FISCAL YEAR 2025-26
City Council Study Session
April 22, 2025
PROPOSED CAPITAL
IMPROVEMENT PROGRAM
BUDGET
“WHEN WE ALL
PULL TOGETHER”
2 3
All Funds % General Fund %
Salaries & Benefits $133,130,777 59% $133,130,777 70%
Maintenance & Operations 52,189,891 22% 44,132,090 23%
Fixed Assets 6,781,618 3% 2,925,298 2%
Transfers Out 12,631,498 5% 9,705,994 5%
Capital Projects 27,901,236 11% - -
Total $239,815,342 100% $189,894,159 100%
Expenditure Category
3 4
STRENGTHEN THE PUBLIC’S SAFETY
Public Safety Represents 52% of General Fund
4 5
FY 2024-25 ADOPTED
General Fund By Department
5 Department FY 2024-25 %
City Council 874,089 0.5%
City Manager * 9,594,377 5.1%
City Attorney 1,086,750 0.6%
Finance 6,073,764 3.2%
Parks and Community Services 9,037,068 4.8%
Information Technology 6,402,558 3.4%
Police 61,919,851 32.6%
Fire and Rescue 37,772,922 19.9%
Development Services 9,911,803 5.2%
Public Works 23,659,001 12.5%
Non-Departmental 23,562,076 12.4%
TOTAL 189,894,159 100.0%
*City Manager’s Department includes City Clerk, Human Resources, and Risk Management. 6 Capital Asset Needs (CAN)
• The City’s Municipal Code Section § 2-209 Capital
Asset Needs Reserve requirement states that the
City shall allocate a minimum of five percent (5%)
of the annual General Fund revenue towards the
capital asset account (Fund 401)
• Staff will request a CAN partial waiver to address
the FY 2024-25 potential revenue shortfall
• Waiver of the CAN requires a supermajority vote:
5 City Councilmember votes
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7 THE CIP PROCESS
8 PUBLIC WORKS
STAFFING & DIVISIONS
The Public Works Department has 79 full-time staff members composed of five management, four clerical, and 70 professional / technical staff spread across five divisions.
Administration • Water Quality
• Streets and
Parkway
Improvements
• Storm Drain
Improvements
• Development
• Real Property
• Park
Development
• Construction
Management
• Active
Transportation
• Traffic Operations
• Transportation
Planning
• Residential Permit
Parking
• Street Cleaning
• Graffiti Abatement
• Street Maintenance
• Storm Drain
Maintenance
• Signs and Marking
• Park, Parkway, and
Median
Maintenance
Administration
General
ServicesEngineering
Transportation
Services
Maintenance
Services
• Facility
Maintenance
• Fleet
Maintenance
• Recycling and
Solid Waste
• Warehouse
Operations
9 CIP BUDGET
• Financed from multiple funding sources
• Can include Federal, State, County,
and local funds
• Funding sources may have different
restrictions regarding eligible
projects, record retention schedules,
and reporting
• Often involve multiple levels of
governmental oversight, coordination,
approval, and auditing
• Requires coordination from all City
departments, City Attorney’s Office, and
related grantors
• CIP Project Financial Threshold in Costa
Mesa: $30,000
10 CIP PROJECTS
• Project identification/idea is developed
• Design phase
• Bidding phase
• Contract selection and award
• Construction phase
• Project completion
• Ongoing maintenance and repair
By definition a
multi-year program
Identifies the next round of
project priorities
Projects typically not
completed in one year
Projects undergo seven (7) distinct
phases over multiple years:
11 CIP RECOGNITIONS
CIP programs encompass
both current year (ongoing
projects) and proposed
future year projects.
City staff are dedicated to
producing a high-quality CIP
program and projects.
Staff has won numerous
awards for CIP projects.
````
12 CURRENT (FY 2024
-
25)
CIP ACCOMPLISHMENTS
13 • Streets improved include a combination of
slurry seal and full-depth pavement
rehabilitation
• Approx. 10.1 lane miles, or 53,451 lineal
feet
• Streets will be improved in the following
neighborhoods:
• Mesa Verde
• Mesa North
• Mesa Del Mar
• Bristol West
• College Park
• Westside
• Eastside
• Costa Mesa has maintained a “good” PCI
of 84.9
EQUIVALENT TO
LENGTH OF
I
-
405 FROM
SR 22 TO SR 73
• Total construction cost of approx.
