the City would get credited for the additional payments. And, unlike a mortgage, the City’s UAL is recalculated each year by CalPERS based primarily on investment performance and is typically based on a 20-year amortization period. Instead, the City’s practice is analogous to having a savings account to supplement or replace a checking account to ensure the mortgage can be paid on time.

15. Does making the 115 payment save "interest" charged by CalPERS? No, there is no savings in interest unless payments are made directly to CalPERS. 115 Trust payments stay within an account controlled by the City, which can only be used for pension related purposes.

April 7, 2026 Item 15
City Council April 7, 2026 Agenda Questions

16. What is the cost to the City for the gap? Are we paying 6.8% interest annual on the full amount? Does that increase the gap? Does that increase future contributions to the gap?
The City is paying 6.8% annual interest on its current UAL. However, the City receives a discount of approximately 3.4% interest on the annual UAL payment by paying in full at the beginning of each fiscal year, which is an opportunity provided by CalPERS.

17. Is the amount of $425,000 for FY2026-27 or for FY2025-26? The additional proposed pension transfer amount is for current fiscal year 2025-26.

18. How much of the mandatory $1,390,000 UAL payment to CALPERS is interest and how much pays down the unfunded gap?
This information is not readily available and would require Council direction and additional staff time to research and respond.

19. What is the City’s current unfunded liability? What was the unfunded liability in 2022?
The UAL reported by CalPERS as of June 30, 2022, was $18.3 million.

The most recent valuation report provided by CalPERS, shows a current total unfunded liability for Del Mar of $19.3 million as of June 30, 2024.

As noted in the March 3, 2026 FY2025-26 Mid-Year Report (pg. 12 and Attachment G), the total estimated UAL as of June 30, 2025, was approximately $17.8M.

The City expects to receive the next CalPERS valuation report in July/August 2026, which will confirm the City’s UAL as of June 30, 2025.

20. Does the City’s Pension Reserve Fund still exist as an entity separate from the 115 Trust?
The City’s Pension Reserve fund still exists, and as noted in the FY 2025-26 Mid-Year Budget Report, continues to hold approximately $1.9M in Water and Wastewater pension set aside funds as described in the City’s Pension Reserve Policy. Retaining the Water and Wastewater pension funds in the City’s Pension Reserve Fund allows the City to maintain discretion to transfer any excess Water and Wastewater Reserve to other reserves as may be prioritized by the City Council (i.e. rate stabilization reserve, revenue loss reserve, capital reserve).

Since the establishment of the 115 Trust, General Fund pension funds are transferred to the 115 Trust. The 115 Trust funds are held and managed separately by a thirdparty administrator. The 115 Trust permits the City, under federal and state law, to invest in a more diversified array of investments to maximize returns in comparison to what the City’s investment options are if the funds were to continue to be held in the April 7, 2026 Item 15
City Council April 7, 2026 Agenda Questions
City’s Pension Reserve and invested in accordance with the City’s investment policy and restrictions on general fund investments.

21. Does a transfer from a reserve fund to the 115 Trust require explicit approval by the Council?
No, once Council authorizes a pension reserve transfer no additional approval is needed to transfer the funds from the City to the 115 Trust. Any Council authorized pension transfer for the General Fund is transferred to the 115 Trust account by the end of the fiscal year. The City Council can request General Fund pension reserve transfers to be left in the Pension Reserve Fund with other City funds, but those funds would not benefit from potentially higher investment interest earned if transferred to the 115 Trust.

22. Who controls the investments of the 115 Trust? (Who is the fund manager and who makes decisions about changing investments?)
The City’s funds held in the 115 Trust are managed by PFM Asset Management (PFMAM), through their Target Index Investment Platform which has four (4) preestablished investment options. All the plan assets in the Target Index Investment Platform are combined for economies of scale, but there is no cross sharing of earnings or liabilities. Strategies are comprised of index-based, mutual funds selected for their low expense ratio.

23. Who controls the investments of the city's reserve funds? (Who is the fund manager and who makes decisions about changing investments?) The City manages the investments of the city’s reserve funds in accordance with the City’s investment policy and restrictions on General Fund investments, with the assistance of Optimized Investments Partners, LLC., who the City Council authorized hiring in November 2024.

24. What is the current distribution of investments of the 115 Trust (bonds, stocks, equity, private equity, other...)? Trying to understand diversification.

This information is not readily available and would require more time to research and provide a response.

25. What is the current (April 1, 2026) balance of the 115 Trust and what was it on January 1, February 1, and March 1, 2026? Trying to understand impacts of market volatility.

The City receives monthly statements from PARS with the balance of the 115 Trust account. The City’s conservative investment election makes the account less susceptible to market volatility. The most recent statement was as of February 28, 2026, and the balance for the prior three months is as follows:

April 7, 2026 Item 15
City Council April 7, 2026 Agenda Questions
February 28, 2026 $5,101,156
January 31, 2026 $5,088,157
December 31, 2025 $5,073,606
November 30, 2025 $5,058,687

26. How does the investment performance of the City's reserve funds compare to that of the 115 Trust? How do they compare to CalPERS?
As of February 28, 2026, the annualized rate of return is 4.13% for the 115 Trust. As of the December 31, 2025 Quarterly Treasurer’s Report the weighted yield to maturity on the City invested funds (including reserve funds) is 3.73%. CalPERS reported a preliminary 11.6% net investment return for year ending June 30, 2025.

27. Considering the most recent CalPERS available UAL ($19.3M) and the current balance of the 115 Trust, what is the City’s level of pension funding? Please see March 3, 2026, FY 2025-26 Mid-Year Report, Attachment G – Pension Funding History.

28. What is the City’s actuarial funded ratio for the general employee and public safety plans?
This information is not readily available and would require more time to research and provide a response.

April 7, 2026 Item 15
City of Del Mar
Agenda Report
TO: Honorable Mayor and City Council Members
FROM: Marco Camacho, Finance Manager/Treasurer
Monica Molina, Finance Officer
Ashley Jones, City Manager
DATE: March 3, 2026
SUBJECT: Fiscal Year 2024-25 Final Financial Report and Fiscal Year 2025-26 Mid-Year Financial Report
REQUESTED ACTION/RECOMMENDATION:

Staff recommends that the City Council: 1) Receive the June 30, 2025 Annual Comprehensive Financial Report (ACFR) and Fiscal Year 2024-25 Final Financial Report; 2) Review the Fiscal Year 2025-26 Mid-Year Financial Report; and 3) Approve Resolution (Attachment A) amending the FY 2025-26 Operating and Capital Budget as included in Exhibit A, authorizing net revenue adjustments totaling $5,673,620 million and net expenditure adjustments totaling $1,325,660, and authorizing unspent FY 2024-25 encumbrances and continuing appropriations to be carried over to FY 2024-25 as included in Attachment B totaling $9,071,519 in expenditures and $3,924,755 in revenues.

DISCUSSION/ANALYSIS:

FISCAL YEAR 2024-25 ANNUAL COMPREHENSIVE FINANCIAL REPORT (ACFR) The City’s audit firm, Davis Farr LLP, has completed its audit of the City’s financial statements and notes to the basic financial statements for the fiscal year (FY) ended June 30, 2025. Based on the results of their audit, Davis Farr LLP provided the City with an unmodified opinion on the financial statements, which means that the City’s financial statements are free of material misstatements and consistent with Generally Accepted Accounting Principles (GAAP). The auditor provided a report with information about the auditor’s responsibilities under generally accepted auditing standards and Government Auditing Standards and OMB Circular A-133 as well as certain communications related to their audit. These communications are contained in the ACFR.

The specific financial documents on which the auditor expresses an opinion are the basic financial statements, and notes to the basic financial statements. These documents, along with the auditor’s opinion letter and management’s discussion and analysis, are the core ACFR documents. Additional documents that make up the ACFR include the letter of transmittal from the City Manager and Finance Manager/Treasurer and a supplemental section, which includes a statistical section presenting detailed information to assist the reader in assessing the economic condition of the City. The ACFR is available on the City’s website at http://www.delmar.ca.us/acfr.

Davis Farr LLP prepared a communication (Attachment C) addressed to individuals charged with governance regarding internal controls over financial reporting and compliance based on an audit of Financial Statements performed in accordance with Government Auditing Standards. The purpose of this report is to describe the scope of the auditors’ testing of internal controls over financial reporting and compliance, and the results of that testing. The City’s internal controls over 1 March 3, 2026 Item 12
2026-27
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FY 2024-25 Final Financial Report and FY 2025-26 Mid-Year Financial Report March 3, 2026

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financial reporting were considered for the limited purpose of expressing an opinion on the financial statements.

Article XIII-B of the California State Constitution places limits on the amount of revenue that can be spent by the State and each local government entity. It is the responsibility of the City to calculate the annual appropriations limit. The City’s auditors are required to review and approve the appropriations calculation as part of their audit of the City. The auditor found no exceptions to the City’s calculation of the appropriations limit. The Independent Accountants’ Report is included as Attachment D.

FISCAL YEAR 2024-25 FINAL FINANCIAL REPORT
The FY 2024-25 Budget was originally adopted in June 2023 and updated in June 2024. The approved FY 2024-25 Budget Update reflected a projected General Fund Contingency (GF) of

25.69% (94 days of operations). The City Council approved the FY 2024-25 Mid-Year Budget amendment in April 2025, which included increasing General Fund revenue projections by $685,620 and General Fund expenditure budgets by $330,724, and included transfers of:
$360,000 to the Pensions Reserve Fund; $100,000 to the Equipment Reserve Fund; $300,000 to the Housing Reserve Fund; and, $2,500,000 to the Capital Reserve Fund. The FY 2024-25 MidYear Budget was approved with an adjusted June 30, 2025 General Fund Contingency of 30.08% or $5,683,024 which represents 110 days of operations.

In January 2026, Davis Farr LLP completed the FY 2024-25 financial audit. Attached for review is the Final Financial Report (Attachment E) for FY 2024-25. The report reflects a final General Fund Contingency balance of $6,503,908, which represents a contingency of 34.80% (127 days of operations).

Attachment F is a General Fund cash flow report for FY 2024-25, which includes the FY 2024-25 Mid-Year budget (column B) as approved in April 2025, Final Results (column C), and the difference between the Mid-Year Budget and audited Final Results (column D) for the year ending June 30, 2025.

The following summary tables compare Final Budgets as of the end of the fiscal year to the audited Final Results for FY 2024-25.

General Fund Revenues
The final revenue report for FY 2024-25 indicates that there was a gain in total General Fund revenues of $1,249,297 when compared to the Final Budget, which is summarized in Table A.

Table A – General Fund Revenues
Revenue
Source
Final
Budget
FY 2024-25
Final
Results
FY 2024-25
Difference % of Budget
Property Tax $8,032,500 $8,088,157 $55,657 100.7%
TOT 4,000,000 4,084,758 84,758 102.1%
Sales Tax 2,300,000 2,297,404 (2,596) 99.9%
Parking Meter 1,700,000 1,734,993 34,993 102.1%
Parking Violations 1,350,000 1,538,560 188,560 114.0%
Planning Services 1,220,000 1,150,732 (69,268) 94.3%
Investment Earnings 400,000 892,952 492,952 223.2%
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Other Revenue 4,003,430 4,467,671 464,241 111.6%
Total $23,005,930 $24,255,227 $1,249,297 105.4%
Overall, roughly all General Fund revenue sources came in as projected. Parking meter, TOT, and parking violations all came in overbudget, including property tax. The surplus in the other revenue grouping is a reflection of additional revenue postings for activities such as parking permits, moving violations, penalties, red light enforcement, contributions, and insurance reimbursements. The largest surplus was for investment earnings due to additional cash on balance, favorable interest rates, better rates of return than projected, and the stewardship of the City’s investment advisors, Optimized Investment Partners. While total General Fund revenues reflect a positive year-end variance, some activities such as planning services and grant reimbursements did come in slightly under budget.

General Fund Expenditures
General Fund operating expenditures were increased to $17,155,684 during the FY 2024-25 MidYear Budget process. Subsequent Council actions adjusted the budget slightly for a final operating expenditure budget of $17,166,481. The following Final Results displayed in Table B indicate that total General Fund operating expenditures ended the fiscal year slightly under budget reflecting a savings of $90,864 when compared to the Final Budget.

Table B – General Fund Operating Expenditures
Program Final
Budget
FY 2024-25
Final
Results
FY 2024-25
Difference % of Budget
General Government* $6,444,810 $6,758,747 ($313,937) 104.9% Public Safety** 8,791,589 8,682,202 109,387 98.8%
Public Works 829,613 646,868 182,745 78.0%
Non-departmental 842,570 868,891 (26,321) 103.1%
Equipment replacement 257,899 118,909 138,990 46.1%
Total $17,166,481 $17,075,617 $90,864 99.5%
* Includes City Council, City Manager, Legal services, Admin services, and Planning services. **Includes Law enforcement, Fire services; Lifeguard services; and Parking enforcement.

The negative variance for general government expenditures is primarily attributed to unanticipated increases in risk management services and claims, which was offset by an insurance claim revenue reimbursement. Non-departmental activity reflects greater expenditures than anticipated for community support programs due to additional TOT revenues received. These overages were offset by savings from services and activities in public works, and equipment replacement expenditures.

Capital Improvement/Special Projects
The calculated Final Results for capital projects totaled $2,899,866 and the Final Results for special projects totaled $191,058. As depicted in Table C, final results show measurable savings between capital and special projects totaling a combined $6,401,995. Since these projects are typically not completed in the same fiscal year that funds are allocated, staff is recommending that the City Council approve the carry-over of FY 2024-25 unspent funds in the amount of $4,987,659 for capital projects and $1,122,910 for special projects. A listing of all encumbrances and continuing appropriations (funds to be carried over to the following fiscal year) is included as Attachment B.
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Table C- Capital & Special Projects
Program Final
Budget
FY 2024-25
Final
Results
FY 2024-25
Unspent
(carry-over)*
% of
Budget
General Fund CIP $4,971,925 $2,458,116 $2,513,809 49.4% Open Space CIP 1,922,398 206,364 1,716,034 10.7%
TransNet CIP 578,000 191,159 386,841 33.1%
Clean Water CIP 482,322 44,227 438,095 9.2%
Total CIP $7,954,645 $2,899,866 $5,054,779 36.5%
Special Projects 1,538,274 191,058 1,347,216 12.4%
Total $9,492,919 $3,090,924 $6,401,995 32.6%
*Only $4,987,659 of unspent capital improvement budget and $1,122,910 of special projects will be carried over to FY 2025-26.

Measure Q Fund
Final results indicate that Measure Q revenues surpassed the $3.50 million budget by $458,543 as displayed in Table D. This outcome points to online purchases and vehicle sales coming in greater than projected, plus additional interest earnings resulting from the high Measure Q balance during the year.

The final Measure Q budget for FY 2024-25 expenditures was $15,216,225. Actual Measure Q expenditures for the year totaled $6,885,074. Although the final results in Table D indicate a savings of $8,331,151 in Measure Q expenditures, the majority of remaining unspent funds will be encumbered and carried over to FY 2025-26.

Table D – Measure Q Fund
Revenue Final
Budget
FY 2024-25
Final
Results
FY 2024-25
Difference % of Budget
Measure Q $3,500,000 $3,958,543 $458,543 113.1%
Expenditures Final
Budget
FY 2024-25
Final
Results
FY 2024-25
Unspent
(carry-over*)
% of Budget
Undergrounding – General $326,263 $259,262 $67,001 79.46% UUD1A – Stratford Ct South 7,261,118 6,339,274 921,844 87.30% UUD-X1A – Crest Canyon 6,991,052 104,587 6,886,465 1.50% UUD1B – Stratford North 450,644 178,358 272,286 39.58%
UUD2 – Beach Colony 8,364 2,539 5,825 30.36%
UUD3 – South Hill 87,784 1,054 86,730 1.20%
Pavement Rehab 91,000 - 91,000 0.00%
Total $15,216,225 $6,885,074 $8,331,151 45.25%
*Only $1,352,130 of unspent Measure Q budget will be carried over to FY 2025-26. On September 8, 2025, the City Council approved a carry-over of $6,886,465 from FY 2024-25 to cover the construction cost of UUD-X1A.

Based on final Measure Q revenues of $3,958,543 (including earned interest) and $6,885,074 million in expenditures, the final FY 2024-25 ending fund balance, including unspent funds that 4 March 3, 2026 Item 12 April 7, 2026 Item 15
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will be carried over to FY 2025-26, is at $7,449,974. Staff is recommending carrying over $1,352,130 of unspent funds as part of the FY 2025-26 Mid-Year Budget action.

General Fund Reserves
Table E provides a summary of the changes in General Fund reserves including the Housing and Capital Improvement Reserve funds. In comparison to the Mid-Year Budget approved in April 2025, the Final Reserve Summary for FY 2024-25 shows an increase of 4.72% to the General Fund Contingency from 30.08% to 34.80%, and a total General Fund Contingency balance increase of $820,884 from $5,683,024 to $6,503,908. The final balances will be carried over to the FY 2025-26 Reserve Summary to calculate the new estimated projected General Fund Contingency at June 30, 2026.

Table E – General Fund Reserves & Transfers
Account Budget
Update
FY 2024-25
(6/17/24)
Mid-Year
Budget
FY 2024-25
(4/7/25)
Final
Results
FY 2024-25
(1/26/26)
General Fund Contingency 25.69% 30.08% 34.80%
General Fund Contingency $4,837,122 $5,683,024 $6,503,908 Pension Reserve* 4,760,000 4,781,894 4,977,684
Housing Reserve 1,650,000 1,650,000 1,650,000
Self-Insurance 300,000 300,000 410,216
Leave Liability 100,000 100,000 100,000
Equipment Replacement 678,460 657,342 796,332
Encumbrances - - 67,655
Total General Fund $12,325,582 $13,172,260 $14,505,795
Capital Improvements Reserve 3,150,000 3,150,000 3,150,000 *A total additional Pension Reserve of $1.90 million is reported in the Water and Wastewater Funds, resulting in a Citywide Pension Reserve balance of $6.88 million.

