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For the next two years, the availability of revenue for CIP project funding is being driven, in part, by three important elements as follows: I. Completion of the City Council's Five Highest Priority Projects Prior to the adoption of the previous CIP, the City Council identified the following five priority capital projects: Renovation of the Veterans Memorial Building ($4.58 million) Renovation of the Alviso Adobe and construction of the adjacent community park and facilities (S5.26 million) Completion of Phase I Bernal Park Lighted Sports Fields ($8.8 million) The Kottinger Creek Restoration Project ($1.25 million) Construction of the Firehouse Arts Center ($10.8 million est.) In addition to the above, the Council also identified the construction of the Delucchi Park Restroom ($465,000). In addition, the City acquired the Downtown Rail Corridor at a cost of approximately $7.5 million and work is currently underway to utilize it to improve parking in the Downtown area. At this time, all of these five priority projects have been fully funded and only the Firehouse Arts Center remains under construction. The Phase I Bernal Park Lighted Sports Fields, Phase 1 construction phase is complete and project acceptance is anticipated later this summer after completion of the grow -in period. As a result, the demand for a significant amount of funding from the General Fund and developer fees to pay for these projects (estimated at $30.69 million) is no longer present. It should also be remembered that all five priority projects and the Delucchi Park Restroom project, were completed without the issuance of debt so the City's financial obligation to them is for project programming and maintenance only (the corridor was purchased in part by future annual payments to Alameda County). 2. The State of the Local Economy Over the past year, both the private and public sectors have experienced a significant economic downturn. For the CIP, the impact is a significant decrease in construction activity that limits receipt of City development impact fees. While these are outlined in detail later, the amount of this funding source limits the ability to fund development related projects or to make contributions to the Capital Improvement Replacement Fund (CIPR). In addition to development impact fees, the state of the econorny is placing a significant strain on the City's Operating Budget and as result, the first two years of the CIP does not include the transfer of General Fund revenue to the CIP. However, a total of S3.5 million is planned for the final two years of the program. The status of General Fund transfers is discussed later in this document. 3. The Decision to Focus on Maintenance Projects and CIP Projects Funded Previously As part of the CIP process, all previously funded CIP projects that have not yet been started or completed, were reviewed. As a result, many were closed out with any existing project balances being transferred to beginning CIP balances to be reprogrammed in this CIP. This effort assured that only those projects funded previously that are still a priority remain in the CIP. In addition, it enables the City's engineering staff to focus its attention on completing current and previous priority projects. A table showing the status of CIP projects funded previously is included in the Appendix. 6