Tracy City Council
April 1, 2025

Project Description:

The purpose of the Project is to provide an improved connection to Interstate 205 (I-205) that serves the existing and planned residential, commercial, and industrial development in the area. This growth is expected within the International Park of Commerce (IPC), and elsewhere in the City, City of Mountain House, San Joaquin County, and neighboring counties. These efforts will also relieve forecasted increases in traffic demand at surrounding interchanges and increase regional mobility. The northeast area of Tracy and its surrounding communities (particularly sout hwest Lathrop) are growing rapidly. This is expected to continue over the next several decades. Growth will continue to increase demand on local interchanges, causing them to operate at a less than acceptable level of service. The Project will help reduce congestion resulting from ongoing and planned development and improve local traffic circulation while increasing accessibility and efficiency for users. Currently the clo
sest access to I-205 is from MacArthur Drive, where future traffic demands at the interchange will result in unacceptable levels of service. This interchange improvement is listed within the City’s circulation element. The Project will support efforts to mitigate climate change impacts, reduce vehicle and diesel emissions, support fiscally responsible land use and transportation efficient design, support domestic manufacturing, increase active transportation opportunities in the regi on, and enh ance mobility and jobs access for multiple communities within t he City and regionally.

The Project will improve the existing interchange to enhance traffic operations, reduce travel times, and improve goods movement. The Project will add new travel lanes southbound along Mountain House Parkway (north of the freeway) and northbound along International Parkway (south of the freeway) approaching the ramp termini. The Project will add a westbound loop on- ramp, realign the westbound diagonal on-ramps and off-ramps, and widen the eastbound diagonal and loop on-ramps. The Project will also retime the signals at the ramp termini to maximize throughput during peak hours and accommodate bicyclists and pedestrians. The mouths of ramp entrances will be widened to accommodate truck turning movements from either direction. The improvements will accommodate the future I-205 Managed Lanes Project along the freeway. Additional improvements will include the interconnection between ramp meters and local roads located within 1,000 fee t of the ramp termini signals.

The Project also accommodates non-motorized travel. The design includes Class II bike lanes and sidewalks on the interchange approaches. The bike lane and sidewalk in the northbound approach transition to a Class I ribbon path that is grade separated at the new westbound off- ramp. The on-street Class II bike lane and sidewalk in the southbound direction continue through the interchange.

Project Environmental Benefits:

The proposed interchange has completed its environmental phase and has achieved state and federal environmental clearance. The Project has identified mitigations to significantly reduce environmental impacts. There are no biological impacts or required mitigations. The environmental and traffic analysis does show improvements to air quality with the reduction of vehicles in the corridor and increased efficiency of travel. The Project components are projected to improve air quality for t he Project a rea. Required mitigation measures include paleontological investigations during construction and stormwater best management practices.

Agenda Item 1.N
April 1, 2025

FISCAL IMPACT
The City is requesting $51,121,000 in congressional appropriations. The funding that has already been secured is $2,918,000. The total cost of the Project is estimated at $54 ,039,000.

In addition to this funding, the proposed Project will be supported through other funding sources, including developer funding, and development impact fees. If the City can se cure additional funding through One Voice and a grant, less local funding would be required.

COORDINATION
City staff worked with consultants at Mark Thomas & Company, Inc. to prepare the SJCOG One Voice application, attached as Attachment A.

CEQA DETERMINATION
This action is not a “Project” and, therefore, not subject to California Environmental Quality Act (CEQA). The submittal of this Project for SJCOG’s One Voice Trip does not require CEQA analysis.

STRATEGIC PLAN
This agenda item supports City of Tracy’s Economic Deve lopment Strategic Priority, which is to enhance
the competitiveness of the City while further developing a strong and diverse economic base.

ACTION REQUESTED OF THE CITY COUNCIL
Staff recommends that the City Council adopt a resolution approving the selection of the Interstate 205/Mountain House Parkway Interchange Project as the City of Tracy 2025 Regional Transportation Project submittal for congressional appropriation requests during San Joaquin Council of Governments’ One Voice trip to Washington D.C.

Prepared by: Habibullah Habib, PE, Associate Civil Engineer Reviewed by: Sharat Bandugula, PE, Acting Assistant City Engineer Sara C
astro, Finance Director
Andrew Shen, Interim City Attorney
Karin Schnaider, Assistant City Manager
Approved
by: Midori Lichtwardt, City Manager

ATTACHMENTS
Att
achment A – SJCOG One Voice Application 2025
Attachment A

2025 SJCOG One Voice® Application Form
1 Project Application Checklist
The San Joaquin Council of Governments Board approved the following project criteria:

• Be regional in nature and have a federal nexus.
• Must be at or near completion of (NEPA) clearance, or qualified waiver, for projects seeking ROW or construction funding.
• Be sufficiently developed to suggest federal assistance is warranted (shovel ready) • Explain whether the sponsor is utilizing any formula funding for the project elements and detail how formula funds are being applied. If not utilizing formula funds, explain why formula funds are not being applied to the project.
• Projects should be targeted for appropriations in the Federal Fiscal Year 2025 budget or an upcoming notice of agency funding opportunity.
• Demonstrated community support.
• Identify if a project can be submitted as an “earmark” if a congressional call for projects is announced. • All narrative shall be written in Microsoft Word for ease in cutting and pasting to project sheets.

The following contents are required to be submitted by SJCOG member agencies:

1. Signed cover letter (electronic signature is accepted)

2. Completed One Voice® Application Form

3. Complete Appendix – in order
a. A high-resolution JPEG or PNG photo, graphic, map or diagram of your project to be included on the project fact sheet.
b. Project talking points Talking points are limited to ten (10) bullet points, no more than 2-3 sent
ences each. (These highlights and benefits will be included in the participant binder and used during meetings in Washington, DC).
c. In 200 words or less describe the project’s benefit to the region and the scope of the project. d. Attach a copy of the environmental clearance resolution or other signed documentation approving or adopting the environmental document (if completed). e. Projects must be approved by your respective city councils or boards prior to submission to SJCOG. Please provide a copy of the minutes or resolution detailing approval. If the project has not secured these documents at the time of application submittal, indicate the date when this will be secured.

4. Letters of community support (Minimum 2 / Maximum 5)

One (1) el ectronic copy must be submitted via email/file sharing site of the complete application packet no later than 4:00 p.m. on December 13, 2024 to:

ATTN: SJCOG 2025 One Voice® Project Submittal
San Joaquin Council of Governments
555 E. Weber Avenue
Stockton, CA 95202
[email protected]
2025 SJCOG One Voice® Application Form
2 1. Project Title: I-205/Mountain House Parkway-International Parkway Interchange

2. Applicant Agency: City of Tracy

3. Agency Address: 333 Civic Center Plaza, Tracy, CA, 95376

4. Staff-level Point of Contact/Title: Sharat Bandugula/Acting Assistant City Engineer

Email: [email protected] Phone N umber: (209) 831.6463

5. Executive-Point of Contact/Title: Midori Lichtwardt, City Manager

Email: [email protected] Phone Number: (209) 831.6159

6. Project Information:

6.a Provide project talking points. Talking points are limited to ten (10) bullet points, no more than 2-3 sentences each. (These highlights and benefits will be included in the participant binder and used during meetings in Washington, DC).

1. The Interstate 205 (I-205)/International Parkway-Mountain House Parkway Interchange project (Project) will occur in the City of Tracy (City) located in the San Joaquin Valley, California.

2. The Project involves enhancing the regionally significant corridor through interchange enhancements, including widening and realigning freeway ramps, adding missing westbound loop ramp, and installing a dedicated multi-use path.

3. The Project aligns with several regional plans and reports including: City General Plan; City Sustainability Action Plan; Northern California Megaregion: Innovative, Connected, and Growing Report; Metropolitan Transportation Commission San Francisco Bay Area Goods Movement Plan; San Joaquin Valley Air Pollution Control District Plan; 2022 SJCOG Regional Transportation Plan/Sustainable Communities Strategy; 2020 SJCOG I-205, I-5, SR 120 & SR 99 Congested Corridor Plan; and 2023 Caltrans California Freight Mobility Plan.

4. The Project adheres to existing and planned regional developments, addressing current and future vehicle and truck congestion and providing multimodal accessibility.

5. The Project addresses prevalent crash patterns, such as rear-end collisions and unsafe speed, along the freeway ramps and the regional arterial as well as provides bicycle and pedestrian facilities to separate vulnerable users from vehicles and trucks.
2025 SJCOG One Voice® Application Form
3 6. The Project bolster economic competitiveness by providing improvements to mobility and goods movement, reducing travel times and transportation costs. The Project provides specific benefits to the International Park of Commerce (IPC), the region’s largest distribution and fulfillment center development.

7. The Project provides bicycle lanes and sidewalks, ensuring ADA compliance and non-motorized access to the future Valley Link Mountain House Mobility Hub for residents and IPC workers.

8. The Project ensures equitable access for all users and provides engagement opportunities to influence project design elements.

9. The Project reduces greenhouse gas (GHG) emissions and improves air quality by reducing congestion, smooths traffic operations and reduces vehicle idling, incorporates stormwater treatment elements, and supports climate and environmental justice initiatives.

6.b. Provide a description of the project (project limits, overall scope of work), and federal nexus and provide a high-resolution map, site plan, or diagram. Include description how the project is significantly developed to warrant federal funding.

Project Scope
The Project will improve the existing interchange to enhance traffic operations, reduce travel times, and improve goods movement. The Project will add new travel lanes southbound along Mountain House Parkway (north of the freeway) and northbound along International Parkway (south of the freeway) approaching the ramp termini.

The Project will add a westbound loop on-ramp, realign the westbound diagonal on- and off-ramps, and widen the eastbound diagonal and loop on-ramps. The Project will also retime the signals at the ramp termini to maximize throughput during peak hours and accommodate bicyclists and pedestrians. The mouths of ramp entrances will be widened to accommodate truck turning movements from either direction. The improvements will accommodate the future I-205 Managed Lanes Project along the freeway. Additional improvements will include the interconnection between ramp meters and local roads located within 1,000 feet of the ramp termini signals.

The Project also accommodates non-motorized travel. The design includes Class II bike lanes and sidewalks on the interchange approaches. The bike lane and sidewalk in the northbound approach transition to a Class I ribbon path that is grade separated at the new westbound off-ramp. The on-street Class II bike lane and sidewalk in the southbound direction continue through the interchange.

Project Need
The purpose of the Project is to provide an improved connection to I-205 that serves the existing and planned residential, commercial, and industrial development in the area. This growth is expected within the IPC, and elsewhere in the City, City of Mountain House, San Joaquin County, and neighboring counties. These efforts will also relieve forecasted increases in traffic demand at surrounding interchanges and increase regional mobility. The northeast area of Tracy and its surrounding communities (particularly southwest Lathrop) are growing rapidly. This is expected to continue over the next several decades. Growth will continue to increase demand on local interchanges, causing them to operate at less than acceptable level of service. The Project will help reduce congestion resulting from ongoing and planned development and improve local traffic circulation while increasing accessibility and efficiency for users. The currently closest access to I-205 is from MacArthur Drive, where future traffic demands at the interchange will result in unacceptable levels of service. 2025 SJCOG One Voice® Application Form
4 This interchange improvement is listed within the City’s circulation element.

The Project will support efforts to mitigate climate change impacts, reduce vehicle and diesel emissions, support fiscally responsible land use and transportation efficient design, support domestic manufacturing, increase active transportation opportunities in the region, and enhance mobility and jobs access for multiple communities within the City and regionally.

Project Location:

The Project is located on I-205 at the Mountain House Parkway Interchange within the City of Tracy and the City of Mountain House.

Federal Nexus:

I‐205 is classified as a Principal Arterial Interstate Freeway which primarily serves as a route for interregional recreation, commuter and freight traffic between the Bay Area and the Central Valley. The Project modifies access to I-205, which provides the federal nexus. The Project has also received federal environmental approval in April 2022.

Project Design Exhibit

2025 SJCOG One Voice® Application Form
5 High Resolution map
Figure: Project location in the context of the Northern California Megaregion.

2025 SJCOG One Voice® Application Form
6 6.c Provide a description of how the project provides or improves regional connectivity across a variety of existing or planned developments, resources, facilities, job centers, etc. within the region.

The Project will assist in alleviating congestion and support goods movement efficiency between the City and the wider Bay Area through travel on the I-205 and I-580. The Project links multiple employment centers, including the IPC which is planned to have 16,000 jobs, and the growing City of Mountain House to the freeway. Commuters from the City and the City of Mountain House travel to and from the San Francisco Bay Area for good paying jobs. Freight traverses the freeway to the Port of Oakland, a significant economic hub in the Northern California Megaregion. The Project will improve access to the freeway, including the future managed lanes on I-205, with additional vehicle lanes and freeway ramp modifications. The improvements will significantly reduce travel times for trucks and commuters.

The Project provides bicycle and pedestrian connectivity over I-205 that will provide multimodal access between housing and jobs. This will support residents who prefer to walk or cycle to jobs to travel along International Parkway-Mountain House Parkway without the need for a vehicle. This will be further enhanced as Valley Link is extended

6.d Provide a description of how the project supports and/or logically extends existing local and countywide or regional plans, strategies, or programs.

City of Tracy Sustainability Action Plan (Link)
The Project is expected to improve employment accessibility by a mix of commercial, industrial, and office uses, further supported by the City's Sustainability Action Plan. The Project's impact on job creation is seen as a crucial factor in reducing vehicle miles traveled (VMT) and improving economic opportunities, especially for disadvantaged households in the project area as identified in the plan.

Northern California Megaregion: Innovative, Connected, and Growing Report (Link) Identified in the 2016 report, the project area faces a housing crisis, heightened traffic, and congestion due to concentrated employment centers and increased goods movement. Before March 2020, over 64,932 commuters traveled from Northern San Joaquin to the Bay Area, with significantly higher home values and 68% of Megaregion jobs located in the Bay Area. Trucks handle 74.1% of freight, resulting in daily volumes of 15,000 to 37,000 from Northern San Joaquin to the Bay Area. Morning peak period congestion at Altamont Pass on I- 580 leads to commute times over 90 minutes from San Joaquin County to the Bay Area, causing delays of 40 to 50 minutes and exacerbating transportation challenges in the region. The Project addresses these concerns identified in the report.

Metropolitan Transportation Commission San Francisco Bay Area Goods Movement Plan (Link) Positioned near the Bay Area, the region serves as a vital goods distribution center. Challenges identified in the 2016 SF Bay Area Goods Movement Plan include limited rail capacity and numerous at-grade railway-highway crossings, leading to reliance on trucks along the I-580 corridor. The Project addresses these identified concerns.

2025 SJCOG One Voice® Application Form
7 San Joaquin Valley Air Pollution Control District Plan (Link) The Project aligns with the plan by improving air quality and reducing GHG emissions.

