Council approves LMD assessments and directs staff to analyze long‑term fiscal health

The Tracy City Council approved the engineer’s report and ordered the levy and collection of assessments for the Tracy Consolidated Landscape Maintenance District (LMD) for fiscal year 2025–26, then separately directed staff to start a general benefit and reorganization analysis aimed at stabilizing the district’s long‑term finances.

At the staff presentation, Parks, Recreation and Community Services staff and Harrison Associates summarized the LMD Engineer’s Report. The consolidated district covers 41 zones, roughly 220 acres of landscaping, 48 parks and approximately 28,000 trees. Staff reported that about 66% of zones have reached their maximum assessment and many zones face budget shortfalls; the engineer recommended a 3% annual adjustment to maximum assessments per the formation formula. Staff noted planned general fund support for arterial landscaping and some storm drain funding to support channel landscaping.

Council approved the engineer’s report and the levy and collection order by roll call. During discussion members raised conflict‑of‑interest questions about voting when they own property in an assessed zone; the city attorney and staff advised that council members should recuse themselves from votes affecting zones where they are property owners. Two council members recused themselves from the levy motion for specific zones where they own property.

In a later item, staff presented an informational report on LMD fiscal health that described rising maintenance costs, aging infrastructure, diminished purchasing power and the need for capital replacement. Staff proposed a phased approach and three service levels (A: full service; B: modest deterioration; C: visible decline) tied to each zone’s funding level. To address long‑term sustainability the council unanimously directed staff to initiate a general benefit and reorganization analysis to distinguish general vs. special benefit, evaluate consolidation opportunities across the 41 zones and develop sustainable funding and service options for council consideration.

Why it matters: Many parks, medians and right‑of‑way landscape assets in Tracy are funded through the LMD assessments; several zones face deficits that threaten maintenance levels and asset replacement. The council action orders assessments for FY 25‑26 while launching a citywide review that could lead to consolidations, ballot measures, or reallocation of general fund support.

Next steps: Staff will perform the general benefit and reorganization analysis, continue stakeholder outreach (webpage, brochures, QR codes, and proposed signage in LMD parks) and return to council with options that may include service reconfiguration, long‑term capital planning and potential Prop 218 balloting where needed.