Benicia Economic Development Manager Mario Giuliani presented the city’s 2014 third quarter sales tax report to the Economic Development Board on Wednesday, and it showed a continuation of a long-term — and disturbing — trend: falling tax revenue in the Industrial Park.
“It really illustrates the narrative that the city has been saying for some time,” Giuliani said of revenue figures for July through September 2014. “It was certainly the catalyst behind our Measure C effort related to sales tax.”
He pointed out that in 2008 and 2009, total sales tax for those years was slightly over $5 million. After that, 2010 was the lowest year, at $4,426,417.
Through three quarters, the 2014 sales tax amount stands at $3,470,900, Giuliani said — with a decrease in the Industrial Park the chief reason.
Third quarter sales tax for the Industrial Park totaled $862,001, or $15,017 lower than the third quarter of 2013, Giuliani said, adding that the area has 25 businesses generating 60 percent of sales tax income, and 1,172 businesses generating the rest.
“That 1,172, that’s not a good number,” he said. “Those are everyone that has reported to the (State) Board of Equalization. We really don’t have a thousand businesses in the Industrial Park. But those are what reported to the Board of Equalization, so that is why I left it in there.”
Giuliani broke down the percentage of sales tax income by category: The Industrial Park has 18 repair shop/equipment rental businesses responsible for 6 percent of sales tax; 44 contractors that bring in 12 percent; 12 electrical equipment businesses that bring in 4 percent; 12 petroleum product and equipment businesses that bring in 9 percent; 38 heavy industrial companies responsible for 31 percent; 40 light industrial companies that bring in 14 percent; and the remaining 212 businesses that make up the remaining 24 percent.
“The biggest is really heavy industrial, then light industrial,” he said. “It really is industry that is driving our economy.”
Giuliani’s report also tracked sales tax in the city’s three major shopping centers, where the picture is somewhat rosier: Southampton Shopping Center, Solano Square and Columbus Parkway.
Southampton Shopping Center saw significant improvement in the third quarter of 2014, at about $63,572, up from $57,387 in 2013.
Giuliani referred to Solano Square as a model of consistency. Its total for the third quarter was $43,296, higher than its $42,449 in 2013.
Columbus Parkway, at $44,121 for the 2014 third quarter, was “essentially identical to the third quarter for last year in 2013,” he said.
Back in December, when Giuliani presented the second quarter sales tax numbers to the EDB, he already had the breakdown for the third quarter of the Transient Occupancy Tax, which had totaled $117,334. It was $104,412 for 2013.
Like its shopping centers, the city’s downtown showed a positive trend, with 2014 third quarter sales tax totals at $52,819, a slight improvement over the $52,774 of 2013.
First Street is “blossoming and doing well,” Giuliani said. “Why is it doing well? As we talked about in our last few discussions, we can thank our restaurants and bars. They are generating the majority of sales tax.”
Of the 260 businesses in the downtown area, 37, or 14 percent, are restaurants and bars. They are responsible for 75 percent of the sales tax generated in the downtown area.
“We certainly need to enhance our retail, because we don’t have enough retail on there,” Giuliani said.
In comparing totals of all the reported areas, Giuliani directed the board’s attention to a new “miscellaneous” category, which accounted for $189,977 for the third quarter.
“We have characterized our geographic areas of Benicia from Columbus, Solano, downtown, and Southampton, but we have a west side and an east side of Military that generates sales tax. Those businesses don’t fall into any of these categories, and you also have some outliers,” he said.
In other news, at the end of the meeting board member Duane Oliveira announced it would be his last meeting. He has been a member of the EDB since June 2006.
“We’re headed in the right way,” he said of the panel. “This board is very active. People came together who would not normally be in the same room. I’m going to miss you all. Thank you for the opportunity to be on the board.”
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As your “Appointed” City Treasure I am concerned about our Citiy’s deficit.
In the words of someone of importance ” Third quarter sales tax for the Industrial Park totaled $862,001, or $15,017 lower than the third quarter of 2013, the area has 25 businesses generating 60 percent of sales tax income, and 1,172 businesses generating the …….” We are at 90%’+ occupancy rate, if my memory serves me right, so what are we to do?