2023 California Freight Mobility Plan (Link)
Recognized in the 2023 California Freight Mobility Plan, I-580 is designated as a key truck corridor, making it eligible for federal investments. The Project area provides a direct connection to I-580 just west of the interchange location. The Project addressed these concerns identified in the plan by reducing congestion accessing the freeway.

6.e. Describe safety, economic, mobility, equity and environmental and other benefits which are expected upon project completion.

Safety Benefits:

A safety analysis was prepared using collision data from UC Berkeley Transportation Injury Mapping System (TIMS) for the five-year period of January 2019 to December 2024. The data recorded indicates the corridor is at great risk of additional collisions, with a total of 87 crashes over this period. There was 1 casualty over five years the Project site, as well as 7 severe injuries. The breakdown of all crashes for is showcased below.

Table 1 – Crash History 2019-2024
Number of Crashes Fatality Severe Injury Injury - Other Visible
Injury -
Complaint of
Pain
87 1 7 23 56
Source: TIMS

The Project will address collision patterns by implementing proven safety countermeasures and design elements.

The freeway ramps will be widened and realigned which will improve geometry, provide additional queue length for vehicles, and improve stopping time. A westbound loop on-ramp will be constructed, eliminating left turns for vehicles entering the freeway. Ultimately, the Project will alleviate congestion and reduce queueing along International Parkway-Mountain House Parkway, on both ramps, and along the highway mainline. The Project will also provide bicycle and pedestrian facilities through the interchange to protect vulnerable roadway users.

Economic Benefits:

The Bay Area’s housing affordability crisis, location of employment centers, and growth of goods movement activity and freight hubs has resulted in significant traffic volumes and congestion on the highways in the Northern California Megaregion.

Individuals are businesses have located in San Joaquin County, particularly in the City, to find affordable housing and available land. Median home values of the San Francisco Bay are nearly three times higher than comparable homes in the Central Valley. Compounding the residential price differential issue, the Bay Area retains 68% of the Northern California Megaregion jobs. An influx of commuters and freight traffic has created a significant transportation challenge along the local arterials accessing the interregional freeways. The existing interchange at I-205 and International Parkway-Mountain House Parkway cannot support future traffic demands to occur as the result of the development growth. The proposed partial cloverleaf interchange will provide travel time savings for freight and commuters by alleviating congestion and increasing 2025 SJCOG One Voice® Application Form
8 access points to the highway network. The new interchange is anticipated to increase traffic flow by over 60% at peak traffic times.

The Project will provide increased access to multiple employment hubs and regional opportunities through additional travel connections to active transportation choices. The Project is critical due to the expected development growth from the IPC, which predicts a diverse collection of retail, housing, commercial spaces, manufacturing, and distribution points growing exponentially. These developments will provide new employment, training, and educational opportunities for those utilizing the I-205 to commute. The Project will also benefit regional growth, as well-paid jobs will entice increased numbers of residents to seek out housing and employment in Tracy and the surrounding regions.

The IPC is a private development with direct access to the I-205 freight network and has driven the need for the Project. Freight movement is a major economic component for the Northern California Megaregion. More than $1 trillion of goods move through the region annually, 74% of which is by trucks using the highway freight corridors.

This includes between 15,000 and 37,000 trucks per day from the Northern San Joaquin region to the Bay Area.

The IPC provides for significant employment opportunities for the residents in San Joaquin County. Employment opportunities in the IPC are in the transportation and warehousing industry. This is a growing industry with higher wages for unskilled labor than comparable industries. San Joaquin County has demographics that support this industry. The University of the Pacific study Warehousing, E-Commerce, and Evolving Trade Patters in San Joaquin County analyzed the job postings and population age and education. The study found that the available jobs in the transportation and warehousing industry are looking for high school education and vocational training.

This is a good match for San Joaquin County’s young workforce with below average educational attainment.

These jobs include truck drivers, packagers, freight movers, and supervisors. These positions have seen real wage growth of 25% from 2013 to 2018. These occupations have similar, if not higher, pay than jobs in the retail sector with similar work experience and education requirements.

Mobility Benefits:

There is a projected increase in commuter traffic for I-205, necessitating Project improvements to reduce traffic congestion and subsequent GHG emissions. Existing traffic is further exacerbated by commuters seeking the increased availability and affordability of housing within Tracy, Mountain House, and other communities in San Joaquin County. Commuters are often delayed by significant congestion both on the freeway and exiting to connect to the local arterial. This results in congestion on both the interstate main line and local road.

The Project’s mobility benefits will include congestion reduction for commuters. Travel times will be reduced through improved mobility. The Project will include HOV bypass on the metered on-ramps as well as connectivity to the I-205 Managed Lanes. The congestion reduction will also improve access to the future Valley Link Mountain House Mobility Hub, providing multimodal choices for commuters. Additionally, the Project will install bicycle and pedestrian infrastructure to provide multimodal mobility choices for residents and workers.

The Project supports an increase in goods movement due to more efficient freight travel along the corridor.

Within the City of Tracy Transportation Infrastructure Master Plan, there are truck routes that run primarily in north-south and east-west directions which connect to the I-205. The existing truck route network connects industrial areas in the south and commercial areas in the north and central. These routes are essential for major 2025 SJCOG One Voice® Application Form
9 economic needs for the City and subsequent freight network for the region.

The Project contributes to USDOT’s ROUTES initiative through supporting economic development and highway safety in a rural area of San Joaquin County and neighboring counties. I-205 is a significant freight corridor connecting agricultural land uses and distribution centers in San Joaquin County to the Bay Area and the Port of Oakland. Agricultural products produced in San Joaquin, Stanislaus, and Merced counties contribute more than $8 billion to the economy, as stated in the 2018 North San Joaquin Valley Index. Many of these products are transported along I-205. The Project supports the movement of agricultural goods, which supports the rural economy. The interchange project enhances safety as well as improves goods movement access.

Equity Benefits:

This Project includes many benefits throughout the region in addition to mobility and reduced commute times.

The interchange improvement will greatly increase safety and reduce the number of vehicle accidents by providing sufficient capacity and vehicle queuing space at the intersections. The Project will result in a reduction in GHG emissions that are a direct result of trucks idling and vehicle congestion during peak hours.

This Project, though not all Tracts are classified as disadvantaged, will serve adjacent historically disadvantaged communities by reducing emissions in their region and will provide more efficient access to local job hubs (see economic benefits above). The Project interchanges are located across two Tracts: 52.07 and 52.06. Though these Tracts are not classified as disadvantaged, they certainly suffer from the same transportation barriers and economic costs of living within the City and will be benefited by the Project. The data showcases transportation insecurity at 94%, annualized disaster losses at 99%, asthma prevalence at 70%, transportation access at 95%, and transportation safety at 98% (CalEnviroScreen). These communities will enjoy greater mobility benefits such as less congestion and more transit connections from the Project improvements.

Environmental Benefits:

The proposed interchange has completed its environmental phase and has achieved state and federal environmental clearance. The Project has identified mitigations to significantly reduce environmental impacts.

There are no biological impacts or required mitigations. The environmental and traffic analysis does show improvements to air quality with the reduction of vehicles in the corridor and increased efficiency of travel. The Project components are projected to improve air quality for the Project area. Required mitigation measures include paleontological investigations during construction and stormwater best management practices.

Per the CalEnviroScreen, the Project areas are located within two Tracts. Mountain House Parkway is located within both Tract 52.07 and 52.06. These Tracts experience high pollution burdens (53 and 86 percentiles, respectively), alongside traffic pollution (70 and 55 percentiles), and hazardous waste (88 and 78 percentiles).

These Tracts also all suffer from heightened asthma, low birth weight, and cardiovascular disease.

2025 SJCOG One Voice® Application Form
10 7. Project Readiness:

Attach detailed information on any completed project milestones or phases, and the project schedule. Describe whether the project can be split into clear and distinct phases.

Milestones & Phases
The environmental clearance was completed in April of 2022. Final design will be progressed starting in February of 2026. Schedule milestone dates are as follows:

• Right of Way Certification – January 2028
• Final Plans, Specifications, & Estimates (PS&E) Complete February 2028 • Advertise – May 2028
• Begin Construction – August 2028
• End Construction – December 2030

Project Milestone Proposed
(Month/Year)
Begin Environmental (PA&ED) Phase
Circulate Draft Environmental Document Document Type
End Environmental Phase (PA&ED Milestone) 4/2022
Begin Design (PS&E) Phase
End Design Phase (Ready to List for Advertisement Milestone) 2/2025 Begin Right of Way Phase
End Right of Way Phase (Right of Way Certification Milestone) 1/2025 Begin Construction Phase (Contract Award Milestone) 7/2025 End Construction Phase (Construction Contract Acceptance Milestone) 12/2026

Engineering Design
The Cordes Ranch Specific Plan (IPC) identified the need to improve the I-205 to provide improved truck access and capacity for the planned warehouses. The City, in cooperation with Prologis, began development of the Project Study Report-Project Development Support (PSR-PDS) documents, which were completed in June 2015. During this phase, the feasibility of the interchange improvement was analyzed and served as the basis of the design. This included project elements, interchange configurations, right of way requirements, traffic operations, and environmental impacts.

Upon approval of the PSR-PDS’s, the interchange began detailed engineering and environmental analysis. This included the preparation of final environmental technical studies, draft CEQA and NEPA documents, final TOAR, draft geotechnical and soils studies, final Pavement Life Cycle Cost Analysis (LCCA), draft Drainage and Storm Water Data Reports, final Initial Site Assessment (hazardous materials), draft Right of Way Data Sheet, and Final Geometric Approval Drawings (GAD) and Structures Advanced Planning Studies (APS). The Project Report was approved by Caltrans in April of 2022 and the Modified Access Report was approved by FHWA in November of 2021.

Right of Way Acquisitions
The right of way needs have been carefully analyzed for the Project. To construct the project improvements, approximately 18.8 acres of right of way were acquired from 13 parcels. Upon construction completion, the roadway right of way will be deeded to Caltrans for future operations and maintenance. The Project will also 2025 SJCOG One Voice® Application Form
11 require the relocation of four private utilities: Chevron 18”/20” steel oil line, PG&E gas line, PG&E overhead 12kV electrical line, and PG&E underground 12kV electrical line. Coordination with the impacted utilities has already begun and has been included in Project scheduling.

7.b If your project is being delivered in phases, indicate the phases that are NOT a part of the project application to provide show the project is part of a larger/ “ultimate” project. Please answer the following questions:

• Describe how the specific stage, segment, phase, or activity fits into a larger project. • Describe the larger project and additional benefits (not described earlier) of the larger project.

8. Funding Plan for the project being nominated.

This section shows all the funds in each phase of the project. Please copy/paste tables if there is more than one funding source. Indicate in the comments section under “FUNDING AGENCY” whether the funds have been secured/committed or whether the funds are still being sought/not committed. Identify the name of the FUNDING AGENCY.

Feel free to change the names of the phases if they’re not applicable (i.e. substitute capital procurement for “construction” phase.

8a. Project Funding Plan
Total Project Cost ($1,000s)

Implementing Agency Component Prior 22-23 23-24 24-25 25-26 26-27 27-28+ Total E&P (PA&ED) 918 918 City of Tracy
PS&E 2,000 2,000

R/W SUP (CT)

CON SUP (CT)
R/W 11,657 11,657
CON 39,464 39,464
TOTAL 918 13,657 39,464 54,039
2025 SJCOG One Voice® Application Form
12 Fund No. 1: City TIMP
Funding ($1,000s)
Component Prior 22-23 23-24 24-25 25-26 26-27 27-28+ Total Funding Agency E&P
(PA&ED)
918 918 City of Tracy
PS&E 1,750 1,750

R/W SUP
(CT)

CON SUP
(CT)
R/W
11,657
CON
TOTAL 918 1,750 2,668
Fund No. 2: City RTIF Program Code
Funding ($1,000s)
Component Prior 22-23 23-24 24-25 25-26 26-27 27-28+ Total Funding Agency E&P
(PA&ED)
PS&E 250 250

R/W SUP
(CT)

CON SUP
(CT)
R/W
CON
TOTAL 250 250
Fund No. 3: OneVoice Need Program Code
Funding ($1,000s)
Component Prior 22-23 23-24 24-25 25-26 26-27 27-28+ Total Funding Agency E&P
(PA&ED)
TBD
PS&E

R/W SUP
(CT)

CON SUP
(CT)
R/W
CON 39,464 39,464
TOTAL 39,464 51,121
11,657
11,657
2025 SJCOG One Voice® Application Form
13 8b. Explain whether the sponsor is utilizing any formula funding for the project elements and detail how formula funds are being applied. If not utilizing formula funds, explain why formula funds are not being applied to the project.

The City is not anticipating pursuing federal formula funds for the Project. The City has other needs for formula funds that will be pursued. The City intends to leverage local and regional development impact fees to use as a match for federal and state discretionary grants. 8c. Provide a Funding Summary:

Line 1: One Voice® Request: $51,121,000
Line 2: Funds already secured: $ 2,918,000
Tot
al Project (add lines 1 and 2 from above): $ 54,039,000

9. Letters of Community Support (or other information that show the project’s history in community engagement/support).

Attac
h letters of support from interested parties including community groups and other agencies.

10. Prospective federal funding opportunities that this project will apply to (check all that apply):
 Advanced Transportation Technology and Innovation (ATTAIN) prog
ram
 Bri
dge Investment Program
 Bus and Bus Facilities Competitive Grants
 Capital Investment Grants
 Charging and Fueling Infrastructure Grants (Community Charging)  Charging and Fueling Infrastructure Grants (Corridor Charging)  Congestion Relief Program
 Consolidated Rail Infrastructure and Safety Improvement Grants  Rebuilding American Infrastructure with Sustainability and Equity (RAISE)
 Low or No Emission (Bus) Grants
 National Culvert Removal, Replacement, & Restoration Grant X
2025 SJCOG One Voice® Application Form
14  National Infrastructure Project Assistance (Megaprojects)  Nationally Significant Freight and Highway Projects (INFRA)  Pilot Program for Enhanced Mobility
 Pilot Program for Transit Oriented Development
 Port Infrastructure Development Program Grants
 Promoting Resilient Operations for Transformative, Efficient, and Cost Saving Transportation (PROTECT) - Discretionary
 Railroad Crossing Elimination Grants
 Reconnecting Communities Pilot Program
 Reduction of Truck Emissions at Port Facilities
 Safe Streets and Roads for All
 Strengthening Mobility and Revolutionizing Transportation (SMART) Grants
 Thriving Communities Program
 Wildlife Crossings Pilot Program
 Other:

X
X

APPROVED AS TO FORM AND LEGALITY
________________________
CIT
Y ATTORNEY’S OFFICE
TRAC

Y CITY COUNCIL
RES
OLUTION 2025-_____
APP
ROVING THE SELECTION OF THE INTERSTATE 205/MOUNTAIN HOUSE PARKWAY INTERCHANGE PROJECT AS THE CITY OF TRACY 2025

REGIONAL TRANSPORTATION PROJECT SUBMITTAL FOR

CONGRESSIONAL APPROPRIATION REQUESTS DURING SAN JOAQUIN COUNCIL OF GOVERNMENTS’ ONE VOICE TRIP TO WASHINGTON D.C.

