Title
Recommendation to Accept the Quarterly Sales Tax Report for the Reporting Period Ending June 30, 2021 (Funds Collected During the Period January 1, 2021 to March 31, 2021). (Finance 10024051)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
The California Department of Tax and Fee Administration (CDTFA) allocates sales tax to the City of Alameda (City) on a monthly basis. This report provides information about sales tax activity for the period ending June 30, 2021 (funds collected during the period of January 1, 2021 to March 31, 2021 and recognized as revenue in the current fiscal year).
BACKGROUND-
This report summarizes the sales tax receipts for the point-of-sales (POS) activity for the period January 1, 2021 through March 31, 2021. This is the basis for sales tax revenues received by the City of Alameda (City) between April 1, 2021 and June 30, 2021. For the purpose of this report, sales tax revenues exclude Proposition 172 funds, the allocation from the statewide pool for public safety services.
DISCUSSION
Fiscal Year to Date (July 1, 2020 to June 30, 2021)
For the Fiscal Year (FY) 2020-21, sales tax is 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 June 30, 2021, the General Fund has received approximately $8,493,000 in sales tax as compared to $8,387,000 for the same period last year. This represents a 1% increase in year-over-year sales tax revenues received.
The City’s voter-approved half cent Transactions and Use Tax, Measure F, became effective on April 1, 2019. Budget projections for FY 2020-21 for the Transaction and Use Tax is $6.0 million. As of June 30, 2021, the General Fund has received approximately $6,132,000 in Transaction and Use Tax.
Quarter-to-Quarter Comparison for the 1st Quarter in 2021 vs. 2020
The City’s receipts from January 1, 2021 through March 31, 2021 were 21% above the first quarter in 2020, reflecting payments missing from the comparable quarter due to the deferral program offered by the State. After adjusting for other reporting corrections, actual sales were down 7.5%.
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.
Although retail prices were up, recovery is beginning to show as General Consumer Goods reflected an increase in consumer spending at discount stores. Building and Construction was impacted by increased demand and higher material prices. People were anxious to get out and dine-in was allowed again in restaurants. Fuel and Service Stations were affected by the increase in fuel prices. Passenger numbers were up 70% on domestic flights, although international flights were still impacted by the closure. State and County Pools were up as spending habits are changing with continued online purchases and subscription services.
The following is a summary of sales tax collected by geographic area, in comparison with the same quarter of the prior year:
Most geographic areas had negative percentage changes from the previous fiscal year although some show small increases. Areas with essential stores helped to minimize the decrease.
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 - 1st Quarter of 2021
Transactions and Use Tax (Measure F)
The City’s voter-approved half percent transactions and use tax, Measure F, became effective April 1, 2019. As of June 30, 2021, the General Fund received approximately $6.132 million in transaction and use tax as compared to $5.440 million during the same period last fiscal year. The increase can be attributed to online sales.
Due to the implementation of the transactions and use tax increase, Measure F, the City’s sales tax rate increased from 9.25 percent to 9.75 percent effective April 1, 2019. The current sales tax rate as of June 30, 2021 is 10.75%.
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
The California Environmental Quality Act (CEQA) applies only to projects that have the potential for causing a significant effect on the environment. This action is not a project pursuant to Public Resources Code section 21065 and CEQA Guidelines section 15378.
CLIMATE IMPACT
There are no identifiable climate impacts or climate action opportunities associated with the subject of this report.
RECOMMENDATION
Accept the Quarterly Sales Tax Report for the reporting period ending June 30, 2021 (funds collected during the period January 1, 2021 to March 31, 2021).
CITY MANAGER RECOMMENDATION
The City Manager recommends acceptance of the Quarterly Sales Tax Report for the period ending June 30, 2021.
Respectfully submitted by,
Annie To, Finance Director
Exhibits:
1. Quarterly Sales Tax Report
2. Quarterly Transactions Tax Report
cc: Eric Levitt, City Manager
Gerry Beaudin, Assistant City Manager