HomeMy WebLinkAboutFIN 2019-01-28 COMPLETE AGENDA PACKETCity of Tukwila
Finance Committee
0 Thomas McLeod, Chair
0 Verna Seal
0 De'Sean Quinn
AGENDA
MONDAY, JANUARY 28, 2019 — 5:30 PM
HAZELNUT CONFERENCE Room
(At east entrance of City Hall)
Distribution:
T. McLeod
V. Seal
D. Quinn
K. Hougardy
D. Robertson
K. Kruller
Z. Idan
Mayor Ekberg
D. Cline
R. Bianchi
C. O'Flaherty
L. Humphrey
Item
Recommended Action
Page
1. PRESENTATION(S)
2. BUSINESS AGENDA
a. A resolution amending the business license fee schedule
a. Forward to 2/11 C.O.W. and
Pg.1
to highlight the $2,000 exemption for outside
contractors.
2/19 Regular Mtg.
Vicky Carlsen, Deputy Finance Director
b. An ordinance correcting General Fund amounts in the
b. Forward to 2/4 Regular Mtg.
Pg.7
2019-2020 Biennial Budget.
Vicky Carlsen, Deputy Finance Director
c. November 2018 General Fund update.
c. Discussion only.
Pg.11
Jeff Friend, Fiscal Manager
d. 2018 3rd Quarter sales tax and miscellaneous revenue
report.
d. Discussion only.
Pg.15
Aaron Williams, Fiscal Coordinator
e. Finance Committee 2019 Work Plan review.
e. Discussion only.
Pg.23
Laurel Humphrey, Council Analyst
3. ANNOUNCEMENTS
4. MISCELLANEOUS
Next Scheduled Meeting: Monday, February 11, 2019
st.). The City of Tukwila strives to accommodate individuals with disabilities.
Please contact the City Clerk's Office at 206-433-1800 (TukwilaCityClerk@TukwilaWA.gov) for assistance.
City of Tukwila
Allan Ekberg, Mayor
INFOR ATIONAL E ORANDU
TO: Finance Council Committee
FROM: Peggy McCarthy, Finance Director
BY: Vicky Carlsen, Deputy Finance Director
CC: Mayor Ekberg
DATE: January 23, 2019
SUBJECT: Update to Business License Fee Resolution
ISSUE
Approve update to Business License Fee Resolution.
BACKGROUND
At the October 15, 2018 Regular Meeting, Council approved Ordinance No. 2588 which adopted
the "model ordinance" language required by the State. Included in this ordinance is language that
exempts businesses operating within the City of Tukwila boundaries without a physical presence
and with gross revenue less than $2,000 from paying a business license fee.
At the November 19, 2018 Regular Meeting, Council approved Resolution No. 1952 that set the
business license fees for 2019 and 2020. The resolution that was approved by Council included
a business license fee of $100 for contractors operating within the City of Tukwila boundaries
without a physical presence.
The legislation was reviewed by the State prior to moving through the Committee and Council
process.
DISCUSSION
The City is set to officially transition the business license function to the State effective March 28,
2019. Before the State will allow the transition to occur, we are required to update the fee
resolution to include the exemption language for those businesses without a physical presence
and where gross revenue does not exceed $2,000.
The draft resolution, with changes tracked, now includes the required language.
RECOMMENDATION
Staff is asking that this resolution be considered at the February 11, 2019 Committee of the Whole
and subsequent February 19, 2019 Regular Meeting.
ATTACHMENTS
Draft resolution with changes tracked.
1
2
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF TUKWILA, WASHINGTON, REPEALING
RESOLUTION NO. 1952 AND ADOPTING A REVISED
BUSINESS LICENSE FEE SCHEDULE TO CLARIFY
LICENSING REQUIREMENTS FOR PERSONS OR
BUSINESSES OPERATING WITHIN THE CITY
BOUNDARIES WITHOUT A PHYSICAL PRESENCE.
WHEREAS, the City has analyzed current business license fees; and
WHEREAS, the State of Washington's streamlined sales tax mitigation payments
are being phased out in 2019 and will cease in 2020, thereby reducing General Fund
revenue by $1.2 million annually; and
WHEREAS, sales tax revenue, due to destination -based sales tax distribution rules,
has not grown at the same rate as expenditures; and
WHEREAS, the City is seeking to take a balanced approach to ensure that ongoing
expenditures are paid for with ongoing revenue; and
WHEREAS, Resolution No. 1952, adopted on November 19, 2018, did not include
language exempting those persons or businesses operating within the City boundaries
without a physical presence, and with gross income in the City equal to or less than
$2,000, from the annual business license fee;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY RESOLVES AS FOLLOWS:
Section 1. Repealer. Resolution No. 1952 is hereby repealed.
Section 2. Fee Schedule. For 2019 and 2020, Business License fees will be
charged according to the following schedule:
(continued...)
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3
ANNUAL BUSINESS LICENSE FEE SCHEDULE
Standard Business License fee:
FOR A 2019 BUSINESS LICENSE
$45 per part-time employee*
plus
$91 per full-time employee*
equals total Business License Fee**
* Employee is defined at Tukwila Municipal Code
Section 5.04.010(10), copied below.
• A "part-time employee" is an employee
working 29 or less hours per week.
• A 'full-time employee" is an employee working
30 or more hours per week.
FOR A 2020 BUSINESS LICENSE
$56 per part-time employee*
plus
$112 per full-time employee*
equals total Business License Fee**
* Employee is defined at Tukwila Municipal Code
Section 5.04.010(10), copied below.
• A "part-time employee" is an employee
working 29 or less hours per week.
• A "full-time employee" is an employee working
30 or more hours per week.
** The total Business License fee due will vary based on the combination of part-
time and full-time employees employed by the business.
