Title
Recommendation to Accept the Quarterly Sales Tax Report for the Period Ending September 30, 2015 Collected During the Period April 1, 2015 to June 30, 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 September 30, 2015 Collected During the Period April 1, 2015 to June 30, 2015
BACKGROUND
This report summarizes the sales tax receipts for the point-of-sales activity for the period April 1 through June 30, 2015. This is the basis for sales tax revenues received by the City between July 1, 2015, and September 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
At the end of Fiscal Year 2014-15, total sales tax receipts exceeded projections by 17% or $973,164. For Fiscal Year 2015-16, sales tax is the second largest source of General Fund revenues for the City of Alameda, representing approximately 11% of the total budgeted revenues for the year. The top 25 businesses in Alameda represent approximately 57%, or $1.1 million, of the quarter’s total sales tax receipts. The top 100 businesses represent approximately 82%, or $1.6 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:
The City had a slight decrease in sales tax revenues for the second quarter of 2015 compared to the same quarter of the previous year. All segments, except three, experienced negative results. The Building and Construction category showed a negative amount due to a reversal of an $82,585 allocation that the City received in error for the fourth quarter of 2012. According to the Board of Equalization (BOE), the funds should have been allocated to county pools. The decrease in the Business and Industry category was due to a decline in sales in health/medical and business services. Autos and Transportations experienced decline in the sales of boats/motorcycles while the decrease in the Fuel and Services Stations category was due in part to lower fuel prices. However, the Restaurants & Hotels, General Consumer Goods, and Food and Drugs categories continue to see improved sales compared to the same quarter in the prior year.
The following is a summary of sales tax by geographic area, in comparison with the same quarter of the prior fiscal year:
Many geographic areas showed a decline in sales tax revenue compared to the same quarter in the prior year. Most notably is the Harbor Bay Business Park area, for which the decline is related to the retroactive BOE adjustment in prior year as described earlier. The Alameda Landing business point-of-sales activity remains strong mainly from increases in sales from large retailers like Target and Michaels and as new businesses open, such as In-N-Out and Sleep Train.
As of June 30, 2015, sales tax revenues, as recorded in the City’s General Fund, were approximately $6.6 million or 117%, of the $5.7 million budgeted amount (excluding Prop 172 sales tax funds) for Fiscal Year 2014-15. For Fiscal Year 2015-16, sales tax revenue projections are expected to increase as the State’s Triple Flip program winds down. From July to September 2015, the City received $1.5 million of sales tax receipts, of which $378,700 is recorded in FY 2015-16. This represents 4.1% of the fiscal year’s budget.
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. Per Capita 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 - 2nd 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 September 30, 2015 collected during the period April 1, 2015 to June 30, 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