City of Merced
Budget 2026-27
1 FY 2026/27
Budget
City Budget Overview
Internal Services
General Fund
Measure C
Measure Y
Other Departments
Options/Discussion
2 Overview
3 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
Overview: Challenges Ahead
Budget options to balance will be provided, however, challenges remain:
Increases in need for fire support as federal grant funds expire Loss of annual $3.5M Grant Revenue
24 Merced firefighters/paramedics at risk
Park safety and homelessness are a community priority, yet ongoing funding could be at risk
Streets deteriorating, deferred maintenance remains an issue 4 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 Citywide-Largest Cost Drivers
$2.7 $2.8
$3.4
$4.9
$5.8
$6.3
$2.4
$3.0 $3.2 $3.5
$5.0
$4.2
$5.0
$5.6 $5.8
$6.4
$6.9 $6.9
$8.8
$9.4 $9.7
$10.2
$12.0
$13.2
$11.6
$12.7
$13.3
$15.7
$17.5
$18.5
$-
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$16.0
$18.0
$20.0
21/22A 22/23A 23/24A 24/25A 25/26B 26/27B
General Liability Workers Comp Vehicle O&M Health Insurance CalPers 156%
38%
59%
75%
50%
$’s in Millions
6 Recommended Staffing 7
Functional Area Add Delete Total Unfunded
FY 25-26 Staffing 562
City Manager - (2) (2)
Fire 2 (2) -
Human Resources 1 - 1
Information Technology 1 - 1
PW-Fleet 1 - 1
Subtotal General Fund Impacts 5 (4) 1
PW-Streets 1 - 1
PW-Water 1 (1) -
PW-Refuse 2 - 2
FY 26-27 Total Staffing 9 (5) 566
Internal Services Allocation
8 Liability Insurance
No. of Positions
No. of Vehicles
Sq. Ft of Property
Experience of claims &
losses
$6.3M Allocation
•GF 36.5%
•Others 63.5%
Workers
Compensation
No. of Positions and Type
35%
Open Claims 65%
$4.2M Allocation
•GF 59%
•Others 41%
Employee Benefits
No. of Positions
Healthcare Election
$11.5M Allocation
•GF 41%
•Others 59%
Fleet Management
Division Vehicles cost to
maintain labor and
supplies
$6.9M Allocation
•GF 31%
•Others 69%
Facilities
Sq Ft of Property
Labor hours
Direct Charges
$2.6M Allocation
•GF 45%
•Others 55%
Internal Services Allocation
9 Support Services
Personnel/Risk Management
•No. of Positions
Information Technology
•Direct Charges
•Weighted Average
•Budget Amount
•Level of Effort
•$5.7M Allocation
•GF 45%
•Others 55%
Direct Service Charges
Direct Service provided based on
hourly rate
$6.2M Charges
•GF 1%
•Others 99%
GF receives $2.4M Revenue
Administration
City Council, City Manager, City
Clerk, City Attorney, Finance
Purchasing
•Weighted Average
•No. of Employees
•Budget Amount
•Level of Effort
$10M GF Operating Costs
•$1.3M Direct Service Charges
•$336k Misc Revenues
•6.2M Admin Chgs other Funds
•$2.2M (22%) GF Absorbed
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
10 General Fund Summary
$31.2
$33.8
$33.8 $33.9
$42.1 $41.0
$41.7
$45.4 $44.3
$52.7
$57.5
$59.1
$67.2
$72.0
$68.5
$31.9
$32.5
$36.8 $36.1
$40.1 $40.2
$43.3
$46.6
$52.5
$53.1
$58.1
$61.3
$66.0
$67.6 $67.2
$30
$40
$50
$60
$70
$80
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 Expenses Revenue
$71.1
$’s in Millions
11 26%
16%
16%3%
12%
11%
4%
12%
Total Revenues of $67.1 million
Sales Tax
Property Tax
Vehicle in Lieu
RDA Residual
Other Taxes
Administration
Direct Svc Chgs
Other
Down
.5%
General Fund Revenues
12 General Fund Expenses
71.9%
20.7%
0.1%
0.1%
3.2%
0.3% 0.4% 0.4%2.8%
Total Expenses $71.1 million
Personnel
M.S. & S.
