Title
Recommendation to Accept the Quarterly Sales Tax Report for the Reporting Period Ending June 30, 2018 (Funds Collected During the Period January 1, 2018 to March 31, 2018). (Finance 2410)
Body
To: Honorable Mayor and Members of the City Council
From: David L. Rudat, Interim City Manager
EXECUTIVE SUMMARY
The California Department of Taxes and Fees Administration (CDTFA), formerly the Board of Equalization, allocates sales tax to the City on the monthly basis. This report provides information about the activity for the period ending June 30, 2018 (funds collected during the period of January 1, 2018 to March 31, 2018).
BACKGROUND-
This report summarizes the sales tax receipts for the point-of-sales activity for the period of January 1 through March 31, 2018. This is the basis for sales tax revenues received by the City between April 1, 2018 and June 30, 2018. 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 June 30)
For the 2017-18 Fiscal Year, Sales Tax is the second largest source of General Fund revenues for the City of Alameda, representing approximately 10% of the total revised budgeted revenues. As of June 30, 2018 (in a twelve month period), the General Fund has received approximately $9.2 million in Sales Tax receipts. The General Fund received $10.1 million in Sales Tax receipts during the same period last fiscal year. This represents a 9% decrease in year over year Sales Tax revenues received for that period.
Business to business transactions were lower than a year ago with mixed results in several sectors due to one-time events including state-initiated audit adjustments and fund transfers. The California Department of Taxes and Fees Administration (CDTFA) implemented new reporting software. This change allows for the collection and allocation of tax revenue more quickly. However, the implementation provided delayed disbursements by the sales tax producers to CDTFA resulting in reporting of lower receipts for the period. These missing payments are expected to be allocated in the next quarter.
1st Quarter 2018 to 1st Quarter 2017 Comparison
Alameda’s receipts from January through March were 5.1% below the first sales period in 2017. Below is a summary of sales tax performance by key economic categories in comparison to the same quarter of the prior year.
Fuel and service station receipts helped overall growth. After a long period of solid growth in new car sales, much of the upward movement within this group is now coming from leases rather than purchases. General Consumer Goods receipts from consumers patronizing brick and mortar stores showed a slight increase.
Delayed disbursements due to the state’s conversion to a new software system adversely impacted grocery stores, quick-service restaurants, specialty stores, and electronics/appliance stores. The missing payments are expected to be received with the 2nd quarter 2018 allocations.
The following is a summary of Sales Tax by geographic area, in comparison with the same quarter of the prior year:
Webster, Alameda Landing, Marina Village Business Park, Marina Village Shopping Center, South Shore Center, and North Waterfront geographic areas showed increases due to continued new business activity, casual dining outlets, quick-service eateries, and brick and mortar shopping.
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 June 30, 2018 (funds collected during the period January 1, 2018 to March 31, 2018).
Respectfully submitted by,
Elena Adair, Finance Director
Exhibit:
1. Quarterly Sales Tax Report