City Council/Public Finance and Economic Development Authority/Parking Authority - Regular Meeting

Present.

Tao.

Present.

Harris. Present. Smith. Zhang. Mayor Pro Tem Boyle. Here. And Mayor Serrato.

Here.

Okay. Council will go into closed session and discuss items B1 through B4. And just for the record, there are no members of the audience to leave a public comment.

Thank you, gentlemen. How are you? Always good to see you. Everything's good. I got a 7-Eleven. Coffee. It's black. Pretty much like gas. How you doing, James? Good to see everybody. We had a lot going on in closed session, so we'll start a few minutes late. It's about 6.02 or 6.01. We'll start in a couple minutes, so just wanna let everybody know. All right, ladies and gentlemen, good evening and welcome. Welcome to the June 1st meeting in Merced City Council. I want to welcome everybody here this evening. Apologize for the late start. We had a lot on our closed session, so we got through it and had to start a few minutes late. So we apologize for that, but we'll get right to it and get going. Again, a lot on the agenda tonight. So. We'll move quick, but a lot of big items on tonight. So I want to thank everybody for being here. First, we'll begin with an invocation from my friend, Mr. Shahid Sohail from the Ahmadiyya Muslim community in Merced. So if everybody could please stand and welcome Shahid. And after that, Council Member DuPont, could you lead us in the Pledge of Allegiance after that? Good evening, Shahid. Good evening, gentlemen.

Thank you. Greetings of peace be on all of you, especially Mir, Sarato, and all council members and all citizens of Merced. God of Moses, Jesus, and Muhammad, peace and blessings be on all of them. The God is most gracious, ever merciful. I'm honored here and humbled to stand before you as a member of our Ahmadiyya Muslim community who believe in the Messiah lead into invocation. Today, I have a special invocation, which is a prayer for seeking elevated spiritual status. In Islam, spiritual development will not realize to it full potential without purifying your heart. This is invocation of our Holy Prophet Muhammad, peace and blessings be upon him. He says, O Allah, I seek from you guidance for the best way of begging. I pray for the best success, ability to do the best deeds, to get the best rewards, the best life, and the best demise. May we steadfast and make the scale of good deeds heavier. Verify with faith and raise up my status. Accept my prayers and pardon my sins. I seek from you high status in heaven, amen. O Allah, I seek from you good beginning and end of every kind and goodness. and comprehensive words and its beginning and ends and its open and well as secret, the higher rank in heaven, amen. Oh Allah, I beg you to exalt my status, enlighten my burden, strengthen my faith. straighten my problem and purify my heart, safeguard my hidden organs and eliminate my heart and forgive my sins. I seek from you high rank in heaven, amen. Oh Allah, I beg thee to bless my hearing and my eyesight and also my soul, body and manners. Bless my family, my life, my death, and my deeds. Accept my virtues. I seek from thy high status in heaven. Amen. I will conclude this with a prayer, which is a prayer, an Abrahamic prayer we have, which is, Allahumma salli ala Muhammadin wala aali Muhammadin kama salli ta'ala Ibrahima wala aali Ibrahima inna ka Hameed al-Majeed. Translation is, bless O Allah, Muhammad, and the people of Muhammad, as thou did blessed Abraham and the people of Abraham. Thou art indeed the praiseworthy, the gracious. Prosper. as thou did prosper Abraham and the people of Abraham. Thou art the praiseworthy, the gracious. Amen. Thank you. Thank you, sir.

Thank you, Council Member DuPont. And thank you, Shahid. Always good to see you, sir.

Junaid MD, roll call. Council Member DuPont.

Present.

Tao.

Present.

Harris.

Present.

Smith.

Present.

Zhang.

Here.

Mayor Pro Tem Boyle. Here. And Mayor Serrato.

Here.

Mayor, I'd like to remind the audience that if they wish to address the city council, please submit a green request to speak form located at the podium in the back of the chamber. Additionally, citizens can submit public comment to the city council electronically no later than 1 p.m. on the day of the meeting. Comments received before the deadline will be sent to the city council and will be part of the record and will be mentioned as part of the written petitions and communications portion of the agenda and will also be posted on the city's website. Material may be emailed to cityclerk at cityofmerced.gov, and any correspondence received after 1 p.m. will be distributed to the city council and retained for the official record. Also, for those audience members who wish to hear the council meeting translated into Spanish or Hmong, please let our interpreters know.

Hello. Thank you, Myrna.

In accordance with government code 54952.3, it is hereby announced that the city council sits either simultaneously or serially as a public financing and economic development authority, parking authority, and or successor agency to the redevelopment agency. City council members receive a monthly stipend of $500 by charter for sitting as the city council, and the mayor receives an additional $100 each month as part of the adopted budget and resolution 2024-78. The Public Financing and Economic Development Authority, Parking Authority, and Successor Agency to the Redevelopment Agency receive no compensation. Agenda item E, report out of closed session.

There is no report out of closed session.

Agenda item F, ceremonial matters. F1, certificate of recognition to Diego Castro, school counselor at Hoover Middle School, being recognized as the 2026 California School Counselor of the Year, requested by Mayor Serrato.

Thank you, Jennifer. All right, we have one ceremonial item tonight and that's to honor Mr. Diego Castro, school counselor at Hoover for winning a statewide award for school counselor of the year. So Diego, if you come on up and give a big round of applause. Gonna put your boss on the spot too and ask her to come down as well. Mr. Smith as well, former school board member, so.

Thank you, Mr. Mayor.

A FEW WEEKS AGO, I HAD THE PRIVILEGE OF GOING TO HOOVER TO SPEAK WITH THE KIDS THERE. RANDON DIEGO LEARNED THAT HE WAS SCHOOL COUNSELOR OF THE YEAR, DOING EXTRAORDINARY WORK THERE. IT JUST GOES TO SHOW, TOO, IN SPEAKING WITH HIM AND SEEING EVERYBODY HOW IMPORTANT YOUR WORK IS, HOW HELPING THOSE KIDS, HELPING GUIDE THEM, HELPING GET THEM TO A GOOD SPOT IS CRUCIAL. AND WE THANK YOU FOR IT. AND WHAT AN INCREDIBLE HONOR. TO WIN SCHOOL COUNSELOR OF THE YEAR FOR THE ENTIRE STATE. SO I HEARD, TOO, I'LL LET YOU GUYS TALK A LITTLE BIT IN A SECOND, BUT PARTICULARLY IN REGARDS TO SOME OF THE STUDENT ABSENTEEISM ISSUES, YOU DID SOME EXCEPTIONAL WORK. SO I'LL TURN IT OVER TO COUNCILMAN SMITH, AND THEN WE'RE GOING TO ASK YOUR SUPERINTENDENT THERE TO SAY SOME NICE WORDS ABOUT YOU AS WELL.

Thank you, Mr. Mayor. Congratulations, Mr. Castro. So I'm not telling anything you don't know, the social, emotional health of our kids is critical. If they don't feel good at school, if they don't feel good about themselves, they're not going to learn to read, they're not going to learn to do math, they're not going to be productive. And so the school counselor is the hardest job on campus, in my view. And I'm not telling anything you don't know either. You know, 2026, we're still dealing with the challenges of the pandemic for a lot of our students. So thank you for being there. Thank you for being there for Hoover. Appreciate it.

I'll keep mine brief. I think this is a testament to the work that all of our school counselors are doing here in Merced City School District, and Diego is an example, an exemplar of that great work. Not only is Diego committed to the school counseling comprehensive model here in Merced City, which includes social-emotional learning, academic advising, as well as college and career readiness, which has really shifted from the time when many of us were in school and we had advisory counselors. So the fact that he is able to provide direct impact in all of these three areas is incredible. He also is RAMP, which is a national certification for comprehensive school counseling program and also serves on CSU Stanislaus program as an adjunct professor for counselors coming into the profession. So I thank him for all that he does in creating a safe and welcoming environment centered on students in our district.

I want to thank everybody. Thank you so much, Mayor Serrato and the City Council for recognizing the school counseling profession as well. And it has been an honor being the 2026 California School Counselor of the Year. Although it does have my name on it, I do want to reach out and appreciate all of the collaborative effort we have done with all the educational partners, our administrators, our students, our parents, our teachers. They have done a phenomenal job. And thanks to them, we're able to build a data-driven comprehensive school counseling program. And it's a privilege working with students because we're helping them break those barriers, overcoming those obstacles, and helping them thrive to meet their maximum potential. So I really want to thank you, all of you, Hoover Middle School, Merced City School Districts, and the previous sites that I have worked at. I really appreciate that you have done so much and put a lot of effort with our profession as well. So thank you.

Thank you, Diego Merced, appreciate you and we're proud of you and it's an honor to recognize your accomplishment and we're proud to have you as part of our community. So that's it, all right. Now it's picture time, most important part.

Thank you.

Agenda item G, written petitions and communications. Mayor, the clerk's office received an email from Curtis Thomas regarding agenda item K2 and emails from Strong Towns Merced and Curtis Thomas regarding agenda item K5. The emails were received by the 1 p.m. deadline. They were sent to council and posted on the city's website. Any emails received after the 1 p.m. deadline will be sent to council. Agenda item H, public comments. Members of the public who wish to speak on any matter not listed on the agenda may speak during this portion of the meeting and will be allotted three minutes. The mayor may propose a further limit to the time available for all speakers at the discretion of the city council in order to accommodate as many speakers as possible. State law prohibits the City Council from acting at this meeting on any matter raised during the public comment period. Members of the public who wish to speak on a matter that is listed on the agenda will be called upon to speak during the discussion of that item. Mayor, I currently have four requests to speak forms.

Thank you, Jennifer.

Okay, if I can get Councilmember Mike Harris, James Moore, Andrea Tolson, and Jay Lewis to the podium to my left, please.

Councilman Harris.

Good evening. Mike Harris, Merced. Recently, public officials across the country have faced criticism for declining to stand or face the flag during the Pledge of Allegiance. Here at home, we've seen similar choices made by public officials. The Supreme Court made it clear in 1943 that every American has the constitutional right to remain seated or decline to recite the Pledge, and I respect that right completely. But tonight I'd like to explain why I choose to stand and face the flag. As President Ronald Reagan once said, freedom is a fragile thing and it's never more than one generation away from extinction. It's not ours by inheritance, it must be fought for and defended constantly by each generation. For it comes only once to a people and those in world history who have known freedom and then lost it have never known it again. I stand and face the flag to honor the brave men and women who came before me to create and defend that freedom. I stand and face the flag to honor those who continue to protect it today. And I place my hand over my heart, or as a veteran, render a salute, not because I believe our country is perfect or without flaws, but because I believe in the promise of what America is and what it can become. I believe in liberty. I believe in equal opportunity and I believe in self-government. I believe in the extraordinary idea that people from different backgrounds, beliefs, religions, and experiences can come together as one nation. To me, our flag represents that shared promise. Not perfection, but possibility. Not uniformity, but unity. When I pledge allegiance to the flag, I am also pledging my continued commitment to help make this country the very best it can be. Thank you.

Thank you, Mr. Harris. Very eloquent. Mr. Moore, good evening, sir. I forgot I had to borrow Mr. McBride's copy of the agenda. So I'm listening.

Somebody can get you on, sir. I'm sure. Good evening, Mr. Mayor, council members, staff, members of the public. My name is James Moore. It's been my pleasure for the last three and a half years to serve as the director of the Merced County Regional Waste Management Authority. We are responsible for the two landfills that we operate here in Merced County along with a number of solid waste and recycling planning initiatives. I'm here tonight to ask for your help in recruiting some citizen members to serve on our integrated waste management local task force. This is a committee that we're required to form by state law. We meet and discuss both our landfill resources, sustainability plans, recycling facilities within the county. And it's the year that we're supposed to do our five-year review. We need to have this committee engaged in order to develop recommendations to go before our RWA governing board. So I have a few just short documents talking about the program along with the applications. In particular, we are looking for four citizen volunteers from within the county. Two of them have to come from within an incorporated city and two have to come from the unincorporated portions of the county. They will serve along with representatives from our solid waste haulers within the county our City Public Works Department that serves the city of Merced along with myself Representing the regional waste authority. So with that, I'll just leave these with the clerk and thank you for your time tonight, James Thank you.

Appreciate you being here, sir Next speaker

Good evening, Mr. Mayor, city council members, captain. I'm going to be speaking on the rise of these kids riding their bikes into traffic. I served 18 years as a law enforcement officer, and I can tell you there's nothing more devastating than going to the scene of the death of a child. I'm sure the captain can agree with me. This is a problem for all of us. I encourage community policing. And even though our law enforcement officer over there probably doesn't wanna hear, but we need to crack down on these kids. They're reckless. When they're riding a bike, they're subject to the rules of the California Vehicle Code. You could even be cited for reckless driving, causing an accident. So the partnership should be between law enforcement, fire, school officials, and us citizens. And I just want to bring that to everybody's attention because they're getting more and more aggressive. And it's only a matter of time before we're going to read about it or hear about it on the news. And to touch on what I... The first speaker spoke on about the flag. I'm a veteran. I've served over in many places, and one thing I'd like to call everybody's attention to is you have the right not to look at the flag or salute the flag. But we all work for those 18-year-old kids that are out there. I don't care if you're a general, you're a sergeant major. leader of a company, mayor, president. We all work for them. So that's on your heart if you don't want to stand for my flag. Thank you.

Thank you, sir. We'll invite you back either the next meeting, June 15th, or the first meeting in July. We're not sure yet when, but we're going to address the, we'll have some preliminary discussions about the issue you raised about the bikes. Thank you, sir. Welcome. Yeah, possibly next meeting or first meeting in July. June 15th or July 7th. Six, choice six.

Hello, good evening, Mayor and City Council members, Chief, I'm Captain, sorry. I too am here to discuss the issue with the kids riding the bikes. It's all over Facebook. It's through different Merced groups. These kids are blatantly playing chicken with these cars. There's video, there's pictures. None of them are wearing helmets throughout the city. There's kids out riding bikes. nothing's enforced. I'm worried because as somebody who drives, I'm gonna be looked at. They're gonna cut down, they're gonna come down on the driver. And these kids are, I don't know, I don't have the answers to it. I just think it needs to be something that as a community, we try to come together and figure this out. I don't know if anybody's mentioned it before, but I did mention on Facebook that I was going to come down here tonight and at least stress it. I have grown kids and they rode bikes, but they've never done this. And these kids are scratching cars. My daughter's pregnant and she almost hit one. So, you know, if she gets into an accident, what's going to happen to her baby? So, I mean, this is just people's lives are at stake. And I understand they're kids and they don't, you know, they're doing this dare. But I've noticed in the past six months it's getting worse. So, yeah. I don't know what, I don't, like I said, I don't have the perfect answer, but I just think that something needs to be addressed. Something needs to be done because when this kid, when a kid gets hit, I mean, no one will, I don't want to be the one to hit a kid, you know? I mean, yeah, it's their fault, but at the end of the day, I wouldn't want to carry that because they are just kids. So that's it. Thank you.

Feel free to talk to our police officers. Feel free to follow up directly with me if you like, and then keep an eye out either the June 15th agenda or July 6th agenda. We'll have a discussion. Jennifer, any other public comment?

That's all we have, Mayor. It looks like we do have one more coming.

Is that Rochelle? Rochelle looks serious tonight.

Good evening, mayor, city council members, residents. I wasn't gonna speak, but I've been coming for the last couple of months regarding our youth and the violence that's going on. And you've never addressed it, mayor. But here they come up here and talk about the kids and the bicycles in the streets one time and you address them? When are you gonna address my concerns?

If you're, I can, Rochelle, we can talk of it, but there's been a lot done, I can tell you, but we can't have this discussion here.

No, but you addressed them that it will be on the agenda, one of the soon agendas coming up. When is mine going to be on an agenda?

We can't have a back and forth here.

I'm not asking you. I'm just saying it's funny how they come and say once, and I've been saying it for a couple of months, and you address theirs and tell them when it's going to be talked about.

Okay, finish your comment and then I'll, we can't have a back and forth. So finish your comment and then I'll talk after that.

And so you're saying it's not going to be on the next upcoming city council meeting. Is that what you're saying? That's what you're saying.

No, I'm saying we'll talk after this. Call me afterwards. Jennifer, anyone else?

That's all we have, Mayor. Okay.

agenda item I consent Consent any Pull up the screen here. All right any members of the council have any items they would like to see pulled for separate consideration Mr. Mayor, I'd like to recuse myself from i7 i7 that's the bill of your ranch north Final map.