For example, a business with one part-time employee (and no other employees) will
pay a Business License Fee of $45 for a 2019 license and $56 for a 2020 license.
A business with one full-time employee (and no other employees) will pay a Business
License Fee of $91 for a 2019 license and $112 for a 2020 license.
Minimum Business License fee:
For a 2019 Business License: $45.00
For a 2020 Business License: $56.00
Business License Fee for contractors operating within the City of Tukwila
boundaries without a physical presence:
$100.00 flat fee if gross income or gross proceeds of sales in the City is greater
than $2,000. If dross income or gross proceeds of sales in the City is $2,000 or
less, there is no fee to obtain a business license.
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4
Page 2 of 4
*Tukwila Municipal Code Section 5.04.010(10):
10. "Employee" means and includes each of the following persons who are not
required by the City to have his/her/its own separate City of Tukwila business license:
a. Any person employed at any business who performs any part of their
duties within the City of Tukwila or reports from a location within the City's corporate
limits; and
b. Any person who is on the business's payroll, and includes all full-time, part-
time, and temporary employees or workers; and
c. Owners, officers, managers, and partners; and
d. Any other person who performs work, services or labor at the business
including, but not limited to, family members, regardless of whether they receive a wage
from the business; and
e. Self-employed persons, sole proprietors, owners, officers, managers, and
partners; and
f. Any other person who performs work, services or labor at the business,
including an independent contractor who may be exempt from requirements to have a
separate City of Tukwila business license.
Other annual license fees:
Adult Cabaret establishment
$500.00 + Business License Fee (per above)
Adult Cabaret entertainer
$75.00 + Business License Fee (per above)
Adult Cabaret manager
$75.00
Adult Entertainment Cabaret
establishment
$500.00 + Business License Fee (per above)
Adult Entertainment Cabaret
entertainer
$75.00 + Business License Fee (per above)
Adult Entertainment Cabaret
manager
$75.00
Amusement Center
$500.00 + Business License Fee (per above)
Amusement device fee
$50.00 per device + Business License Fee (per above)
Amusement device removal fee
$50.00 per device
Amusement device storage fee
$10.00 per device per day
Appeal Fee
$250.00
Cabaret establishment
$300.00 + Business License Fee (per above)
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Page 3 of 4
5
Penalty for late acquisition of
business license (operating a
business without a valid license)
If received or postmarked within 0 to 30 days of
operation = 5% of license fee
If received or postmarked within 31 to 60 days of
operation = 10`)/0 of license fee
If received or postmarked within 61 to 90 days of
operation = 15% of license fee
If received or postmarked within 91 to 120 days of
operation = 20% of license fee
If received or postmarked at 121 days of operation or
longer = maximum of 25% of license fee
Penalty for late renewal of business
license
If received or postmarked Feb. 1 through Feb. 28
= 15% of license fee
If received or postmarked March 1 through March 31
= 30% of license fee
If received or postmarked April 1 or later
= 45% of license fee
Peddler/Solicitor
$70.00
Reinstatement of license fee
$50.00
Washington State Patrol WATCH
background check
$12.00
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at
a Regular Meeting thereof this day of , 2019.
ATTEST/AUTHENTICATED:
Christy O'Flaherty, MMC, City Clerk Kathy Hougardy, Council President
APPROVED AS TO FORM BY:
Rachel B. Turpin, City Attorney
Filed with the City Clerk:
Passed by the City Council:
Resolution Number:
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Page 4 of 4
City of Tukwila
Allan Ekberg, Mayor
INFOR ATIONAL E ORANDU
TO: Finance Council Committee
FROM: Peggy McCarthy, Finance Director
BY: Vicky Carlsen, Deputy Finance Director
CC: Mayor Ekberg
DATE: January 23, 2019
SUBJECT: Correct math error in ordinance that adopted 2019-2020 biennial budget
ISSUE
The ordinance that adopted the 2019-2020 biennial budget contained a math error in the general
fund. The general fund budget did not include Council's intent regarding the property tax or sales
tax revenue budget.
BACKGROUND
At the work session with Council held on October 24, 2018 staff provided updated information on
both property tax and sales tax revenue.
The City had received updated property tax information from King County indicating that the
property tax revenue budget could be increased by $250 thousand. Additionally, sales tax
revenue in 2018 was exceeding budget by $132 thousand and exceeded prior year revenue by
$1.26 million. Due to the increased sales tax collections, the budget for sales tax in 2019 was to
be increased by $650 thousand.
There was Council consensus to include these increases in the budget adoption ordinance. The
ordinance to adopt the budget was approved by Council on December 3, 2018.
DISCUSSION
Due to a math error when drafting the budget ordinance, both the increase to property tax and
sales tax revenue budgets were not included in the final ordinance presented to Council. This
error impacted both 2019 and 2020 budgets and resulted in a general fund budget that was
adopted $1.8 million less than it should have been.
2019 2020
Property tax $250k $250k
Sales tax 650k 650k
$900k $900k
All other changes requested by Council were included in the budget ordinance. This ordinance
is not amending the adopted budget, it corrects a math error. By correcting the math error, the
budget will fully reflect Council's intent.
RECOMMENDATION
Staff is asking that this item be forwarded to the February 4, 2019 Regular Meeting for adoption.
ATTACHMENTS
Draft ordinance.
7
8
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
TUKWILA, WASHINGTON, AMENDING ORDINANCE NO. 2597,
WHICH ADOPTED THE CITY OF TUKWILA'S BIENNIAL
BUDGET FOR THE 2019-2020 BIENNIUM, TO CORRECT A
MATH ERROR IN THE AMOUNTS SHOWN FOR THE GENERAL
FUND (FUND 000); PROVIDING FOR SEVERABILITY; AND
ESTABLISHING AN EFFECTIVE DATE.
