Forget the federal government. Tracy hopes to spend more than $120 million it has saved in building fees and local tax money on its own "stimulus" plan to create jobs, help small businesses expand and revive comatose retail spending by giving people who buy cars in the city a $500 gift card.

Mayor Brent Ives outlined the city’s plan to inject tens of millions of dollars into the local economy during the annual State of the City speech Tuesday.

"We’re changing the business culture in Tracy," he said. "We’re very, very serious about this."

About 250 attendees heard economist John Mitchell say there are a few signs that the trillions spent at the federal level are making the economy better, though there are likely many months of tough times ahead.

Many of the ideas Ives talked about have to be OK’d by a vote of the City Council, but the massive spending plan aims to position the city ahead of others in the region to be a sort of economic runway when the economy finally takes off again.

The city had planned to spend a little more than $30 million on a few road and other expensive projects in town this year. It’s upped that to $120 million to build sewer and water pipes, storm drains and roads so that 2,400 acres of empty land in western Tracy will be ready for commercial and industrial development when the market turns around.

The city has tens of millions in the bank it received years ago in fees from homebuilders and commercial developers, as well as money from the gas tax, and it plans to spend much of it.

The money is for projects that are already on the books, but this plan would jumpstart them more quickly, said city finance director Zane Johnston.

"There’s no obligation to pay this back — ever," Johnston said.

About 91 projects are expected to receive money first, Ives said, and he predicted the money would put 3,700 people to work.

Tracy also hopes to help small business owners by providing a pool of $1 million in city money that will be loaned out to small businesses. Ives said 80 percent of job growth in town comes from small businesses hiring more people.

And to plug the loss of retail sales and generate sales taxes the city relies upon to operate, Ives suggested Tracy use $500,000 to pay people to buy cars in town, by far the single-biggest sales tax producer in Tracy. Historically, about 20 percent of the money Tracy uses to pay its bills comes from sales taxes on cars.

Under the plan, anyone who buys a car in Tracy would receive a $500 gift card to spend in town, a move that seems certain to help aid West Valley Mall, which recently lost Pier 1 Imports and will soon lose Gottschalks.

But the city is still trying to figure out a way to dangle that carrot in front of car buyers without violating a law that forbids the giveaway of public money, said Councilwoman Evelyn Tolbert.

Ursula Luna-Reynosa, head of the city’s Economic Development Department, said she’s talking with Wells Fargo Bank to work out the details of how a gift card might work, a move that would give Tracy car dealers a competitive advantage.

The city gets 1 percent of the 7.75 percent sales tax — a figure that will jump to 8.75 percent April 1. If 1,000 people bought cars in Tracy for $20,000 each, the money would generate $200,000 in sales tax income for the city from car sales, and another $5,000 in sales taxes from the gift cards if it all were spent on goods that have taxable sales.

Ives said Tracy will boost its marketing campaign as well to encourage people to spend money in the city. And the city hopes to boost from 5 percent to 10 percent an advantage that local companies have when bidding for public contracts.

"They’re the right moves to do for the economy right now," he said.