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Measure C revenues show recent gains; draft 2026–27 budget still faces shortfall
Summary
City staff reported two consecutive strong quarters for Measure C sales-tax receipts (roughly $200,000 increases per quarter) but said the 2026–27 budget still shows a shortfall and may require transfers or continued use of general-fund resources to sustain positions and projects.
A city presenter told the Merced City Commission that Measure C sales-tax receipts improved in the last two quarters, with fourth-quarter receipts above $2.5 million and quarter‑over‑quarter gains of about $200,000. The presentation said the city’s Measure C annual budget is a little over $9.1 million and that the fourth-quarter revenue represented approximately 27.9% of that total.
The presenter said retail openings helped drive the increase but warned the overall Measure C budget for fiscal 2026–27 still shows a shortfall. ‘‘So these last 2 quarters have actually been very good quarters for us,’’ the presenter said, noting quarter‑over‑quarter increases of 9.6% on a cash basis and 9.1% when adjusted for economic data.
The recommended Measure C budget assumes a combined beginning balance of about $6.4 million and projected sales-tax receipts of just over $9.3 million. Personnel costs make up the bulk of proposed spending, about 63.7% of the budget, with maintenance, supplies and services at roughly 11.4% and capital carryover at about 13.1%.
Staff highlighted specific planned uses of Measure C funds, including continued renovations at Fire Station 53 (about $214,000 carryover) and several police and fire positions funded by Measure C. The presenter said code enforcement remains a council priority and that police are requesting funding for four part‑time code‑enforcement positions and $105,000 for duty weapon replacements. Streets staff requested equipment purchases, including a shared boom truck allocation of $200,000 (the full equipment cost is $800,000 shared across divisions) and truck purchases for street maintenance.
The presenter said seven positions moved into Measure C last year and that staff may recommend transferring roughly $250,000 of operating costs from the general fund into Measure C to help cover the shortfall, though no formal transfer was made at the meeting. Commissioners asked clarifying questions about equipment and the shortfall forecast.
The commission unanimously voted to accept the Measure C reports and the staff presentation as information.
What happens next: staff will present the citywide manager-recommended budget to the city council on Monday, and engineering staff will bring a list of road projects for council direction in June.
