ITEM 15 ATTACHMENT 2 CIP - Laserfiche WebLink

5 City of Pleasanton Capital Improvement Program • FY 2025/26 - FY 2029/30 To the Honorable Mayor and Councilmembers, In accordance with the City’s ordinance, I am pleased to present the two-year Proposed Capital Budget and the five-year Capital Improvement Program (CIP) from FY 2025/26 to FY 2029/30. As the City faces an ongoing structural deficit, with revenues not keeping pace with expenses, the proposed budget and the CIP does not fully account for the City’s true capital investment needs due to the lack of funding. The Asset Management Plan, currently under development, will provide a more comprehensive understanding of the City’s needs. This CIP reflects a balanced approach to investing and planning for high-priority projects in various program areas, such as water, sewer, and General Fund supported community infrastructure. Consistent with the City’s two-year budget policy, it is recommended that the Proposed Capital Budget, which represents the first two years (FY 2025/26 and FY 2026/27) of the CIP be adopted and that funds be appropriated. The projects included in the final three years (FY 2027/28, FY 2028/29 and FY 2029/30) of the CIP represent those that are identified as priority but not as critical com- pared to the ones included in the first two years, moved out due to staffing resources, or delayed because of limited funding in the first two years. Proposed projects in the CIP are based on urgent and critical identified needs, which are subject to revision, as necessary, to accommodate changes in priorities and/or expected funding levels. The two-year Proposed Capital Budget is approximate- ly $86.0 million. Over a five-year period, the Proposed CIP totals approximately $221.7 million. The total fiscal resources available for the CIP incorporate estimates for future revenue collec- tion that are subject to economic and political elements outside of the City’s control. In addition to assuming $61.5 million in new debt, $35.0 million for water projects and $26.5 million for sewer projects, the debt amount required will be contingent on the additional revenues from rate increas- es. As such, the City’s ability to fund projects included in this CIP could change if the City does not receive the anticipated revenues. While some of the capital program revenues, such as the state gas tax and related transportation revenues, have remained mostly stable, several other revenue sources have been revised to be lower in the Proposed Capital Budget and CIP. For example, one of the core funding sources for the City’s capital program is development-related fees, which have been impacted in recent years due to delays associated with proposed commercial and residen- tial developments and recent state law that requires appropriate fees to be collected only at final inspection or occupancy. As a result, several projects budgeted for this funding source have been postponed. As part of the ongoing budget monitoring process, staff will periodically conduct a review of the Capital Budget and CIP. If these reviews determine that adjustments are needed, staff will pro- vide the City Council with any recommended changes to projects and corresponding revenues for FY 2026/27 as part of the Mid-Term Budget Review process or through a standalone City Council agenda report.