Quarterly report: Dana Point revenues track ahead as hotel receipts and property taxes rise; committee approves filing

The Financial Review Committee voted unanimously April 28 to forward the city’s third‑quarter financial report to the City Council after staff said revenues were modestly ahead of expectations.

Andrea Bartlow, the city’s presenter, reported that general fund revenue through March 31 totaled $36,600,000 while expenditures excluding transfers were $34,300,000. "The overall financial performance is within expectations at this point in the fiscal year," Bartlow said, noting that higher transient occupancy tax (TOT), property tax and investment income were the primary drivers of the improvement.

Bartlow detailed that TOT receipts through March totaled $13,600,000 — an increase of about $678,000 year over year — and that about 89% of TOT receipts come from the city’s top four hotels, including the Ritz Carlton, Monarch Beach, Marriott and Hilton. Staff projected FY26 TOT revenue could reach roughly $18.4 million, above the amended FY26 TOT budget of $17.6 million.

Committee members pressed staff on timing and comparisons: one member observed that annualizing the Q3 receipts produced a lower number than the amended revenue budget, and staff explained the discrepancy reflects large property‑tax tranches received in April and May and other timing differences in receipts.

The committee also discussed transfers to the capital improvement program. Staff explained the increase in planned transfers (about $6,000,000 compared with an earlier figure of roughly $2.7 million) was driven by fiscal‑year 2025 excess fund balance carryover and routine policy allocations to CIP and other funds.

Staff confirmed that the city’s amended FY26 general fund revenue budget is $53,600,000 and that property tax receipts year to date were approximately $8,100,000, with the city on track to meet the $12,600,000 property tax budget by year end. Sales tax, licenses and permit revenues and charges for services were discussed as line items with smaller variances.

Audits and compliance work were also on the agenda. Staff said auditors are nearly finished with two hotel TOT audits (Marriott and the Blue Mary Inn) and that prior audits of the Riviera Shores and Hilton Garden Inn resulted in no material findings after follow‑up. Hotel audit costs for the round were estimated at about $8,000; staff noted the municipal code provides for penalties and interest if underpayments are discovered. Short‑term rental monitoring and TOT collection are being consolidated into a new Deckard system to centralize permitting and collections.

The committee approved the quarterly report by motion and recorded a 5‑0 vote to forward the item to city council for receipt and filing.

The committee will next meet Sept. 8 at 4 p.m. in the Public Works Conference Room.