No furor over Petaluma’s downtown tax this year

Petaluma City Council members Monday approved the downtown business district’s annual report with little fanfare, signaling an end to internal strife that erupted last year over the downtown tax.

The 14-year-old tax, actually a self-imposed “business improvement district” assessment, is administered by the Petaluma Downtown Association with little City Council oversight other than checking off on the pre-approved budget.

Last year, several downtown business owners challenged the tax, saying they didn’t see any improvements from the annual proceeds, which range from $20,000 to as much as $65,000.

After merchants raised concerns, the PDA made an effort to be more transparent and invited members into the planning and budgeting process. Two of the most vocal critics, including Athletic Soles owner Holly Wick, joined an advisory committee that meets monthly.

“We have really worked together,” Wick said Monday night, saying members have clarified some misconceptions about the mandatory tax, suggested new beautification efforts and have begun working to collect from delinquent businesses.

“There are literally people who owe us thousands of dollars,” she said.

The assessment - which many merchants ignore, according to the group’s annual accounting - goes toward downtown security, marketing, beautification and administration.

A levy between $41 and $500 a year depending on business type, size and location, has raised about $41,000 this fiscal year, with another $6,000 expected to be collected. If all of the 600 businesses paid their full assessments, the fund could raise $65,000 a year.

City Finance Director Bill Mushallo said the city has pressed its billing contractor to go back three years to collect from businesses that haven’t paid - and to begin charging a late fee.

The council approved the assessment district in 2000 at the request of downtown businesses, whose owners sought a way to raise funds for their special interests - security, beautification and marketing the downtown retail core.

More than 600 businesses fall within the district’s boundaries, roughly centered at Petaluma Boulevard and Western Avenue and radiating outward about a half-mile.

The City Council has no authority over the district’s budget, only requiring an annual report and procedural approval of the spending report and budget plan. It typically was a routine action, done without much comment.

Mayor David Glass said Monday he was happy to see the factions ironing out their differences.

“I never imagined there would be kumbaya down there,” he said.

The council scheduled a Jan. 5 hearing to accept public input on the group’s budget plan and the annual assessment, which is the same amount as last year.

You can reach Lori A. Carter at 762-7297 or lori.carter@pressdemocrat.com. On Twitter @loriacarter.

Editors Note: An earlier version of this story incorrectly stated that the levy on businesses has raised $14,000 this fiscal year.