$9.2 M from various funding
sources:
• Capital Improvement Fund
• Measure M2 Fairshare Fund
• Gas Tax Fund
FY
24/25
CITYWIDE STREET IMPROVEMENTS
14 ADAMS AVENUE REHABILITATION
FY
24/25
• Santa Ana River to Royal Palm
Drive
• Royal Palm Drive from Adams
Avenue to Elm Avenue
• Street pavement rehabilitation
• Improved bicycle facilities
• Road Maintenance
Rehabilitation Account funded
• First project administered by
Community Workforce
Agreement
15 FY
24/25
LED UPGRADES AT VARIOUS LOCATIONS
• Removed existing lighting and replaced with LED lights • Funded by then-State Senator David Min
16 FY
24/25
TENNIS CENTER IMPROVEMENTS
• Resurfaced courts
• Eight new pickleball
courts
17 FY
24/25
POLICE DEPARTMENT RANGE REMODEL
• Replaced range targeting systems
• Replaced existing exhaust air and filtration system
• New elevator unit
18 FY
24/25
INFORMATION TECHNOLOGY OFFICE REMODEL
• Additional office space
• Replaced flooring and
light fixtures
• Optimized workstations
19 LIONS PARK CAFE
FY
24/25
• Walk-up concession counter
• Full kitchen equipment
• Estimated completion in May 2025
• Partially funded by County ARPA
funds through Supervisor Katrina
Foley
20 CLEAN MOBILITY OPTIONS
FY
24/25
• Fare-free on demand rideshare
• Serves Westside area and
sections of College Park
• Grant-funded
• Three vehicles in service
21 CITYWIDE BICYCLE WAYFINDING
FY
24/25
• Installed 116 new wayfinding signs:
• Westside
• Eastside
• College Park
• Mesa del Mar
• Mesa North
• Mesa Verde
• SoBeca
• South Coast Metro
22 ADAMS AVENUE – PINECREEK DRIVE
INTERSECTION IMPROVEMENTS
FY
24/25
• Pedestrian and bicycle safety
improvement at OCC
• New crosswalk, high visibility
crosswalk striping
• New pedestrian paths
• New Class I off-street bicycle
trails
• ADA improvements
• Construction is scheduled for
completion in May 2025
````
23 CURRENT (FY 2024
-
25)
CIP UPDATE
24 FY 2024-25 BUDGET
• Staff will request a partial waiver of the CAN
Ordinance to address the FY 2024-25 potential
revenue shortfall
• Fiscal Year 2024-25 General Fund budget will
need to be adjusted by $3.6M to address a
potential revenue shortfall
• Reductions proposed by:
• $0.7M in operating budget utilizing Gas Tax for street sweeping services, and
• $2.9M temporary deferrals of approved capital projects 25 STAFF INITIAL PROPOSED
FY 24-25 CIP DEFERRALS
No. Project Name Deferred Amount
1 City Hall Cast Iron Drain Repipe $254,019
2 Finance Security/Effic. Remodel $250,000
3 Citywide Community Choice Energy Study $150,000
4 City Hall 5th Floor Air Handler Replacement $140,000
5 City Hall Breezeway Roof $245,000
6 City Hall Heater(s) Replacement $350,000
7 Westside Restoration Project $450,000
8 Parkway Maintenance Program Citywide $233,757
9 Costa Mesa Country Club Modernization $400,000
10 Butterfly Gardens $100,000
Savings from Completed Projects $300,000
Ongoing Capital Improvement Projects for Fund Deferral $2,872,776 26 FiPAC RECOMMENDATION
• Staff presented FY 2024-25 and FY 2025-26 CIP at the April 9 Finance and Pension Advisory Committee (FiPAC) meeting
• FiPAC made following recommendations:
o Support waiving the CAN ordinance for FY 2024-25
o Support proposed projects for deferral, except for the following:
City Hall Cast Iron Drain Repipe $254,019
City Hall 5th Floor Air Handler Replacement $140,000
City Hall Heater(s) Replacement $350,000
o Staff to recommend alternative reductions for Council consideration
o Deferred action on Fiscal Year 2025-26 CIP to May 2025 for consideration along with the Operating Budget
27 ALTERNATIVE CIP DEFERRALS FOR
CONSIDERATION
No. Project Name Deferred Amount
1 City Hall Cast Iron Drain Repipe $ 254,019 2 Finance Security/Effic. Remodel $ 250,000 3 Sewer Line Improvement $ 250,000
4 Citywide Community Choice Energy Study $ 150,000 5 City Hall Breezeway Roof $ 245,000
6 Westside Restoration Project $ 450,000 7 Parkway Maintenance Program Citywide $ 233,757 8 Costa Mesa Country Club Modernization $ 400,000 9 Butterfly Gardens $ 100,000
10 Senior Center Improvements $ 250,000 Savings from Completed Projects $ 300,000 Alternative Ongoing Capital Improvement Projects for Fund Deferral $ 2,882,776 28 MAJOR PROJECTS UNDERWAY/SCHEDULED
Full listing of ongoing projects in Attachment 1.
