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e equity issues for businesses that continued to pay the same amount of tax despite the elimination of services. Due in part to tax equity concerns, support for the free parking program has declined; businesses fail to pay their taxes on time and often do not ask their employees to abide by the rules of the free parking program. Mr. Gill said as a result of these problems, the Downtown Commission proposed the formation of the Downtown Development District Review Group (DDDRG). The DODRG was charged with reviewing these issues and recommending what the ODD should do and how to pay for its program. Mr. Luell reviewed the preliminary ODD redesign recommendations Csee memorandum to the council dated April 14, 1989). He also reviewed the financial impact that these recommendations would have on the budget if implemented. For the current budget year (FY89), the total expenses in the DDD budget equal $667,000 while the total revenues equal only $570,000. This results in a deficit of $107,000. In order to balance this budget by raising taxes, the ad valorem tax would have to be increased by 23 percent and the gross receipts tax would be increased by 21 percent. Mr. Luell said if the recommendations were implemented, total expenses of the ODD would equal $468,000 and the anticipated revenue would equal $528,000. This surplus of $60,000 could be eliminated by freezing the ad valorem tax and reducing the gross receipts tax by 20 percent. e Ms. Ehrman asked whether the DDDRG recommended that downtown business people who pay neither the ad valorem nor the gross receipts tax be included in the redesign. Mr. Luell said this is a difficult issue and the DODRG decided to address this issue later. Mr. Holmer emphasized that while the payment issue does not need to be addressed immediately, it should not be postponed until the two-year review period. Mr. Bennett asked how the decision to reduce only the gross receipts tax was made. Ms. Ehrman said the DODRG made a list of all the functions the DOD performs and noted which group gained the primary function from each of these functions. In the end, the group decided that free parking is most beneficial to retail owners, so the gross receipts tax ought to be reduced as the amount of free parking is reduced. Ms. Ehrman said there was strong consensus among members of the OODRG that this was equitable. Mr. Bennett said one theory is that the ad valorem tax eventually gets passed on to the retailer indirectly. He said this distorts the question of who can operate and merchandise effectively under a transition to a paid parking program. Mr. Boles voiced his support for the recommendations and emphasized the need to address forcefully the larger issue of the future of transportation in the downtown area. Mr. Rutan said he, too, ;s supportive of the redesign recommendations. He noted that although there are financial reasons for making changes to the free parking program at this time, the important question to consider is e MINUTES--Eugene City Council April 26, 1989 Page 4