WHER
EAS, the City of Tracy submits a list of projects each year to San Joaquin Council of Governments (SJCOG) for consideration in their legislative agenda and congressional appropriation requests during the One Voice trip to Washington D.C.; and WHER
EAS, this year the City was asked to submit a project of regional significance; and WHER
EAS, staff has reviewed the existing needs of various transportation projects and reviewed the project criteria provided by SJCOG; and
WHER
EAS, staff has determined that the Interstate 205/Mountain House Parkway Interchange Project (Project) is best suited for submission to SJCOG; and WHER
EAS, staff submitted the application to SJCOG in January of 2025; and WHEREAS, staff would like Council approval to continue the process with SJCOG and to include the Project in the San Joaquin Council of Governments’ One Voice trip; now, therefore, be it
RESOLVED: That the City Council of the City of Tracy approves the selection of the Interstate 205/Mountain House Parkway Interchange Project as the City of Tracy 2025 Regional Transportation Project submittal for congressional appropriation requests during San Joaquin Counc
il of Governments’ One Voice trip to Washington D.C.
* * * * *
* * * * * * * * *
Resolution 2025-_____

The foregoing Resolution 2025-_____ was adopted by the Tracy City Council on the 1st day of April 2025, by the following vote:

AYES:

NOES:

ABSENT:

COUNCIL MEMBERS:

COUNCIL MEMBERS:

COUNCIL MEMBERS:

ABSTENTION: COUNCIL MEMBERS:
______________________________

DAN ARRIOLA
Mayor of the City
of Tracy, California
ATTEST: _________________________

NECY LOPEZ
Ac
ting City Clerk and Clerk of the Council of the
City of Tracy, California
April 1, 2025
Agenda Item 3.A

RECOMMENDATION

Staff recommends that the City Council receive an informational report on the South San Joaquin County Fire Authority (SSJCFA) Board’s February 12, 2025, decision to form a Joint Powers Authority (JPA) with the City of Stockton and the City of Lodi, referred to as the CENCAL Fire EMS Authority (CENCAL), to pursue the award of an ambulance contract for San Joaquin County to provide ambulance services.

EXECUTIVE SUMMARY
On February 12, 2025, the SSJCFA Board adopted a resolution authorizing the Fire Chief to enter on behalf of SSJCFA, into a Joint Powers Agreement with the City of Stockton and the City of Lodi to form CENCAL. CENCAL will be formed to pursue the award of an ambulance contract for San Joaquin County. The impact of such a contract on EMS in San Joaquin County could include:
• Fire agency control of ambulance resources and EMS system management. • Increased number of system ambulances.
• Reduced response times.
• A single communication center with coordinated dispatch. • Additional revenue streams to further enhance service levels.

This informational briefing is intended to provide the City Council with an overview of the formation and objectives of the CENCAL Fire and EMS Authority as the CENCAL JPA prepares to compete for the San Joaquin County EMS contract, in partnership with American Medical Response (AMR).

BACKGROUND AND LEGISLATIVE HISTORY

The San Joaquin County Emergency Medical Services Agency (SJCEMSA) oversees emergency medical services (EMS) within the county, including exclusive operating areas (EOAs) for ambulance providers. Under California Health and Safety Code Section 1797.224, SJCEMSA has the authority to establish EOAs for ambulance services. Zone X, one of four EOAs in San Joaquin County, covers the greater Lodi, Stockton, and Tracy areas and is currently serviced by AMR under an agreement set to expire in May 2026.

With the impending expiration of the existing ambulance transport provider agreement, in May 2022, the Stockton Fire Department (SFD), Lodi Fire Department (LFD), and SSJCFA began evaluating the feasibility of forming a JPA to compete for the new ambulance contract for Zone X.

The initial discussions focused on improving service levels by:
• Establishing direct public fire agency-based EMS oversight in patient care and system management.
• Enhancing revenue streams through access to increased Medicaid reimbursements. • Reinvesting additional revenues to improve service levels.

A consultant was engaged to conduct a comprehensive analysis of the feasibility of competing for the contract and exploring different service delivery models. Based on the consultant's Agenda Item 3.A
April 1, 2025

findings, the agencies determined that forming a JPA and partnering with a private ambulance company was the optimal approach to:
• Leverage the experience of a private ambulance provider. • Increase the likelihood of securing the ambulance contract. • Reduce financial and operational risks.

Subsequently, the three agencies entered into a Memorandum of Agreement (MOA), authorizing the issuance of a joint Request for Proposals (RFP) for ambulance services. The RFP, released on October 29, 2024, sought proposals for ground transport, 9-1-1 dispatch support, interfacility transport, and critical care transport. Pursuant to the County’s RFP process AMR was awarded the contract.

FORMATION OF CENCAL FIRE AND EMS AUTHORITY
Following the identification of a viable private ambulance partner, AMR, SSJCFA, SFD, and LFD approved the formation of CENCAL, a separate legal entity from the Cities of Stockton and Lodi and the SSJCFA, and a separate legal entity from the members of the SSJCFA – the City of Tracy and the Tracy Rural Fire Protection District. This step enabled the fire agencies to formalize a partnership with AMR to jointly compete for the County’s upcoming RFP.

CENCAL has the following structure:
• CENCAL would have a three-member Board of Directors, with each member agency – SSJCFA, Stockton, and Lodi – having one representative on the CENCAL Board.

Currently, pursuant to the same motion that approved the resolution for the formation of the CENCAL JPA, Jeff Ramsey was appointed to serve as the primary representative for SSJCFA to the CENCAL Board, with Steve Abercrombie as first alternate and Dotty Nygard as the second alternate.
• Board approval would require a simple majority vote, unless the approval addresses a financial matter, in which case a unanimous vote would be required. • CENCAL would have an Administrating Member that would assist with the day-to-day work of the Board and other tasks assigned by the Board. As of the effective date of the Joint Powers Agreement, the SSCJFA would serve as the Administrating Member for two years. Thereafter, the Administrating Member role would alternate between SSJCFA and Lodi every two years.
• The City of Stockton would serve as the Treasurer which, among other duties, would receive all money for CENCAL, be responsible for disbursement of CENCAL funds, and provide quarterly financial reporting.
• CENCAL’s intention is that it would be funded with revenue derived from the provision of services, if and when those services are operational. Until those services are operational, CENCAL would incur expenses, and the member agencies would be responsible for those expenses according to the following, initial percentages: City of Stockton - 65.9%; SSJCFA - 21.5%; and City of Lodi - 12.6%. The anticipated startup costs for CENCAL are estimated to total $2,237,000.
• Access to services would proceed through a single command center operating through the City of Stockton Fire Department’s Emergency Communication Division.

Key elements of the Teaming Agreement negotiated with AMR include:
• Collaboration on Proposal Development: CENCAL will lead proposal development, with AMR providing operational, financial, and technical expertise.

Agenda Item 3.A
April 1, 2025

• Exclusivity: Both parties agree to work exclusively together for this RFP and not engage with other entities for a competing proposal.
• Defined Roles and Responsibilities: Each entity will contribute resources and expertise necessary for a competitive submission.
• Confidentiality and Compliance: The agreement ensures confidentiality of strategic information and compliance with all regulatory requirements. • Termination Provisions: The agreement outlines conditions for termination, including material changes to the RFP, non-selection by the County, or failure to meet regulatory standards.

Additionally, per Exhibit A to the SSCJFA February 12, 2025: Scope of Work and Fees details the operational and financial responsibilities of each party, including:
• Day-to-day transport service operations.
• Oversight of patient care and medical control responsibilities. • Quality management services and regulatory compliance. • Cost structures, compensation for ambulance unit hours, and reimbursement procedures.
• Deferred service payment provisions and repayment structures.

The Teaming Agreement does not create a formal business partnership or joint venture but provides a structured framework for collaboration to strengthen CENCAL’s competitive position.

Should CENCAL secure the contract, an operations agreement will be established to define the long-term relationship between CENCAL and AMR. The agreement between CENCAL and the County would, in turn, govern CENCAL’s provision of ambulance services in its service territory.

Upon the release of the SJCEMSA Ambulance RFP, CENCAL will evaluate its feasibility to develop and submit a competitive proposal. If the proposal is deemed unfeasible, AMR will be released from its exclusivity obligation, and CENCAL will be dissolved. Should CENCAL submit a proposal but fail to secure the contract, CENCAL will also be dissolved.

ANALYSIS

This is an informational item on an action that was already taken by the SSJCFA Board, which includes two Council Members. The SSJCFA Board exercised its authority to authorize the Fire Chief, on behalf of SSJCFA, to enter into a Joint Powers Agreement with the City of Stockton and the City of Lodi to form CENCAL and implement this program. Therefore, the immediate focus of this staff report is on the fiscal implications moving forward.

Staff also notes that questions have been raised regarding whether SSJCFA may participate in a JPA to provide ambulance services and whether SSJCFA has the power to provide services – through the JPA – beyond the boundaries of its two members. Regarding such questions, the SSJCFA could amend its joint powers agreement to clarify both issues.

FISCAL IMPACT

There is no immediate fiscal impact. Assuming that CENCAL would be awarded the EMS contract, SSJCFA’s estimated pro-rata share of startup costs is approximately $500,000. Staff recommends funding these costs through existing SSJCFA fund balance reserves, with anticipated cost recovery in the initial contract phase. Future fiscal impacts to the City are unknown at this time. If a contract between CENCAL and SJCEMSA occurs, the terms should be evaluated for fiscal impacts to member agencies. The City’s share of SSJCFA’s budget is Agenda Item 3.A
April 1, 2025

62.5%. Any further contribution from the City, if ever requested, would require City Council approval. Likewise, the City’s ongoing financial support of the SSJCFA, and the resulting indirect support of CENCAL, also requires City Council approval each budget year.

Costs and revenues for CENCAL will be distributed based on the population served. Initial funding will be derived from operational revenue, with any deficits shared proportionally among member agencies. The first priority for any surplus revenue would be reimbursement to CENCAL’s member agencies for the initial startup costs. Thereafter, surplus revenue would be reinvested into EMS improvements.

COORDINATION

Staff has coordinated and discussed the presentation of their report with SSJCFA Fire Chief Bradley.

CEQA DETERMINATION

Review under the California Environmental Quality Act is not applicable for this informational report.

STRATEGIC PLAN

This agenda item relates to Council’s Strategic Priorities for Public Safety.

ACTION REQUESTED OF THE CITY COUNCIL
Staff recommends that the City Council receive this informational report.

Prepared by: Karin Schnaider, Assistant City Manager
Randall Bradley, Fire Chief, SSJCFA

Reviewed by: Arturo Sanchez, Assistant City Manager
Sara Castro, Finance Director
Andrew Shen, Interim City Attorney
Approved by: Midori Lichtwardt, City Manager
Attachments:
• Attachment A – CENCAL Fire and EMS Authority PowerPoint • Attachment B – SSJCFA Board Staff Report
1 Attachment A

CENCAL FIRE & EMS AUTHORITY

1 BACKGROUND

• The San Joaquin County Emergency Medical Services Agency (SJCEMSA) oversees EMS within the county.
• SJCEMSA establishes exclusive operating areas (EOAs) for ambulance services under California Health and Safety Code Section 1797.224. • Zone X (covering Lodi, Stockton, and Tracy) is currently served by AMR under an agreement expiring May 2026.

2 2

JOINT RFP FOR

AMBULANCE SERVICES

• Stockton Fire Department (SFD), Lodi Fire Department (LFD), and SSJCFA explored forming a Joint Powers Authority (JPA) in May 2022 to compete for the new ambulance contract.
• Goals of the JPA:
o Establish direct fire-based EMS oversight.
o Enhance revenue streams through increased Medicaid reimbursements. o Reinvest additional revenues to improve service levels. • A consultant study confirmed that forming a JPA and partnering with a private ambulance company was the optimal approach.

3 • Stockton Fire Department (SFD), Lodi Fire Department (LFD), and SSJCFA entered into a Memorandum of Agreement (MOA) to issue a joint Request for Proposals (RFP)
• RFP released on October 29, 2024 seeking:
o Ground transport services
o 9-1-1 dispatch support
o Interfacility and critical care transport
• A satisfactory proposal was received from AMR

4 JPA FORMATION &

FEASIBILITY STUDY
3 OPERATIONAL & FINANCIAL

FRAMEWORK

• SSJCFA, SFD and LFD formally established the CENCAL Fire and EMS Authority • Teaming Agreement with AMR includes:
o Collaboration on Proposal Development CENCAL leads, AMR provides operational and financial expertise
o Exclusivity CENCAL and AMR will work solely together on this bid o Defined Roles & Responsibilities Each entity contributes resources for a competitive proposal
o Confidentiality & Compliance Strategic information is protected; all regulatory requirements met
o Termination Provisions Agreement ends if the RFP changes significantly. CENCAL is not selected, or regulatory standards are unmet

5 • Exhibit A outlines:
o Day-to-day transport service operations.
o Oversight of patient care and medical control responsibilities. o Quality management services and regulatory compliance. o Cost structures, unit-hour compensation, and reimbursement procedures. o Deferred service payments and repayment structures.
• No formal business partnership or joint venture—structured framework for collaboration.
• If CENCAL secures the contract, an operations agreement will be established.

6 FORMATION OF CENCAL

FIRE AND EMS AUTHORITY
4 PATH FORWARD

• Upon release of the SJCEMSA Ambulance RFP, CENCAL will evaluate feasibility for submission.
• If submission is unfeasible, AMR will be released from exclusivity, and CENCAL will dissolve.
• If submitted but unsuccessful, CENCAL will also dissolve.

7 FISCAL IMPACTS

• No immediate fiscal impact.
• Estimated SSJCFA startup cost share: $500,000 (funded via SSJCFA reserves, with cost recovery in initial contract phase).
• Costs and revenues distributed based on population served. • Initial funding derived from operational revenue; deficits shared proportionally; surplus reinvested in EMS.

8 5

SUMMARY

• Transformational impact on EMS if awarded the contract:
o Fire agency control of ambulance resources and system management. o Increased system ambulance availability.
o Reduced response times.
o Centralized dispatch communication.
o Additional revenue reinvested into EMS improvements.

9 CONCLUSION

• This briefing provides an overview of the formation and objectives of the CENCAL Fire and EMS Authority
• Next Steps: Prepare to complete for the San Joaquin County EMS Contract • Questions?