Property
Administration
Direct Svc Chgs
Transfers
Debt
Other Non-Op
Capital
Future Planning
13 Operating
up 1.35%
General Fund Transfers
$’s in Millions
14 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)
15 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
Set-Aside Balances
$’s in Millions
16 $7.89
$17.87
$11.37
$1.45 $1.17
$-
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
General Fund GF Reserve Trust 115 Pension Ec Dev Op Fund Affordable Housing FundFY 26/27 Balance $1.0
$3.4
Contingency
$0.61$0.40
overfunded
$0.74
Measure C 17
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 C Ballot Requirement
18 Police and Fire Levels of Spending
FY 2021-22
Fund 1000 4502/4503 2002/2003 2010 2001
Description General Fund CFD Measure Y
Abandoned
Vehicle
Abatement
Total Public
Safety Measure C
Fire $ 11,654,420 $ 703,512 $ 600,209 $ 12,958,141 $ 3,122,742 Police 22,167,181 1,378,206 343,524 51,578 23,940,489 4,166,379 Total Public Safety Expense $ 33,821,601 $ 2,081,718 $ 943,733 $ 51,578 $ 36,898,630 * $ 7,289,121 Total Fund Expenses $ 53,133,114 $ 2,081,718 $ 943,733 $ 51,578 $ 56,210,143 $ 7,515,982 Percentage of Expense 64% 100% 100% 100% 66% 97%
FY 2026-27 CM Recommended Budget
Fund 1000 4502/4503 2002/2003 2010 2001/2030
Description General Fund CFD Measure Y
Abandoned
Vehicle
Abatement
Total Public
Safety Measure C
Fire $ 16,662,198 $ 1,444,659 $ 378,441 $ - $ 18,485,298 $ 4,007,149 Police 30,887,693 2,846,475 483,111 25,556 34,242,835 6,632,220 Total Public Safety Expense $ 47,549,891 $ 4,291,134 $ 861,552 $ 25,556 $ 52,782,133 * $ 10,639,369 Total Fund Expenses $ 71,150,221 $ 4,291,134 $ 861,552 $ 25,556 $ 76,328,463 $ 12,240,791 Percentage of Expense 67% 100% 100% 100% 69% 87%
Meet or Exceeds by Dollar $ 15,829,503
Meet or Exceeds by Percentage 3%
Measure Y-Cannabis Tax by Fiscal Year
19 $0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
2019/20A
2020/21A
2021/22A
2022/23A
2023/24A
2024/25A
2025/26B
2026/27B
Measure Y
20 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
21 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
Parks & Community Services
62%
18%
14%
6%
0.4% 0.3% Expense
Personnel $2.2M
M.S. & S. $639k
Internal Svc Chgs
$488k
Administration $219k
Direct Svc Chgs
$13k
Transfers $17k
22 Total Expenses $3.6 million
15%
50%
9%
9%
7%
3%
5%
2% Revenue Program Fees $526k
General Fund
$1.8M
Measure Y-20%
$322k
Measure Y-40%
$322k
CFD $241k
CVOF Grant $125k
MCSD
Contributions $197k
Zookeeper
Donation $76k
Police – 143 Positions (98 sworn officers)
23 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)
24 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
25 Administration
26 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
27 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
28 Public Works-Staffing
29 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
PW-Enterprise Fund Summary
$’s in Millions
30 Rate Studies in progress for all utilities.
$23.4
$16.9
$25.0
$29.5
$16.0
$26.7
$33.5
$19.5
$28.5
$17.2
$14.5
$4.2
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
$40.0
Wastewater Water Refuse
Operating Expense Revenue Reserve Reserve Goal
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
31 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
32 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
33 Capital Projects
34 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
35 Fiscal Stability-Revenues
36 Adopt new CFD for Services
Adopt new Development Services Fee
Study
Business License/TOT/Cannabis Audits
Identify Other Potential Cost Recovery
Areas
New citywide CFD- Services pending
formation
Completed-Effective 7/1/26 and included in
budget estimates
In progress
Council Approved January 2026
Go Live May 2026
In Progress
P&CS Fee increases approved
Airport
Budget Options-$1.3 M Shortfall
37 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
Questions?
38 Council Budget
Discussion