The Merced City Council on Monday voted to move forward with hiring a third party group or person to handle cleanliness, security and event planning that comes from the downtown double tax.
With a 5-2 vote, the council told city staff to request bids for a service provider who will be given the majority of duties related to the downtown double tax. Councilmen Tony Dossetti and Noah Lor voted no.
“I don’t think we need to be spending our resources and our time on the (accounting) books for them,” Dossetti said. “I’d like to see this go away.”
Merced’s downtown is bounded by G and V streets, the Union Pacific railroad tracks and the alley north of 19th Street. The 400 to 500 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.
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The other two options at Monday’s meeting included eliminating the tax or a restructuring that used only city staff. The council made its decision after hearing more about a downtown double tax survey, which was administered last summer.
Most council members said the double tax was important because the city is judged by its downtown. They agreed that business owners in the area need to have all the say over the downtown fund.
Councilman Mike Murphy said the downtown tax was too small for the amount of time city staff spent with it, so a third party handler was warranted. The city is preparing a roughly $191 million budget, and the fund pools between $65,000 and $85,000.
“This small part of it attracts an oversized amount of attention,” Murphy said.
The council received the Alliance for Community Research and Development’s downtown survey results in January, 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.
An additional survey of UC Merced students found they want to see “safety, security and beautification” in the downtown, which they called a “scary” place.
Robert Tomasetti, who owns a retirement services company in downtown, said there is no need to feel unsafe in downtown. “I don’t think there’s a real big security problem,” he said.
The biggest problem, he said, is lack of communication. Not having a line item budget, he said, leaves many owners feeling out of the loop.
Just 60 of the roughly 540 businesses in downtown took the double tax survey last summer.
Frank Quintero, Merced’s economic development director, said the city looked at San Luis Obispo, Chico and Davis for examples of systems in which tax dollars are allocated by a downtown organization.
John Cardenas, president of Merced County Multi-Cultural Chamber of Commerce, said the newly formed Downtown Association plans to bid for the job. The organization is working on getting nonprofit status, he said, and is working with a nonprofit in the meantime.
Mayor Stan Thurston said it is important that the city continue to improve the downtown when it can. “As much as possible, the people paying the tax should be running the tax,” he said.