HomeMy WebLinkAboutIR 9496 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9496
To the Mayor and Members of the City Council June 12, 2012
Page 1 of 4
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SUBJECT: APRIL 2012 — SALES TAX UPDATE
Sales tax revenue represents approximately 19% of the City's General Fund budget. Staff is
committed to providing you regular updates on this important and sometimes volatile revenue source.
The Texas Comptroller's Office posted monthly results on June 6th. The results are dependent upon
the timeliness and accuracy of sales tax payers' returns. This payment from the State represents
taxes collected on sales that occurred primarily in the month of April. In this report, you will see Fort
Worth's sales tax collection compared to last year and the impact the results are having on the current
year's budget. Also, as requested, we've provided some additional explanations for the impressive
sales tax results for February 2012.
MONTHLY NET SALES TAX COLLECTIONS FOR MARCH
CITY OF FORT WORTH
APRIL FY2012 $8,439,886 DOLLARVARIANCE %VARIANCE
APRILFY2011 $6,572,158 $1,867,728 28.4%
to
C
� � � $7.1 1 $7.5 1 $7.7
FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012
Note: The City's net payment for sales tax collection is up $1,867,728 or 28.4% compared to this
month last year. However, like March 2011 net collections for April 2011 were reduced by an audit
adjustment of $1.4M. This adjustment was refunded to a Fort Worth company that had over paid
sales taxes in prior years. The State Comptroller's Office reversed this audit adjustment later in 2011,
resulting in an abnormal increase in collections for that month. In upcoming reports, you will see the
impact of that reversal. As depicted in the table below, "current period collections" increased 5.1%
over last year, which is a better barometer of pure economic improvement.
CITY OF FORT WORTH COLLECTION DETAIL
COLLECTION DETAIL FOR CITY SALES TAX
APRIL 2011 APRIL 2012 CHANGE
Current Period Collections: $8,014,261 $8,424,186 6.1%
Other Collections: $47,690 $125,471 II'Ir3 `194'
Audit Collections: 1;!1;1 Y 1 'I,O(3 i') $12,915 100.9%
Service Fee: 1 ^"78) 1 7 1) 28.8%
Retainage: $56,248 $48,565 -13.7%
Net Payment $6,672,168 $8,439,886
Current Period Collections 18.4%
11.2% 9.7%
3.9% 5.4% 5.7% 4.2% 6.0% 4.3% 5.1% 5.1%
Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12
City Sales Tax Trend: Variance for the most recent months vs.same period last year.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9496
To the Mayor and Members of the City Council June 12, 2012
Page 2 of 4
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SUBJECT: APRIL 2012 - SALES TAX UPDATE
CITY OF FORT WORTH BUDGET COMPARISON -FY2012
ADOPTED BUDGET YR END
BUDGET RE-ESTIMATE VARIANCE
CITY OF FORT WORTH $ 102,259,196 $ 107,550,857 5.2%
CRIM E CONTROL AND PREVENTION DIST. $ 46,304,344 $ 48,007,145 3.7%
MASS TRANSIT AUTHORITY-THE"T" $ 47,647,392 $ 51,569,351 8.2%
Note: For the year, the City has collected $5,291,661 or 5.2% more than the FY2012 adopted
budget. As depicted above, you will also see how the positive results are affecting our partner
agencies. While these results are encouraging, Staff recommends maintaining a conservative
forecast for FY2012 as we continue to experience uncertainty with the national economy and potential
audit adjustments.
Note: YTD collections for Fort Worth are up 10.0% compared to last year.