WHEREAS, on December 3, 2018, the City Council of the City of Tukwila adopted
Ordinance No. 2597, which adopted the 2019-2020 biennial budget of the City of Tukwila;
and
WHEREAS, a math error was discovered when reconciling the General Fund to the
budget adoption ordinance; and
WHEREAS, a correction to the budget adoption ordinance was presented to the City
Council in a timely manner for their review;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY ORDAINS AS FOLLOWS:
Section 1. Ordinance Amended. Ordinance No. 2597 is hereby amended with the
City Council's adoption of the corrected General Fund amounts for Expenditures and
Revenues in the 2019-2020 Biennial Budget as shown below:
FUND
EXPENDITURES
REVENUES
000 General
$1/13,908,876
W3,908,876
$145,733,333
$145,733,333
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9
Section 2. Copies on File. A complete copy of the budget for 2019-2020, as
adopted, together with a copy of this amending ordinance, shall be kept on file in the City
Clerk's Office, and a copy shall be transmitted by the City Clerk to the Division of Municipal
Corporations of the Office of the State Auditor and to the Association of Washington
Cities.
Section 3. Corrections by City Clerk or Code Reviser. Upon approval of the City
Attorney, the City Clerk and the code reviser are authorized to make necessary
corrections to this ordinance, including the correction of clerical errors; references to other
local, state or federal laws, codes, rules, or regulations; or ordinance numbering and
section/subsection numbering.
Section 4. Severability. If any section, subsection, paragraph, sentence, clause or
phrase of this ordinance or its application to any person or situation should be held to be
invalid or unconstitutional for any reason by a court of competent jurisdiction, such
invalidity or unconstitutionality shall not affect the validity or constitutionality of the
remaining portions of this ordinance or its application to any other person or situation.
Section 5. Effective Date. This ordinance or a summary thereof shall be published
in the official newspaper of the City, and shall take effect and be in full force and effect
five days after passage and publication as provided by law.
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at
a Regular Meeting thereof this day of , 2019.
ATTEST/AUTHENTICATED:
Christy O'Flaherty, MMC, City Clerk
APPROVED AS TO FORM BY:
Rachel B. Turpin, City Attorney
AIIan Ekberg, Mayor
Filed with the City Clerk:
Passed by the City Council:
Published:
Effective Date:
Ordinance Number:
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10
City of Tukwila
Allan Ekberg, Mayor
INFOR AT 0 AL E ORANDU
TO: Councilmembers
CC: Mayor Ekberg
FROM: Peggy McCarthy, Finance Director
BY: Jeff Friend, Fiscal Manager
DATE: January 23, 2019
SUBJECT: November 2018 Year -to -Date Financial Update
Summary
The purpose of the 2018 Financial Report is to summarize for the City Council the general state of
Departmental expenditures and to highlight significant items or trends. The following provides a high-
level summary of the Departmental financial performance. The November 2018 Year -To -Date report is
based on financial data available as of January 14, 2019, for the period ending November 30, 2018.
Additional details can be found within the attached financial report.
Allocated budgets through the reporting period are calculated by analyzing spend patterns in the previous
and allocating the current year budget using the same spend pattern. If a line item had no expenditures
in the prior year but a budget in the current year, the allocated budget for the current year would be zero.
Departmental Expenditures
General Fund expenditures totaled $54.6 million as compared to the allocated budget of $57.9 million,
which is $3.3 million below budget. Notable variances include:
• Compared to the Allocated Year -to -Date Budget Human Resources ($12.5K), City Attorney
($87.3K), Court ($6.7K), Fire ($133.5K), and Technology and Innovation Services ($37.6K) are
above budget. However, it is expected that when compared to the full Annual Budget at year-end
these departments will finish near or below budgeted levels.
• Transfers from the General Fund are $1.5 million under budget as a transfer was budgeted to be
made from the General Fund to the fund for Bridges and Arterial Streets but was not needed.
11
INFORMATIONAL MEMO
Page 2
Year to Date Department Expenditures Compared to Allocated Budget
(Through November2018)
111 C$332ity Council 5347
Mayor
$3,433
$3,548
$679
Human Resources • $667
Finance
Attorney
Recreation
Community Development
Municipal Court
Police
Fire
Technology & Innovation Svcs
Public Works
Park Maintenance
Street Maintenance & Operations
Dept 20
-$2,000
$2,432
$2,525
$876
$788
$2,837
$2,992
$1,180
$1,174
$3,124
$3,302
$16,051
$17,147
$1,774
$1,737
$1,368
$1,460
$3,221
$3,457
$2,933
$2,976
$2,912
$2,000
$4,430
$6,000
$11,481
$11,348
$10,000 $14,000
• YTD Actual a YTD Budget
518,000
Thousands
12
INFORMATIONAL MEMO
