Title
Recommendation to Accept the Quarterly Sales Tax Report for the Reporting Period Ending March 31, 2020 (Funds Collected During the Period October 1 to December 31, 2019). (Finance 2410)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
The California Department of Taxes and Fees Administration (CDTFA) allocates sales tax to the City of Alameda (City) on a monthly basis. This report provides information about the activity for the period ending March 31, 2020 (funds collected during the period of October 1 to December 31, 2019 and recognized as revenue in the current fiscal year).
BACKGROUND-
This report summarizes the sales tax receipts for the point-of-sales activity for the period of October 1 through December 31, 2019. This is the basis for sales tax revenues received by the City between January 1 and March 31, 2020. 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 March 31)
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 March 31, 2020, the General Fund has received approximately $6.4 million in sales tax receipts. The General Fund received $6.3 million in sales tax receipts during the same period of the last fiscal year. On a fiscal year basis over the same time period, sales tax revenue is flat.
On April 1, 2019, Measure F, the City’s voter-approved half cent transactions and use tax, became effective. Budget projections for 2019-20 for the Transaction and Use Tax were $5.5 million. As of March 31, 2020, the General Fund received approximately $4.1 million in sales tax receipts.
4th Quarter 2019 to 4th Quarter 2018 Comparison
Alameda’s receipts from October through December 2019 were 2.4% above the 4th quarter sales in 2018. However, excluding reporting anomalies, actual sales were up 0.2%. 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.
The Building & Construction category experienced the highest percentage in growth due to increased costs of contractor labor and building materials. State and County Pools showed a gain due to higher online sales. General consumer goods reflected out of state allocations, while store closures contributed to the loss in holiday quarter retail. Fuel and service stations were affected by consumption increases, as well as by higher prices and refineries closing.
The following is a summary of sales tax collected by geographic area, in comparison with the same quarter of the prior year:
Harbor Bay Business Park and Harbor Bay Landing realized increases this quarter. Several of the other geographic areas showed a decline compared to the same quarter in the previous year.
This quarter’s report (Exhibit 1) 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 - 3rd 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, 2019. This is the third quarter of the new tax collection. The budget estimate for the transaction and use tax to be recognized in FY 2019-20 was revised as part of the mid-year update to $5.5 million from $4.6 million. Between July 2019 and March 2020, the General Fund received approximately $4.1 million in transaction and use tax receipts.
With the implementation of the transactions and use tax increase (Measure F), the City’s sales tax rate increased to 9.75% effective April 1, 2019.
ALTERNATIVES
• Accept the quarterly sales tax report.
• Do not accept the report and provide direction to staff.
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 are no climate impacts from the acceptance of this report.
RECOMMENDATION
Accept the Quarterly Sales Tax Report for the reporting period ending March 31, 2020 (funds collected during the period October 1 to December 31, 2019).
CITY MANAGER RECOMMENDATION
The City Manager recommends acceptance of the Quarterly Sales Tax Report.
Respectfully submitted by,
Nancy Bronstein, Interim Finance Director
Exhibits:
1. Quarterly Sales Tax Report
2. Quarterly Transactions Tax
cc: Eric Levitt, City Manager
Gerry Beaudin, Assistant City Manager