Major projects include:
• Adams at Pinecreek Improvements
• Adams Ave. Active Transportation Project
• Adams Ave. Bicycle Facility
• Brentwood Park Improvements
• Citywide Alley Improvements
• Citywide Storm Drain Improvements
• Citywide Street Improvements
• Fairview Park Mesa Restoration/Cultural
Resource Preservation CA- ORA- 58
• Fairview Park West Bluff Stabilize &
Restoration
• Fairview Rd Rehab (RMRA) Project
• Fairview Road Improvement Project
• Fire Station 4 Training Tower & Grounds
Reconstruction
• Golf Course & Tennis Center Improvements
• Ketchum-Libolt Park Expansion
• Newport Blvd Improvement
• Parkway Maintenance Program Citywide
• PD Carpet Replacement and Repaint
• Police Dept - Emergency Comm Facilities
Remodel
• Shalimar Park Expansion
• Signal Modernization Multi Modal Safety
Improvements
• TeWinkle Park - Skate Park Expansion
• TeWinkle Park Lakes Repairs
29 NEXT STEPS
• On May 6, Staff will bring an agenda item for
formal City Council consideration of the following
actions:
Partial waiver of the CAN Ordinance for FY 2024-25
Reduce General Fund transfer to Capital Improvement
Fund (401) in the approximate amount of $2.9 million
Allocate $0.7 million in Gas Tax (201) funds for street sweeping
Deferred projects will receive priority in FY 2026-27
````
30 FY 2025
-
26 PROPOSED CIP PROJECTS
31 CIP OVERVIEW
• Projects were identified based on:
City Council Priorities, Goals, and Objectives
Commissions, committee, and community feedback
Citywide infrastructure and facility needs assessments Department requests
Budgetary constraints
• Staff will request a full waiver of the CAN Ordinance to address FY 2025-26 potential revenue shortfall
• The CIP includes General Fund allocation to meet minimum Maintenance of Effort (MOE) for Gas Tax and Measure M2
32 QUICK FACTS
Projects recommended
Total CIP amount
Future Bond/Financing
33 FUNDING SOURCES
Primary funding sources for Proposed FY 2025-26 CIP include:
Future Bond/Financing Options 12,000,000$
Grant Funds 6,882,000$
Gas Tax (RMRA) 2,951,612$
Measure M2 Competitive and Fairshare 2,820,000$
Capital Improvement (General Fund)* 2,150,000$
Gas Tax 1,040,000$
Traffic Impact Fees 420,000$
Community Development Block Grant 230,000$
Cannabis Traffic Impact Fees 150,000$
Jack Hammett Sports Complex 100,000$
Total 28,743,612$
*Funded by prior year General Fund transfers
34 FISCAL YEAR 2025-26 PROPOSED CIP PROJECTS
35 CIP CATEGORIES
Facilities
$12,250,000
42.6%
Parks
$550,000
1.9%
Streets
$7,406,612
25.8%
Transportation
$8,537,000
29.7%
Significant portion of this is $12
million bond financing for the Fire
Station 2 reconstruction
Primarily funded by grants or
restricted funds
Approximately $18 million in
ongoing Parks projects
Primarily funded by grants or
restricted funds
````
36 FY 2025
-
26 PROJECTS
37 FIRE STATION 2 RECONSTRUCTION
• Increase in size to 9,400 SF
• Improves operational function and living quarters
• Enlarged apparatus bay
• Conference room, utility rooms, exercise room,
medical supply storage
• On-site temp living and operating quarters
$15M
$12M
Bonds
$2.5M available in
FY 24/25
FY
25/26
38 CITYWIDE TREE MAINTENANCE
(in Public Right-of-Way)
Provides enhanced maintenance
to median and parkway trees that
are susceptible to the effect of
recent unprecedented weather
events.
$200K
Gas Tax
FY
25/26
39 HARBOR BLVD. REHABILITATION
• Street rehabilitation along Harbor Blvd.
(MacArthur Blvd. to South Coast Dr.) and
(Gisler Ave. to Baker St.)
