Title
Recommendation to Accept the Quarterly Sales Tax Report for the Reporting Period Ending December 31, 2020 (Funds Collected During the Period July 1, 2020 to September 30, 2020). (Finance 2410)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
The California Department of Taxes and Fees Administration (CDTFA) allocates sales tax to the City of Alameda (City) on a monthly basis. This report provides information about the activity for the period ending December 31, 2020 (funds collected during the period of July 1, 2020 to September 30, 2020 and recognized as revenue in the current fiscal year).
BACKGROUND-
This report summarizes the sales tax receipts for the point-of-sales (POS) activity for the period July 1, 2020 through September 30, 2020. This is the basis for sales tax revenues received by the City of Alameda (City) between July 1, 2020 and September 30, 2020. For the purpose of this report, sales tax revenues exclude Proposition 172 funds, the allocation from the statewide pool for public safety services.
DISCUSSION
Fiscal Year to Date (July 1, 2020 to December 31, 2020)
For the Fiscal Year (FY) 2020-21, sales tax is the third largest source of General Fund revenues for the City (behind property tax and transfer tax), representing approximately 11% of the total budgeted revenues. As of December 31, 2020, the General Fund has received approximately $3,443,000 in sales tax as compared to $3,390,000 for the same period last year. This represents a 1.5% increase in year-over-year sales tax revenues received.
The City’s voter-approved half cent Transactions and Use Tax, Measure F, became effective on April 1, 2019. Budget projections for FY 2020-21 for the Transaction and Use Tax is $6.0 million. As of December 31, 2020, the General Fund has received approximately $2,465,000 in Transaction and Use Tax.
Quarter-to-Quarter Comparison for the 3rd Quarter in 2020 vs. 2019
The City’s receipts from July 1, 2020 through September 30, 2020 were 7.5% below the third quarter in 2019, due to the pandemic. After adjusting for other reporting corrections, actual sales were down 8.9%.
The following is a summary of sales tax performance by key economic categories in comparison to the same quarter of the prior year, based on numbers adjusted for aberrations.
Reflecting the extended closures, hardest hit this quarter were Restaurants & Hotels and Fuel and Service Stations. Many employees continued to work remotely, and few people were travelling. Retail spending at stores was down, affecting General Consumer Goods. However, State and County Pools were up due to online purchases. The drop reflected in medical/biotech affected the Business and Industry category. Food and drugs showed a positive increase due to grocery and convenience store sales.
The following is a summary of sales tax collected by geographic area, in comparison with the same quarter of the prior year:
All geographic areas had negative percentage changes from the previous fiscal year. Areas with essential stores - Food and Casual take-out dining - helped to minimize the decrease.
This quarter’s report (Exhibit 1) 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. Alameda County All Agencies Comparison
7. Seven Cities Per Capita Sales Comparison
8. City to State Comparison by Sector - 3rd Quarter 2020
Transactions and Use Tax (Measure F)
The City’s voter-approved half percent transactions and use tax, Measure F, became effective April 1, 2019. As of December 31, 2020, the General Fund received approximately $2.465 million in transaction and use tax as compared to $2.134 million during the same period last fiscal year. The increase was primarily due to the online sales.
Due to the implementation of the transactions and use tax increase, Measure F, the City’s sales tax rate increased to 9.75% effective April 1, 2019.
ALTERNATIVES
• Accept the quarterly sales tax report.
• Do not accept the report and provide direction to staff.
FINANCIAL IMPACT
This is an informational item only. There is no financial impact from acceptance of the report.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is in conformance with the Alameda Municipal Code and all policy documents.
ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) applies only to projects that have the potential for causing a significant effect on the environment. This action is not a project pursuant to Public Resources Code section 21065 and CEQA Guidelines section 15378.
CLIMATE IMPACT
There are no identifiable climate impacts or climate action opportunities associated with the subject of this report.
RECOMMENDATION
Accept the Quarterly Sales Tax Report for the reporting period ending December 31, 2020 (funds collected during the period July 1, 2020 to September 30, 2020).
CITY MANAGER RECOMMENDATION
The City Manager recommends acceptance of the Quarterly Sales Tax Report.
Respectfully submitted by,
Annie To, Finance Director
Exhibits:
1. Quarterly Sales Tax Report
2. Quarterly Transactions Tax Report
cc: Eric Levitt, City Manager
Gerry Beaudin, Assistant City Manager