Title
Workshop to Provide Direction on Fiscal Years 2023-24 and 2024-25 Capital Improvement Program (CIP) Budget. (Public Works 31041520) [Not heard on May 2, 2023]
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 2 and 4, 2023, and possibly May 11, 2023. 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 Operating Budget and Capital Improvement Program (CIP) budget for Fiscal Years (FY) 2023-24 and 2024-25. Specifically, on May 2, staff will present this two-year CIP budget and Exhibit 1 contains the draft project sheets with information on the proposed projects. Capital investments are shown by project type and fund source for each year. The proposed CIP totals approximately $72.5 million for FY 2023-24 and $32.3 million for 2024-25. The proposed General Fund allocations to capital projects are $21.7 million (inclusive of $15 million Aquatic Center funding) for FY 2023-24 and $4.6 million for FY 2024-25. In preparing the proposed CIP, staff considered capital investment needs, fund balances, City Council priorities, and staffing resources required to manage and execute projects. Staff seeks input on the proposed CIP budget to be incorporated into the budget coming back for City Council consideration and adoption in June.
BACKGROUND
As part of the City of Alameda (City) biennial budget process, a capital budget for FY 2023-2024 and 2024-2025 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
• Sea Level Rise and Climate Adaptation
Each of the categories has multiple projects and funding sources. City staff proposes funding for capital improvement projects within each category. City Council ultimately allocates funds for the projects through the adoption of the Biennial Budget in June for the fiscal year that begins on July 1, 2023.
Capital Budget Process
The main components of the capital budget include:
1. Fund balances and expected revenues;
2. Estimated operational expenses from each fund; and
3. Proposed projects by City departments with estimated costs.
The first step in developing a capital budget is to determine available funds based on revenue and expense projections for each fund. 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), and Vehicle Registration Fees. Transportation projects are also supplemented by the Development Impact Fee funds, which are paid for by new residential and commercial development, as well as project-specific grants. The Urban Runoff and Water Quality and Flood Protection fees fund the maintenance and enhancement of the City’s stormwater infrastructure and 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 one of the only funding sources that is not restricted and can support any public infrastructure expense.
Operational expenses are proposed by each department and evaluated by the Finance Department. Several funds are shared between operating divisions and capital projects. For example, operating expenses include the cost of maintaining existing traffic signals, while the capital budget funds the purchase and installation of new traffic signal equipment. Operating and capital expenses are balanced throughout the budget process.
Once fund balances are confirmed, Public Works staff consults with City departments, reviews master plans and other policy documents, and performs necessary condition assessment to understand capital needs. The capital needs are then used to identify projects and costs. The proposed expenditures for each project are allocated within each funding source so that funds are budgeted to retain a positive fund balance. In addition, City Council priorities and the availability of staffing resources to manage and execute projects are major considerations in developing the capital budget. The draft capital budget is refined through budget meetings with the City Manager, Finance, and City departments.
On March 22, 2023, 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 to 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).
On April 13, 2023, the Recreation and Parks Commission approved the Recreation and Parks Department operating and capital budget.
In addition, before the City Council approves the capital budget, the Planning Board must determine its consistency with the General Plan. On May 8, 2023, 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 2023-24 and 2024-25 is consistent with the General Plan.
These budget workshops provide City Council and the community an opportunity to discuss the capital budget and consider proposals for capital improvements and priorities. City staff will develop a capital budget book that provides additional information and context for the proposed projects and funding prior to City Council’s review and adoption of the two-year capital budget in June 2023.
DISCUSSION
Exhibit 1 contains the draft project sheets with information on the proposed projects included in the capital budget for FY 2023-24 and 2024-25. Capital investments are shown by project type and fund source for each year. The proposed CIP totals approximately $72.5 million for FY 2023-24 and $32.3 million and for 2024-25.
