City of Merced
Budget 2026-27
1 FY 2026/27
Budget
New State Challenges
City Budget Overview
General Fund
Measure C
Measure Y
Other Departments
Options/Discussion
2 Overview: New State Challenges
AB1383 effective 1/1/27 for Pension
Rollback on Public Employee Pension Reform Act(PEPRA) will create significant pension cost increases
Increases pensionable limits
Creates New Tiers (lower)
Increases unfunded accrual liability (UAL)
Governor’s May Revise
Sales Tax on Software
Revenue increase to General Fund and Measure C
Operating Expense increases to all departments citywide IT Dept approximately $125,000 increase (not in the budget)
3 Overview
4 Labor Negotiation Increases
included 4%
Maintenance, Supplies, and
Services <0%-2% increase
Methodology changes:
• New Grants
• Opioid Carryover
Parks and Community
Services – Balanced but
could have future
challenges
PC and Fleet Replacement
•Not included in the General Fund
•Included in Enterprise Funds and
other Special Revenue Funds
No Funding Allocation:
•Community Funding
FY 2026-27 Budget Overview
Total City Budget $461.2 million
$69.1
$210.6 $59.3
$21.1
$101.1
General Fund
Enterprise Funds
Internal Service Funds
Measure Funds
Other Operating Funds
5 FY 2026/27 General Fund
Estimated Beginning Balance – July 1, 2026 $11,813,391
Budgeted Revenue $67,230,559
Operating Expenses $66,222,614
Operating Transfers $2,300,660
Total Operating Expenditures $68,523,274
Revenue over/under Expense ($1,292,715)
Below the Line (Non-operating) $401,123
Future Planning $2,025,000
Prior Year Projects $200,824
Recommended Ending Balance – June 30, 2027 $7,893,729
Less Committed Funds-5% Contingency Reserve $3,426,164
Total Available Funds – June 30, 2027 $4,467,565
6 General Fund Transfers
$’s in Millions
7 07/08A 08/09A 09/10A 10/11A 11/12A 12/13A 13/14A 14/15A 15/16A 16/17A 17/18A 18/19A 19/20A 20/21A 21/22A 22/23A 23/24A 24/25A 25/26B 26/27B Housing Admin $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.08 $0.03 Airport $0.08 $0.20 $0.07 $0.10 $0.06 $0.02 $0.06 $0.05 $0.04 $0.08 $0.00 $0.04 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.37 $0.35 Development Services $0.00 $0.00 $0.57 $0.70 $0.50 $0.30 $0.96 $0.46 $0.25 $0.54 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Parks and Recreation $2.43 $1.80 $1.27 $1.10 $0.85 $0.50 $0.67 $0.75 $0.76 $1.00 $1.02 $1.32 $1.34 $1.13 $1.34 $1.21 $1.33 $1.62 $1.70 $1.78 $0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
Parks and Recreation Development Services Airport Housing Admin $2.00
$1.91 $1.90
$1.41
$0.82
$1.69
$1.26
$1.05
$1.62
$1.02
$1.36 $1.34
$1.13
$1.34 $1.21 $1.33
$1.62
$2.15 $2.16
Below the Line Expenses (Non-Operating)
8 Enterprise Resource Planning (ERP) $ 60,623
Election Cost 80,000
Compensation Study 150,000
Arts Projects (carryover) 70,500
Bob Hart Fountain Repairs 20,000
Park Maintenance ¾ Ton Truck 80,000
Subtotal $401,123 Economic Development Opportunity Fund 405,000
Affordable Housing Fund 607,500
Trust 115-Pension 1,012,500
General Fund Reserve – 25% set aside 0 Total $2,426,123
Measure C 9
Fund 2001-Old
Measure C
Fund 2030-Public
Safety
Fund 2031-
Roads Total
Beginning Balance 7/1/26 $3,890,521 $1,862,885 $643,266 $6,396,672 Sales and Use Tax 0 8,852,100 465,900 9,318,000
Other Revenue 158,500 0 7,420 165,920
Total Budgeted Revenue 158,500 8,852,100 473,320 9,483,920 Transfers 145,000 597 0 145,597
Operating Expenses 1,287,712 9,137,094 3,765 10,428,571 Acquisitions 0 0 530,000 530,000
Capital Improvements 1,670,388 0 0 1,670,388
Total Budgeted Expense 3,103,100 9,137,691 533,765 12,774,556 Ending Balance 6/30/27 $945,921 $1,577,294 $582,821 $3,106,036 *Meets GFOA Recommended Minimum
Measure Y
10 Police-20% Fire-20%
Parks & Rec-
20%
Discretionary–
40% Total
Beginning Balance
7/1/26
$73,014 $351,201 $179,855 $109,781 $713,851
Estimated Tax Revenue 321,590 321,590 321,590 643,180 1,607,950 Estimated Other
Revenue
5,050 16,470 2,000 8,500 32,020
Estimated Transfers-In 348,101 (348,101) 0
Estimated Transfers-Out 321,590 321,590 643,180
Estimated Expenses 378,441 483,111 442,101 0 1,303,653
Ending Balance 6/30/27 $21,213 $206,150 $87,855 $91,770 $406,988 Parks & Community Services
Balancing the Operating Budget
Measure Y 20% Parks and Recreation $321,590
Measure Y 50% of 40% Discretionary $321,590
General Fund Transfer
$68,284 4% annual increase
$1,775,372 Total GF Transfer
Field Equipment
Mule Gator $20,000
Tractor $30,000
Lawn Mower (16ft wide) $20,000
Turf Tank Lease $15,000
Storage Container $5,000
Trailer $2,500
11 Additional Revenues
Council Approved Rate Increases
CP42 Field Rentals $60,000
Zookeeper 3 yr Donation