Debt Management
As of June 30, 2025, the City had a total outstanding debt balance of approximately $20.05 million. Of that amount, roughly $13.12 million or 65% was a General Fund debt obligation.

The Wastewater Fund accounts for approximately $4.56 million or 23% of that total balance and $2.37 million or 12% is attributed to TransNet funds. While largely deliberated during FY 2024-25, the most recent $5.00 million IBank loan to fund construction of Undergrounding Program district projects X1A Crest Canyon and 1B Stratford Court North was executed in Fiscal Year 2025-26.

Table F – City Debt
Debt Purpose Issued Term Amount Balance Repayment
Source
Final
Payment
State Water
Resources
Control Board
- Clean Water
State
Revolving
Fund
21st Street
Sewer Pump
Station
Replacement
Feb
2010
20 years
$5,000,000 $2,425,114 Wastewater
Fund
Aug
2032
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IBank Loan San Elijo Joint
Powers Authority
Pipeline
Oct
2015
20 years
3,535,354 2,130,240 Wastewater
Fund
Aug
2035
SANDAG's
Debt
Financing
Program
ROW
Improvements
Jul
2014
30 years
3,000,000 2,370,000 TransNet
Funds
Jun
2044
IBank Loan City Hall Jun
2016
30 years
16,161,000 13,073,771 General
Fund
Aug
2045
County of
San Diego
Finance
Agreement
Regional
Communication
System Upgrade
Aug
2016
10 years
435,436 49,130 General
Fund
Jun
2026
IBank Loan* Undergrounding
Program: X1A &
1B
Nov
2025
10 years
5,000,000 5,000,000 Measure Q
Fund
Aug
2035
Total $33,131,790 $25,048,255
*Issued during Fiscal Year 2025-26.

FISCAL YEAR 2025-26 MID-YEAR FINANCIAL REPORT
The original FY 2025-26 Budget, was approved on June 16, 2025. The adopted budget included capital and special project expenditures related to the City Work Plan that was discussed by the City Council during the Goals & Priorities Workshop on March 5, 2025. The original adopted FY 2025-26 Operating and Capital Budget totaled approximately $48.38 million with a General Fund Contingency of 21.33% (78 days of operations) and included transfers of $250,000 to the Pension Reserve Fund and $250,000 to the Housing Reserve Fund. Subsequent Council actions since July 1, 2025, have amended the total expenditure budget to a current total of approximately $55.33 million.

In order to present the FY 2025-26 Mid-Year Financial Report with the most updated information, the July 1, 2025, beginning balances have been updated to reflect the FY 2024-25 Final Results as previously discussed in this report.

After a thorough review of financial data through the second quarter (July-December 2025) of FY 2025-26, as discussed in detail below and presented in Attachment A as Exhibit A, staff is recommending increasing General Fund revenues by $936,180 and decreasing General Fund expenditures by $23,000. Accounting for excess equity from FY 2024-25 Final Results, current year-end projections, and General Fund Contingency goals, additional transfers of $425,000 are recommended to both the Housing and Pension Reserve Funds plus $850,000 to the Capital Reserve Fund. Staff is also recommending carrying over funds from FY 2024-25, resulting in a revised General Fund Contingency of $5,324,903 million at June 30, 2026 and reflecting a 25.17% contingency (92 days of operations), matching the Council’s General Fund Contingency goal of 25%.

General Fund Revenues
Staff has reviewed revenues through the second quarter of the current fiscal year and an increase of $936,180 in General Fund revenue is being recommended. Below is information regarding the revenues received for the first half of the fiscal year in each of the City’s largest sources of revenue, which is summarized, along with recommended adjustments in Table I.

Property Tax
Property tax is the City’s largest source of revenue and accounts for 36% of the City’s FY 2025- 26 General Fund revenues. The City receives 12 property tax apportionments per fiscal year (July 6 March 3, 2026 Item 12 April 7, 2026 Item 15
City Council Agenda Report
FY 2024-25 Final Financial Report and FY 2025-26 Mid-Year Financial Report March 3, 2026

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1 – June 30). To date, the City has received six property tax apportionments, with the largest of these distributions received in December. As of January 2026, the total property tax received by the City for the first six periods in FY 2025-26, is $4.74 million. In comparison to prior year collections, current receipts indicate that property tax is 6.0% above prior year collections through the same periods. Applying a 6.0% increase to FY 2024-25 final results of approximately $8.09 million, would result in a FY 2024-25 year-end projection of $8.57 million.

Another available resource that staff utilizes to project property tax revenue is the County of San Diego tax/revenue accountability report that is provided to the City monthly. This report includes total property tax allocated to Del Mar based on the property tax bill that was sent out to residents for the current year. The reported amount includes corrections, supplemental bills, prior year escapes and penalties and interest. Staff estimates that 98% of expected collections will be received by the end of the year, which for FY 2025-26 is projected at $8.46 million. Based on the data and revenues received to date, and reports provided by the County of San Diego, staff is recommending a modest increase of $61,000 above the adopted budget.

Transient Occupancy Tax (TOT)
TOT is the City’s second largest revenue source and accounts for 19% of the City’s FY 2025-26 General Fund revenues. The City receives TOT payments on a monthly basis. Final Results for FY 2024-25 reflect a 7.5% increase over the previous year’s results.

In comparison to the prior year, the first half collections (July-December 2025) for FY 2025-26 show revenue coming in approximately 9.1% higher than FY 2024-25 through the same time period. The following Table G summarizes Mid-Year and Final Results for the past five fiscal years.

Table G. FY 2021-22 thru FY 2025-26 Mid-Year and Year-End TOT Results Fiscal Year
Mid-Year
Results
% of
Total
Final
Results
Difference
to PY
2025-26 $2,409,836 55.59% $4,335,000* $250,242
2024-25 2,209,192 54.08% 4,084,758 285,720
2023-24 2,123,582 55.90% 3,799,038 (17,354)
2022-23 2,146,670 56.25% 3,816,392 396,526
2021-22 1,851,155 54.13% 3,419,866 1,627,776
*Budget projection for TOT revenue.

Historical data indicates that receipts collected through December of each year typically represent approximately 55.1% of the total revenue collected by the end of the year. Applying this average to the Mid-Year Results yields a year-end estimate of $4.37 million. Based on the current 9.1% increase in TOT collections through December, the projected FY 2025-26 total over prior year results would be approximately $4.46 million. Accounting for current year trends, staff is recommending an increase of $175,000.

In addition to the aforementioned adjustment, staff is also recommending a reduction of $65,000 in TOT revenue associated with Short-Term Rentals (STR). The adopted FY 2025-26 Operating and Capital Budget included $193,750 in anticipated revenues from permitted STR activities over the final quarter of the fiscal year. The proposed revenue adjustment is based on the updated 7 March 3, 2026 Item 12 April 7, 2026 Item 15
City Council Agenda Report
FY 2024-25 Final Financial Report and FY 2025-26 Mid-Year Financial Report March 3, 2026

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timing of implementation of the City’s STR regulations and associated TOT revenue collections for the remainder of FY 2025-26.

Sales Tax
Sales tax is the City’s third largest source of revenue and accounts for 10% of the City’s total General Fund revenues. The City receives sales tax payments on a monthly basis with quarterly true-up payments, which the State correlates with the calendar year not the fiscal year. To date, the City has received $970,389 in sales tax receipts. When compared to the same quarter receipts last year, third quarter receipts (July-September 2025) came in 4.5% higher primarily driven by performance in the restaurants and hotels group and state and county pool allocations.

Third quarter receipts were generated geographically 19% by businesses on the eastside and 23% by businesses on the westside of Camino del Mar, 30% by Del Mar Fairgrounds, 10% from other locations, and 18% from state and county pools. The City’s sales tax consultant’s (HdL) forecasts anticipate Fiscal Year 2025-26 revenue to remain relatively flat at $2.34 million citing contributing factors including inflation, high interest rates, weaker consumer confidence, and lower household discretionary spending.

Staff is not recommending any adjustments to the current $2.30 million budget and will continue to monitor sales tax revenue and return to the City Council if adjustment is necessary. Table H below includes historical sales tax data by calendar year quarter. The last three quarters of the current fiscal year are estimated projections.

Table H. FY 2021-22 thru FY 2025-26 Quarterly Sales Tax Receipts Fiscal Year
3 rd Quarter
Jul-Sep
Receipts
4 th Quarter
Oct-Dec
Receipts
1 st Quarter
Jan-Mar
Receipts
2 nd Quarter
Apr-Jun
Receipts
Totals
2025-2026 $809,036 $482,000* $360,000* $649,000* $2,300,000* 2024-2025 773,839 502,486 373,679 647,400 2,297,404
2023-2024 760,245 433,535 354,742 647,943 2,196,465
2022-2023 813,190 509,776 346,379 636,917 2,306,262
2021-2022 644,065 476,648 368,787 579,216 2,068,716
*Projected quarterly receipts and totals.

Parking Violation Revenue
Parking violation revenue is anticipated to come in similar to prior year final results. Adjustments to fees, and improved equipment that increased the ability to acquire vehicle registered owner data, continue to factor into strong revenue performance. Through the first six months of the fiscal year, attractive weather, visitor demand, and experienced staff are also contributing factors to the projected revenue generation. Staff is recommending increasing parking violation revenue by $150,000, resulting in an amended revenue estimate of $1.55 million.

Parking Meter Revenue
Parking meter revenue for the first six months of the fiscal year came in 6.93% higher than the prior year through the same period largely driven by the same factors benefitting parking violation revenues, plus maintenance of functional meters with little downtime. Staff is recommending increasing parking meter revenue by $165,000, resulting in a new revenue projection of $1.70 million.
8 March 3, 2026 Item 12 April 7, 2026 Item 15
City Council Agenda Report
FY 2024-25 Final Financial Report and FY 2025-26 Mid-Year Financial Report March 3, 2026

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Investment Earnings
An increase of $390,000 for projected investment earnings is recommended based on prior year results and current year trends. Estimated cash balances, favorable rates of return, and good guidance from the City’s investment advisors are supporting the proposed adjustment.

Other General Fund Revenue Adjustments
Based on actual receipts received to date, a net increase of $60,180 is being recommended in other revenues. This adjustment combines additional contributions from penalties, rental income, and miscellaneous sources. These gains are partially offset by reductions in planning and building services.

The following Table I summarizes the requested General Fund Mid-Year revenue adjustments.

Table I. Recommended FY 2025-26 General Fund Revenue Adjustments Account Current Budget Recommended
Adjustment
Amended
Budget
Property Tax $8,394,000 $61,000 $8,455,000
TOT 4,353,750 110,000 4,463,750
Sales Tax 2,300,000 - 2,300,000
Parking Violations 1,400,000 150,000 1,550,000
Parking Meters 1,535,000 165,000 1,700,000
Investment Earnings 400,000 390,000 790,000
Other Revenue 5,011,470 60,180 5,071,650
Total $23,394,220 $936,180 $24,330,400
Other Non-General Fund Revenues
In addition to the General Fund adjustments described above, staff will be requesting an increase of $41,530 in the Supplemental Law Enforcement Fund to account for the actual funds received from the Revenue Growth program, and a combined increase of $70,860 based on grants and other miscellaneous revenues. A revenue reduction of $57,190 is also recommended for the Workers’ Compensation Fund based on final receipts for the year.

Included in this report is an increase of $200,000 to the Water Fund and $85,000 to the Wastewater Fund that does not have an impact to the General Fund. This increase is largely due to increased usage revenues based on current activity.

General Fund Operating Expenditures
Staff has reviewed expenditures through the second quarter of the current fiscal year and a net decrease of $23,000 in General Fund expenditure adjustments is being recommended. Below is information regarding the more significant General Fund adjustments being proposed, which are summarized along with the recommended adjustments in Table J.

Legal Services
The City of Del Mar contracts with Devaney Pate Morris & Cameron, LLP for City Attorney legal services. Based on demand for services through the mid-year including ongoing high-risk litigation and claims requiring additional legal counsel, and anticipated needs through the year-end, staff is recommending an increase of $50,000 for legal services. 9 March 3, 2026 Item 12 April 7, 2026 Item 15
City Council Agenda Report
FY 2024-25 Final Financial Report and FY 2025-26 Mid-Year Financial Report March 3, 2026

Page 10 of 13 ends

Fire Protection Services
In June 2025, the City of Encinitas notified Del Mar and Solana Beach that they would be leaving the Cooperative Management Agreement (COOP) between the three cities for shared fire management services effective March 31, 2026. On January 20, 2026 the City Council approved a new Cost Sharing Agreement with the City of Solana Beach for Fire Management Transition Services. Furthermore, on February 17, 2026, the City Council is being asked to approve the first amendment to this agreement to provide interim fire prevention services including the addition of shared costs for a Fire Marshal and Fire Prevention Technician positions. Per this agreement and the estimated costs for the remainder of the fiscal year, staff are recommending an increase of $60,000 to support the transition plan. This adjustment takes into account the original budget to fund the COOP and anticipated budget savings for the final quarter of the fiscal year.

Other Services
A net decrease of $148,000 is also requested across other General Fund services. Reductions for storm drains and risk management are based on funding adjustments and final insurance premium costs. The reduction for building services is based on the current year trend for building permit and inspections services, and has a related revenue reduction. These reductions are partially offset by an increased need for contractual current planning services, and increased parking enforcement services, which also has a related revenue increase.

Equipment Replacement
A requested adjustment of $15,000 is recommended to replace the City’s security server. This will enhance facility access control and video security. The security server hosts mission critical applications including the door access control system and the video security system. It was installed in 2018 with the new Civic Center. The hardware is at the end of its useful life and running out of storage space for the video archives.

Table J. Recommended FY 2025-26 General Fund Expenditure Adjustments Program Current
Budget
Enc &
Approp
Recommended
Adjustment
Amended
Budget
General Government $6,973,460 $9,787 ($32,000) $6,951,247 Public Safety 9,166,860 - 84,000 $9,250,860
Public Works 1,251,500 57,868 (90,000) $1,219,368
Non-Departmental 907,910 - - $907,910
Equipment Replacement 112,240 - 15,000 $127,240
Total $18,411,970 $67,655 ($23,000) $18,456,625
Other Non-General Fund Expenditure Adjustments
Recommended adjustments to Non-General Fund expenditures are included in Table K below.

Table K. Recommended FY 2025-26 Non-General Fund Expenditure Adjustments Fund Amount Description
Gas Tax ($18,450) Less street maintenance staff time and wooden light pole repair costs, and more street landscaping
operations and supplies.

Open Space 27,000 Less seasonal staff operations at Powerhouse; more beach vehicle maintenance; and more park landscape
rejuvenation.
10 March 3, 2026 Item 12 April 7, 2026 Item 15
City Council Agenda Report
FY 2024-25 Final Financial Report and FY 2025-26 Mid-Year Financial Report March 3, 2026

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PEG 63,540 New Cablecast system hardware and pro-services to comply with new State mandate (SB 707) by July 1,
2026 requiring public meetings to be closed captioned.

Capital
Improvement
(1,750,000) JDB Pavement Improvement Project cost savings based on bid results.

Total ($1,677,910)
Included in this report are also recommended adjustments to the Enterprise funds that do not impact the General Fund Contingency. This includes an increase of $295,000 to the Water Fund and $80,250 to the Wastewater Fund, which are largely due to increased operational costs including vehicle maintenance, supplies, and contractual expenses.

Reserves
An updated FY 2025-26 Reserve Summary Report is included with this report as part of Exhibit A within Attachment A, which reflects the following:
 Updated beginning balances at July 1, 2025 based on FY 2024-25 final results;  Current adopted budget which includes adjustments approved by the City Council from July 1, 2025 to February 3, 2026;
 Encumbrances and Continuing Appropriations (Attachment B) for committed contracts or capital projects that were not completed by June 30, 2025;  Additional adjustments recommended for approval, as described above; and,  Additional reserve transfers recommended for approval which include: an additional $425,000 to the Housing Reserve, an additional $425,000 to the Pension Reserve, and $850,000 to the Capital Reserve. An allocation of $900,000 in Capital Reserves for the JDB Pavement Improvement Project is being returned to the reserve balance as a result of the project cost savings which further improves the total year-end Capital Reserve balance to $4 million.

Table L below displays the estimated ending General Fund reserve balances at June 30, 2026, reflecting adjustments and additional reserve transfers recommended by staff as part of this MidYear Budget report.

Table L. General Fund Reserve Balances
Account FY 2025-26
Original Budget
(6/16/25)
FY 2025-26
Mid-Year Budget
(3/3/26)
Difference
General Fund Contingency 21.33% 25.17% 3.84%
General Fund Contingency $4,341,582 $5,324,903 $983,321 Pension Reserve* 5,200,000 5,842,684 642,684
Housing Reserve 1,900,000 2,325,000 425,000
Self-Insurance 300,000 377,216 77,216
Leave Liability 100,000 100,000 -
Equipment Replacement 545,102 669,092 123,990
Total General Fund $12,386,684 $14,638,895 $2,252,211
Capital Improvement Reserve 2,250,000 4,000,000 1,750,000 *An additional $1.90 million in Pension Reserve Funds are held in the Water and Wastewater Funds. 11 March 3, 2026 Item 12 April 7, 2026 Item 15
City Council Agenda Report
FY 2024-25 Final Financial Report and FY 2025-26 Mid-Year Financial Report March 3, 2026

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Pension Reserve
Per the most recent CalPERS Actuarial Report for June 30, 2024, the City’s pension assets totaled approximately $47.81 million and had a funded ratio of 80.7% (Attachment G). As of June 30, 2025, the City has a total Unfunded Accrued Pension Liability estimated at approximately $17.80 million. When accounting for Governmental Fund and Enterprise Fund pension reserve balances of approximately $6.88 million on June 30, 2025, the adjusted unfunded pension liability is reduced to an estimated $10.92 million.