Page 3
GENERALFUND
CITY OF TmKWILA
GENERAL FUND EXPENDITURES
vro^oopwuvsmasnxo.eom
SUMMARY OF EXPENDITURES BY
DEPARTMENT
BUDGET
ACTUAL
COMPARISON OF RESULTS
2018
ACTUAL
ALLOCATED
%
01
City Council
430,319
34e,981
300,23
303,321
332,218
(14,763)
77%
1 %
mm
uo
Mayor
4.1*3,651
3,548.332
3,3*4,118
3,280,400
3,432,e 1
(115,371)
ox%
pyu
om
u*
Human Resources
ruopva
666,659
59e,974
606121
679.132
12473
nsm
1m
12m
oo
Finance
2.733,016
2.524,802
1,996.*61
2.21e,2e1
2,431.687
(93^115)
as%
11m
10w
oo
Attorney
983,185
788.187
4+8,916
533,536
875,527
87.340
aa%
19m
o+m
or
Recreation
3.282.244
2.991.810
2.706,186
2,806,638
2.836720
(155.090)
na%
4%
1m
na
Community Development
3.e71.160
3.301,814
2.873.377
o.aoo.*x+
3'12*.488
(177.326)
nsm
zm
om
oe
Municipal Court
1.295,812
1.173'779
1.051,435
1.11e.45e
1,180,47*
6.695
91w
a%
a%
10
puooe
18J26.049
17.146,876
1e,218.758
16.006,954
16.050.798
(1.09e.077)
oam
(1)%
nm
11
Fire
12.541,640
11.347,952
10,680.e82
,u.uan.noo
/1,481,400
133,448
oum
u%
sm
12
TecxnmooruInnovation Svcs
2.063,671
1736.912
1.156,552
1,663.956
1774.483
37,570
00%
4*m
r%
13
Pum|cmmrxo
3.876'0*7
3.456.657
3,295,901
3,181.653
3.220,557
(236.100)
oom
(o)y
1%
15
Park Maintenance
1.572.214
1,460.207
1,303.977
1,264.005
1.367,820
<nu.uum
nr%
(3)m
om
16
Street Maintenance `uOperations
3.1*9,643
2.9/e'151
2�49,91/
2,860714
2,932.710
(43.441)
00%
o%
a%
Subtotal
uo
oeptuo
e,470,580
4.430.363
4.069,855
2,561.693
2.9/1.589
n.518.//4/
31%
po%
'14%
Total Expenditures
68,66/.314
57,897,480
52.866,545
52.294.233
s*'oxu.sso
(3,264,917)
no%
(1}m
4m
Percent of year completed
13
INFORMATIONAL MEMO
Page 4
GENERAL FUND
CITY OF TUKWILA
GENERAL FUND EXPENDITURES
YTD AS OF DECEM BER 31, 2018
SUMMARY OF SALARIES AND BENEFITS
BUDGET
ACTUAL
COMPARISON OF RESULTS
2018 ANNUAL
2018
ALLOCATED
2016
2017
ovEpr(uNDBR)
1' PENDED
% CI-IANGE
2018
ALLOCATED
BCGT
2016/2017/
2017/2018
11
Salaries
28,076,720
25,568,690
24,121,186
24,729,977
25,196,003
(372,687)
90%
3%
2%
12
Extra Labor
754,693
699,993
591,664
619,902
645,443
(54,550)
86%
5%
4%
13
Overtime
1,672,035
1,571,788
1,367,993
1,419,938
1,364,439
(207,349)
82%
2%
(4)%
15
Holiday Pay
525,583
395,617
322,425
320,885
326,956
(68,662)
62%
(0)%
2%
21
FICA
1,843,684
1,691,954
1,553,909
1,605,967
1,629,899
(62,055)
88%
3%
1%
22
Pens ion-LEOFF 2
949,316
784,825
743,369
771,675
859,201
74,375
91%
4%
11%
23
Pension-PERS/PSERS
1,610,013
1,472,377
1,268,569
1,383,274
1,544,376
71,998
96%,
9%
12%
24
Industrial Insurance
941,170
833,875
587,671
561,338
596,343
(237,532)
63%
(4)%
6%
25
Medical & Dental
6,397,364
5,669,442
5,121,435
5,134,273
5,026,672
(842,770)
79%
0%
(2)%
26
Unemployment
13,000
-
40,380
13,639
26,779
26,779
206%
(66)%
96%
28
Uniform/Clothing
10,774
3,364
3,011
2,401
3,378
14
31%
(20)%
41%
Total Salaries and Benefits
42,794,352
38,891,925
35,741,613
36,563,269
37,219,488
(1,672,437)
87%
2%
2%
Perce 1 of year completed
91.67%
SUMMARY OF SUPPLIES, SERVICES, AND
CAPITAL
BUDGET
ACTUAL
COMPARISON OF RESULTS
2018 ANNUAL
2018
ALLOCATED
2016
2017
2018
OVER/(UNDER)
% E<PENDED
% CHANGE
ALLOCATE
BDGT
20,6/2017
2017/2018
Transfers
9,470,580
4,430,363
4,069,855
2,561,693
2,911,589
(1,518,774)
31%
(37)%
14%
31
Supplies
1,188,804
1,077,181
1,120,277
1,001,610
933,792
(143,388)
79%
(11)%
(7)%
34
Items Purchased for resale
22,000
21,662
20,849
20,215
21,909
247
100%
(3)%
8%
35
Small Tools
97,318
63,338
84,695
84,146
88,102
24,764
91%
(1)%
5%
41
Professional Services
3,602,177
2,752,759
2,175,874
2,535,457
2,928,352
175,592
81%
17%
15%
42
Cornibunication
436,370
389,556
351,662
360,277
388,215
(1,341)
89%
2%
8%
43
Travel
189,880
171,451
140,143
159,322
153,664
(17,766)
81%
14%
(4)%
44
Advertising
51,500
41,920
22,589
20,148
29,933
(11,987)
58%
(11)%
49%
45
Rentals and Leases
2,313,870
2,234,850
2,397,745
2,104,166
2,120,418
(114,432)
92%
(12)%
1%
46
Insurance
976,992
975,434
810,799
867,617
974,066
(1,368)
100%
9%
10%
47
PublicUtilities
1,928,305
1,810,448
1,742,261
1,794,024
1,864,889
54,441
97%
3%
4%
48
Repairs and Maintenance
807,488
641,088
575,515
487,981
504,505
(136,583)
62%
(15)%
3%
49
Miscellaneous
1,566,554
1,411,330
948,010
902,244
1,423, i 72
11,842
91%
(5)%
56%
51
Inter -Governmental
3,191,119
2,960,012
2,280,123
2,721,887
2,907,168
(52,845)
91%
19%
7%
53
Ext Taxes, Oper. Assess
5
1
12
918
91,293
91,291
1825858%
7383%
9843%
64
Machinery& Equipment
30,000
24,160
384,523
89,258
71,988
47,828
240%
(77)%
(19)%
Total Supplies, Services, and Capital
25,872,962
19,005,555
17,124,932
15,730,963
17,413,075
(1,592,480)
67%
(8)%
11%
Total Salaries, Supplies, Services, and Capital
68,667,314
57,897,480
52,866,545
52,294,233
54,632,563
(3,264,917)
80%
(1)%
4%
Percent of year completed
91.67%
14
City of Tukwila
Allan Ekberg, Mayor
INFOR ATIONAL E ORANDU
TO: Finance Committee
FROM: Peggy McCarthy, Finance Director
BY: Aaron Williams, Fiscal Coordinator
CC: Mayor Ekberg
DATE: January 23, 2019
SUBJECT: Sales Tax and Miscellaneous Revenue Report- 3rd Quarter 2018
chedule I - Sales Tax
in $1,000s
2017 Actual
2018
Actual
YOY Change
1 !
