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Home My WebLink AboutCity Council Agenda Item No 11CITY OF LPL LS I lYOKE ` DREAM EXTREME- REPORT TO CITY COUNCIL TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: THOMAS P. EVANS INTERIM CITY MANAGER DATE: MAY 8, 2012 SUBJECT: SALES TAX ANALYSIS REPORT — 4T" QUARTER 2011 Discussion City staff met with our sales tax consultant, MuniServices, to review sales tax activity for the fourth quarter ended December 2011 and sales tax receipts collected through March 2012. This information is a valuable tool in Economic Development planning and target marketing of the City. It also reinforces the principle that it is important to stay in contact with existing businesses that are contributing to the City's economy. Sales tax activity for the quarter October to December 2011 in the City increased 6.9% over the same time period in 2010. The January to December 2011 activity increased 5.7% over 2010. Sales tax receipts collected for the City through March 2012 for the 4th quarter 2011 increased 11.6% over the same period in the previous year. Further information regarding the fourth quarter 2011 sales taxes is included as attachments to this report. Recommendation Receive and file. Prepared By: James R. Riley Director of Admi i ative Services Approved By: T E`s Interim City Manager Attachments: City of Lake Elsinore Sales Report January 2011 — December 2011 City of Lake Elsinore Sales Tax Digest Summary: Collections through March 2012. Sales through DecembeAGENI(A11,01T'13A NO. 11 Page 1 of 8 *The California New Car Dealers Association (CNCDA) reported that California's new -car dealers sold 1.29 million new cars and trucks in 2011- a 9.9 percent improvement over 2010. The Honda Civic was California's best - selling new car for 2011. *The number of California homes going into foreclosure dropped to the second - lowest level in more than four years. Notices of Default were down 11.9 % from 4th quarter 2010. (Dataquick) *Retail sales barely rose up in December by 0.1 %. The government revised the November performance to show a 0.4% gain. 2011 had total sales of $4.7 trillion, a gain of nearly 8% over 2010, showing a strengthening economy. (Associate Press) ik) 5 2a av flt Z rt`r `ii ': ti ��NE �.57�"+ "E.,- ;�Y.sr,Y.,.,n�.. tr't� ... ,, .2� 4?�"f��.Y.. �trtir ,t[El -.,. ., s'R ,. A4�:? ✓��tt�1r. � „SSt�,:... °e,� '�..ti L '.`v ��.^�}._ 4.�14';'.�,.3A,n5. *Gas prices have been rising on the back of soaring oil prices, which have shot up more than 5% since February. Barring a major disruption in supplies from the Middle East, pump prices will continue to soar, especially impacting the peak driving season, defined as April through September. (LA Times) *Retail spending rose 1.1% in February, auto dealers rose by 1.9 %, gas station jumped 3.3% and building supply retailers posted a 1.4% rise. (CNN Money) *Employment growth of 1.4% and 2.1% is expected in 2012 and 2013 respectively. The unemployment rate will hover around 11.6% through 2012. Real personal income growth is forecast to be 2.6% in 2012 and 2.1% in 2013. (UCLA) General Retail 4.9% 2.4% 4.4% 4.2% 4.9% 4.5% Food Products 13.0% 4.3% % 5.6% 3.0 %I 4.896 5.4% Transportation 4.2% 11.5% 12.7% 9.8% 18.3% 15.8% Construction 0.7% 2.3% ' 9.090 0.8% 74% 6.6% Business To Business 50.8% -1.3% 4.5% 11.8% 3.9% 7.1% Department Stores Si0% 0.0% 4.1% 6.2% 2.2% 3.8% Service Stations 4.5% 10.2% 14.4% 10.8% 21.7% 22.2% Auto Sales - New 3:3% 1510%, 19.8 Restaurants 5.1% 3.6% 5.7% 1.0% 4.8% 5.7% Apparei'Stores 3.9% 6.