Title
Recommendation to Accept the Quarterly Sales Tax Report for the Period Ending June 30, 2015 Collected During the Period January 1, 2015 to March 31, 2015. (Finance 2410)
Body
To: Honorable Mayor and Members of the City Council
From: Elizabeth D. Warmerdam, Interim City Manager
Re: Recommendation to Accept the Quarterly Sales Tax Report for the Period Ending June 30, 2015 Collected During the Period January 1, 2015 to March 31, 2015
BACKGROUND
This report summarizes the sales tax receipts for the point-of-sales activity for the period January 1 through March 31, 2015, which is the basis for sales tax revenues received by the City between April 1, 2015, and June 30, 2015. For purposes of this report, sales tax revenues exclude Proposition 172 funds, the allocation from the statewide pool for public safety services.
DISCUSSION
Sales tax is the fourth largest source of General Fund revenues for the City of Alameda, representing approximately 8% of the total budgeted revenues for the Fiscal Year 2014-15. Total sales tax receipts based on the point-of-sales activity in Alameda increased approximately 0.3%, or $6,493, from the same quarter in the prior fiscal year which included a retroactive favorable accounting adjustment by the Board of Equalization (BOE). The table on the following page shows changes in sales tax revenues by the geographic areas.
The top 25 businesses in Alameda represent approximately 53%, or $1.1 million, of the quarter’s total sales tax receipts. The top 100 businesses represent approximately 77%, or $1.5 million, of the quarter’s sales tax revenues.
The following is a summary of sales tax performance by key economic categories in comparison to the same quarter of the prior fiscal year:
As mentioned above, City saw a slight increase in sales tax revenue for the current quarter despite various favorable accounting adjustments by the BOE in prior year’s similar quarter. All segments except two, showed positive results to the comparison quarter. The Transportation and Fuel tax revenues declined mainly due to lower fuel prices in the current year. In the Business and Industry category, a retroactive favorable accounting adjustments in prior year was a main factor for lower revenues in the current year. Food and Drugs and General Consumer Goods categories continue to see improved sales compared to the same quarter in prior year. With the addition of new establishments, restaurants and hotels, we continue to see growth in the casual and fine dining sectors. An accounting adjustment generated most of the increase in the Building and Construction segment.
The following is a summary of sales tax by geographic area, in comparison with the same quarter of the prior fiscal year:
Alameda Landing, Alameda Point and North Waterfront geographic areas showed strong growth in sales activity both from existing businesses and the opening of new business establishments. The Harbor Bay Business Park sales tax decline is related to a retroactive accounting adjustment in prior year described above despite strong sales from all business types and opening of new establishments. The Park & Webster Streets retail areas and Neighborhood Development District businesses point-of-sales activity remained strong but their sales tax revenues declined mainly from Service Stations business segment due to lower fuel prices. The Marina Village Business Park experienced a drop in their sales tax from business services due to an accounting adjustment in prior year comparing quarter.
As of June 30, 2015, fiscal year sales tax revenues, as recorded in the City’s General Fund, were approximately $5.6 million or 99%, of the $5.7 million budgeted (excluding Prop 172 sales tax funds) for Fiscal Year 2014-15. This is in line with expectations and budgeted assumptions for the fiscal year.
This quarter’s report includes a supplemental section containing the following information:
1. Major Industry Groups - Current Quarter Comparison
2. Major Industry Groups - 13 Quarters History
3. Sales by Geographic Area - 13 Quarters History
4. Sales Tax Surplus/Gap Comparison by Retail Category
5. Quarterly Sales Comparison of Cities in Alameda County
6. Per Capita Sales Comparison of Cities in Alameda County
7. City to State Comparison by Sector - 1st Quarter 2015
8. Statewide Sales Tax Trend Information
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 period ending June 30, 2015 collected during the period January 1, 2015 to March 31, 2015.
Respectfully submitted by,
Elena Adair, Finance Director
Exhibit:
1. Quarterly Sales Tax Report Supplemental Information
cc: Robb Ratto, PSBA
Tony Kuttner, GABA
Sandip Jariwala and Michelle Berner, WABA
Mark Sorensen, Alameda Chamber of Commerce