Mr. Mayor. Yes. I'll have to recuse myself from item i7 as well. Okay, I

All right. Any additional items, any additional requests from the council? All right, Jennifer, anything from the public?

We don't have anything, Mayor.

All right, so we'll pull I-7 for separate consideration. And then is there a motion or any discussion with respect to the balance? What do you think, Jen? I heard Boyle cares, I think. Second. All right. That's OK.

Okay, I have a motion by Mayor Tim Boyle and a second by Council Member Harris. The motion will include agenda item I-9, the adoption of resolution 2026-29, a resolution of the City Council, the City of Merced, California, acting as a legislative body of the Community Facilities District number 2003-2 of the City of Merced, authorizing the establishment of an annual special tax for said district for fiscal year 26-27. Mayor and Council, please cast your votes. And the motion passes unanimously. Agenda item, we're at seven, huh?

I-7.

I-7.

Any questions from the council? Daryl's here if we have any questions, city engineer. If not, I would entertain. Jennifer, there's nothing from the public on this?

We don't have anything.

Okay. Any questions from council? Any comments from council? Or else I would entertain a motion.

Motion.

Harrison Tau.

Okay, I have a motion by Council Member Harris and a second by Council Member Tao. The motion will include the adoption of Resolution 2026-24, a resolution of the City Council of the City of Merced, California, approving the final map, track number 5431, Bellevue Ranch, North Village 24A. Mayor and Council, please cast your votes. Okay, and the motion passes with Council Member Zhang voting no.

Thank you, Jennifer. Thank you, Mr. Jordan, for being there. All right, we'll invite council members Dupont and Smith back in. And that takes us to our public hearings.

Agenda item J, public hearings. J1, public hearing to allow the interested public an opportunity to provide input on the content of the City Council Public Financing and Economic Development Authority, Parking Authority, and successor agency to the Redevelopment Agency of the City of Merced, fiscal year 26-27, proposed budget, and after hearing all comments, continue the public hearing to June 15, 2026. Good evening, Venus.

Good evening, Mayor, members of the council. Tonight is the second night and the opening of the public hearing for the city recommended budget for fiscal year 26-27. So last meeting on May 18th, I presented next year's recommended budget. And this year I will be doing very similar presentation. The only difference is I take out a lot of the statistical slides that we talk about and just kind of focus in on the actual budget for next year. I did add one new slide, which is just discussing some State information that has come down recently, I think we talked a little bit about one of them last time. So these are items that could create, again, some additional challenges as we either move through the year or potentially for, not necessarily for 26, 27, but maybe as we're getting into 27, 28. So AB 1383. This is an assembly bill for pension. And my understanding is that it has passed the assembly, and it's now into the Senate. And so we don't have all of the details on this. And especially because it's not all the way through, there could be still some changes to come. But basically, this is a rollback on Public Employee Pension Reform Act that was put into place back in 2013. which helped agencies to reduce their pension costs. So this is a rollback of that and it would create significant pension increases. So some of what is recommended or part of the bill is to increase pensionable limits. So currently on PEPRA employees, there's a cap to what pay is pensionable. This would increase those limits. It also creates new tiers. It lowers the tier. And they could also go retroactive to actual PEPRA employees. So all of that could cause additional significant increases to our unfunded accrued liability. Also, as part of the Governor's Bay Revise, the state is going to start putting sales tax on software. And so although it will give us a little bit of money from our sales tax, our 1% and our Measure C funding, which go into the general fund and the Measure C, also we do purchase a lot of software at the city. So not only through the IT department, but all departments have software in their department budgets. And so IT was able to give an estimate and said, based on the software costs in their budget currently, that could be about $125,000 in sales tax that we would need to pay in this next budget. And that was definitely not included in the budget. So I just wanted to kind of put those couple things out there that we're hearing about, and that could be causing additional potential stresses on our budget. But now moving into fiscal year 26-27. So it's just an overview and kind of the methodologies in creating the budget. We did include labor negotiation increases of 4%. So this is based on current MOUs that are in place, and they go through next fiscal year. maintenance supplies and services we were able to keep those anywhere from less than a 0% increase to 2% increase within all the departments that were discretionary so mainly in your general fund departments some methodology changes so we typically would include estimates of new grants or Opioid carryover into the new budget We are not doing that. We're either bringing them to you as they come or as the opioid is carried over, there's a resolution we're putting in place to be able to carry that over. And so by taking that out, it does not factor into your general fund reserve requirement calculation. In parks and community services, we were able to balance the budget, but a lot of that came from potential one-time fundings. And so although we balanced it for this coming year, that could have potential challenges in the future. PCM fleet replacement, we did not include any in the general fund. We included them in enterprise funds, and if other special revenues funds were able to support that, we did include those there too. As far as some funding allocation that the council would typically give, we did not include community funding. But again, there's an opportunity to add that if you'd like to do that. And that does not affect the shortfall because it's considered a one-time funding. And it does not affect your general fund reserve requirement either. So next fiscal year, citywide, the budget is $461.2 million. Of that, the general fund is 69.1 million. Enterprise funds make up the bulk of that, 210.6 million. Internal service funds are 59.3 million. Measure funds, which is Measure C, Measure Y, Measure V funding, that's 21.1 million. And then all other operating funds make up 101.1 million. This is the presentation of the general fund budget. So we're estimating the year to start at $11.8 million. We're estimating revenue of 67.2 million. Operating expenditures are 68.5 million. So you see that operating to revenue, we have a shortfall of almost $1.3 million. Some non-operating costs we've added are $401,000. Some future planning costs a little over 2 million. And then you have some projects that are carrying over from prior year for completion. So that's a little over 200,000. So recommended ending balance at June 30 would be about 7.9 million. 5% of that needs to stay within the general fund to meet your general fund reserve requirement of 5% for contingency. So that's 3.4 million. So it leaves funding available of almost 4.5 million. This slide is showing historically what the general fund has transferred to other funds in order to help their operations. So in the past, we've funded airport development services and parks and recreation. Development services has not needed a transfer in several years due to the building activity that they've had there and them being able to support themselves. They had some reserve in their fund for several years. In the years that they didn't have enough revenue, they were able to support themselves with their fund balance. And that's continued to current. The airport did not need general fund support while they were getting the FAA grant for operating. But in the last two years, we have started to supplement their budget there. And so they're getting a supplement of about $350,000. And Parks and Recreation, we have supplemented them over several years and continue to do that. It did increase a little bit this year by 4%. So they're almost at 1.8 million. And then what we've added in this year and in next year's housing admin is now needing some support in order to fund the housing administration operations. And so this year we've added about 30,000 to supplement the housing administration fund. Some of the non-operating costs in the general fund that we've included are $60,000 for the enterprise resource planning. So again, this is not for the system itself. This is for temporary help in order to help the implementation process for utility billing. Utility billing is the last module to be implemented and we're expecting that to be done through September. The election cost of $80,000 we've included. We've also included $150,000 for the compensation study. And the $70,500 for ARCH projects, which is actually a carryover. It's not new money. This was funding that was dedicated by the council in prior years and just has not been used. So we're carrying that over into next year. also setting aside $20,000 for Bob Hart Fountain Repairs and Parks Maintenance is needing to purchase a three quarter ton truck for $80,000. As far as your set asides for your financial policies, we're setting aside $405,000 to go to Economic Development Opportunity Fund, $607,500 to go to Affordable Housing Fund, and then you have a little over a million that's going into your Trust 115 for pension. So again, these dollars are calculated based on a savings dollar amount from a prior year. So again, this is not affecting your operating budget. It's not affecting your general fund reserve requirement. So moving on to Measure C, this is beginning balance. We're estimating at $6.4 million. So these are the three funding funds where we set aside Measure C. Fund 2001 is your old Measure C. There's still some funding left in there from before the new ballot measure for Measure C had been approved. Fund 2030 is your 95% of Measure C funding, which is allocated for public safety, so police and fire. And then you have Fund 2031, which is the 5% of revenue for sales tax, of the half cent sales tax. And so that is dedicated to roads. So we are estimated to receive 9.3 million in sales and use tax next year for these funding sources. We have a little bit of other revenue, which really is your interest, so 165,000 there. Moving on to expenditures, we're estimating 145,000 in transfers. a little over $10 million in operating expenses, and this really mostly is personnel. We have some acquisitions in the roads area of $530,000 for equipment, and then you have capital improvements that are carrying over from prior years and to be completed, and it's a little over 1.6 million, leaving your budget at, I'm sorry, leaving your fund balance for the Measure C funds at $3.1 million. Here we have Measure Y, which is our cannabis tax. And again, that money is very specific where we have to set it aside 20% for police, 20% for fire, 20% for parks and recreation, and then you have 40% discretionary. But again, that discretionary portion can only be used for those three areas, police, fire, and parks and rec. So we're estimating to start the year a little over $700,000. We're estimating revenue of $1.6 million. Again, a little bit of other revenue, which is your interest of $32,000. We have estimated transfers in and out. So the $348,000 is coming from the discretionary portion and moving into for parks maintenance. And then on the transfers out, we have the 643,000 transferring out of your 20% allocation and your 40% allocation and transferring over to Parks and Recreation for operating. We have some other expenses of a little over 1.3 million between police, fire and Parks and Community Services. And it leaves about 400,000 in your Measure Y fund balance. So a little bit more detail on how Parks and Community Services balance the budget. So measure Y, again, we talked about the 20% allocation funding the operating, and then you have the half of the 40% discretionary. And then we have $1.7 million transferring from the general fund, so that's a 4% increase from last year. And some additional revenues that Parks and Community Service was able to secure on top of the typical funding they get is they were able to get rate increases for their programming that was approved in December. We also increased some of the field rentals, assuming that CP 42 is gonna come online next year. So we added $60,000 in those revenues. They had also secured a three year donation for zookeeper and so we are in year two of that donation. And so that would be 76,200 that's included in the budget for that. And they also have an agreement with the Merced City School District, which they're contributing. The agreement is actually for a little over $230,000, but some of that portion will come into this fiscal year for junior Giants. And then the $196,850 will go into next year, and that will be for flag football and junior basketball. They also secured a grant from CVOF for their outdoor recreation program of a little over $124,000. And then CFD special tax they've gotten for several years, but it does increase every year a little bit based on how many parcels we're adding to the CFD. So for next year, we are assessing a little over 6,400 parcels, which is about $240,000. In addition to that, because there was a little bit of fund balance in Measure Y, and because we know CP42 will be coming online, those ball fields need to be prepped and ready for rentals. We did fund for some of the equipment. So we included $20,000 for a mule gator, $30,000 for a tractor, $20,000 for a very large lawnmower, apparently, $15,000 for a turf tank lease, and $5,000 for a storage container, and $2,500 for a trailer to be put out at CP42. So moving on to the police department, the police has 143 positions and 98 of those are sworn officers. Those positions are included within the general fund measure C and CFD. They're also including several part-time positions, for code enforcement. So these are CSO temporary positions for code enforcement. And so there's several positions being added in measure C and in measure Y. They're also including the replacement of their duty weapons of $105,000. And then we had moved in some operating costs last year because we also had a shortfall last year. And to help with that, we moved in some operating costs, and then we're also increasing them for this year in Measure C. So on the fire side, there are 93 positions in the fire department. 88 of those are sworn officers. So this is within the general fund measure and measure C and the CFD. Within the general fund, they are proposing to delete two battalion chiefs and add two division chiefs. We had also included an equity adjustment for the fire chief position. Again, this position only makes 1% more than the deputy chief. And so in order to make that more equitable, we added a 9% to make it a 10% differential. The safer grant positions are included in that grant expires in March of 2027. So there is a quarter where the general fund is funding them. It's not funded by the grant. We also know that the NOFA was released for FEMA. And we now know that we do not qualify to apply for any retention grant to to keep the 24 officers. So this will definitely be something that we need to look at for the next fiscal year. Although we're including them for 26, 27, this will be another challenge for 27, 28. So some of the items that were included by the fire department for next year for measure Y are the purchase of two cardiac monitors for $120,000. They also included $80,000 for weed abatements and continuing with the code enforcement and knowing that's council priority. And then they've added $11,000 for a narcotic safe for the ALS program. An administration under city council, there's an item later on tonight where there was a recommendation by the stipend setting commission to increase the council stipend. And so if it is approved as recommended, that would need to be added to the budget and that amount is $22,575. If there's a different amount that's approved, then we would have to do the calculation on what that would be. In the city manager's department, they are adding two part-time interns and then we're deleting two peer support specialists because that grant expired in December. those employees that were funded under the CalVIP grant had actually resigned and so it was timely with the grant expiring. We've included again the $150,000 for the compensation study. In the city clerk's division, we are adding one part-time deputy city clerk and this is to help with the SB 707 requirements and for public record requests. Under human resources, we've added one HR director, the cost of $217,000. And of course I break down what the general fund cost of that would be. So 95,000 is being paid by the general fund and all other funds are paying 122,000 of that cost. Under information technology, there's an additional cybersecurity specialist position for a cost of 154,000. And then there's the breakdown of general fund to other funds. They are also including end of life server replacements for $80,000 and then a wire access point replacements for $30,000. And again, we did not include any cost towards the ERP system itself. We've funded that for several years and we feel that that is fully funded and does not need additional allocation through final implementation. In the general fund RDA residual, we had added quite a bit of revenue last year, about a million dollars. I've increased that to $2 million for next year. And with the payoff of the DOF settlement now, and that is complete, we do feel comfortable in being able to add this RDA residual towards operating costs within the general fund. Again, we're carrying over the arts funding of 70,500. And again, we've not allocated any community funding. Development Services, they were able to increase their fees, which the council approved in April. And based on that, they were able to balance their budget. It also created a new fee for a general plan update. And so we created a new fund to set aside those fees. It's 5% of certain building permit types, and that funding would set aside in that fund until they were ready to... to do future general plan updates, work on the housing element and zoning codes. In the housing administration fund, we've talked about how the general fund is now needing to supplement them this year and now there's a proposed amount for next year. So their deficit is 159,000. It's assumed that they work on affordable housing about 80%. And so 127,000 of that would come from the affordable housing to supplement them. And then the 20% is non-affordable housing items that they work on. So that's 32,000 that would come from the general fund. In downtown, we're increasing the PBID to 2%, and that's based on the PBID board recommendation or request. For TBID, we're estimating a 3% increase, and we base that on what we're seeing in TOT increases. Again, we were hoping to have the sale of the ballast station completed this fiscal year, but that will likely not happen until July or August of next year. We did not include a budget for the ballast station, but since we know that we'll need one for at least a few months into the new year, that's something that will come on the errata for you to approve in the next budget, next council meeting when you're approving budget. So the airport, they're completing the new terminal. They're gonna start having new carrier, Contour Air, and because of that, we were able to increase some of their revenue in the airport, but we are still needing to supplement them from the general fund by $350,000. It's a little bit less than last year, but it is still quite a bit there. So they are still continuing to look for other opportunities to increase revenues in the airport that could help offset that for future years. So in the public works, some of the staffing changes there are they're adding three maintenance workers, one in streets and two in refuse. They're deleting a water distribution quality assurance tech and they're adding a water distribution operator three in the water division. And in fleet, they are adding a storekeeper. So that is a cost of $94,000. That is an internal service fund. So that charges back to departments to pay for that. So the general fund pays $17,000 for that position and all other funds pay about $77,000. Some of the projects that Public Works has added into the budget and requested are re-roofing, sorry, excuse me, resealing the roof for the skater room out at the corp yard. and also some service center partitions for the offices of $17,000. For fleet, they're looking to purchase some oil containment tanks for $30,000 and a carport out for the Highway 59 shop of $50,000. In the civic center, they're wanting to do the third floor fire alarm for $13,000 and to replace the restroom partitions in the first and second floor for $28,000. So for measure C, the roads 5% allocation, Public Works is looking to purchase a three quarter ton truck of $80,000 and a 10 wheel dump truck for 250,000. And they're also purchasing a shared boom truck. So 25% share of that truck is $200,000. Some of the projects they're adding for the enterprise funds are the wastewater programmable logic controller for 3.4 million. And then they're also adding some asphalt repairs to the corp yard that the water and refuse division will have shared costs. So that's a total of 350,000. So the 50% of the 40% discretionary portion of Measure Y remains for park maintenance. And so what is proposed to fund for next year is continued bike path maintenance, which we've been putting in the budget for several years, and continued tree trimming of $100,000. They also set aside funding for just building park maintenance when parks need it for 75,000. We are adding the McNamara pool fence and Ada Givens pool fences, 35,000 each. And then we're including the 25,000 required playground deductibles for these are two parks that their playground were set on fire. And so we will get the The cost is about $100,000 for each park. So we're putting in the 25,000 deductible and the insurance will pay the offset to be able to replace those playgrounds. We also included the $30,000 for Rahili Park. It's a one-time fee for the cellular tower agreement. And so that is proposed to happen next fiscal year at the end of December, around December is what I'm understanding. So we did include it. So although we haven't set a lot of the money we're getting for roads to projects yet, there was just some small projects where there were requests. And so one of them was the Bellevue Road bike path. So we're adding $300,000. So this is a project we're doing in coordination with UC Merced. Then these next two projects, Public Works does a little bit every year. And so they're adding another $100,000 for the APS Polaro push buttons at schools project and then $40,000 for downtown concrete light poles. And then the new project is $200,000 to be added towards Craig Drive Rehab. So this is just to show the funding that we have available for roads projects. And it's being set in projects to be determined until projects are identified for this funding. And then we have a little bit of Measure C roads, which is unappropriated. And when it's ready for a project, we would come to council to appropriate that funding. So altogether with all these fundings, there's about $11.9 million. And I know it got brought up last time about Measure V. And so I did just want to point out that our Measures V funding is set aside in two different funds. So we have 2008, which is we're required to spend 20% of that money on alternative modes. And then 2009, 80% is in local transportation. So we do keep that funding separate from all other funds. And just to make sure that we are receiving that money and spending it on what we're supposed to be spending on for roads. Okay, so we're getting to the end of the presentation. And as we talked about, we do have a $1.3 million shortfall in the general fund operating to revenue. And so these are some recommendations. And of course, any other recommendation that the council would like us to look into, we can do that too. But first one would be to leave it as is. So even though you are out of balance, there is fund balance in the general fund that could absorb the 1.3 million. You would just leave that as is. That wouldn't be a forever fix. We could probably do that for one or two years. And again, the downfall to that would be that if we ever wanted to go out for any kind of a debt, it would impact our credit rating. The second option would be to transfer. So we've talked about the reserve and we have money set aside in another fund that meets your reserve requirement. So based on this operating fund in the general fund, we are overfunded there by $740,000. So it would be transferring back the 740 from that fund into the general fund. And then we can also transfer operating police costs of $150,000 to the CFD. We could transfer $250,000 of police and fire costs into Measure C. and then the balance we can take from the trust 115, which we allocate funding and set it aside for pension. But we are able to move in funding that is supposed to be used to pay pension. So again, this could be a one year fix. The third option is similar to the second. The only difference is that you would, if you wanted to identify or wanted us to identify any other type of expense reductions. then we could do that and try to clear the shortfall that way too. Otherwise, it would be moving in the overfunded from the reserve and then any balance of that would come from the Trust 115. So these last two slides are really about your direction. The last slide is basically asking if you wanted me to put in community funding or any other requests. So however you guys want to discuss and kind of work through those and propose different options so that we can come back to you next meeting with an errata list of what you were wanting to see and then making those changes part of your adopted budget.