!
1
,
!
i
Other
---- Month ----
1 Other 1
Total
!
Other !
Total
Construction !
Industries !
Total
Collect-
ed Rec'd
Construc-j j
;Industries;
ton ;
Construct
tion !Industries ;
Amount
% ;Amoun
1
t
% ;
;
Amount
%
Jan
Mar
$ 123 1 $ 1,149 j
$ 1,272
$ 116 j $ 1,222 j
$ 1,339
$ (6)
-5%j
$ 73
6%j $ 67
5%
Feb
Apr
83 1 1,123 j
1,206
128 j
1,211 j
1,338
45
54%j
88
8%j
132
11%
Mar
May
120 i 1,664 i
1,784
131 i
1,487 i
1,618
11
9%i
(177)
-11%i
(166)
-9%
Q-1 Totals
$ 326 ; 3,936 ;
$ 4,262
$ 375 ;
3,920 ;
$ 4,295
$ 49
15%;
(16)
0%;
$ 33
1%
Apr
Jun
92 ! 1,316 !
1,408
122 !
1,349 !
1,471
31
33%!
33
2%!
64
5%
May
Jul
106 ! 1,315 !
1,421
134 !
1,492 !
1,626
28
27%!
177
13%!
205
14%
Jun
Aug
119 1 1,387 I
1,506
139 I
1,682 I
1,821
20
17%!
295
21%l
315
21%
Q-2 Totals
$ 317 1 4,018 1
$ 4,335
$ 395 j
4,524 I
$ 4,919
$ 79
25%j
505
13%i
$ 584
1 %
Jul
Sep
131 j 1,376 j
1,508
136 j
1,678 j
1,814
5
4%j
302
22%j
307
20%
Aug
Oct
126 j 1,345 j
1,471
124 j
1,682 j
1,805
(2)
-2%j
337
25%j
335
23%
Sep
Nov
140 i 1,473 i
1,613
163 i
1,619 !
1,782
23
16%i
146
10%1
169
10%
Q-3 Totals
$ 397 ; 4,194 ;
$ 4,591
$ 423 ;
4,979 ;
$ 5,402
$ 26
7%;
785
19%;
$ 811
18%
1 1
i
i
i
Oct
Dec
144 ; 1,329 ;
1,473
.
-
Nov
Jan
110 ! 1,424 !
1,534
!
i
-
j
I
Dec
Feb
120 I 1,849 !
1,969
!
!
-
I
I
Q-4 Totals
$ 374 i 4,602 i
$ 4,976
- I
- 1
$ -
$ -
0%i
-
0%i
-
0%
Totals
$ 1,414 j 16,750 j
$ 18,164
$ 1,194
13423 j
$ 14616
$ 154
11%j
1,274
8%j $ 1,428
8%
Third Quarter sales tax collections were $811 thousand or 18% more than the same period in 2017. Of the $811
thousand increase over the prior year, Construction related sales tax made up $26 thousand while all other
industries accounted for an increase of $785 thousand.
Year -to -Date through the third quarter 2018, sales tax collections are $1.4 million or 8% more than the first three
quarters of the prior year collections. If this trend continues through the fourth quarter, annual collections are
expected to finish the year just over $19.6 million.
15
INFORMATIONAL MEMO
Page 2
Budget to Actual - Sales Tax in $1,000's
Schedule I -Sales Tax
in $1,000's
-
_Month -
Actual
Allocated
Actual
Collected ' Rec'd
Budget
Amt
96
Jan
Mar
$ 1.272
$ 1.308
$ 1.330
(57)
-4%
Feb
Apr
1.206
$ 1.323
$ 1.338
15
196
K8or
May
1.784
$ 1.968
$ 1.618
(340)
47Y6
Q-1 Totals
$ 4,262
$ 4,677
$ 4,295
$ (382)
-896
Apr
Jun
1.408
$ 1.545
1.471
(74)
'596
May
Jul
1.421
$ 1.559
1.628
67
4%
Jun
Aug
1.506
$ 1.653
1.821
168
1098
0_2Tbbe|a
$ 4,335.
'$ 4,757
$ 4,919
$ 162
3%
Jul
Sep
1.508
$ 1.654
1.814
160
1096
Aug
Oct
1,471
$ 1,614
1.805
192
1296
Sep
Nov
1,613
$ 1,770
1.782
12
196
Q-3Toba|s
$ 4,581
$ . 5,038
.$ 5.402
$ 384
7% .
