2026
HUD
ANNUAL
ACTION
PLAN
• MERCED CITY COUNCIL
• FINAL PUBLIC HEARING – JUNE 1, 2026
• (CONTINUED FROM MAY 18, 2026)
ATTACHMENT 6
RECAP:
1st Public Hearing
March 16, 2026
2nd Public Hearing
May 18, 2026
Presented Needs Assessment
Results
Presented preliminary CDBG and
Home budget & project funding
Presented preliminary draft AAP
Held the 1
st Public Hearing &
received public comment
Received Council direction:
o Public services proposals
o Joe Herb Park additional funding
o Pursue Fire Station 56 funding
Opened Public Hearing and
accepted comment
2 Public Comments received
Continued Hearing to June 1
st
FINAL PUBLIC HEARING & APPROVAL
COUNCIL ACTIONS REQUESTED:
Re-Open the Public Hearing continued from May 18, 2026 Receive all public comment & close Public Hearing
Provide direction regarding Public Services funding options Provide other direction, if any
Adopt Resolution 2026-31 approving the Final Draft 2026 Annual Action Plan (as per direction)
2026 BUDGET – CDBG PUBLIC SERVICES - OPTION 1
Organization/Agency Description HUD Project T ype Requested Recommended Award *
MAXIMUM AVAILABLE FOR PUBLIC SERVICES = $194,863.92
CALCULATION = CDBG ALLOCATION $1,045,361 + UNALLOCATED PRIOR YEAR PROGRAM INCOME $253,731.84 X 15% * RECOMMENDED PROJECT AMOUNTS ARE CALCULATED AT 83.5% OF REQUESTED ** $7.84 BALANCE TO SIERRA SAVING GRACE *** HOUSING ADC CALCULATED AT 8.7% OF PS CAP Harvest Time Food distribution to
LMI/homeless
05W Food
Bank/Distribution $75,750 $ 63,251.25
Project Sentinel, Inc T enant/landlord counseling
service for city residents
05K/T enant Landlord
Counseling $ 52,307.40 $ 43,676.67
Sierra Saving Grace
Short term emergency
rental/mortgage/utility assistance
+ deposits
05Q/Subsistence
Payments $ 40,000 ** $ 33,407.84
Boys and Girls Club
of Merced County
T een workforce readiness
program
05H/Employment
Training $ 45,000 $ 37,575.00
Youth for Christ
Central Valley
Y outh 11-19 years-life skills
training, mentoring, career
development
05D/Y outh Services $24,000 0
Housing Division
Direct per-hour Activity Delivery
Costs of implementing all above
PS activities
Estimated average based
on direct hours
Shown: 8.7% of
Cap *** $16,953.16
T otal public service funding (proposed/recommended): $ 237,057.40 $ 194,863.92 PUBLIC SERVICES 15% CAP: $ (194,863.92) $ 194,863.92
Over/Under public service cap: $ 42,193.48 0
2026 BUDGET – CDBG PUBLIC SERVICES - OPTION 2
Organization/Agency Description HUD Project T ype Requested Recommended Award *
MAXIMUM AVAILABLE FOR PUBLIC SERVICES = $194,863.92
CALCULATION = CDBG ALLOCATION $1,045,361 + UNALLOCATED PRIOR YEAR PROGRAM INCOME $253,731.84 X 15% * RECOMMENDED PROJECT AMOUNTS ARE CALCULATED AT 83.5% OF REQUESTED ** $7.84 BALANCE TO SIERRA SAVING GRACE *** HOUSING ADC CALCULATED AT 8.7% OF PS CAP Harvest Time Food distribution to
LMI/homeless
05W Food
Bank/Distribution $75,750 $ 56,812.50
Project Sentinel, Inc T enant/landlord counseling
service for city residents
05K/T enant Landlord
Counseling $ 52,307.40 $ 39,230.55
Sierra Saving Grace
Short term emergency
rental/mortgage/utility assistance
+ deposits
05Q/Subsistence
Payments $ 40,000 ** $ 30,117.71
Boys and Girls Club
of Merced County
T een workforce readiness
program
05H/Employment
Training $ 45,000 $ 33,750.00
Youth for Christ
Central Valley
Y outh 11-19 years-life skills
training, mentoring, career
development
05D/Y outh Services $24,000 $ 18,000.00
Housing Division
Direct per-hour Activity Delivery
Costs of implementing all above
PS activities
Estimated average based
on direct hours
Shown: 8.7% of
Cap -> *** $16,953.16
T otal public service funding (proposed/recommended): $ 237,057.40 $ 194,863.92 PUBLIC SERVICES 15% CAP: $ (194,863.92) $ 194,863.92
Over/Under public service cap: $ 42,193.48 ----
2026 BUDGET – CDBG PUBLIC SERVICES COMPARISONS
Organization/Agency Description
$ Change
if Option 2
chosen
Harvest Time Food distribution to LMI/homeless -$ 6,438.75 Project Sentinel, Inc T enant/landlord counseling service for city residents -$ 4,446.12
Sierra Saving Grace Short term emergency rental/mortgage/utility assistance + deposits -$ 3,290.13
Boys and Girls Club of
Merced County T een workforce readiness program -$ 3,825.00 Y outh for Christ Central
