San Fernando Sales Tax Update Q22018 Third Quarter Receipts for Second Quarter Sales (April - June 2018)

San Fernando SALES TAX BY MAJOR BUSINESS GROUP In Brief $350,000 2nd Quarter 2017 $300,000 San Fernando’s receipts from April 2nd Quarter 2018 through June were 14.7% below the $250,000 second sales period in 2017. How- ever, for the second consecutive quarter, challenges with the State’s $200,000 new software system have result- ed in delayed funding for 2Q18 lo- $150,000 cal tax payments. Other accounts received only partial funding for the $100,000 current quarter. Including these al- locations, actual sales would have $50,000 been down 7.7%%.

A business closeout reduced re- $0 ceipts from the general consum- Autos Building Restaurants County General Business Food er goods sector. Missing and par- and and and and State Consumer and and tial payments accounted for the Transportation Construction Hotels Pools Goods Industry Drugs decline in the building and con- struction group, service stations, quick-service restaurants and auto leasing. Top 25 Producers In Alphabetical Order REVENUE COMPARISON n incorrectly allocated payment A Ally Financial Malbros Ready Mix Four Quarters – Fiscal Year To Date (Q3 to Q2) temporarily depressed returns from Concrete Araca Merchandise casual dining restaurants. McDonald’s Arroyo Building 2016-17 2017-18 The losses were partially offset by Materials Nachos Ornamental double-up payments that inflated CCAP Auto Lease Pool & Electrical Point-of-Sale $4,576,822 $4,377,993 Products results from electronics/appliance El Pollo Loco stores. Rydell Chrysler County Pool 635,186 630,025 El Super Dodge Jeep Ram The City’s Measure A voter ap- Enterprise Rent A Smart & Final State Pool 2,477 2,546 Car proved half-cent transaction tax T Mobile generated an additional $522,564 Ferguson Enterprises Taco Bell Gross Receipts $5,214,485 $5,010,563 for the quarter, a decrease of 17.8% Ganas Auto TMB Production from the same period one year ago. Supplies & Goodman Services Net of aberrations, taxable sales Distribution Vallarta Supermarket for all of Los Angeles County grew Home Depot Western Motor Sport 0.6% over the comparable time pe- Jack in the Box Measure A $2,464,351 $2,468,080 WSS riod; the Southern California region Legacy Effects was up 1.0%. Published by HdL Companies in Fall 2018 www.hdlcompanies.com | 888.861.0220 ing prices by absorbing the costs of the of the by costs absorbing the prices ing to avoid rais have managed ufacturers man 5% of new Many the rates. ahead customs inventories spring through rush to attempting are and holiday season inventory for their the imported already of 2018-19 have most major retailers as remainder the through minimal be will sales on and prices impact the that lieve be Despite analysts debates, current the 2018. of to 25% quarter, rising third end by the of 10% for end the of the announced duties additional with strategy trade government’s federal international the element key a arebecoming of Tariffs Tax Sales and Tariff Policies state. the of rest outperformed the Valley areas Joaquin San and Sacramento the and Bay area Francisco Regionally, San the amajorprojects being factor. energy new in declines with quarters previous lower than slightly were purchases Business-industrial group. goods consumer general the within gainers stores were primary apparel the themed andcentersvalue fulfillment Online gains. to show substantial continued from autoreceipts leases although anticipated, previously as leveled off Autosecond quarter. sales the during growth of statewide drivers primary to the have been appear ping shop- online and jet fuel materials, construction and building of Sales 2017. second quarter than higher 1.6% be revenues will tax use and sales local statewide receipts, quarter actual adjusted to reflect data the and properly processed are returns all once that estimates HdL payments, partial of amounts full the approximating and After reviewing unprocessed returns quarter. next generated be will it revenues estimates that tax by advancing shortages resulting the State’s by the skewed attempt to offset further were The results system. CDFTA’s software reporting tax new due to implementationago with issues 10.1% one year quarter same from the dropped sales June through April from receipts Government cash Local Overall California NOTES 2018 Q2 - - - opportunities. expansion and equipment supplies, in investment capital and job base panies’ com affected the both atively impact neg will exports California on tariffs $5.6announced retaliatory in billion the and dollar stronger the that worry Opponents consumers. on increases relatedprice tariff impact theof offset will of U.S. the dollar strength rising the that argue Proponents tariffs of rising income. discretionary portion of for asignificant compete costs care health education and housing, rising where environment an in particularly number ofthe purchases, reduce potentially also they purchases, from individual tax generate more sales prices higher revenues. Although tax use and on sales impact the and policies trade government its refines federal the 2019-20ing how be revenues will tax project analysts concern for Thekey projects. on long range increases cost to cover potential contracts in clauses escalation to require beginning tors are contrac and a competitive disadvantage at placed be may power prices to in lock without the retailers side,down small the On components. and machinery onmetals, roundtariffs of first initial S Gross Receipts County &StatePool Allocation Total AllAccounts Quick-Service Restaurants New MotorVehicleDealers Shoe Stores Repair Shop/Equip.Rentals Plumbing/Electrical Supplies Business Type Grocery Stores Fast-Casual Restaurants Electronics/Appliance Stores Contractors Casual Dining Used AutomotiveDealers Auto Lease Building Materials Auto RepairShops Automotive SupplyStores AN F ERNANDO San Fernando T OP 15 1,142,535

157,109 985,426 112,147 201,524 143,786 Q2 '18 B L — — CONFIDENTIAL — — CONFIDENTIAL — — CONFIDENTIAL — — CONFIDENTIAL - - - - 15,512 18,045 69,889 34,360 15,230 43,889 36,640 42,477 22,548 36,576 15,537 23,884 USINESS San Fernando R San FernandoThisQuarter S $1,000 $2,000 $3,000 $4,000 Autos/Trans. San Fernando Fuel 1% 27% EVENUE ALES $0 Change -14.7% -16.4% Food/Drug -14.7% -14.1% -20.8% -35.0% 74.0% 32.2% -2.6% -2.1% -0.5% -3.7% -4.1% -6.4% 0.2% 3.6% 3.8% 1.0% Q2 Sales TaxSales 15 5% T P YPES ER B Bus./Ind. Y Change 7% County -23.0% -14.1% -12.1% -11.4% -41.4% -11.9% -10.1% -14.7% -34.3% -10.2% C 61.0% -0.3% -6.0% -2.4% -5.4% -6.0% -7.0% 3.2% Q2 B 16 County Building APITA 22% USINESS Cons.Goods Update 10% HdL State Change -18.6% -10.7% -12.7% -41.5% -12.2% -10.1% -14.8% -23.2% -11.6% 60.9% -3.3% -6.0% -6.8% -2.0% -7.0% -3.4% -5.1% 5.5% Q2 17 G California ROUP Restaurants 14% Pools 15% Q2 18