Oct
Dec
1.473
$ 1.617
Nov
Jam
1.534
$ 1.883
Dec
Feb
1.969
$ 2.161
Q4Totm|m
$ 4'976
$ 5.461
$ ~
$ -
U%
Actual no|en tax collected in the third quarter was $384 thousand greater than anUdPmted, representing e 796
positive variance from budget. Overall year-to-date sales tax collection through the third quarter was $144
thousand above budget, which is 1 % positive variance from budget expectations.
ituncKAgenda homnTinanceU28.18\110 Memo Sales Tax-x018-W.dmz
INFORMATIONAL MEMO
Page 3
Below is a graph of the year-to-date changes in sales tax collections by industry type year over year.
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$(100,000)
$(200,000)
$(300,000)
Change YTD by Category
Automotive
$584,067
Constructi on
$153,888
Manufacturing
$61,982
Whol esa I e Tra de
$122,098
Tra ns port / Warehousing
$(3,874)
Services
$533,462
Retail Trade
$189,951
Miscellaneous
$(213,586)
All industry categories show an increase in sales tax except for transportation/warehousing, which had a slight
decline of $3,874 when compared to the prior year. The miscellaneous category contains sales tax from periodic
and one-time type transactions. Adjusting for the one-time transaction in the miscellaneous category, year -over -
year sales tax through the 3rd quarter 2018 increased by $1.64 million.
As the chart above shows, there are two categories that account for more than $1 million of this year -over -year
increase. Automotive sales tax is primarily being boosted by a bus manufacturer that, in the past 5 months, has
contributed approximately $638 thousand. Within the Services category multiple groups have contributed to this
growth, indicating that the sector is growing as opposed to just one taxpayer/business.
Z:\Council Agenda ItemsTinance11.28.191Info Memo Sales Tax-2018-Q3.doex
17
INFORMATIONAL MEMO
Page 4
Schedule U nhovva year-to-date sales tax collections from the top ten industry classifications.
Schedule 11 - YTD sales tax collections - top ten industry classifications
YTD YTO Dollar Y6
Group Name Current Prior Oiff. Diff.
452 General Merchandise Stores $ 1^560,561 $ 1.521,737 $ 38,824 2.55%
722 Food Services, Drinking Places $ 1,481,880 $ 1,388,565 $ 108,321 7.44%
448 Clothing and Accessories $ 1,484547 $ 1^445,559 $ 38,889 2.70%
441 Motor Vehicle and Parts Dealer $ 1.114.040 $ 534.900 $ 579.140 108.27%
423 Wholesale Trade, Durable Goods $ 839.292 $ 729,926 $ 108,368 14.9896
236 Construction ofBuildings $ 758.597 $ 606.447 $ 152.150 25D9Y6
443 Electronics and Appliances $ 750.716 $ 754,930 $ (4.220) '0.50Y6
444 Building Material and Garden $ 619.544 * 602.949 $ 16.595 2.75%
453 Miscellaneous Store Retailers $ 572.837 $ 515.893 $ 56.944 11.04%
721 Accommodation $ 566,937 $ 517.003 $ 49.933 9.86Y6
The top ten industries remain relatively stable with 721-Accommodation replacing 517-Telecommunications in
the last spot onthe list. The group with the greatest gains this year iothe 441-Motor Vehicles, which ismore
than double the prior year primarily driven sales from abus manufacturer. The top three categories continue to
be strong, posting positive growth compared to the prior year performances. These groups provide stability to
the retail sales tax collection contributing more than 30% of all sales tax collections for the city.
f8ounci| 28.19V* Memo Sales Tax-2018-0,docx
INFORMATIONAL MEMO
Page 5
Schedule III shows the year-to-date ten largest declines insales tax collections bydollar difference b«industry
Schedule III -YTDten largest declines($) in salestax collectionsby industry class
YTO YTO Dollar Y6
Group Name Current Prior Qiff. [hff.
ygA NnncaoeifiobleEotabishmente $ 70,032 $ 283,839 $ (213,807) -7533m
454 NonatonaReba|ero $ 120.574 $ 184.336 $ (63762) -34.59%
237 Heavy and {]\A|ConotmcUnn $ 49,523 $ 81.669 $ (32.147) -39.36%
621 Ambulatory Health CereGerice * 37.922 $ 64,870 * (26.e40) '41`54Y6
488 Transportation Support $ 25.769 $ 39.305 $ (13.535) '34.44`&
446 Health and Personal Care Store $ 199.135 * 212.365 $ (13.230) 'n.uo%
323 Printing and Related Support $ 14.916 $ 20.872 m (5.950 -28.54%
515 Broadcasting (except Internet) $ 3.926 $ 8`773 $ (4.847) '55.25%
443 Electronics and Appliances $' 750.716 $ 754.936 $ (4`220) '0.56%
611 Educational Services $ 4,531 $ 8.617 $ (4.085) '*7,*1%
The largest decline was in the industry category (m|am referred to as the
miscellaneous oatmoo,v).which reflects alarge art related transaction inthe prior year. Notrends were detected
when analyzing these groups compared toprior periods.