The City’s Pension Reserve Policy established a 15-year schedule to achieve a 100% funded ratio by Fiscal Year 2031-32 for Governmental Fund pension obligations. Approximately 84% of the City’s total unfunded pension liability is attributed to Governmental Fund salary employee benefits. As of June 30, 2025, the Governmental Fund share of the pension liability was 33% funded. After accounting for the $250,000 Pension Reserve allocation in the adopted budget, and the additional $425,000 transfer recommended in this report, it is estimated that annual pension reserve contributions of approximately $1.10 million would be required over the next six years to achieve the 100% funded ratio by Fiscal Year 2031-32 for Governmental Fund pension obligations. Per prior Council direction, this policy has remained flexible to allow for the funding of other competing priorities.

Measure Q Fund
Revenues
Measure Q revenues allocated to the City are made up of 1% of all taxable transactions that occur within the Del Mar city boundary, online purchases made by Del Mar residents, and vehicle purchases by Del Mar residents from out-of-town vendors and car dealers.

To date in the current fiscal year, the City has received $1,317,229 in Measure Q tax receipts.

Based on current trends, including interest earnings, and quarterly reports prepared by HdL, the City’s sales tax consultant, the Measure Q revenue for FY 2025-26 is projected as budgeted at approximately $3.68 million. Staff will continue to monitor Measure Q revenue and will request additional adjustments as necessary.

The adopted FY 2025-26 Operating and Capital Budget included an estimated $12 million in additional Measure Q Fund revenues to be sourced from an anticipated California Infrastructure Economic Development Bank (IBank) loan. Subsequent to the final budget adoption on June 16, 2025, the City Council approved on September 22, 2025 the final loan amount at $5 million to fund construction of Undergrounding Program projects Crest Canyon (X1A) and Stratford Court North (1B). The net Measure Q revenue adjustment accounts for the reduced final loan amount.

Expenditures
Through the midpoint of Fiscal Year 2025-26, the Undergrounding Program has completed multiple project phases, as follows: Utility companies’ construction and anticipated overall completion for Stratford Court South (UUD 1A); bidding and City Council award of construction contracts, along with the initiation and continuation of City construction, homeowner private service laterals, and utility companies’ construction for Crest Canyon (UUD X1A); continued design for Stratford Court North (UUD 1B); and Undergrounding Program cash flow analysis to determine the timing of future phases, including Beach Colony (UUD 2) and UUD 25th Street.

The total available funding for all Measure Q projects is currently at $14.24 million, which includes the $1,352,130 in carry over funds from FY 2024-25, and the $6,886,465 in carry over funds 12 March 3, 2026 Item 12 April 7, 2026 Item 15
City Council Agenda Report
FY 2024-25 Final Financial Report and FY 2025-26 Mid-Year Financial Report March 3, 2026

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previously authorized by City Council in September 2025. Based on a review of all current activities and available resources, no budget adjustments are recommended.

Reserves
Based on the final FY 2024-25 year-end results, revenues received to date, and projected activity through the remainder of the fiscal year, the Measure Q fund balance at June 30, 2026, is projected at $1,883,009.

Finance Committee Feedback
Staff presented the FY 2024-25 Final Financial Report and FY 2025-26 Mid-Year Financial Report to the City’s Finance Committee on February 18, 2026. The Committee was pleased with the positive results and voted unanimously to support staff’s recommendation to approve the budget adjustments as included in the report. The committee also provided feedback and suggestions on formatting and level of detail which have been incorporated in this agenda report.

OVERALL SUMMARY
After a thorough review of financial activity through January 2026 for all funds, staff is recommending a net total revenue decrease of $5,673,620; a net total expenditure decrease of $1,325,660; and a net carry-over of unspent FY 2024-25 funds totaling $5,146,764. Also recommended are additional transfers of $425,000 to both the Pension Reserve and Housing Reserve, and $850,000 to the Capital Improvement Reserve. If these adjustments are approved, the new ending General Fund Contingency balance at June 30, 2026, will increase from $4,341,582 as adopted on June 16, 2025, to $5,324,903, which represents a 25.17% contingency (92 days of operations) satisfying the Council’s 25% General Fund Contingency goal.

FISCAL IMPACT:

Council approval of the recommended action for this agenda item will result in amending the Fiscal Year 2025-26 Operating and Capital Budget as included in Exhibit A of Attachment A.

ENVIRONMENTAL IMPACT:

The proposed City Council action does not constitute a “project” under the definition set forth in California Environmental Quality Act (CEQA) Guidelines Section 15378 because it will not have a potential to result in a direct or indirect physical change in the environment and is, therefore, not subject to CEQA. No further action under CEQA is required.

NEXUS TO CITY COUNCIL GOALS AND PRIORITIES:

This item is operational in nature and is not directly related to the City Council’s list of Goals and Priorities.

ATTACHMENTS
Attachment A - Resolution 2026-XX Amending the Fiscal Year 2025-26 Operating and Capital Budget
Attachment B - Fiscal Year 2024-25 Encumbrances and Continuing Appropriations Attachment C - Independent Auditors’ Communication regarding internal controls over financial reporting and compliance performed in accordance with Government Auditing Standards
Attachment D - Independent Accountants’ Report regarding appropriations limit worksheets Attachment E - Fiscal Year 2024-25 Final Financial Report Attachment F - Fiscal Year 2024-25 General Fund Cash Flow Report Attachment G - Pension Funding History
13 March 3, 2026 Item 12 April 7, 2026 Item 15
Attachment A
RESOLUTION NO. 2026-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DEL
MAR, CALIFORNIA, AMENDING THE FISCAL YEAR 2025-2026

OPERATING AND CAPITAL BUDGET
WHEREAS, on June 16, 2025, the City Council of the City of Del Mar adopted Resolution 2025-17, approving the Fiscal Years 2025-2026 and 2026-2027 Operating and Capital Budget; and
WHEREAS, a comprehensive second quarter review of expenditures and revenues through December 31, 2025, has been completed; and WHEREAS, based on the results of the review, adjustments to the Fiscal Year 2025-2026 Operating and Capital Budget are needed to cover costs and account for anticipated revenues through the end of the current fiscal year (Exhibit “A”); and WHEREAS, it is necessary to purchase a replacement security server from the Equipment Replacement Fund in an amount not to exceed $15,000 to enhance facility access control and video security at the Civic Center.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Del Mar, California, that the above recitals are true and correct.

BE IT FURTHER RESOLVED that the Fiscal Year 2025-2026 Operating and Capital Budget is amended as shown in Exhibit “A” to the Resolution.

BE IT FURTHER RESOLVED that the City Council does hereby provide authorization to the City Manager to approve the purchase of a replacement security server from the Equipment Replacement Fund for Fiscal Year 2025-2026 for an amount not to exceed $15,000.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Del Mar, California, at a Regular Meeting held on the 3rd day of March 2026. ________________________________
Tracy Martinez, Mayor
City of Del Mar
14 March 3, 2026 Item 12 April 7, 2026 Item 15
Resolution No. 2026-XX

Page 2 of 2 ends

APPROVED AS TO FORM:
________________________________
Christina Cameron, City Attorney
City of Del Mar
ATTEST AND CERTIFICATION:

STATE OF CALIFORNIA

COUNTY OF SAN DIEGO

CITY OF DEL MAR
I, Sarah Krietor, Administrative Services Manager/City Clerk of the City of Del Mar, California, DO HEREBY CERTIFY that the foregoing is a true and correct copy of Resolution No. 2026-XX, adopted by the City Council of the City of Del Mar, California, at a Regular Meeting held the 3rd day of March 2026, by the following vote:

AYES:

NOES:

RECUSE:

ABSENT:

ABSTAIN:
________________________________
Sarah Krietor, Administrative Services
Manager/City Clerk
City of Del Mar
15 March 3, 2026 Item 12 April 7, 2026 Item 15

BEGINNING ENDING

BALANCE O & M CIP BALANCE
JUL 1, 2025 REVENUES EXPENDITURES EXPENDITURES IN (OUT) JUN 30, 2026 ACTUAL FY 2026 FY 2026 FY 2026 FY 2026 FY 2026 ESTIMATE CONTINGENCY 25.17% 6,503,908 24,058,500 (18,146,830) - 530,718 $ (7,621,393) 5,324,903 RESTRICTED:

SELF-INSURANCE 410,216 - (33,000) - - - 377,216
DESIGNATED:

ENCUMBRANCES 67,655 - (67,655) - - - -
COASTAL PARKING REVENUE - 81,900 (81,900) - - - -
HOUSING RESERVE 1,650,000 - - - 675,000 - 2,325,000
PENSION RESERVE 4,977,684 190,000 - - 675,000 - 5,842,684 LEAVE LIABILITY 100,000 - - - - - 100,000
EQUIPMENT REPLACEMENT 796,332 - (127,240) - - - 669,092 TOTAL GENERAL FUND 14,505,795 24,330,400 (18,456,625) - 1,880,718 (7,621,393) 14,638,895 3,677,380 7,449,974 - (9,244,345) - - 1,883,009
NOTE PROCEEDS - 5,000,000 - (5,000,000) - - -
TOTAL MEASURE Q FUND 7,449,974 8,677,380 - (14,244,345) - - 1,883,009 107,000 221,777 - - - (328,777) -
119,560 19,980 (1,025,810) - 886,270 - -
621,392 - (1,543,230) - 921,838 - -

DESIGNATED
ENCUMBRANCES 302,404 - - (302,404) - - -
CAPITAL IMPROVEMENT PROJECTS 1,418,673 - - (1,453,591) 34,918 - - OPEN SPACE ACQUISITION 86,388 - - - - - 86,388
TREE RESERVE 41,017 - - - - - 41,017
TOTAL OPEN SPACE FUND 429,809 2,040,065 (1,543,230) (1,755,995) 956,756 - 127,405 201,530 411 - - - (201,941) -
46,000 15,529 (61,250) - 2,072 - 2,351

CITY OF DEL MAR

RESERVE SUMMARY
FISCAL YEAR 2025-2026

TRANSFERS

MID-YEAR FINANCIAL REPORT

GENERAL FUND

MEASURE Q

ROAD MAINTENANCE REHABILITATION ACCT

GAS TAX FUND

OPEN SPACE FUND

SUPPLEMENTAL LAW ENFORCEMENT FUND

REGIONAL COMMUNICATIONS FUND
Attachment A - Exhibit A1
16 March 3, 2026 Item 12 April 7, 2026 Item 15

BEGINNING ENDING

BALANCE O & M CIP BALANCE
JUL 1, 2025 REVENUES EXPENDITURES EXPENDITURES IN (OUT) JUN 30, 2026 ACTUAL FY 2026 FY 2026 FY 2026 FY 2026 FY 2026 ESTIMATE

CITY OF DEL MAR

RESERVE SUMMARY
FISCAL YEAR 2025-2026

TRANSFERS

MID-YEAR FINANCIAL REPORT
75,000 159,775 (61,500) - - - 173,275
- 158,004 (61,660) - - - 96,344
154,000 679,196 (107,810) - - - 725,386
37,200 8,267 (75,440) - 29,973 - -
2,740,250 - (4,243,494) 1,503,244 - -
ENCUMBRANCES 1,166,296 - (1,166,296) - -
RESERVE FOR CAPITAL 3,150,000 - - - 850,000 4,000,000
DEBT SERVICE - - (899,880) - 899,880 - -
TOTAL CAPITAL IMPROVEMENT FUND 4,316,296 2,740,250 (899,880) (5,409,790) 3,253,124 - 4,000,000 2,248,900 453,852 - (3,215,910) 513,158 - -
649,000 3,487 - (649,000) - - 3,487
- 38,130 - (36,000) - - 2,130
362,000 502,835 (322,750) - - - 542,085
NET POSITION 1,799,681 4,995,000 (5,189,190) - - (1,094,455) 511,036 RESTRICTED:

CONTRIBUTED CAPITAL 4,028,272 - - - - - 4,028,272

DESIGNATED

ENCUMBRANCES - - - - - - -
SELF-INSURANCE 50,000 - - - - - 50,000
RATE STABILIZATION 200,000 - - - - - 200,000
CAPTIAL REPLACEMENT 470,000 - - (1,036,455) 916,455 - 350,000 NET PENSION LIABILITY (1,962,119) - - - - - (1,962,119) PENSION RESERVE 1,000,000 - - - - - 1,000,000
OPERATING RESERVE 500,000 - - - 150,000 - 650,000
EQUIPMENT REPLACEMENT 200,000 - (28,000) - 28,000 - 200,000 UTILITY PLANT IN SERVICE 7,423,130 - (385,000) - - - 7,038,130 TOTAL WATER FUND 13,708,964 4,995,000 (5,602,190) (1,036,455) 1,094,455 (1,094,455) 12,065,319

PEG FEE FUND

GRANTS FUND

HOUSING FUND
AB 939 FUND

CAPITAL IMPROVEMENT FUND

SPECIAL PROJECT FUND

TRANSNET FUND
RTCIP

WORKERS' COMPENSATION FUND

WATER FUND
17 March 3, 2026 Item 12 April 7, 2026 Item 15

BEGINNING ENDING

BALANCE O & M CIP BALANCE
JUL 1, 2025 REVENUES EXPENDITURES EXPENDITURES IN (OUT) JUN 30, 2026 ACTUAL FY 2026 FY 2026 FY 2026 FY 2026 FY 2026 ESTIMATE

CITY OF DEL MAR

RESERVE SUMMARY
FISCAL YEAR 2025-2026

TRANSFERS

MID-YEAR FINANCIAL REPORT
NET POSITION - 612,500 (911,651) - 299,151 - -
-

DESIGNATED -
UTILITY PLANT IN SERVICE 536,251 - 536,251
ENCUMBRANCES 515,984 (145,249) (370,735) - -
CAPITAL REPLACEMENT - 244,790 (575,679) 330,889 -
TOTAL CLEAN WATER FUND 1,052,235 857,290 (1,056,900) (946,414) 630,040 - 536,251 NET POSITION 1,940,691 4,515,960 (4,781,990) - - (1,061,980) 612,681 -

RESTRICTED
IBANK RESERVE 228,828 - - - - - 228,828
CONTRIBUTED CAPITAL 650,814 - - - - - 650,814
LOAN RESERVE-STATE REVOLVING - 332,979 - - - - 332,979

DESIGNATED

ENCUMBRANCES - - - - - - -
SELF-INSURANCE 50,000 - - - - - 50,000
CAPITAL REPLACEMENT 500,000 - - (1,005,080) 855,080 - 350,000 NET PENSION LIABILITY (1,962,119) - - - - - (1,962,119) PENSION RESERVE 900,000 - - - - - 900,000
OPERATING RESERVE 408,000 - - - 192,000 - 600,000
EQUIPMENT REPLACEMENT 300,000 - (14,900) - 14,900 - 300,000 UTILITY PLANT IN SERVICE 7,895,094 - (700,000) - - - 7,195,094 RATE STABILIZATION 200,000 - - - - - 200,000
TOTAL WASTEWATER FUND 11,444,287 4,515,960 (5,496,890) (1,005,080) 1,061,980 (1,061,980) 9,458,277 TOTAL ENTERPRISE FUNDS 26,205,486 10,368,250 (12,155,980) (2,987,949) 2,786,475 (2,156,435) 22,059,847 TOTAL - ALL FUNDS 55,168,603 52,156,535 (34,771,935) (28,298,989) 10,308,546 (10,308,546) 44,254,214

CLEANWATER FUND

WASTEWATER FUND
18 March 3, 2026 Item 12 April 7, 2026 Item 15
ACTUAL ACTUAL ACTUAL % CURRENT MID-YEAR PROPOSED ACTUAL %

REVENUE REVENUE REVENUE RECV'D ADOPTED ENC & BUDGET AMENDED REVENUE RECV'D PROJECTED

FINAL FINAL MID-YEAR FINAL BUDGET APPROP REQUEST BUDGET MIDYEAR MIDYEAR REVENUE SOURCE OF FUNDS FY2023-24 FY2024-25 FY2024-25 FY2024-25 FY2025-26 FY2025-26 FY2025-26 FY2025-26 FY 2025-26 FY2025-26 FY2025-26

GENERAL FUND
TAXES
PROPERTY TAX 7,651,288 8,088,157 3,330,496 41.2% 8,394,000 - 61,000 8,455,000 3,590,756 42.5% 8,455,000 VLF IN LIEU OF PROPERTY TAX 807,116 858,932 - 0.0% 860,000 - 44,840 904,840 - 0.0% 904,840 SALES AND USE TAX 2,196,466 2,297,404 895,354 39.0% 2,300,000 - - 2,300,000 970,389 42.2% 2,300,000 TRANSIENT OCCUPANCY TAX 3,799,038 4,084,758 2,209,192 54.1% 4,160,000 - 175,000 4,335,000 2,409,836 55.6% 4,335,000 TRANSIENT OCCUPANCY TAX - STR - - - 0.0% 193,750 - (65,000) 128,750 - 0.0% 125,000 BUSINESS LICENSE TAX 362,769 360,364 203,298 56.4% 350,000 - - 350,000 211,473 60.4% 360,000 FRANCHISE TAX 446,816 422,411 77,866 18.4% 420,000 - - 420,000 70,890 16.9% 418,050 REAL PROPERTY TRANSFER TAX 178,484 171,806 70,777 41.2% 150,000 - - 150,000 73,734 49.2% 180,000 TOTAL 15,441,977 16,283,832 6,786,983 41.7% 16,827,750 - 215,840 17,043,590 7,327,078 43.0% 17,077,890 - -

LICENSES & PERMITS - -
LICENSES & PERMITS 4,615 3,485 750 16.3% 500 - - 500 - 0.0% 500 JUNIOR LIFEGUARD 92,770 90,310 1,615 1.7% 95,000 - - 95,000 1,021 1.1% 95,000 PARKING PERMITS 34,995 27,387 13,165 37.6% 30,000 - - 30,000 19,148 63.8% 37,000 TOTAL 132,380 121,181 15,530 11.7% 125,500 - - 125,500 20,169 16.1% 132,500 -

