Report Prepared by: Jeff Frederick, Public Works Manager - Tax Services
Title
SUBJECT: Adoption of a Resolution Setting a Public Meeting for Monday, June 1, 2026, and a Public Hearing for Monday, June 15, 2026, Regarding Maintenance Districts Engineer’s Reports and Budgets - Fiscal Year 2026/2027
REPORT IN BRIEF
Considers adopting a Resolution to set a public meeting for Monday, June 1, 2026, to address the proposed Engineer’s Reports and Budgets and a formal public hearing for Monday, June 15, 2026, before a determination is made on the level of assessment to approve.
RECOMMENDATION
City Council - Adopt a motion adopting Resolution 2026-11, a Resolution of the City Council of the City of Merced, California, approving Engineer’s Reports on Maintenance Districts and setting a public meeting and a public hearing thereon.
Body
ALTERNATIVES
1. Adopt Resolution reviewing the Engineer’s Reports and Budgets on the various Maintenance Districts; set a public meeting for Monday, June 1, 2026, and a public hearing for Monday, June 15, 2026; or,
2. Return to Staff with specific direction; or,
3. Deny.
AUTHORITY
Chapter 26 of Part 3 of Division 7 of the State of California Streets and Highways Code provides the applicable general law for Maintenance Districts; and,
Article I (alternative method for the levy of benefit assessments) of Title 13, Division VIII, of the Merced Municipal Code (MMC) dealing with Maintenance Districts, provides for subsequent modifications to existing Maintenance Districts; and,
Initiative Measure (Proposition 218, Sections 2, 3, 4, 5, and 6) approved at the November 5, 1996, election and also known as the “Right to Vote on Taxes Act,” provides for assessment ballot proceedings.
CITY COUNCIL PRIORITIES
Addresses City Administrative Priority for Maintenance District Funding.
DISCUSSION
The Fiscal Year 2026/2027 budgets and engineer’s reports on the various Maintenance Districts are complete and expenses are balanced with available revenue.
They are available upon request for review and have been submitted to the City Clerk’s office, as required by MMC Sections 13.62.130 and 13.62.150.
Several Districts will continue to benefit from existing operating reserve funds, as well as a consumer price index (CPI) increase adjustment of 2.9%. Attachment 1 is a summary of the budgets and assessment levies.
LED Light Conversion
The budget includes $44,231 in carry over funding for LED streetlight conversions. The benefits for converting to LED lights are energy efficiency, longer lifespan of the light, a quicker start of the light, and better visibility for residents after dark.
The funding for this project has been budgeted in the Districts below, which also shows the breakdown of cost to each District.
|
District |
Amount |
|
Paulson Place |
$1,597 |
|
Ronnie |
$831 |
|
Fahren’s Park II |
$35,668 |
|
Sky Moss |
$5,919 |
|
Vista Del Sol |
$216 |
|
Total |
$44,231 |
Sidewalk, Curb/Gutter Replacement
The budget includes $62,625 in funding for sidewalk and curb/gutter replacement and repairs. Issues with lifting sidewalks and curbs/gutters need to be addressed for safety concerns, aesthetics, and improved function.
The funding for this project has been budgeted in the Districts below, which also shows the breakdown of cost to each District.
|
District |
Amount |
|
Silverado |
$25,000 |
|
Sunset West |
$25,000 |
|
Sequoia Hill |
$9,729 |
|
Vista del Sol |
$2,896 |
|
TOTAL |
$62,625 |
Tree Work
The budget includes $171,863 in funding for tree trimming/removal and replacement. Issues with lifting sidewalks and curbs/gutters from tree roots need to be addressed for safety concerns and aesthetics. Trimming of the eucalyptus trees in the Fahren’s Park II basin continues each year for cleanup and health of the trees.
The funding for this project has been budgeted in the Districts below, which also shows the breakdown of cost to each District.
|
District |
Amount |
|
Sunset West |
$3,131 |
|
Landscape District 1 |
$5,000 |
|
Mansionette |
$10,000 |
|
Las Brisas |
$10,667 |
|
Fahren’s Park II |
$100,000 |
|
La Bella Vista |
$8,073 |
|
Davenport |
$7,625 |
|
Yosemite Gateway |
$16,000 |
|
Vista del Sol |
$11,368 |
|
TOTAL |
$171,863 |
Landscape Maintenance Services
Landscape maintenance services provided by a contractor at Quail Creek, Oakmont #3, and Northwood Village Districts will be able to increase scheduled maintenance to weekly, and Ridgeview Meadows will increase scheduled maintenance to bi-weekly, due to the successful ballots to increase assessments.
