Tracy council adopts $388 million FY 25‑26 budget, approves new positions and fiscal-sustainability measures

The Tracy City Council unanimously adopted the fiscal year 2025–26 citywide operating and capital budget, approved new positions and a set of fiscal sustainability strategies intended to shore up reserves and fund deferred maintenance.

City staff presented the proposed $388 million appropriations plan, which includes roughly $36 million in capital improvements and $35 million in interfund transfers. The general fund budget is projected at about $161 million in revenues and $130 million in operational expenses for 2025–26. Staff noted the operating appropriation is about $1.4 million lower than the adopted 2024–25 budget, primarily from a reduction in capital carryovers.

The council first approved a set of new staffing positions with an annual ongoing cost of $1,975,547 and authorized the budget officer to update the city’s position control roster. Council then adopted the full annual operating and capital budget, approved the council travel budget allocation, adopted committed fund balances (GASB 54), established the FY 2025–26 appropriations (Gann) limit, and approved a resolution adopting the fiscal sustainability strategies recommended by the Finance Committee.

Staff said the budget prioritizes core services including public safety, infrastructure and parks, and includes a 2.7% inflation estimate (Bay Area CPI) for personnel budgeting pending final bargaining unit negotiations. The presentation also noted Measure V sales tax projections and called out that some capital projects reflected in attachments are carryovers that will be reappropriated.

Votes at a glance - Approve new positions (annual cost $1,975,547): Adopted (Yes: Mayor Areola; Mayor Pro Tem Abercrombie; Council members Evans, Bedoya, Nygaard, Raydoya) - Adopt FY 2025–26 annual operating and capital budget: Adopted (unanimous) - Approve allocation of FY 2025–26 council travel budget: Adopted (unanimous) - Adopt committed fund balances / GASB 54 actions: Adopted (unanimous) - Establish FY 2025–26 appropriations limit (Gann): Adopted (unanimous) - Adopt fiscal sustainability strategies recommended by Finance Committee: Adopted (unanimous)

Why it matters: The adopted budget sets the city’s priorities for the coming year, preserves funding for public safety and infrastructure, and begins implementing a multi‑year approach to fiscal sustainability that the Finance Committee and staff argued is necessary to address deferred maintenance and long‑term liabilities.

Council next steps and context: Staff said final personnel costs remain subject to ongoing labor negotiations. The council also asked staff to return with any required budget adjustments during the first quarter and to monitor Measure V trends. The city will re‑appropriate carryover capital projects separately when ready.