• Funded with Road Maintenance and
Rehabilitation Account (RMRA) funds
$2.95M
RMRA
FY
25/26
40 CITYWIDE STREET IMPROVEMENTS
• Annual program provides major street
rehabilitation to maintain a Citywide Pavement
Condition Index (PCI) of 85
• Improvements in all Council districts
$4.1M
$1.5M
CIP
$ 600K
GAS TAX
$2M
M2 FUND
FY
25/26
41 ADAMS AVENUE ACTIVE
TRANSPORTATION IMPROVEMENT
• Adams Avenue between Royal Palm
Drive Road and Santa Ana River
• Enhances accessibility and safety for
bicyclists and pedestrians by
providing separation from vehicles
• City received competitive federal
grant for construction
• Improvements consistent with the
City's General Plan and the Active
Transportation Plan
$4.2M
FEDERAL GRANT
FY
25/26
42 ADAMS AVENUE BICYCLE FACILITY PROJECT
• Adams Avenue between Fairview
Road and Harbor Boulevard
• Improves pedestrian and bicycle
mobility and access in the area
• City received competitive federal
grant for construction
• Improvements consistent with the
City's General Plan and the Active
Transportation Plan
$850K
FY
25/26
$200K
TIF
$650K
M2 FUND
43 FAIRVIEW ROAD IMPROVEMENT PROJECT
• Construct active transportation
improvements along Fairview
Road between Fair Drive and
Adams Avenue
• Project includes improved bicycle
facilities, green bicycle conflict
zone striping, high visibility
pedestrian crossings, transit stop
improvements and traffic signal
modifications
• $300K in prior fiscal budget for
design
$2.0M
$1.759M
GRANTS
FY
25/26 $120K
TIF
$ 120K
M2 FUND
44 PEDESTRIAN SAFETY FESTIVAL
• Temporary weekend closure
of Harbor Boulevard between
Newport Boulevard and West
19 th Street to automobiles
• Event anticipated to occur on
four separate event dates
• Various activities with
primary focus on pedestrian
safety
$400K
Grant
FY
25/26
45 PACS RECOMMENDATION
• One-Year and Five-Year CIP pertaining to Parks
presented to PACS on April 10, 2025
• PACS concurred with staff recommendation while
requesting allocation of $250,000 for Westside
Park Development in FY 2025-26 and future fiscal
years (funding has not been identified at this
time)
• The Westside Park Development project currently
has prior year unspent funds of $250,000
````
46 ADDITIONAL
INFORMATION
47 FIVE-YEAR CIP (FY 2025-26 to FY 2029-30)
• Five-Year plan includes projects deferred and those proposed in upcoming fiscal years
• Attachment 4 includes proposed Five-Year CIP
• Five-Year plan is updated annually based on Goals and Priorities by City Council, input from commissions, committees and community, and best practices
• Projects listed from Years 2 - 5 and Future are for planning purposes and to plan for future grant opportunities
• Facilities Assessment and Park Assessment Studies will identify future project priorities and funding needs
48 NEXT STEPS
• The FY 2025-26 Proposed Operating and Capital
Improvement Program budget must be adopted by
June 30, 2025
• The proposed CIP recommendation provides $28.7 million from multiple funding sources to improve City infrastructure in all key areas
• In addition to the new Proposed CIP , there are 102 ongoing CIP projects, totaling approximately $93 million
• The one-year waiver of the General Fund transfer for the CAN Ordinance provides a method for reducing General Fund
expenses while not impacting core City services
49 FY 2025-26 Budget Calendar
FY 2024-25 Mid-Year Budget Update Study Session City Council March 11, 2025 FY 2045-25 Mid-Year Budget Update Presentation
Finance and Pension Advisory
Committee March 12, 2025
FY 2025-26 Proposed CIP Budget Review
Finance and Pension Advisory
Committee April 9, 2025
FY 2025-26 Proposed CIP Budget Review
Parks and Community Services
Commission April 10, 2025
FY 2025-26 Proposed CIP Budget Study Session City Council April 22, 2025 FY 2025-26 Proposed CIP Budget Review Planning Commission May 12, 2025 FY 2025-26 Proposed Budget Study Session City Council May 13, 2025 FY 2025-26 Proposed Operating Budget
Finance and Pension Advisory
Committee May 14, 2025
FY 2025-26 Proposed Operating and CIP
Budget Public Hearing City Council June 3, 2025
FY 2025-26 Proposed Operating & CIP Budget
Special Meeting/ Study Session #2 (if necessary) City Council June 10, 2025 FY 2025-26 Proposed Budget Adoption (if
necessary) City Council June 17, 2025
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50 Questions?