City of Seal Beach Sales Tax Update Q22018 Third Quarter Receipts for Second Quarter Sales (April - June 2018)

Seal Beach SALES TAX BY MAJOR BUSINESS GROUP In Brief $400,000 2nd Quarter 2017 $350,000 Seal Beach’s receipts from April 2nd Quarter 2018 through June were 9.2% below the $300,000 second sales period in 2017. How- ever, for the second consecutive $250,000 quarter, challenges with the State’s new software system have result- $200,000 ed in delayed funding for 2Q18 lo- cal tax payments. Other accounts $150,000 received only partial funding for the current quarter. Including these al- $100,000 locations and other reporting ab- errations, actual sales would have $50,000 been up 2.4%. $0

Missing and partial payments ac- General Restaurants County Fuel and Food Business Autos Building counted for the decline in service Consumer and and State Service and and and and stations, restaurants and sever- Goods Hotels Pools Stations Drugs Industry Transportation Construction al categories of general consumer goods. A onetime accounting ad- justment that inflated year ago re- turns caused the drop in electron- Top 25 Producers ics/appliance stores. In Alphabetical Order REVENUE COMPARISON AT&T Mobility Panera Bread Four Quarters – Fiscal Year To Date (Q3 to Q2) A double up payment exaggerated results from specialty stores. A re- Bed Bath & Beyond Pavilions cent addition helped boost receipts Chevron Petsmart 2016-17 2017-18 from the building and construction Chick Fil A Ralphs Point-of-Sale $3,611,494 $3,491,828 sector. The City’s allocation from CVS Pharmacy Roger Dunn Golf the county use tax pool also added Energy Tubulars Shop County Pool to overall results. 474,166 471,366 Home Goods Seal Beach Chevron et of aberrations, taxable sales State Pool 1,989 1,971 N In N Out Burger Spaghettini for all of Orange County grew 0.7% Islands Sprouts Farmers over the comparable time period; Market Gross Receipts $4,087,649 $3,965,165 Kohls the Southern California region was Target up 1.0%. Marshalls Toys R Us Old Ranch Country Club Ulta Beauty Original Parts Group Walts Wharf

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 Specialty Stores Service Stations Quick-Service Restaurants Drug Stores Business Type Gross Receipts County &StatePool Allocation Total AllAccounts Women's Apparel Grocery Stores Fast-Casual Restaurants Electronics/Appliance Stores Discount DeptStores Sporting Goods/BikeStores Casual Dining Department Stores Petroleum Prod/Equipment Home Furnishings Family Apparel EAL B EACH City of Seal Beach ofCity Seal T OP 15

B USINESS 947,213 118,018 829,195 128,715 Q2 '18 L — — CONFIDENTIAL — — CONFIDENTIAL — — CONFIDENTIAL — — CONFIDENTIAL — — CONFIDENTIAL — — CONFIDENTIAL - - - - 69,547 54,624 54,918 23,949 57,906 27,287 22,912 22,358 64,682 22,942 34,479 36,825 45,636 35,670 Seal Beach R Seal BeachThisQuarter S $1,000 $2,000 $3,000 $4,000 Cons.Goods EVENUE ALES Seal Beach $0 Change 108.9% -40.8% -10.9% -24.9% -27.2% -34.4% -31.1% 36% 51.5% T -9.0% -6.5% -6.5% -0.3% -9.2% -8.5% 0.0% 6.8% 4.7% 3.1% Others Q2 Sales TaxSales 15 YPES 7% P ER B Food/Drug Y Change County -31.3% -10.9% -18.4% -20.3% -23.3% -11.5% -13.9% C 20.2% 16.8% -8.7% -1.6% -6.4% -7.1% -8.2% -6.6% -1.3% -9.8% 3.9% 9% Q2 B 16 County APITA USINESS Update HdL State Change -26.4% -12.8% -13.5% -10.1% -20.9% -21.7% -27.2% -12.2% -12.6% 12.7% -4.6% -5.8% -4.2% -7.0% -3.3% -5.1% 5.5% 0.4% 10% Fuel Q2 17 G Restaurants California 25% ROUP Pools 12% Q2 18