10 119
Attachment B

South San Joaquin County Fire Authority
835 Central Avenue, Tracy, CA 95376 | Tel: (209)831-6702 Fax: (209)831-6732

STAFF REPORT

TO: Board of Directors MEETING DATE: February 12, 2025

PREPARED BY: Randall Bradley, Fire Chief
APPROVED BY: Randall Bradley, Fire Chief

ITEM: ADOPT A RESOLUTION AUTHORIZING THE FIRE CHIEF TO ENTER INTO A JOINT

POWERS AGREEMENT WITH THE CITY OF STOCKTON AND THE CITY OF LODI TO

FORM THE CENCAL FIRE EMS AUTHORITY (CENCAL) AND APPOINTING SSJCFA

REPRESENTATIVES TO THE CENCAL BOARD OF DIRECTORS

RECOMMENDATION

Staff recommends the South San Joaquin County Fire Authority (SSJCFA) Board of Directors adopt a resolution authorizing:

1. The Fire Chief to enter into a Joint Powers Agreement (JPA) with the City of Stockton and the City of Lodi to form the CENCAL Fire EMS Authority (CENCAL).

2. The appointment of an SSJCFA Board member to serve on the CENCAL Board of Directors, along with two SSJCFA Board members to serve as first and second alternates.

BACKGROUND

The San Joaquin County Emergency Medical Services Agency (SJCEMSA) manages emergency medical services (EMS) within the county, including exclusive operating areas (EOAs) for ambulance providers. With the upcoming expiration of the existing ambulance transport provider agreement in May 2026, the Stockton Fire Department (SFD), Lodi Fire Department (LFD), and South San Joaquin County Fire Authority (SSJCFA) seek to collaborate with a private ambulance provider to submit a joint proposal for EMS delivery in one or more EOAs.

To facilitate this effort, the agencies propose forming the CENCAL Fire EMS Authority (CENCAL), a JPA created through a Joint Powers Agreement (Exhibit A). This JPA will allow SFD, LFD, and SSJCFA to contract with a private ambulance provider and oversee service delivery if awarded a contract by SJCEMSA.

Under California Health and Safety Code Section 1797.224, SJCEMSA has the legal authority to establish EOAs for ambulance services. Zone X, one of four EOAs in San Joaquin County

Board Meeting Date: 2/12/2025

120
(Attachment 3), covers the greater Lodi, Stockton, and Tracy areas and is currently serviced by American Medical Response (AMR) under an agreement set to expire in May 2026.

In anticipation of SJCEMSA's Request for Proposals (RFP) for emergency ambulance services, SFD, LFD, and SSJCFA conducted a comprehensive analysis of the county’s EMS system, determining that a joint response would be advantageous. Consequently, the agencies entered into a Memorandum of Agreement (MOA) (Attachment 2), authorizing the issuance of a joint RFP for ambulance services, including ground transport, 9-1-1 dispatch support, interfacility transport, and critical care transport. Following the release of the RFP on October 29, 2024, a satisfactory proposal was received from AMR.

To proceed, the creation of a JPA is necessary to provide a unified legal and operational framework for the joint EMS response, ensuring stability, shared governance, and enhanced accountability.

By forming CENCAL, SSJCFA will:

1. Strengthen regional EMS collaboration.

2. Retain direct fire-based EMS oversight in patient care and system management.

3. Enhance efficiency and service delivery through a coordinated approach.

4. Maintain local control over ambulance quality, response times, and integration.

5. Create a new revenue stream to improve overall service levels.

DISCUSSION

If approved, SSJCFA will join SFD and LFD to establish CENCAL, a separate legal entity responsible for managing emergency medical transport services, including ambulance response, interfacility transport, and critical care transport.

CENCAL will be governed by a three-member Board of Directors, with each participating agency appointing one representative. Each director will hold one vote, with most decisions requiring a simple majority and financial decisions requiring unanimous consent. Costs will be shared based on the population served, reassessed every five years. Initial funding will come from operational revenue, with any deficits shared proportionally among member agencies. Debts incurred by the JPA will remain the sole responsibility of CENCAL, as per California Government Code Section 6508. Any surplus revenue will be reinvested into EMS improvements.

CENCAL will contract with AMR to establish a public -private partnership, aligning performance metrics, regulatory compliance, and operational goals outlined in the forthcoming SJCEMSA RFP.

This partnership will:

• Increase ambulance availability by approximately 11%. • Improve response times and emergency preparedness.
• Ensure seamless EMS coordination from 911 call to hospital transfer. • Provide flexibility during high-demand periods and major incidents. • Centralize data collection to enhance performance monitoring and quality improvement.

Board Meeting Date: 2/12/2025
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Additionally, as a public entity, CENCAL qualifies for a higher Medi-Cal reimbursement rate than AMR would receive as a private provider. Structuring transport services under the JPA, even with a subcontracted provider, maximizes available reimbursements, improving financial sustainability.

If CENCAL’s joint proposal is selected, the JPA will oversee EMS operations. If not, or if the SJCEMSA RFP significantly changes the existing EMS model, CENCAL will be dissolved, and AMR will be released from its non-compete obligation.

The City of Stockton will serve as CENCAL’s Treasurer, managing finances and ensuring regulatory compliance. Stockton will oversee all JPA funds and maintain records in accordance with accepted accounting standards.

FISCAL IMPACTS

There is no immediate fiscal impact. Any financial commitments will require future Board approval.

If the JPA is approved, an agreement is reached with a private ambulance provider, and CENCAL is awarded an EMS contract, SSJCFA’s estimated pro-rata share of startup costs is approximately $500,000. Staff recommends funding these costs through existing SSJCFA fund balance reserves, with recovery anticipated in the initial contract phase.

ATTACHMENTS

1. Resolution authorizing the Fire Chief to enter into a Joint Powers Agreement with the City of Stockton and the City of Lodi to form the CENCEL Fire EMS Authority (CENCAL), and appointing South San Joaquin County Fire Authority Board Representatives to the CENCAL Board of Directors

2. Memorandum of Agreement between SSJCFA, City of Stockton and City of Lodi

3. SJCEMSA Exclusive Operating Area (EOA) Map

EXHIBITS

A. DRAFT Joint Powers Agreement between the City of Stockton, City of Lodi and the South San Joaquin County Fire Authority creating the CENCAL Fire EMS Authority

Board Meeting Date: 2/12/2025
122
Attachment 1

RESOLUTION NO.: 2025-0XX

AUTHORIZING THE FIRE CHIEF TO ENTER INTO A JOINT POWERS AGREEMENT WITH THE

CITY OF STOCKTON AND THE CITY OF LODI TO FORM THE CENCAL FIRE EMS

AUTHORITY (CENCAL), AND APPOINTING SOUTH SAN JOAQUIN COUNTY FIRE

AUTHORITY BOARD REPRESENTATIVES TO THE CENCAL BOARD OF DIRECTORS

WHEREAS, the South San Joaquin County Fire Authority (SSJCFA) is a Joint Powers Authority (JPA) established under California Government Code Section 6500 et seq., formed to provide fire protection, emergency medical services, and related emergency response functions within its jurisdiction; and

WHEREAS, the San Joaquin County Emergency Medical Services Agency (SJCEMSA) oversees emergency medical services (EMS) within San Joaquin County, including the establishment of Exclusive Operating Areas (EOAs) pursuant to California Health and Safety Code Section 1797.224; and

WHEREAS, the current agreement for ambulance transport services within San Joaquin County’s Zone X EOA is set to expire in May 2026, requiring the issuance of a Request for Proposals (RFP) for ambulance service providers; and

WHEREAS, the City of Stockton Fire Department (SFD), the City of Lodi Fire Department (LFD), and SSJCFA seek to collaborate with a private ambulance provider to submit a joint proposal to provide prehospital emergency medical services within one or more of SJCEMSA’s EOAs; and

WHEREAS, in accordance with a previously executed Memorandum of Agreement (MOA), SSJCFA, SFD, and LFD conducted a feasibility analysis and subsequently issued an RFP for ambulance service providers, receiving a favorable proposal from American Medical Response (AMR); and

WHEREAS, to facilitate a unified response to the SJCEMSA RFP and to effectively manage ambulance transport services, SSJCFA, SFD, and LFD propose the formation of a new Joint Powers Authority, the CENCAL Fire EMS Authority (CENCAL), through a Joint Powers Agreement (JPA) as authorized under California Government Code Section 6502 (Exhibit A); and

WHEREAS, the establishment of CENCAL will provide a dedicated governance structure to oversee ambulance transport operations in collaboration with AMR, leveraging public -private partnerships to enhance service delivery, improve response times, and maximize financial sustainability; and

WHEREAS, CENCAL will be governed by a three-member Board of Directors, consisting of one representative from each participating entity, with each entity appointing a first alternate and a secondary alternate representative to ensure continuity in decision-making; and

WHEREAS, SSJCFA’s participation in CENCAL aligns with its mission to enhance regional collaboration in emergency medical services, maintain local control over ambulance operations, and establish sustainable revenue sources for future EMS improvements.

NOW, THEREFORE, BE IT RESOLVED that the Board of Directors of the South San Joaquin County Fire Authority hereby:
123
Resolution No.: 2025-0XX
February 12, 2025

1. Authorizes the Fire Chief to execute the Joint Powers Agreement establishing the CENCAL Fire EMS Authority in collaboration with the City of Stockton and the City of Lodi.

2. Appoints one SSJCFA Board Member, to serve as the
primary representative on the CENCAL Board of Directors.

3. Appoints two SSJCFA Board Members, (1st alternate) and (2nd alternate) to serve as the first and second
alternates on the CENCAL Board of Directors.

4. Directs the Fire Chief to take all necessary actions to implement this resolution, including coordinating with CENCAL member agencies, executing necessary agreements, and ensuring compliance with applicable laws and regulations.

IT IS HEREBY CERTIFIED that the above and foregoing resolution was passed and adopted by the Board of Directors of the South San Joaquin County Fire Authority at its regular meeting held on the 12th day of February 2025, by the following vote:

AYES: BOARD MEMBERS:

NOES: BOARD MEMBERS:

ABSENT: BOARD MEMBERS:

ABSTAIN: BOARD MEMBERS:

ATTEST: APPROVED:

Nicole Boswell, Clerk of the Board TBD, Chairperson of the Board 124
Attachment 2

MEMORANDUM OF AGREEMENT

This Memorandum of Agreement ("Agreement") is made and entered into by and among the City of Stockton, a charter city and municipal corporation in the State of California ("Stockton"), the City of Lodi, a general law city and municipal corporation in the State of California ("Lodi"), and the South San Joaquin County Fire Authority, a duly organized joint powers agency under the Joint Exercise of Powers Act ("SSJCFA"), each of which may be hereinafter referred to individually as "Party" and collectiv ly as the "Parties" or "Members." There are no other patties to this Agreement.

RECITALS

1. Government Code sections 6500 -6515 permit two or more local public entities to jointly exercise any power common to them by agreement.

2. The Parties desire to improve the delivery of emergency medical services by establishing a holistic approach, including, but not limited to, emergency ground ambulance transportation, 9 -1-1, interfacility, and critical care transportation, which they each are authorized to provide.

3. To accomplish this goal, the Parties agree that a public -private alliance model for the provision of emergency ground ambulance transportation may be appropriate.

4. The Parties agree that access to service determined by a single command center operating through the City of Stockton Fire Department's Emergency Communication Division ("Stockton Fire ECD") will ensure the right medical resources are dispatched to the most appropriate call for service.

5. The Parties believe that the joint retention of a private ambulance service provider may deliver a higher level of servi-::e and faster emergency response times for our communities with the planned addition of ambulances, paramedics, and Emergency Medical Technicians (EMTs), to better meet the needs of each Parties' communities, and the increased demand to provide ervices to the expanded geographic area and locations. This joint retention could also allow greater transparency and accountability to the Parties and individuals served, because both first responders and the public would know precisely where and how ambulances a: -e deployed to serve community needs.

6. The Parties further believe that utilizing a platform that tracks all active incidents, responses, and real -time operations will allow the mobilization of resources to occur quickly to different county regions, which will in turn ensure that emergency resources are available to each community :11ember when they need it most.

7. The Parties desire to enter into a Joint Powers Agreement ("JPA") to jointly consider the provision of emergency and non -emergency ambulance services and contracting with a private ambulance service·provider for such service delivery. To that end, the Parties desire to enter into this Agreement to coordinate efforts in procuring a private ambulance service

125
provider to partner with the proposed JPA. Should a qualified provider be selected and a sustainable financial model be developed, the Parties agree, pursuant -to the terms and conditions set forth herein, to enter into a JPA and submit a proposal and request authorization by the San Joaquin County EMS Agency to provide emergency and non- emergency ambulance services.

NOW, THEREFORE, it is mutually understood and agreed by the Parties as follows:

AGREEMENT
I. Recitals. The recitals set fo1th above ("Recitals") are true and correct and are hereby incorporated into and made part of this Agreement by this reference. In the event of any inconsistency between the Recitals and Sections 1 through 21 of this Agreement, Sections 1 through 21 shall prevail.

2. Purpose. The purpose of this Agreement is to develop a single Request for Proposals ("RFP") for procurement of emergency and non-emergency ambulance services, including, but not limited to, emergency ground ambulance transportation, 9-1-1 emergency dispatch assistance, interfacility transpo11ation, and critical care transportation (the "Services"). It is the intention of the Parties that such Services would ultimately be contracted by and the responsibility of a separate joint powers agency, fanned by the Parties hereto pursuant to Chapter 5, Division 7, Title 1 of the Government Code of the State of California (commencing with§ 6500, as amended from time to time) (the "Authority").

3. Formation of the Authority. The Parties agree that, should one (1) or more qualified bidders submit a satisfactory proposal in response to the RFP and a sustainable financial model is developed, a JPA forming the Authority shall be presented to each Party's governing body for consideration and approval. The JPA shall give the Authority authorization, in its own name, to do all acts necessary to procure and provide the Services, including, but not limited to, each of the following:

(1) Make and enter contracts, including, but not limited to, contracting with San Joaquin County EMS Agency (the "EMS Agency") to serve as the EMS provider under the EMS Agency's plan and contracting with ambulance service providers to assist with delivering such services.

(2) Incur debts, liabilities, and obligations; provided that no debt, liability, or obligation of the Authority is a debt, liability, or obligation of any Patty except as separately agreed to by a Party in writing, agreeing to be so obligated.

(3) Acquire, hold, construct, manage, sell, or otherwise dispose ofreal and personal property by appropriate means, excepting only eminent domain.

126

(4) Receive contributions and donations of property, funds, services, and other forms of assistance from any source.

(5) Sue and be sued in its own name.

(6) Employ agents and employees.

(7) Lease real or personal property as lessee or lessor.

(8) Receive, collect, invest, and disburse monies.

(9) Issue revenue bonds or other forms of indebtedness, as provided by law.

