Merced’s budget for the next fiscal year faces a shortfall of $1.3 million, partly because of expired federal grants that help fund city firefighters.
Officials are expected to work with a $461.2 million budget, which will fund 566 full-time positions – up from 562 last year. Additional staff will cover human resources, public works and information technology and refuse services.
It’s a slight increase from the 2025-26 budget, where city officials had $438.5 million. But the city is again facing another year of challenges with balancing the budget.
“There’s just one word that comes up over and over again as a word for the budget: constraints. The city faces huge constraints,” City Manager Scott McBride said during Monday’s city council meeting.
The city’s finance officer, Venus Rodriguez, outlined the city’s projected funds for the 2026-27 fiscal year in a presentation during the city council meeting.
Large federal firefighting grant expiring
Nearly $9 million in SAFER Grant money helped the fire department bring on more staff in 2023 and plan for a new fire station in the Bellevue Ranch area.
Now, the SAFER grant, which funds 24 positions in the fire department, is set to expire in March 2027. General fund money will be used to cover these positions instead, Rodriguez said.
There are no expected staffing reductions to service areas at this time, city spokesperson Jennfier Flachman wrote in an email to The FOCUS. The city intends to reapply to the SAFER Grant.
If not renewed, the city will lose $3.5 million in grant revenue, according to Rodriguez.
Ongoing funding for park safety and homelessness may also be at risk.
There’s a reduction in revenues this year due to franchise fees, the SAFER grant and other areas, Rodriguez said during Monday’s meeting.
District 6 Councilmember Fue Xiong asked for clarification about what this risk entails. He also requested the council consider creating a breakdown of park and community services fees.
Councilmember Darin Dupont, who represents District 1, said he intends on providing more comments during the next budget hearing.
“I think there are other items that I am wanting to have a full council here to discuss on other expense reductions we can make – and also other revenue that maybe we’re not accounting for or discussing,” Dupont said.
Councilmembers Mike Harris of District 3 and Shane Smith of District 4 were both absent.
City officials will discuss the budget twice in June before making a final vote. The next hearings are scheduled for June 1 and June 15.