FINES & FORFEITURES -
MOVING VIOLATIONS/VEHICLE CODE FINES 69,284 66,761 31,893 47.8% 65,000 - - 65,000 27,835 42.8% 65,000 PARKING VIOLATIONS 1,395,851 1,538,560 569,311 37.0% 1,400,000 - 150,000 1,550,000 141,045 9.1% 1,550,000 PENALTIES 25,267 22,788 9,505 41.7% 9,000 - 21,000 30,000 22,558 75.2% 30,000 ADMINISTRATIVE CITATIONS 55,152 41,590 24,115 58.0% 45,000 - - 45,000 11,187 24.9% 25,000 RED LIGHT ENFORCEMENT 94,156 86,561 38,291 44.2% 80,000 - - 80,000 33,161 41.5% 75,000 TOTAL 1,639,711 1,756,260 673,115 38.3% 1,599,000 - 171,000 1,770,000 235,786 13.3% 1,745,000 -

REVENUE FROM USE OF ASSETS -
INV EARN-GENERAL 892,952 925,444 378,132 42.3% 400,000 - 390,000 790,000 349,382 44.2% 790,000 RENTAL INCOME 256,210 240,743 182,029 71.0% 235,000 - 37,000 272,000 187,768 69.0% 272,170 PARKING METER INCOME 1,433,473 1,734,993 892,896 51.5% 1,535,000 - 165,000 1,700,000 954,790 56.2% 1,700,000 SIDEWALK CAFÉ USER FEE 7,980 12,371 4,055 50.8% 4,000 - - 4,000 2,577 64.4% 3,000 TOTAL 2,612,031 2,892,135 1,457,112 50.4% 2,174,000 - 592,000 2,766,000 1,494,517 54.0% 2,765,170

REVENUE FROM OTHER AGENCIES
MOTOR VEHICLE LICENSE FEE 6,229 4,868 - 0.0% 4,000 - - 4,000 - 0.0% 6,000 PUBLIC SAFETY AUGMENTATION FUND 109,006 107,890 46,154 42.3% 100,000 - - 100,000 36,654 36.7% 105,000 HOMEOWNER EXEMPT 34,652 34,592 5,150 14.9% 30,000 - - 30,000 - 0.0% 34,600 STATE MANDATED COST REIMB - 128 - 0.0% - - - - - 0.0% - FEDERAL/STATE/LOCAL GRANTS 5,000 24,406 5,000 100.0% - - - - 5,000 100.0% 5,000 CORONAVIRUS RELIEF FUNDS - - - 0.0% 162,310 - - 162,310 - 0.0% 162,310 ON-TRACK PARIMUTUEL - - - 0.0% - - 24,340 24,340 24,344 100.0% 24,340 OFF-TRACK PARIMUTUEL 5,726 7,465 1,366 23.9% 5,000 - - 5,000 1,459 29.2% 6,000 SOLID WASTE 12,932 12,620 12,932 100.0% 12,900 - - 12,900 12,639 98.0% 12,640 TOTAL 173,545 191,969 70,602 40.7% 314,210 - 24,340 338,550 80,096 23.7% 355,890

CITY OF DEL MAR
FISCAL YEAR 2025-2026

MID-YEAR FINANCIAL REPORT

REVENUE SUMMARIES
Attachment A - Exhibit A2
19 March 3, 2026 Item 12 April 7, 2026 Item 15
ACTUAL ACTUAL ACTUAL % CURRENT MID-YEAR PROPOSED ACTUAL %

REVENUE REVENUE REVENUE RECV'D ADOPTED ENC & BUDGET AMENDED REVENUE RECV'D PROJECTED

CITY OF DEL MAR
FISCAL YEAR 2025-2026

MID-YEAR FINANCIAL REPORT

REVENUE SUMMARIES

CHARGES - PLANNING SERVICES
PLANNING SERVICES 552,483 502,183 314,907 57.0% 525,000 - (35,000) 490,000 244,239 49.8% 490,000 ENGINEERING SERVICES 124,232 171,259 77,847 62.7% 120,000 - - 120,000 61,260 51.1% 122,520 BUILDING SERVICES 474,017 612,862 292,629 61.7% 500,000 - (60,000) 440,000 221,322 50.3% 442,500 TOTAL 1,150,732 1,286,304 685,383 59.6% 1,145,000 - (95,000) 1,050,000 526,821 50.2% 1,055,020

OTHER REVENUE SOURCES
PARKING IN-LIEU FEE 10,372 13,764 2,669 25.7% 2,500 - - 2,500 4,122 164.9% 4,120 ADMINISTRATIVE CHARGE 965,790 937,650 482,898 50.0% 994,760 - - 994,760 497,380 50.0% 994,760 ADMINISTRATIVE CHARGE-MEASURE Q 152,731 90,528 - 0.0% 150,000 - - 150,000 - 0.0% 150,000 EXPENDITURE REIMBURSEMENT 53,613 148,006 30,766 57.4% 35,000 - - 35,000 18,119 51.8% 42,000 MISCELLANEOUS 683,836 73,594 81,274 11.9% 26,500 - 28,000 54,500 50,609 92.9% 55,410 TOTAL 1,866,342 1,263,541 597,607 32.0% 1,208,760 - 28,000 1,236,760 570,230 46.1% 1,246,290 TOTAL GENERAL FUND 24,255,226 22,556,715 10,286,332 42.4% 23,394,220 - 936,180 24,330,400 10,254,697 42.1% 24,377,760 MEASURE Q FUND 3,958,543 3,780,939 1,537,116 38.8% 15,627,380 - (6,950,000) 8,677,380 1,317,229 15.2% 8,680,000 ROAD MAINTENANCE REHAB ACCOUNT 114,392 107,381 39,257 34.3% 107,000 - - 107,000 46,271 43.2% 104,560 GAS TAX FUND 115,990 114,641 42,124 36.3% 119,560 - - 119,560 51,183 42.8% 119,280

OPEN SPACE FUND
TAXES 5,374 18,144 2,308 42.9% 6,000 - - 6,000 200 3.3% 5,300 LICENSE & PERMITS 423,758 403,365 195,030 46.0% 390,000 - - 390,000 182,767 46.9% 410,000 RENTAL INCOME 221,676 - 110,838 50.0% 227,200 - - 227,200 113,610 50.0% 227,200 FEDERAL/STATE/LOCAL GRANTS - 215,672 - 0.0% - 1,393,635 - 1,393,635 - 0.0% 1,393,635 ON-TRACK PARIMUTUEL - - - 0.0% - - 16,230 16,230 16,229 100.0% 16,230 OFF-TRACK PARIMUTUEL 3,817 4,976 911 23.9% 3,000 - - 3,000 972 32.4% 4,000 MISCELLANEOUS 6,302 42,952 3,445 54.7% 4,000 - - 4,000 3,183 79.6% 5,000 TOTAL OPEN SPACE FUND 660,927 685,109 312,532 47.3% 630,200 1,393,635 16,230 2,040,065 316,961 15.5% 2,061,365 SUPPLEMENTAL LAW FUND 199,879 192,923 126,665 63.4% 160,000 - 41,530 201,530 131,537 65.3% 201,530 REGIONAL COMMUNICATION 45,165 46,159 - 0.0% 46,000 - - 46,000 - 0.0% 46,000 GRANTS FUND 85,067 87,833 13,664 16.1% 62,400 - 12,600 75,000 46,363 61.8% 75,000 HOUSING FUND 222,137 42,364 191,109 86.0% - - - - - 0.0% - AB 939 179,710 251,345 51,140 28.5% 154,000 - - 154,000 75,000 48.7% 154,000 -
PEG FEE FUND 36,839 40,405 9,023 24.5% 37,200 - - 37,200 17,344 46.6% 37,200 20 March 3, 2026 Item 12 April 7, 2026 Item 15
ACTUAL ACTUAL ACTUAL % CURRENT MID-YEAR PROPOSED ACTUAL %

REVENUE REVENUE REVENUE RECV'D ADOPTED ENC & BUDGET AMENDED REVENUE RECV'D PROJECTED

CITY OF DEL MAR
FISCAL YEAR 2025-2026

MID-YEAR FINANCIAL REPORT

REVENUE SUMMARIES

CAPITAL IMPROVEMENT FUND
FEDERAL/STATE GRANTS 182,145 208,899 2,226 1.2% 1,170,000 1,309,220 63,230 2,542,450 63,230 2.5% 2,542,450 MISCELLANEOUS 214,538 202,872 137,543 100.0% 219,000 - (21,200) 197,800 - 100.0% 197,800 TOTAL CAPITAL IMPROVEMENT FUND 396,683 411,771 139,769 35.2% 1,389,000 1,309,220 42,030 2,740,250 63,230 2.3% 2,740,250 TRANSNET FUND 191,281 228,931 80 0.0% 131,000 518,000 - 649,000 - 0.0% 649,000 RTCIP FUND 1,525 4,977 873 100.0% - - - - - 0.0% -
SPECIAL PROJECTS FUND 177,814 - - 0.0% 1,545,000 703,900 - 2,248,900 87,403 0.0% 2,248,900 TOTAL GENERAL GOVERNMENTAL FUNDS 30,641,178 28,551,493 12,749,684 41.6% 43,402,960 3,924,755 (5,901,430) 41,426,285 12,407,218 30.0% 41,494,845 WORKERS' COMPENSATION FUND 395,606 349,499 192,817 48.7% 419,190 - (57,190) 362,000 180,272 49.8% 362,000

WATER UTILITY FUND
WATER SALES 2,760,874 2,365,627 1,515,410 54.9% 2,700,000 - 200,000 2,900,000 1,618,099 55.8% 2,900,000 READY TO SERVE CHARGE 2,021,281 1,954,206 949,921 47.0% 2,000,000 - - 2,000,000 1,029,252 51.5% 2,000,000 OTHER CONNECTION FEES 56,558 68,356 19,686 34.8% 30,000 - - 30,000 11,966 39.9% 30,000 MISCELLANEOUS 163,392 200,549 99,136 60.7% 65,000 - - 65,000 17,960 27.6% 65,000 TOTAL OPERATING REVENUE 5,002,105 4,588,738 2,584,153 51.7% 4,795,000 - 200,000 4,995,000 2,677,277 53.6% 4,995,000

CLEAN WATER PROGRAM
SERVICE CHARGE 617,884 657,722 304,405 49.3% 575,000 - - 575,000 302,009 52.5% 585,000 MISCELLANEOUS 7,869 10,973 2,423 30.8% 282,290 - - 282,290 1,369 0.5% 279,890 TOTAL CLEAN WATER PROGRAM 625,753 668,695 306,828 49.0% 857,290 - - 857,290 303,378 35.4% 864,890

WASTEWATER FUND
SERVICE CHARGES 2,178,563 1,954,106 1,009,510 46.3% 2,200,000 - 15,000 2,215,000 1,114,775 50.3% 2,215,000 USAGE CHARGES 2,026,033 1,950,126 1,028,892 50.8% 2,100,000 - 100,000 2,200,000 1,182,501 53.8% 2,200,000 OTHER SEWER FEES 83,766 83,766 19,331 23.1% 40,000 - (30,000) 10,000 3,222 32.2% 10,000 MISCELLANEOUS 172,209 188,378 90,154 52.4% 90,960 - - 90,960 8,397 9.2% 90,960 TOTAL WASTEWATER FUND 4,460,571 4,176,376 2,147,887 48.2% 4,430,960 - 85,000 4,515,960 2,308,895 51.1% 4,515,960 -
TOTAL ENTERPRISE FUNDS 10,088,429 9,433,809 5,038,868 49.9% 10,083,250 - 285,000 10,368,250 5,289,550 51.0% 10,375,850 TOTAL ALL FUNDS 41,125,213 38,334,801 17,981,369 43.7% 53,905,400 3,924,755 (5,673,620) 52,156,535 17,877,040 34.3% 52,232,695 21 March 3, 2026 Item 12 April 7, 2026 Item 15
ACTUAL ACTUAL ACTUAL % CURRENT MID-YEAR PROPOSED ACTUAL %

EXP EXP EXP EXPENSED ADOPTED ENC & BUDGET AMENDED EXP EXP PROJECTED

FINAL FINAL MID-YEAR MID-YEAR BUDGET APPROP REQUEST BUDGET MIDYEAR MIDYEAR EXP DEPARTMENT FY 2023-24 FY 2024-25 FY 2024-25 FY 2024-25 FY 2025-26 FY 2024-25 FY 2024-25 FY 2024-25 FY 2024-25 FY 2024-25 FY 2024-25

GENERAL FUND

GENERAL GOVERNMENT
CITY COUNCIL 48,113 41,603 10,440 21.7% 78,970 - - 78,970 23,872 30.2% 66,770 LEGAL SERVICES 634,897 700,194 201,991 31.8% 550,000 - 50,000 600,000 248,595 41.4% 600,000 CITY MANAGER 1,002,306 878,774 418,517 41.8% 1,071,350 5,000 - 1,076,350 529,677 49.2% 1,081,840 HUMAN RESOURCES 283,609 258,453 145,932 51.5% 316,850 - - 316,850 139,876 44.1% 329,490 CITY CLERK 432,525 361,529 227,303 52.6% 370,080 - - 370,080 190,425 51.5% 375,690 INFORMATION SYSTEMS 471,783 548,153 349,802 74.1% 540,380 4,787 - 545,167 298,313 54.7% 538,940 FINANCE SERVICES 801,530 764,865 352,223 43.9% 1,015,980 - - 1,015,980 394,198 38.8% 1,028,010 RISK MANAGEMENT 804,507 368,636 401,001 49.8% 554,500 - (56,000) 498,500 472,356 94.8% 498,000 PLANNING SERVICES 1,744,868 1,508,816 956,054 54.8% 1,929,860 - 22,000 1,951,860 976,267 50.0% 1,951,130 CODE ENFORCEMENT 145,465 161,031 99,344 68.3% 141,990 - - 141,990 75,001 52.8% 145,600 BUILDING SERVICES 389,145 476,118 247,615 63.6% 403,500 - (48,000) 355,500 136,279 38.3% 354,000 TOTAL 6,758,748 6,068,172 3,410,222 50.5% 6,973,460 9,787 (32,000) 6,951,247 3,484,859 50.1% 6,969,470

PUBLIC SAFETY
LAW ENFORCEMENT 2,837,524 2,747,809 978,161 34.5% 3,072,560 - - 3,072,560 1,007,959 32.8% 3,068,850 LIFEGUARD SERVICES 1,664,222 1,516,815 866,376 52.1% 1,730,100 - - 1,730,100 937,835 54.2% 1,740,100 PARKING ENFORCEMENT 1,181,768 1,046,838 573,396 48.5% 1,213,570 - 24,000 1,237,570 568,465 45.9% 1,236,730 FIRE PROTECTION 2,970,463 2,741,927 1,481,517 49.9% 3,116,030 - 60,000 3,176,030 1,601,453 50.4% 3,166,000 HAZARDOUS WASTE MANAGEMENT 21,907 20,077 21,907 100.0% 23,850 - - 23,850 23,372 98.0% 24,420 SOLID WASTE 3,345 3,001 191 5.7% 5,000 - - 5,000 887 17.7% 3,000 EMERGENCY PREPAREDNESS 2,973 3,152 1,327 44.6% 5,750 - - 5,750 1,142 19.9% 5,750 TOTAL 8,682,202 8,079,619 3,922,875 45.2% 9,166,860 - 84,000 9,250,860 4,141,113 44.8% 9,244,850

PUBLIC WORKS
ENGINEERING SERVICES 170,231 284,858 73,229 43.0% 314,750 - - 314,750 71,556 22.7% 314,750 STORM DRAIN 221,939 199,913 147,414 66.4% 359,740 10,700 (90,000) 280,440 131,465 46.9% 277,050 FACILITIES 254,698 284,889 102,166 40.1% 577,010 47,168 - 624,178 240,446 38.5% 625,000 TOTAL 646,868 769,660 322,809 49.9% 1,251,500 57,868 (90,000) 1,219,368 443,467 36.4% 1,216,800

NON-DEPARTMENTAL
COMMUNITY SUPPORT 472,548 385,398 287,159 60.8% 482,600 - - 482,600 287,475 59.6% 479,700 TV STUDIO 120,488 89,375 16,373 13.6% 124,950 - - 124,950 19,261 15.4% 125,570 CITY MEMBERSHIPS 105,164 101,741 101,308 96.3% 112,310 - - 112,310 105,798 94.2% 109,750 CITY HALL - GENERAL 170,691 156,326 100,817 59.1% 188,050 - - 188,050 83,671 44.5% 193,310 TOTAL 868,891 732,840 505,657 58.2% 907,910 - - 907,910 496,205 54.7% 908,330

TOTAL GENERAL FUND BEFORE
EQUIPMENT REPLACEMENT 16,956,709 15,650,291 8,161,563 48.1% 18,299,730 67,655 (38,000) 18,329,385 8,565,644 46.7% 18,339,450 EQUIPMENT REPLACEMENT 118,909 270,159 60,953 51.3% 112,240 - 15,000 127,240 38,272 30.1% 112,240

TOTAL GENERAL FUND INCLUDING -
EQUIPMENT REPLACEMENT 17,075,618 15,920,450 8,222,516 48.2% 18,411,970 67,655 (23,000) 18,456,625 8,603,916 46.6% 18,451,690

CITY OF DEL MAR
FISCAL YEAR 2025-2026

MID-YEAR FINANCIAL REPORT

EXPENDITURE SUMMARIES
Attachment A - Exhibit A3
22 March 3, 2026 Item 12 April 7, 2026 Item 15
ACTUAL ACTUAL ACTUAL % CURRENT MID-YEAR PROPOSED ACTUAL %