$1?6 ; 7.1% 3.8% '7.9% 7.7% Bldg.Matls- Retail 4.9% 3.5% 3.4% 311% 4.3% 2.3% Food Markets 29.9% 7.1% 5.8% 7.9% 4,59ec 4.9% Miscellaneous Retail -8.0% 3.6% 1.3% -3.2% 6.7% 4.0% BIdg.Matis llYhsle ! -7.695 1.3 %? 15.6% -4.0% 10.1% 11;9% Auto Parts /Repair 2.7% 7.6% 3.5% 2.4% 8.5% 5.3% Drug Stores 14.5% 10.0 % 7.1% 5,2% 7.9% 4.3% Heavy Industry Light Industry Office Equipment 109.9% 4.9% 16.4% 20.1% 4.8% 13.0% 33.7% -9.4 %` 1.4% 1 d,8% 2.7% 115% 61.2% -1.7% -2.4% 1 17.5% 2.0% 4.2% Jan '02- Jan '03- Jan '04- Jan'05- Jan '06- Jan '07- Jan '08- Jan '09- Jan '10- Jan'll- Dec'02 Dec'03 Dec'04 Dec'05 Dec'06 Dec'07 Dec'08 Dec'09 Dec'10 Dec'11 $139 $135 $135 $141 $169 $154 $130 $112 $116 $121 ■ General Retail -!,? Food Products ■ Transportation ® Construction ® Business To Business ® Miscellaneous 30.0% 20.0% 10.0% 0.0% -10.0% -20.0% 182% 45% "` = 40% 47% �e`' ce5 c<,a ces ° a� �aJ c e` cee oQ ae ey' ea e �e �e wa• , 41 Sw° S'�° Oa S�° oar Jae Qe J�z a� S'�° 0� �eQ Jy jai?° eSa �r Oe ��o Qc � ceoJy �e5a � i o`eSycQa�a\ Sy\eS Sa\eS S ,er\� �a", s`eO1 11,00 oaQc PJwo Patio PJ�o Sacs �o. �\a�. 6�a� y\ceS Ati O e c. � § ti O a � l c o 3 O e � 0 I�p 0° O o o l � p o ' O e � o` I� c d ° O a � (ZO I� p � O e � 0 o c Q % O e d S P l � c o O e � o � � c O � y o l Jc yti e' ti ti mm Recession —City of Lake Elsinore Riverside Countywide — California 120% 114% 128% 9 , 70% 76% 83/ 8 8 8 - 95% . , 45% "` = 40% 47% �e`' ce5 c<,a ces ° a� �aJ c e` cee oQ ae ey' ea e �e �e wa• , 41 Sw° S'�° Oa S�° oar Jae Qe J�z a� S'�° 0� �eQ Jy jai?° eSa �r Oe ��o Qc � ceoJy �e5a � i o`eSycQa�a\ Sy\eS Sa\eS S ,er\� �a", s`eO1 11,00 oaQc PJwo Patio PJ�o Sacs �o. �\a�. 6�a� y\ceS Ati O e c. � § ti O a � l c o 3 O e � 0 I�p 0° O o o l � p o ' O e � o` I� c d ° O a � (ZO I� p � O e � 0 o c Q % O e d S P l � c o O e � o � � c O � y o l Jc yti e' ti ti mm Recession —City of Lake Elsinore Riverside Countywide — California z City of Lake Elsinore Sales Tax Digest Summary Collections through March 2012 Sales through December 2011 (2011Q4) CALIFORNIA'S ECONOMIC OUTLOOK For the Vh Quarter of 2011, overall California sales tax receipts increased by 8.0% over the same quarter from the previous year, with Northern California reporting an 8.4% increase compared to 7.7% for Southern California. Receipts for the City of Lake Elsinore changed by 11.6% over the same periods. The state appears to be in a midst of a modest, drawn -out recovery. New -car dealerships sold 1.29 million new cars and trucks in 2011 - a 9.9% improvement over 2010. They should see an additional 8.5% growth in 2012. Though the construction, agriculture and food services industries have barely kept pace with inflation, high - technology industries, the professional services sector and a robust global demand for California's exports are primarily responsible for an economic growth rate that is now keeping pace with the national rate. Senior Economist, Jerry Nickelsburg from UCLA predicts that California's employment growth will be 1.4% for 2012 and 2.1% for 2013. The state labor market should continue to improve, with a projected payroll growth of 1.2% for 2012 and 2.0% for 2013. Existing home sales were up in 2011 compared to 2010, but at the expense of falling prices. Though the state housing market is still struggling to regain price stability, foreclosure rates for the 4`h Quarter of 2011 dropped to the second - lowest level in more than four years. The worst may be over for California. We can expect slow and steady growth as we rebuild a healthy, well- balanced economy. LOCAL RESULTS Local Collections Share of County Pool (2.82 %) Share of State Pool (.14 %) SBE Net Collections Less: Amount Due County 0.0% Less: Cost of Administration 240,557 386 1,983,791 .00 (18,623) Net 4Q2011 Receipts 1,965,168 Net 4Q2010 Receipts 1,761,605 Actual Percentage Change 11.6% Business Activity Performance Analysis Local Collections $1,742,848 Less: Payments for Prior Periods (160,619) www.MuniServices.com (800) 800 -8181 WM IT-MM I =021 Preliminary 4Q2011 Collections 1,582,229 Projected 4Q2011 Late Payments 60,720 Projected 4Q2011 Final Results 1,642,949 Actual 4Q2010 Results 1,595,026 Projected Percentage Change 3.0% HISTORICAL CASH COLLECTIONS ANALYSIS BY QUARTER (in thousands of 5) !, $2,500 - ALBERTSON'S FOOD CENTERS - $20 ARCO AM /PM MINI MARTS MAIN STREET SERVICE STATION AUTOZONE MCDONALD'S RESTAURANTS BIG LOTS MOBIL SERVICE STATIONS f$2,000 - _._._____ _ -_. .__. -_. _.- __. __- - _ -.___— ._ $16 COSTCO WHOLESALE "! >6 DELTACO STAPLES OFFICE SUPERSTORE _ $14 STATER BROS MARKETS a $1,500 - _..____ .. .. _. ___ ____ ....._.__ $12 w . $10 v 8 G $1,000 - — - ____ - ------ ___ $8 $ 6 z. I $500 $4 ! $2 so 3Q2009 4Q2009 1Q2010 2Q2010 3Q2010 4Q2010 1Q2011 2Q2011 3Q2011 4Q2011 �NOt Receipts ®State & County Pool Receipts � SBOE Admin fees Due , TOP 25 SALES /USE TAX CONTRIBUTORS The following list identifies Lake Elsinore's Top 25 Sales /Use Tax contributors. The list is in alphabetical order and represents sales from. The Top 25 Sales /Use Tax contributors generate 63.9% of Lake Elsinore's total sales and use tax revenue. ACS LAKE ELSINORE FORD ALBERTSON'S FOOD CENTERS LOWE'S HOME IMPROVEMENT ARCO AM /PM MINI MARTS MAIN STREET SERVICE STATION AUTOZONE MCDONALD'S RESTAURANTS BIG LOTS MOBIL SERVICE STATIONS CHEVRON SERVICE STATIONS NIKE FACTORY STORE CIRCLE K FOOD STORES RITE AID DRUG STORES COSTCO WHOLESALE SHELL SERVICE STATIONS DELTACO STAPLES OFFICE SUPERSTORE FERGUSON WATERWORKS STATER BROS MARKETS HOME DEPOT TARGET STORES LAKE BUICK PONTIAC GMC WAL MART STORES LAKE ELSINORE CHEVROLET www.MuniServices.com (800) 800 -8181 Page 5 of 8 ®f Lake Elsinore HISTORICAL SALES TAX AMOUNTS The following chart shows the sales tax level from sales through December 2011, the highs, and the lows for each segment over the last two years. $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 (in thousands of $) ®4QZOU- 0High I � Low ANNUAL SALES TAX BY BUSINESS CATEGORY tia 11.easaa d9 o r$i !, 4 Q 2 0 1 1 2Q2011 1 Q 2 0 1 1 u j 4 Q 20 1 0 3Q2010 2 Q 2 0 1 0 1 Q 2 0 1 0 4 Q 2 0 0 9 3 Q 2 0 0 9 $0 S1,000 $2,000 $3,000 $4,000 55,000 $6,000 $],000 ®C Meta it ®PaodP roducls Dl ranepor,a l,on ®Con slru aUOn ®Hus,nesaT H in es ®Mite elln ,eous 1 � www.MuniServices.com (800) 800 -8181 Page 6 of 8 � r FIVE -YEAR ECONOMIC TREND: General Retail PER CAPITA BY BUSINESS SEGMENT This chart shows sales tax per capita from business segments from January 2011 to December 2011. Per Capita by Business Segment Department Stores Servttc Stations A u to So les - N ew R es tan ra a is Apparel Stores B Id g a tls -R eta it Food Markets I isrellancoas Retail BIdg.M ails -W hsie Auto Parts /Repair Drug Stores 11 eery Industry Light Industry ALL 0TII E R S So www.MuniServices.com (800) 800 -8181 Page 7 of 8 City of Lake Elsinore FINAL RESULTS: July- September 2011 Sales Local Net Cash Collections $1,736,573 Less: Pool Amounts ($156,357) Less: Prior Quarter Payments ($80,115) Add: Late Payments $138,049 Local Net Economic Collections after Adjustments $1,638,151 Percent Change from July- September 2010 Sales UP BY 6.0% MUNISERVICES' ON -GOING AUDIT RESULTS This Quarter $45,743 Totalto Date $495,171 www.MuniServices.com (800) 800 -8181 Page 8 of 8