Downtown owners could get bigger say in double tax money in Merced

02/03/2014 10:43 PM

02/03/2014 10:44 PM

Downtown businesses could be on their way to calling all the shots when it comes to the downtown double tax.

The Merced City Council voted 6-0, with Councilman Noah Lor absent, Monday to direct staff to look at restructuring the downtown steering committee, which makes the funding recommendations for the money gathered by the double tax.

The city will also consider hiring another group or individual to handle overseeing the downtown tax funds. The staff will study the options and then report back to the council with its recommendations.

“It’s my opinion that we should get out of this business,” Councilman Tony Dossetti said. “This has been such a sore point.”

The council made the decision Monday after hearing more about a downtown double tax survey, which was administered last summer. Time for comment ran out during the January study session, so the council continued that portion to Monday’s session.

The council received the Alliance for Community Research and Development results last month of a downtown survey, which found 56 percent of business owners like the double tax but wanted more power over the money. Thirty percent would leave it as it is, and 14 percent would dump the whole thing.

Kevin Hammon, owner of Binary Systems Computer Repair on Main Street, said he wants to see “clarity, transparency and accountability” in how the money is budgeted and spent. Without the budget information, “How do we get accountability?” he asked on Monday.

Sixty of the roughly 540 businesses in the downtown took the double tax survey.

Merced’s downtown is the area bounded by G and V streets, the Union Pacific railroad tracks and the alley north of 19th Street. The 544 businesses in that area pay double taxes on their business licenses, and the money is pooled into a downtown fund. Since 1970, the double tax has been designated to improve downtown through capital improvements, administration, promotions and other uses as approved by the City Council.

How the money is spent is ultimately up to City Council.

City Attorney Greg Diaz said it would be possible to give the downtown steering committee total control over the cash, but that could raise the cost of auditing the fund because it would need its own auditing services.

According to city records, $60,000 to $85,000 is generated every year by the tax. City staff said about $35,000 goes to administrative costs.

Frank Quintero, Merced’s economic development director, said the city would likely need to walk “hand in hand” with a downtown committee for a year before turning the power over to the panel.

Quintero said a transition of the fund to the control of a downtown committee would work similarly to the three-year process that handed the Merced Theatre over to the Merced Theatre Foundation. The city still owns the building, he said.

The economic development department will not enter into any new long-term contracts before the city decides on restructuring the downtown steering committee or contracting with an agency, Quintero said.

John Cardenas, president of Merced County’s Multi-Cultural Chamber of Commerce, said he was happy with the council’s decision. He said it’s a move in the right direction, and what downtown owners have told him they wanted.

“It’s up to the business owners to step up,” he said. “They’re getting what they are asking for.”

A copy of the full report of the survey is available at www.cityofmerced.org.

In other news, with a 6-0 vote, council approved retired Oakdale Fire Chief Michael Wilkinson as interim chief of Merced City Fire.

According to the resolution, Wilkinson will serve no more than 960 hours beginning Feb. 10. He will be paid $66 an hour, which is at the high end of the salary range, according to city records. Wilkinson replaces Mike McLaughlin, whose last day was Sunday. He made $137,298 per year, which is also at the high end of the salary range.

City Manager John Bramble has said he hopes to recruit a permanent chief in four or five months. He said Wilkinson will not be a candidate for the permanent job. Wilkinson had to be approved by the City Council because he is a retiree under California Public Employees’ Retirement System.

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