Title
Recommendation to Accept the Quarterly Sales Tax Report for the Reporting Period Ending September 30, 2019 (Funds Collected During the Period April 1 to June 30, 2019). (Finance 2410)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
The California Department of Taxes and Fees Administration (CDTFA), formerly the Board of Equalization, allocates sales tax to the City of Alameda (City) on a monthly basis. This report provides information about the activity for the period ending September 30, 2019 (funds collected during the period of April 1 to June 30, 2019).
BACKGROUND-
This report summarizes the sales tax receipts for the point-of-sales activity for the period of April 1 through June 30, 2019. This is the basis for sales tax revenues received by the City between July 1 and September 30, 2019. For the purpose of this report, sales tax revenues exclude Proposition 172 funds, the allocation from a statewide pool for public safety services.
DISCUSSION
Fiscal Year to Date (July 1 to September 30)
For the 2019-20 Fiscal Year (FY), sales tax shifted to be the third largest source of General Fund revenues for the City (behind property tax and transfer tax), representing approximately 11% of the total budgeted revenues. As of September 30, 2019, the General Fund has received approximately $2.9 million in sales tax receipts. The General Fund received $2.6 million in sales tax receipts during the same period last fiscal year. This represents an 11% increase in year-over-year sales tax revenues received for that period. Last year’s launch of the State’s updated tax filing system delayed timely processing of multiple returns.
2nd Quarter 2019 to 2nd Quarter 2018 Comparison
Alameda’s receipts from April through June showed a 23.5% increase in sales compared to the second quarter sales period in 2018. Actual receipts included catch-up adjustments. Excluding reporting anomalies, actual sales were up 8.8%. The following is a summary of sales tax performance by key economic categories in comparison to the same quarter of the prior year, based on numbers adjusted for aberrations.
Most economic categories show increases for the quarter. The building & construction category experienced the highest percentage in growth, thereby affecting contractor labor and use of building materials. State and county pools showed a gain due to new taxpayers from out of state. The business-industry group contributed to the City’s Measure F Transactions and Use Tax and grew as a result of continued increased activity. Auto prices increased but sales volume decreased. Fuel and service stations were affected by consumption increases, as well as by higher prices and refineries closing. Restaurants and hotels were affected by higher labor and food costs.
The following is a summary of sales tax collected by geographic area, in comparison with the same quarter of the prior year:
The North Waterfront experienced the greatest increase over the previous year. Significant increase over the previous year was also realized in the Harbor Bay Business Park and Webster Street areas.
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. Alameda County All Agencies Comparison
7. Seven Cities Per Capita Sales Comparison
8. City to State Comparison by Sector - 2nd Quarter 2019
Transactions and Use Tax (Measure F)
Measure F, the City’s voter-approved half percent transactions and use tax, became effective April 1 and is being reported for the first time. The budget estimate for the Transaction and Use Tax to be recognized in FY 2018-19 was $800,000 and for FY 2019-20 is $4.6 million. Between June 2019 and September 2019, the General Fund received approximately $2.0 million in transaction and use tax receipts, of which $1.8 million was recognized as revenue in FY 2018-19.
ALTERNATIVES
Accept the report due to no further action being requested.
FINANCIAL IMPACT
This is an informational item only. There is no financial impact from acceptance of the report.
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 that do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment.
CLIMATE IMPACT
There is no climate impact from acceptance of this report.
RECOMMENDATION
Accept the Quarterly Sales Tax Report for the reporting period ending September 30, 2019 (funds collected during the period April 1 to June 30, 2019).
CITY MANAGER RECOMMENDATION
The City Manager recommends that the City Council accept the quarterly sales tax report ending September 30.
Respectfully submitted by,
Elena Adair, Finance Director
Exhibit:
1. Quarterly Sales Tax Report