VCouncil Agenda 1temokFinammU.2819k1nfoMemo Sales Tax-201043dnu
19
INFORMATIONAL MEMO
Page 6
SALES TAX SUMMARY I Ili
2018 (Received in March 2018 - Nover
NAICS CONSTRUCTION
236 Construction of Buildings
237 Heavy & Civil Construction
238 Specialty Trade Contractors
17 TOTAL
844,136
107, 260
17YTD 18YT0
606,447 758,597
81,669 49,523
462,376 351,617 385,502
YTD
% Diff
25.1 %
-39.4%
9.6%
TOTAL CONSTRUCTION $ 1,413,773 $ 1,039,734 $ ::1,193,622
Overall Construction Change from Previous Year $ 153,888 14,8%
MANUFACTURING
17 TOTAL 17 YTD
311 Food Manufacturing 10,703.
312 Beverage & Tobacco Products 11,960
313 Textile Mills 409
314 Textile Product Mills 14,792
315 Apparel Manufacturing 888
316 Leather & Allied Products 88
321 Wood Product Manufacturing 3,740
322 Paper Manufacturing 24,646
323 Printing & Related Support 28,490
324 Petroleum & Coal Products 41
325. Chemical Manufacturing -15,834
326 Plastic & Rubber Products 3,955
327 Nonmetallic Mineral Products 5,081
331 Primary Metal Manufacturing 1,803
332. Fabricated Metal Mfg Products 8,752.
333 Machinery Manufacturing 6,300
334 Computer& Electronic Products 10,531
335 Electric. Equipment Appliances 3,949
336. Transportation Equipment Mfg 29,297
337 Fumiture & Related Products 8,432
339 MiscellaneousManufacturing19,765
TOTAL MANUFACTURING. $ 177,788 $ 140,081 $
Overall Manufacturing Change from Previous Year
TRANSPORTATION & WAREHOUSING
481 Air Transportation
482 Rail Transportation
483 Water Transportation
484 Truck Transportation
485 Transit and Ground Passengers
487 Scenic and Sightseeing Tran
488 Transportation Support
491. Postal Services
492 Couriers & Messengers
493 Warehousing & Storage
TOTAL TRANSP & WHSING $
Overall Transportation Change
17 TOTAL
11
169
86
1,852
395
57
47,071
816
1,600
1,878
53,936 $
from Previous Year
8,891
8,876
366
10,154
686
53
2,709
18,257
20,872
19
1,873
3,157
3,446
1,213
5,931
3,544
7,877
2,960
19,543
7,549
12,107
17 YTD
11
97
61
1,380
151
18 YTD
18,877
8,874
201
10,100
357
32
2,320"
18,826
14,916`
73
4,324
4,641
2
919
7,999
6,033
19,771
11,734
41,940
7,754
19,417
202,063`s
$61,982 44.2%
18 YTD'
0
1 17
1,282
452
6
57 7,291
39,305 25,769
673 782
1,413 1,563
1,332 1,799
44,479 $ 40,605
($3,874)
WHOLESALE TRADE 17 TOTAL 17 YTD
423 Whis Trade -Durable Goods. 1,016,477 729,926
424 Whls Trade -Nondurable -Goods 155,695 118,357
425 Wholesale Electronic Markets 2,6961,883 2,282
WHOLESALE TRADE TOTAL $ 1,176,868 $ 850,166 $ 972,264
Overall Wholesale Change from Previous Year $122,098
18YT0
839,292
130,690
YTD
% Diff
112.3%
0.0%
-45.1%
-0.5%
48.0 %
-38.5%
-14.3%
3.1 %
-28.5%
280.2%
130.9%
47.0%
-14.3%
-24.2%
34.9%
70.2%
151.0%
296.5%
114.6%
2.7%
60.4%
YTD
% Diff
0.0%
-48.1%
2568.8%
-7.1%
200.0%
12613.5%
-34.4%
16.2%
10.6 %
35.1%
-8.7%
YTD
% Diff
15.0%
10.4%
21.2%
NAICS. AUTOMOTIVE 17 TOTAL 17 YTD 18:YT0
441 Motor Vehicle & Parts Dealer 709,541 534,900 1,114,040
447 Gasoline Stations 91,039 68,920 73,847
TOTAL AUTOMOTIVE $ 800,581 $ 603,820 $ 1,187,887
Overall AutomotiveChange from Previous Year $584,067 ` 96.7%
NAICS RETAIL TRADE
442 Fumiture & Home Furnishings
443 Electronics & Appliances
444 Building Material &Garden
445 Food & Beverage Stores.
446 Health & Personal Care
448 Clothing & Accessories
451 Sporting Goods, Hobby, Books
452. General Merchandise :Stores.
453 Miscellaneous Store Retailers
454 NonstoreRetailers
TOTAL RETAIL TRADE $
Overall General Retail Change from Previous Year
SERVICES
17 TOTAL 18 YTD
445,454 371,858
1,168,189 750,716
805,251 619,544
257,762 224;869
298,682 199,135
2,066,870 1,484,547
533,560 391,519
2,131,267 1,521,737 1,560,561
738,487 515,893 572,837
248,748 184,336 120,574
8,694,271 $ 6,106,210 $ 6,296,160.
$189,951 3.1%
17 YTD
324,405
754,936
602,949
187,119
212,365
1,445,559
356,909
17 TOTAL 17 YTD
51X Information 820,832
52X Finance & Insurance 106,045
53X Real Estate, Rental, Leasing 623,983
541 Professional, Scientific, Tech 547,039
551 Company Management 9
56X Admin, Supp, Remed Svcs 170,046
611 Educational Services. 10,355
62X Health Care Social Assistance 119,513
71X Arts & Entertainment 256,620
72X .Accommodation & Food Svcs 2,536,470
81X Other Services 270,882
92X Public Administration 87,143
TOTAL SERVICES $ 5,548,937 $ 4,119,365 $ 4,652,827
Overall Services Change from Previous Year $533,462: 13.0%
YTD
%Diff
108.3%
7.1%
% Diff
14.6%
-0.6%
2.8%
20.2%
2.7%
9.7%
2.6%
11.0%
-34.6%
MISCELLANEOUS
18YT0
580,066 680,664
76,701 99,301
454,951 486,448
412,456 528,657
0 1
121,094 237,409
8,617 4,531
92,427 63,746
201,276 231,899
1,905,568 2,058,823
197,986 192,910
68,223 68,438
17 TOTAL 17 YTD
000 Unknown 0
111-115 Agriculture, Forestry, Fishing
211.221 Mining &Utilities
999 Unclassifiable Establishments
MISCELLANEOUS TOTAL $
Overall Miscellaneous: Change from Previous Year
0
382
351
1,089
547
296,439 283,839 :70,032.