Valley
Y outh 11-19 years-life skills training,
mentoring, career development + $ 18,000.00
Housing Division ADC (administration of public services) (no change) Net change: $0
CDBG– OTHER PROJECTS
Housing & Infrastructure Projects
Sierra Saving
Grace
Acquisition with
Rehabilitation 14G-Rehabilitation: Acquisition $ 500,000 Housing Division Activity Delivery Costs
(estimated 5%) ADC: Same $ 25,000
City of
Merced/Parks and
Community
Services
Parks Improvement Activities
– Joe Herb Park supplemental
funding for park lighting
03F-Parks/Rec Facilities $ 352,035.00
Housing Division Activity Delivery Costs
(estimated 3%) ADC: Same $ 17,601.46
T otal Housing & Infrastructure ADC & Project Costs – CDBG: $ 894,636.46 Economic Development
UC Merced
Monarch Small
Business Center
Small Business T echnical
Assistance
18B-Econ Development: T echnical
Assist $ 38,000
Housing Division Activity Delivery Costs
(estimated 5%) ADC: Same $ 1,900
T otal Economic Development Project Costs – CDBG: $ 39,900 CDBG – JOE
HERB PARK
• Allocated $834,981 CDBG
with PY 2025 AAP (includes
ADC for housing staff hours)
• Use PY 2026 to supplement
project - park lighting
• Interdepartmental MOU in
progress - pending final scope
of work & estimated costs
• Council approval needed of
PY2026 additional funding to
include in MOU
HOME– OTHER PROJECTS
Organization/
Agency
Description Project T ype Project Costs Activity
Delivery
Project
TOTAL
Housing
Activities Maximum Available for Housing Activities = $800,355.66 Merced
Community
Action Agency
Homeowner
Rehabilitation-
Weatherization
Homeowner
Rehabilitation $ 200,000
$ 10,000 (5%
of project
cost)
$ 210,000
To B e
Determined
TBD project: new
rental housing
construction, rehab
existing rental
units, or acquire
property for rental
housing
Affordable
housing $ 461,388
$ 13,840.74
(3% of project
cost)
$ 475,228.74
CHDO Organization
To Be Determined
CHDO-15%
mandatory set-
aside
Affordable
Housing $ 67,854.77
$ 2,035.64
(3% of project
cost)
$ 69,890.41
T otal Housing ADC & Project Costs – HOME: $ 729,242.77 $ 25,876.38 $ 755,119.15
CDBG & HOME ADMINISTRATION
Administrative
Activities - CDBG
Estimated maximum available for CDBG administrative activities = $230,672 Calculation = CDBG Allocation $1,045,361 + Estimated 2026 Program Income $108,000 x 20% Allowance
Description Project Type Requested Budget
Housing Division Direct Administration costs Admin (remaining) $ 160,672 Housing Division Indirect Administration
costs Admin N/A $ 20,000
Merced County
HSA Continuum of Care Admin $ 50,000 $ 50,000
T otal Admin Projects - CDBG: $230,672
Administrative
Activities - HOME
Maximum available for HOME administrative activities = $ 45,236.51 Calculation = HOME Allocation $452,365.10 x 10% Allowance Description Project Type Requested/Available Budget
Project Sentinel,
Inc
Fair Housing Services for
city residents
Admin
Fair Housing
$ 37,885.90 $ 37,885.90
Housing Division Direct Administration
costs Admin
$7,350.61 $ 7,350.61
T otal Admin Projects - HOME: $ 45,236.51
STATION 56
BACKGROUND:
• COUNCIL HAS APPROVED A SIXTH FIRE STATION TO MAINTAIN EMERGENCY RESPONSE TIMES
• STATION 56 HAS FUNDING SHORTFALL OF $4,619,878
• CDBG ELIGIBLE ACTIVITY OF CONSTRUCTING A PUBLIC FACILITY UNDER CDBG REGULATIONS 24 CFR 570.703(I)
• SECTION 108 – SUBJECT TO REG’S OF 24 CFR PART M (CDBG REGS; 570.700 - 570.712) • CITIZEN INPUT PROCESS MUST COME FIRST – 30 DAY COMMENT PERIOD • CITY OF MERCED ELIGIBLE TO LEVERAGE UP TO FIVE TIMES ITS CURRENT CDBG ALLOCATION: PY2025-26 $5,447,065 (OR $5,226,805 IN PY2026) • TO FUND THE GAP: SUBJECT TO NEPA PART 58 – ENVIRONMENTAL ASSESSMENT • NEPA & APPLICATION PROCESS CAN COINCIDE – MUST RECEIVE CLEARANCE BEFORE
APPROVAL GRANTED
TONIGHT’S ACTIONS & NEXT STEPS
Public Hearing:
• T onight:
Re-Open and Hold
Final Public
Hearing:
• Receive Public
Comment
• Close Public
Hearing
Council:
• Provide Any
Council Comments
• Direction regarding
Public Service
Funding Options
• Approve Annual
Plan
Finalization
of AAP
Staff to make final AAP
updates to :
- Executive Summary
- Expected Resources
- Goals & Objectives
- Affordable Housing
Submit completed Final
Plan to HUD
- June 3 target
QUESTIONS?