Thank you, Mr. Rodriguez. It's always appreciate all your exceptional work and putting the budget together. We all know how hard you work, how good you are at it and how complex everything is, but you make it look easy. So we have, first we'll start with questions from councils. As most of the people here know, the budget process is a long lengthy process that staff works on for quite a while. City manager, city finance officer, in conjunction with all the departments. We have our council involvement as well. And then our first meeting is historically the first meeting or the second meeting in May. And then we have our two public hearings, this one and then our last public meeting, which will be June 15th, when we'll finalize the budget. All right, first, any questions from council? It's a public hearing tonight, so we'll take initial questions from council and then we'll turn it over to the public and we'll bring it back to council for discussion and direction. All right, first question should be council. Councilor Smith.

Thank you, Mr. Mayor. Thank you, Ms. Rodriguez for the excellent presentation.

Thank you.

I think I have three questions. Can you please go to your slide number eight? So my question is I want to get a little bit more clarity as to what the what we're talking about with these two line items economic development opportunity fund and affordable housing fund. These are proposed transfers from the general fund. Yes into these funds.

Correct.

Is there a minimum reserve requirement for either fund beyond general accounting principles?

There's not a minimal, I'm sorry, there's not a minimum. The policies set a maximum that we can set over there, but there's no minimum.

What's the maximum for the Economic Development Fund?

Sorry.

Is it more than $405,000? Yes.

Okay. Yes.

And is the maximum for the Affordable Housing Fund more than $607,500?

I do know that that one is 5 million. So there's a max to set of 5 million over there.

And this is monies we'd be adding to whatever else is in the fund so that council and the city have discretion in these areas to fund projects as they come up in the next budget year.

That's right.

Okay. Back to your last slide. I should have been more organized, but I don't expect you to go back to it. Can you explain for people like me who can't do math, how it is that if we add back... $85,000, $100,000 in community funding that that will not impact the deficit?

So if you look at this slide, the community funding comes under the below the line non-operating. So it's not impacting this because it's considered non-operating.

I mean, I get that, but the money comes from somewhere, right?

Within the general funds. So this will be less by whatever amount of money you allocate.

Okay.

And then final question for me at this point. You had a slide up there about where the park's expenditures are going. I didn't see General Vang Pao Park or Alita June Playground. Is that still on track for design, build, and groundbreaking this coming budget year?

I'm gonna say yes and probably Chris Jensen or engineering could probably answer that better. But the reason you don't see it here is because it's in a capital fund and it's a separate fund that houses all of the parks and community services capital projects. So it's separate from your operating.

Got it. No, I don't need to drill down. Just wanna keep my eye on that. So thank you for your answer. That's all I have right now. All right, Council Member DuPont.

If you could go back or go forward to slide eight, the enterprise resource planning, can you explain what that is?

Yes. So that is temporary help. So people that come in and help us. So what happens right now is when we're working on the implementation, full-time staff is taken from their job like two to three days, full days a week in order to implement the new system. And so somebody has to backfill them a little, at least a little bit in order to keep that work the day-to-day work and operations to continue. So that is for staffing to help that process. So we hire temporary staff to help us take the payments over the counter or to do this kind of easier things. And then the full-time position that would normally do that is working on the implementation of utility billing.

So... Is this one position, two? It's two. It's two positions. What department?

Finance.

If you could go to, or you can just answer this question. The storekeeper, you had said that it's being paid by Public Works. Is that position housed in Public Works or is it housed in a different department?

It's housed in Public Works in the fleet division.

Okay. No further questions currently. Thank you.

Thank you. Mayor Pro Tem Boyle.

Thank you. I just need a clarification. You're on my first slide, slide eight for the affordable housing fund. It says $607,000. But then if you go to slide 16, it says 127,000. So what are these two different line items, I guess?

So where the 607,500, that is the allocation from the general fund going to affordable housing fund. This right here is coming from affordable housing fund and going into housing administration operating fund. So it's like general fund is funding this fund and then this fund is then funding housing administration. Does that make sense?

Thank you.

Councilor Harris.

Thank you, Mayor. Thank you for all your work on this, Ms. Rodriguez. Thank you. Slide six. Six. Can you explain a little bit about what future planning entails?

So your future planning, it's this. It's this. So it's your financial policies that you've set. And every year at budget, we come and we say, based on the calculation that was determined when you set these financial policies, these are the allocations for these areas. So your financial policies currently have... So the way that these work, and I can bring it to you next meeting if you wanted to look at the calculation, but for instance, if we say the general fund has an uncommitted balance of $8 million at the end of fiscal year 25, we take that $8 million and we say 45% of it is $2,025,000. And that money then gets divided between these three areas, your Economic Development Opportunity Fund, your Affordable Housing Fund, and your Trust 115. And this is also a percentage. So affordable housing is 30% of that 45%. And I can't remember the other percentage off the top of my head, sorry. But that is how these are created. And then on top of that, if this operating budget required additional set aside for your reserve, the 25% set aside, then that would also be part of this. But for this year, because it's overfunded, I have a zero there, right? But this is the future. This is what that, if you add this up, it's that 2 million 25 that's on the other slide.

So that's usually a pretty accurate number and it doesn't...

Unless you change it at this stage, what you can do, I set those numbers based on those policies that are already approved policies. All right, thank you. You're welcome.

Thank you, Councilor Harris.

Councilor Jean. Venus, can you remind me what's the budget for parks and community service?

I believe it's 3.9 million.

And then how much of that is coming out of the general fund?

One point...

I believe it should be a slight 11 or close to there.

A little over 1.7 million.

Okay. And then how about for police and fire? What's the total operating budget for each of those? And how much of that is coming out of general fund?

I don't have that off the top of my head. Hang on a second. Are you looking for all of PD or just within the general fund?

It would be all of PD and then what's in the general fund.

So PD within the general fund, it's almost $31 million. And then you have, so I can tell you each individual fund that funds PD, but I don't have a total. So you have measure C, police has 1.1, sorry, hang on a second. Yeah. The old Measure C fund has 1.1 million. Measure Y has 378,000. The new Measure C with the 95% allocation, it's 5.5 million for police. And then you have CFD, which is 2.8 million. Okay, and then how about for fire? 21.5 is general fund. And then you have measure Y, which is 377,000. Measure C, the old measure C is 1.4. The new measure C is 3.6. And then you have CFD, which is Oh no, I'm sorry, that was the 1.4. The whole measure, so you think was 480,000. All right, thank you.

Thank you, Councilor Jean. This is a 3.9 for parks. Is that just parks and rec programming or does that include maintenance as well?

That's maintenance too. Oh, I'm sorry, not park maintenance. That's just programming. Park maintenance within the general fund, that's a different, do you wanna know that one? No, I can't.

That's okay. But we have that for programming, then there's also maintenance, then there's also capital projects as well.

Right, so 3 million of park maintenance within the general fund.

Okay, so 3.9 total for programming, 3 million. Park maintenance. And then is there more from other funds for park maintenance?

Yes, there's CFD. Hang on a second, let me find it. 600,000 from CFD park maintenance. And then you have the park maintenance within measure Y, which is not a lot. It's like 300,000 maybe or so.

Then there's parks capital projects as well, such as CP 42.

Right.

The improvements we need to add, but on and on. Okay. Thank you, Powell.

Council Member DuPont. How much is the finance budget from general fund?

Okay, so the finance budget in total is a little over $5 million, but because we do the admin allocation and the direct service charge allocation, so what is actually absorbed within general fund revenues is about $1.4 million.

Slide 5.1, expenditure summary, sorry, and the budget itself, says general fund is $5.4 million finance.

So the expenditures are all within the, like the appropriation is all within the general fund. So that's the case with all of these, right? City council, city manager, city attorney. But all of those departments, they all get revenue back from allocating to other departments.

General fund dollars are coming back to the department's

Yes, yes. So for instance, we charge out to public works departments, right? And all of those, yes.

So the 5.4 is going out to other departments and coming back to finance, but it's still a general fund source.

Right.

Okay, thank you.

All right, additional questions? Okay, seeing none, we'll open the public hearing. It is 7.17. Jennifer, do we have any requests to speak from the public?

We have four requests to speak forms.

Okay.

Five.

Five, all right.

Okay, if I can get the speakers to the podium to my left, Monique Torres, Ashley Marie Suarez, Rocio P, Daisy, and Latanya Rashard.

Hang on a second. We got to wait. I apologize. Can you please wait? We have to call the first. We have to call them in order. I'm sorry. Sorry about that. Right. He was Monique was first.

Yeah.

Okay. Monique Torres. Yes. Hello, good evening, welcome.

Hi, I'm Monique Torres from Southside Merced and I am not in favor of the city's budget allocation. I think that the budget should invest funds for the eviction protection program and it should at least be around $800,000. I want the city to prioritize tenant protections right now. Existing resources do not help undocumented people or people who only get tenancy termination notices. I want the people to also get help. That's why I want the city to invest in at least $800,000 for the eviction. Thank you.

Thank you. Thanks for being here. All right, next speaker. Actually, I believe that was you, but Jennifer Kirsten.

Sorry, before I start, is there anyone that can provide interpretation for Spanish? I'm right here. Oh, I'm so sorry, Mirna.

Spanish interpreter. Perfect. Just the person for the job.

Good evening, Council. I'd like to share a few community priorities that relate to the budget recommendations. To start us off, residents would like to see funding set aside to develop the South Merced community-specific plan and replace the one from 2007. The plan must include a holistic understanding of community conditions, priorities, implementation efforts, and clear commitments for land use planning compatible with resident priorities. including access to opportunities such as grocery stores and active transportation improvements. By improving this plan, the city will plan to facilitate future development in a way that aligns with community needs. Additionally, the city should keep its promise to fix roads and install mobility infrastructure that was promised to residents Specifically, South Mercedians are asking for sidewalk improvements, public lighting, installation of stormwater drainage to prevent flooding, and repaving roads. These demands have been delayed for far too long, specifically speaking and referring about the Childs and South Canal project. We urge the city to allocate separate funding that will address these historically disinvested neighborhood roads instead of solely focusing on arterial streets. To address housing issues, specifically likely scenarios where tenant units get an order to vacate notices and owners might not have money to assist with providing benefits for tenant relocation assistance. We're asking the city to allocate $250,000 of its general fund dollars and its affordable housing dollars in combination with revenue generated from the housing code violation penalties that will come into play later. to advance benefits to displaced tenants in the event that their unit has an order to vacate and that the owner of the unit does not pay. This program would decrease the risk of households experiencing homelessness. Similarly, we strongly recommend that council allocate at least $800,000, as mentioned by the previous speaker, in discretionary dollars and apply for grants to establish an eviction protection program, or at least an eviction prevention program. that will assist all persons regardless of immigration status, considering that existing resources do have restrictions as to who qualifies and who's able to get assistance. This program can focus on fighting illegal terminations of tendencies and evictions before it becomes an actual unlawful detainer. Many tenants are facing retaliation as a result of reporting uninhabitable conditions, and a lot of the retaliatory actions include terminations of tenancy that result in evictions, oftentimes illegal evictions. And so the council can choose to run a pilot program and assist these households that need it the most. Not everyone, because we know funding is limited, but at least prioritizing those that need it the most. Partnering with existing law firms that have experience in dealing with these cases can greatly address the gaps. and especially considering not everyone qualifies for services by local legal aid providers, this would be extremely helpful in bridging that gap. If there are any questions or concerns about these community identified programs, we're happy to arrange a meeting between council members, city staff, and residents. Thank you.

Thank you, Ashley. All right, next speaker.

This should be Rocio.

All right, good evening, Rocio. Hi.

Hi, my name is .

I come to support the eviction program, the protection program. Yeah, protection program. This is for the reason there is more people that they need from this program. And also there would be less contamination in the city with this program. And also I want to consider that there are streets that are very destroyed, like meadows, lofts, Loughborough. Loughborough. The R Street. R Street. And also I consider that the parks, they're also not having the well maintenance that they should be having. They need more playgrounds for the kids. And I also consider that There are some places that they're for kids for recreation. And they are also destroyed.

Like the skateboarding, I already forgot how you say it, where they skateboard the pista. The speedway or I don't know. The skate park.

The skate park, uh-huh. And I also consider that there should be more vegetables, more vegetation, trees. More than anything, I am here. There is a budget of a certain amount that would be considerable to support the programs

protection for renters, and to restore the streets, and attraction and recreation for the children.

Awesome.

This is another topic.

Okay, it's another topic, okay. Thank you. Gracias, thank you. Thank you very much.

Good evening. My name is Daisy Ramos Acosta. I'm a Merced resident. I'm from South Merced. My children have all grown up there. I came to Merced when I was around 10 years old after my parents got divorced. We were just looking for a better life. When I moved here, I was expecting for my life to be better and I went through some hurdles. I had my kids young. I had my first child at the age of 14. She's now a college student and she attends Mercy College. So my life took a little turn for the worst. After I was evicted from my unit, I reported mold and I reported and followed all the protocols. I reported to code enforcement. I did everything by the book and I was still evicted. April 21st, 2026, we were evicted and we're not homeless. So I'm here speaking on my experience as a poster child, if you wanna call it that. Too many families are having a housing crisis and I believe that there should be relocation assistance and meaningful tenant protections. I'm asking council to consider investing 250,000 to support our community with tenant relocation assistance and strengthen tenant protections and allocate 800,000 to prevent tenant evictions. There's no reason why any family should feel like they're not welcome in their own community. I believe that these protections are needed and they're not a luxury, they're a necessity. I'm a perfect example of what could go wrong, even though I followed everything by the book. I think that there's no reason the community needs more support with that, more support and more, if you guys can invest and just even consider investing and putting back into the heart of Merced, because South Merced is the heart of Merced for me. And just, that's just my humble opinion here. Thank you.

All right, thank you.

