Half Moon Bay facing $4M structural deficit

“I don’t think we can over-emphasize how we got here, because a $4 million structural deficit is significant for us,” he said.

Total revenue is projected at $21.1 million, with $8.62 million in hotel tax, the city’s largest revenue source.

Expenditures are projected at $25.1 million — despite a 10% decrease in departmental spending, expenditures are down only 1% from last year because of obligatory expenses. Those include $2.4 million in public safety costs, $253,000 in contractual obligations, and $1.3 million in pension costs, among others.

Councilmembers and staff discussed how to increase tourism in Half Moon Bay, including better signs, incentivizing spending money through potential coupons or discounts and prioritizing the city’s potential as a coastside destination.

“[It’s] not just getting people to come here, but getting more money out of the people who are here,” Councilmember Debbie Ruddock said. “You need a plan to get them to actually part with their money. A lot of people are already here, you just got to get them to spend.”

The Business Improvement District is working to market Half Moon Bay as a destination for visitors, said Krystlyn Giedt, CEO and president of the Chamber of Commerce — including separating its reputation from neighboring cities like San Francisco.

The city is also looking to a potential sales tax measure that would increase the city’s sales tax after receiving favorable polling data on the proposal.

The $18 million capital budget was also approved at the Tuesday meeting, with $1.7 million from the general fund for various city projects like parks, sewer and facility improvements.

While the upcoming year will be covered by $1.6 million from unassigned revenue and the remaining $2.4 million from the economic uncertainty fund, the staff report warns of long-term issues that could arise for the city if revenue doesn’t perk up.

“Without increased ongoing revenues, the city will need to make significant cuts that will affect valued programs and services, and potentially impact the health, safety, and quality of life in Half Moon Bay,” the staff report read.