Stan Thurston is currently leading Bill Blake by fewer than 200 votes. Thurston served as a Merced City Council member from 1995 to 2003.
Now it appears he'll be taking over as mayor at a time when the city is facing a financial crisis.
His plans include a special tax holiday to attract new businesses to the North Valley.
County election workers are busy analyzing about five hundred postal votes and provisional ballots that could make an impact on the race for mayor of Merced.
"It's definitely a tight race with only 168 votes difference right now," assistant Registrar of Voters Stacey Cotter said.
However, Thurston is feeling confident about his lead and the message voters sent by leaving incumbent Bill Spriggs in third place.
"I think they wanted some new blood, a change in attitude perhaps, new leadership for sure," he said.
Thurston is a former city council member and the co-owner of an aviation services company. He has promised to oppose new taxes and any more cuts to police and firefighters. He's also pushing a one year "tax holiday" that would eliminate fees for new or expanding businesses.
"Merced needs to be much more than just competitive to bring in new businesses. We have to kind of shock the system and say it's affordable here, we're open for business, expand or bring your business here because we need the jobs here," he said.
Current council member and former undersheriff Bill Blake is still holding out hope he'll gain enough votes to win the mayor's seat, but he knows the odds are against him.
Realistically, there's a mathematical possibility, but following trends it would be something to surmount," Blake said.
Blake says he is ready to work with Thurston if he's named the official winner, and he even supports Thurston's tax holiday plan.
"I have recommended something very similar, that we do look at the fees and drop them," Blake said.
Now both men are just waiting for all of the votes to be counted.
We're expecting to learn the final election results on Thursday, and the new mayor could be sworn in by the end of October.
If Blake does not win, he will keep his seat on the council.
Merced voters also decided on three council seats last night.
While incumbent Noah Lor kept his seat with 21 percent of the vote, there will be two new faces on the council.
They are former Police Chief Mark "Tony" Dossetti and Mike Murphy, a small business attorney.
In the South Valley, Bob Link was re-elected to the Visalia City Council, along with Amy Shuklian and Gregory Collins.