Tax Transparency Commission - Regular Meeting

Okay, we'll call this meeting to order at 06:00.

Okay, we'll go ahead and

do the Pledge of Allegiance. Pledge allegiance to the flag of The United States Of America and to the republic for which it stands, one nation under God and indivisible with liberty and justice for all. Agenda item C, roll call. Commissioner Chu, Garcia, Johnson, Murphy, Flores, Here. Takar?

Here. And Chair Kostecchi? Here. Okay. Chair Kostecchi, I would like to remind the audience that if they wish to address the commission, they must submit a green request to speak form located at the podium in the back of the council chamber. Citizens can submit public comment to the commission electronically no later than 1PM on the day of the meeting. Comments received before the deadline will be sent to the commission and will be part of the record and will be mentioned as part of the public comment portion of the agenda. Matera may be emailed to cityclerkcityofmerced dot gov. And any correspondence received after 1PM will be distributed to the commission and retained for the official record. Agenda item D, public comment.

The clerk's office did not receive any emails for this meeting tonight. And just for the record, there are no audience members to participate in public comment. Genitem E, consent calendar.

Okay. Do we have a motion to approve wait, E, right? Yes.

So you're going to approve the entire consent calendar.

Okay. Do we have a motion to approve the entire consent calendar? Do we have a second? A second.

Okay. I have a motion by Commissioner Murphy and a second by Commissioner Johnson. Commissioners, chair and commissioners, please cast your votes. And the motion passes unanimously. Agenda item H oh, I'm sorry. F, action items, F1, measure C, revenue and expense reports for 03/31/2026.

Do we have a motion to accept this as information

only? We have a presentation. Oh, sorry. Yeah, it's Okay.

You don't have to do it. It's totally fine. Good evening, commissioners. Tonight is the quarterly Measure C financial update. And in your packet, of course, you have your quarterly reports, revenue and expense reports for Measure C.

And this slide here is just telling you historically what we have received in Measure C funding, which is sales tax dollars, and then what the budget is for twenty five-twenty six. So as you can see, we're kind of leveling out here on the last few years. So these last two quarters have actually been very good quarters for us. This slide here shows you quarter over quarter. We like to compare in similar quarters.

The 2025 includes your October, November, and December receipts. So this would include your Christmas quarter. So it's always nice to look at that quarter and see how we ended up. And as you can see for fourth quarter twenty twenty five compared to 2024, we were actually up over $200,000 in one quarter. So the last two quarters have been very similar, up $200,000 in each of those two quarters.

So that's always nice to see revenue going up. We did have a lot of retail that opened in that time frame, so that definitely attributed to the increase in these sales tax numbers. So a little bit of detail on the fourth quarter. So our budget for the entire year is a little over $9,100,000 The fourth quarter revenue alone came in a little over $2,500,000 which is 27.9% of the budget. So again, as long as we're meeting the 25% mark, which is where we want to be, we are meeting the budget expectation.

Of course, when we exceed it, that's always better for us. So quarter over quarter on a cash basis, it's up 9.6%. Quarter over quarter on an economic or adjusted for economic data, it's up 9.1%. So either way, are very good numbers. As far as major industry groups, we were down in autos and transportation and food and drugs.

But we were up in everything else. So if you remember from last time I presented, we were quite a bit up in autos and transportation. There were a lot of auto sales in that quarter. We did know that in the next quarter, though, that would probably be leveling off. So we are actually not surprised to see that auto and transportation is down.

So that is the financial update for Measure C. If you have any questions, I'd be happy to answer those.

If there are no questions, do we have a motion to accept this as information only?

Motion to accept this as information only.

A second.

Okay. The motion by Commissioner Murphy and a second by Commissioner Johnson. Commissioners, please cast your votes. And the motion passes unanimously. Agenda item F2, review city manager recommended measure C budget for twenty twenty six-twenty seven fiscal year revenue expenditures.

So this meeting is also the meeting where I present you with the measure C city manager recommended budget will be. So on Monday, will be to the city council the citywide budget for the entire city. And tonight, will give you some detail on the Measure C and Measure Y later on. So we have three funds currently that we track and monitor funding for Measure C. So we called Fund 2,001 the old Measure C.