Latonya.

Latonya. Anybody else, Jennifer, any other speakers?

It looks like Blanca wants to speak as well.

Good evening, Council, Mayor, residents, I'm LaTanya Richard. I'm here to give direction and to ask the Council that they spend the $607,000 that is currently available in affordable housing funds to allocate $250,000 to fund a tenant relocation assistance program. The money could be used to hire a manager or an employee to operate the program, which can assist 15 families get security deposits, first month's rent, and utility connection costs. This could be a one-time program. The affordable housing funding can also be used to assist people that are at risk of homelessness, including but not limited to rapid rehabilitation. housing, rental assistance, supportive case management services, rehabbing and preserving our current housing supply, environmental cleanup, or even use the money for home ownership programs like down payment assistance and assistance for budgeting classes. This matters to me because I know how hard it is to quickly come up with the money to move, especially when you have your health and you put your trust and health into a landlord who more than likely nothing will happen to. I ask that you reassess the use of affordable housing fund and general fund dollars to help the people who will be fined or jailed if they end up living on the street. And as a side note, I see that you're cutting peer support specialist jobs. So I'm just going to give you this quote from the West Wing since you're politicians. There's a man down in the hole. And he sees out in the hole, he's yelling up and a doctor walks by. He says, doc, help, I'm down in this hole. Doc looks at him, writes a prescription, throws it in the hole and walks away. There's a priest that walks by. He says, father, please help me, I'm down in this hole. His father makes the sign of the cross, sorry, Catholic guilt, and makes the sign of the cross. throws a prayer down and walks away. But then a friend walks by. And he says, friend, please help me. I'm down in this hole. And that friend jumps in the hole with that man. And the man says, hey, what the hell are you doing? Now we're both stuck in this hole. And the friend turns and says, yeah, but I know the way out. Police are not trained for mental health emergencies, period. Having people who have experienced being anxious, being unable to speak, being neurodivergent, hearing voices or anything, having a person who has been there is way more helpful than bringing the police. The police response is more likely to get someone 5150, killed or injured. You cannot police your way out of mental illness. You cannot police your way out of homelessness. 80% of a budget, and you guys are claiming broke all the time, but you still put the money in dumbass, excuse the expression, but dumbass programs. These are real human beings, real live human beings who are on the street right now experiencing horrible mental health challenges, but you're going to send the police out there and fine them. If they can't afford to eat, how are they going to pay a fine? If they can't afford to find a place to live, why put them in jail? Thank you.

Thank you. All right. Speak.

Good afternoon, Council. I'm out here reiterating similar messaging just to consider as we draft the budget and continue to draft the following year's budget to keep in mind about the needs of Merced residents. One of the things that I speak on a lot is housing, so speaking on that again, especially to consider As the message has been shared before, we do have a lot of residents that live in Merced who are also undocumented, and a lot of them do not qualify for support or assistance. And so just wanted to reiterate, $250,000 seems reasonable. We don't know the budget like you do, so maybe you come up with a different number. But just wanna reiterate that it's important that we continue to keep in mind, I know I've heard the council say before, you know, the need is much bigger than the help really, how, I'm sorry, the need is much bigger than what the Support can be given sometimes But still wanted to reiterate, you know as we move forward This year's budget and the following year's budget to continue to consider tenant protections Representation for tenants and other alternatives to support our tenants.

Thank you Thank you block Jennifer any additional speakers on the budget

That's all we have, Mayor.

Okay. All right, 7.34, we'll close the public hearing and bring it back to council for additional discussion and direction. And again, we'll have another public hearing on June 15th to finalize the budget. All right, turn over to my colleagues. Any additional questions or... Comments. Latanya Rook, I wanna respond to one thing you said. The county has the mental health departments. They have the mental health department with a significant, I'm not sure the exact budget, but I think it's in excess of $100 million, if I'm not mistaken. But they have the mobile crisis unit. So everything you say about partnering with mental health workers is done. The county mobile crisis unit goes out to a lot of homeless related calls, other calls. They have a number of stabilization services as well. Just kind of the way it works out is they provide the mental health workers and the budget's bigger than our police department budget for sure. It's countywide, but still, I think it's a lot bigger than our police department budget. And then we have the police and they partner. I mean, I'm sure Captain Perez can talk a little more too about some of the partnerships that we have with the mental health department. Just one preliminary comment in response to your question. Council Member DuPont.

Thank you, Mayor. If I could have Director Jensen come up, I have some questions specifically to Parks and Community Services, Director Jensen, in the proposed budgets, youth basketball and youth football programs used to have a revenue source of roughly $25,000 and $10,000. This year it's zero. Can you explain as to the reason why or if that's correct or not correct?

I think it's an indication alluded to by Mrs. Rodriguez earlier about the contract that we were able to get through Merced City School District. One of the things that the contract doesn't pay for is any students that we serve outside of that district, which would include Weaver, private school, homeschooled students. So there is a proportion of revenue that we would expect outside of that particular district. So that zero may not actually be zero? It may be an underestimate of what we would bring in from other districts.

you may not have these questions or answers, but also in your expense sheet, you have a contingency reserve. Your department request was about 8,100. The city manager recommendation is 11,000. Do you have ideas to the increase of that? Could you reference the page, Mr. DuPont? 12-7. Okay.

So typically there's a fish and game program that Parks and Community Service does where they collect money from fish and game every year. But until we know that we're getting that for sure, we don't release funding for them to be able to use until we know we have that money. So that's typically around the $8,000 range. The additional couple thousand was, it was basically by the time we finished putting in all of the revenue sources and making changes, their budget ended up with like $3,000 left. And so we just put that last 3,000 into the contingency just to zero out because we typically like to zero out, like leave their budget to zero out.

As an expense?

Yeah, so they have more revenue than expenditures by about $3,000. So we just put that into contingency.

Okay. You also have community support. Department head request was $8,000, and you have a city manager recommendation of $18,000.

So that has to do with the outdoor recreation program. Part of the requirements was, so by the time we were working on the city manager version, Director Jensen had told us that he was approved for this grant, and so that we made changes based on the requirements of the grant. It's correct, right?

The grant requires that he was approved by the city?

The recreation program?

Yeah, sure. I don't know.

Thank you, Mr. DuPont. The outdoor recreation program has in the model stipends for any young adults that we have doing the vocational training part of that program. Initially, we didn't put it in the ask. And so after speaking with Mrs. Rodriguez, we set some money aside in case that wasn't funded, almost like a match, which is often required by grants. That proportion actually ended up being funded by the CBOF application. Okay. So the 18,000 is covered by that 126? Not the 18. There's still a contribution. The original request from our department is specific to a few years ago, the city council allocated a scholarship fund. So any students that can't afford or are not covered by the MCSD afterschool contract with the LOP services can still qualify for those scholarships and have their attendance in our program covered.

Thank you.

You're welcome.

No further questions for Director Jensen. Thank you. Ms. Rodriguez, in the airport budget, there's a contingency reserve of 20,000, which has never happened in that department.

Sorry, I don't have the details. I'd have to look and bring it back to you in the next meeting. I can respond to that in the next meeting.

Thank you. No further questions at this point. Anybody else?

Councilor Jean. Floor is yours.

I guess first off Venus, could you remind me how much ARPA dollars we have and when that is set to expire?

So ARPA, we need to use and expend the funding. Trying to remember. Wasn't prepared for ARPA questions. So by December of 31st of 2027, we have to have it all spent. Sorry, this year, this year, 26. I was like, I don't think that's right. December 31st of 2026, we have to have it completely spent and reported and everything. And I can't remember. So there's several different projects that are currently being worked on. And I can't remember what the balance is. We probably have about... maybe nine, $10 million left that we're still working to finish out. Plus I think we got some funding from counties ARPA, which we're still working on CP 42 to use those dollars too.

Okay, thank you. And for any of the ongoing projects that were part of ARPA, we currently don't have any allocation from the general fund to supplement those programs to continue through the rest of the fiscal year. Is that correct?

For ARPA projects?

Correct.

Yeah. The ARPA projects that we're working on now are just one-time capital investment type of thing. So there's nothing that would be an ongoing. So there's even for maintenance, right? So if we're doing capital projects, there's not maintenance money or anything that's

okay so for example with the youth job program i think we have like 2.5 million dollars or so in there that program ends in december and then we're not going to continue that that's correct yes okay so then i guess my question is why are we looking at the safer grant and trying to put general fund dollars into a grant that is expiring and trying to maintain that grant after the expiration of the why are we maintaining those positions after the grant expiration date? When we don't do the same with other programs or other grants. So if we look at the... It would be a good answer. How about I leave that for you?

Chief Wilson would probably better answer this question, but I believe when they applied for that grant, it was to get positions on board and trained for potentially opening Station 56. Because I think he's mentioned in the past that you can't just hire brand new positions and put them out in a new station. They have to have people that are trained up or know our program. And then once you open that station, you'd set them out there.

I understand that. But then for us to reserve money for positions to extend the safer grant doesn't make sense to me. When we are eliminating Calvary, the peer support specialist positions that were funded under the CalVIP grant, right?

Those we didn't look to extend them, is that correct? I'm sorry, I'm not that familiar with if they were going to try to extend them or not. I think by the end, well, Scott looks like he can answer that question for you.

Yeah, Council Member, we've got people that can help you. The CalVIP specialists actually left before the program even was completed. I guess I'm having a difficult time with understanding your questions, but if I can maybe rephrase it back so I can understand what you're asking me or asking our staff, you're asking why would we try to preserve 24 firefighters? Is that your question? That were funded through the grant that is set to expire. Okay. So do you want to eliminate 24 firefighter positions? Is that what you're...

Implying? I'm implying, what I'm saying is that if a grant expires, typically a position that is funded through a grant disappears along with that grant. And so if we're looking at this, like any other grant, we do not extend a position, right? Everybody understands that a position through a grant is a temporary position. Okay. And then, The other point I wanted to make here was that when I was asking specifically with regards to PD and fire their budget, last council meeting, when we had this discussion, I asked the same questions with regards to a slide that has been removed since then. And that was showing the breakdown of parks and community service, their budget and expenses. And I asked for that to be replicated for police and fire. And so I'm not quite sure I understand why that slide was removed as well. It's not in this slide.

We have all the slides.

I have it. I took all the slides out, but I do have them in case we wanted to refer to them. But I take a lot of the slides out from the first presentation because it's a very lengthy presentation. They're more statistical related. And then I kind of just condense it to what I think is important things. But it's still the same slides that you saw the last time. But if you wanted to see that slide, I could show it to you. I do understand that you're asking about police and fire. The reason why it's easier to do that for parks and community services is because it's one fund. With police and fire, there's funding over several funds. And so it gets very kind of difficult to show you in the way that the other slides were presented for parks and community services. I will say that I did try to do it, and it just got very complex and kind of awkward. And so at the end, I didn't do it. But it's just because of the way the funding sources are across several different funds. And some have grants, and some have interest, and some don't. It just gets very odd.

I understand. Now, with regards to the community request in terms of a tenant relocation fund of $250,000, tying that back to, in this case, very specific police budget. So we're looking at $31 million, as was mentioned before, out of the general fund for police. $250,000 is less than 1% of that, right? It's less than 1% of that $31 million. And so... I guess, and it's up to council, right? We're gonna make decisions up here, but my opinion is that we need to start prioritizing community safety, right? Which includes housing, which includes parks, which includes streetlights, sidewalks. And these are, the amount of money that's going into these programs are tiny, tiny compared to police budget, right? Compared to fire, police takes up what? 40, 50% of the general fund dollars. And so, I'll leave it there for now. Thank you.

Couple comments. I got an answer from the county. $138 million is their mental health budget every year. So and we partner again, you know with them a lot but countywide 138 million dollars they spend on mental health services every year a couple other comments There's some comments about South Merced sidewalks and other streets big need I think at one point last year we had approximately five million dollars in District one, district two sidewalks projects either just done or going. So there's been quite a bit of work, obviously still more to go, but big projects in Southwest Merced, the motel drive project, the child's the canal or the child's Golden Valley to Weaver project, which is a long time coming and multimillion dollar project. So a lot of big, uh, important projects down there done, um, with, and have been a lot of talk as well about housing and how we spend our housing money, how we invest in housing, you know, whether we spend it on, uh, on rent, on tenant protections, or traditionally what we do is, you know, our housing money, we use that as seed money to attract grants, um, which we've been doing, I think with quite a bit of success for the last few years, 700 plus affordable units. Um, uh, so, uh, Devinwood project, I, you know, we've heard the list over and over again, Bella Vista at, um, Yosemite Parkway and Parsons, R and Childs, the B Street Complex, 1213 B Street, Link Housing, on and on, total of over 700 units. That's us using our local money to attract grants, which total hundreds of millions of dollars in state money. So, you know, us, we have a choice to make. We can use our housing money and spend it on rental assistance, doing things that, I mean, the Housing Authority has roughly, I think, a $25 million plus budget every year. And that's kind of what they specialize in. And there's project-based vouchers, other things, HUD-VASH vouchers to help veterans, all those projects that kind of go in to help people pay rent. So are we going to kind of jump on to what, you know, that's being done in groups like Sierra Saving Grace, other groups as well that do that work, Catholic Charities, or, you know, are we, I don't know if anybody else, probably nobody else in the city is going to do this. The Housing Authority maybe has some projects, but no one else can do what we do. And that's getting that money, using that money to make our bids for grants more attractive and then you know, doing those big projects. So we've been able to fill multiple vacant lots that had nothing going on for a long, long time and put housing there, you know, to the tune of 700 plus units over the last few years. So, and that bringing in hundreds of millions of dollars in grants. So, you know, at least in my view, that's a very worthy, use of that money if we can attract the state grants. So just a couple of thoughts there. And again, one last time, I mean, the police funding as well, it would be nice if we lived in a world where we could spend our money on things, you know, to just, if we didn't have to devote so much to police and fire, but the problem is there's just, there's such a need. And police respond to 70,000 plus calls every year. These are domestic, they stop domestic violence. They investigate child molestation. They stop gang shootings, other shootings. So the police have an essential role to play in this town. And you know, we need them. And there's just a lot of work to do and probably more, there's probably more work than we, you know, than we fund. They're busy and there's a huge demand for them. There's probably no other department in the city where 70,000 times every year someone's calling, demanding them to come right away. So just a thought. Okay, Council Member Jean.

I mean. Tell me I'm wrong. I will. That's good. In terms of call volume, if we have another department that has over 50% of our budget, yeah, I would imagine they would be handling most things. And so, yeah, that's the way we designed this system is that we continue to fund police with over half our budget. And so that's why they're doing more things. They're handling more calls. You keep bringing up that the county does mental health services, right? They have their own sheriff's department. They have their own fire, right? And yet we provide those services too. because we know we could do it better. The city does it better. And so I don't think that's a justification to why we shouldn't continue to do or provide these services. Oh, and then in terms of community service officers from PD, again, I brought this up before. It doesn't make sense why we have a parks and community service department that doesn't have community service officers or community service personnel. Why are they not handled through parks and community services? with regards to ARPA and the youth program, um, mentioned earlier by one of the speaker. Um, I think when we start thinking about addressing root causes of crime and again, the speaker is passionate about it, we need to start investing money into youth programs and continue to do so. And so again, I would love to see money actually allocated towards a youth program here in Merced that would keep young people out of trouble. Right. Um, Stop.

Okay.

Thank you. Just one day. I mean when you have you a little more precisely the word that's it when you say that's half our budgets not it's rough police is roughly 10% maybe a little less of overall budget and And if it comes to general fund, yeah, it's roughly 45 percent or so the general culture DuPont Thank You mayor We're not gonna get rid of police.