(10) Carry out other duties as required to accomplish other responsibilities as set fort in this Agreement.

(] 1) Assign, delegate or contract with a Party or third pa1iy to perform any of the duties of the Boat·d including but not limited to, acting as administrator for the Authority.

(12) Exercise all other powers necessary and proper to carry out the provisions of this Agreement.

These powers will be exercised in the manner provided by applicable law and as expressly set forth in the JPA.

4. Term. This Agreement shall become effective upon full execution by all Parties hereto ("Effective Date") and shall remain in effect until terminated in accordance with Section 10, below.

5. Development of the RFP.

a. The Parties agree to cooperate to develop an RFP seeking qualified and responsible bidders to partner with the Authority to perform the Services; however, the Paiiies agree and understand that any award of a contract pursuant to the RFP shall be completed by the Authority formed pursuant to Section 2, above.

b. The Parties agree to cooperate to review and evaluate any proposals submitted pursuant to the RFP for purposes of assisting their respective governing bodies in considering the formation of the Authority to partner with a qualified and responsible bidder to provide the Services.

c. The Parties agree to cooperate to develop a JPA, including, but not limited to, recommended procedures for governance, funding, administration, dispute resolution, and stakeholder participation requirements.

127

6. Roles and Responsibilities of the Parties. In addition to performance of the roles and responsibilities set forth aboYe related to, among other things, development of the RFP, the Parties shall:

a. Work jointly to meet the objectives of this Agreement through, among other things, coordination of all activities related to fulfillment of said objectives;

b. Internally or jointy designate a staff person(s) to provide expertise and existing infonnation in a timely manner and to participate in the development of the RFP or related materia:s or actions being considered by each Party agency; and

c. Upon recommendation of staff for each Party agency, consider approval of the IPA and, as defined in the JPA once approved, participate as necessary in the formation of the JPA. Notwithstanding the foregoing, nothing contained in this Agreement shall be construed as obligating any Party to approve the JPA developed pursuant to this Agreement, or as preventing any Party from adopting the JPA developed pursuant to this Agreement in the event that any Party hereto fails to recommend approval or another Party elects not to approve the JPA developed under t1is Agreement.

7. Ioteragency Communication. To provide for consistent and effective communication among the Parties, each Party agrees to designate a representative as its central point of contact on all matters relating to this Agreement and the JPA. Additional representatives from a Party's staff may be c.ppointed to serve as points of contact on specific actions or issues.

8. Fiscal. Each Party shall be responsible for their own costs and expenses incurred in carrying out the cooperative efforts agreed to and set forth herein, up to and including the final approval of the JPA by each Party's governing body. Each party shall operate within their respective authority limits and applicable processes.

9. Liability and Indemnification. No Party, nor any officer or employee of a Party, shall be responsible for any damage or liability occurring by reason of anything done or omitted to be done by another Party under or in connection with this Agreement. The Parties further agree, pursuant to Government Code section 895.4, that each Party shall fully indemnify and hold harmless each other Part and its agents, officers, employees, and contractors from and against all claims, damages, losses, judgments, liabilities, expenses, and other costs, including litigation costs and attorney fees, arising out of, resulting from, or in connection with any work delegated to or action taken or omitted to be taken by such Party under this Agreement.

10. Termination. Unless earlier terminated pursuant to this Section 10, this Agreement shall automatically terminate witho·.it any further action of the parties, upon the occurrence of any of the following events:

128

a. Failure to develcp an RFP seeking qualified and responsible bidders to partner with the Authority to perform the Services; or

b. Failure of the RF: to secure a qualified and responsible bidder to partner with the Authority to perform the Services; or

c. Approval of the JPA by the governing bodies of all Parties ("Automatic Termination").

The Parties may mutually agree in writing to terminate or extend this Agreement at any time prior to the Automatic Tem1ination.

11. Withdrawal from MOA. Any Party may withdraw from this Agreement by delivery of at least sixty (60) days advance written notice to the other Parties of the proposed withdrawal.

The withdrawing Party's legal rights and obligations under the Agreement shall continue through the proposed withdrawal date, and such withdrawal shall not affect the legal status of the Agreement or alter any other Party's legal rights or obligations under the Agreement.

12. Modification. No alteration. amendment, or modification of this Agreement shall be valid unless made in writing and e::ecuted by all Parties to this Agreement.

13. Assignment. No Party to this Agreement shall assign, transfer, or otherwise dispose of this Agreement, in whole or in part, to any individual, firm, or corporation, without the prior written consent of the other Party. Subject to the forgoing provisions, this Agreement shall be binding upon, and ir_ure to the benefit of, the respective successors and assigns of the Parties hereto.

14. Authority. All Parties to th :s Agreement warrant and represent that they have the power and authority to enter into thi 3 Agreement and the names, titles, and capacities herein stated on behalf of any entities, persons, states, or firms represented or purported to be represented by such entities, persons, states, or firms and that all former requirements necessary or required by state or federal law in order to enter into the Agreement have been fully complied with. Further, by entering into this Agreement, neither Party hereto shall have breached the terms or conditions of any other contract or agreement to which such Party is obligated, which such breach would have a material effect hereon.

15. Severability. If any provision of this Agreement is determined to be invalid or unenforceable, the remaining provisions shall remain in force and unaffected to the fullest extent permitted by law and regulation.

16. Entire Agreement. This Agreement constitutes the sole, entire, integrated, and exclusive agreement between the Parties regarding the contents herein. Any other contracts, agreements, terms, understandings, promises, or representations not expressly set forth or referenced in this writing are null and void and of no force and effect.

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17. Construction and Interpretation. The Parties agree and acknowledge that thjs Agreement has been developed through negotiation , and that each Party has had a full and fair opportunity to revise the terms of thjs Agreement. Consequently, the normal rule of construction that any ambiguities are to be resolved against the drafting Party shall not apply in construing or interpreting this Agreement.

18. No Third -Party Beneficiaries. Nothing in this Agreement, e'X.-pressed or implied , is intended to confer on any person or entity other than the Parties hereto and their respective successors and assigns, any rights or remedies under or by virtue of this Agreement.

19. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California and venued in San Joaquin County.

20. Section Headings. All section headings contained herein are for the convenience of the Parties and reference only and are not intended to define or limit the scope of any provision of this Agreement.

21. Counterparts. This Agreement may be executed in several counterparts, each of which is an original and all of which constitutes but one and the same instrument.

[Signatures on Following Page]

IN WITNESS WHEREOF, the Parties have executed this Agreement on the dates shown below.

AN JOA COUNTY FIRE AUTHORITY:

By:

Randall Bradley, Fire Chief

Date: /rJ;'.z - /20 2 L,/
r 1
Approved as to Form:

To111 Hatti11a.11
Torn Halllnan(Ott 1.8, 2024 15:o• POT)
Tom Hallinan, General Counsel

CITY OF STOCKTON:

By: Harrv Blac Oct 28, 202415:12 PDT)
Harry Black, City Manager
Date: 10-28-2024

Approved as to Form:
fk\-

Lori Asuncion, City Attorney

CITY OF LODI:

Approved as to Form:
} cd::<c.:..

Kalle Lucd1esl{0Cll8, 102 15:32 PDT)
Katie Lucchesi, City Attorney

ATTEST:
0-tu,Lt G

OLIVIA NASHED
City Clerk

130

Attachment 3

131
132
Exhibit A

JOINT EXERCISE OF POWER AGREEMENT

BETWEEN THE CITY OF STOCKTON, THE CITY OF LODI, THE SOUTH SAN

JOAQUIN COUNTY FIRE AUTHORITY

CREATING THE CENCAL FIRE EMS AUTHORITY
133

JOINT POWERS AGREEMENT

This Joint Powers Agreement (“Agreement”) dated , 2025, is made and entered into by and among the City of Stockton, a Charter City and municipal corporation in the State of California (“Stockton”), the City of Lodi, a general law city and municipal corporation in the State of California (“Lodi”), and the South Stockton San Joaquin County Fire Authority, a duly organized joint powers agency under the Joint Exercise of Powers Act (“SSJCFA”), each of which may be hereinafter referred to individually as “Party” and collectively as the “Parties” or “Members.”

RECITALS

1. Government Code sections 6500 -6515 permit two or more local public entities to jointly exercise any power common to them by agreement, and authorizes the Parties to enter into this Agreement.

2. The Parties desire to establish a holistic approach to emergency medical services, including but not limited to emergency ground ambulance transportation, 9 -1-1, interfacility, and critical care transportation, which they each are authorized to provide.

3. To accomplish this goal, the Parties agree that a public -private alliance model for the provision of emergency ground ambulance transportation may be appropriate.

4. The Parties agree that having access to service determined by a single command center operating through the City of Stockton Fire Department’s Emergency Communication Division (“Stockton Fire ECD”) will ensure the right medical resources are dispatched to the most appropriate call for service.

5. The Parties believe that the joint retention of a private ambulance service provider will:
a. deliver a higher level of service and faster emergency response times for our communities with the planned addition of ambulances, paramedics, and Emergency Medical Technicians (EMTs), to better meet the needs of each Parties’ communities, and the increased demand to provide services to the expanded geographic area and locations. This joint retention will also allow greater transparency and accountability to the Parties and individuals served, because both first responders and the public will know precisely where and how ambulances are deployed to serve our community needs.

6. The Parties further believe that utilizing a platform that tracks all active incidents, responses, and real -time operations will allow the mobilization of resources to occur quickly to different county regions, which will in turn ensure that emergency resources are available to each community member when they need it most.

7. To those ends, the Parties desire to enter into a Joint Powers Agreement (“JPA”) to jointly consider the provision of emergency and non-emergency ambulance services and contract with a private ambulance service provider for such service delivery. 134

AGREEMENT

1. Agency Established.

a. Formation. Pursuant to Chapter 5, Division 7, Title 1 of the Government Code of the State of California (commencing with § 6500, as amended from time to time, the “JPA Law”), the Parties hereby create a separate joint powers agency which is named CENCAL Fire EMS Authority (the “Authority”).
b. Authorization. Each Party also certifies that the legislative body of each Party hereby authorizes, by entry into this Agreement, the joint exercise of powers common to the Parties to further the Purpose, as defined in Subsection (c) below.

c. Purpose. The purpose of the Authority is to benefit those persons served by the Parties and, if approved by the County, those persons currently in the X Zone, as more particularly described in Exhibit A, attached hereto and incorporated herein by this reference, that are currently served by other agencies, by operating an emergency medical transportation services system, including, but not limited to, emergency ground ambulance transportation, 9-1-1 emergency dispatch assistance, interfacility transportation, and critical care transportation (collectively the “Services”).

d. Limitation. Except as otherwise authorized or permitted by the JPA Law and for purposes of, and to the extent required by Government Code section 6509, the Authority is subject to the restrictions upon the manner of exercising the powers of SSJCFA.
e. Powers. The Authority is authorized, in its own name, to do all acts necessary to fulfill the purposes of this Agreement referred to in Subsection (c) above, including but not limited to, each of the following:
(1) Make and enter contracts, including, but not limited to, contracting with San Joaquin County EMS Agency (the “EMS Agency”) to serve as the EMS provider under the EMS Agency’s plan and contracting with ambulance service providers to assist with delivering such services. (2) Incur debts, liabilities, and obligations; provided that no debt, liability, or obligation of the Authority is a debt, liability, or obligation of any Party except as separately agreed to by a Party in writing, agreeing to be so obligated.
(3) Acquire, hold, construct, manage, sell, or otherwise dispose or real and personal property by appropriate means, excepting only eminent domain.

(4) Receive contributions and donations of property, funds, services, and other forms of assistance from any source.
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(5) Sue and be sued in its own name.
(6) Employ agents and employees.
(7) Lease real or personal property as lessee or lessor. (8) Receive, collect, invest, and disburse monies.
(9) Issue revenue bonds or other forms of indebtedness, as provided by law. (10) Carry out other duties as required to accomplish other responsibilities as set forth in this Agreement.
(11) Assign, delegate, or contract with a Party or third party to perform any of the duties of the Board, including but not limited to, acting as administrator for the Authority.
(12) Exercise all other powers necessary and proper to carry out the provisions of this Agreement.

These powers will be exercised in the manner provided by applicable law and as expressly set forth in this Agreement.
f. Appointment of Administrating Member . Each member shall serve as the Administrating Member on a rotating basis. As of the Effective Date of this Agreement, SSCJFA shall automatically be appointed as the Administrating Member and shall serve for two (2) years.

The position of Administrating Member shall alternate between a representative of SSJCFA and Lodi every two (2) years (the “Rotation Schedule”). SSJFCA and Lodi shall have the discretion to delegate the Administrating Member duties to any person employed by or contracted with each of them. The Rotation Schedule may be amended at the discretion of the Board from time to time.

The Administering Member shall include, but not necessarily be limited to, the following duties:

(1) Day-to-day work of the Board including agenda preparation. (2) Scheduling and preparation for regular and special meetings of the Board.
(3) Coordination of Members to accomplish Board directives and the purposes and intent of this Agreement.
(4) Other tasks and responsibilities, as may be directed by the Board from time-to-time.

g. Appointment of Treasurer. City of Stockton shall serve as the Treasurer for the Authority. Any employee, volunteer, elected official, contractor, or agent of the City of Stockton delegated the duties of Treasurer is the exclusive agent of the City of Stockton and shall have no agency relationship with the Authority or be entitled as a beneficiary, directly or otherwise, of this Agreement. The Treasurer 136
shall perform such duties and responsibilities specified in Government Code §§ 6505.5 and 6505.6.
h. Unless otherwise expressly provided herein, nothing contained in this Agreement shall be construed as creating an employment, agency or partnership relationship between the Authority and any agent, employee, contractor, volunteer, or elected official of any Member. The Authority shall have the right to control the Administrating Member and Treasurer only insofar as the result of that Member’s services rendered pursuant to this Agreement; however, the Authority shall not have the right to control the means by which any Member accomplishes their respective obligations pursuant to this Agreement.

2. Governance.

a. Board of Directors.
(1) The Authority shall be governed by a three-member Board of Directors. (2) Each Party shall appoint one (1) of its legislative body members as a primary Director (“Primary Director”) and two (2) alternate Directors – “First Alternate” and “Second Alternate.” Alternate Directors shall serve in the absence of the Primary Director in the order of availability by First Alternate and then to Second Alternate.
(3) Upon appointment of the primary and alternate Directors, each Party shall deliver to the Administrating Member a written notification identifying its primary and alternate Directors. Until such notification is delivered to the Administrating Member, the Authority shall not recognize the appointee(s) and any previous appointments shall remain in effect.
(4) The Board of Directors is responsible for:
(i) Providing recommendations to the governing bodies of the Parties regarding the addition of new parties to this Agreement; and (ii) Approval of the annual budget and assessment schedule of the Authority.

(5) The Board of Directors may establish rules governing its own conduct and procedure, including Board Bylaws and Policies that are consistent with this Agreement

(6) A quorum for the transaction of all business by the Board of Directors shall exist when all Primary Directors (100%) are present, or Alternate Directors as may be necessary, as defined in Section 2(a)(2) above. 137
(7) No one serving on the Board of Directors shall receive any salary or compensation from the Authority. However, with Board approval a Director or alternate Director may be reimbursed for reasonable expenses incurred in the conduct of the business of the Authority.

(8) At its annual organizational meeting, the Board of Directors shall:

(i) Select one (1) of its Directors to serve as Chairperson of the Board of Directors and one Director to serve as the Vice Chairperson of the Board until the next annual meeting; and

(ii) Establish a regular meeting schedule for the coming year.

Unless waived by the Board of Directors, the Board of Directors shall schedule at least two (2) regular meetings per year. b. Committees.
(1) The Board has the authority to create an Executive Committee as necessary to carry out the purpose of this Agreement.
(2) The Board has the authority to create other committees as necessary to carry out the purpose of this Agreement.
c. Voting.

(1) Board of Directors
(i) Each member of the Board of Directors shall have one (1), equal vote.

(ii) A vote may only be cast by that Party's Director (primary or alternate) who is physically present (or is lawfully present via teleconference).
(iii) Board action shall require a simple majority vote unless the decision is financial in nature, in which case a unanimous vote is required. For purposes of this Agreement, the phrase “financial in nature” shall mean any decision with financial consequences to any Party or in which liability may be incurred.

d. Vacancies.

A vacancy shall immediately occur in the office of any director of the Board of Directors, upon the resignation or death of such person holding such office, or upon his/her ceasing to be an officer or employee of the Party that appointed him or her. Parties shall fill any vacancies arising using the appointment procedure in Section 3.
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3. Fiscal.
a. Dispatch and Dispatch-Related Services. Dispatch and dispatch related service costs will be billed to the Authority through a separate agreement with Stockton Fire Department Emergency Communication Division (“Dispatch Center”).
b. Costs and Expenses. The Parties recognize that, from time -to-time, the Authority may incur costs and expenses which are not directly related to the provision of services to Parties. Each Party shall pay its pro -rata share by population of the areas served (including contract districts) by each Party as defined in Section 3.c., below(“pro -rata share”), of such costs and expenses upon approval by the Board. The Parties agree to meet and confer at least once every five (5) years to re-evaluate the pro-rata share. c. Ongoing Financial Obligations. It is the Parties’ intention that the ongoing expenses of the Authority will be funded with revenue derived from the provision of Services, if and when the Services are operational. The Authority will incur expenses until such Services are operational and there may be circumstances where those revenues cannot be used for such purposes or where the revenues are insufficient to meet the Authority’s obligations. In those cases, each Party shall be responsible for its pro-rata share of any obligation that was incurred at a time when that entity was a Party. This shall include, by way of illustration and not limitation: long-term debt and multi-fiscal-year debt related to the above-described Services, Costs and Expenses.
(1) Pro-rata share shall be determined by using each Party’s population served, including any contractual fire districts. Populations would be determined for the cities by using the U.S. Census Bureau’s data and San Joaquin LAFCO for the fire districts. This pro-rata share shall be re-evaluated when the new 2030 U.S. Census Bureau data is released.

The initial pro-rata share for each Party shall be as follows :

City of Stockton- 65.9%
South County- 21.5%
City of Lodi- 12.6%.
(2) The pro-rata obligation of each Party is immediately binding on the Party at the time the obligation is incurred.
(3) In order to fund the Authority’s initial startup costs, each Party agrees to make an initial pro rata contribution to cover the initial start up costs and expected expenses during the first 120 days following award of the award of an EMS provider contract by the EMS Agency. Anticipated 139
costs include: Franchise Fee, dispatch costs, insurance premiums, and administrative costs for an estimated total of $2,237.000.

d. Excess Revenues
(1) The Parties anticipate that the operation of the Services may generate revenues that exceed the costs of operating the Services. The Authority shall use such revenues in the following order of priority:

(i) To reimburse the initial funding contributed by each Member Agency pursuant to Section 3.c.(3) of this Agreement; then

(ii) To improve the Services, such as improvement service levels and making infrastructure investments that are in the best interests of the areas receiving the Services.

(iii) Maintenance of any necessary budget reserve limit established by the Board.

(iv) Any remaining excess revenue will then be distributed at the close out of each budget cycle to the Parties in accordance with their pro- rata share defined in Section 3(b) above.

e. Billing.
(1) If there is an underfunding of the Authority, the Treasurer of the Authority shall bill each Party for its Fiscal Contributions quarterly, unless a request is made and approved for bi-annual billing. The Parties shall pay the bill within sixty (60) days of receipt.

(2) Any Party whose bill has not been paid within sixty (60) days may be deemed by the Authority to be in default and required to pay interest on the unpaid balance, not to exceed one (1) percent per month ("Defaulting Party").

(3) The members of the Authority not in Default, have the power, at their option, to take the following action against a Defaulting Party:

(i) Commence an action in its own name against the Defaulting Party to recover the amount of the obligation due to the Authority hereunder; or

(ii) Suspend the voting rights of the Defaulting Party until all Fiscal Contributions have been paid; or

(iii) Involuntarily terminate the Defaulting Party as set forth in Paragraph 6, below.
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f. Accountability and Audits. The Authority shall be strictly accountable for all funds and shall report all receipts and disbursements, as required by Government Code section 6505.

(1) An independent audit of the Authority shall be undertaken annually by an independent, certified public accountant, in compliance with Section 6505 of the Government Code.
(2) Audit costs to be paid by the JPA and each Party is responsible for its pro rata share of any overage.

4. Liability, Indemnification, and Insurance.

a. No Vicarious Liability . Pursuant to Government Code section 820.9, as may be amended from time to time, members of the Board of Directors for the Authority are not vicariously liable for injuries caused by the act or omission of the Authority or any of its members. Nothing in this section exonerates an official from liability for injury caused by that individual's own wrongful conduct. Nothing in this section affects the immunity of any other public official.

b. Indemnity by Parties . Except as provided in Section f below, from and after the Effective Date of this JPA, the Authority shall defend, indemnify, and hold harmless the Members and their officers, employees, agents, and representatives with respect to any loss, damage, injury, claim, demand, litigation, or liability and all expenses and costs relating thereto (including attorneys' fees) arising out of or in any way related to the performance of services pursuant to this Agreement.

c. Insurance. The Authority shall procure and maintain general liability, auto, professional, and worker's compensation insurance policies with limits set out in Exhibit B, as amended from time to time by the Board of Directors, attached hereto and incorporated herein by reference. The Parties agree to pay their pro- rata share of the first year of insurance policy costs out of each Party’s initial contribution to the Authority. To the extent that the Authority or any Party does not have an employee, workers compensation coverage shall not be required.

The Authority and each Party may satisfy the insurance requirement set forth herein with an adequate self -insurance program or participation in a public agency insurance pool.

d. Indemnification by Members to the Authority . From and after the Effective Date of this JPA, each member shall defend, indemnify, and hold harmless the Authority, its Directors, officers, employees, agents, and representatives, each other individual member, and its respective officers, employees, agents, and 141
representatives with respect to any loss, damage, injury, claim, demand, litigation, or liability and all expenses and costs relating thereto (including attorneys' fees) arising out of the member’s actions or omissions prior to the Effective Date of this JPA, that related to the provision of emergency and non- emergency dispatch services and related operations.

e. Employment of Personnel and Administration of Services.

The Authority will contract with a Member to serve as the “Employer of Record” and provide all employees and employee services to the Authority. In the event that the Authority elects to employ its own personnel, the Board shall appoint an officer to prepare a personnel plan (the “Personnel Plan”), with the assistance of staff and consultants of the Members, detailing how the Authority would employe its own personnel. The Personnel Plan shall detail the treatment of matters such as transfer of employees from the Members to the Authority (and the transfer’s effect on existing collective bargaining agreements, the allocation of pension liabilities and obligations, the treatment of accrued leave, civil service and seniority rights, and other employee benefits and rights), risk management, and other administrative matters required at the start-up of a new organization. The Personnel Plan shall be presented to the legislative bodies of the Members. Upon their receipt of the Personnel Plan, the Members agree to meet and confer in good faith to negotiate the terms of the Authority employing personnel. Thereafter, Members and the Authority shall enter into an agreement regarding the terms of employing personnel (the “Personnel Agreement”).

Until such time as personnel are transferred to the Authority, the Authority pursuant to this Section, the Employer of Record shall assign the functions of its personnel to the Authority.

All of the privileges and immunities from liability, exemptions from laws, ordinances and rules, all wages and benefits, disability, workers compensation, and other benefits which apply to the activities of officers, agents, or employees of the Members when performing their respective functions shall apply to them to the same degree and extent while engaged in the performance of any of the functions of duties under this Agreement.

5. Termination/Withdrawal/Dissolution.

a. Termination
(1) This JPA is entered into for the purposes stated in both the Recitals and Section 1(c) above. The first step in that process is to enter into contract with a private partner that would provide emergency and non - emergency ambulance services if the Authority is the selected provider in the EMS Agency’s process. The second step is for the Authority and the private partner to participate in the EMS Agency’s process to select 142
a provider of emergency services. If the Authority or a majority determines that either step was unsuccessful, the JPA shall automatically terminate, subject to following all applicable statutory procedures.
(2) This Agreement may be terminated with respect to a Party for material non-compliance with provisions of this Agreement upon a no less than a two-thirds vote of the Board of Directors, excluding the vote of the Party subject to possible termination. Prior to any vote to terminate this Agreement with respect to a Party, written notice of the proposed termination shall be provided. The written notice of proposed termination shall identify the specific provisions of this Agreement that the Party has allegedly violated and provide notice of the right to provide a written response within ten (10) business days, either evidencing compliance with the terms of this Agreement or a plan to cure the default and a reasonable timeline acceptable to the Authority within which the Party subject to termination will diligently prosecute the same to completion.

(3) If the Party subject to possible termination is unable to provide satisfactory evidence of their compliance with the Agreement or ability to cure the default, the Party subject to possible termination shall have the right to respond to the reasons for the proposed termination at the Board of Directors meeting prior to any vote regarding termination.

Any vote for termination by the Board of Directors shall be at least thirty (30) business days after delivery of the written notice identified in Paragraph 9(a), above.

(4) Any Party that is involuntarily terminated in accordance with Paragraph 9(a), above, shall remain responsible for their pro -rata share of all outstanding debts and obligations that were incurred while they were a Party. This shall include, by way of illustration and not limitation: long- term debt, pension obligations and multi-fiscal- year debt.

b. Withdrawal.

(1) Any Party may withdraw as a party to this Agreement should the withdrawing Party determine, in its sole discretion, that the conditions placed on any proposed contract between the EMS Agency and the Authority are untenable or undesirable. The Parties acknowledge and agree that, should one Party withdraw, the Authority shall continue to operate and will not automatically terminate.
(2) Any Party may withdraw as a party to this Agreement as follows:
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(i) Notice of Intent to Withdraw shall be given not less than eighteen (18) months prior to the proposed date that the withdrawal shall take effect (“Notice Period”).
(ii) Notice of Intent to Withdraw shall be in writing and addressed to the Chairperson of the Board of Directors of the Authority at its primary address and by electronic mail.
(iii) Notice of Intent to Withdraw must be accompanied by a proof of service that notice was sent by certified mail with return receipt requested. Notice shall be considered given on the date of service. (3) No withdrawing Party shall be entitled to any payment for its interests or assets in the Authority upon withdrawal.
(4) A withdrawing Party must:

(i) Pay their full pro-rata share of all outstanding debts and obligations that were incurred while they were a Party. This shall include, by way of illustration and not limitation: long-term debt and multi - fiscal-year debt.

(ii) Or, execute a contract with the Authority to pay for all outstanding debts and obligations that were incurred while they were a Party (5) Prior to the end of the Notice Period, the remaining Members shall meet and confer in good faith to renegotiate the terms of this Agreement to properly contemplate the participation of only those remaining members.

c. Dissolution.

(1) If this Agreement is terminated and/or dissolved by the Board by a two- thirds (2/3) vote:

(i) No assets may be distributed (divided or returned) until all outstanding debts and obligations have been resolved. Resolved means that each Party has:
(ii) Either paid their pro -rata share of all outstanding debts and obligations that were incurred while they were a Party; or

(iii) Executed a contract with the Authority to pay for all outstanding debts and obligations that were incurred while they were a Party. (iv) All assets of the Authority will be distributed in proportion to the contributions of the Parties during the fiscal year of dissolution. 144

6. Enforcement.

The Authority is hereby given authority to enforce this Agreement against the individual Parties. If suit is necessary to enforce any of the provisions of this Agreement, the Authority and the Parties shall pay their own attorney fees, regardless of who is the prevailing party.

7. Debts.
a. To the furthest extent permitted by law, the debts, liabilities and obligations of the Authority shall not be the debts, liabilities, and/or obligations of the Parties.

8. Miscellaneous
a. Provisions Required by Law Deemed Inserted.

(1) This Agreement is subject to all provisions of the Constitution and laws of California and the United States which: (1) govern, control, or affect the Authority and/or the Parties; or (2) the property, funds, operations, or powers of the Authority and/or the Parties.

(2) Such provisions are by this reference made a part of this Agreement.

(3) Any provision required by law to be included in this Agreement shall be deemed to be inserted.
b. Amendment. This Agreement may be amended and the Authority may be terminated or its power may be modified, restricted, or eliminated by supplemental agreement executed by all Members at any time, with approval from each respective governing body. A proposed amendment must be submitted to each Member at least thirty (30) days in advance of the date when the governing body will consider it.

c. Notices. Notices to Members shall be sufficient if delivered to the Clerk and Fire Chief for the each Member.

d. Assignment. This Agreement may be amended, and the Authority may be terminated, or its power may be modified, restricted, or eliminated by supplemental agreement executed by all Members at any time, with approval from each respective legislative body.
e. Severability. Should any part, term, or provision of this Agreement be decided by the courts to be invalid or in conflict with any law of the State of California, or otherwise be rendered unenforceable or ineffectual, the validity of the remaining parts, terms, or provisions shall not be affected and shall remain effective and enforceable.
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f. Non-Discrimination. The Parties to this Agreement shall comply with all applicable federal, state, and local laws, rules, and regulations regarding nondiscrimination in employment or provision of services. All nondiscrimination laws, rules, or regulations required by law to be included in this Agreement are incorporated herein by this reference. g. Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of California and venued in San Joaquin County.
h. Force Majeure . Neither the Authority nor any of the Parties shall be held responsible or liable to any other Party or the Authority for any loss, damage or delay caused by accidents, strikes, lockouts, fire, flood, declared public health emergencies, act of civil or military authority or by insurrection or riot or by any other cause which is beyond its control.
i. Form of Approvals . Whenever an approval is required in this Agreement, unless the context specifies otherwise it shall be given by resolution duly adopted by the respective governing body of each member agency and in the case of the Authority, by resolution duly adopted by the Board. j. Section Headings. All section headings contained herein are for the convenience of the Parties and reference only and are not intended to define or limit the scope of any provision of this Agreement.
k. Counterparts. This Agreement may be executed in several counterparts, each of which is an original and all of which constitutes but one and the same instrument.
l. Effective Date. This Agreement becomes effective on the date the last required signature is executed, following separate approvals by the legislative bodies of each Party.

