The lack of construction and the abundance of foreclosed homes in Tracy have forced the city’s public works department to look into raising garbage collection rates to close a growing deficit.

Zane Johnston, Tracy’s finance director, said the waste department’s $17 million budget operated at a roughly $1.1 million loss in the 2008-09 fiscal year and has been in the red three of the past four fiscal years. He added that there’s about $1.5 million left in the bank, and another rough year could be dangerous.

“If we experience another loss the magnitude of this year’s loss, then we would virtually wipe out all the cash in the fund,” Johnston said. “You can’t sustain operating losses here, because you have nowhere else to go with your money.”

Kevin Tobeck, the public works director, said the problem his department faces is threefold. Few houses have been built in the past few years, so there has been no construction debris to discard. Tracy is also home to a swarm of empty, foreclosed houses, where no garbage is collected so no bills are sent out, he said.

“We went from lots of building to virtually none,” he said.

Tobeck added that the value of recyclables has gone down, too.

Tobeck said he and Johnston are in the early stages of looking into higher garbage rates, and no decision is expected to go before the City Council until the spring. He said he didn’t know yet how much rates would be boosted.

Johnston said the garbage fund works much like a checking account — getting revenue solely from recyclables and from residents and businesses that pay their monthly bills (an average of $29.95 for houses), and then spending that money to collect and dispose of the city’s trash. Tobeck said rates have not gone up since July 2007.

Out of that money the department has available, Johnston said, it doesn’t pay employees, so there’s no one they can lay off, furlough or cut pay to. Instead, the work is contracted out to Tracy Delta Disposal for collection and Tracy Materials and Recovery Inc. for disposal, Johnston said.

“It’s those things you don’t control that make it extremely difficult,” Johnston said.

In the 2007-08 fiscal year, the waste account was in the black, because more people paid their bills, Johnston said. Before that, though, the department had losses of more than $1 million in the two prior fiscal years.

Tobeck said it will take public works a couple of months of analysis, as well as discussion with Johnston and a consultant, before any action is taken. He said raising rates is an idea he and Johnston have tossed around the past few months.

“Nothing’s been decided, but we’re going to take a closer look,” Tobeck said.