Committee reviews fiscal sustainability strategies; staff asked to model adding public‑safety and building‑maintenance categories

The Finance Committee on April 29 examined the City’s fiscal sustainability strategies — a framework adopted in 2022 that allocates a portion of general fund revenue to four categories: CalPERS pension prefunding, retiree medical prefunding, deferred streets maintenance and deferred parks maintenance — and directed staff to return in May with modeling of alternate allocations and new category options.

Director of Finance Sarah Castro reviewed the strategies’ history and outcomes. Castro said the framework has guided about $36.1 million in contributions over recent years (roughly 12% of general fund revenues over that period) split across pension prefunding (PERS 115 trust), retiree health savings, deferred streets maintenance and deferred parks maintenance, and program/service enhancements. Castro said the City’s unfunded pension liability is approximately $135.2 million and that the city is about 72% funded; staff has placed roughly $4.5 million into a PERS 115 trust to date. Staff also reported $11.0 million allocated to deferred streets maintenance (with $3.7 million completed in projects so far) and $7.0 million allocated to parks deferred maintenance (committed to El Pescadero Park renovations).

Staff presented key questions for the committee: should categories remain the same; should allocations continue as a percentage of general fund revenue or shift to a flat amount; and how much deferred maintenance can staff realistically complete per year given engineering and delivery capacity. Castro said staff is tracking potential state changes to the allocation of e‑commerce sales tax that could reduce local sales tax around FY 2028–29.

Committee members asked that staff prepare scenarios that would (1) add a category for public safety facilities (fire substation replacements and fire station reconstruction) and (2) add a reserve for deferred building capital maintenance (roofs, HVAC, major repairs). Council members discussed whether to use a flat dollar approach or maintain percentage allocations; some committee members favored a flat approach for clearer round‑number targets. The committee asked staff to model the impact of temporarily reducing existing categories for one year and redirecting funds to high‑priority facilities.

Public commenters and emergency responders urged prioritizing fire station replacements and additions. South County Fire Chief Randy Bradley and Justin Legasse (vice president, Tracy Firefighters Association) described Station 97 as a 38‑year‑old temporary facility that does not meet ADA or seismic or current operational standards and urged the committee to accelerate funding. Chief Bradley also said Station 98 (a future station to serve expanded areas) is eligible for impact‑fee funding but Station 97 will be a general‑fund responsibility.

After discussion the committee voted to accept the staff report and asked staff to return in May with flat‑amount and percentage scenarios, and with options to add categories for public safety facilities and deferred building maintenance.