Title
Recommendation to Accept the Quarterly Sales Tax Report for the Period Ending June 30, 2017 Collected During the Period January 1, 2017 to March 31, 2017. (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 June 30, 2017 Collected During the Period of January 1, 2017 to March 31, 2017
BACKGROUND-
This report summarizes the sales tax receipts for the point-of-sales activity for the period of January 1 through March 31, 2017. This is the basis for sales tax revenues received by the City between April 1, 2017 and June 30, 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 June 30, 2017, the General Fund has received approximately $9.5 million in Sales Tax receipts. The General Fund received close to $7.3 million in Sales Tax receipts during the same period last fiscal year. This represents a 30% increase in year over year Sales Tax revenues received between July 2016 and June 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”) final clean-up payment covering the first two quarters of the prior fiscal year was not received by the City until August 2016. Further, noted gains were realized in the Business and Industry group, general consumer goods, and restaurants and hotels.
1st Quarter 2017 to 1st Quarter 2016 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 $700,000 in sales tax revenues for the first quarter of 2017 compared to the same quarter of the previous year. The Business and Industry category had a misallocated payment in the prior year and positive adjustment in the current year. Excluding those aberrations this sector experienced a strong quarter. The increase in General Consumer Goods suggests that the City continues to attract shoppers from outside the community. Multiple newly opened eateries helped to boost sales in the Restaurants and Hotels category. Positive returns from service stations reflects the rise in retail gas prices. Building & Construction category showed a slight increase compared to last year.
The following is a summary of Sales Tax by geographic area, in comparison with the same quarter of the prior year:
Harbor Bay Business Park showed a major increase among the geographic areas, which was mainly due to an underpayment that occurred in prior year. South Shore Center, Alameda Landing, Park Street both north of Lincoln Avenue, Alameda Point and Webster showed increases, some due to casual dining outlets, quick-service eateries, and continued new business activity. There was slight increase in the other geographic areas as well.
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 - 1st Quarter 2017
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, 2017 collected during the period January 1, 2017 to March 31, 2017.
Respectfully submitted by,
Elena Adair, Finance Director
Exhibit:
1. Quarterly Sales Tax Report Supplemental Information