June 7 budget meeting will go a long way to determine how City moves forward
Tracy City Administrator Erik Hansen on Monday presented the Tracy City Council with multiple options to pay for a new senior center. Ultimately, the answer — and the timeline — will depend on what exactly the council and community wants to see happen.
“I know that there are a lot of people in the community that really have their heart set on something new,” Hansen said. “The question is, what MPC (Multi-Purpose Center) can we afford? The short answer is, it kind of depends — on what you want to do with taxes, and it depends on the timing. A lot of people are saying, ‘We want this now, we lost our senior center’ — I empathize with that, I really, really do, which is why we’re working on this plan. I would ask for some patience, because there are some really hard choices the council is going to have to make.”
There has been no final decision on how the City will move forward with a new center — will it be a remodel of a current building, or a new building altogether. The City has $138,500 set aside ($5,500 of the original $144,000 that was set aside was spent on a study by ISG).
“That won’t get you a brand new building, but it gets you something,” said Hansen. “If you want to do more than a $138,000 project, that money’s going to have to come from debt service, donations or grants — those are your three sources.”
One of the problems the City is facing, Hansen said, is cash flow in 2023-25. The City’s debt service cost in the general fund will increase $283,484 in 2023. Continued 3% annual increases in the tax levy will result in an estimated general fund deficit of $190,609 over the next five years (the deficit would be $350,000 had the City not sold the MPC). Hansen estimates that a 5% increase in the tax levy will be required to have a minimal Capital Improvement Plan.
“I think there are some other ways to have capital projects that we’re working on right now — and I realize these numbers are difficult to swallow — but I don’t have that plan yet; we’ll be talking about that in the budget meeting in a couple of weeks,” Hansen said. “The good news is that it gets easier in 2026-2028. In 2026, some of our debt gets paid off.”
With that, Hansen laid out three options for the council to consider: a no-cash option, using the Eagles Club for some period of time, with an estimated annual operating cost of $17,134 (staffing, plus rent); a cash-only option, which includes either a new building or a remodel of the VMC or liquor store, with an estimated annual operating cost of $13,543; or a cash, plus debt option. Hansen said the annual debt service on a $1 million loan at 3% interest would be $66,854 annually over 20 years. The debt service alone would require a one-year tax increase of 3% in 2022, in addition to 5% tax levy increases — additional tax levies for operational costs might be necessary as well.
See this week’s Headlight Herald for more on this article.