So this is where we were receiving money from the sales tax ballot measure that was approved back in 2006. And then in 2024, I think it was, we had a new measure on the ballot. And so that ballot was approved, and it superseded the old. But we still have funding in that old fund from that funding that we still had. And then the new funds have to actually they are special tax.

And so they have to be separated by public safety. So 95% of the funding we get has to go to public safety, and 5% of the funding we get goes to roads. So that's why you see three columns here. So the beginning balance for all three funds, we're estimating it will end the current year at $6,400,000 We're estimating little over $9,300,000 in sales tax for next fiscal year between the public safety and the roads funding. We have a little bit of other revenue, which is interest.

There are some transfers that we transfer out for roads fundings. And then we have operating expenses in all three funds. The bulk of it, you'll see, is in the public safety because we have several fire and police positions that are funded through Measure C. We do have several acquisitions, which we'll review in detail in a future slide. But that will be coming from the roads funding for $530,000 We have some continued capital improvement funding.

There are some projects that are still carrying over from prior years of a little over 1,600,000 And so that leaves our balance at $3,100,000 for all three of these funds. So next year's budget so just to give you an idea of what's funded and by percentage. So personnel, again, is definitely the bulk of all the funding. So 63.7% of that is personnel. Maintenance supplies and services is 11.4%.

You have a little bit of property with those acquisitions at 4.8%. Some admin costs of 5.9%. The transfer that we discussed is 1.1%. And then that carryover of capital funding is 13.1%. So some of the highlights that are in next year's budget is fires carrying over a project that was established a year ago.

And so they're continuing to renovate Station 53. So there's $214,000 coming over for that. Code enforcement has been a high priority of the council. And so the PD is allocating funding for four part time positions for code enforcement. And then they're also requesting funding for duty weapon replacements of $105,000 In the streets division, we have been adding positions to the street maintenance operations over the last few years.

And so with that comes the need for certain types of vehicles in order to do that street work. And so they are requesting funding of $200,000 for a shared boom truck. So the cost for that equipment is actually $800,000 but they're sharing it with other divisions, so water, sewer, and wastewater. They're also requesting $250,000 for a 10 wheel dump truck and then $80,000 for a threefour ton truck. Some of the projects that are carrying over so that they can be completed are the quiet zones, safe streets lighting.

We actually heard today that there's some funding left over, and they're going to be adding another 800 to 900 lights to this safe street lighting project, and then the R Street Olive to Northwood. So when I present budget on Monday and last year so we presented with a shortfall. This year, again, there is a shortfall. And so some of the options that they took last year were moving in some positions from the general fund. We had actually recommended that they unfund the positions.

Council did not want to do that, so they actually put them into Measure C. And they're continuing in Measure C. So there are seven positions that got moved into Measure C last year that will continue into next year's budget. They also moved in about $150,000 of operations expense from the general fund into Measure C. This year, because there, again, will be a shortfall, one of the recommendations will be to move in about $250,000 of operation costs from the general fund into measure C.

It's not in there now, but if they decide to do that to help some of that shortfall, then we could be adding that later. So that's the presentation on the budget. If you have any questions

I had a quick question. What's a boom track?

Am not that familiar with those types of equipment. And it looks like Daryl, our city engineer here, is probably familiar with that type of a truck.

Evening. Darrell George, city engineer. Boom trucks are the ones with the elongated arms that can stretch out over for trees or in difficult areas and can articulate out into difficult situations.

You. Was that budget shortfall expected?

Yes. Typically give a five year forecast every year. And so for the last few years with that forecast, we have discussed that based on how we're seeing revenue come in and the current expenses that we have, that there would be a shortfall.

Okay. If there's no other questions, do we have a motion

to accept this information?

Second.

Okay. Have a motion by Commissioner Murphy and a second by Commissioner Takar. Chair and commissioners, please cast your votes. Okay. And the motion passes unanimously. Agenda item F3, Measure Y revenue and expense reports 03/31/2026.

Okay, so again in your packets you received the quarterly financials for Measure Y, which is our cannabis tax. So here this slide is showing you year over year what we received. And then for 'twenty five-'twenty six, we are estimating to receive about a little over $1,600,000 So cannabis, unfortunately, we're not doing as well in. So as you can see, quarter over quarter, we're still getting decreases in cannabis tax. So up until this 2026, which is your January, February, March of this current year, we are still seeing declines.

