The City of Los Alamitos recently released the fiscal results for the first 9 months of the year and the national trends are clearly evident in the numbers. When comparing the year to date results for this year with those of last year, sales taxes are down 17.4%, the hotel occupancy taxes are off 20.8%, and investment earnings are lower by 52.8%. The drop in sales taxes means that property taxes and the utility user tax have both replaced sales taxes as the City's largest source of funds.
The good news: total City revenues are down only 0.7%.

Last year at this time, sales taxes totaled $1,722,900. This year the total was only $1,422,742, $300,158 lower than the previous year. The City lowered by $151,240 forecasted sales taxes for the full year at the mid year budget update back in February and now, according to Nita McKay, Assistant City Manager, even the lowered projection may not be reached.

Property taxes and the utility user tax are the other large sources of funds for the city and these are both moderately higher than last year. Property taxes are up by 3.4% and the utility tax is higher by 4.6%. In previous years, property taxes increased substantially as properties are reassessed when homes are sold. These three taxes (property, sales, and utility taxes) are by far the largest sources of funds for the city. together they represent 65% of total city revenues.

In addition to the increases in property and utility taxes, the city received significant increases in recreation services and licenses and permits. These items increased over last year because of higher fees implemented by the city. Also, These revenues include the very successful Race on the Base. The Race on the Base generated net profit of $78,670.

The fiscal results include a number of smaller increases and decreases. Total city general fund revenues for the current 9 month period were $7,023,604, compared to $7,074,040 for the same period last year. The decrease in revenue was more than offset by lower expenditures. Total general fund expenditures fell by $600,000 when compared to last year.

The city implemented a plan to reduce discretionary spending in several areas to offset the falling sales taxes, but $500,000 of the $600,000 reduction in expenses from last year is in the non-departmental/insurance areas. This area includes workers compensation insurance and general liability insurance costs.

While many of the city departments are spending less money than they did last year, some are spending more. Administrative Services, Police, and Recreation were all higher. Police is the city's single largest expense item. At a current year to date expenditure of $3,532,756, the Police Department represents 44% of total general fund expenses. During the same period last year, the Police Department spent $3,391,337 , or $141,419 less than this year.

At the City Council meeting earlier this week, McKay said "We are projecting at the end of this fiscal year, if everything holds true, we will have a surplus of $5,100." The lower sales tax receipt for Los Alamitos contrasts sharply with higher sales taxes for Seal Beach. Sales tax receipts for Seal Beach have increased substantially because of the new Rossmoor Center which is in the City of Seal Beach. Los Alamitos has not had a recent comparable expansion in its retail sales tax base.