We're not gonna get rid of fire. So let's move on from that And let's actually talk about some budget items here. The third largest department in general fund is finance. It also has 26 positions. And I don't think that we talk about finance enough in these slides of having a full picture of where our general fund dollars are going. General fund dollars may be going to parks and community services or the airport or other departments, but then they come right back to the finance. And I get it. It's a cost of doing business. We can't directly charge the public for a city manager, can't directly charge the public for a city attorney. I understand that. I do want to see the cost allocation of how we're allocating the reimbursement to our departments. I need to understand that. So providing that information would be helpful in not only understanding the reimbursement, but the other issue I have is you have the reimbursement side, but then some departments are also having interdepartmental direct service charges. So we are having, I think, a double dip of revenue in some areas of we're gonna cost allocate, but then we're also gonna directly charge some of these departments. So for example, like Parks and Community Services, since we all like to talk about Parks and Community Services, we have $106,000 that goes to reimbursement charge to finance, and then roughly $12,000 for direct service charge. And then obviously you have city council, city manager, city clerk, city attorney, and purchasing that also have a reimbursement charge. So again, cost of doing business, but I think there is not a... clear way in which we are seeing these reimbursement and direct service charges. $5 million being the third largest general fund budget is not discussed enough. We have two more temp positions that are going into finance under the RP. We had an additional position that we added to finance last year. So we have 26 positions in the finance department. Maybe we need all those positions, but again, we have to talk about priorities. So I just raised the concern, raised the question to ponder and think about to my other council members, because I raised the question at least in my head of $5 million from a general fund being the third largest department is quite interesting to me. The other thing that I discussed last time, Councilmember Harris, Councilmember Smith, you aren't here, but last time I talked about Trust 115. Trust 115 from 25-26 end year balance was estimated to come out at $9.656 million. This draft budget that we got the beginning balance will start at ten point three six one million dollars It's an increase of about nine hundred and seventy four thousand that's without us putting any money into it So we that's close to the same amount that we are going to budget and put into it again And there's no expenditures coming out of trust 115 none so over four years, it's grown from $7 million to roughly going to be close to $12, $12.5 million by the fiscal year end 26, 27. So again, I raise that as well, because if we are realizing that much money and interest revenue, we have to question why we're putting just as much in each year on Trust 115 with no realized expenditure. We're just saving more money. It's just another general fund reserve. With that I will conclude my comments. I do think that we need to look into some of the revenue sources As well as director Jensen had mentioned I think there was a thought of why it was zero, but it will not actually possibly be zero in a budget. So we can relook at that, you know, every dollar counts for parks and community services. So if we can budget correctly, that that's the best way to do it. Thank you. Thank you.

Oh, video. If you want to talk briefly about, I'm obviously we all want finance to be as efficient as possible. Could you talk a little bit about all the work that, your department does both taking in money and making sure it goes where it's supposed to go.

Yes, of course, actually kind of planned for this question, right? So we do have 26 positions and we are an administrative support department. So we support all of the departments and their operations. And then we also have customer service, right? That we maintain a counter and we provide customer service by phone calls and at the counter. But just to run down a little bit of what our positions are and what they do, right? We have We do have a purchasing division. So we have three positions in that position that are basically work with departments for purchase orders, requisitions, inventory. We manage inventory and deliver inventory. We have three in payroll. One is a supervisor to actually manage the payroll or process the payroll that we need every two weeks. And then, of course, there's always work on the off weeks, right? The reporting requirements for all of that payroll stuff. And actually, that supervisor, we recently reclassified to a senior accountant because when you have it be so specific to payroll, it can't really help with other duties. And of course, we always talk about how we do less with more or do more with less, right? So we're trying to get that position to do more because our other supervisors are already pretty impacted. But we also have... a supervisor and three techs that work on accounts payable, general ledger, contracts, month end, treasury and audit and year end. We have a supervisor and four accountants that work on budget, audit, grants. We talk about grants and we have... We have achieved and been awarded a lot of grants in the last few years, more than ever. And that grant administration actually has created a lot of work in our area. Just monitoring and grant reporting and all of that, it takes a lot of work. But they also manage projects, the year end and the debt, debt service, debt management. We have nine employees in the customer service area one. So they oversee business license, parking citations, utility billing, general billing. We have one position that is manages business license, one position manages general billing, two positions are specific to managing utility billing and maintenance. And then we have four positions that are payment processing and customer service. And then we have the deputy finance officer that oversees the day-to-day, the training, the treasury, the audit, kind of oversees all the day-to-day stuff. Also asset management, right? So your capital assets. And then the finance officer, which I manage the long-term planning, the policy, the debt, the budget. So that's the positions. I will not say that there is a shortage of work. If anything, there are... I could probably use two to three more positions, to be honest. People that work in my area, the one thing we have is heavy deadlines. Our positions, our work has a lot of deadlines to it, whether it's grant report, audit, budget. It's not things that we can just continue to be like, put that on the back burner. So I do have a lot of employees that work a lot of overtime. They work a lot of Saturdays and Sundays. I have supervisors that are salary positions, right? But they're still here on Saturdays every weekend or a lot of weekends. I won't say every weekend, but a lot of weekends to try to manage that work and make sure that we're meeting our deadlines. So I mean, I understand what you're trying to do, but it will be very impactful in my department to decrease positions if that's what you're looking to do.

Thank you, Mr. Rubio.

Council Member Smith. Thank you, Mr. Mayor. I kind of forgot what I was going to say, so I'll see if I can pull it together here real quick. Yeah, we're kind of at the point of discussion. We need to start putting our cards on the table. I'm not in favor of reducing the size or the scope of our police department, our fire department, or our finance department. I'm certainly not at a haphazard way up here. I mean, I'm happy to drill down on some of those things, but I will say that I do subscribe to the view held by members of our business community that sometimes council in the city try to keep ourselves too small. You know, I'm not seeing the level of investment that I want to see in the interior, city manager's office, planning services, engineering, et cetera. I'm glad to see we're adding an HR director. That's been a hole that we needed to fill for a long time. We tend to react to things slowly and deliberately. And I think it's in part because our team is already stretched. So I would share Council Member DuPont's perspective desire to see a little bit more how the money flows in and out of finance. I think it's smart. I think it's what we're supposed to be asking about. But everything runs through finance. His comments, though, do give me a chance to talk about what I think we should be talking about, which is how to close the budget shortfall. Venus has pointed out that we're out of balance by about $1.3 million. She suggested that we're... We're putting in too much money into our general fund reserve. And I agree that we're not in a slush fund time here. We're at a time where expenses are exceeding revenue. So I would agree with taking her suggested amount out of the general fund reserve allocation, not out of the reserve to help close the shortfall. Trust 115, I completely agree with council member DuPont's observations. I think we need trust 115 because the state likes to do things like increase our pension obligation without asking us or telling us it's coming. And those obligations are gonna be due when they're due. I don't wanna have the conversation about cutting staff People are working in between the lines because we're paying our retirees more than we thought, although our tire is do deserve to be paid. But I would agree with transferring less in a trust 15 to help close the shortfall. I'm a little concerned about putting operational costs into CFDs and measure C. I mean, that's what that money is for, but we had this conversation last year, right? There was this council, majority of the council was concerned with the notion of leaving money in the account to have in future years. I'm not categorically opposed to making these transfers, but when I see $400,000 going into an economic development fund and over 600,000 going into affordable housing fund, I kind of wonder if in a time when we're expenses are exceeding revenue, if that's a good idea. I would also favor reducing the set aside for those two funds so that they hit on the police and fire operational counts is reduced and try to balance the load as opposed to putting it in one place. I think we'll be able to manage that transfer a little bit better if it's spread across different funds. And also, I mean, honestly, I care other than a community center where we, I think allocated 25 grand to help recover from a fire. The Economic Development Fund is for significant projects with exceptional impact. I'd like to think that that project is coming, but this economic downturn, the lack of affordability is hitting everybody. I'm not aware of something on the horizon that we should be putting that money away for. And somebody can correct me if they think I'm wrong. I'm happy to hear, happy to discuss. But I would rather see a little bit broader approach to clearing our shortfall. I would agree with the finance department. We do need to do something about it. It would be a mistake to leave it as is. Council Member Harris.

Thank you, Mayor. I agree with Council Member Smith on staff recommendation to close the shortfall. On another subject, if I recall, and this was for City Manager McBride, with regard to supporting tenant relocation for eviction, aren't there other options out there besides the, uh, landlord, if a landlord fails, aren't there other options that exist right now, including HUD?

We haven't done an exhaustive look, but I think that may be an option that's available. Uh, I think the city attorney's office has done research too, that that's a requirement. Um, outside by a different responsible entity, but I think you're correct. I think that we did look at that as a cursory option. I think that it could potentially be an available option. There could be others too.

Thank you. And finally, I want to note that the City of Santa Barbara, the County of Santa Barbara, for the past over 20 years, I'm thinking closer to 25 years, their paramedics are trained as mental health specialists also. And when they go out on a call, on a mental health call, they're the first responders for that. And it's something I think we explore with AMR. It is AMR who provides that service down in Santa Barbara, and they're very good at it. Somebody to look. look for that doesn't cost the city anything. Thank you.

All right. Thank you, sir. Okay. Additional comments.

The other one I had was looking at the fire chief equity salary. 9% seems like a lot right off the, right off the top. And I understand that there was a, miscommunication on that issue is there a way that we could allocate that cost over a period of time instead of nine percent in a full fiscal year so take four percent now five percent next fiscal year or three three and three i understand the compaction issue that we have at the one percent

Yeah, there's definitely an option to do that if that's what the council chooses to do.

I would entertain discussion on that issue as well of maybe splitting that 9% over two fiscal years.

All right, good segue into us getting down to the, to the heart of the matter here. First, I guess to that point, any changes, anything that's currently budgeted that anyone would like to see changed or anybody would like to see removed? Council Member DuPont's idea about, you know, the equity adjustment for the fire chief? If I'm wrong, currently the fire chief salary is essentially the same as the battalion chiefs?

Base pay, yes.

Okay. And what's the justification for the 9% equity adjustment?

So it was just to give it, so we looked at the other management, right? So battalion chief to fire chief is a 21% differential. And then the fire, the deputy chief to battalion chief is 17 and a half percent differential. So we were just trying to make it so that there was some differential there, but it wasn't, I mean, we know that this will, we were going to have a shortfall, right? So just giving some type of equity adjustment, but it's obviously way lower than the other differentials.

Discussion on that item, either modifying that 90%. Kelsmore Harris.

Thank you, Mayor. I think the fire chief has served in that spot either temporarily or as a permanent position for several years now. And I would not be in favor of delaying his long overdue adjustment.

Any other thoughts on that topic? Councilor Smith.

Yeah, and I appreciate the chance to have the conversation. I would agree with Councilmember Harris. I think we've got an excellent fire chief who's patiently waited for this opportunity while serving as an interim. And I don't know, team, I mean, that... I don't know what this miscommunication was and I don't know that I need to know, but the, the size of the equity salary increase seems to me to be something that can be informed by salary studies that we've done ad nauseum. And also it's the city manager's call. So I'd want to respect that, but you know, I appreciate the conversation.

I see additional thoughts on that. Um, would you want to, uh, a vote or a motion or additional discussion? Thank you, sir. Okay. Anything else currently that's in the budget that anyone would like to see changed or modified? Councilman Harris.

Thank you, Mayor. Can you refresh my memory? What did we do about community funding last year? That was a last minute addition, wasn't it?

Sorry, I can't remember off the top of my head.

It might have been.

I think it was 30,000.

If he has mentioned in their presentation, it varies between 28. It's historically been between 28 and 50. 30,000 last year.

And I think I feel the same way Councilmember DuPont does. I don't understand it, but if you tell me that it's not adding to the deficit, I guess I believe you. So I would entertain discussion on adding that 30,000 again this year.

The community funding and the other below the line things such as Trust 115, affordable housing and economic development opportunity fund. Those are all, those, I guess, again, like Council Member Harris said, still understand exactly why, but they don't impact

They don't impact the shortfall because they're not considered operational costs. They're to, if you wanted to remove this, it's not going to affect your operations.

Okay. All right. Um, discussion on community funding, customer Harris, uh, what community funding you're, you just talk.

I think in that situation, I'm in favor of adding that in.

Okay. Counselor Tao. Yeah, I wanted to agree with Councilor Harris because, you know, these small nonprofit organizations, smaller groups in Merced here can use those funds because, you know, I think $2,000 to $3,000 per group when I see the grants is, you know, it can go a long way to help this group here. So I agree with Councilor Harris. Mayor Pro Tempoy.

Thank you, Mayor. Community funder. I agree with Council Member Harris, myself with you Mayor and Council Member Zhang, we've been on the committee to go over the request for the last few years and I thoroughly do enjoy it to see the projects that do come forward to us and be able to fund some of these requests and they really do make a good impact for our community. Like Marissa said, SPCA, they were able to spay and neuter, I think cats, I'm not sure if it's dogs too, but just that alone was helping an issue we had in our community. So there's different nonprofits that are looking at issues that we might not be able to do as a city, but they're able to fulfill those duties. So I think it is a worthy cause.

Okay, Cal State DuPont. Venus, this is still coming out of the general fund, correct?

Yes, that's correct.

So it's not going to impact the $1.2 million deficit, but it will remove funding from our fund balance from the general fund.

Correct.

Councilor Jean. I support community funding. I think it needs to come to the condition though that we fund new organizations or phrase it this way. We don't continue to fund the same organizations over and over. And so if we're going with community funding, we need to spread out that love and make sure that other organizations get a chance at this money as well. Any new ones?

I got a few there. Council Member DuPont, is that a new one? That is a new one. I'm going to clear after this. I'm going to clear the speaker queue. So if anybody has another one, please.

I don't think we can put that condition on the community funding. It needs to be a merit-based system.

I would agree with that. One, I think the community funding requests can be a great value for us because it can be a very low-cost extension of city services. Sarah, for example, gave the example of SBCA funding, which I think $10,000 for us saved who knows how much in terms of you know, in terms of our animal control department and everything we had to do to deal with, deal with all that. And two, I think, I agree with Council Member DuPont where placing conditions are hard because there's some that repeat, but they have tons of value and, or, you know, in a lot of ways can be extension of city services. And so, and some new ones are good, some, and other ones, you know, they're not proven and it might not be a good investment. Council Member Harris.

Thank you, Mayor. I agree with Councilmember DuPont. It should be merit-based. And if it's close or if it's a tie, I'd say give the new people a chance. But otherwise, let it just be merit-based and let the scores determine the awards.

And then in terms of community funding, one, it's been 20 to $50,000. Two, in the past for a while, it was the city manager who made the decisions. Lately, it's been the council group kind of advisory in conjunction with the city manager and advisory to the city manager on this as well. And I think at times, too, back to council and the full council made the final allocations. So we've had a couple of different ways to work through the process. Is there an amount on that anybody thinks is good or suggesting or? Council member Harris.

I go the same as last year, 30,000. Okay.

Discussion on that number. Is people okay with 30 or do people want less or more? Everybody's quiet means probably 30. Council member Smith.

I support the community funding and 30,000 sounds good to me.

Okay. All right. Additional comments. Phoenix needed a motion on that or is that sufficient direction?

I think that's a good direction. I'll put it on the errata list. And if you approve the errata list without changes, it would just be part of the budget.

Okay. Look to my right. Anybody disagree with 30,000 want to see something different?

Okay.

So you have your direction. All right, anything else the members of the council would like to see modified? Councillor Smith, is that a new one or is that old? I think it was my old one. Okay, I'll reset. All right, anything else the members of the council would like to see modified? Councillor Jean.

As I mentioned earlier, I would support a tenant relocation program. as mentioned before, $250,000. This is money that we could recoup. And so I don't think this is any sort of loss of revenue, but it's a way in which we could support the community and then recoup this money back from landlords.

Additional comments, discussion on that, the request that leadership council made for tenant relocation funding. Any additional support?

Council Member Smith. And so we've talked about this. I mean, I've already signaled my personal support for when revenues come in, which unfortunately I think they will from the repeat housing code violator program. I'd appreciate to have a discussion with council about setting some of that aside for tenant relocation assistance. I think that's the more appropriate venue for having that discussion rather than finding general fund dollars here at the close of the budget cycle.

Yeah, I tend to agree. I mean, I definitely, I think it could be a decent, it could be a decent program and a funding source, but I think, you know, how's the money going to come in? How are we going to make it sustainable? I think just spending our housing dollars on rental assistance is probably a mistake because it's going to go quick and then we're not going to have money for projects. So if they're, I think a wait and see sort of approach, seeing how the repeat housing violator program goes and then seeing how this goes is, but I think, you know, in this budget, I don't think, I think it's too soon.

It also ties the relocation assistance to the purpose of the ordinance, which is reducing uninhabitable housing.

Yeah. Okay.

Additional thoughts? Council Member Smith, go ahead.

I would appreciate getting some more staff input on other options for closing the budget shortfall. Could I stop you, hold you real quick? Yeah.

Hold that thought. Anybody else on... tenant relocation, any additional support for it in budget this year in response to Council Member Xiong's request. Mayor Pro Tem Boyle.

Thank you, Mayor. I will support what Council Member Smith had mentioned. Once the repeat offender program goes into effect, see how much money we're receiving and what we can do with that and allocate it. We don't have a policy set up. We don't have a resolution set up for an eviction program or anything like that. So I don't want to put money somewhere that we don't even have anything set up yet. Not saying that we won't set it up, but I think we just, I want that to hopefully pass later tonight and then we'll go from there.

