Title
Recommendation to Accept the Quarterly Sales Tax Report for the Period Ending March 31, 2017 Collected During the Period October 1, 2016 to December 31, 2016. (Finance 2410)
Body
To: Honorable Mayor and Members of the City Council
From: Jill Keimach, City Manager
Re: Recommendation to Accept the Quarterly Sales Tax Report for the Period Ending March 31, 2017 Collected During the Period of October 1, 2016 to December 31, 2016
BACKGROUND-
This report summarizes the sales tax receipts for the point-of-sales activity for the period of October 1 through December 31, 2016. This is the basis for sales tax revenues received by the City between January 1, 2017 and March 31, 2017. For the purposes of this report, sales tax revenues exclude Proposition 172 funds, the allocation from statewide pool for public safety services.
DISCUSSION
For the 2016-17 fiscal year, sales tax is the second largest source of General Fund revenues for the City of Alameda, representing approximately 11% of the total budgeted revenues. As of March 31, 2017, the General Fund has received approximately $7.1 million in sales tax receipts. The General Fund received close to $5.4 million in sales tax receipts during the same period last fiscal year. This represents a 31% increase in year over year sales tax revenues received between July 2016 and March 2017. The significant difference between the two years’ revenue to date was due to a large underpayment in 2015/16 that was corrected with a double payment that inflated the Business and Industry category this year. In addition, the State’s 25% sales tax shift (“triple flip”) clean up payment covering the first two quarters of the prior fiscal year was not received by the City until April 2016. Further, noted gains were realized in the business and industry group, office supplies/furniture, and business services increasing sales tax revenues in the current fiscal year.
4th Quarter 2016 to 4th Quarter 2015 Comparison
On the following page is a summary of sales tax performance by key economic categories in comparison to the same quarter of the prior year.
The City showed a significant increase of just over $250,000 in sales tax revenues for the fourth quarter of 2016 compared to the same quarter of the previous year. The Business and Industry category remained steady after the double payment adjustment that occurred in the third quarter. The increase in General Consumer Goods suggests that the City is capturing its local market for goods plus attracting shoppers from outside the community. Casual dining restaurants continue to provide the gain in the Restaurants and Hotels category. The Food & Drugs category had a slight increase compared to the same quarter of the previous year, but remained at the same level as the previous quarter. For the first time in over a year, rising fuel prices contributed to positive returns from service stations. Building & Construction category decreases are offset by the increases in the other categories.
South Shore Center, Park Street north of Lincoln Avenue, Clement & Blanding, Alameda Point, and Alameda Landing experienced increases, some due to casual dining outlets, quick-service eateries, and continued new business activity. Some geographic areas showed decreases. The sales tax decline in Marina Village may be a result of the newer dining and shopping selections available at Alameda Landing which continues to show increase.
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 - 4th Quarter 2016
9. City of Alameda Sales Tax Rate Breakdown
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 March 31, 2017 collected during the period October 1, 2016 to December 31, 2016.
Respectfully submitted by,
Elena Adair, Finance Director
Exhibit:
1. Quarterly Sales Tax Report Supplemental Information