Revenue company has saved City Hall $200K
Sales tax revenue for the first quarter of 2003 was up more than 3 percent in Santa Monica over the first quarter of 2002, putting it directly in line with City Hall’s projections.
“Our budget is right on course,” said Steve Stark, the city’s director of finance, adding that City Hall predicted a 2.8 percent hike in sales tax revenue for the year.
A total of $6,211,990 in sales tax revenue was collected from January through March, which is typically the weakest quarter because it follows the holidays and is often marked by relatively bad weather.
New cars and auto leases continued to climb in the quarter, while higher fuel prices poured more money into city coffers, according to a report prepared for City Hall by a private revenue-tracking company.
Family apparel and light industrial outfits also posted gains, while department stores and business services companies suffered the greatest setbacks during the period, according to the report, which was prepared by Diamond Bar-based Hinderliter, de Llamas and Associates.
Overall, Santa Monica experienced a 3.04 percent rise in revenue, while LA County sales tax revenue rose by 6.7 percent and California’s by 4.6 percent.
The section of town comprised of Ocean Avenue, the Santa Monica Pier and many of the city’s hotels posted a 33.3 percent increase, while sales for downtown businesses, excluding those on the Third Street Promenade and in the Santa Monica Place Mall, rose by 16.6 percent, said Mark Richter, manager of economic development.
“We’ve been working hard at getting businesses to develop outside the Third Street Promenade and these figures are encouraging,” said Kathleen Rawson, executive director for the Bayside District Corp., a non-profit that runs downtown in conjunction with City Hall. “It’s been a tough year. The economy has not been good to us and the lack of tourists has been difficult.”
Richter said the numbers tend to show that businesses downtown that can’t afford to be on the Promenade are becoming more and more successful on the surrounding streets, where rents are cheaper and foot traffic has historically been less heavy.
But he warned against reading too much into the results of the data.
“One quarter’s adjusted figures do not make a trend,” he said. “We’re looking forward to seeing the second quarter’s figures.”
“One quarter’s adjusted figures do not make a trend. We’re looking forward to seeing the second quarter’s figures.” — – MARK RICHTER Manager of economic development
Jay Schermerhorn, a sales manager at Santa Monica Nissan, one of the city’s top 25 producing companies, according to the report, said sales have continued to climb over the already high first quarter.
“It’s going great,” he said. “We sold another 200 cars more. Business is booming right now for us. It just keeps going up.”
City Hall gets 1 percent of every taxable sale made in the city. State officials collect 8.25 percent of each sale, then send checks to California’s cities.
Lloyd de Llamas, president of Hinderliter, said City Hall pays his company $750 monthly to analyze sales tax returns. He said the service his company provides is important because no information comes with the state’s checks to explain which sectors are producers and which are stagnant.
“It’s kind of like running a business without knowing where your money is coming from,” de Llamas said.
“It’s kind of like running a business without knowing where your money is coming from.” — – LLOYD DE LLAMAS President Hinderliter, de Llamas and Associates
In addition to analyzing the returns, de Llamas said his company recovers misallocated revenue that the state should send to cities but does not. From the time his company’s contract with City Hall began in May of 2001, through the end of 2002, de Llamas said he recovered $198,780 due City Hall from the state.
Even with the commission he collects on that money, de Llamas said City Hall has recovered $397 for every dollar paid to his company.
Mark Richter
Manager of economic development
Santa Monica’s top 25 sales tax producers for the first quarter of 2003 (listed alphabetically):
Advantage Infiniti
Banana Republic
Hornburg Jaguar
Kramer Honda, Volvo, Mazda
Macy’s
PC Mall
Robinsons May
Santa Monica Acura
Santa Monica BMW
Santa Monica Ford
Santa Monica Lincoln Mercury
Santa Monica Mitsubishi
Santa Monica Nissan
Santa Monica VW, Lexus, Isuzu
SavOn
Sears
Shutters on the Beach
Specialty Laboratories
Taggs
Toyota Motor Credit
Toyota Santa Monica
Urban Outfitters
Volvo of Santa Monica
Originally published in the Santa Monica Daily Press print edition on August 18, 2003. Read the original PDF.