The Tracy City Council on Tuesday agreed to put $435,447 worth of federal grant money toward small-business loans to get local businesses through the COVID-19 shutdown.

The city originally was looking at as much as $764,000 from the U.S. Department of Housing and Urban Development’s Community Development Block Grant program, but $150,000 of that was earmarked for sidewalk improvements, the council wanted another $100,000 to go toward homeless assistance, and $30,000 will go toward utility bill assistance for businesses. That leaves a total of $483,830 for the loans, with about 10% of that to go toward administrative costs and consultant services.

The city plans to offer loans between $5,000 and $20,000 to established businesses with no more than 20 employees, and the loans could be forgivable. City economic development management analyst Barbara Harb expects that the city will make applications for the loans available the first week of June.

Also on Tuesday, the Tracy City Council:

• Reviewed the city’s budget plan for 2020-21. The city expects to spend $197.1 million overall. That includes $93.5 million in the general fund, which pays the salaries for city workers and supports day-to-day operations. Revenues, meanwhile, are expected to be affected by the COVID-19 economic slump and add up to about $84.3 million, mostly from property and sales taxes. The result is a deficit of $9.2 million on top of a $7.3 million deficit from 2019-20.

The city can make up some of the deficit by leaving vacant positions unfilled in the city’s administration, planning department, public works department and police and fire departments. The city also has a general fund balance of about $31.8 million that it can draw upon, and Measure V, the half-cent sales tax approved by voters in 2016, could provide $14.1 million.

An ad hoc committee of council members Veronica Vargas and Dan Arriola will work with the city staff to define the policy issues needed to create a balanced budget for the council to adopt in June.

• Approved a $900,000 per-year landscaping contract with MCE Inc. It’s the latest two-year extension of a 2017 contract to care for 220 acres of parks and landscaped areas around the city, such as meandering sidewalks and median barriers, in the city’s Landscape and Lighting District. The original contract cost the city $705,000 per year, but now the landscaping company must cover the Ellis and Tracy Hills developments as well.

• Approved a final subdivision map for part of Tracy Hills. It allows Lennar Homes of California Inc. to build 68 more houses within Tracy Hills Phase 1A, which will eventually have 1,160 homes, a 50-acre business park, three parks and a school.

• Agreed to allow a Tracy woman to file a late claim against the city related to a city tree falling on the woman’s car back in January. Her original claim reportedly went to the wrong address. While the city allowed her to file the claim, the council then rejected the claim, meaning the woman will have to take the city to court if she wants compensation.

• Agreed to extend the deadline that would keep residential growth allotments active through mid-November. Back in November 2019, the city issued residential growth allotments that could be used to take out as many as 750 building permits for new homes, the maximum allowed under the city’s Growth Management Ordinance. Ordinarily, those RGAs would expire at the end of September, but because COVID-19 has caused construction delays, the developers who hold those RGAs asked for the extension to Nov. 14.

• Amended an agreement with Tracy Hills Project Owner LLC and Tracy Phase I LLC to confirm the delivery date of a new fire station in the Tracy Hills development. The original agreement from May 2016 required the station to be built by May 2018, but it has been amended three times since then so that the opening of the station would coincide with people moving into the new homes. The updated agreement states that the station must be completed by September 2021. The developers will pay for $5.5 million of the station’s $6.6 million price tag.

• Agreed to a general plan amendment and specific plan amendment that will allow rezoning of part of a 45-acre commercial zone in Tracy Hills on the east side of Corral Hollow Road along the California Aqueduct. The rezoning will allow medium-density housing on 27 acres of that project area. The Tracy Hills KT project will now have 185 homes, two commercial parcels on Corral Hollow Road, and a linear park that connects a conservation easement next to the aqueduct with bike paths that run through Tracy Hills.

• Adopted an ordinance that extends some development-related deadlines, such as building permits and project reviews, including those set to expire before the end of July, for two months in response to COVID-19 development delays. The ordinance also authorizes City Manager Jenny Haruyama to approve change orders of up to $300,000, without prior City Council approval, on public works projects.

• Authorized, on a 4-1 vote, the display of the LGBT pride flag in front of City Hall during the month of June in recognition of Pride Month. Councilman Dan Arriola requested the monthlong display, with the exception of June 12 to 14, when the city will display the U.S. Army flag in commemoration of the Army’s 245th anniversary. He also asked that the flag be displayed for a day in mid-October for National Coming Out Day. Mayor Pro Tem Nancy Young dissented on the vote, stating that the city gets multiple requests to display banners in front of City Hall and she didn’t feel that the city could accommodate them all, especially if someone asks to display a flag for a full month.

Contact the Tracy Press at or 835-3030.

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