Capital Budget Allocations from the General Fund
The City Manager reviews the proposed capital project allocations, including projects that require allocations from the General Fund. The projects listed below include regularly occurring or “ongoing” projects that typically are in the capital budget. Also included are proposed one-time investments that emphasize improving safety, security, and accessibility at public facilities. Projects listed below are recommended for General Fund allocations from existing residual General Fund balance over the two-year period.
|
Department |
Project |
FY 2023-24 |
FY 2024-25 |
Ongoing |
|
Public Works |
Street, Park and Parking Lot Lighting |
$600,000 |
$300,000 |
Y |
|
Recreation & Parks |
Park Pathway Repair & Replacement |
$300,000 |
$300,000 |
Y |
|
Recreation & Parks |
Park Maintenance |
$285,000 |
$325,000 |
Y |
|
Recreation & Parks |
Playground Replacement |
$285,000 |
$325,000 |
Y |
|
Public Works |
ADA Transition Plan Implementation |
$625,000 |
$625,000 |
Y |
|
Public Works |
AMP Undergrounding (streetlights cost sharing) |
$690,645 |
|
Y |
|
Public Works |
City Buildings - Additional Projects |
$305,000 |
|
N |
|
Public Works |
City Hall Work Space Assessment and Improvements |
$100,000 |
|
N |
|
Public Works |
Civic Center Garage Improvements |
$1,000,000 |
|
N |
|
Public Works |
City Building Security and Card Reader Access |
$2,465,000 |
$2,742,750 |
N |
|
Recreation & Parks |
De-Pave Park |
$50,000 |
|
N |
|
Recreation & Parks |
City Aquatic Center |
$15,000,000 |
|
N |
|
TOTAL |
$21,706,000 |
$4,617,750 |
|
The proposed General Fund allocations to capital projects total approximately $21.7 million for 2023-2024 and $4.6 million for 2024-25.
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
• Parks: In addition to park and pathway maintenance across various parks and playground replacement at McKinley Park (due to storm damage), the under 5 structure at Tillman Park and partial funding for the Krusi Park playground, projects include constructing Phase 2 of Estuary Park and improvements for Marina Village Park.
• Transportation: Construct major corridor projects: Clement Avenue, Central Avenue, and Clement/Tilden Safety Improvement projects; design and install infrastructure for active transportation, street safety, safe routes to school, and transit stop enhancements.
• Sea Level Rise Adaptation: Advance projects that prevent flooding and address sea level rise
It should be noted that Urban Forest has been moved from the capital budget to a separate operating budget. The funding amount remains the same as the FY 2023 - 25 budget. Once the Urban Forest Plan is updated, staff will bring recommendations to City Council for consideration.
ALTERNATIVES
• Provide direction on the proposed Capital Improvement Program Budget for staff to incorporate into the budget proposed for City Council’s adoption in June 2023.
• Accept the current Capital Improvement Program Budget proposal. Staff will bring a recommended Capital Improvement Program Budget for City Council consideration in June 2023.
FINANCIAL IMPACT
No funding allocations are made as a result of this action and there is no impact on the General Fund or other funds as a result of this informational item. As noted in the proposed FYs 2023-25 Biennial Budget (File #2023-3014) projects that are recommended for receiving General Fund allocations will be funded from existing residual General Fund balance over the two-year period. 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.
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 providing direction on the FY 2023 - 2025 Capital Improvement Project budget. When projects are brought to City Council for approval, detailed climate impacts will be described. City Council may provide direction to staff on funding priorities for the implementation of the Climate Action and Resiliency Plan as part of the budget workshops.
RECOMMENDATION
Provide direction to staff on the FYs 2023-24 and 2024-25 proposed capital improvement program budget.
Respectfully submitted,
Erin Smith, Public Works Director
By,
Robert Vance, Deputy Public Works Director
Financial Impact section reviewed,
Margaret O’Brien, Finance Director
Exhibits:
1. Draft CIP project Sheets
2. Presentation