EXP EXP EXP EXPENSED ADOPTED ENC & BUDGET AMENDED EXP EXP PROJECTED

CITY OF DEL MAR
FISCAL YEAR 2025-2026

MID-YEAR FINANCIAL REPORT

EXPENDITURE SUMMARIES
MEASURE Q FUND 6,885,074 1,174,333 490,157 7.1% 12,892,215 1,352,130 - 14,244,345 852,553 6.0% 14,244,345 ROAD MAINTENANCE REHAB ACCOUNT - - - 0.0% - - - - - 0.0% -

GAS TAX FUND
STREET MAINTENANCE 277,835 269,233 151,983 54.7% 518,280 12,900 (35,000) 496,180 228,935 46.1% 495,270 STREET LIGHTS/SIGNS 152,887 174,857 52,538 34.4% 204,630 - - 204,630 65,906 32.2% 203,420 STREET LANDSCAPING 277,867 314,882 126,681 45.6% 308,450 - 16,550 325,000 87,614 27.0% 325,000 TOTAL GAX TAX FUND 708,589 758,972 331,202 46.7% 1,031,360 12,900 (18,450) 1,025,810 382,455 37.3% 1,023,690

OPEN SPACE FUND
POWERHOUSE OPERATIONS 481,065 426,569 199,801 41.5% 518,870 - (20,000) 498,870 248,380 49.8% 497,960 BEACH MAINTENANCE 380,586 334,473 152,942 40.2% 481,570 - 20,000 501,570 230,992 46.1% 498,880 PARK MAINTENANCE 451,888 434,342 195,166 43.2% 515,790 - 27,000 542,790 154,738 28.5% 542,480 TOTAL OPEN SPACE FUND 1,313,539 1,195,384 547,909 41.7% 1,516,230 - 27,000 1,543,230 634,110 41.1% 1,539,320 SUPPLEMENTAL LAW ENFORCEMENT - - - 0.0% - - - - 0.0% -
REGIONAL COMMUNICATION FUND 45,168 44,521 - 0.0% 61,250 - - 61,250 - 0.0% 61,250 GRANTS FUND 81,066 68,491 12,695 15.7% 61,500 - - 61,500 20,830 33.9% 61,500 HOUSING FUND 57,328 45,684 57,234 99.8% 61,660 - - 61,660 61,657 100.0% 61,660 AB 939 72,574 64,849 29,403 40.5% 95,480 12,330 - 107,810 21,142 19.6% 107,810 PEG FEE FUND 31,813 10,736 3,837 12.1% 11,900 - 63,540 75,440 5,166 6.8% 75,440 TOTAL GENERAL O&M FUNDS 26,270,769 19,283,420 9,694,953 36.9% 34,143,565 1,445,015 49,090 35,637,670 10,581,829 29.7% 35,626,705

CAPITAL IMPROVEMENT FUNDS
OPEN SPACE CIP 206,364 146,197 106,267 51.5% 50,000 1,705,995 - 1,755,995 8,121 0.5% 174,145 GENERAL FUND CIP 2,458,116 2,230,198 817,743 33.3% 4,707,750 2,452,040 (1,750,000) 5,409,790 305,291 5.6% 7,159,790 DEBT SERVICE-CITY HALL 901,391 902,860 689,595 76.5% 899,880 - - 899,880 695,276 77.3% 899,880 TRANSNET II CIP 191,159 228,756 - 0.0% 131,000 518,000 - 649,000 - 0.0% 649,000 RTCIP FUND - - - 0.0% 36,000 - - 36,000 - 0.0% 36,000
TOTAL CAPITAL IMPROVEMENT FUNDS 3,757,030 3,508,011 1,613,605 42.9% 5,824,630 4,676,035 (1,750,000) 8,750,665 1,008,688 11.5% 8,918,815 SPECIAL PROJECT FUND 191,058 430,060 102,043 53.4% 2,093,000 1,122,910 - 3,215,910 324,556 10.1% 3,215,910 TOTAL GENERAL GOVERNMENTAL FUNDS 30,218,857 23,221,491 11,410,601 37.8% 42,061,195 7,243,960 (1,700,910) 47,604,245 11,915,073 25.0% 47,761,430 23 March 3, 2026 Item 12 April 7, 2026 Item 15
ACTUAL ACTUAL ACTUAL % CURRENT MID-YEAR PROPOSED ACTUAL %

EXP EXP EXP EXPENSED ADOPTED ENC & BUDGET AMENDED EXP EXP PROJECTED

CITY OF DEL MAR
FISCAL YEAR 2025-2026

MID-YEAR FINANCIAL REPORT

EXPENDITURE SUMMARIES
WORKERS' COMPENSATION FUND 289,382 261,612 237,279 82.0% 322,750 - - 322,750 236,257 73.2% 341,730

WATER FUND
GENERAL ADMINISTRATION 2,184,901 2,051,373 867,612 39.7% 2,550,360 18,000 295,000 2,863,360 732,079 25.6% 2,863,310 RISK MANAGEMENT 219,864 162,220 200,403 91.1% 266,750 - - 266,750 235,544 88.3% 242,000 RAW WATER SUPPLY 1,939,778 1,717,992 922,902 47.6% 1,997,150 - - 1,997,150 1,052,358 52.7% 2,100,000 TREATMENT/DELIVERY 355,734 374,796 150,427 42.3% 474,930 - - 474,930 172,025 36.2% 444,000 TOTAL WATER FUND O&M 4,700,277 4,306,381 2,141,344 45.6% 5,289,190 18,000 295,000 5,602,190 2,192,006 39.1% 5,649,310 WATER CAP IMPROVEMENT - - 16,665 100.0% 312,000 724,455 - 1,036,455 - 0.0% 1,036,455 TOTAL WATER FUND 4,700,277 4,306,381 2,158,009 45.9% 5,601,190 742,455 295,000 6,638,645 2,192,006 33.0% 6,685,765

CLEAN WATER FUND
PLANNING 92,943 78,255 46,496 50.0% 82,300 - - 82,300 43,833 53.3% 81,680 CODE ENFORCEMENT 34,562 39,025 25,625 74.1% 36,600 - - 36,600 20,232 55.3% 37,450 CLEAN WATER MANAGEMENT 273,178 307,573 103,177 37.8% 343,750 - - 343,750 152,163 44.3% 327,020 PUBLIC WORKS 310,951 287,993 159,493 51.3% 585,850 8,400 - 594,250 137,940 23.2% 559,200 TOTAL CLEAN WATER O & M 711,634 712,846 334,791 47.0% 1,048,500 8,400 - 1,056,900 354,168 33.5% 1,005,350 CLEAN WATER CAP IMPROVEMENT 44,227 - 10,746 24.3% 634,790 311,624 - 946,414 4,195 0.4% 946,414 TOTAL CLEAN WATER FUND 755,861 712,846 345,537 45.7% 1,683,290 320,024 - 2,003,314 358,363 17.9% 1,951,764

WASTEWATER FUND
RISK MANAGEMENT 219,864 162,220 200,403 91.1% 275,750 - (24,750) 251,000 235,544 93.8% 251,000 WASTEWATER TRANSPORTATION 181,634 57,498 59,404 32.7% 146,730 - - 146,730 74,605 50.8% 146,000 WASTEWATER TREATMENT 1,141,611 927,290 463,246 40.6% 1,254,790 - - 1,254,790 921,677 73.5% 1,255,000 DEBT SERVICE 562,673 563,446 545,735 97.0% 568,300 - - 568,300 547,069 96.3% 568,300 WASTEWATER PROGRAM 2,567,858 2,550,377 938,029 36.5% 3,161,070 10,000 105,000 3,276,070 758,531 23.2% 3,276,230 TOTAL WASTEWATER FUND O&M 4,673,640 4,260,831 2,206,817 47.2% 5,406,640 10,000 80,250 5,496,890 2,537,426 46.2% 5,496,530 WASTEWATER CAPITAL IMPROVEMENT - (501,927) 5,887 100.0% 250,000 755,080 - 1,005,080 16,090 1.6% 1,005,080 TOTAL WASTEWATER FUND 4,673,640 3,758,904 2,212,704 47.3% 5,656,640 765,080 80,250 6,501,970 2,553,516 39.3% 6,501,610 TOTAL ENTERPRISE FUNDS 10,129,778 8,778,131 4,716,250 46.6% 12,941,120 1,827,559 375,250 15,143,929 5,103,885 33.7% 15,139,139 TOTAL EXPENDITURES 40,638,017 32,261,234 16,364,130 40.3% 55,325,065 9,071,519 (1,325,660) 63,070,924 17,255,215 27.4% 63,242,299 24 March 3, 2026 Item 12 April 7, 2026 Item 15
City of Del Mar
Cash Flow Report
General Fund
Fiscal Year 2025-26
Mid-Year
Adopted Proposed
FY 2026 FY 2026
(6/16/25) (2/18/26) Difference
(A) (B) (C=B-A)
Total Revenue 24,330,400 23,394,220 936,180
Total Expenditures 18,456,625 18,372,370 84,255
Transfers
RMRA Reimb (107,000) (328,777) (221,777)
Gas Tax 911,800 886,270 (25,530)
Open Space 886,030 921,838 35,808
SLESF (160,000) (201,941) (41,941)
Regional Comm 2,072 2,072 -
Clean Water (non-CIP) 416,000 299,151 (116,849)
PEG Fee Reimb (30,000) 29,973 59,973
Total Transfers 1,918,902 1,608,586 (310,316)
City Hall Debt 899,880 899,880 -
Cash Flow (before CIP & SP) 2,203,068 $ 3,365,309 $ 1,162,241 $ Transfer to CIP/Reserves
Open Space CIP 50,000 34,918 (15,082)
General Fund CIP 3,318,630 1,503,244 (1,815,386)
CIP Reserve Transfer - 850,000 850,000
Clean Water CIP 390,000 330,889 (59,111)
Total CIP 3,758,630 2,719,051 (1,039,579)
Transfer to Special Projects 513,158 298,000 215,158
Cash Flow (after CIP & SP) (1,853,562) $ 133,100 $ 1,986,662 $ Reserves
Contingency Reserves 4,341,582 5,324,903 983,321
Self-Insurance 300,000 377,216 77,216
Housing Reserve 1,900,000 2,325,000 425,000
Pension Reserves 5,200,000 5,842,684 642,684
Leave Liability 100,000 100,000 -
Equipment Replacement 545,102 669,092 123,990
14,638,895 12,386,684 2,252,211
Other Reserves
Capital Reserve 2,250,000 4,000,000 1,750,000
Attachment A - Exhibit A4
25 March 3, 2026 Item 12 April 7, 2026 Item 15
City of Del Mar
Summary of Continuing Appropriations
Fiscal Year 2024-25
Project Name Department Account Number Amounts
General Fund CIP
Pavement Rehabilitation PW 40.7000.7009 752,842 $
CDM Bridge over San Dieguito PW 40.7000.7011 1,309,220 * Jimmy Durante Blvd Bluff Repairs PW 40.7000.7026 184,025 Hoska Ave Alley Assessment PW 40.7000.7047 45,137
San Dieguito Dr Development PW 40.7000.7048 816
Small Area Pavement Repairs PW 40.7000.7056 60,000
Citywide Bridge Repairs PW 40.7000.7057 100,000
Total Fund 2,452,040 $
Open Space CIP
Powerhouse Trellis PW 21.7000.7005 4,360 $
Riverpath Del Mar PW 21.7000.7007 1,393,635 *
29th St Seawall & Beach Access PW 21.7000.7008 162,000
Major Arterial Median Improvements PW 21.7000.7027 115,000 Powerhouse Repairs & Improvements PW 21.7000.7055 31,000 Total Fund 1,705,995 $
TransNet CIP
Pavement Rehabilitation PW 44.7000.7009 518,000 $ *
Total Fund 518,000 $
Clean Water Fund
Oceanview Drainage/Penny Lane PW 55.7000.7032 45,086
Storm Drain Improvements PW 55.7000.7045 266,538
$ 311,624
Special Projects
Housing Element - 6th Cycle PL 49.8000.8004 43,391 $
SCOUP Sand Replenishment PL 49.8000.8008 30,218
Fairgrounds Affordable Housing PL 49.8000.8013 685,276 * General Plan Updates PL 49.8000.8018 48,500
Affordable Housing Incentives PL 49.8000.8020 81,000
Affordable Housing City-owned PL 49.8000.8023 10,000
ADU Facilitation Measures PL 49.8000.8026 37,724
Fair Housing Amendments PL 49.8000.8027 5,000 *
6th Cycle Zoning Programs PL 49.8000.8028 17,127
TSVS Updates PL 49.8000.8030 25,000
Public Tree Policy Update PL 49.8000.8031 52,000
Shoreline/Living Levee PL 49.8000.8032 13,624 *
Implement Solar Access App PL 49.8000.8033 5,000
Civic Center Outdoor Lighting CM 49.8000.8034 20,000
ERP System Implementation FI 49.8000.8036 49,050
Total Fund 1,122,910 $

CAPITAL PROJECTS

SPECIAL PROJECTS
Attachment B1
26 March 3, 2026 Item 12 April 7, 2026 Item 15
City of Del Mar
Summary of Continuing Appropriations
Fiscal Year 2024-25
Project Name Department Account Number Amounts
Measure Q Fund
Undergrounding Project - General PW 02.7000.7001 67,001 $ Pavement Rehabilitation PW 02.7000.7009 91,000
Utility Specialist (PO58-00795) PW 02.7000.7202 230,990 UUD 1A-Stratford Ct South PW 02.7000.7202 690,854
Utility Specialist (PO58-00730) PW 02.7000.7204 272,285 Total Fund 1,352,130 $
Water Fund
Infrastructure Improvements PW 51.7000.7017 395,670
Valve Replacements PW 51.7000.7037 88,785
Citywide Pressure Upgrades PW 51.7000.7054 240,000
$ 724,455
Wastewater Fund
Infrastructure Improvements PW 57.7000.7024 755,080
` 755,080 $
Total Continuing Appropriations 8,942,234 $
* Offset with Federal, State, or Local grants in the amount of $3,924,755.

MEASURE Q CAPITAL PROJECTS

ENTERPRISE FUNDS CAPITAL PROJECTS
27 March 3, 2026 Item 12 April 7, 2026 Item 15
City of Del Mar
Summary of Encumbrances
Fiscal Year 2024-25
Project Name Department Account Number Amounts
General Fund
Carahsoft Tech (PO52-00116) IT 01.5320.3200 4,787 $
Colin Leibold (PO54-00054) CM 01.5200.3200 5,000
Major Facility Repairs PW 01.5854.3200 47,168
Portillo Concrete (PO58-00860) PW 01.5841.3200 10,700
Total Fund 67,655 $
AB939 Reimbursement Fund
Solana Center for Env (PO52-00107) CM 26.5225.3200 12,330 $ Total Fund 12,330 $
Gas Tax Fund
Portillo Concrete (PO58-00860) PW 20.5845.3200 8,400 $
Portillo Concrete (PO58-00860) PW 20.5845.2300 4,500
$ 12,900
Water Fund
Portillo Concrete (PO58-00860) PW 51.5840.3200 18,000 $ $ 18,000
Clean Water Fund
Portillo Concrete (PO58-00860) PW 55.5840.3200 8,400 $
$ 8,400
Wastewater Fund
Portillo Concrete (PO58-00860) PW 57.5840.3200 10,000 $ ` 10,000 $
Total Encumbrances 129,285 $
Attachment B2
28 March 3, 2026 Item 12 April 7, 2026 Item 15
Honorable Mayor and Members of City Council
City of Del Mar, California
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Del Mar (the “City”) as of and for the year ended June 30, 2025, and have issued our report thereon dated January 26, 2026. Professional standards require that we advise you of the following matters relating to our audit.

Our Responsibility in Relation to the Financial Statement Audit As communicated in our engagement letter dated August 5, 2025, our responsibility, as described by professional standards, is to form and express an opinion about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America. Our audit of the financial statements does not relieve you or management of your respective responsibilities.

Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, as part of our audit, we considered the internal control of the City solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control.

We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures for the purpose of identifying other matters to communicate to you.

Planned Scope and Timing of the Audit
We conducted our audit consistent with the planned scope and timing we previously communicated to you.

Compliance with All Ethics Requirements Regarding Independence The engagement team, others in our firm, as appropriate, and our firm have complied with all relevant ethical requirements regarding independence under the American Institute of Certified Public Accountants (“AICPA”) independence standards, contained in the Code of Professional Conduct.

We identified self-review threats to independence as a result of non-attest services provided.

Those non-attest services included the preparation of the financial statements and recording journal entries detected during the audit process.

Attachment C
29 March 3, 2026 Item 12 April 7, 2026 Item 15
To mitigate the risk, management has compared the draft financial statements and footnotes to the underlying accounting records to verify accuracy and has reviewed a disclosure checklist to ensure footnotes are complete and accurate.

Additionally, we utilize a quality control reviewer to perform a second review of journal entries and the financial statements. We believe these safeguards are sufficient to reduce the independence threats to an acceptable level.

Significant Risks Identified
We have identified the following significant risks:
 Implementation of the new Compensated Absences accounting standard, Governmental Accounting Standards Board (GASB) Statement No. 101. As a result, we received the City’s records of compensated absences, tested the calculations of the records, and ensured the City’s footnote disclosures are accurate and complete in accordance with the new standard.
 Compliance with Federal Grant Requirements. We performed a Single Audit over major programs to test for compliance with federal grant requirements.

Qualitative Aspects of the Entity’s Significant Accounting Practices Significant Accounting Policies
Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by the City is included in Note 1 to the financial statements. There have been no initial selection of accounting policies. The City changed the accounting policies related to compensated absences by adopting Statement of Governmental Accounting Standards (GASB Statement) No. 101, Compensated Absences, and risk disclosures related to government vulnerabilities due to concentrations and constraints by adopting Statement of Governmental Accounting Standards (GASB Statement) No. 102, Certain Risk Disclosures, in the fiscal year ended June 30, 2025. Accordingly, the cumulative effect of the accounting changes related to GASB 101 as of the beginning of the year have been reported in the Statement of Activities. No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.