298,074 $ 284,572 $ 70,985
(6213,586) -75.1%
YTD
% Diff
17.3%
29.5%
6.9%
28.2%
0.0%
96.1%
-47.4%
-31.0%
15.2%
8.0%
-2.6 %
0.3%
Y7D
0
474
479
YTD
% Diff
0.0%
24.0%
36.6%
-75.3%
YTD
17 TOTAL 17 YTD 18 YTD Diff
GRAND TOTALS 518,164,227. 613,188,426. 514,616,413
Grand Total Change from Previous Year :$1,427,987 10.83%
14.4% Grand Total. Change. from Previous Year - Without New Construction $1,274,099 10.49%'
2bouncil Agenda Items\Finance11.28.191Info Memo Sales Tax-2018-Q3.docx
INFORMATIONAL MEMO
Page 7
Schedule 0V ahovva quarterly gambling tax performance year over year and for the current year
compared tobudget.
Schedule IV - Gambling Tax (a)
(d) 2018
Quarter 2017 2018 Allocated
Earned Actual Actual Budget
D1 $ 977003 $ 988.421 $ 985.831
Q2 983.322 841.104 1,002.272
C>3 951,981 885.439 970.337
O4 958.503 876.974
INCREASE(DECREASE)
YEAR OVER YEAR BUDGETVARLANCE
Amount % Amount %
11.418 196 $ (7,410) '11%
(142.218) '14Y6 (161,168) 46%
Totals $' 3,870,819 $ 2,814,96$ 3,945,414 $ (97,352) -3% $ (153,476) -4%
During the third
quarter Gambling tax revenue was 4Y6above the same period of the prior year and296
greater than budget expectations. The City has four casinos — the Riverside Inn, the Great American,
the Fortune and the Macau. Ananalysis ofthe third quarter gambling taxes show that, after the decline
in the second quarter, the gambling revenue has bounced back to expected levels in the third quarter.
While still anticipated to come in under bUdget, the variance is primarily a result ofsecond quarter
underperfornlmnce. Gambling tax isbudgeted toincrease by296over 2D17actual revenue.
Schedule Voho««o quarterly admissions tax performance year over year and for the current year
compared tObudget.
(d) 2018
Quarter 2017 2018 Allocated
Earned Actual Actual Budget
INCREASE(DECREASE)
YEAR OVER YEAR BUDGETVARV\NCE
Amount % Amount ^&
Q1 $ 16I003 $ 206037 $ 176,211
Q2 157.574 249.086 167.263
O3 177.422 281.591 188.331
O4 171.641 182`185
$ 40,034 24% $ 29,827 17%
91,522 58% 81.833 49Y6
Admissions tax has continued tobestrong through the third quarter of2O18.During the third quarter,
the City recognized $73 thousand of admission tax revenue for past due taxes from a business that had
not paid taxes since opening in3O15.The business will remit the past due amounts hfseven payments,
NoV`18-K88y'19.
Z:kCouncil Agenda ltems\Financek1.28.19\lm�Memo Sales ���Q3.docx
21
INFORMATIONAL MEMO
Page 8
Schedule VI shows quarterly telecommunications utility tax performance year over year and for the
current year compared to budget.
Schedule VI - Telecommunications Utility Tax (c)
(d) 2018
Quarter 2017 2018 Allocated
Earned Actual Actual Budget
INCREASE (DECREASE)
YEAR OVER YEAR BUDGET VARIANCE
Amount %a Amount
Q1 $ 323,708 $ 292,954 $ 319,585
Q2 312,456 279,555 308,476
Q3 388,433 266,244 383,486
Q4 316,497 312,466
$ (30, 754) -10% $ (26, 632) -8%
(32, 900) -11% (28, 921) -9%
(122,189) -31% (117, 242)" -31%
Totals $ 1,341,094 $ 838,753 $ 1,324,013 $ (185,844) -14% $ (172,794) -13%
Third quarter telecommunications utility tax was $122 thousand, or 31% less than the previous year
and $117 thousand less than budget. This large variance is partly driven by an $80k payment received
in 2017 for past due taxes. Excluding this prior year payment from the 2017 activity; third quarter 2018
activity was $42k or 25% under the same period for the prior year. The 2018 revenue is budgeted at
1% less than 2017 actual revenue.
(a)
(b)
(c)
(d)
Gambling tax currently includes card games, punch boards, pull tabs, and amusement games.
Excludes golfcourse admissions tax.
Telecommunications Utility tax currently includes cellular, pager and telephone usage.
Actuals reflected in Schedules IV, V and VI are amounts earned for the quarter.
22 Z:\Council Agenda Items\Finance11.28.191Info Memo Sales Tax-2018-Q3.docx
0
Status/Notes
Council requests starting in 4th Qtr
Dependant on negotiations
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SCORE financial update
Longacres Parcel Sale
Indirect cost allocation model
Gambling tax fee briefing
Surface Water billing transition to King County update
UTGO Bond Issuance
LTGO Bond Issuance
Priority Based Budgeting
10-year Sustainability Model
Banking RFP and New Banking Contract
Healthcare broker RFP
Fleet funding policy
Benefits Update
Capital asset policy
Self -insured healthcare plan update — funds 502/503
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Budget Amendments
Property Tax Legislation
Sales Tax Review
2021-2022 Biennial Budget Preparation
Business license fee increase and transition to State
Public Safety Plan Financial Framework
Terms for sale of Newporter site
Sale of Traveler's Choice property
Land sales: George Long, Minkler, Old Fire Stations
Compensation including non -rep analysis
Standard Reports/Briefings
Revenue and Investment Reports
Financial Results
Department Budget to Actual Reports
Committee work plan
Technology & Innovation Services
Public Safety Bond Financial Oversight Committee Report(s)
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Updated January 23, 2019
City of Tukwila
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