It makes me nuts for folks to criticize without offering a solution. I have stated numerous times ” You can’t save your way to prosperity”. My team has suggested several options which I feel has merit:
1. Develop our available acres with a Developer that will put in roads, schools, parks and fire stations. Development by the City as a stand along source is too costly to absorb. Let someone else pay the bill.
2. Attract new business to our Industrial Park with concessions. Fill the park, expand as needed and attract clients. We offer so much with the exception that every business is asking “What’s in in for Me”? WIFM… Tax credits, job fairs, state training funds……etc. Economic Developmemt needs to get on this in my opinion.
3. Populate, rent, sell parts of the arsenal. Blastphemy you say? Ask, as I did two years ago, what is the annual maintenance fee for the Commanding Officers Quarter? No answer…. No one could respond. I’d guess with maintenance , security and loss of funds’ we are spending or losing or combined, close to $50,000 per year. Let’s get the details
This is a great building with lots of Historical value. Lease it for a long term commitment with provisions that protect the History and stop the bleeding of revenue.
The Bottom Line
The readers of this column may, can and will disagree. But until we start to think, plan and operate our City as a business and spend less time on non value added projects, we’ ll not get out of this pickle anytime soon.
ON A FINAL NOTE: Our City Manager has done an oustanding job. In my opinion he thinks like a businessman . He’s made tough calls, cuts as needed and weathered the storm. He’s added a new rudder to the ship. Together he and his team will connect the dots and figure it out. We just need the other folks of importance to get on board. .
” You Can’t Save Your Way to Prosperity”
Beyond the Industrial Park finances—-
Government’s Statement of “Net Worth” – Budgets are for the “Year” CAFRs (Comprehensive Annual Finance Reports) are what developed since the beginning! Decades if not over a century of investment, income wealth amassed from that local government.
Mr. Paulk states, ” You Can’t Save Your Way to Prosperity.” Really?
Curious comment, We need a report from our City Manager and our city council –Tom Campbell is an expert when it comes to Benicia finances— about the CAFR and the “true wealth” of our “Little City.”
From Mr. Paulk:
“But until we start to think, plan and operate our City as a business and spend less time on non value added projects, we’ ll not get out of this pickle anytime soon.”
The last time I looked, at the Benicia CAFR, the city of Benicia had $3 million in its checking account and had over $47 million in its investment portfolio.
The Herald has written a few articles on this subject matter—but to my knowledge no member of the City Council, Mayor or City Manager has ever mentioned/commented/ written an article fully to the public they serve— on the wealth amassed in Benicia over time –all recorded by LAW in the CAFR.
The public has a” right to know” about the full accounting of Benicia’s real, true, wealth.
Mr. Paulk,
Your plan sounds reasonable. Like it. You are correct when you state “you cannot save your way to prosperity.”
Beyond that, it is equally true that “one cannot tax your way to prosperity.”
Some are advocating raising tax rates as a way to solve the declining revenue picture. This makes no sense as it is counter productive. Raising taxes, in the long run, will diminish revenues due to diminishing business activity. As you stated, we need to expand and attract revenue based business activity. Your plan addresses that need.
Just who are the other folks. Solutions are more important than just words. Lay out your solution. I did not see one.
Raise the sales tax to 50 percent and see what happens to total tax revenues. The old Goose is getting killed in Zbenicia!
Has more to do with the mix than the rate. Storage will not generate sales tax.
In many ways the Mayor under estimates the worth of the Industrial Park and Valero. They are there and must be utilized to the fullest advantage.. They are not the enemy. The Mayor must quit worrying about issues that she cannot control. The City must make the Seeno property state of the art business/industrial park. We as a city cannot dictate to landlords who they rent to either downdown or the Industrisal Park. We must make the improvements at once. They are dedicated at present to do that. But keep your eye on 2016 and who you elect. We could get caught up in a bicycle path mentality and not revenue producing ventures. The Seeno property is the at once answer. Not the Mayors idea of making an enemy out of Valero and PG&E. Proper planning is in the beginning stages AT presaent. I do agree the City spends far to much time om the Mayors projects like the CSC etc. The rest of the council can steam roll right over her and the heck with her lemmings that show up at ALl council meetings. Get tough and get moving. It will change. It does appear the City Treasuere is this time going to really run for office. He uses the term “My Team”. That should tell you something.