Okay. Wait and see approach. All right. Anybody else on that? Okay. Councilman Jean, would you want a motion or it doesn't seem like there's, at least I'm not hearing any support for it in the budget this year, but is there, would you like to make a motion or a formal request or anything else like that?

No, I don't think a motion is needed here. I don't think there's support for it.

All right, so no support for it in this budget, but we'll continue to keep an eye on it as that situation unfolds, okay? Any additional requests from the council?

Councilor Jean. And then as mentioned before too, I support a extension of the youth jobs program. So I don't know if there's support up here from the rest of council.

Okay. Any support for continuing the youth jobs program? We had funded through ARPA, I believe $2 million. It expires at the end of this year, I believe. A contract with the county through their workforce development department to provide the program. Any additional, any support for continuing that per Council Member Zhang's request? Okay, hearing none. Again, Council Member Xiong, you can make a motion if you like, but I'm not hearing any other support.

No, no motion needed.

Anybody else? Okay, seeing none, Council Member Smith, I will conclude with what you were saying.

Sorry to be focused on the bad news, guys. I guess it doesn't make intuitive sense to me that we would not put money into reserve and put it to other priorities that are causing the shortfall given in part because we used the same maneuver last year. But I don't feel like I have enough information to make an informed decision about how to close this $1.3 million shortfall. I'd appreciate some more options and tackle this question in two weeks. But I'm personally just inclined to... put this much of the burden on operating funds for police and fire.

Venus, would you be able to show us two slides? One is the one you're going to. There it is. And then the other one would be, I don't know, I'm not sure if you had it in this presentation or not, but you definitely had it last week. The current balances for general fund, general fund reserve, 115, I think all told adds up to close to 40. Yeah, there it is. Okay.

This one? Yep.

Okay. And those total numbers would be with the current allocations?

Correct.

Okay. So the $600,000 or so this year gets affordable housing to $1.17 million. $400,000 gets economic development opportunity to $1.45 million.

Yes.

All right. And all told, ballpark $40 million or so in reserves.

Correct.

Customer DuPont.

Thank you. Mayor, I would lean to clear shortfall with the recommendation number two. I think we are, again, heavily underutilizing Trust 115, 153,000, it made $940,000 last year. So I think leaning into Trust 115 is... more of the option that I'm looking at instead of looking at other fund reserves. And I'm okay with using the overfund balance that we have in the reserve. So balancing that, the 740 with what we need from Trust 115 to get to the 1.3 roughly is about 50-50. And it still doesn't even get to the $940,000 that we made in Trust 115 last year.

All right. And Venus, do we, if we pick one of these three, does it get set? It's obviously a huge difference between budgeted expenses than actual expenses. Right. Do we, does this happen at the beginning, July 1, or does this kind of, do we wait till the end of the fiscal year, June 30 of 27 to-

So when it comes to the reserve piece, I would typically wait until we get our county payments, which is typically January, to kind of see how cash looks for moving money around. But for the Trust 115, because that is actually set with an investor and that money is invested. So I would wait towards the end of the year and I would let them know, hey, this is a the investor can do what they need to make that money liquid for us. And then I would determine if the fund needs it, right? So if we ended up with a little bit more revenue than we thought, or we save money and it closed that 100, we'll say it's 153 right now, right? And close that 153 gap, then I would not move in more than what's needed. to close that gap, if that makes sense. If you guys made it 50-50, right? I'd look at the 700,000 and see if we were able to close that gap just with actuals and then just do what we needed to make it work.

So 115 is essentially, it's a big investment fund and we had- Yes, but that money is invested somewhere.

So I can't just yank it tomorrow, right? I'd have to let them know, hey, when something matures, I got to pull some money out. And they kind of know that we just met with them recently because we told them that this was going to be an option for you. And so they have that in mind. And so they would put things in investments that were somewhat liquid so that we can pull that money when it's needed, but we would only pull what we needed.

And would you, could you come back or would you come back at mid-year potentially with a check-in or an update on this? So, you know, it looks like where we have salary savings, revenues above expectations. We're going to hold off for now, or look, this is not good. We're going to.

I think the trouble with mid-year is that it's the way that our revenues come in. Sometimes I'm not exactly sure. We usually don't. We probably have more of an indication around May-ish than we do in February when I come at mid-year. So I can come with some discussion about it, but I wouldn't know for sure yet if I was going to need to actually...

tap into these funds. For example, May 27 would be a better potential time for you.

Right. Because we'd have our second allocation of property taxes. We'd kind of know where that fell. We'd have a few quarters of our sales tax and we'd kind of know what that's trending. We'd have some measure-wise stuff going on. We just have a better idea.

You know, Venus's may revise like that. That's a good one. Catherine Dupont. Correct me if I'm wrong, Venus, but we had Trust 115 as a way to close the gap in the previous or the current budget that we're in. Yes. So have we pulled any money out of Trust 115?

But you didn't choose that option. You guys chose the option of moving over some operating into other funding sources, and then you reduced the reserve requirement to 30%, which opened up a lot of reserve funding to be able to move over back to the general fund. So you didn't pick Trust 115 as an option, even though it was given to you as an option.

Okay, thank you.

All right. So, Council Member DuPont, you prefer item two or clear the shortfall number two? Correct. All right. Council Member Smith.

To use the words of my colleague, Council Member DuPont, I prefer shortfall two as well. However, I would appreciate seeing some more scenarios to choose from. I'd like to see the shortfall spread across a few more funds. You talk about sales tax measures. She has sales tax dependent too.

Yes. So let me just, so I understand what you're wanting. So you, so 740 would come from the reserve because it's overfunded, but then the balance of that, you want to see it between expense reductions and trust 115.

I'm saying, speaking for council member Smith, I agree with the transfer of 740 from the reserve. I agree this is a one-year fix that we have to do. I don't, I'm not necessarily personally opposed to transferring some operating costs to the CFD or measure C, but I'd like to see some other places we can pull money from as councilman DuPont said, you know, what does it look like if we take a little bit more to trust 15, maybe there's another option that's not on the slide. It just seems to be a healthier way to go about withdrawing funds from our priorities. If we could spread the pain out a little bit more than just what we see here in the proposal. And if it's completely impossible, you know, please tell me, but... Well, it's not impossible.

I'm just trying to figure out, like, are you trying to keep everybody's budgets the way they are, but then... Because then it's the 50-50, right? 50% from the reserve and then 50% from Trust 115. Everybody's operating budgets stay the way they are. But if you're saying you still maybe want to see some transfers of operating costs into other funds and something else, I'm just not sure what that something else would be.

Well, I mean, that's what I'm asking... He was the finance director. My policy concern is that our community cares deeply about strong police and fire protection. And I'm concerned, I know we're only talking about 400,000 total, but I'm concerned about drawing down public safety specific funds to close a general fund shortfall. And I'd like to see if there are other options, not exempting PD and fire, but are there other options that we can take a look at? I like trust 115 for the reasons articulated. 153 seems to be the number that you've come up with. I wonder if we can bear more. I wonder if there are other options. And it's unfair for me to be asking you to have the answer right now because you'd know that the question was coming.

Are you opposed to freezing positions within the general fund when it comes to public safety?

I'm sorry, what'd you say?

Freezing positions within the general fund that are vacant when it comes to public safety.

That's a good question. I am not.

You're not opposed to that?

I'm not in favor of that.

Oh, you're not in favor?

Yeah. Anyway, I'm not trying to play gotcha on the dais in front of live television audience, but I just wonder if on this particularly important point, we could maybe put a little bit more thought and bring back some more options at council. Okay.

You're expressing support for clearly shortfall number two, but with potential more options? Yes, sir. Okay. All right. Anybody else? Preferences? I think both I'm one or two are both fine with me. You know, in a lot of ways too is, you know, Venus, like I said, the budget, just a big puzzle piece. And a lot of the things are kind of, you know, move in backfilling. So I think I'm, I'm certainly fine with two is suggested if there's some more options, I think, you know, one, the staff recommendation does kind of provide some of those potential options, you know, and obviously coming out of public safety because public safety does make up the lion's share of the general fund. So, you know, obviously that, that makes it the most likely candidate for, for savings as well. But I don't know if we want to have a, if there's a motion or further discussion, you know, I think we have some decent options here too. And two, if there's, you know, if there's anything else you guys can think of, you know, in terms of other ways to fill it as well. All right. Additional discussion or a request for direction or a motion? Council Member DuPont.

Let me ask this clarifying question. Are you looking for a motion tonight or the discussion allows you to understand where the council is at before we take a formal motion at the next meeting?

Well, I think that what you've given me, I have an idea of what you're trying to do. I'm not sure I'll be able to give you more options just because if We've talked about this before, right? So if you're not willing to reduce any public safety, because that gives you your 100% savings of whatever you reduce there, then we could reduce in other areas, but you're not getting a one for one. You'd have to reduce quite a bit a lot in order to get a big chunk down for savings in the general fund. But I also want to be able to bring you an errata list that's somewhat ready to adopt with changes. But if I'm still bringing you options, that's not really ready for you to adopt a budget on the next meeting. So I guess I'm trying to figure out how to do that part of it, right?

So what you're saying, it's possible to finish it next week. But what you want, typically, we have it pretty much ready to go. So you can bring us close to a finished product by then.

So typically this type of direction, I'm getting the last meeting and then I'm bringing you what that would be in this meeting. And then next meeting, I'm bringing you an errata list of like, this is the budget with your specific line item changes is what I give you. So I wouldn't be able to really do that for you yet in the next meeting if you're still wanting more options. Does that make sense?

Yes. All right. Yes, I mean, we could decide either with, and one, we could ask for more information, two, with kind of general direction, or if we're unable to articulate general direction, possibly a motion as well, another way to articulate it. Or additional thoughts, comments from the council members who have not been heard so far on the side. Mayor Pro Temboa, your thoughts. Do you have a preference?

Thank you, Mayor. The third option, clear the shortfall with number two is probably my preference.

Okay. Councilman Jean. I'm not in favor of it. I think we need to cut police budget. I think there's other things to do. So I'm not in favor of supporting shortfall or option number two. Okay. Which one do you prefer? mean technically two here works right because other identify expense reductions would be considering cutting police and fire but if that's not the direction and then I do not support that option okay so that one is more clearly the shortfall number one is that your reference or do you have no mine would be none of these all right okay closest would be two with the Other identify expense reductions taking the lead in terms of cutting from police and fire Okay, but since that's not the discussions the discussion up here and then I don't support any of the recommended options. Okay customer Harris You have a preference, sir.

I Reiterate my preference for shortfall number one In counselor town

I'm in favor of the clear, the shortfall number two. Okay.

I will support, I support one or two. I think we have four. And then Councilor Smith is two, but possibly with more information or seeking more information as well.

When you say two, are you looking at the middle one or are you looking at shortfall number two?

Good question. That's clearly shortfall number two. So leave as is, number one and then two. But number two, which is in the position three. Councilor Smith.

Thank you. In the interest of finding common ground and respecting the fact that Venus needs some firmer direction, I don't know if my question is to explain, please, how we got to the proposed transfer of 153,000 from Trust 15. But my real question is, we're on the fly now, but would you feel comfortable edging up that transfer from 115 beyond 153,000? Yes. So just conceptually, you know, maybe edge up the transfer for 115 and reduce the transfers at a proportion amount from the CFD and measure C to bring that down. And then perhaps we go a shortfall number one under the circumstances.

Okay.

That's a, that's a modified one where the 115 transfers a little higher and then the other two are lower.

Yeah, because I mean, from a practical perspective, excuse me, I respect the fact that I'm not going to get perfect information to make this decision. And unfortunately, I wasn't able to join you all in the last couple of weeks. So I'm trying to find common ground hearing everybody's values up here and taking the lead from Council Member DuPont. And I think rightly focusing on 115 as an underused resource.

Okay. All right, Council Member DuPont.

Okay. Yeah, I would take probably a little bit stronger of an approach of just a small increase, I think I said it before, splitting that cost 50-50 between the 740 and the Trust 115. Trust 115 is there if we need to use it at the end of the fiscal year. If not, we have salary savings, then we're in a good position for the general fund. But if we can split 50-50, then we're not moving other costs from police and fire to solve the issue. So I think keeping to the 740 and covering the rest with Trust 115 is... keeping everything else constant, I think is a simple way in which to do it. Now I say simple, could not be simple, but simple in my terms. Thank you.

Okay.

Is there a motion to that effect or any other motion?

So just to confirm. So if we say the shortfall is a 1.3 million, you want 650 to come from the reserve and 650 to come from trust 115.

I think, yeah, 740, I think, and then the rest.

Oh, or you want 740 and then the rest, because you keep saying 50-50, so I just want to make sure.

Yeah, 740 and the rest will be fine. I'll make a motion to that. Is there a second?

I'll second it.

We'll call for the question. First, any other discussion? Can you repeat your motion, please?

The motion is transferring the 740 from the general fund reserve to cover the shortfall and then transferring the remainder amount of- 553. From trust 115 to cover the shortfall. All right, thank you.

Okay. I'm pushing the second. Additional comments? Seeing none, Jennifer will call for the question.

I have a motion by Council Member DuPont and a second by Council Member Harris. Mayor and Council, please cast your votes. And the motion passes with Council Member Zhang voting no. Okay.

Thank you, Jennifer Venis, thank you. Thank you, Council, for a very robust very high quality discussion. I think that concludes. Is there anything else? I think we've gone through everything.

We need to make a motion to continue the public hearing.

Yes. So moved. Okay. First, anything else you need from us tonight?

No, that was it. Thank you.

Okay. Scott, anything else you need from us tonight? All right. We have a motion to continue the public hearing to our June 15th council meeting.

I got it. Council Member DuPont made a motion. Yes.

Is there a second?

Second. Second. Okay, I have a motion by Council Member Dupont and a second by Council Member Harris. Mayor and Council, please cast your votes. Okay, the motion passes unanimously.

All right, it's 8.45 right now. We'll take a brief recess. We'll take a 10 minute recess. We'll be back at 8.55 to continue. I hope everybody's comfortable out there. It's probably gonna be a long night, so.

Okay, agenda item J2, continued public hearing to receive public comment regarding the U.S. Department of Housing and Urban Development 2026 annual action plan and adoption of resolution approving the draft 2026 annual action plan and final determination and award of project funding pending HUD approval of the submitted plan.

Thank you, Jennifer. Ms. Nutt.

