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Council directs staff to craft capital‑infrastructure reserve policy; places $310,000 FY25 surplus into reserve pending plan
Summary
Council directed staff to draft a capital infrastructure reserve policy (broad enough for parks and other capital needs), agreed to seed the reserve with $310,000 of FY25 year‑end savings and asked staff to hold a study session to review a parks and trails master plan and reserve parameters.
The Gilroy City Council discussed establishing a dedicated reserve for parks infrastructure and broader capital needs on Oct. 20 and provided staff direction to prepare a policy and seed a reserve with available FY25 surplus funds.
Finance and staff background
Finance Director Herjia Tsang told the council that FY25 closed with roughly $1.3 million in general fund year‑end savings. Under existing policies the council had already allocated 25% to a pension Section 115 trust and 25% to an OPEB Section 115 trust; after those allocations and some reappropriations the funds available were roughly $310,000.
Council direction and rationale
Councilmembers discussed two approaches: (1) immediately seeding a dedicated parks (or broader capital infrastructure) reserve with available year‑end funds, and (2) deferring reserve creation until completion of a parks and trails master plan to define priorities and dollar needs. Several members urged parallel paths: acknowledge the clear and present maintenance needs in parks and other capital areas while completing a master plan that will shape longer‑term priorities.
By consensus the council directed staff to prepare a draft capital infrastructure reserve policy that would outline accumulation and expenditure parameters and to seed the new reserve with the available $310,000 FY25 surplus. Council also asked staff to plan a study session (early 2026) to review the parks and trails master plan RFP scope, cost estimates and recommended reserve rules, and to return with recommended percent‑of‑savings rules for future years. Staff suggested a model similar to the city’s sidewalk reserve and to the existing pension/OPEB approach (where a fixed percentage of year‑end savings flows into specified reserves).
Quotes
“We would set aside those funds in a separate reserve fund. Think of like the sidewalk reserve fund… The mechanisms for this council to consider could be taking the savings from the general fund annual budgetary savings as either a fixed percentage or a fixed amount,” Finance Director Herjia Tsang said.
Ending
Staff will draft a capital infrastructure reserve policy, place the $310,000 FY25 surplus into a newly created reserve fund and schedule a study session early next year to review the parks and trails master plan RFP, proposed reserve parameters and recommended next steps.