[Signatures on Following Page]
146
IN WITNESS WHEREOF, the undersigned public agencies have set their signature on the respective dates set forth below, which have been executed and attested by their duly authorized officers, and their official seals to be hereto affixed, as of the day and year first above written.

CITY OF STOCKTON: CITY OF LODI

By: By:

Will Crew, Acting City Manager Scott R. Carney, City Manager

Date: Date:

ATTEST: ATTEST:

By: By:

Katherine Roland, CMC, CPMC Olivia Nashed, City Clerk City Clerk

Approved as to Form: Approved as to Form:

Lori Asuncion, City Attorney Katie Lucchesi, City Attorney

SOUTH SAN JOAQUIN COUNTY FIRE AUTHORITY:

By:

Randall Bradley, Fire Chief

Date:

Approved as to Form:

Tom Hallinan, General Counsel

147
148
EXHIBIT B:

Insurance Requirements
(Joint Powers Authority)

MINIMUM SCOPE AND LIMIT OF INSURANCE

Coverage shall be at least as broad as:

1. Commercial General Liability (CGL): Party shall carry General Liability Insurance covering all operations performed by or on behalf of Party providing coverage for bodily injury and property damage with a combined single limit of not less than two million dollars ($2,000,000), per occurrence. The policy coverage shall include:
a) Premises operation and mobile equipment.
b) Products and completed operations.
c) Broad form property damage (including completed operations) d) Explosion, collapse, and underground hazards.
e) Personal Injury
f) Contractual liability
g) $4,000,000 general aggregate limit

2. Automobile Liability: Primary insurance coverage shall be written on Insurance Services Office Business Auto coverage form for all owned, hired, and non-owned automobiles or symbol 1 (any auto). The policy shall have a combined single limit of not less than one million dollars ($1,000,000) for bodily injury and property damage, per occurrence.

If party transporting one or more non -employee passengers in performance of services, the automobile liability policy shall have a combined single limit of two million dollars ($2,000,000) for bodily injury and property damage per occurrence.

3. Workers’ Compensation / Employers Liability
A program of Workers’ Compensation insurance or a State -approved Self -Insurance Program in an amount and form to meet all applicable requirements of the Labor Code of the State of California, including Employer’s Liability with limit of no less than $1,000,000 per accident for bodily injury or disease, covering all persons, including volunteers, providing services on behalf of Party and all risks to such persons under this agreement.

4. Cyber Liability Insurance, with limits not less than $1,000,000 for each occurrence or event with an annual aggregate of, $2,000,000 covering privacy violations, information theft, damage to or destruction of electronic information, intentional and/or unintentional release of private information, alteration of electronic information, extortion, network security, breach response cost, and regulatory fines and penalties.

5. Additional Insured Status - The Entity, its officers, officials, employees, and volunteers are to be covered as additional insureds on the CGL policy with respect to liability arising out of work or operations performed by or on behalf of the Contractor including materials, parts, or 149
equipment furnished in connection with such work or operations. General liability coverage can be provided in the form of an endorsement to the Contractor’s insurance (at least as broad as ISO Form CG 20 10 11 85 or if not available, through the addition of both CG 20 10, CG 20 26, CG 20 33, or CG 20 38; and CG 20 37 if a later edition is used).

Other Insurance Provisions

The insurance policies are to contain, or be endorsed to contain, the following provisions:

Umbrella or Excess Policy
The Member may use Umbrella or Excess Policies to provide the liability limits as required in this agreement. This form of coverage will be acceptable provided that all of the Primary and Umbrella or Excess Policies shall provide all of the coverages herein required, including, but not limited to, primary and non-contributory, additional insured, Self-Insured Retentions (SIRs), indemnity, and defense requirements. The Umbrella or Excess policies shall be provided on a true “following form” or broader coverage basis, with coverage at least as broad as provided on the underlying Commercial General Liability coverage.

Notice of Cancellation
Each insurance policy required above shall provide that coverage shall not be canceled, except with notice to the Authority (minimum 30 days written notice)..

Acceptability of Insurers
Coverage is to be placed with insurers authorized to conduct business in the state with a current A.M. Best’s rating of no less than A:VII, unless otherwise acceptable to the Authority.

April 1, 2025
Agenda Item 3.B

RECOMMENDATION
The Tracy Finance Committee recommends that the City Council receive a report on the Five-year forecast for the City’s General Fund and provide direction regarding the City’s preliminary Fiscal Year 2025-26 Operating and Capital Budget.

EXECUTIVE SUMMARY
This item provides a report on the five-year forecast for the City’s General Fund. A financial forecast allows the creation of a sustainable financial vision for the City. The forecast is a dynamic tool that allows for consideration of the most reasonable outcomes. The City’s forecast will continue to be updated annually to allow the City to better anticipate future challenges and opportunities, thereby creating a solid foundation to make strategic decisions about the City’s financial position. The forecast reflects economic estimations and assumptions based upon what is known today and provides guidance on what may be coming ahead. It should be used to provide guidance and policy direction to staff related to the development of the operating, capital, and liabilities budget.

In addition to providing the report, staff seeks direction on the City’s preliminary Fiscal Year (FY) 2025-26 Operating and Capital Budget.

BACKGROUND AND LEGISLATIVE HISTORY
The City Council remains committed to maintaining fiscal sustainability while providing high quality public safety, public works, and community development to meet its existing and future needs. In 2023, the City Council adopted a two-year Strategic Priority Work Plan and identified desired outcomes related to the City’s social, economic, organizational, and environmental priorities. The City Council adopted a governance strategy designed to enhance fiscal stability, retain and attract new talent, improve the use of technology, and enhance transparency for the betterment of the Tracy community. In response, a set of strategic priorities, goals and objectives were adopted to carry out the vision of the City Council. The Council’s strategic priorities, along with their goals and objectives, are the foundation for development of the budget and forecast.

The City prepares a five-year fiscal plan annually as a tool for the Council to meet these strategic priorities and budget development. The City’s fiscal strategy includes the creation of a financial forecast to evaluate current and future fiscal conditions and is to guide policy and programmatic decisions. In building the multi-year forecast, the City uses information based on past, current, and projected financial conditions and has developed and maintains several tools to provide analytic measurements of future fiscal impacts.

First, the forecast includes two separate actuarial studies to analyze the impacts of employee retirement benefits on the City’s finances over time. One is focused on the fiscal impacts of pension and one on retiree medical costs. These reports are updated every 2-3 years based on Government Accounting Standards Board (GASB) rules.

Agenda Item 3.B
April 1, 2025

Secondly, the City conducts three separate studies on revenue forecasts based on economic trends surrounding short and long-term retail and housing markets. The City overlays each of these studies into the planning documents to create a multi-layered approach to fiscal analysis and planning.

The goal of the City’s annual Operating and Capital budget is to provide a plan that allocates resources to meet the needs and desires of Tracy’s residents. It balances City revenues and costs with community priorities and requirements. In preparing for the FY 2025-26 Operating and Capital Budget, City staff reviewed the FY 2024-25 amended budget and estimated the expenditures and revenues anticipated for the upcoming fiscal year, FY 2025-26. These trends are then applied to the short term (first year) to see projected outcomes. It reflects current market conditions both for revenues and expenditures. The long-term (5-year) forecast applies more conservative revenue and expenditure trends that are indicative of the restrictiveness of revenues while applying current spending to measure the City’s ability to sustain a fiscally balanced budget.

ANALYSIS

Economic Outlook
Tracy’s economy continues to experience consistent growth, supported by diverse sectors such as logistics and manufacturing. Tracy’s strategic location between the Bay Area and Central Valley has continued to be beneficial for both business and residential growth.

The transportation linkage to the Tri -Valley and the Silicon Valley with the ACE line and future Valley Link plan, combined with investments into downtown, have allowed the City to emerge as a great place to live, work, and play.

Tracy’s economy is diverse with over 4,000 businesses. In addition to many supply chain and e - commerce businesses in its business parks, over half of the businesses are considered small businesses, which are the backbone of our community. The City of Tracy has experienced new job growth over the last three years. As a result, Tracy’s unemployment rate is at 4.6%, below that of the County and State, and the median household income is $117,761.

The housing market in Tracy remains healthy, with consistent growth year over year. Currently, there are 30,610 completed housing units in the City with the median home price in being $652,500, trending slightly lower than the prior year’s median price of $700,000. New home sales continue to be the primary driver of residential home sales, as the inventory of existing homes remains limited.

The City is focused on implementing the Economic Development Strategic Plan, a document serving as a roadmap for the next ten years with key strategies to help expand, maintain, and protect the City’s tax base by bringing new retail amenities to the city, getting resources into the hands of small businesses, and partnering with advanced industries. Businesses on the horizon include Popeyes, Starbucks, Crunch Fitness, and Trader Joe’s. Tracy will also be the home of the first net zero Taco Bell restaurant, complete with carport canopies and electric vehicle charging stations.

The construction and planning of several regional hotels—Marriott Courtyard, Tru by Hilton, Extended Stay America Premier Suites, Candlewood Suites, Hilton Garden Inn, and Cambria Hotel and Event Center—are contributing to our tourism industry with direct and indirect economic benefits, including increases to our transient occupancy tax revenues. Another planned project includes Tracy Assisted Living and Memory Care.

Agenda Item 3.B
April 1, 2025

Tracy is leading as a test bed for innovation, entrepreneurship, and investment in clean and green technology. Heirloom Carbon and Tracy Renewable created 20 new jobs in San Joaquin County, built 20,000 sq. ft. of new or expanded space, or made a $1 million capital investment. Heirloom Carbon is the nation’s first commercial direct carbon removal facility fully powered by renewable energy. The technology uses abundant, easy -to-source, inexpensive limestone to pull CO2 from the air. Tracy Renewable Energy cleans and discharges wastewater for companies in Northern California through renewable energy. The City’s support in attracting these types of businesses contributes to reducing emissions, reaching carbon neutrality goals, and creating jobs, research and development, and partnership opportunities that provide economic benefits for all.

With that being said, the economy has natural growth and contractions that are outside of the City’s control. Even with solid financial planning and long-term forecasting, not all future outcomes can be predicted. Knowing that, the City has positioned itself well by building financial reserves, adopting strong fiscal policies, and passing important revenue measures to support City services. However, even with these proactive steps, the City, like other agencies, will continue to be faced with unmet needs in an environment where resources are limited.

At the State and Federal level, the impacts of legislative changes remain unknown. The forecast is based on current laws and does not reflect any future policy changes that may be implemented by the new Federal administration, including tariffs, immigration, and grant funding. Staff will continue to monitor legislative changes and will report out on any significant impacts.

Creating a forecast has helped identify future revenue and expenditure trends that may have an immediate or long-term influence on government policies, strategic goals, funding obligations, or community services. The City uses the five-year financial forecast as a management tool to best anticipate inflows and outflows of City resources in the short- term, then projects out these trends into the longer five-year model to ensure budget sustainability. Modeling of long-term strategies also allows marginal shifts to occur over time to maintain healthy reserves while still actively improving services to the public. The forecast has become an integral part of the annual and mid- year budget process.

General Fund Fiscal Sustainability:

In FY 2021-22, a change in tax reporting by a predominant sales tax producer shifted the tax allocation from a statewide allocation through the County sales tax pool where the tax was distributed pro-rata throughout the State to a local sales tax allocation based upon the businesses’ point-of-sale or fulfillment of the sale. The change has had a significant impact on the City’s General Fund revenues; nearly doubling the Sales Tax revenues for the City.

However, this increase in revenue is not guaranteed as there is significant interest to have these funds reallocated to other jurisdictions. In 2022, CDTFA published a study related to sales tax specific to e-commerce, which reviewed the impacts of changing the method of sales tax allocation from the point of fulfillment to the point of delivery. The study showed that if this change occurred, the impact to the City would be 25% or greater from the City’s current allocation. Through the League of California Cities, a City Manager’s sales tax working group was formed to provide input on possible legislation change in relation to sales tax specific to e-commerce.

Through the working group, a recommendation was made to the Cal Cities board to split the allocation by 50% based on point-of-sale and 50% based upon point-of-destination, with a +/- of 10%. The recommendation also included a five-year phase in period. While no decision has been made, staff is tracking possible changes and their impacts. The forecast reflects a drop in sales tax beginning in FY2028-29, which is when it is estimated that the first year of a reduction could begin.

Agenda Item 3.B
April 1, 2025

Since the FY 2022-23 operating budget, Council has adopted a set of strategies for use of the General Fund surplus to City Council, which included prepayment of CalPERS and retiree medical liabilities, funding to cover deferred maintenance for streets and parks, and a 3% increase to City services and programs. These fiscal sustainability strategies are continued with this forecast through FY2027-28.

In the long-term forecast, all but the program increases will stop being funded in FY 2028- 29, the same year the potential Sales Tax revenues could be reduced. As a result, the five-year forecast shows that the General Fund is fiscally sustainable with the revenue growth from other tax sources and reduction in one-time funding commitments.

Table 1: Council Adopted Fiscal Sustainability Strategies

Estimated

On-Going Revenue % of
Revenues
FY25/26 FY26/27 FY27/28
General Fund Revenues* $148,231 $152,276 $155,879
CalPERS Pre-funding 2% $2.9M $3.0M $3.1M
Retiree Medical Pre-funding 2% $2.9M $3.0M $3.1M
Road Improvements - Deferred Mtc. 3% $4.4M $4.5M $4.6M
Parks - Deferred Mtc. 2% $2.9M $3.0M $3.1M
City Services and Program Increase 3% $4.4M $4.5M $4.6M Total $17.5M $18.0M $18.5M
*Revenues defined as total General Fund revenues less Measure-V Sales Tax and Transfers In

General Fund Fiscal Highlights:

Revenue Trends
Property Tax: New housing units being added to the assessor's roll, coupled with commercial developments in the community, and higher property values, have led to a steady increase in local property tax revenues over the last few fiscal years. In 2024, new construction continued to thrive in Tracy.

Small declines in interest rates increased demand for new home sales. In 2024, Tracy saw an increase in sales of single-family residential homes of 9%. This is largely due to the combination of a lack of inventory of existing homes and Tracy’s affordability in comparison to bay area home prices.