Significant Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s current judgments. Those judgments are normally based on knowledge and experience about past and current events and assumptions about future events.

Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ markedly from management’s current judgments.

The most sensitive accounting estimates affecting the financial statements are:
 Management’s estimate of the transactions related to net pension liabilities based on actuarial information. We evaluated the key factors and assumptions used to develop the amounts used by the actuaries and determined that they are reasonable in relation to the basic financial statements taken as a whole and in relation to the applicable opinion units.
30 March 3, 2026 Item 12 April 7, 2026 Item 15
 Management’s estimate of revenue and expense accruals related to federal grant programs. We evaluated the key factors and assumptions used to develop the amounts recorded as accruals and determined that they are reasonable in relation to the financial statements taken as a whole.

Financial Statement Disclosures
Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the City’s financial statements were:
 The disclosure of pension obligations in note 9 of the financial statements.

The financial statement disclosures are neutral, consistent, and clear.

Significant Unusual Transactions
For purposes of this communication, professional standards require us to communicate to you significant unusual transactions identified during our audit. There were no unusual transactions noted as a result of our audit procedures.

Significant Difficulties Encountered during the Audit
We encountered no significant difficulties in dealing with management relating to the performance of the audit.

Uncorrected and Corrected Misstatements
For purposes of this communication, professional standards also require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole and each applicable opinion unit. Management has corrected all misstatements.

In addition, professional standards require us to communicate to you all material, corrected misstatements that were brought to the attention of management as a result of our audit procedures. None of the misstatements identified by us as a result of our audit procedures and corrected by management were material, either individually or in the aggregate, to the financial statements taken as a whole or applicable opinion units.

Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to City’s’s financial statements or the auditor’s report. No such disagreements arose during the course of the audit.

Representations Requested from Management
We have requested certain written representations from management in the letter dated January 26, 2026.
31 March 3, 2026 Item 12 April 7, 2026 Item 15
Management’s Consultations with Other Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters.

Other Significant Matters, Findings, or Issues
In the normal course of our professional association with City, we generally discuss a variety of matters, including the application of accounting principles and auditing standards, significant events or transactions that occurred during the year, operating and regulatory conditions affecting the entity, and operational plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as City’s auditors.

Other Information Included in Annual Reports
Pursuant to professional standards, our responsibility as auditors for other information, whether financial or nonfinancial, included in the City’s annual report, does not extend beyond the information identified in the audit report, and we are not required to perform any procedures to corroborate such other information. However, in accordance with such standards, we have read the information and considered whether such information, or the manner of its presentation, was materially inconsistent with its presentation in the financial statements.

Our responsibility also includes communicating to you any information which we believe is a material misstatement of fact. Nothing came to our attention that caused us to believe that such information, or its manner of presentation, is materially inconsistent with the information, or manner of its presentation, appearing in the financial statements.

This report is intended solely for the information and use of the City Council and management of the City and is not intended to be and should not be used by anyone other than these specified parties.

Irvine, California
January 26, 2026
32 March 3, 2026 Item 12 April 7, 2026 Item 15
INDEPENDENT ACCOUNTANT’S REPORT
The Honorable Mayor and City Council
City of Del Mar, California
We have performed the procedures enumerated below on the City of Del Mar, California (City) appropriations limit worksheets for compliance with the requirements of Section 1.5 of Article XIIIB of the California Constitution for the year ended June 30, 2021. The City is responsible for compliance with Section 1.5 of Article XIIIB of the California Constitution.

The City has agreed to and acknowledged that these procedures are appropriate to meet the intended purpose of evaluating compliance with the requirements of Section 1.5 of Article XIIIB of the California Constitution and the League of California Cities publication entitled Article XIIIB Appropriations Limitation Uniform Guidelines for the year ended June 30, 2021.

This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.

The procedures and the associated findings are as follows:

1. We obtained the worksheets referred to above and compared the limit and annual adjustment factors included in those worksheets to the limit and annual adjustment factors that were adopted by resolution of the City Council. We also compared the population and inflation options included in the aforementioned worksheets to those that were selected by a recorded vote.

Results: No exceptions were noted as a result of our procedures.

2. We recalculated the mathematical computations reflected in the City’s worksheets.

Results: No exceptions were noted as a result of our procedures.

3. We compared the current year information used to determine the current year limit and agreed it to worksheets prepared by the City and to information provided by the State Department of Finance.

Results: No exceptions were noted as a result of our procedures.

4. We compared the amount of the prior year appropriations limit presented in the worksheets to the amount adopted by the City Council for the prior year.

Results: No exceptions were noted as a result of our procedures.

Attachment D
33 March 3, 2026 Item 12 April 7, 2026 Item 15
The Honorable Mayor and City Council
City of Del Mar, California
Page Two
We were engaged by the City to perform this agreed-upon procedures engagement and conducted our engagement in accordance with standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review, the objective of which would be the expression of an opinion or conclusion, respectively on the worksheets referred to above. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. No procedures have been performed with respect to the determination of the appropriation limit for the base year, as defined by the League publication entitled Article XIIIB Appropriations Limitation Uniform Guidelines.

We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.

This report is intended solely for the information and use of the Management of the City of Del Mar, California and is not intended to be, and should not be, used by anyone other than the specified party.

Irvine, California
January 26, 2026
34 March 3, 2026 Item 12 April 7, 2026 Item 15

BEGINNING ENDING

BALANCE O & M CIP BALANCE
JUL 1, 2024 REVENUES EXPENDITURES EXPENDITURES IN (OUT) JUN 30, 2025 ACTUAL FY 2025 FY 2025 FY 2025 FY 2025 FY 2025 ACTUAL
CONTINGENCY 34.80% 6,849,772 23,607,037 (16,498,892) - 1,217,230 $ (8,671,240) 6,503,908 RESTRICTED:

SELF-INSURANCE 415,632 353,910 (359,326) - - - 410,216
DESIGNATED:

ENCUMBRANCES - - - - 67,655 - 67,655
COASTAL PARKING REVENUE - 81,900 (81,900) - - - -
SIDEWALK CAFÉ - 5,300 (5,300) - - - -
HOUSING RESERVE 1,600,000 - - - 300,000 (250,000) 1,650,000 PENSION RESERVE 4,421,894 207,080 (11,290) - 360,000 - 4,977,684 LEAVE LIABILITY 100,000 - - - - - 100,000
EQUIPMENT REPLACEMENT 815,241 - (118,909) - 100,000 - 796,332 TOTAL GENERAL FUND 14,202,539 24,255,227 (17,075,617) - 2,044,885 (8,921,240) 14,505,794 3,958,543 9,957,775 - (6,466,344) - - 7,449,974
ENCUMBRANCES 418,730 - - (418,730) - - -
TOTAL MEASURE Q FUND 10,376,505 3,958,543 - (6,885,074) - - 7,449,974 114,392 107,385 - - - - 221,777
115,990 - (708,589) - 612,579 - 19,980
660,927 - (1,313,539) - 652,612 - -

DESIGNATED
ENCUMBRANCES 241,725 - - (206,364) 267,043 - 302,404

CAPITAL IMPROVEMENT PROJECTS - - - - - - -
OPEN SPACE ACQUISITION 86,388 - - - - - 86,388
TREE RESERVE 41,017 - - - - - 41,017
TOTAL OPEN SPACE FUND 369,130 660,927 (1,313,539) (206,364) 919,655 - 429,809 199,879 - - - - (199,467) 411
45,165 15,531 (45,168) - - - 15,529
85,067 155,774 (81,066) - - - 159,775

GENERAL FUND

MEASURE Q

ROAD MAINTENANCE REHABILITATION ACCT

GAS TAX FUND

OPEN SPACE FUND

SUPPLEMENTAL LAW ENFORCEMENT FUND

REGIONAL COMMUNICATIONS FUND

GRANTS FUND

CITY OF DEL MAR

RESERVE SUMMARY
FISCAL YEAR 2024-2025

TRANSFERS

FINAL FINANCIAL REPORT
Attachment E1
35 March 3, 2026 Item 12 April 7, 2026 Item 15

BEGINNING ENDING

BALANCE O & M CIP BALANCE
JUL 1, 2024 REVENUES EXPENDITURES EXPENDITURES IN (OUT) JUN 30, 2025 ACTUAL FY 2025 FY 2025 FY 2025 FY 2025 FY 2025 ACTUAL

CITY OF DEL MAR

RESERVE SUMMARY
FISCAL YEAR 2024-2025

TRANSFERS

FINAL FINANCIAL REPORT
222,137 48,745 (57,328) - - (55,550) 158,004
179,710 572,060 (72,574) - - - 679,196
36,839 13,241 (31,813) - - (10,000) 8,267
396,683 47,793 - (1,582,556) 1,138,080 - -
ENCUMBRANCES 875,560 - - (875,560) 1,166,296 1,166,296
RESERVE FOR CAPITAL 650,000 - - - 2,500,000 3,150,000
DEBT SERVICE - - (901,391) - 901,391 - -
TOTAL CAPITAL IMPROVEMENT FUND 1,573,353 396,683 (901,391) (2,458,116) 5,705,767 - 4,316,296 177,814 798,574 - (191,058) - (331,478) 453,852
191,281 3,365 (191,159) - - - 3,487
1,525 36,605 - - - - 38,130
395,606 396,611 (289,382) - - - 502,835
NET POSITION 1,836,306 5,002,105 (4,789,493) - 121,498 (370,735) 1,799,681 RESTRICTED:

CONTRIBUTED CAPITAL 4,028,272 - - - - - 4,028,272

DESIGNATED
ENCUMBRANCES 121,498 - - - (121,498) -
SELF-INSURANCE 50,000 - - - - - 50,000
RATE STABILIZATION 200,000 - - - - - 200,000
CAPTIAL REPLACEMENT 470,000 - - - - - 470,000
NET PENSION LIABILITY (1,976,172) - 14,053 - - - (1,962,119) PENSION RESERVE 1,000,000 - - - - - 1,000,000
OPERATING RESERVE 500,000 - - - - - 500,000
EQUIPMENT REPLACEMENT 200,000 - - - - - 200,000
UTILITY PLANT IN SERVICE 7,347,968 - 75,162 - - - 7,423,130 TOTAL WATER FUND 13,777,872 5,002,105 (4,700,278) - 121,498 (492,233) 13,708,964

CAPITAL IMPROVEMENT FUND

SPECIAL PROJECT FUND

TRANSNET FUND
RTCIP

WORKERS' COMPENSATION FUND

WATER FUND

PEG FEE FUND

HOUSING FUND
AB 939 FUND
36 March 3, 2026 Item 12 April 7, 2026 Item 15

BEGINNING ENDING

BALANCE O & M CIP BALANCE
JUL 1, 2024 REVENUES EXPENDITURES EXPENDITURES IN (OUT) JUN 30, 2025 ACTUAL FY 2025 FY 2025 FY 2025 FY 2025 FY 2025 ACTUAL

CITY OF DEL MAR

RESERVE SUMMARY
FISCAL YEAR 2024-2025

TRANSFERS

FINAL FINANCIAL REPORT
NET POSITION 63,698 625,753 (711,634) - 392,919 - 370,735

DESIGNATED
UTILITY PLANT IN SERVICE 446,876 - 89,375 - 536,251
ENCUMBRANCES 66,186 - (133,602) 583,400 (370,735) 145,249

CAPITAL REPLACEMENT RESERVE - - - -
TOTAL CLEAN WATER FUND 576,760 625,753 (711,634) (44,227) 976,319 (370,735) 1,052,235 NET POSITION 713,858 4,460,570 (3,608,697) - 374,960 - 1,940,691 -

RESTRICTED
IBANK RESERVE 228,828 - - - - - 228,828
CONTRIBUTED CAPITAL 650,814 - - - - - 650,814
LOAN RESERVE-STATE REVOLVING - 332,979 - - - - 332,979

DESIGNATED
ENCUMBRANCES 374,960 - - - - (374,960) -
SELF-INSURANCE 50,000 - - - - - 50,000
CAPITAL REPLACEMENT 500,000 - - - - - 500,000
NET PENSION LIABILITY (1,986,628) - 24,509 - - - (1,962,119) PENSION RESERVE 900,000 - - - - 900,000
OPERATING RESERVE 408,000 - - - - - 408,000
EQUIPMENT REPLACEMENT 300,000 - - - - - 300,000
UTILITY PLANT IN SERVICE 8,548,709 - (653,615) - - 7,895,094 RATE STABILIZATION 200,000 - - - - - 200,000
TOTAL WASTEWATER FUND 11,221,520 4,460,570 (4,237,803) - 374,960 (374,960) 11,444,288 TOTAL ENTERPRISE FUNDS 25,576,152 10,088,429 (9,649,715) (44,227) 1,472,777 (1,237,928) 26,205,487 TOTAL - ALL FUNDS 54,245,570 41,125,212 (30,417,340) (9,784,840) 10,755,663 (10,755,663) 55,168,603

CLEANWATER FUND

WASTEWATER FUND
37 March 3, 2026 Item 12 April 7, 2026 Item 15
ACTUAL ACTUAL ADOPTED MID-YEAR ACTUAL %

REVENUE REVENUE BUDGET AMENDED REVENUE RECV'D PROJECTED FINAL FINAL (6/17/24) BUDGET FINAL FY REVENUE
SOURCE OF FUNDS FY 2022-23 FY 2023-24 FY 2024-25 FY 2024-25 FY 2024-25 2024-25 FY 2024-25

GENERAL FUND
TAXES
PROPERTY TAX 7,241,627 7,651,288 8,032,500 8,032,500 8,088,157 100.7% 8,070,000 VLF IN LIEU OF PROPERTY TAX 759,841 807,116 821,800 821,800 858,932 104.5% 830,000 SALES AND USE TAX 2,306,262 2,196,466 2,300,000 2,300,000 2,297,404 99.9% 2,200,000 TRANSIENT OCCUPANCY TAX 3,816,392 3,799,038 3,820,000 4,000,000 4,084,758 102.1% 4,000,000 BUSINESS LICENSE TAX 276,466 362,769 430,000 350,000 360,364 103.0% 330,000 FRANCHISE TAX 442,409 446,816 350,000 430,000 422,411 98.2% 430,000 REAL PROPERTY TRANSFER TAX 134,893 178,484 140,000 140,000 171,806 122.7% 145,000 TOTAL 14,977,890 15,441,977 15,894,300 16,074,300 16,283,832 101.3% 16,005,000

LICENSES & PERMITS
LICENSES & PERMITS 3,485 2,335 500 500 4,615 923.0% 750 JUNIOR LIFEGUARD 90,310 96,990 95,000 95,000 92,770 97.7% 95,000 PARKING PERMITS 27,387 30,060 25,000 25,000 34,995 140.0% 30,000 TOTAL 121,182 129,385 120,500 120,500 132,380 109.9% 125,750

FINES & FORFEITURES
MOVING VIOLATIONS/VEHICLE CODE FINES 58,170 69,284 55,000 55,000 66,761 121.4% 65,000 PARKING VIOLATIONS 1,368,108 1,395,851 1,250,000 1,350,000 1,538,560 114.0% 1,450,000 PENALTIES 5,712 25,267 12,000 12,000 22,788 189.9% 12,000 ADMINISTRATIVE CITATIONS 88,167 55,152 45,000 45,000 41,590 92.4% 45,000 RED LIGHT ENFORCEMENT 73,937 94,156 65,000 65,000 86,561 133.2% 80,000 TOTAL 1,594,094 1,639,710 1,427,000 1,527,000 1,756,261 115.0% 1,652,000

REVENUE FROM USE OF ASSETS
INTEREST EARNINGS 925,444 199,381 400,000 400,000 892,952 223.2% 400,000 RENTAL INCOME 240,743 230,372 200,000 200,000 256,210 128.1% 240,000 LEASE INCOME/LOSS - - - - 174,205 100.0% -
PARKING METER INCOME 1,268,930 1,433,473 1,400,000 1,700,000 1,734,993 102.1% 1,650,000 SIDEWALK CAFÉ USER FEE 12,371 1,469 3,000 3,000 7,980 266.0% 3,000 TOTAL 1,700,152 2,612,031 2,003,000 2,303,000 3,066,340 133.1% 2,293,000

REVENUE FROM OTHER AGENCIES
MOTOR VEHICLE LICENSE FEE 4,868 4,040 4,000 4,000 6,229 155.7% 4,800 PUBLIC SAFETY AUGMENTATION FUND 107,890 107,147 100,000 100,000 109,006 109.0% 100,000 HOMEOWNER EXEMPT 34,592 35,835 35,000 35,000 34,652 99.0% 30,000 STATE MANDATED COST REIMB 128 - 1,500 1,500 - 0.0% 1,500 FEDERAL/STATE/LOCAL GRANTS 24,406 5,000 162,200 162,200 5,000 3.1% 162,200 CORONAVIRUS RELIEF FUNDS - 870,883 162,310 162,310 - 0.0% 162,310 OFF-TRACK PARIMUTUEL 7,465 9,009 8,000 8,000 5,726 71.6% 6,500 SOLID WASTE 12,620 10,996 11,000 11,000 12,932 117.6% 12,900 TOTAL 191,969 1,042,910 484,010 484,010 173,546 35.9% 480,210

CHARGES - PLANNING SERVICES
PLANNING SERVICES 502,183 625,509 520,000 520,000 552,483 106.2% 525,000 ENGINEERING SERVICES 171,259 181,888 200,000 200,000 124,232 62.1% 160,000 BUILDING SERVICES 612,862 606,602 500,000 500,000 474,017 94.8% 540,000 TOTAL 1,286,304 1,413,999 1,220,000 1,220,000 1,150,732 94.3% 1,225,000

