The sentence that helps readers determine the story’s setting is:
"The morning mist was completely gone. The sun was strong and bright, intensifying the color of a row of potted marigolds on the front porch of one of the houses."
This sentence provides details about the time of day (morning), the weather (mist gone, bright sun), and visual descriptions that give a sense of place (potted marigolds, houses), creating a clear setting for the story.