Last year, there was only about I'm sorry, not last year. Last quarter, there was only about 7,000 in the decrease. This year, it's quite a bit more. It's over 50,000 of a decrease from same quarter last year. I think that was it. It was my pleasure presentation. So if you have any questions, I'd be happy to answer those for you.

Did they have opened that last cannabis store on Motel Drive?

JULIE No, that I'm aware of, that has not opened yet.

JULIE Is it still a possibility?

I'm looking over at Frank because he seems to be more familiar with where they are in progress. And he's shaking his head yes, so I'm making an assumption.

So they check-in with our development services division, mainly planning and the building folks. And yes, they are making progress. It's slow. Their clock, if memory serves me well, is they have to be opened up by June. So we'll find out very shortly.

Yeah. I'll keep an eye on it. It's right down the street from my house. Just slip us through. Yeah. I'll send you a picture. Oh, there you go.

All right. Do we have a motion to accept that report as information only? A

second.

I have a motion by Commissioner Murphy and a second by Commissioner Johnson, Chair, and Commissioners. Please cast your votes. And the motion passes unanimously. Agenda item F4, review city manager recommended measure wide budget for twenty six-twenty seven fiscal year revenue and expenditures.

Okay, one more. So this is the city manager recommended budget for fiscal year 'twenty six-'twenty seven, again, that I will be presenting on Monday. So the difference between this bar slide and the one I showed you previously is that in this one for 'twenty five-'twenty six, I actually updated that not for budget, but for what we're projecting we're going to get. So for instance, in 'twenty four'twenty five, we got a little over $1,600,000 'twenty five'twenty six, we estimated we'd get 1,680,000 We don't think we're going to get that 680,000. We think we're going to get either 1,600,000 or maybe even a little under that for the current year, which means we're estimating that same amount for 'twenty six, 'twenty seven as a budget estimate.

So for measure y, the requirements are that all the funding needs to be the police needs to get 20% of that, fire needs to get 20% of it, parks and recreation needs to get 20%. And then 40% of that is discretionary, but it can only go to those three areas. So the council gets to decide how to use that 40% as long as it's for police, fire, and parks and recreation. So this is those four funded areas. We're estimating that the beginning balance for next year is at about 700,000.

Again, we're estimating a little bit over 1,600,000 in tax revenue. We have a little bit of other revenue, which again is your interest. So in the estimated transfers in, so some of the discretionary funding is used for parks maintenance. And so all it's doing is it's moving from discretionary into your parks and recreation 20% because that's where we fund the parks maintenance piece of it. So that's why you see them equal there.

On the transfer out, council has approved using all of the 20% allocation towards recreation and half of the 40% discretionary towards recreation programming. So that's why you're seeing those $2 amounts that look the same. But that's all transferring out and going towards parks and recreation and their operating budget. And I'll show you that in or we'll talk about that in a future slide. So then you have your total expenses of $1,300,000 And so that leaves Measure Y balance at June 30 at $406,000 So under police, the police 20% allocation again, because code enforcement police is really starting to allocate funding and resources towards code enforcement.

In this fund, they are also allocating $100,000 towards five part time code enforcement officers. They're also allocating $75,000 for unanticipated fleet repairs. And then there is operating budget in here of a little over $175,000 In 'twenty five'twenty six, we moved $125,000 of operating budget into Measure Y. And then so we're adding on top of that, on top of what we did last year. Under fire, they're purchasing two cardiac monitors for $120,000 They're also adding 80,000 towards weed abatement, again, for that code enforcement priority that we're all working on.

And then they're purchasing a narcotics safe for $11,000 which is for their ALS program. And then in Measure Y, they're still carrying over some of their projects from prior years for completion two, so the Fire Station fifty one and Fire Station fifty two renovations that they're still working on. Parks and recreation gets a little bit more complicated because their programming and their budget is in a different fund. And the Measure Y supplements them is what they're doing. So I can just give you kind of a little bit of an overview of their budget.