CITY OF DEL MAR
FISCAL YEAR 2024-2025

FINAL FINANCIAL REPORT

REVENUE SUMMARIES
Attachment E2
38 March 3, 2026 Item 12 April 7, 2026 Item 15
ACTUAL ACTUAL ADOPTED MID-YEAR ACTUAL %

REVENUE REVENUE BUDGET AMENDED REVENUE RECV'D PROJECTED FINAL FINAL (6/17/24) BUDGET FINAL FY REVENUE
SOURCE OF FUNDS FY 2022-23 FY 2023-24 FY 2024-25 FY 2024-25 FY 2024-25 2024-25 FY 2024-25

CITY OF DEL MAR
FISCAL YEAR 2024-2025

FINAL FINANCIAL REPORT

REVENUE SUMMARIES

OTHER REVENUE SOURCES
PARKING IN-LIEU FEE 13,764 - 1,500 1,500 10,372 691.5% 2,700 SALE OF PROPERTY - - - - - 0.0% -
ADMINISTRATIVE CHARGE 937,650 910,344 990,000 990,000 965,790 97.6% 990,000 CONTRIBUTIONS - 3,660 - - 48,384 0.0% -
ADMINISTRATIVE CHARGE-MEASURE Q 90,528 59,875 150,000 150,000 152,731 101.8% 150,000 WC/STD REIMBURSEMENTS - 22,665 - - 11,888 100.0% -
INSURANCE CLAIM REIMBURSEMENT - 3,807 - - 353,910 0.0% - EXPENDITURE REIMBURSEMENT 148,006 3,811 5,000 35,000 53,613 153.2% 35,000 MISCELLANEOUS 73,594 137,182 25,000 100,620 95,449 94.9% 100,620 TOTAL 1,263,542 1,141,344 1,171,500 1,277,120 1,692,137 132.5% 1,278,320 TOTAL GENERAL FUND 22,556,715 21,999,774 22,320,310 23,005,930 24,255,227 105.4% 23,059,280 MEASURE Q FUND 3,780,939 3,401,946 3,500,000 3,500,000 3,958,543 113.1% 3,490,000 ROAD MAINTENANCE REHAB ACCOUNT 107,381 90,384 100,860 100,860 114,392 113.4% 99,760 GAS TAX FUND 114,641 105,890 114,770 114,770 115,990 101.1% 117,400

OPEN SPACE FUND
TAXES 18,144 34,115 12,000 12,000 5,374 44.8% 8,000
LICENSE & PERMITS 403,365 390,339 440,000 440,000 423,758 96.3% 435,000 RENTAL INCOME 221,670 - 221,676 235,000
FEDERAL/STATE GRANTS 215,672 - - 680,000 - 0.0% -
OFF-TRACK PARIMUTUEL 4,976 4,334 5,000 5,000 3,817 76.3% 4,000 CONTRIBUTIONS 34,000 102,856 137,000 941,673 - 0.0% 1,621,673 MISCELLANEOUS 8,952 8,021 264,530 42,860 6,302 14.7% 42,860 TOTAL OPEN SPACE FUND 685,109 539,665 858,530 2,343,203 660,927 28.2% 2,346,533 SUPPLEMENTAL LAW FUND 192,923 166,847 160,000 194,000 199,879 103.0% 194,000 REGIONAL COMMUNICATION 46,159 43,990 45,000 45,000 45,165 100.4% 46,000 GRANTS FUND 87,833 71,515 60,000 66,352 85,067 128.2% 70,000 HOUSING FUND 42,364 2,546 30,000 162,850 222,137 136.4% 162,850 AB 939 251,345 159,145 154,000 154,000 179,710 116.7% 154,000 PEG FEE FUND 40,405 43,647 46,000 46,000 36,839 80.1% 40,000

CAPITAL IMPROVEMENT FUND
FEDERAL/STATE/LOCAL GRANTS 208,899 684,949 1,411,950 2,835,764 396,683 14.0% 2,672,450 MISCELLANEOUS 202,872 63,564 - - - 0.0% -
TOTAL CAPITAL IMPROVEMENT FUND 411,771 748,513 1,411,950 2,835,764 396,683 14.0% 2,672,450 TRANSNET FUND 228,931 133,698 147,000 578,000 191,281 33.1% 578,000 RTCIP FUND 4,977 23,784 - - 1,525 100.0% 400
SPECIAL PROJECTS FUND - 225,000 - - 177,814 0.0% -
TOTAL GENERAL GOVERNMENTAL FUNDS 28,551,493 27,756,344 28,948,420 33,146,729 30,641,178 92.4% 33,030,673 WORKERS' COMPENSATION FUND 349,499 290,088 290,000 290,000 395,606 136.4% 290,000 39 March 3, 2026 Item 12 April 7, 2026 Item 15
ACTUAL ACTUAL ADOPTED MID-YEAR ACTUAL %

REVENUE REVENUE BUDGET AMENDED REVENUE RECV'D PROJECTED FINAL FINAL (6/17/24) BUDGET FINAL FY REVENUE
SOURCE OF FUNDS FY 2022-23 FY 2023-24 FY 2024-25 FY 2024-25 FY 2024-25 2024-25 FY 2024-25

CITY OF DEL MAR
FISCAL YEAR 2024-2025

FINAL FINANCIAL REPORT

REVENUE SUMMARIES

WATER UTILITY FUND
WATER SALES 2,365,627 2,250,941 2,375,000 2,575,000 2,760,874 107.2% 2,600,000 READY TO SERVE CHARGE 1,954,206 1,860,332 1,950,000 1,950,000 2,021,281 103.7% 1,960,000 OTHER CONNECTION FEES 68,356 57,667 54,000 54,000 56,558 104.7% 35,000 MISCELLANEOUS 200,549 101,824 90,000 90,000 163,392 181.5% 74,000 TOTAL OPERATING REVENUE 4,588,738 4,270,764 4,469,000 4,669,000 5,002,105 107.1% 4,669,000

CLEAN WATER PROGRAM
SERVICE CHARGE 657,722 623,696 630,000 630,000 617,884 98.1% 595,000 MISCELLANEOUS 10,973 5,266 5,000 5,000 7,869 157.4% 41,200 TOTAL CLEAN WATER PROGRAM 668,695 628,962 635,000 635,000 625,753 98.5% 636,200

WASTEWATER FUND
SERVICE CHARGES 1,954,106 1,860,666 1,940,000 2,000,000 2,178,563 108.9% 2,000,000 USAGE CHARGES 1,950,126 1,923,924 2,000,000 2,000,000 2,026,033 101.3% 2,000,000 OTHER SEWER FEES 83,766 67,657 75,000 75,000 83,766 111.7% 47,700 MISCELLANEOUS 188,378 56,127 77,000 77,000 172,208 223.6% 48,000 TOTAL WASTEWATER FUND 4,176,376 3,908,374 4,092,000 4,152,000 4,460,570 107.4% 4,095,700 TOTAL ENTERPRISE FUNDS 8,808,100 9,433,809 9,196,000 9,456,000 10,088,429 106.7% 9,400,900 TOTAL ALL FUNDS 36,854,533 38,334,801 38,434,420 42,892,729 41,125,212 95.9% 42,721,573 40 March 3, 2026 Item 12 April 7, 2026 Item 15
ACTUAL ACTUAL ADOPTED FINAL ACTUAL %

EXP EXP BUDGET AMENDED EXP EXPENSED PROJECTED
FINAL FINAL (6/17/24) BUDGET FINAL EXP
DEPARTMENT FY 2022-23 FY 2023-24 FY 2024-25 FY 2024-25 FY 2024-25 FY 2024-25 FY 2024-25

GENERAL FUND

GENERAL GOVERNMENT
CITY COUNCIL 41,603 23,400 35,280 35,280 48,113 136.4% 39,870 LEGAL SERVICES 700,194 625,181 506,000 606,000 634,897 104.8% 600,000 CITY MANAGER 878,774 714,344 922,090 922,090 1,002,306 108.7% 920,095 HUMAN RESOURCES 258,453 226,829 249,590 249,590 283,609 113.6% 274,860 CITY CLERK 361,529 337,212 364,740 364,740 432,525 118.6% 448,500 INFORMATION SYSTEMS 548,153 504,087 544,960 544,960 471,783 86.6% 561,200 FINANCE SERVICES 764,865 736,709 809,760 810,410 801,530 98.9% 814,690 RISK MANAGEMENT 368,636 280,408 481,350 481,350 804,507 167.1% 428,000 PLANNING SERVICES 1,508,816 1,196,048 1,876,690 1,877,340 1,744,868 92.9% 1,830,700 CODE ENFORCEMENT 161,031 148,242 149,550 149,550 145,465 97.3% 170,390 BUILDING SERVICES 476,118 485,477 403,500 403,500 389,145 96.4% 403,500 TOTAL 6,068,172 5,277,937 6,343,510 6,444,810 6,758,747 104.9% 6,491,805

PUBLIC SAFETY
LAW ENFORCEMENT 2,747,809 2,687,591 2,962,340 2,962,340 2,837,524 95.8% 2,848,940 LIFEGUARD SERVICES 1,516,815 1,393,458 1,547,960 1,573,957 1,664,222 105.7% 1,626,080 PARKING ENFORCEMENT 1,046,838 1,084,591 1,189,520 1,189,520 1,181,768 99.3% 1,221,730 FIRE PROTECTION 2,741,927 2,442,988 2,894,330 3,032,062 2,970,463 98.0% 3,024,020 HAZARDOUS WASTE MANAGEMENT 20,077 17,632 22,960 22,960 21,907 95.4% 22,910 SOLID WASTE 3,001 3,508 5,000 5,000 3,345 66.9% 4,000
EMERGENCY PREPAREDNESS 3,152 2,884 5,750 5,750 2,973 51.7% 5,580 TOTAL 8,079,619 7,632,652 8,627,860 8,791,589 8,682,202 98.8% 8,753,260

PUBLIC WORKS
ENGINEERING SERVICES 284,858 137,256 263,750 263,750 170,231 64.5% 250,000 STORM DRAIN 199,913 154,487 205,750 206,125 221,939 107.7% 249,300 FACILITIES 284,889 237,242 359,280 359,738 254,698 70.8% 328,090 TOTAL 769,660 528,985 828,780 829,613 646,868 78.0% 827,390

NON-DEPARTMENTAL
COMMUNITY SUPPORT 385,398 415,129 427,510 427,510 472,548 110.5% 442,200 TV STUDIO 89,375 97,575 119,420 119,420 120,488 100.9% 124,200 CITY MEMBERSHIPS 101,741 93,740 109,890 109,890 105,164 95.7% 105,170 CITY HALL - GENERAL 156,326 157,091 185,750 185,750 170,691 91.9% 185,000 TOTAL 732,840 763,535 842,570 842,570 868,891 103.1% 856,570

TOTAL GENERAL FUND BEFORE
EQUIPMENT REPLACEMENT 15,650,291 14,203,109 16,642,720 16,908,582 16,956,708 100.3% 16,929,025 EQUIPMENT REPLACEMENT 270,159 987,427 182,240 257,899 118,909 46.1% 257,900

TOTAL GENERAL FUND INCLUDING
EQUIPMENT REPLACEMENT 15,920,450 15,190,536 16,824,960 17,166,481 17,075,617 99.5% 17,186,925 MEASURE Q FUND 1,174,333 1,325,555 6,720,500 15,216,225 6,885,074 45.2% 9,752,400 ROAD MAINTENANCE REHAB ACCOUNT - - - - - 0% -

CITY OF DEL MAR
FISCAL YEAR 2024-25

FINAL FINANCIAL REPORT

EXPENDITURE SUMMARIES
Attachment E3
41 March 3, 2026 Item 12 April 7, 2026 Item 15
ACTUAL ACTUAL ADOPTED FINAL ACTUAL %

EXP EXP BUDGET AMENDED EXP EXPENSED PROJECTED
FINAL FINAL (6/17/24) BUDGET FINAL EXP
DEPARTMENT FY 2022-23 FY 2023-24 FY 2024-25 FY 2024-25 FY 2024-25 FY 2024-25 FY 2024-25

CITY OF DEL MAR
FISCAL YEAR 2024-25

FINAL FINANCIAL REPORT

EXPENDITURE SUMMARIES

GAS TAX FUND
STREET MAINTENANCE 269,233 276,033 382,420 398,170 277,835 69.8% 318,505 STREET LIGHTS/SIGNS 174,857 161,080 198,850 199,390 152,887 76.7% 178,640 STREET LANDSCAPING 314,882 272,320 306,180 306,554 277,867 90.6% 285,780 TOTAL GAX TAX FUND 758,972 709,434 887,450 904,114 708,589 78.4% 782,925

OPEN SPACE FUND
POWERHOUSE OPERATIONS 426,569 379,591 485,030 489,199 481,065 98.3% 472,600 BEACH MAINTENANCE 334,473 363,402 451,620 452,370 380,586 84.1% 406,450 PARK MAINTENANCE 434,342 309,117 493,710 494,460 451,888 91.4% 498,080 TOTAL OPEN SPACE FUND 1,195,384 1,052,109 1,430,360 1,436,029 1,313,539 91.5% 1,377,130 SUPPLEMENTAL LAW ENFORCEMENT - - - - - 0% -
REGIONAL COMMUNICATION FUND 44,521 40,960 61,250 61,250 45,168 73.7% 61,250 GRANTS FUND 68,491 69,752 61,170 73,373 81,066 110.5% 67,520 HOUSING FUND 45,684 101,143 40,000 57,240 57,328 100.2% 57,240 AB 939 64,849 35,989 118,890 118,890 72,574 61.0% 119,530 PEG FEE FUND 10,736 18,510 31,200 31,200 31,813 102.0% 43,530 TOTAL GENERAL O&M FUNDS 19,283,420 18,543,989 26,175,780 35,064,802 26,270,767 74.9% 29,448,450

CAPITAL IMPROVEMENT FUNDS
OPEN SPACE CIP 146,197 584,768 81,000 1,922,398 206,364 10.7% 1,741,398 GENERAL FUND CIP 2,230,198 909,191 2,339,450 4,971,925 2,458,116 49.4% 4,971,925 DEBT SERVICE-CITY HALL 902,860 904,283 904,290 904,290 901,391 99.7% 904,290 TRANSNET II CIP 228,756 133,264 147,000 578,000 191,159 33.1% 578,000 RTCIP FUND - - - - - 0.0% -
TOTAL CAPITAL IMPROVEMENT FUNDS 3,508,011 2,531,506 3,471,740 8,376,613 3,757,030 44.9% 8,195,613 SPECIAL PROJECT FUND 430,060 452,662 669,460 1,538,274 191,058 12.4% 1,488,274 TOTAL GENERAL GOVERNMENTAL FUNDS 21,528,157 23,221,491 30,316,980 44,979,689 30,218,855 67.2% 39,132,337 WORKERS' COMPENSATION FUND 261,612 380,724 304,000 304,000 289,382 95.2% 304,000

WATER FUND
GENERAL ADMINISTRATION 2,051,373 1,653,945 2,157,790 2,188,122 2,184,901 99.9% 2,178,010 RISK MANAGEMENT 162,220 132,948 187,540 187,540 219,864 117.2% 202,900 RAW WATER SUPPLY 1,717,992 1,677,581 1,902,040 2,102,040 1,939,778 92.3% 2,100,000 TREATMENT/DELIVERY 374,796 441,012 461,090 461,090 355,734 77.2% 450,000 TOTAL WATER FUND O&M 4,306,381 3,905,486 4,708,460 4,938,792 4,700,278 95.2% 4,930,910 WATER CAP IMPROVEMENT - 1,367 622,000 741,217 - 0.0% 741,210 TOTAL WATER FUND 4,306,381 3,906,853 5,330,460 5,680,009 4,700,278 82.8% 5,672,120 42 March 3, 2026 Item 12 April 7, 2026 Item 15
ACTUAL ACTUAL ADOPTED FINAL ACTUAL %

EXP EXP BUDGET AMENDED EXP EXPENSED PROJECTED
FINAL FINAL (6/17/24) BUDGET FINAL EXP
DEPARTMENT FY 2022-23 FY 2023-24 FY 2024-25 FY 2024-25 FY 2024-25 FY 2024-25 FY 2024-25

CITY OF DEL MAR
FISCAL YEAR 2024-25

FINAL FINANCIAL REPORT

EXPENDITURE SUMMARIES

CLEAN WATER FUND
PLANNING 78,255 66,315 71,460 91,460 92,943 101.6% 90,630 CODE ENFORCEMENT 39,025 37,415 39,560 39,560 34,562 87.4% 42,390 CLEAN WATER MANAGEMENT 307,573 281,209 344,030 344,030 273,178 79.4% 341,500 PUBLIC WORKS 287,993 275,141 330,420 351,744 310,951 88.4% 350,590 TOTAL CLEAN WATER O & M 712,846 660,080 785,470 826,794 711,634 86.1% 825,110 CLEAN WATER CAP IMPROVEMENT - 3,462 365,000 482,322 44,227 9.2% 416,500 TOTAL CLEAN WATER FUND 712,846 663,542 1,150,470 1,309,116 755,861 57.7% 1,241,610

