Report Prepared by: Leah Brown, Senior Planner, Development Services Department
Title
SUBJECT: Adoption of a Resolution Approving a Deposit, Reimbursement, and Contribution Agreement (Services Only) for Lennar Homes of California, LLC
REPORT IN BRIEF
Consider adopting a Resolution and approving a deposit, reimbursement, and contribution agreement for services only by and between the City of Merced (City) and the Lennar Homes of California, LLC (Lennar) to providing a funding mechanism for the costs associated with the creation of a Citywide Community Facilities District (CFD) of which it will be a part.
RECOMMENDATION
City Council - Adopt a motion:
A. Adopting Resolution 2026-75, a Resolution of the City Council of the City of Merced, California, approving deposit, reimbursement and contribution agreement with Lennar Homes of California, LLC to facilitate the formation of a citywide community facilities district; and,
B. Approving the Deposit, Reimbursement and Contribution Agreement by and between Lennar Homes of California, LLC and the City; and,
C. Authorizing the Finance Officer to accept developer deposits in the amount of $30,000.00 received pursuant to the Deposit, Reimbursement and Contribution Agreement and appropriate said funds into the appropriate account for Citywide CFD formation activities; and
D. Authorize the City Manager to execute the agreement and make minor modifications, if needed, with the City Attorney’s approval as to form.
Body
ALTERNATIVES
1. Approve, as recommended by staff; or,
2. Approve, subject to conditions other than as recommended by staff; or,
3. Deny; or,
4. Continue to a future meeting.
AUTHORITY
Charter of the City of Merced, Section 200
CITY COUNCIL PRIORITIES
As provided for in the 2026-2027 Adopted Budget.
DISCUSSION
The properties controlled by Lennar are approximately 73.7 acres of land located at 3345, 3351, and 3610 East Gerard Avenue. A General Plan Amendment, Vesting Tentative Subdivision Map, and establishment of Residential Planned Development #83 was approved for this project in 2025.
Simultaneously, the City seeks to establish a Citywide CFD to provide a long-term mechanism for funding municipal services associated with future development throughout Merced. Unlike a project-specific CFD, the Citywide CFD is intended to create a framework allowing future development areas to annex into the district as development occurs.
The properties controlled by Lennar are anticipated to serve as part of the initial formation areas, or “kernel areas,” of the to-be established Citywide CFD. Establishing this initial area will create the foundation of the district and allow future projects to annex into the CFD as needed.
Staff has negotiated this Deposit, Reimbursement, and Contribution Agreement with Lennar wherein Lennar provides an initial deposit of $30,000 to fund costs associated with the Citywide CFD formation, including but not limited to, consultation services, legal services, preparation of the Rates and Methods of Apportionment, election costs, staff costs, public noticing expenses, and related formation activities. Because this Deposit and Reimbursement Agreement is contemplated with the formation of a CFD, it must be adopted and approved by City Council Resolution in accordance with Government Code Section 53314.9. The agreement provides for additional funding should it be required to complete the work and provides that any unspent funds be returned to Lennar at the conclusion of the CFD establishment process.
In the event City Council approves the Professional Services Agreement with Goodwin Consulting, Inc. for the formation of the Citywide CFD, the funds deposited under this agreement will be applied to those services.
IMPACT ON CITY RESOURCES
None.
ATTACHMENTS
1. Resolution No. 2026-75
2. Lennar Home of California, LLC Deposit, Reimbursement and Contribution Agreement