Title
Budget Workshop for Fiscal Years 2025-26 and 2026-27 to Provide Direction on the Capital Improvement Program Budget. (Public Works 310)
Body
To: Honorable Mayor and Members of the City Council
From: Jennifer Ott, City Manager
EXECUTIVE SUMMARY
The City Council is holding Budget Workshops on May 5 and May 13, 2025. The budget workshops are intended to give the City Council and community an opportunity to look more closely into the factors that make up the overall City of Alameda (City) Operating Budget and Capital Improvement Program (CIP) budget. Exhibit 1 contains the draft capital project sheets with information on the proposed projects included in the capital budget for Fiscal Years (FY) 2025-26 and 2026-27. Capital investments are shown by project type and fund source for each year. The proposed CIP totals approximately $43.8 million and $42.4 million for FY 2025-26 and 2026-27, respectively. The proposed General Fund allocations to capital projects are $6.3 million for FY 2025-26 and $2 million for 2026-27. In developing the proposed CIP, staff considered capital investment needs, fund balances, City Council Strategic Plan priorities, and staffing resources available to manage and execute projects. Staff seeks input on the proposed CIP budget that will be incorporated into the budget for final City Council adoption in June.
BACKGROUND
As part of the City biennial budget process, a capital budget for FY 2025-26 and FY 2026-27 is developed to fund infrastructure improvements in the City. Capital improvements generally are categorized as follows:
• Pavement, Lighting and Urban Forest
• Sanitary Sewer
• Stormwater, Lagoons and Shoreline
• Buildings and Facilities
• Parks
• Transportation System Enhancements
• Adaptation and Resiliency
Each of the categories has multiple projects and funding sources. The FY 2025-27 includes funding for capital improvement projects within each category.
Capital Budget Process
The main components that provide the basis of the capital budget are:
1. Fund balances and expected revenues
2. Estimated operational expenses from each fund
3. Proposed projects by City departments with estimated costs
The first step in developing a capital budget is to determine available funds. The CIP is largely funded with revenues from restricted funds. For example, the Sewer Fund is restricted to maintenance and replacement of City sewers. Transportation funds include Measure BB (Alameda County Transportation Sales Tax), Gas Tax, the State Road Maintenance and Rehabilitation Program (SB1), Vehicle Registration Fees and project specific grants. Transportation projects also are supplemented by the Development Impact Fee funds, which are paid by new residential and commercial development. The Urban Runoff and Water Quality and Flood Protection fees are for the maintenance and enhancement of the City’s stormwater infrastructure and various efforts to make stormwater pollution-free before it enters the Bay. The Alameda Point Fund reinvests revenue from leases and building sales to operate existing and construct new infrastructure at Alameda Point. The General Fund is the only funding source that is not restricted and can support any public infrastructure expense.
As further detailed in the May 5, 2025 Budget Workshop for Fiscal Years 2025-26 and 2026-27 staff report (File 2025-5016), General Fund revenues are impacted by the current economic downturn and the economic outlook is marked by significant uncertainty. The rapidly changing landscape of federal policy and macro-economic conditions require careful review of capital projects funded by General Funds.
Once fund balances are confirmed, Public Works staff consults with City departments, reviews the City Council Strategic Plan Priorities and projects, master plans and other policy documents for prioritization and conformance as well as performs necessary facility condition assessments to understand capital needs. The proposed project expenditures, specifically for non-General Fund funding sources, are allocated to levels that ensure the fund balances remain positive. In addition, the availability of staffing resources to manage and execute projects is a consideration in developing the capital budget.
On April 30, 2025, staff presented the transportation projects proposed for the two-year capital budget to the Transportation Commission. Transportation projects represent a large portion of the capital budget and major projects typically require a long timeframe to plan, design and construct. The transportation projects in the capital budget build from ongoing commitments for maintaining existing infrastructure and enhancing transportation infrastructure. The projects are drawn from and consistent with adopted plans including the General Plan Mobility Element (2021), Active Transportation Plan (2022), Vision Zero Action Plan (2021), and Transportation Choices Plan (2018).
In addition, before the City Council approves the capital budget, the Planning Board must determine its consistency with the General Plan. On May 27, 2025, Public Works staff will present the proposed capital budget to the Planning Board and seek approval of a finding that the proposed Capital Budget for FY 2025-26 and 2026-27 is consistent with the General Plan.