Campus North will continue to receive clean up twice during the year. Pleasanton Park will have a decrease in service from monthly to quarterly. These Districts had assessment ballot hearings to increase the annual assessment levies that were not approved by the property owners by a majority vote.
Hansen Park and Olivewood will continue to be completed on a will-call basis, commensurate with available funding. Due to the quantity of mature landscape within these Districts, and the disparity between expenditures and revenue, maintaining existing vegetation within available funding continues to be a challenge.
Staff will continue to explore ways of reducing expenditures, as well as being proactive in maximizing revenues. As in year’s past staff will explore the availability of partnering with volunteer service groups for future landscape activities.
Fahrens Park I
Fahrens Park I had an assessment ballot hearing to increase the annual assessment levy that was not approved by the property owners by a majority vote. Also, Public Works staff identified an error of the City contributing 90% of maintenance cost for this District which has been removed from the Fiscal Year 2026/2027 budget for this District. Therefore, landscape maintenance services are being reduced from bi-weekly to quarterly, irrigation will only be on for three months during the Summer, and no funds will be allocated for Pump Replacement.
Underfunded Districts
There are six Maintenance Districts that are currently underfunded and have no CPI increase. This has resulted in reduction of services, cutting back or turning off irrigation, no funds for storm pump maintenance, and the possibility of stopping services altogether. These Districts have less than two year’s operating expenses in their fund reserve balance. It is our recommendation that the following Districts be considered for going out to ballot so the residents of these areas can vote on establishing a CPI increase. Those Maintenance Districts are: East College Homes, Pleasanton Park, Fahrens Park I, Olivewood, Campus North, and Hansen Park.
History and Past Actions
Maintenance Districts were originally established to pay for the operation and maintenance costs associated with maintaining storm drainage systems, street lighting, and aesthetically pleasing landscaping to open spaces such as park strips and street center-islands.
Property owners within these identified Districts are levied annual assessments against each lot or parcel of land to cover these expenses.
Proposition 218, enacted by the voters in 1996, requires the City to conduct an assessment ballot proceeding in order to levy increased assessments, beyond the allowed adjustment, based on the United States Department of Labor’s All Urban Consumers-Western Region CPI report.
Each year City Council must hold both a public meeting and public hearing on the various Maintenance Districts’ budgets for the coming fiscal year before final adoption of the budget.
The approval process for Districts with no increase in assessment above the allowable CPI is as follows:
• Public Works Department determines annual budget costs by District;
• Engineer prepares annual report and assessment spread;
• Council adopts resolution approving Engineer’s Reports and sets dates for public meeting and public hearing;
• Council seeks public input at public meeting, but takes no other action;
• Following a public hearing, Council adopts resolution approving, confirming, and adopting Engineer’s Reports.
The approval process for Districts with an increase in assessment above the allowable CPI is as follows:
• Public Works Department determines annual budget costs by District;
• Engineer prepares annual report and assessment spread;
• If the proposed increase in annual assessments is greater than the amount allowed under Proposition 218, then an assessment ballot proceeding must be held. Assessments remain at the previous year’s rate, until the legal ballot process is followed;
• Notices and ballots are mailed 45-days prior to the scheduled public hearing;
• Council holds a public hearing to determine voter approval of increased assessments and the public hearing is continued to a subsequent meeting to allow time to open and tally the sealed ballots;
• Following the “continued” public hearing, Council adopts a resolution approving, confirming, and adopting the Engineer’s Reports based on the results of the ballots.
In closing, operating budgets are balanced with available revenue and/or fund balance reserves. The CPI adjustment increase to budgets with previously held successful ballot proceedings will be 2.9%.
The City Attorney's office has prepared the necessary resolution setting a public meeting and public hearing for the various budgets and reports (Attachment 2).
Council will have the opportunity to consider a motion on the various budgets following the close of the public hearing scheduled for Monday, June 15, 2026.
IMPACT ON CITY RESOURCES
The Finance Department has confirmed each Districts’ operational and maintenance expenses are balanced with available revenue and/or fund balance reserves.
ATTACHMENTS
1. Budget Summary Report
2. Resolution 2026-11