Commercial and industrial real estate sales have continued to see moderate growth. As property tax revenue lags 12-18 months behind market conditions, the City estimates FY2025-26 will see an estimated increase of 2-3%. Property tax will begin to grow in FY2026-27 by 4-5% annually over the following 4 years based on anticipated market turnover and valuation growth. In the long-term (5-year term), the City will see property tax slow to the 2% annual growth cap as allowed under Proposition 13.

Sales Tax (Bradley Burns): Over the last three fiscal years, the City’s sales tax allocation from Bradley Burns rapidly increased as a result of changes from the CDTFA. The rapid growth seen in prior fiscal years has begun to slow as rising interest rates and inflation have slowed consumer spending. FY 2025- 26’s sales tax allocation is projected to grow by 2.5%. FY 2026-27 is also projected to gain a moderate amount of growth in the 2-3% range.

Agenda Item 3.B
April 1, 2025

Sales Tax from Bradley Burns is now nearly 50% of the City’s total General Fund revenues because of this recent taxpayer allocation change. The City is currently tracking a policy discussion occurring within the League of California Cities to consider supporting legislation that would modify the allocation of Bradley Burns (1% of State Sales Tax) for e- commerce businesses statewide. This has the potential to have a significant impact to the City’s Sales Tax revenues and its long-term forecast. As a result, staff continues to recommend that the 5-year forecast only shows the current Bradley Burns Sales Tax revenues from ecommerce in the short-term, until FY2027-28. The forecast has a phased decline of $5M in FY 2028-2029, and a $10M decline in FY 2029-30 to reflect the start of phased risk of the Sales Tax revenues being reduced. By placing this decline in the forecast, the City will have the flexibility to see the potential outcomes on a conservative basis to understand what these future impacts could generate.

Measure V Sales Tax (Local Sales Tax): In November 2016, the City Council and voters passed an additional ½ cent local sales tax (known as Measure V) that has a twenty-year sunset (expires April 2037).

Over the last five years, the City Council has adopted several resolutions, which prioritized Measure V Sales Tax to fund multiple amenities located in the City: The Aquatic Center, Multigenerational Recreation Center, Legacy Fields Sports Complex, Ritter Family Ball Park, and the Nature Park. These capital expenditures demonstrate the City Council’s Strategic Priority for improved Quality of Life and Economic Development.

Transient Occupancy Tax (TOT): The Transient Occupancy Tax (TOT), is a tax collected on hotel stays within the City of Tracy. The TOT is currently 10%. With tourism statewide remaining strong, the City has seen TOT revenues remain steady. There are currently two new hotels under construction and three approved, but not yet constructed. The City is also in review of an additional three proposed hotels. It is expected that the two under construction will be completed in the upcoming fiscal year and as a result, the City can likely expect to see an increase in TOT revenue.

Business License and Cannabis Tax: In November 2022, voters approved the modernization of the Business License Tax. The updated tax went into effect on July 1, 2023 and is based upon a percentage of gross receipts, depending on business category. The updated tax increased Business Tax revenues by approximately $6M. In August 2024, after public discussion and workshops, the City Council amended the Business Tax, reducing the tax rates to provide relief to the business community. The updated tax is anticipated to provide $3.5 million in tax revenue and provides vital funding for community priorities, such as improving City streets and roads, public safety, and recreation programs.

Additionally, Cannabis tax is an overlay component of business license tax classifications. The City Council and voters approved a Cannabis Tax in 2020, which provided a gross receipts tax on retail, distribution, and manufacturing and a square foot tax on cultivation. In July 2023, Tracy’s first Cannabis business opened. There are currently five Cannabis businesses open in Tracy. Like the Business Tax, Cannabis taxes are based on the gross receipts of the business. It is estimated that FY2025-26 Cannabis revenues will be $1 million.

Expenditure Trends & Assumptions

Because it takes people to provide services, the City’s General Fund personnel costs are more than 50% of operating expenses. Drivers of cost as it relates to personnel expenses over the forecast horizon include but are not limited to: changes in labor agreements, health care, and CalPERS normal cost and unfunded liability. The City’s current labor agreements expire on June 30, 2025 and it is currently unknown what the cost of the new agreements will be.

Agenda Item 3.B
April 1, 2025

$170

$165

$160

$155

$150

$145

$140

$135
FY25
FY26
FY27
FY28
FY29
FY30
Projected
Proposed
Forecast
Forecast
Forecast
Forecast
Revenues Expenditures

The General Fund forecast is based upon the assumption of full staffing levels. Although some attrition can be expected, it is difficult to rely upon personnel savings to reduce annual expenditures. In addition, it is uncertain when and where the vacancies may occur and their potential impact on service demands. It is not a good practice to rely upon salary savings as a permanent cost saving measure.

The General Fund forecast includes an inflation factor of 3% for non-personnel expenses in the short term and flattens to 1-2% in the long-term. This factor is used to maintain the current buying power of the City.

The inflation factor may result in the City’s costs rising higher than the forecast and reducing the overall buying power. The City will continue to monitor the inflation rate on goods and services as it has historically outpaced the City’s revenue growth due to regulatory restrictions on revenues. Staff will continue to monitor the costs of goods and services and their impacts on a quarterly basis.

Chart 1: 5-Year Revenue and Expenditure Projections

(In Millions)

Agenda Item 3.B
April 1, 2025

GENERAL FUND RESERVES: The City’s General Fund is projected to have a surplus for the next three fiscal years, assuming the Sales Tax revenues collected today remain in place for the next three years.

Table 2: Five-Year Forecast
(In millions)

Projected Proposed Forecast Forecast Forecast Forecast
FY25 FY26 FY27 FY28 FY29 FY30
Revenues $159 $160 $165 $168 $165 $161
Expenditures $147 $159 $164 $168 $165 $161
Surplus/Deficit $12 $1 $1 $0 $0 $0

Pre-funding Pension/Medical Leave Liabilities: Adopted in the FY2022-23 budget, the City Council approved the recommendations from City Council’s Fiscal Sustainability Ad-Hoc Committee to begin setting aside funding to pay down debt by making additional payments towards liabilities for pension and retiree medical benefits, 2% of General Fund revenues, approximately $4M each in the has been pre-funded to date. By making additional payments towards these debts, the overall balance owed declines, better positioning the City for when it expects to see a decline in revenue. The additional payments drop off in FY 2028-29 when Sales Tax is projected to decline.

Deferred Maintenance and Capital Improvement Projects: Included in the Forecast, is funding for deferred maintenance and capital improvement projects, such as road, building, and park improvement projects. Adopted fiscal sustainability strategies provide $4.5M for road improvement deferred maintenance and $3M for parks deferred maintenance. This funding drops off in FY 2028-29 when Sales Tax is projected to decline.

During the March 10, 2025 Finance Committee meeting, the Committee requested that staff return with modifications to the fiscal sustainability strategies that allow for maximization of one- time dollars over the next three fiscal years to fund deferred maintenance and prefund PERS and retiree medical liabilities. Staff is evaluating possible changes and will discuss the options with the Committee at the next Finance Committee meeting. Changes recommended by the Committee will be presented to City Council with the budget adoption.

FISCAL IMPACT
There is no fiscal impact associated with this item. However, the five-year forecast is critical in establishing financial policy. The forecasted outcome has the potential to improve or worsen.

Some potential outcomes that would improve the forecast would include higher employee vacancy rates (more vacant positions or vacancies for longer periods of time), PERS investment gains, and stronger economic development activity beyond what is included in the forecast.

Potential outcomes that could worsen the forecast include: PERS investment losses (or additional discount rate cuts), weaker revenue growth, fewer new hotels, delays, or closures in commercial activities, inflationary or recessionary losses, adjustment in labor COLAs, staffing beyond current levels assumed in the forecast, impacts from changes in Federal legislation, and unplanned, one- time expenditures.

Agenda Item 3.B
April 1, 2025

STRATEGIC PLAN

This agenda item supports Governance Strategic Goal 3: Ensure Short and Long-term Financial Sustainability.

ACTION REQUESTED OF THE CITY COUNCIL

The Tracy Finance Committee recommends that the City Council receive a report on the Five- year forecast for the City’s General Fund and provide direction regarding the City’s preliminary FY 2025-26 Operating and Capital Budget.

Prepared by: Sara Castro, Director of Finance
Reviewed by: Karin Schnaider, Assistant City Manager
Andrew Shen, Interim City Attorney
Approved by: Midori Lichtwardt, City Manager

ATTACHMENTS
Attachment A – Five Year Forecast Power Point Presentation

CITY COUNCIL

FIVE-YEAR FORECAST
GENERAL FUND UPDATE FY 2025-2030
APRIL 1, 2025
Attachment A
City of Tracy Five-Year Forecast
• Annual five-year fiscal plan to begin budget
planning process.
• Presented to Finance Committee on March 10, 2025
• Forecast incorporates:
• Council’s adopted 2023 – 2025 Strategic Priorities
• Past, current and projected financial conditions
• Known economic conditions
2 3
Agenda
 Economic Outlook
 Rev
enue and Expenditure
Trends
 Forecast
 Next Steps
Economic Outlook
4 Economic Trends - Local
• Tracy’s local economy remains stable
• Over 4,000 businesses
• 4.6% unemployment rate, lower than County/State
• Home sales have remained steady
• Low inventory of existing homes has driven new home
sal
es
• Tracy housing remains more affordable than neighboring Bay A
rea homes
• Median home price of $652,500 (December 2024)
5 Economic Trends - Local
The City adopted an Economic Development
Strategic Plan, a 10-year roadmap to maintain and
expand the City’s tax base by:
• Bringing new retail amenities
• Getting resources to small businesses
• Partnering with advanced industries
6 Economic Trends – State & Federal
• Impacts of legislative changes at the State and
Feder
al level that have unknown impacts:
• Tariffs
• Grant funding
• Immigration
• State’s budget deficit
Sta
ff will continue to monitor changes as they occur and
will report out any significant impact.
7 Revenue and Expenditure Trends
8 Revenue Trends
9 • Property Tax
• Short Term: 2-3% growth
• Long Term: 4-5% growth
• Sales Tax
• Short Term: 2.5% growth
• Long Term: 2-3% growth in fiscal years 2026/27 and
2027/28
• Estimated loss of $5M in FY 2029 and $10M in FY
2030 possible if ecommerce changes move forward
Revenue Trends, Continued
10 • Other Revenues
• Business License tax
• Short Term: 3% growth
• Long Term: 1-2% growth
• TOT
• Short Term: 10% growth
• Long Term: 15% growth
• Cannabis tax
• Short Term: 3% growth
• Long Term: 1-2% growth
Expenditure Trends
11 • Salary and Benefits
• Labor contracts expire June 30, 2025, impacts
unknown
• Short Term: 2.5% growth, based on current CPI
• Long Term: 1-2% growth
• Non-personnel
• Short Term: 3% growth for standard inflation
• Long Term: 1-2% growth
• Current inflation rates are approximately 2.5%
Council Adopted Fiscal
Sustainability Strategies
$2.9M CalPERS (2% of revenues*)
$2.9M Retiree Medical (2% of revenues*)
$4.4M Deferred Maint. - Streets (3% of revenues*)
$2.9M Deferred Maint. – Parks (2% of revenues*)
$4.4M Program Increase (3% of revenues*)
----------------------------------------------------------- $17.5M budget increase FY26
*Revenues defined as total General Fund revenues less
Measure V-Sales Tax and Transfers In
12 Forecast of Fiscal Sustainability Strategies
13 Estimated
On-Going Revenue % of FY25/26 FY26/27 FY27/28
Revenues
General Fund Revenues* $148,231 $152,276 $155,879
CalPERS Pre-funding 2% $2.9M $3.0M $3.1M
Retiree Medical Pre-funding 2% $2.9M $3.0M $3.1M
Road Improvements - Deferred Mtc. 3% $4.4M $4.5M $4.6M
Parks - Deferred Mtc. 2% $2.9M $3.0M $3.1M
City Services and Program Increase 3% $4.4M $4.5M $4.6M Total $17.5M $18.0M $18.5M
*Revenues defined as total General Fund revenues less Measure-V Sales Tax and Transfers In General Fund 5-year Forecast
FY 2025-2030
14 The City’s General Fund is projected to maintain a surplus for the next three fiscal years, assuming the current Sales Tax revenue allocation method remains in place.

Projected Proposed Forecast Forecast Forecast Forecast
FY25 FY26 FY27 FY28 FY29 FY30
Revenues $159 $160 $165 $168 $165 $161
Expenditures
$147 $159 $164 $168 $165 $161
Surplus/Deficit
$12 $1 $1 $0 $0 $0
General Fund 5-year Forecast
FY 2025-2030
15 $135
$140
$145
$150
$155
$160
$165
$170
FY25 FY26 FY27 FY28 FY29 FY30
Projected Proposed Forecast Forecast Forecast Forecast
Revenues Expenditures
(in millions)
16 Sales Tax
• The City is tracking possible legislation
change r
elated to sales tax related to
ecommerce.
• California Department of Tax and Fee
Administration (CDTFA) studied
changing the allocation method from
point of fulfillment to point of delivery.
• The study showed that if such a change
occurred, Tracy’s allocation would be
impacted by 25% or greater.
17 Sales Tax, Continued
• The League of California Cities formed
a Ci
ty Manager’s sales tax working
group to provide input on possible
legislation change specific to e-
commerce.
• A recommendation to the Cal Cities
board was made to split the allocation
50% based on point of sale and 50%
based on point of destination, with a +/-
of 10%, with a 5-year phase in.
18 Sales Tax, Continued
• While no decision has been made, staff
is
tracking possible changes and their
impacts.
• The forecast reflects a drop in sales tax
of $5 million in FY2028-29, which is
when it is estimated the first year a
reduction could begin.
19 Use of Reserves:

Offset Future Costs and Revenue Instability
to Gain Fiscal Sustainability
Projected
Revenues/Expenses
• 5M decrease in sales tax revenue
expected FY29
• 10M decrease in sales tax
revenue expected FY30
• Expenses continue to rise
Prefunding Liabilities/New
Revenue Sources
• Prefunding deferred maintenance
• Prefunding employee retirement
liabilities
20 Use of Forecast
• The forecast is meant to provide
the
City Council with potential
impacts that could have a long-
term impact of the fiscal
sustainability of the General Fund.

• It provides indicators based on
current trends and potential
impacts as they are known today.

Recommendation from Finance Committee
21 • Staff to review additional options for fiscal
sustainability strategies to maximize prepayment of
liabilities and deferred maintenance
• Staff will present options to the Committee at the
next Finance Committee meeting
• Recommended outcome will be presented to the
City Council with the FY26 budget adoption
Next Steps
23 Next Steps
May 2025
Staff will present the proposed changes
to the FY26 operating budget to the
Finance Committee at a special meeting.

June 3, 2025
Staff will present the five-year capital
plan to the City Council.

June 17, 2025
Staff will present the proposed FY26
budget to the City Council for adoption.