Good evening, Mayor and Council Members. So this is regarding our 2026 HUD Annual Action Plan, and this is the final public hearing. Just a quick rehab, or recap, sorry. For the first public hearing back on March 16th, we presented the needs assessments that came about as a result of surveys and needs assessments stakeholder surveys. We also presented the preliminary CDBG and home budgets and project funding. We held the public hearing and received public comments. We also received council direction regarding public service proposals, Joe Heard Park additional funding, and had a discussion about Section 108 funding. Joe Heard Park and Section 108 I'll talk about here in a few slides. For the second public hearing that was noticed for May 18th, we needed to continue that. We asked Council to open the public hearing and accept comment, and we did get two comments, and then it was continued to tonight. So what we are requesting tonight is to reopen that public hearing that was continued from May 18th, receive public comment and then close the public hearing, receive direction regarding the options one and two for public service funding, any other direction you have and then approve the resolution which would approve the annual plan. So option one for public services, specifically public services, we did get some additional program income calculated in this. And then with our allocation, our cap is now 194,863. For option one, we calculated four of the five projects. You'll see the youth services project is not in this. And we calculated the funding at eighty three point five percent of their request with the seven dollars and eighty four cents remaining going to Sierra saving grace for rental assistance And then we are including for housing division activity delivery costs of sixteen thousand nine hundred fifty three So that's option one Option two, and I apologize, the green section at the top is incorrect. So it should say calculated at 75% of requested. And then the remaining after applying that 75% is 117 and 71 cents. So apologize for that error up there. But as you see, This option two is recommended funding of $18,000 for the youth services project. The ADC is staying the same and so this would give us five projects. With our ADC staying the same, if you can imagine, we'd be a little more stretched with our ADC amounts. We'd have to stretch that over five projects and not four. So that does impact us. Okay, so those are public services options. Our recommendation is to approve option one, So for comparisons, just to put them side by side, going from 83.5% to 75% funding for funding option two, the food distribution would be losing a little bit over $6,000, tenant landlord counseling services, You lose about $4,400. Short-term emergency rental assistance, about $3,000, which is basically one household for three months. And the team workforce readiness program would lose $3,000, and then you'd fund $18,000 for the youth services. Again, no change for ADC, and then your net change is zero. For other projects with CWG, we're recommending Serious Saving Grace for, we have with acquisition at 500,000. And then as a result of the last, or the first public hearing on March 16th, recommending that the previous To Be Determined project goes to the Johor Park for additional lighting. or it could be some other park project, but your direction last time focused on Johor Park. And then there's an economic development project with UC Merced for technical assistance to businesses and doing a little bit of research on the specific types of businesses that could be funded with technical assistance. Those would be micro enterprises. businesses with one to five employees. Talking about Joe Heard Park real quick. In 2025 annual plan, you approved an allocation of 834,000, which includes ADC for the housing vision to implement it. The 2026 annual plan proposes to put the additional funding to park lighting. As staff, we are working on an interdepartmental MOU right now for the first year of funding. And so if you approve your 2026 funds for that, we'd be including that also in the MOU interdepartment. Okay, so home funds, we have a total of 800,355.66 cents to allocate over different projects. So we've got Merced Community Action Agency, recommended at 210,000. We do have a to be determined project, 475,228. That typically has been reserved for affordable housing projects. I am putting in the description that we also could do rehab, acquiring property for rental housing, that sort of thing also, which is an eligible use for home funds. And then we're required to set aside a minimum of 15% of our home funding for a CHOTA or Community Housing Development Organization project. After two years, those funds can be transitioned back to regular home funds, which is what we've been doing for the last five years or so. So yeah, your total home funding budget is $800,355. For housing administration and also other admin projects, for the upper section there is CDBG. We've got Broussard County Human Services Agency funded at $50,000. They are requesting a little bit more this year. And then for housing admin, $160,672 for direct charges or... direct costs and then indirect costs at 20,000. And then our home funds for housing services by Project Sentinel at 37,885 and then our direct costs for housing admin at a little over 7,000. So at the March 16th meeting, Council talked about Section 108 funding for Station 56. We do recognize that's a Council priority. The last dollar amount that I've heard, the shortfall is $4,619,000 and change. There is Section 108 funding available in program year 2026 at $5,226,000, and that's five times our allocation. Our 2025 amount, based on allocation, was $5.4 million, so it's directly calculated on five times our allocation. Comparing the numbers, we would have enough in the Section 108 availability to do that. We would have to do a substantial amendment process because the discussion regarding Section 108 funding came in too late to be able to include it in our 30-day review public comment period. So we'd have to turn around and do a substantial amendment process. The Section 108 funding is regulated under Part M of the CDBG regs, and it does require its own separate public review period. So we have to do that anyway, but that would help with Station 56. Earlier in tonight's council meeting, we were talking about displacement and relocation funding. Being that home funds may, I'm gonna look into see if home funds can be used for displacement and relocation costs. There may be some special activities that it's tied to, but I'll look into that. And if we could use home funds for that use, we'd have to go back and do an amendment to move our TBD home fund over to that, being able to use it for that. So being that Station 56, Section 108 funding needs an amendment anyway, we could just potentially throw the change of use from affordable housing to displacement or relocation into that process. So that's available. And then just to add, Section 108 does require also, or the project needs to have an environmental review, Federal Environmental Review, NEPA. The application and the environmental review process can happen concurrently, but we do need to accomplish the public review, the approval by the public, give the public opportunity to comment, provide their input before we can apply, so. So tonight's actions, we are asking council to reopen the public hearing and hold the public hearing and then close the public hearing. And then provide any council comments, whether option one or option two is your choice for public services. And then... So following approval, we'll finalize the annual action plan with your changes and the final amounts and then submit to HUD. June 3rd is our target date, which is Wednesday. So it's a pretty quick turnaround.

Okay.

Open the public hearing. Council Member Harris.

Thank you, Mayor. Thank you for the presentation. Can you tell me the maximum available for public service is $194,000 and change. Where does that maximum come from? What regulates that?

It's our allocation. So it would be the 2026 allocation. Let me go back to the slide. Too far. So it's our allocation of $1,045,361 plus last year's program income that was received times 15%.

So last year we ended up with a surplus of $253,000. Is that what I'm seeing?

That was our program income that comes in from existing loans, typically. So housing loans funded with CDBG previously going back many, many years. When those payments come in, that's our program year for this current year, program year 25-26. And then... that figure is used in combination with the allocation of next program?

So we just use it as a carryover to the next year?

Basically, yeah.

I'm just wondering if we can't find a way to put that youth money, that 18,000 back in knowing that there's gonna be program income coming at the end?

Well, we've included estimates, like conservative estimates, through June 30th based on what our payments typically are coming in as income. It probably won't fluctuate very much, and it's 15% of that.

And the 15% comes from what guideline is that?

It's the CDBG regs.

Okay.

It's our cap.

So that's a firm number?

Yeah.

It just seems to me that 18,000 is an investment that ends up saving money in the long run. Thank you. You're welcome.

Councillor DuPont. Thank you, Mayor. As for Station 56, we're going to be leveraging five times the CDBG funding allocation, but does that mean that we cannot allocate funding?

So, okay, so the way this works, you have an available sort of pool out there and you apply for it and the amount equals five times our allocation. Every year, if we do that, every year ensuing, we'd be basically repaying HUD an annual payment calculated on the terms 20 years potentially, and then that amount's taken away from our allocation each year. So we'd include it in our project list, the repayment.

So it's a debt service to the CDBG fund source that we get from HUD.

Right.

And so we could do it over a 20-year span, not a five-year span? Or is it just a determination on how we want to pay it off each year?

Right. So... Being that our allocation is typically a million and change, I mean, this year we estimated low because we weren't sure what the federal government was going to do with our CDBG funds this year. In our first review period, we estimated 900,000. So, you know, at 5.2 or whatever the gap is, we'd have to, that would be the, we only get so much CDBG funds per year. So we'd have to also include our admin, any public services or anything else. If your payment's too large, then there's nothing left for other projects or admin or anything.

Right, but we can set how much we're paying that debt service off.

Yeah.

Okay.

Okay, additional questions? Councilor Smith.

Thank you, Mr. Mayor. Ms. Nutt, thank you for the presentation. I know two meetings ago, I don't know if it was just me, but I was one of the people who was asking for this analysis on Station 56. I appreciate the time that you put in. First, a framing question. The investigation of whether Section 108 funding makes sense for Station 56 in the current year, does that impact your recommendation for the other funding allocations of the various groups in town?

No, so what we're including tonight is the public services, everything that's budgeted, and the section 108 wouldn't affect your list here. When it's approved, our payments would start probably next program year, so no, it wouldn't affect this budget.

So a lot of ifs, but we would be able to see that coming.

Right.

Is it super high level? Is it fair to think about the Section 08 funding as like a low interest loan? More or less? Fair.

Yes.

Okay. All right. Do you have a sense for when this additional public comment period and environmental review could start?

Going back to other substantial amendments I've done, and this would also be a 30-day comment period. I think we've done them in three months before two and a half months. It's fast track.

So potentially end of summer, early fall, we could be having a discussion with you up here about what the path looks like and whether or not it's the right way to go and if it was, how we want to proceed?

Yeah. Okay. Fall more likely. Okay.

So I greatly appreciate your effort. I think this is an important priority for the council. My high-level thoughts on the rest of your proposal are that you've captured council priorities pretty well. I'm sure we'll have discussions, you know, around the edges, but I'd be comfortable with the proposal. I like that we've gotten very good results from Harvest Time, Sierra Saving Grace, Project Sentinel, Boys and Girls Club, obviously, so... you know, happy to have an individual discussion in the individual case, but I think your selection of options is dead on. So thank you. Thanks.

And Kim, just to summarize, one, the Station 56 is just for information and questions and discussion, but no, you're not requesting any decisions.

Just letting you know that it's going to be a substantial amendment coming, basically.

And our big decision points, option one or option two, when it comes to the community funding, anything else specifically you're looking for, direction?

Everything else is pretty locked in, numbers-wise.

Additional questions? Okay, we'll open the public hearing. Jennifer, any requests to speak from the public?

We do have four requests to speak, Mayor. If I can get Sheila Garcia, Joe Carroll, Armando Valenzuela, and Greg Terzakis to the podium, please.

Ms. Garcia.

Good evening, mayor and council members. The team from United Way that produced our video packed a lot into it. And so those that saw it last hearing, I'm sure that you'll still see some new things in it. So with that, we'll put play.

Harvest Time is a food ministry that is here for the community. We gather food from different vendors around Merced and we give food together and we have sometimes up to 30 volunteers that come in and help put it all together and hand it out to our community. Right now we are helping 330 families every two weeks.

My name is Mica Martinez. I am the assistant supervisor of Harvest Time Warehouse. I have been here a little over three years. We have a good partnership, not only with our food bank, but with Catholic Charities, with Target, with Save Mart. And then we have local people that come that have harvested their trees, their fruit trees at home, and they've brought it here to us. So yeah, we have a good partnership with a lot of people. In our mission, it says that we are filling the food gap or the food insecurities in our community.

Harvest time is for those that have food insecurity or lack of food, if they're having to make choices between paying the rent or buying groceries. From the very beginning, it's all been volunteers that had a heart for the community and to serve others. So we're trying to help fill in the gaps.

I'm Patricia. I work at the Atwater Super Target. I actually reached out to Harvest Time. We were looking for a secondary place to donate food because we were getting so much that we needed to get out of the store and didn't want to waste. And then just from working with them, I've learned, like, they're very... passionate about the community and giving to those in need. They always ask us for anything that they need. It's a great community, very nice people. They care about you. You can't go wrong.

Thank you.

Thank you, Sheila.

Mr. Kerr. Oh, I'm short. I don't have a presentation and I'm not long winded like the last two people have been up here. I'm with saving grace. I'm chairman of the board. And for the past 10 years, we have been working with the city of Merced, the housing department, in purchasing homes. These homes that we purchased need to be rehabbed. There are blights in the neighborhood, so we clean them up, make them really presentable, increase the value in that neighborhood, and then we put people in them. The people that we put in could be homeless, victims of domestic violence, or veterans, or near homeless people, okay? We've been doing this now for over 17 years, and right now we have 10 lots or locations. We have 18 units, and we house about 50 people. This is just one organization. And it's all because of working with the city of Merced and the housing department. And we take these funds that they loan to us. It's not a grant. It's a loan. And we were able to house people. And that's what we do. Thank you. Thank you, sir.

Good evening, Mr. Mayor and council members. My name is Armando Valenzuela, and I'm the program director for the Merced County Community Action Agency. I first wanted to start out and say thank you for considering my agency for the home funding. We have a long track record here in Merced County of providing services to low-income families, and that is what we continue to do, and that is what we want to do with that $210,000 of potential funding that we may be able to What happens normally in any program years you we have about 50? Homes that we are not able to service because they have too many repairs or too big of amount of invested money We work with state and federal dollars currently, but there's a cap on what we can invest in the homes So what we want to potentially do with these dollars is do the larger projects such as roof replacement for some low-income families energy panel electrical panel upgrades Siding repairs stuff that is not covered under the regular state program and we have a current funding through the IIJ IIJ a from the Department of Energy there came from the Biden administration And we are currently doing that but it is set to expire very shortly. We're running out of money so this is gonna potentially help us bring more people out of deferral and to allow us to invest the other money that we have from the Department of Energy in the state and So I just wanted to say I appreciate you guys considering us for these funds, and we're going to show you guys if we are awarded them that we're going to do a really good job with them, and we will continue to come back because now that I'm aware that these funds are available, we know that we need them in our community, so we're going to be applying for them every year. So I just want to say thank you guys for considering us for the funding. Thank you. Thank you, sir. Thank you for your work.

Mr. Terzakis.

Good evening, Mr. Mayor, council and staff. Greg Terzakis, California Apartment Association. Wanted to briefly touch upon the HUD money for tenant assistance. I spoke with Director Nuts a moment ago. I'm gonna call some of my colleagues in the larger cities that deal with this more prevalently. and see if we've been able to do this. As a former chief of staff, I know that there was some flexibility with this kind of money, but there are really strict guidelines and we wanna make certain that it's feasible and legal. And if it is, I'm gonna find out who the director can talk to, to try to bridge that gap, because I think that's a good use of HUD money. And if I can get a quick two for one in here, I'd also say, I'd like to very much support the Annex of Enforcement, Ordinance you're going to be hearing later.

Oh, yes. Yeah, you got it. Yes.

And I'm done.

All right. Thanks. Appreciate it. We'll hear from you later. Thing about the ref always foul happens first and then I got to call.

That's all we have, Mayor. Okay.

What's that? All right, that'll close the public hearing. Seeing no additional comments, we'll bring it back to council for further questions, discussion, and action. All right. So it's not really, it's option one or option two on the committee funding request, essentially, if you want to put that back up. Okay, first any questions, any questions for Kim?

Can you pull up the PowerPoint?

Okay.

Councilor Smith. So it seems to me one of the questions is whether or not to accept the option that includes funding for Youth for Christ Central Valley. I wonder if Ms. Nutt could just reset the table. Can you give us a summary again of what that project is that they proposed?

The youth services one?

Yeah. Okay. If funded, what would the project be? And take your time, please.

So in the March 16th admin report, there was a description, just going back to that. They're based out of Modesto, but they would be providing it to Merced residents, locating it, teaming up with Lifeline CDC at McNamara Park. providing life skills training. It's targeting at-risk youth. There's also mentoring and career awareness and then family engagement days. Lifeland CDC is a leaseholder at McNamara Park. We did get clearance from Parks and Rec Director Jensen that that would be okay. There's family nights they would host, and then they also listed neighborhood block parties to promote family enrichment. The focus is to reach youth, to mentor them and keep them out of trouble, keep them out of gangs. That helps.

Is there any discussion in their application about what message they give to the kids, the youth, as part of this program or how they reach out to them?

There wasn't a lot of that description. I know we went through the scoring. They are new to CDBG, so they would need a little bit of hand-holding and assistance and guidance on how they do that. I know that working with Lifeline CDC, Monica Grazily is very tied into youth involved with the Loughborough area. She does have the center down there in McNamara Park now. So I think that's kind of the idea is working with Lifeline CDC on those youth that they've already identified teaming up and providing additional services to them.

Okay. All right. Thank you.

Yeah. Additional questions? Do we know, Kim, do we know anything about their track record? It seems to me certainly a very worthy cause, and if you look at a lot of the improvements in Loughborough over the last 10, 15 years, Monica deserves a lot of credit for a lot of the improvements over there. And it just seems something very worthy, but it needs to be Effective if it's fits a group that does that's a huge need That's what right, you know public comment Rochelle was yelling at me about and beating me up about right exactly But I know obviously that too that would take money away from other very very worthy causes as well

We as staff would probably need to spend a lot of time with them because they didn't list any previous experience with running a CDBG or even a federally assisted program at all. So there's a lot of requirements with reporting and this would be an income qualified. CDBG 51% have to be income qualified so they would also need to have a little bit of guidance on determining people's income, setting up a structure for that. So there would be a lot of time that we need to spend with them, and it's not impossible. Okay.

Yeah, it seems there's a big need there. There's an acute need, given a lot of the violence that took place at the beginning of this year, especially in January. But at the same time, too, we've got to make sure it's... I'm not saying we do it, I'm not saying we don't, but it's got to be an effective program.

Council Member DuPont. Thank you, Mayor. I do know Youth for Christ, they have programming within Juvenile Hall. So they do do programming within Juvenile Hall. Now, this is their first year in CDBG funds, so they may be green in that area. But I think it's a good first step for them to go through this process to understand CDBG funds. And even if they don't get funding next year, I'd encourage them to come back sorry, this year. I encourage them to come back next year as well. But they do have, they do do some programming here in Merced County. So it's bridging that gap. Once youth get out of juvenile hall, finding a space that they feel comfortable with and continuing in that good space. That makes sense. What are your thoughts? You think... And that sort of continuum is important too out of the whole. It is. I still think they're getting their feet grounded in Merced County. They actually have stronger programs in Stanislaus County. I encourage council members to look at what they're doing in Stanislaus County and kind of the nightlife that they're doing, which is building that connection from Juvenile Hall and into the communities as well. I just think they're still trying to ground themselves in Merced County, giving them a little bit more time, maybe next year coming back with CDBG funds, showing that experience here in Merced County, I think would be the best fit for, I think, this year.

Okay. And probation being the primary funder for programs like this as well, too. I don't know what the... It might be just a much better funding source for them in general and a more natural funding source as well. May find more funding there. Yeah, for sure. For sure. Okay. Thank you for that. That was very, very valuable. All right. Anybody else, questions, comments, or preferences, direction, motion? Councilor Jean.

