Title
Recommendation to Accept the Quarterly Sales Tax Report for the Reporting Period Ending December 31, 2017 (Funds Collected During the Period July 1, 2017 to September 30, 2017). (Finance 2410)
Body
To: Honorable Mayor and Members of the City Council
From: Elizabeth D. Warmerdam, Acting City Manager
Re: Recommendation to Accept the Quarterly Sales Tax Report for the Reporting Period Ending December 31, 2017 (Funds Collected During the Period of July 1, 2017 to September 30, 2017)
BACKGROUND-
This report summarizes the sales tax receipts for the point-of-sales activity for the period of July 1 through September 30, 2017. This is the basis for sales tax revenues received by the City between October 1, 2017 and December 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
Fiscal Year to Date (July 1 to December 31)
For the 2017-18 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 December 31, 2017 (in a six months period), the General Fund has booked approximately $3.3 million in Sales Tax receipts. The General Fund booked close to $3.1 million in Sales Tax receipts during the same period last fiscal year. This represents a 6% increase in year over year Sales Tax revenues recognized for that period. A fund transfer that spiked returns in the comparison quarter accounted for the drop in the business and industry group. This one-time adjustment was the primary contributor to lower overall gross receipts. However, business to business sales activity was up 5.1% once all non-recurring events were removed. Noted gains were realized in restaurant and hotels and general consumer goods.
3rd Quarter 2017 to 3rd Quarter 2016 Comparison
While the fiscal year to date has increased 6%, the current quarter comparison to same quarter of last year is showing a decline. The Business and Industry category had a misallocated payment in the prior year which was the primary contributor to the lower gross receipts. Excluding reporting adjustments, actual sales were up 2.5%. 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.
Recently opened eateries offered a boost to quick-service and casual restaurants, increasing revenues across Restaurants and Hotels. Higher fuel prices affected service station proceeds. General Consumer Goods receipts from consumers patronizing brick and mortar stores were up as well as revenues from online purchases.
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 significant increase among the geographic areas. Park Street, South Shore Center, Alameda Point, and Clement Ave & Blanding Ave reflected decreases due to businesses closing. Most of the remaining geographic areas experienced slight increases, some due to continued casual dining, quick-service eateries, and new business activity.
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 - 3rd 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 reporting period ending December 31, 2017 (funds collected during the period July 1, 2017 to September 30, 2017).
Respectfully submitted by,
Elena Adair, Finance Director
Exhibit:
1. Quarterly Sales Tax Report