Finance Committee Agenda and Packet 2023 10 19

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City Council Finance Committee Meeting Minutes September 21, 2023 Page 2 of 5 Questions from the Committee: Councilmember Hamlington asked how use tax variance is calculated given the variable nature of the tax. The Tax Auditor noted that there is analysis work done to estimate this income. For example, businesses have relocated within the city, and we've tracked what to expect to project their use tax in the future. It is correct that there is part of this that we are unable to fully forecast the income. The Revenue and Sales Tax Manager noted that we are focusing on new improvements with these numbers and there will be a portion of normal business uses throughout the process, such as purchasing supplies out of state. The Finance Director added that the most difficult data to capture is any new businesses coming into the city. He also noted that we have nothing greater than 50% in our current model. Any changes to that will alter these numbers. Councilmember Dickinson noted that the 12-month total wasn't calculated correctly and requested clarification and correction to the report. The Tax Auditor responded that rebates were deducted from the annual amount, so it appears the calculation is off. Councilmember Hamlington noted that the Auto Use Tax includes a lot of variables out of our control, such as the UAW strike, which will make this difficult to project. The Revenue and Sales Tax Manager added that Auto Use Tax is also only collected on vehicles where the taxes weren't charged at time of purchase. The same applies to leased vehicles — this will be captured in sales tax rather than auto use tax. Councilmember Dickinson asked what businesses are affecting the CTC sales tax numbers the most right now and how is the CTC growing. The Sales Tax Auditor will research this information and provide the committee with a breakdown by industry. Councilmember Dickinson noted that brick and mortar sales are very flat which is concerning. Councilmember Hamlington asked for information on what industries it would be helpful to attract to Louisville to improve sales tax. The Sales Tax Auditor pointed the committee to the Sales Tax Revenue Comparison by Industry — Outside City Area chart. Councilmember Dickinson requested a drilldown of outside city service industries. The Sales Tax Auditor reviewed the service categories with the committee. Councilmember Dickinson asked what the impact of losing Lowe's is. To protect privacy, the Director of Finance suggested that the answer can be found in the provided category trends in the report without discussing individual businesses. Councilmember Hoefner noted that the report is very well done, and he prefers as much data as possible. The Executive Summary is very valuable. Questions from the public: Councilmember Most noted that the Council gets a lot of feedback asking about the state of businesses in the city and there is a perception that we are not doing well. She asked if there is anything public facing 4/47