WASTEWATER FUND
RISK MANAGEMENT 162,220 131,867 196,540 196,540 219,864 111.9% 200,500 WASTEWATER TRANSPORTATION 57,498 102,276 139,740 139,740 181,634 130.0% 134,000 WASTEWATER TREATMENT 927,290 909,145 1,039,550 1,169,550 1,141,611 97.6% 1,167,000 DEBT SERVICE 563,446 150,176 568,850 568,850 562,673 98.9% 568,850 WASTEWATER PROGRAM 2,550,377 2,109,626 2,752,790 2,807,622 2,567,858 91.5% 2,804,070 TOTAL WASTEWATER FUND O&M 4,260,831 3,403,091 4,697,470 4,882,302 4,673,640 95.7% 4,874,420 WASTEWATER CAPITAL IMPROVEMENT (501,927) - 425,000 797,679 - 0.0% 797,680 TOTAL WASTEWATER FUND 3,758,904 3,403,091 5,122,470 5,679,981 4,673,640 82.3% 5,672,100 TOTAL ENTERPRISE FUNDS 8,778,131 7,973,485 11,603,400 12,669,106 10,129,779 80.0% 12,585,830 TOTAL EXPENDITURES 29,882,366 32,261,234 42,224,380 57,952,795 40,638,016 70.1% 52,022,167 43 March 3, 2026 Item 12 April 7, 2026 Item 15
City of Del Mar
Cash Flow Report
General Fund
Fiscal Year 2024-25
Adopted Mid-Year Final
FY 2025 FY 2025 Results
(6/17/24) (4/7/25) FY 2025 Difference
(A) (B) (C) (D = C- B)
Total Revenue 23,005,930 22,320,310 24,255,227 1,249,297 Total Expenditures 17,155,684 16,824,960 17,075,617 (80,067) Transfers
Gas Tax 772,680 787,745 612,579 (175,166)
Open Space 571,830 510,058 652,612 142,554
SLESF (160,000) (194,000) (199,467) (5,467)
Regional Comm 13,897 13,897 - (13,897)
Housing Fund - - (55,550) (55,550)
Clean Water (non-CIP) 150,000 126,772 392,919 266,147
RMRA Reimb (100,860) (208,245) - 208,245
PEG Fee Reimb (20,000) (10,000) (10,000) -
Total Transfers 1,227,547 1,026,227 1,393,092 366,865
City Hall Debt 904,290 904,290 901,391 (2,899)
Cash Flow (before CIP & SP) 3,363,513 $ 3,919,729 $ 4,885,127 $ 965,398 $ Transfer to CIP
Open Space 81,000 81,000 267,043 186,043
General Fund 927,500 1,212,808 2,304,376 1,091,568
CIP Reserve Transfer 2,500,000 2,500,000 2,500,000 -
Clean Water 365,000 416,500 (158,070) (574,570)
Total CIP 3,873,500 4,210,308 4,913,349 703,041
Transfer to Special Projects 739,700 669,460 (331,478) (1,071,178) Cash Flow (after CIP & SP) (1,179,447) $ (1,030,279) $ 303,256 $ 1,333,535 $ Reserves
Contingency Reserves 4,837,122 5,683,024 6,571,563 888,539 Self-Insurance 300,000 300,000 410,216 110,216
Housing Reserve 1,650,000 1,650,000 1,650,000 -
Pension Reserve 4,760,000 4,781,894 4,977,684 195,790
Leave Liability 100,000 100,000 100,000 -
Equipment Replacement 678,460 657,342 796,332 138,990
13,172,260 12,325,582 14,505,794 1,333,534
Other Reserve Balance
Capital Reserve 3,150,000 3,150,000 3,150,000 -
Attachment F
44 March 3, 2026 Item 12 April 7, 2026 Item 15
Fiscal Year Accrued Liability Market Value of
Assets
Pension Reserve Unfunded
Accrued Liability
Plan's Funded
Ratio
Annual Pension
Contribution

CALPERS
Investment
Earnings
June 30, 2016 $43,061,758 $31,547,017 $ - $11,514,741 73.3% $843,723 0.6% June 30, 2017 45,368,252 33,812,916 249,087 11,306,249 75.1% 927,010 11.2% June 30, 2018 50,284,136 36,846,264 1,099,122 12,338,750 75.5% 995,243 8.6% June 30, 2019 52,871,543 38,713,741 1,949,170 12,208,632 76.9% 1,221,744 6.7% June 30, 2020 55,435,711 39,940,142 2,240,200 13,255,369 76.1% 1,410,817 4.7% June 30, 2021 59,195,784 48,413,744 2,528,950 8,253,090 86.1% 1,517,070 21.3% June 30, 2022 62,155,326 43,862,582 3,890,200 14,402,544 76.8% 1,697,869 -6.1% June 30, 2023 65,021,732 45,439,148 4,997,500 14,585,084 77.6% 1,860,532 5.8% June 30, 2024 67,090,804 47,813,311 6,321,894 12,955,599 80.7% 1,950,479 9.3% June 30, 2025* Not available Not available 6,877,684 10,919,832 Not available 2,255,847 11.6% * CalPERs Actuarial report for June 30, 2025 is not available. The unfunded accrued liability amount is based on the estimates prepared for the June 30, 2025 Annual Comprehensive Financial Report.

City of Del Mar
Pension Funding History
June 30, 2016 - June 30, 2025
Attachment G
45 March 3, 2026 Item 12 April 7, 2026 Item 15
FISCAL YEAR 2024-25 FINAL FINANCIAL
REPORT & FISCAL YEAR 2025-26 MIDYEAR FINANCIAL REPORT
February 18, 2026
April 7, 2026 Item 15
FISCAL YEAR 2024-25

FINAL FINANCIAL RESULTS
April 7, 2026 Item 15
FY 2024-25 Final Financial Results
3 Summary of FY 2024-25 Annual Comprehensive Financial Report (ACFR) Results Audit Finding or Issues
• Material weakness identified in internal control – None • Significant Deficiency in internal control over financial reporting – None • Instances of noncompliance reported - None
• Accounting transactions for which there was a lack of authoritative guidance – None • Difficulties in performing the audit – None
• Uncorrected misstatements – None
• Material misstatements corrected by management – None • Disagreements with management – None
April 7, 2026 Item 15
FY 2024-25 Final Financial Results
4 Summary of General Fund Final FY 2024-25 Results
Revenues
• Revenues came in $1,249,297 higher than final budget
Expenditures
• Operating Expenditures came in $90,864 below final budget projections • General Fund required transfers came in $366,865 higher than anticipated • Capital Project expenditures came in $703,041 higher than planned Reserves
• Reserves came in roughly $1,333,534 higher than final projections April 7, 2026 Item 15
FY 2024-25 Final Financial Results
5 General Fund Revenues
Revenue Source Final Budget
FY 2024-25
Final Results
FY 2024-25
Difference % of
Budget
Property Tax $8,032,500 $8,088,157 $55,657 100.7%
TOT 4,000,000 4,084,758 84,758 102.1%
Sales Tax 2,300,000 2,297,404 (2,596) 99.9%
Parking Meters 1,700,000 1,734,993 34,993 102.1%
Parking Violations 1,350,000 1,538,560 188,560 114.0%
Planning Services 1,220,000 1,150,732 (69,268) 94.3%
Investment Earnings 400,000 892,952 492,952 223.2%
Other Revenues 4,003,430 4,467,971 464,241 111.6%
Totals $23,005,930 $24,255,227 $1,249,297 105.4%
April 7, 2026 Item 15
FY 2024-25 Final Financial Results
6 General Fund Expenditures
Program Final Budget
FY 2024-25
Final Results
FY 2024-25
Difference % of
Budget
General Government $6,444,810 $6,758,747 ($313,937) 104.9% Public Safety 8,791,589 8,682,202 109,387 98.8%
Public Works 829,613 646,868 182,745 78.0%
Non-Departmental 842,570 868,891 (26,321) 103.1%
Equipment Replacement 257,899 118,909 138,990 46.1%
Totals $17,166,481 $17,075,617 $90,864 99.5%
April 7, 2026 Item 15
FY 2024-25 Final Financial Results
7 Capital Improvements/Special Projects
Program Final Budget
FY 2024-25
Final Results
FY 2024-25
Unspent
(carry-over)
% of
Budget
General CIP $4,971,925 $2,458,116 $2,513,809 49.4%
Open Space CIP 1,922,398 206,364 1,716,034 10.7%
TransNet CIP 578,000 191,159 386,841 33.1%
Clean Water CIP 482,322 44,227 438,095 9.2%
Total CIP $7,954,645 $2,899,866 $5,054,779 36.5%
Special Projects 1,538,274 191,058 1,347,216 12.4%
Total $9,492,919 $3,090,924 $6,401,995 32.6%
April 7, 2026 Item 15
FY 2024-25 Final Financial Results
8 Measure Q Fund:

Measure Q Fund Final Budget
FY 2024-25
Final Results
FY 2024-25
Difference/
Unspent
% of
Budget
Revenue $3,500,000 $3,958,543 $458,543 113.1%
Expenditures 15,216,225 6,885,074 8,331,151 45.25%
April 7, 2026 Item 15
FY 2024-25 Final Financial Results
9 General Fund Reserves:

Reserves Budget Update
FY 2024-25 (6/17/24)
Mid-Year Budget
FY 2024-25 (4/7/25)
Final Results
FY 2024-25 (1/26/26)
Contingency % 25.69% 30.08% 34.80%
Contingency $ $4,837,122 $5,683,024 $6,571,563
Pension Reserve 4,760,000 4,781,894 4,977,684
Housing Reserve 1,650,000 1,650,000 1,650,000
Self-Insurance 300,000 300,000 410,216
Leave Liability 100,000 100,000 100,000
Equipment Replacement 678,460 657,342 796,332
Total $12,325,582 $13,172,260 $14,505,795
Housing Reserve 3,150,000 3,150,000 3,150,000
April 7, 2026 Item 15
FY 2024-25 Final Financial Results
10 Debt Management:

Debt Purpose Amount Balance Repayment
Source
State Water Resources Control
Board - Clean Water State Revolving
Fund
21st Street Sewer Pump
Station Replacement
$5,000,000 $2,425,114 Wastewater
Fund
IBank Loan San Elijo Joint Powers
Authority Pipeline
3,535,354 2,130,240 Wastewater
Fund
SANDAG's Debt Financing Program ROW Improvements 3,000,000 2,370,000 TransNet Fund
IBank Loan City Hall 16,161,000 13,073,771 General Fund County of San Diego Finance
Agreement
Regional Communication
System Upgrade
435,436 49,130 General Fund
IBank Loan* Undergrounding
Program: X1A & 1B
5,000,000 5,000,000 General Fund
Total $33,131,790 $25,048,255
April 7, 2026 Item 15
Fiscal Year 2025-26 Mid-Year
Financial Report
April 7, 2026 Item 15
FY 2025-26 Mid-Year Financial Report
12 Summary of General Fund Mid-Year Results & Recommended Actions • Increase in revenue budget of $936,180
• Decrease in expenditures budget of $23,000
• Transfer of $425,000 to both the Pension Reserve and Housing Reserve • Transfer of $850,000 to the Capital Reserve
• General Fund Contingency (GFC) Balance of $5.32 million (25.17% GFC / 92 operating days)
April 7, 2026 Item 15

REVENUES
April 7, 2026 Item 15
FY 2025-26 Mid-Year Financial Report
14 Property Tax: #1 City Revenue Source
• Represents 36% of total General Fund revenue budget
• 6-month receipts total $4.74 million
• Property tax trending 6.0% higher than last year
• County of San Diego tax/revenue accountability report • Year-end revenues projected to come in slightly over budget at $8.46 million • Revenue adjustment of $61,000 recommended
April 7, 2026 Item 15
FY 2025-26 Mid-Year Financial Report
15 Transient Occupancy Tax (TOT): #2 Highest City Revenue Source • Represents 19% of total General Fund revenue budget
• First half (July-Dec 2024) collections trending 9.1% higher than same period last year • Based on current data, staff is recommending increasing the revenues by $175,000 • Staff is also recommending a decrease of $65,000 for TOT associated with Short-Term Rentals based on updated timing of program implementation • Net revenue adjustment of $110,000
April 7, 2026 Item 15
FY 2025-26 Mid-Year Financial Report
16 Sales Tax: #3 Highest City Revenue Source
• Represents 10% of total General Fund revenue budget
• 6-month receipts total $970,389
• July - September receipts came in 4.5% higher than last year • HdL, City’s sales tax consultant, forecasts revenues to remain relatively flat • Year-end revenues projected to come in as budgeted at $2.30 million • No revenue adjustment recommended
April 7, 2026 Item 15
FY 2025-26 Mid-Year Financial Report
17 Summary of Recommended General Fund Revenue Adjustments Account Current Budget Recommended
Adjustments
Amended Budget
Property Tax $8,394,000 $61,000 $8,455,000
TOT 4,353,750 110,000 4,463,750
Sales Tax 2,300,000 - 2,300,000
Parking Violations 1,400,000 150,000 1,550,000
Parking Meters 1,535,000 165,000 1,700,000
Investment Earnings 400,000 390,000 790,000
Other Revenue 5,011,470 60,180 5,071,650
Total $23,394,220 $936,180 $24,330,400
April 7, 2026 Item 15
FY 2025-26 Mid-Year Financial Report
18 Other Non-General Fund Revenue Adjustments:
• Staff recommends a net adjustment to other revenue of $340,200 including:
• $41,530 increase to the Supplemental Law Enforcement Fund • $70,860 increase for grants and other miscellaneous revenues • $57,190 reduction to the Workers’ Compensation Fund
• $200,000 to the Water Fund
• $85,000 to the Wastewater Fund
April 7, 2026 Item 15

EXPENDITURES
April 7, 2026 Item 15
FY 2025-26 Mid-Year Financial Report
20 Encumbrances & Continuing Appropriations
• Encumbrances: Carry over of funds from FY 2024-25 for committed contracts not completed in the previous year
• Continuing Appropriations: Carry over of funds from FY 2024-25 for capital projects not completed by June 30, 2025
• Staff recommends total carry over expenditure adjustments of $9.07 million partially offset by $3.92 million in carry over revenues April 7, 2026 Item 15
FY 2025-26 Mid-Year Financial Report
21 Summary of Recommended General Fund Expenditure Adjustments Program Current Budget Enc & Approp Recommended
Adjustments
Amended
Budget
General
Government $6,973,460 $9,787 ($32,000) $6,951,247
Public Safety 9,166,860 - 84,000 9,250,860
Public Works 1,251,500 57,868 (90,000) 1,219,368
Non-Departmental 907,910 - - 907,910
Equipment
Replacement 112,240 - 15,000 127,240
Total $18,411,970 $67,655 ($23,000) $18,456,625
April 7, 2026 Item 15
FY 2025-26 Mid-Year Financial Report
22 Summary of Recommended Non-General Fund Expenditure Adjustments Fund Current Budget Enc & Approp Recommended
Adjustments
Amended
Budget
Gas Tax $1,031,360 $12,900 ($18,450) $1,025,810
Open Space 1,516,230 - 27,000 1,543,230
AB 939 95,480 12,330 - 107,810
PEG Fee 11,900 - 63,540 75,440
CIP 5,824,630 4,676,035 (1,750,000) 8,750,665
Special Project 2,093,000 1,122,910 - 3,215,910
Enterprise 12,941,120 1,827,559 375,250 15,143,929
Total $23,513,720 $7,651,734 ($1,302,660) $29,862,794
April 7, 2026 Item 15

RESERVES
April 7, 2026 Item 15
FY 2025-26 Mid-Year Financial Report
24 Projected General Fund Reserves as of June 30, 2026
Account FY 2025-26
Original Budget
(6/16/25)
FY 2025-26
Budget Mid-Year
(3/3/26)
Difference
General Fund Contingency % 21.33% 25.17% 3.84%
General Fund Contingency $ $4,341,582 $5,324,903 $983,321 Pension Reserve 5,200,000 5,842,684 642,684
Housing Reserve 1,900,000 2,325,000 425,000
Self-Insurance 300,000 377,216 77,216
Leave Liability 100,000 100,000 -
Equipment Replacement 545,102 669,092 123,990
Total General Fund $12,386,684 $14,638,895 $2,252,211
Capital Improvement Reserve 2,250,000 4,000,000 1,750,000 April 7, 2026 Item 15
FY 2025-26 Mid-Year Financial Report
25 Pension Reserve:
• As of June 30, 2024, the City’s pension assets totaled $47.81 million • As of June 30, 2025, City’s Unfunded Accrued Pension Liability estimated at $17.80 million
• Accounting for pension reserves, adjusted unfunded pension liability is estimated at $10.92 million
• City Pension Reserve Policy would require $1.10 million annual payment for six years to achieve 100% funded ratio by FY 2031-32 for Governmental Fund obligations April 7, 2026 Item 15

MEASURE Q
April 7, 2026 Item 15
FY 2025-26 Mid-Year Financial Report
27 Measure Q Revenue:
• Similar results to sales tax for non-pooled receipts
• 6-month receipts total $1.32 million
• HdL and staff project revenues to come in as budgeted at $3.68 million • Reduction of $7.00 million in MQ revenue based on final Undergrounding Program loan amount
April 7, 2026 Item 15
FY 2025-26 Mid-Year Financial Report
28 Measure Q Expenditures:
• Current budget is $14.24 million which includes funding for:
• Undergrounding Utility Districts 1A, X1A, 1B, 2, and 3 • Measure Q portion of City’s required Maintenance of Effort (MOE) paving costs • Carryover funds from FY 2024-25 in the amount of $1.35 million • Additional carryover funds of $6.89 million previously authorized by City Council in September 2025
• No additional adjustments recommended
April 7, 2026 Item 15
FY 2025-26 Mid-Year Financial Report
29 Measure Q Reserves:
• Beginning balance updated to reflect FY 2024-25 final results which is $7.45 million • Current year projected Measure Q revenues of $8.68 million • Current expenditure budget of $14.24 million
• Estimated Measure Q balance as of June 30, 2026, is estimated at $1.88 million April 7, 2026 Item 15

NEXT STEPS
April 7, 2026 Item 15
Next Steps:

1. Present the Fiscal Year 2026-27 Budget Update to the Finance Committee on May 20, 2025; and

2. Present the Fiscal Year 2026-27 Budget Update to the City Council on June 16, 2026, including feedback and recommendations provided by the Finance Committee.

FY 2024-25 Final Financial Results & FY 2025-26 Mid-Year Financial Report
31 April 7, 2026 Item 15
QUESTIONS?
FY 2024-25 Final Financial Results & FY 2025-26 Mid-Year Financial Report
32 April 7, 2026 Item 15

Del Mar City CouncilApril 7, 2026

Del Mar City Council
April 7, 2026