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Page 1 of 7 <br />Item #3 <br /> CITY COUNCIL AGENDA REPORT <br /> <br />April 8, 2025 <br />Public Works - Engineering Division <br /> <br />TITLE: RECEIVE A REPORT ON GENERAL FUND DEPENDENT CAPITAL NEEDS AND <br />OTHER CAPITAL/INFRASTRUCTURE PRIORITIES FOR FY 2025/26 AND FY <br />2026/27 AND PROVIDE DIRECTION TO INFORM THE DEVELOPMENT OF THE <br />TWO-YEAR CAPITAL BUDGET AND FIVE-YEAR CAPITAL IMPROVEMENT <br />PROGRAM <br /> <br />SUMMARY <br />The City faces an ongoing General Fund structural deficit. This report provides a summary of <br />current capital projects that rely on the City’s General Fund for funding to move forward and <br />seeks City Council direction on how to prioritize these capital projects as the City Council <br />considers the General Fund Budget Preliminary Reduction recommendations. The proposed <br />full Capital Improvement Program (CIP) will be presented in May 2025. <br /> <br />The City is developing its five-year CIP for fiscal years 2026-2030 amid significant <br />infrastructure funding challenges. The City has identified approximately $900 million in “state of <br />good repair” infrastructure needs over the next 10 years, and available funding is insufficient to <br />meet these demands. The ongoing Asset Management Program (AMP), expected to be <br />completed by year-end, will provide more precise data to guide future investments. However, <br />current funding constraints require prioritization of the most urgent projects. <br /> <br />After a call for projects from all City departments, staff identified $53.4 million in needed <br />General Fund-supported CIP requests. If all available fund reserves and anticipated General <br />Fund contributions were expended, the General Fund could not address all the requests. <br />Given this funding gap, staff recommends deferring most identified CIP projects until the AMP <br />is complete to ensure the City does not spend resources on projects that might not ultimately <br />be the most necessary. In the interim, staff recommends prioritizing only the most <br />urgent/critical projects totaling $16.6 million. Staff also recommends allocating $2.0 million to <br />the Repair and Replacement (R&R) program to extend the service life of assets on the <br />deferred project list. As the AMP advances toward completion later this year, staff will present <br />new options to the City Council to plan for and take care of the City’s long-term capital funding <br />needs. <br /> <br />RECOMMENDATION <br />Receive a report on General Fund dependent capital needs and other capital/infrastructure <br />priorities for FY 2025/26 and FY 2026/27 and provide direction to inform the development of <br />the two-year Capital Budget and five-year Capital Improvement Program <br /> <br />BACKGROUND <br />Capital Improvement Program Overview <br />Projects discussed in this report include Capital Improvement Projects and Repair and <br />Replacement Projects. <br />Page 31 of 40