By Per Peterson
In an effort meant to protect Tracy taxpayers from subsidizing Orchard Lane in the future, the Tracy EDA last Wednesday voted to raise rent at the complex $100 per month, starting March 1, 2022.
“We want to get to the point eventually where we’re at least breaking even,” Tracy Community Development Director Jeff Carpenter said at last week’s meeting. “Nobody’s trying to get rich on this.”
Currently, the rent is $900 per month for a two-bedroom unit and $1,000 for a three-bedroom. As of today, assuming all units are full, the City is collecting $91,200 per year but is losing money on the EDA-owned property to the tune of a little more than $6,000 per year. Carpenter said a $50 increase in rent would trim that number to just under $1,300; to “break even,” rent would have to increase by $64. Raising the rent $100 per month would result in a gain of just over $3,500 annually.
“This gives us a little bit of cushion,” Carpenter said. “There’s not a lot of cushion there. And things are getting more expensive as we go along — nothing’s getting cheaper — repair, maintenance.”
Tracy City Administrator Erik Hansen said Orchard Lane is in the hole to the tune of $270,000. Had the Orchard Lane and O’Brien Court pot not been combined, he added, money would’ve had to have been taken out of the City’s general fund.
“What we’re trying to avoid is putting general tax revenues into this fund,” said Hansen. “The general fund has its own things to take care of. I think the city council would say it’s important for these funds to be self-sustaining, so you’re not taking general taxes out, and the taxpayers aren’t subsidizing the rent for folks out there. That’s what we’re trying to avoid.”
Hansen and Carpenter have estimated capital requests for future budgets: $6,290 for 2022, 2023 and 2024 and $36,290 for 2025.
“That would be if there were some roofing jobs that needed to be done,” Carpenter said of the 2025 capital request.”
Monies not used from the capital requests would stay in its own fund. The last rent increase for Orchard Lane — which is 10 years old — was this past March.
EDA member Tom Morin made the motion to approve the rent increase, effective March 1; board member Sis Beierman seconded.
“I think to be fiscally-responsible as a public body, we need to operate our facilities at a (profit),” EDA Chair Dennis Fultz said.