Agenda Item
City Council
Item #: 11.1. 3/28/2023 File #: 23-0185
TO: Honorable Mayor and Members of the City Council
THRU: Tom Kisela, City Manager
FROM: Susan Galvan, Assistant City Manager
1. SUBJECT
First Study Session for the Proposed Fiscal Year 2023-24 Budget.
2. SUMMARY
This is the first study session in support of the preparation of the FY 2023-24 Budget. This study session is intended to provide the draft of the Five-Year Capital Improvement Plan for the period of FY 2023-24 through FY 2027-28.
3. RECOMMENDED ACTION
Receive and file the report and provide direction to staff.
4. FISCAL IMPACT
Fiscal impact will be determined with final budget adoption.
5. STRATEGIC PLAN GOALS
Goal 2: Be a fiscally healthy community
a: Expend fiscal resources responsibly.
b: Analyze future fiscal needs and potential revenue opportunities. c: Provide appropriate reserves.
Goal 4: Provide outstanding public service
b: Provide facilities and services to meet customer expectations.
6. DISCUSSION AND BACKGROUND
This is the first study session in support of the preparation of the City’sFY 2023-24 (FY 24) Budget and is intended to focus on presenting the draft Five-Year Capital Improvement Plan for the period of FY 23-24 through FY 27-28.
Introduction
The Five-Year Capital Improvement Plan (CIP) serves as a comprehensive budget and strategic planning tool used to determine the extent of future needs and identify sources of funding. Funding is provided by a variety of sources including development impact fees, transportation funds, grants, reimbursement agreements, and long-term financing.
The City continues to provide its residents and businesses with much needed capital improvements and infrastructure. As in recent years, we will maintain an increased level of capital improvement activity in Orange.
The FY 24 Five-Year CIP identifies 145 proposed projects. For FY 24 itself, there are 12 newly City of Orange Printed on 3/23/2023Page 1 of 5
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Item #: 11.1. 3/28/2023 File #: 23-0185
The FY 24 Five-Year CIP identifies 145 proposed projects. For FY 24 itself, there are 12 newly budgeted projects and 133 projects that are either a continuation of previously approved plans or anticipated to start during the out-years. With these proposed projects, the City Council will be investing over $36.2 million in the upcoming fiscal year and $125.6 million over the five-year planning horizon. This is in addition to project appropriations that will be carried over from the current fiscal year. This is a major investment in the City’sinfrastructure and represents a significant commitment to our community’s future.
As in previous years, the CIP will be funded through several funds. This includes $8.8 million from the City’s Enterprise funds (Sewer and Water); $5.9 million from the City’s Internal Service Funds (Equipment Replacement and Computer Replacement); $5.9 million from various Transportation funds (Traffic Improvement, Gas Tax Maintenance, Road Maintenance Rehabilitation); $4.9 million from the City’s Capital Project Fund; and $10.7 million from other funds.
In FY 24, there are ten identified category types. The most funded include a $9.6 million investment towards improvements of the City’swater infrastructure, $9.2 million towards various improvements in roads, a $4.4 million investment in the City’svehicle replacements, and a $3.1 million investment in City parks.
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Item #: 11.1. 3/28/2023 File #: 23-0185
Five-Year Capital Improvement Plan
The following are highlights of the FY 24 Five-Year CIP projects:
Orange Police Headquarters Atrium Rehabilitation
The Police Headquarters is over 30 years old, and the glass atrium roof has been past its useful life for several years, with an increasing number of water leaks continuing inside its lobby. The construction phase of this project will consist of replacement of the existing skylight roof system with a new metal deck and standing seam metal roof system, replacement of the facility’sHVAC system chiller, air handlers and other components, as well as the installation of photovoltaic panels and corresponding infrastructure on the existing building’s flat roof area. Bond funding from the successful issuance of Lease Revenue Bonds in July 2020, will be used to finance the project. The total cost of this project is estimated at $5.0 million and the project is estimated to be completed in December 2023.
Corporate Yard Renovations
A feasibility study for the City’sCorporate Yard (Corp Yard) renovation project was completed in October 2020 and design was completed in late 2022. The City plans to move forward with the first of two construction phases in FY 24. $1.0 million in funding has been included in the FY 24 CIP, for a total allocation of $6.5 million earmarked for the first phase of construction. This phase will focus on improving the Corp Yard’s space allocation by providing ample parking space for employees, designating raw material storage areas, enhancing paths of travel, maximizing equipment and vehicle storage, and redistributing storage for four City departments who utilize the space. The project also includes necessary improvements to comply with National Pollutant Discharge Elimination System (NPDES) environmental requirements as well as other modifications including surface and underground drainage systems, lighting, landscaping, installation of a perimeter wall, and striping.
