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Committee keeps current practice for Measure V interest allocation but asks staff to publish annual hypothetical allocation
Summary
Finance staff recommended keeping the current approach of assigning investment interest to operating funds while not crediting capital funds like Measure V; staff proposed providing an annual report showing what Measure V's share of interest would have been so council can optionally transfer funds.
Director of Finance Sarah Castro told the Tracy Finance Committee that the city currently allocates interest on pooled investments proportionally only to operating funds and does not credit capital funds such as Measure V. "Currently, our capital improvement funds, like Measure V's, are not receiving their share of the interest," Castro said, adding that the practice is intended to protect capital project balances from investment market-value fluctuations that could create a liability.
Castro said auditors consider both approaches allowable but favor consistency. Staff recommended maintaining the current method for risk management while producing an annual report showing the hypothetical amount of interest that would have been allocated to Measure V. That would allow City Council, at its discretion during annual audited statements or budget preparation, to transfer the equivalent amount from the general fund to Measure V. "This approach would keep the fund safe. It would still remain transparent as to what amount of interest is attributed to that balance for Measure V," Castro said.
Committee members said they want Measure V interest figures shown whenever Measure V reports are published and to allow Council to act on a transfer at the time the number is presented, rather than requiring a separate follow-up item. A resident, Mary Mitrakos, urged transparency and asked how much is set aside for operations versus projects and called for clearer line items showing Measure V interest earned to date. "It seems like... that's a way of double dipping," Mitrakos said, describing public expectations that Measure V would fund amenities such as a multi-generational aquatic center and a nature park.
Staff did not propose an immediate transfer; instead, staff will publish an annual (or on-publication) report with hypothetical interest allocations and make results available to Council and the Measure V oversight processes. The committee endorsed that approach for transparency and potential annual council action.