Yr 2 cost of zookeeper $76,200
MCSD Contribution
Youth Sports $196,850
CVOF Grant
Outdoor Recreation Program $124,725
CFD Special Tax
6,423 Parcels to be Levied $240,640
Police – 143 Positions (98 sworn officers)
12 General Fund
Total Funded Positions =109.30
(67.3 sworn/42 non-sworn)
Measure C
Total Positions = 23.49
(20.49 sworn/3 non-sworn)
4 Part-Time CSO’s for Code
Enforcement
Duty Weapon Replacements
$105k
Operating Costs $1M -18%
increase
CFD
Total Positions = 10.21 sworn
Measure Y
5 Part-Time CSO’s for Code
Enforcement
Fleet Repairs (unanticipated)
$75K
Fire – 93 Positions (88 sworn officers)
13 General Fund
Delete 2 Battalion Chiefs (40
hr)
Add 2 Division Chiefs
Fire Chief Equity Salary
Adjustment (9%)
SAFER Grant Positions -24
Grant Expire March 2027
Total Non-SAFER Funded
Positions =52.18 (47.18
sworn/5 non-sworn)
Measure C
Total Positions 11.3 sworn
Operating Costs $1.1M-
8% increase
CFD
Total Positions = 5.52 sworn
Measure Y
2 Cardiac Monitors $120k
Weed Abatement $80k
Narcotics Safe $11k
Administration
City Council
Recommended Stipend $1000/$1,250
month
Add $23,575 to Shortfall
City Manager
2 Part-Time Interns
Delete 2 Peer Support Specialist
CalVIP Grant Expired 12/31/25
Compensation Study $150k
City Clerk
1 Part-Time Deputy City Clerk
SB707 and Public Records Requests
14 Administration
15 Human Resources
Add HR Director $217K
GF (44%) 95K
Other Funds (56%) $122K
Info Technology
Add Cyber Security Specialist II $154k
GF (45%) $69k
Other Funds (55%) $85k
End of Life Server Replacements $80k
End of Life Wireless Access Point Replacements
$30k
ERP Allocation $0
Other
$2 million RDA Residual revenue
Arts funding carryover $70,500
No allocation for Community Funding
Development
Services/Housing
Fee Increases Effective 7/1/26-
Balanced Budget
Fee Study approved April 2026
New Fund 3008 General Plan Update
Fee
5% of certain BP types
Future costs of General Plan updates,
housing elements, and zoning code
Housing Deficit
FY 26/27 ($159,000)
Affordable Housing Fund (80%) $127k
General Fund (20%) $32k
16 Downtown/Economic
Dev/Airport
Property Based Improvement
District (PBID)-2% increase
Tourism Based Improvement
District (TBID)-3% increase
Sale of Bell Station
Airport Deficit
Completion of new
Terminal
New carrier-Contour Air
GF Transfer $354k
Other Opportunities to
increase revenue
17 Public Works-Staffing
18 Add 3 Maintenance Worker I/II-Streets (1) and
Refuse (2)
Delete Water Distribution Quality Assurance
Tech and add Water Distribution Operator III
Add Storekeeper-Fleet Maintenance $94k
GF (17%) $17k
All other funds (77%) $77k
Public Works
Admin
SCADA Room Roof
Reseal $17k
Service Center Partitions
$17k
Fleet
Oil Containment Tanks
$30k
Hwy 59 Shop Carport
$50k
Civic Center
3rd Floor Fire Alarm $13k
Replace restroom
partitions (1
st&2nd floor)
$28k
19 Public Works
Measure C-Roads 5%
¾ Ton Truck $80k
10-wheel dump truck
$250k
Boom Truck (25% shared)
$200k
Enterprise Capital Projects
WW-Programmable Logic
Controller $3.4M
Water/Refuse-Corp Yard
Asphalt Repairs $350k
20 Parks
Measure Y -40%
Bike Path Maintenance $53K
Tree Trimming $100k
Park Maintenance $75k
McNamara Pool Fence $35k
Ada Givens Pool Fence $35k
Playground Deductibles
Frederick Douglas $25k
Kingsland $25k
Cellular Tower Agreement
Rahilly Park $30,000
21 Capital Projects
22 Streets
Bellevue Road Bike Path-New $300k
(UCM)
APS Polara-Push Buttons @ Schools-add
$100k
Downtown Concrete Light Poles-add
$40k
Craig Drive Rehab-New $200k
Roads Projects Available Funding
Fund Funding Source PTBD Unappropriated Total
2007 Gas Tax-SB1 $ 3,315,841 $3,315,841
2008 Measure V-Alternative Modes 759,145 759,145 2009 Measure V-Local Transportation 3,794,680 3,794,680 2031 Measure C-Roads 582,822 582,822
3006 Surface Transportation Program (STP) 3,241,991 3,241,991 3007 Local Transportation 209,269 209,269
Total $11,320,926 $582,822 $11,903,748
23 Council Direction-$1.3 M Shortfall
24 Leave As Is
• $1.3M out of balance
• 1-2 year fix
• Credit rating impact
Clear the Shortfall #1
(staff recommended)
• T’fer $740k from Reserve
(one-time emergency
funding)
• T’fer Op PD Costs to
CFD $150k
• T’fer Op PD/Fire Costs to
Measure C $250k
• T’fer from Trust 115 $153k
• 1 year fix
Clear the Shortfall #2
• T’fer $740k from Reserve
(one-time emergency
funding)
• Other identified
expense reductions
• T’fer from Trust 115
• 1 Year fix
*No option is sustainable long term
Council Direction
25 Community
Funding
• Historically $28k-$50k
• Non-operating/does not impact deficit or General
Fund Reserve Requirement
Council
Request
• Any additional request
Questions?
26 Council Budget
Discussion