Yeah, I would prefer option two and providing funding to Youth for Christ Central Valley. As I mentioned before, with community funding, I think it's important to kind of spread it around a bit and yeah, let them do their work. And I think we need it for our young folks.

Okay.

Council Member DuPont. I will say, besides the options, just a general comment. Obviously, love to see the investment in Joe Hurt Park. We're going to be putting close to $1.2 million in Joe Hurt Park, and it's such a utilized regional park in southeast Merced that we need to continue to show the love too. So I'm really excited to see and realize that funding to Joe Herb. And I know a lot of community members, including Slow Piss Softball, will be very pleased to see that funding. So thank you.

I was on Saturday. I was at the Celebrate Recovery softball tournament at Joe Hurt Park, and I told them we had the funding coming, and they were very happy to hear that. Councilman Zhang, is that a new one? All right. I'd support option two as well, too. I think, you know, with... I'll support option one. I think both are... All of these are very, very worthy. Councilman Smith.

Well, I just... I'll just point out that in other contexts, we've declined to provide this community service type funding to groups that are newer with some feedback to continue to solidify yourself and come back with a little bit better details about what you wanna do. I think for that reason alone, I would prefer option one. I wasn't sure I was gonna go here, but I'm just gonna ask the question. So the Youth for Christ website shows that they're a very Jesus focused group, which is of course fine. But I'm wondering if under the CDBG regulations, are we allowed to fund groups that have that kind of very denominationally focused message?

As long as it's not a requirement of the participants to hear that message.

Yes, I mean, here's why I was hoping to get some more information. You know, they've got their mission statement online. There's five essential things they do. The second one is that they consistently pursue lost kids and engage them in lifelong relationships with Jesus, which is something that I can support. But I just am concerned that that might not be an appropriate use of federal funding.

Yeah, the funding, the program would have to be structured so that the religion is taken out of it. Sure. So that is a CDBG requirement. So we'd write the agreement with that.

And do we know that that is or could be the case?

Say that again.

Do we know that, as you said, the religion is taken out of it?

It would be a requirement that we write into the agreement that we draft. We'd probably emphasize that. I mean, it's a regular part of our CDBG agreements, but that would be an additional thing that's stressed in it. There would be, what we'd probably do in this case, just thinking off the top of my head, is attend, you know, one or two of the sessions as staff and just kind of see how it comes together. We'd also meet with them before it even starts and have them understand that there can't be any religion services during their regular sessions. Now, if the participants choose to have that later on as a completely separate activity, they can choose to do that. But for the CBG funded activities, there can't be any religion discussion.

Yeah. So it's possible to fund this group consistent with the regs, consistent with the establishment clause. I haven't seen their primary grant application, or at least I don't remember. I mean, was this issue specifically addressed in the grant application?

Well, they're applying for the funds. We haven't met with them yet.

That's something that we would...

It was actually, as I was going through and scoring earlier this year, back in February, that was something in my mind that came up, that we would need to spend a little more time with them to, again, not just the income qualification part of the guidance, but having them understand, having us understand what it is they're gonna be teaching, maybe require some curriculum documents to see what they're proposing to do specifically.

It sounds like it'd be a bit of a departure from what I'm at least seeing on their website. All right, so I'll turn back to my, thank you. I'll turn back to my colleagues. I mean, hearing all that, I think there's some uncertainty as to whether this would be a viable grant of funds to this group unfortunately in this grant cycle. Understanding that the consequence of that is we take funds away from other groups that have a proven track record of serving our community. I'd be disinclined to support option two, but I would appreciate giving Youth for Christ feedback and encourage them to come back with a stronger application next year. I think that's the prudent and right approach. Council Member Harris.

Thank you, Mayor. If it turns out that they can't comply with that, would those funds just revert back to the other applicants?

No, because the annual plans are being submitted with that funding. We could, I mean, we're going to be doing a substantial amendment anyway for Section 108. We could take care of that minor detail later. So...

Councillor Dupont. Yeah, I'm a supporter of Youth for Christ. I just think there are some questions as to CDBG that need to be discussed with Youth for Christ. I don't want them to risk the, if they do get funding, risk the ability to not be able to use the funding. So, you know, having a conversation and setting them up for success next year allows us to make a stronger decision in giving them CDBG funding. I think this year we should hold off, have a discussion with them, get them more familiar with CDBG, get them more familiar to maybe tailor what they're doing. If it's these life skills, mentoring, career development, and even the nightlife that they do is not necessarily Christ-centered, but just community-centered, those are the things that they may be able to do without... running afoul of what the federal government would require. So this year, I think getting information, talking to them, setting them up for success next year would be a better option for us to do at this point.

And I'll just throw another comment out there for pondering. I mean, we've worked with other organizations that are centered around religion or include religion in their regular activities. I mean, what I'm saying is it's not impossible. So if council wants to try to fund them, you know, we will, we're willing to work with them. We'll just need to spend a little more time with them than a normal activity.

Yeah, rescue mission, Sarah Saving Gray, a lot of good organizations. Okay, Council Member Harris, your preference, sir, one or two?

Thank you. I think if that wasn't putting that money at risk and it was able to go back to other organizations, I'd be in favor of it. But I have to agree with Councilmember DuPont and try to set them up for success next year. So my option is, my choice is option one.

Okay. Councilmember Tao or Mayor Pro Tem Boyle, either of you have a preference?

Just a quick question, curiosity, Kim. Why was Youth for Christ Center Valley wasn't awarded anything on the first option?

Why wasn't it? Yeah. Well, there's several reasons. Part of it has to do with there's three people in housing, two that normally work hands-on with the projects. And so... When we're getting beyond four projects, it's a little bit of a stretch for us. We've got five, you know, between four and five, we've got four or five agreements to write. That many organizations times, you know, monthly invoices they're sending in for reimbursements. There's a lot more to juggle with Five, then four. Four is getting a little more manageable. Five is stretching us a little bit. So that was part of the consideration. We're also looking at timeliness, you know, it'll take a little more time for this, for Youth for Christ to get going a little bit once we work through the setup with them and the requirements, you know, writing in the extra language in the agreements, it'll take a little bit more to implement. So that means the funds will take a bit longer to spend. They may not meet be able to expend them all by June 30th, or actually May 2nd, which could impact their timeliness deadlines for CDBG. There's expenditure deadlines we have to abide by. All of those things, taken into consideration in that first list, the option one list, and actually going back to the March 16th meeting. So to answer your question, it's looking at capacity, the ability to expend the funds quickly, you know, typically these public services projects are a year long and even even shorter really by the time you get a contract going and even access to the funds from HUD. For instance, we didn't get access to our current year funds until January because of the shutdowns. So there's other factors that affect it. Implementing a brand new project, you know, given still some of the upheaval in the federal government, you know, it may be delayed again. Our allocation, we just don't know that.

Well, thank you for the explanation, Kim. I know it's important to fund youth, but I'm also in agreement with Council Member DuPont and Chief Smith that we need more information from this group too. So option one is my option, Mayor. Okay.

Hearing four for option one, Mayor Pro Tem Boyle, you want to?

I'm with option one.

Okay.

Option one, it is. Do you need a sufficient direction?

That's enough direction to include with the approval of the annual plan. We'll make the changes following approval and then hopefully make our target deadline for Wednesday so we can be timely.

That could be a good option too for a community funding request. I know, I'm not sure how scalable their program is, but potentially, you know, in that five to 10,000 ranges is potentially a good candidate for community funding. City Attorney wants to weigh in.

Mr. Mayor and councilor, two motions that are being requested. Yeah, we have A, approving option one, and B, adopting the resolution.

Okay.

I'll make a motion to adopt option one and adopt the resolution. Second.

All right, Jeff, we'll call for the question.

I have a motion by Council Member DuPont and a second by Council Member Smith. The motion will include the adoption of Resolution 2026-31, a resolution of the City Council of the City of Merced, California, approving the 2026 HUD Annual Action Plan and certifying compliance with the requirements of the Community Development Block Grant, CDBG, and Home Investment Partnership Home Programs. Mayor and Council, please cast your votes. Okay, and the motion passes with Council Member Zhang voting no.

Thank you, Jennifer. Kim, thank you. You deserve a break. Hopefully we don't see you at the next meeting. Not like that. Like she deserves a rest.

Okay, agenda item K, action items. K1, approval of the Citizen Stipend Setting Commission's written recommendation to the City Council regarding the recommended City Council monthly stipend to be $1,000 a month and the Mayor's monthly stipend to be $1,250. All right, is there a staff group?

All right, Jennifer.

Good evening, Mayor and Council. I'm Jennifer Parsley, Assistant City Clerk for the City Clerk's Office. Tonight's item is the written recommendation from the Citizens' Stipend Setting Commission. Just a little history on this. The commission held a total of three meetings, two of which were the required public hearings. At the April 16 public hearing, the commission, with a 3-2 vote, voted to increase the council stipend from $500 per month to $1,000 per month, excuse me, and the mayor's stipend from $600 per month to $1,250 per month. At their April 30th public hearing, the commission adopted a formal written recommendation, which is before you tonight. Some of the items that they discussed was the council's current stipend, the growth of the city, the state of the economy, the city's budget, and the amount of time that council spends on city business. So those were the talking points that led them to the decision that they made. If approved, the increase will go into effect January 1st, 2027. And with that, I'll just leave it up to council for any questions.

Okay, any questions for our assistant city clerk? Okay. I'm just curious, do we have any requests to speak from the public?

We do have two. They are from our two commissioners, from Lee Pevsner and Belinda Burnett. Okay. Yeah.

That's how good you are. You're sitting up there and you still know. All right, Belinda and then Mr. Peasant.

I had this whole thing written down and you know how much I get nervous sitting up here. First off, thank you for choosing to support our community by sitting on the city council. There's a lot of work to do and it's important work to do. For those who don't know too much about this stipend commission, we're just a group of seven people. We come with whatever background we have. We do not have the advantage of seeing what the budget is looking like. So we have no idea if things are doing fabulous or there's concerns. So, When we're talking, we're talking about what we would like to see that you guys get. I tend to be more on the conservative level. I was a city employee for over 25 years, so I've seen the highs and the lows, the layoffs, and how money can change really fast, financial conditions, that cause a problem. With that being said, I am not for the increase that they've set. It's not that, it's a 200% increase from this year to the next one. what employee gets a 200% increase in their salary? But also after, I'm glad I was here to hear the budget and hearing what the shortfall is. If you would, and you have, you're empowered to not accept it, to lower it. You can't raise it, but you can lower it. and you've got a shortfall going. And if you would consider doing like 700 for the council, 800 for the mayor, I have a feeling that would help your shortfall in that way because based on a stat that I had heard from your finance director, that increase was going to be, I think, $47,000 increase. Lowering that down, that $23,000 that she was talking about today would be covered based on my light math. So I hope you will take that into, okay? I hope you'll take it in consideration. And thank you guys for your service.

Okay, thank you. Paz.

Well, I too thank you for appointing me to the commission. I enjoyed serving. I want to give you some feedback that I got from serving on the committee commission. There were three younger people. And from the get-go, they talked enthusiastically, positively, lovingly about how you served our community. And they felt you needed more compensation. And they stuck with that. They did it the first meeting and then between the first meeting and the second meeting they did homework. They called some of you to ask you how many hours you spent out in the community. It was a warm feeling and to see this kind of feedback and I assume and hope you're getting that from the community in other ways but it was very positive. At the first meeting, I was not totally unaware that there were some budget pressures. I made a motion that you should just read an increase of $200 a month for the city council members and 300, or no, 200, excuse me, for the mayor. It died for lack of a second. The motion that passed was $1,012.50. I voted no on that motion because I already made one. Same one that Brenda made a minute ago. But I'd like to go on record as saying the final meeting, the votes cast, I voted with the young people, I voted. to give you the big bucks. Now, you'd have to be kind of deaf and blind to the realities of the political optics of giving yourselves a huge raise. I hope you do it. give some context, there are general law cities and there are charter cities. And the general law cities, they have a formula that you use based on population to give you a reference point of what a city council person should make. Our population, it's $1,900 a month. So we'd be getting off cheap if we gave you $1,000 a month. Anyhow, thanks for letting me serve on the committee and thank you for the good work you do.

Thank you, Mr. President. Any additional input from the public?

That's all we have, Mayor.

Bring it back to council. Again, the stipend, we have a stipend setting commission they recommended. Council at $1,000. Mayor, monthly stipend of $1,250. Discussion?

Council Member Smith. Thank you, Mr. Mayor. Thank you to the commissioners. I wanna inform our conversation a little bit more information. So what these five or six commissioners did was a task that was set for them by Merced residents back in 2020. Council member Boyle will remember the charter review committee. We had a committee and the council then approved something that became measure L. As the chair of the committee, I wrote the ballot argument in favor of measure L. There was no argument filed in opposition. And as a city attorney can tell you, when voters are asked to decide yes or no, it's the ballot argument that informs what we deem the voter to have believed when he or she voted yes or no. I'll read you an excerpt from our committee's argument in favor of measure L. We expect our elected leaders to put in an honest effort and commit the time to actively learn about the needs of our community and then work together to address those needs. City residents would be in an even stronger position to impose that accountability by reasonably compensating council members and the mayor for what should at least amount to a part-time job. We may also enable a resident who may not be able to otherwise afford to serve on council to do so. Measure L closes this loophole. The ballot argument concludes, let's strengthen Merced resident's ability to keep our leaders accountable. Vote yes on measure L. The measure passed basically two to one with 63.24% of the electorate in that election voting in favor. So I'd ask you not to frame this in the context of voting ourselves a raise. This is the system our charter has in place to hold us accountable. And I don't think that each of us getting $1,000 a month before taxes or $12,000 a year somehow converts this into a legitimate part-time job or we can do nothing else. This is the amount of money that the residents think that our job is worth and they expect us to do a good job at it. So I accept the committee's recommendation for what it is, and for these reasons, because it's how they keep us accountable.

And we'll put, Council Member DuPont. Thank you, Mayor. Thank you, Council Member Smith for setting that stage. Now, given our budget situation currently being in a deficit for now two years in a row, as well as the state of the state, it becomes more and more difficult to sit up here and say, yes, it's okay to give ourselves raises. I think it is not good timing and does not allow for really what we really need to be focused on, which is attacking the issues of the city. Um, and I understand the recommendations from the stipend committee, but I don't think it's in my good conscience, the proper time to provide raises to ourselves.

Additional thoughts. We also wanna jump out there. I'd support it. I think a lot of the reasons council member Smith stated, you know, it's obviously it's for us. We're gonna start getting it January 1st, but also too, it's for future council members as well. And I think the big point too is, you know, a lot of us up here are blessed to have, you know, good paying jobs and we're in a good position, but for some people, you know, this, it could matter because, You know, one, there's expenses involved. So this is what we're getting paid, but there's also expenses. We're expected to attend a lot of events. I think we're all very, and to this council's credit, this council is very generous when it comes to donating to the community as well. I think this will potentially enable us to do even a little more. And, you know, I certainly share the sentiment that we do this, you know, for public service, that we're not doing this to certainly enrich ourselves. And I mean, this still, it's not exactly lavish, right? It's still probably below, certainly below minimum wage for the time we put in. So, you know, I think it can certainly hold, you know, you know, water in that regard, where it's not exactly, we're lavishing ourselves with all kinds of city resources. And I think, and all of us too are, and I've seen it firsthand from so many of the council members up here is people are very generous with the community and we're constantly giving back and donating back as well. Mayor Pro Tem Boyle.

Thank you, Mayor. And thank you, Council Member Smith for bringing forward what the verbiage was. And it is about accountability. And as awkward as it is to discuss how much we should be paid, this is the recommendation from the commission. I will say, and Mayor, you briefly touched about on this was, it's not just for us, it's for the future council. We had the same discussion two years ago in 2024 when there were four of us up for election, not knowing who was gonna be in these seats. And so even though we're up here approving it, it's not just for us, it's for the future. Not approving it today, what is it gonna look like in two years and are we gonna be falling behind on what those members should be paid for the accountability, so.

I looked at some other cities too. Modesto, for example, 31,000 for the council. Modesto is a significantly bigger city and 57,000 for the mayor of Modesto. Council Member Harris.

Thank you, Mayor. Thank you, Council Member Smith, for that summation and putting it like that. It was a Well put. I agree with you. I agree with you, Mayor. I do want to thank the commission for the work that they did and for the thought they put into it. They did do their homework. I know I was contacted. I know others were contacted. And we gave them the information that they requested. So I think they made an informed recommendation. So I'm in favor of it.

All right, anybody else? Council Member Tao, Council Member Xiong, or is there a motion?