DISCUSSION
Exhibit 1 contains project sheets with information on the proposed projects included in the recommended Capital Budget for FY 2025-26 and 2026-27. The proposed Capital Budget totals approximately $43.8 million for FY 2025-26 and $42.4 million for FY 2026-27.
Capital Budget Allocations from the General Fund
The proposed capital budget reflects thoughtful evaluation and planning. Departments were asked to initially submit all project requests they determined necessary so the scope of need across the City could be understood. The initial requests for General Funds for FY 2025-27 totaled $28 million for short-term project needs. However, due to the current economic downturn and ongoing uncertainty, projects funded by the General Fund were carefully evaluated and prioritized based on several factors: enhancing public safety, alignment with the City’s Strategic Plan, and maximizing opportunities to leverage grant funding. For instance, repairing park pathways to address trip hazards was prioritized over a playground replacement that can be deferred for another couple years. And, required grant matches or work needed to leverage grant funds were prioritized. An example is funding to design the Lincoln/Marshall/Pacific Corridor Improvement project because this is required to then utilize a $16 million grant already awarded for construction. Timelines on projects were also adjusted, as feasible within grant parameters, to maximize the FY 2025-27 General Fund dollars.
The projects listed below are the recommended projects for General Fund allocations. As noted in the project sheets, many have additional funding from other sources.
|
Project |
FY 2025-26 |
FY 2026-27 |
|
Street, Park and Parking Lot Lighting |
$300,000 |
$300,000 |
|
City Building Projects |
$1,100,000 |
|
|
ADA Plan Implementation-City Buildings |
|
$250,000 |
|
Park Pathway Repair & Replacement |
$305,000 |
$275,000 |
|
Park Maintenance |
$350,000 |
$400,000 |
|
ADA Transition Plan Implementation-Parks |
|
$100,000 |
|
Street Safety |
$300,000 |
$300,000 |
|
Neighborhood Greenways |
$1,200,000 |
|
|
Stargell Ave Complete Streets |
$100,000 |
|
|
Lincoln/Marshall/Pacific Corridor Improvements |
$1,800,000 |
$300,000 |
|
Comprehensive Emergency Water Supply System |
$400,000 |
|
|
Bay Farm Island Adaptation |
$230,000 |
$75,000 |
|
TOTAL |
$6,085,000 |
$2,000,000 |
The City Buildings Project amount is additional funding to the Facilities Internal Service Fund and includes the replacement of standby generators at Fire Stations 1,2,3 and City Hall; funding for repair of structural wood columns at Alameda Point gym; and Mastick Senior Center drains. Also, $300,000 of this total will be funded by reallocating funds from other parks project that are now closed. The net total new funding from the General Fund for these facility projects is $800,000 but the total amount of $1.1 million needs to be formally allocated by City Council for the new projects.
The Stargell Avenue Complete Streets funding is a local grant match that leverages $4,860,000 of grant funds from the Metropolitan Transportation Commission Regional Measure 3 Safe Routes to Transit and Bay Trail program. This project will make improvements from Webster Street to Main Street including school crossings, active transportation facilities, slowing traffic, improving the safety of major intersections, greening the street, and adding new bus stops for AC Transit’s Line 19 that will be re-routed in fall 2025.
Neighborhood Greenways implementation will be phased with the first phase converting the existing Slow Street segments of Pacific Ave, San Jose Ave/Morton St, and Versailles Ave in FY 2025-26. In FY 2026-27, an additional mile of Neighborhood Greenway will be planned and constructed using only Measure BB funding. Measure BB funds, in the amount of $1.2 million each fiscal year are allocated to the project in addition to the $1.2 million of General Fund monies in FY 2025-26.
Street Safety is funded at the requested amount because it includes work to increase street safety for vulnerable users, including daylighting at intersections to improve visibility. Other safety measures include high visibility crosswalks and other intersection striping, and infrastructure such as curb bulb-outs and pedestrian refuge islands. In addition, the project funds the Fatal Crash Response program to address locations where traffic fatalities have occurred
For parks maintenance and pathway repairs, projects that improve community safety were prioritized such as fixing pathway trip hazards, making significant fence repairs to address safety issues, and replacing basketball court surfaces to address major cracks and trip hazards so they remain open to the public. However, while over $1.3 million in safety investment is proposed for park maintenance and pathway repairs, replacement of playground equipment and the public restroom at Grand Street Boat Launch is being deferred.
