Merced City Council Special Meeting: HSR Station and Rate Study - January 27, 2026

On January 27, 2026, the Merced City Council held a study session at 5:00 PM on sewer and water rate proposals, followed by a special meeting at 6:00 PM to reconsider the relocation of the High-Speed Rail (HSR) station from downtown to Southeast Merced. The council took public testimony and voted on a letter to the California High-Speed Rail Authority.

Study Session: Sewer and Water Rate Study

• Consultant Mark Hildebrand presented a comprehensive rate study covering water and wastewater utilities, financial plans, rate design, capital facility fees, and a new state law (AB 2257) providing legal protection against rate challenges.
• Water rates: Proposed increases of 8% per year for three years, then 7% for two more years, with a structural change reducing the monthly water allocation from 20 HCF to 15 HCF. The city currently has the lowest water rates in the region. Capital spending is projected to jump from an average of $272,000 per year to $8.7 million per year due to a backlog of projects.
• Wastewater rates: Proposed increases of 5% for two years, then 4% annually, with no structural changes. The city remains the lowest in the region. Two capital scenarios were presented: one with a $30 million grant (lower long-term rates) and one without (requiring debt and higher rates in later years). Both scenarios result in identical rate increases through year five.
• Capital facility fees: Water fees increase about 2%; wastewater fees increase 45% (from $7,433 to $10,888 per single-family home) due to an outdated 2011 study.
• Council members asked about conservation impacts, collection rates, and aquifer sustainability. No formal action was taken; the session was for discussion and direction.

Public Comments & Testimony

• 13 speakers addressed the council on the HSR station relocation. Key positions included:
  • Paula Made (UC Merced): Presented survey results showing 91% of residents strongly support community engagement in HSR decisions; top concerns are rising housing costs (48%), project cost, and environmental impact. Majority support pedestrian and low-cost bus connections.
  • Richard Barnes: Opposed relocation, warning it would divert travelers from downtown businesses and harm local economy.
  • John Carlos: Supported relocation with conditions, including no blank check to HSR Authority, adequate parking, and reimbursement for added expenses.
  • Mary Mua (Boys & Girls Club): Supported HSR and relocation, noting earlier plans would have impacted their youth center; committed to expansion regardless.
  • Curtis Thomas: Opposed, arguing suburban stations perform poorly, the city gains nothing without enforceable commitments, and the process is a manipulated compromise.
  • Sandra Uribe (Leadership Counsel): Criticized lack of community outreach and rushed timeline; raised concerns about infrastructure costs and environmental justice.
  • Eric Ham: Detailed negotiation tactics (e.g., “door in the face,” “creating facts on the ground”) he argued the HSR Authority is using to pressure the city into accepting relocation.
  • Sharon Wardell Trejo (Merced Senior Center): Supported relocation, noting it would avoid disruption to downtown businesses, senior center, and youth center.

Discussion Items

• HSR Station Relocation (F.1): Deputy City Manager Frank Quintero reviewed the history of the station location (from 2010 downtown site to 2026 proposed southeast site near Highway 99 and Mission Ave). Council members discussed:
  • Councilmember DuPont: Distrusted the HSR Authority; proposed red-line amendments to the letter to soften support from “conceptual support” to “support for collaborative review” and adding a call for analysis of impacts.
  • Councilmember Harris: Supported exploring the alternative, noting downtown is mostly built out, and Southeast Merced could generate more revenue and avoid disruptions during construction.
  • Councilmember Smith: Emphasized need for more community engagement and a timeline for further discussions with HSR Authority and state officials.
  • Councilmember Zhang: Opposed sending the letter, citing insufficient community input and premature commitment.
  • Mayor Serrato: Acknowledged state law (SB 198) currently requires a downtown station; any change requires legislative action.

Key Outcomes

• Study Session: No formal action; rate study information was presented for council consideration. Council directed staff to incorporate a flat 4% increase in fiscal years 2032-2033 for the wastewater scenario without a grant (per Councilmember Smith’s suggestion).
• HSR Station Relocation: The council adopted a motion (6-1, with Councilmember Zhang dissenting) to:
  • Approve conceptual support of the HSR Authority’s recommendation to move the station to Southeast Merced, subject to good-faith negotiations on identified issues.
  • Authorize the City Manager to send a letter expressing the city’s support for a collaborative review of the concept, incorporating Councilmember DuPont’s amendments (softened language and added request for analysis of infrastructure, utility, and service impacts).
• Next Steps: The council’s transportation subcommittee will continue discussions with the HSR Authority and state partners, and the community will be engaged more formally. The letter serves as a starting point for further negotiation; no final commitment to relocation has been made.