Title
Recommendation to Accept the Quarterly Sales Tax Report for the Reporting Period Ending September 30, 2018 (Funds Collected During the Period April 1, 2018 to June 30, 2018). (Finance 2410)
Body
To: Honorable Mayor and Members of the City Council
From: Eric Levitt, City Manager
EXECUTIVE SUMMARY
The California Department of Taxes and Fees Administration (CDTFA), formerly the Board of Equalization, allocates sales tax to the City of Alameda (City) on a monthly basis. This report provides information about the activity for the period ending September 30, 2018 (funds collected during the period of April 1, 2018 to June 30, 2018).
BACKGROUND-
This report summarizes the sales tax receipts for the point-of-sales activity for the period of April 1 through June 30, 2018. This is the basis for sales tax revenues received by the City between July 1, 2018 and September 30, 2018. For the purposes of this report, sales tax revenues exclude Proposition 172 funds, the allocation from statewide pool for public safety services.
DISCUSSION
Fiscal Year to Date (July 1 to September 30)
For the 2018-19 Fiscal Year, Sales Tax is the second largest source of General Fund revenues for the City, representing approximately 12% of the total budgeted revenues. As of September 30, 2018, the General Fund has received approximately $913,000 in Sales Tax receipts. The General Fund received $657,000 in Sales Tax receipts during the same period last fiscal year. This represents a 1.3% increase in year over year Sales Tax revenues received for that period.
CDTFA’s new computer system, launched earlier in the year, again had taxpayer processing complications. The implementation provided delayed disbursements by the sales tax producers to CDTFA, resulting in reporting of lower receipts for the period. These missing payments are expected to be allocated in the next quarter. Including the omitted distributions and other reporting anomalies, actual sales were up 1%.
2nd Quarter 2018 to 2nd Quarter 2017 Comparison
The City’s receipts from April through June were 11.3% below the second sales period in 2017. Below is a summary of sales tax performance by key economic categories in comparison to the same quarter of the prior year.
The business/industry group posted lower spring sales. Taxes were suppressed due to a large prior year one-time transfer for back period revenues. The new CDTFA collection system has been a challenge for taxpayers, which resulted in delayed allocations, temporarily reducing collections from food and drug stores, restaurants, service stations, and general consumer goods. Building and construction activity was strong but was affected by rising interest rates, and tariffs on materials caused costs to increase. Fuel and service station receipts were up due to increasing gas prices. The State and County Pools were affected by the closing of some long-time businesses.
The following is a summary of Sales Tax by geographic area, in comparison with the same quarter of the prior year:
The decreases in all but one geographic area reflected mainly the missing payments and delayed disbursements, which should be corrected in a future quarters.
This quarter’s report includes a supplemental section containing the following information:
1. City of Alameda Sales Tax Update
2. Major Industry Groups - Current Quarter Comparison
3. Major Industry Groups - 13 Quarters History
4. Sales by Geographic Area - 13 Quarters History
5. Per Capita Sales Tax Surplus/Gap Comparison by Retail Category
6. Quarterly Sales Comparison of Cities in Alameda County
7. Seven Cities Per Capita Sales Comparison
8. City to State Comparison by Sector - 2nd Quarter 2018
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is in conformance with the Alameda Municipal Code and all policy documents.
ENVIRONMENTAL REVIEW
This activity is not a project and is exempt from the California Environmental Quality Act (CEQA) pursuant to section 15378(b)(4) of the CEQA Guidelines, because it involves governmental fiscal activities, which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment.
RECOMMENDATION
Accept the Quarterly Sales Tax Report for the reporting period ending September 30, 2018 (funds collected during the period April 1, 2018 to June 30, 2018).
Respectfully submitted by,
Elena Adair, Finance Director
Exhibit:
1. Quarterly Sales Tax Report