Report Prepared by: Joe Cardoso, P.L.S., City Surveyor, Engineering Department
Title
SUBJECT: Approval of the Appropriation of Funds for the Public Facilities Impact Fee Credit/Reimbursement Agreement Approved for the Yosemite Crossing Shopping Center in the Amount not to Exceed $241,696
REPORT IN BRIEF
On September 2, 2025, the City Council approved Final Map #5429 for Phase 3 of the Yosemite Crossings Shopping Center. This approval included a Subdivision Improvement Agreement and a Public Facilities Impact Fee Credit/Reimbursement Agreement. The latter agreement allows the developer to receive impact fee credits or reimbursement for completing certain off-site improvements that exceed what is required for development. The shopping center is generally located at the northeast corner of Yosemite Avenue and G Street.
The developer is now requesting approval to allow for reimbursement of impact fees, rather than receiving only credits. However, the exact reimbursement amount cannot be determined at this time because it depends on future development details, such as land use and square footage of future buildings, which have not yet been finalized. To accommodate this uncertainty of future reimbursement amount, staff is requesting that the Council approve with a maximum cap not to exceed $241,696.00 (the maximum that the developer would qualify for based on Engineer Estimates approved in the approved Public Facilities Impact Fee Credit/Reimbursement Agreement).
RECOMMENDATION
City Council - Adopt a motion:
A. Approving an appropriation from the unreserved, unencumbered fund balance of PFFP Facilities Roadways or Facilities Transportation Funds, in the amount not to exceed $241,696, transferring to Fund 5005-Streets and Signals CIP, and appropriating the same in Fund 5005; and,
B. Authorizing the City Manager to execute all necessary documents.
Body
ALTERNATIVES
1. Approve the request as recommended by staff; or,
2. Deny the request; or,
3. Approve, subject to modifications as conditioned by Council; or,
4. Refer back to staff for reconsideration of specific items (specific items to be addressed in City Council motion); or,
5. Continue to a future City Council meeting (date and time to be specified in City Council motion).
AUTHORITY
Chapter 17.62 of the Merced Municipal Code and Policy A-32 (Attachment 2) of the City Administrative Policy and Procedures deal with the Public Facility Impact Fee Program including eligibility of credit or reimbursement.
Merced Municipal Code Section 17.62.060 - Developer construction of facilities:
“Except as may otherwise be provided by development agreement, whenever a developer is required to construct a public facility described in the plan, which facility is determined by the city to have supplemental size, length or capacity over that needed for the impacts of that development, and when such construction is necessary to ensure efficient and timely construction of the facilities network, a reimbursement agreement with the developer and a credit against the fees, which would otherwise be charged pursuant to this chapter on the development project, shall be offered. The reimbursement amount shall not include the portion of the improvement needed to provide services or mitigate the need for the facility or the burdens created by the new development. The timing and amount of the reimbursement or credit shall be determined in accordance with the administrative guidelines adopted pursuant to Section 17.62.080 and shall in no event be owed until sufficient public facilities impact fees have been collected for such purpose.”
CITY COUNCIL PRIORITIES
As provided for in the 2025-26 Adopted Budget.
DISCUSSION
The owner and developer, Yosemite and G, LLC, is developing a shopping center within Planned Development #72, located at the northeast corner of Yosemite Avenue and G Street. The project is being developed in multiple phases.
On September 2, 2025, the City Council approved Final Map #5429 for the shopping center, along with a Subdivision Improvement Agreement and a Public Facilities Impact Fee Credit/Reimbursement Agreement. The approval of the agreement allows the developer to receive credit and/or reimbursement-toward impact fees for eligible off-site improvements.
The developer is requesting that the City allow reimbursement (not just credits) for certain off-site improvements that exceed the standard frontage improvements required for the project. According to Merced Municipal Code Chapter 17.62 and Administrative Policy and Procedure A-32 (Attachment 2), developers may qualify for credits and/or reimbursements for off-site improvements that go beyond what is typically required along a project's frontage.
In this case, the developer is:
• Widening G Street along the project frontage (not eligible for credit/reimbursement), and
• Installing a median, including associated signage and striping (eligible for credit/reimbursement).
An engineer’s estimate for the eligible improvements (the median and associated work) was reviewed and approved by City Engineering staff. This estimate is included as Exhibit B in Attachment 2, which was part of the original Council approval on September 2, 2025.
Credit/Reimbursement Amount
The total eligible amount for credit/reimbursement is $241,696.00. This amount can be applied toward the transportation/roadway portion of impact fees.
Under Administrative Policy A-32, developers are guaranteed credit/reimbursement for half of the transportation impact fee (the developer’s portion). The policy also allows for the possibility of receiving credit/reimbursement for the City’s portion (the other half), subject to Council approval.
Staff recommends approving the maximum allowable credit/reimbursement for both the developer and City portions, up to $241,696.00.
The developer intends to apply credits to the development of Lots 11 and 12, and reimbursement for Lot 13. No credit or reimbursement will be issued until the City has approved the completed median and associated improvements (striping/signage), and a Notice of Completion has been filed with the County Recorder’s Office.
IMPACT ON CITY RESOURCES
A supplemental appropriation from the unreserved, unencumbered fund balance in the amount of not to exceed $241,696.00 from PFFP Facilities Roadways or Facilities Transportation Funds, transferring to Fund 5005-Street and Signal CIP, and appropriating in Fund 5005, Project CP260043 is needed to reimburse development for improvements along G Street for the Yosemite Crossing shopping center.
This budget amendment will require an affirmative vote of five council members to pass.
ATTACHMENTS
1. Location Map
2. Administrative Policy A-35
3. Approved Final Map
4. Public Facilities Impact Fee Credit/Reimbursement Agreement