The following chart demonstrates how our trend compares to other cities:
CITY OF FORT WORTH
CITY COMPARISONS -FY 2012 v. FY 2011
CITY QTR 1 QTR 2 APRIL YTD
BURLESON 17.9% 35.5% 29.5% 26.4%
GRAND PRAIRIE 19.4% 14.9% 5.0% 15.4%
EULESS 8.7% 14.3% 9.8% 11.2%
FORT WORTH 2.2% 13.9% 28.4% 10.0%
KELLER 9.4% 5.6% 3.5% 7.0%
WATAUGA 7.3% 5.3% 8.9% 6.7%
DALLAS 5.7% 4.9% 11.6% 6.1%
SOUTHLAKE 4.0% 6.5% 10.6% 5.9%
ARLINGTON 3.3% 3.4% 7.9% 3.9%
BEDFORD 2.5% 3.1% 2.2% 2.7%
NORTH RICHLAND HILLS 8.5% 4.3% 3.1% 2.6%
HURST 1."'7% 3.9% 7.1% 1.5%
GRAPEVINE 4 "7% 3.9% 10.9% 0.7%
Also, on May 15, 2012, City Council requested additional information on the City's sales tax
collections, in particular for February 2012.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9496
To the Mayor and Members of the City Council June 12, 2012
Page 3 of 4
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SUBJECT: APRIL 2012 — SALES TAX UPDATE
Growing sales tax revenue continues to signal an improvement in business activity in the local
economy. The trend of positive collections began in earnest last year. As previously reported, the
City of Fort Worth is extremely fortunate to have a very diverse sales tax base. Most cities and
towns are heavily reliant on retail but there are a variety of vibrant business sectors in Fort Worth.
The following pie chart illustrates the broad range of industries that fuel the City's sales tax
collections.
Manufacturing 9%
Information/ Media
9%
Wholesale Trade
9%
Utilities 9%
Construction 3%
Hotels/Food Svcs
Professional 10%
Services 3%
Rental Stores 3%
Mining 2%
Other(Less than
1%)8%
Retail Trade 34%
In February of this year, the City saw the largest collection on record for that month. The
collections were $8.3M, a staggering $1.4M higher than last year. As you recall, last February we
had the benefit of Super Bowl activities that strengthen sales tax results so we were somewhat
surprised by the tremendous improvement. Staff researched detailed information provided by the
State Comptroller to identify the specific industries that contributed to the significant growth.
Staff is precluded by state law from identifying the exact business entity and their sales results as
these are private companies and their information is confidential. However we are able disclose
the industry categories or sectors that comprise the individual businesses. The following table
identifies those sectors and the impact they had on the February results.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9496
To the Mayor and Members of the City Council June 12, 2012
Page 4 of 4
r
SUBJECT: APRIL 2012 — SALES TAX UPDATE
Feb 2011 Feb 2012 Var. % Var
Total Monthly Collections 6,955,000 8,372,000 1,417,000 20%
Industry/ Business Sector Feb 2011 Feb 2012 Var. % of Incr. Industry Description
Retail Trade 2,374,000 2,842,000 468,000 33% Consumer Retail Stores
Wholesale Trade 625,000 859,000 234,000 16% Warehouse, Business to Business
Manufacturing 579,000 772,000 193,000 14% Large Scale Assembly
Hotel/ Food Sery 762,000 943,000 181,000 13% Lodging and Meals
Construction 202,000 358,000 156,000 11% Bldgs and engineering projects
Mining 111,000 242,000 131,000 9% Production of minerals
Other Industries 2,302,000 2,356,000 54,000 4% Everything else
Total 6,955,000 8,372,000 1,417,000 100%
While not quantifiable, it's worth noting, February 2012 had one additional shopping day compared to
February 2011. We believe this did have an impact on the monthly results. As noted above, retail is
not only the largest sector it is also the largest driver of our year over year improvement, contributing
33% of the growth. The leading retailers in this category included department stores, sporting goods
stores and supermarkets. The wholesale industry deals primarily with durable and non durable goods
affecting business and consumer purchases. Specifically this includes industrial machinery and
roofing supplies. As the economy continues to grow with businesses investing more and new
residents calling Fort Worth home, retail and wholesale activity will serve us well. While relatively
small compared to our retail sector, the impact of manufacturing, hospitality and construction cannot
be ignored. The success of these industries also bolsters our results.
Again, through April, the City has collected $5,810,255 or 10.0% more than last year. The strength of
our diverse sales tax base continues to provide needed resources to address the challenges of our
growing City.
Again, hopefully you find this additional information helpful. If you have any questions, please call
Horatio Porter, Budget Officer, at 817.392.2379.
Tom Higgins
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS