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Merced studies citywide services CFD that could roughly double per‑home assessment
Summary
At a Feb. 2 study session, a consultant told the council a new citywide services Community Facilities District (CFD) would streamline annexations and — at a preferred service level — raise the base assessment on future single‑family units from about $750 to roughly $1,500, with multifamily rates set lower by formula. Council asked for alternatives and requested the item return for possible action.
Goodwin Consulting Group specialist Cindy Yan told the Merced City Council on Feb. 2 that an updated citywide fiscal‑impact analysis shows a projected annual services shortfall of about $8.1 million at buildout and that a new citywide services CFD could set special taxes to mitigate that gap.
The consultant said the update used Merced’s FY 2024–25 budget and standard fiscal‑impact methods and found mitigation amounts in the ballpark of $1,500 per single‑family home and about $1,300 per multifamily unit under the preferred level‑of‑service assumptions. Yan said the multifamily rate can be adjusted as a share of single‑family — an option her team modeled that reduced what each unit would pay.
Why it matters: the city’s current services CFD rate for new annexations is $750 per single‑family unit for FY 2025–26; adopting a citywide CFD with a new methodology would allow future annexations to be processed internally and would avoid the multi‑month canvassing process now required for each project. Council members pressed staff on which services are covered, who sets line‑item allocations, whether capital projects could be paid from the services CFD (they cannot), and how the policy would affect neighborhoods and maintenance districts.
Council response and next steps: council members asked staff to return with alternatives and options at future meetings — including lower assessment tiers and clearer breakdowns of which services would be funded by the CFD. Staff said the new rate schedule and any recommended structure would be brought back within a few council meetings, along with sample annexation (“kernel”) projects to test the process. No vote was taken at the study session; staff recommended further discussion and an eventual public hearing if council wishes to proceed.