So to balance their operating budget, again, they're using the 20% allocation for Measure Y, and then they're using half of the 40% of the discretionary of Measure Y. They also receive a supplement from the general fund. So this year, it's a little over $1,700,000 which is a 4% increase from last year. What they are able to purchase out of Measure Y, because we had a little bit of balance there, are some one time expenses to help for some of the parks, field equipment, and field improvement or not maintenance, more maintenance. So there's a mule gator of $20,000 a tractor of $30,000 a lawn mower, a 16 foot wide lawn mower for 20,000 They're leasing a turf tank for 15,000.

And then they'll have a storage container for 5,000 and a trailer for 2,500. So this is also in anticipation of CP42 opening up later this year and to be able to have equipment to keep those fields available for use. What I will say is that Parks and Recreation Department and really the director, Chris Jensen, has really been able to establish good communication with a lot of the partnering agencies in our community. And so he's been able to leverage a lot of funding to make his budget work. If he was not able to get some of these additional revenues we're going to talk about, then that means his budget would be cut.

So in order to prevent that, he really did a lot of delayed work to get some of this funding. So in December, the council approved some rate increases, which has helped with additional revenues in his department. He was also able to secure a three year donation to fund a zookeeper. So next year will be the second year of that. So there's $76,200 that will get to fund that position.

He also leveraged a contract with the Merced City School District for youth sports, where they're going to fund 500 participants in football and basketball and Junior Giants baseball programs that will help not only next year's budget of $196,000 but a little bit in this year's budget too. He's leveraging a grant from Central Valley Opportunity Fund of $124,725 to fund their outdoor recreation program. So this program got started with grants. First, it was a Prop 64 grant, and then it was a CalVIP grant that was covering these costs. And now he's able to leverage this additional grant for next year's because those expired.

And then the CFD special tax so as developments come into the CFD, all these parcels have a special tax. And part of that special tax goes to kind of all the services that the city gets or provides, I should say. And one of those is parks and community services. And so every parcel that pays into this tax, a little bit of their tax pays towards these programming. And so for next year, we'll be assessing 6,423 parcels.

And so they're estimated to receive a little over $240,000 from that special tax. So Parks and Recreation gets half of the discretionary, but then that leaves half for parks maintenance is typically what we have been using it. So that 50% we will use for tree trimming, 100,000. We will use for bike path maintenance, dollars 53,000. And then there will be some park improvement funding that we'll set aside for $25,000 We have a couple of playgrounds that got burned down in the last few years.

And so unfortunately, there's not enough funding for all of the playground. But because insurance will be paying us back some of that, we at least have to come up with a deductible. And so you see the $25,000 for the deductible for each of those parks. And then the insurance will pay the additional needed to replace those playgrounds. And then we will be putting in fences at McNamara and Ada Givens Pool for $35,000 each.

So that is the budget presentation. I'll be happy to answer any questions. She just said kudos.

You're definitely in the community seeing an improvement. And I think even with school relationships, a lot of the schools having those opportunities outside in the summer or spring break opportunities. Kudos to you and your leadership.

Thank you. Appreciate it.

All right. Do we have any motion regarding the Measure Y budget?

Advanced Life Support.

Okay. Anyone take a

motion? Yeah. You can take a motion.

All right. Well, then I move that we accept that budget as information.

Okay. Second.

Okay. I have a motion by Chair Kistecchi and a second by Commissioner Murphy. Chair and commissioners, please cast your votes. And the motion passes unanimously. Agenda item G, reports G1, update on road pavement projects.

Good evening, Commission. Darrell Jordan, your city engineer. I've got a spreadsheet I'd like to spread out to you since I'm not as fancy as my predecessor here. Put on the screen for if you don't mind. Just a minute.

Darryl? We can pass them on to him. No, it's fine.

Those two fellows over there might be.

Think I

got one.

Here's an updated one for you, Scott.

Yeah, just can't give it to Lee Bain. He'll pass

one down. What you're going to receive here in just a minute is a spreadsheet of numerous road projects that we are in some level of process procuring and preparing for construction for the city. I know tonight you were focusing on Measure C money. We do have three projects that we're using Measure C money that we can briefly talk about. But basically, what we're doing now in the engineering department is preparing this document for council for June to be able to provide a list to the city council that they can comment on and give us direction on which projects they may prioritize or any modifications to this list that we have before you tonight.

