The city has turned up the heat on downtown merchants who don’t pay their business district assessment fees.
Wednesday afternoon, a Lodi city finance department official was accompanied by one or more Lodi police officers carrying guns and wearing badges.
Their mission was to deliver misdemeanor citations to several downtown merchants for failure to pay Downtown Lodi Business Partnership fees.
If the business owners fail to pay the fees, they are subject to criminal penalties.
“We may need to look at the way that we do that,” said Lodi Mayor Susan Hitchcock. “That collections are done by the police department seems strange to me.”
Hitchcock added that it is possible that the city is required by state law to take certain measures regarding tax collection, and may not have the discretion to change those rules.
DLBP executive director Lew Van Buskirk said the citations were simply part of a collection effort by the city, and there was no coordination between the DLBP and city officials.
“It is a tax,” he said. “You will be arrested if you don’t pay. Once it gets to a citation, it is punishable by imprisonment.”
The Kundert and Bauer appliance store on East Lodi Avenue received a citation, although the store has moved outside the DLBP assessment district. Kundert and Bauer was previously located on Oak Street downtown.
Owner Shirley Davis said that she did not want to comment until she and her husband had spoken to their attorney.
Using police officers to cite merchants for a failure to pay business district assessment fees has never been done before, said Vicky McAthie, city of Lodi finance director.
She said that the finance department made repeated attempts to collect the fees, but had received no response from the business owners. The efforts included letters, telephone calls and visits to the businesses.
The police officers were required because the DLBP’s fees are considered in the same category as the city’s business taxes.
The municipal code makes the police department responsible for collecting unpaid city business taxes, according to Steve Schwabauer, deputy city attorney.
But the DLBP is not a city or government agency, he said.
The failure to pay the fees is a violation of a city ordinance, which is a misdemeanor, he said. And only police officers have the authority to issue misdemeanor citations.
As for why criminal citations were issued for failure to pay fees to a private organization like the DLBP, Schwabauer referred questions to Lodi City Attorney Randy Hays, who is on vacation until next week.
In addition to the DLBP fees, there is also a city fine that goes with the citations. The fine amount is $100 for the first violation, $200 for the second, and $500 for each subsequent violation, Schwabauer said.
The city of Lodi took over collection of the DLBP assessment fees in 2002 after the organization ran into difficulty collecting the fees. In Feb. 2002, the city paid $15,000 to the DLBP to resolve a dispute over collection of the fees.
The fees for the assessment district vary from $50 to $500 per merchant per year, depending on the location and the type of business.
Van Buskirk said that it was just a coincidence that the action by the city comes just a week before he leaves the DLBP, having been voted out by a majority of the group’s board of directors. Pamela Hayn takes over Van Buskirk’s duties on Oct. 1.
Van Buskirk said that strong punishment for merchants that fail to pay the DLBP fees is appropriate. But he said that he did not speak for the DLBP, and referred questions to the group’s president, Peter Westbrook.
Westbrook agreed that the enforcement action was necessary.
“The people who don’t pay are biting the hand that feeds them,” he said. “It’s an investment in the downtown,” he added, and said that all merchants should participate.
Westbrook said that merchants who are unhappy with the fees have two options: Pay up, or “rally the community” to change the DLBP’s rules, he said.
Some business owners, like Tim Vallem, owner of Old Town Antiques, simply subtract the DLBP assessment and pay only the business tax portion.
Vallem said that he has been in regular contact with the city Finance Department over the status of his unpaid fees, but they have never reached a resolution on the matter.
Vallem did not receive a citation Wednesday, though he has not paid his DLBP fees since 1999.
“I paid them the first couple of years, but when I realized that the leadership was not going the right way, I stopped,” he said.
McAthie said that all merchants with overdue partnership fees will eventually receive citations.
DLBP fees are used to promote downtown business through events such as the farmer’s market and the wine stroll, as well as cosmetic improvements and decorations. The fees also pay the salaries of partnership employees like Van Buskirk.
Since last year, the yearly DLBP assessment has been included with the merchants’ business tax bill, which caused some confusion among business owners at the time.