The implementation of the ADA Transition Plan for City buildings and parks was only partially funded to better align with available staff capacity to manage projects.
The Comprehensive Emergency Water Supply System is composed of several modules, with a total estimated cost of $16.4 million. As an initial step, staff prioritized the purchase of two trailered turntable reels, which enables the rapid, mechanical deployment of large-diameter fire hose after a major disaster to pump water from the estuary to a water truck for fighting fires. This investment was chosen for its immediate, practical benefits.
The Bay Farm Island Adaptation Project is a near-term sea level rise adaptation project to address two feet of sea level rise over the coming decades, bolster the northern shoreline and Bay Trail from erosion, enhance shoreline habitat with nature-based solutions, and enhance public recreation, including improvements to the San Francisco Bay Trail. The General Funds allocated for the Bay Farm Island Adaptation plan will fund grant writing and serve as matching funds for potential grants. It also allows the Oakland Alameda Adaptation Committee, a broad coalition of shoreline communities and stakeholders, to continue working together to address sea level rise adaptation.
Capital Budget Allocations from Other Fund Sources
The draft project sheets with information on the proposed projects included in the capital budget and fund sources for each year are included in Exhibit 1. Highlights include the following:
• Pavement Management: Resurface and repair local streets and roads; incorporate new signage and traffic striping to improve safety for all users.
• Sidewalks: Remove trip hazards and replace sidewalks damaged by city-owned trees.
• Traffic Signals and Systems: Replace obsolete equipment and improve safety and multimodal operations at key intersections and corridors.
• Sanitary Sewer Rehabilitation: Replace sewer lines, lower laterals and pump stations according to the City’s Sewer Master Plan.
• Stormwater Management: Provide improved performance at city-owned pump stations; replace critical storm water infrastructure; prevent trash and pollutants from entering the Bay.
• Buildings and Facilities: Maintain and improve city-owned buildings, including at Alameda Point.
• Relocation of Alameda’s Day Center and Safe Sheltering program - including Permanent Local Housing Allocation grant funding.
• Transportation: implement Safe Routes to School, design Lincoln/Marshall/Pacific Corridor improvements and Willie Stargell Completed Streets, install transit stop enhancements and advance the planning of the Oakland Alameda Estuary Bridge.
• Adaptation and Resiliency: implement a pilot project to increase the availability of electric vehicle (EV) chargers, start building a comprehensive emergency water supply system, advance projects that prevent flooding and address sea level rise.
The $86.2 million investment from multiple funding sources during the two-year capital budget advances 17 Strategic Projects included in the ’Citys 2023 Strategic Plan <https://www.alamedaca.gov/files/assets/public/v/1/city-manager/%5bfinal%5d-alameda-strategic-plan-2023-2026.pdf>, including nearly all of the General Fund funded projects.
ALTERNATIVES
• Provide direction on the proposed Capital Budget for staff to incorporate into the budget proposed for City Council’s adoption in June 2025.
• Do not provide direction on the current proposal. Staff will bring a recommended Capital Budget for City Council consideration in June 2025.
FINANCIAL IMPACT
No funding allocations are made as a result of this action. There is no impact to the General Fund or other funds as a result of this informational item. Future financial contributions from the City will be subject to future City Council approval.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is in conformance with the Alameda Municipal Code and all policy documents. As described above, the two-year capital budget advances 17 Strategic Projects included in the ’Citys 2023 Strategic Plan <https://www.alamedaca.gov/files/assets/public/v/1/city-manager/%5bfinal%5d-alameda-strategic-plan-2023-2026.pdf>.
ENVIRONMENTAL REVIEW
This action does not constitute a “project” as defined in California Environmental Quality Act (CEQA) Guidelines Section 15378, and because it involves governmental fiscal activities, which do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment; therefore no further CEQA analysis is required.
CLIMATE IMPACT
There are no climate impacts associated with this action. City Council may provide direction to staff on funding priorities for implementation of the Climate Action and Resiliency Plan as part of the budget workshops.
RECOMMENDATION
Provide direction to staff on the FYs 2025-26 and 2026-27 proposed capital improvement program budget.
Respectfully submitted,
Erin Smith, Public Works Director
Financial Impact section reviewed,
Ross McCarthy, Acting Finance Director
Exhibit
1. CIP Project Sheets