Funding has been identified for the first phase of the project and construction is anticipated to begin in late summer 2023. Funding for the second phase of the project will be identified in future years and will include installation of prefabricated metal buildings for the Public Works, Community Services, City of Orange Printed on 3/23/2023Page 3 of 5
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Item #: 11.1. 3/28/2023 File #: 23-0185
Police, and Fire Departments.
Hart Park Pickleball and Fitness Circuit
In FY 22, Congressman Lou Correa secured $2.0 million in federal FY 22 Community Projects Funding for the proposed pickleball facility and fitness circuit, designed to fulfill the recreational needs of the surging pickleball community. Proposed facility amenities will include lighted pickleball courts, shaded outdoor fitness equipment, area and pathway lighting, paved access to courts, and other park features. The City committed an additional $750,00 to the project and intends to complete the design process, including environmental review and opportunities for public input in FY 24, with construction to follow.
Tot Lot Shade Sails Installation
As a long-standing Council initiative, shade sails have been installed over tot lots in multiple City park sites to protect users from sun exposure and heat from the equipment in warm summer months. In FY 24, the proposed sites for shade sail installations are Eisenhower and Killefer Parks with an estimated project cost of $223,000. Hart and Santiago Hills Parks will be proposed for FY 25, concluding the installation of shade sails over all tot lots in the City.
Pavement Management Program
This program identifies the condition of 320 miles of streets and identifies the maintenance needs of this roadway system. Approximately $6.8 million is requested in FY 24, and the project requires $6 million annually for slurry sealing, asphalt overlays, and reconstructions, and also includes landscaping maintenance activities within the street right-of-way. This program is funded from Measure M2, Community Development Block Grant, Capital Projects, and the Road Maintenance Rehabilitation Account funds. The program will focus on locations such as Fairhaven Avenue, Crawford Canyon Road, Yorba Street, Hewes Street, Orange-Olive Road, Metropolitan Drive, The City Drive and Via Escola.
Water Projects
Commitment of $5.6 million in FY 24 towards 10 water infrastructure projects intended to maintain or improve the City’s water production and distribution. This includes $1.5 million for pipeline replacement, which provides for the design and construction of water mainline replacements for the City's water system. Approximately two miles of pipeline are targeted to be replaced annually due to increasing age, substandard sizing, corrosion, or high maintenance. The program will focus on locations such as Heim Avenue and the surrounding residential streets near Batavia Street and Walnut Avenue. Additionally, $2.0 million is requested to complete the second phase of the construction of Well 28. The Orange County Water District is funding a conjunctive use and treatment program to assist with construction costs for this project in the amount of $2 million for FY 24 as well.
Sewer Projects
Commitment of $2.4 million to the Sewer Replacement Program will maintain or improve the City’s sewer pipe network, which provides for the design and construction of sewer mainline replacements for the City's sewer system. Approximately one mile of pipeline is targeted to be replaced annually due to increasing age, substandard sizing, corrosion, or high maintenance. The program will focus on locations such as Lomita Avenue, Orange Street, Grand Street, Oakmont Avenue, Everette Place, Orange Grove Avenue, and Pixley Street.
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Item #: 11.1. 3/28/2023 File #: 23-0185
Capital Projects Fund (500)
In previous years, the City Council has set-aside monies from the unreserved fund balance of the General Fund in the Capital Projects Fund (500) to reinvest in the City’sinfrastructure. In FY 23, the City was able to set aside $7 million in reserve funds for the Capital Projects Fund. Staff is recommending the following projects, totaling $3.15 million, which will provide much needed repairs and improvements to various City infrastructure for FY 24:
1. Pavement Management Program ($1,100,000);
2. City Facility Improvements ($725,000);
3. Streetlight Pole Replacement Program ($470,000);
4. Administration Building Improvements ($445,000);
5. Minor Traffic Control Devices ($200,000);
6. Main Library Improvements ($130,000);
7. Pedestrian Beacon Upgrades ($27,730);
8. Rolling File Cabinet Replacement ($25,000);
9. Municipal Parking Lot Maintenance ($20,000).
In addition to these projects, $1.75 million of Capital Project funding, collected as development fees from a housing development in the east side of Orange, has been earmarked for the Skate Park at Grijalva. The Skate Park was originally evaluated as a part of the Grijalva Master Plan, and has already concluded environmental review. Project design is anticipated to begin in the fall of 2023 and construction to begin in FY 25.
Conclusion
In the next few months, staff will continue to provide detail to the FY 24 Five-Year CIP. In addition, feedback from the City Council received at this study session will help refine our projects. The next study session, tentatively planned for April 25, 2023, will review projected revenues and expenditures for the City’s operations as well as Departmental Performance Measures, Goals, and Objectives.
7. ATTACHMENTS
· FY 24 Draft Five-Year Capital Improvement Plan
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