So I'd like to if you look along the top there, you'll see columns with labels on each one of them. You'll see measure C about one, two, three, four, five, six columns over from the left. And if you scroll down from measure C, you'll see three monetary values in that column. The first one would be Safe Street's Light Retrofit Project, which we'll talk about shortly. But you'll see there a number of 7 and $35,000 some odd dollars.

That's how much we have left in that budget to continue the project with. And we'll be looking at expanding that through a change order and actually improving more streetlights than we already have at this point. As you look further down, you'll see the next item under measure C would be the R Street Olive Avenue to Northwood Drive project. That project is an intersection upgrade, as well as the potential of changing the left turn lane into two left turn lanes to help traffic travel

through

the intersection much quicker and smoother and safer. And it's also rehabilitating the street that's in some pretty bad condition at the moment. The third project that you'll see right below that is the BNSF Quiet Zones Project, Highway 59 Canal Street, Glen Avenue, M Street, and K Street. We're currently coordinating with multiple jurisdictions at the state and the railroad to have a set of plans approved by them to improve the safety mechanisms at each intersection. We'll have new striping, some change into the crossing arms.

And what this project is, is the quiet zone, to allow the trains to come through town and not have to blow their horns so loud and wake everybody up in the middle of the night. So there's additional safety issues that we'd have to implement to make sure that people know that train's coming when that horn's not blowing. Because as you all know, a train coming even at a slow speed is a very dangerous thing. So those are the three projects that we're highlighting tonight with Measure C. But as you can see, we've got dozens of other projects in some level of construction or design throughout the city that will be coming forward through the city soon.

Again, I would like you guys to actually attend our city council meeting in June when we go through the actual projects. And if you have any comments to please chime in at that time with what the priorities might be for the city. But I'm here to answer any questions that you might have on how we're spending or want to spend the Measure C money on the projects, on the road projects, any other road projects is open for discussion tonight.

Do you have any timeline on McKee?

McKee is actually under construction now. That's a great question. Currently, we're doing curb ramps returns, concrete work. So you'll see if you're traveling down there, the county's out there. We're working hand in hand with the county on this project. It's a co op project with them. And we'll be doing the concrete work probably over this next month. And then after that, we'll be starting on the actual pavement rehabilitation. And that may take a month or two as well, so sorely needed.

Any other questions on the roads? Thanks for your time.

Okay. Genital item G2, update on the streetlight project.

Okay, well, this rolls into our next project. We actually alluded to a little bit earlier. You may know, hopefully you've noticed that throughout the city, we have replaced multiple heads for the street lights throughout the entire city into LED lights, much wider and brighter and cleaner light. Maybe you've seen those hopefully in your neighborhoods or your surrounding neighborhoods. Originally,

let me

see if I get the number right here. We replaced 2,500 lights with the first phase of the project. We've also incorporated a change order, which has included another 800 lights to that original contract. And now we're looking at a third change order to add an additional 800 to 900 lights with that remaining budget that you saw previously in the measure C column. So we've tried to focus on several of the neighborhoods with either the older lights or some dimmer areas to replace first with the lights.

We're also looking at some of the arterials now and some of the collector streets, some of the larger streets to make sure we have a consistent light pattern down those corridors to light those up as well. So our goal is to expend as much as the measure C money we can to implement the light replacement program. So I would suspect this will probably be continuing throughout the next six months as we get the approval by counsel to spend additional monies that's already in the account as you've seen below and move forward on the project with the same vendor. So I'm here to answer any questions you might have on that project. Any feedback you have on what you've seen in the field would be helpful to our team as well because I can relate to them.

Thanks, Joe.

Okay. Thank you.

Okay. Agenda item H, business H1, request to add item to future agenda. Anybody have any items they want to add? No? Agenda item H2, commission comments. Any comments?

I do have a comment. I realized I'm in the wrong chair.

Yes, you're fine.

So the first two votes were under Commissioner Chu. But once I noticed that, I was voting on mine.

That's Okay. All right. If there's no other comments, we'll go to agenda item I, adjournment.

All right. We'll call this meeting adjourned.

Need a motion and a second. Oh, sorry. Adjourned. Okay. I have a motion by Commissioner Murphy and a second by Commissioner Johnson. Chair and commissioners, please cast your votes. And the motion passes unanimously.

Thank