ATTACHMENT A, EXHIBIT 2
Revenues Expenses
Department Adjustment Adjustment
CAPITAL IMPROVEMENT FUNDS
CAPITAL IMPROVEMENT FUND (471)
Capital PF‐93009 Americans with Disabilities Act Compliance This action reduces appropriation from $600,000 to $450,000.
While deferred funding would delay progress on accessibility upgrades, funding is reserved for time‐critical needs such as code required improvements identified for active construction projects or urgent path‐of‐travel corrections. (One‐time savings:
$150,000)
‐$ (150,000)$
Capital OS‐09002 Baylands Levee Repair
This action postpones the project from FY 2026 to FY 2028. While postponing could increase the risk of deterioration, this deferral allows concentration of resources on higher priority projects. In the interim, routine inspections and maintenance protocols will be maintained to mitigate risk unt il the project resumes in FY 2028. (One‐time savings: $288,000)
‐$ (288,000)$
Capital PG‐06001 Athletic Courts Resurfacing
This action reduces appropriation from $365,000 to $315,000 while continuing repairs in FY 2027 through FY 2030 at about $240,000 annually. Although the reduction may delay or extend schedules for full court resurfa cing enhancements,
the phased repair strategy ensures that safety and usability improvements continue on an annual basis through FY 2030. This approach balances short‐term fiscal limitations with the ongoing need to maintain athletic facilities. This work safeguards user safety and extends the lifespan while addressing time‐sensitive maintenance needs. Maintenance tr eatments like applying an overcoat at the right time can add five to seven years of useful life to the pavement, delaying the need for full reconstruction and significantly reducing lifecycle costs. (One‐time savings:
$50,000)
‐$ (50,000)$
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET
ATTACHMENT A, EXHIBIT 2
Revenues Expenses
Department Adjustment Adjustment
CAPITAL IMPROVEMENT FUNDS
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET Capital PG‐06003 Benches, Signage, Walkways, Perimeter Landscaping, and Site Amenities
This action reduces appropriation from $262,000 to $212,000.
While reducing the scope and budget will limit the number of immediate upgrades to park aesthetics and user amenities, it preserves critical funds for essential maintenance and high priority projects across the parks. This ensures that while some enhancements might be scaled back or deferred, the continued investment in core operational and safety improvements is maintained, supporting overall user experience and facility functionality in the short term. (One‐time savings: $50,000) ‐$ (50,000)$
Capital PE‐26000 Foothills Nature Preserve Restroom
This action defers replacement of three rest rooms at the Foothills Nature Preserve by one year (from FY 2027 to FY 2028) to focus on more time‐sensitive projects. Staff will monitor conditions to ensure restrooms remain safe and functional in the interim. (One‐ time savings: $300,000 in FY 2027 and $900,000 in FY 2028) ‐$ ‐$
Capita
l OS‐09001 Off‐Road Pathway Repair
This action reduce appropriation from $208,000 to $133,000 while continuing repairs in FY 2027 and FY 2028 at $185,000 and $208,000, respectively. The reduced budget will limit the number of off‐road paved trail segments addressed but will still enable repairs at the most degraded sect ions with safety concerns.
Maintaining on‐going funding addresses overall network usability and prevents further deterioration of Palo Alto’s nine miles of off‐ road paved trail system that are 35 years old. (One‐time savings:
$75,000)
‐$ (75,000)$
Capital PE‐21002 Johnson Park
This action defers from FY 2026 and FY 2027 to FY 2028 the renova
tion of existing park elements including asphalt concrete and pathways, furnishing and playground equipment and
resurfacing, fencing and irrigation to focus on more time‐sensitive projects. Staff will continue to monitor safety and accessibility needs in the interim and as a contingency plan use the ADA C
ompliance capital project to make any emergency repairs needed as a stop gap. (One‐time savings: $250,000 in FY 2026 and $1.4 million in FY 2027)
‐$ (250,000)$
ATTACHMENT A, EXHIBIT 2
Revenues Expenses
Department Adjustment Adjustment
CAPITAL IMPROVEMENT FUNDS
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET Capital PG‐22000 Werry Park Playground
This action defers by two years from FY 2026 to FY 2028 replacement and accessibility improvements of the existing playground to focus on more time‐sensitive projects. The existing play area remains serviceable and safe for use. The delay allows for advancement of higher‐priority playgrounds and
in
frastructure with more critical needs while maintaining Werry Park in the capital queue for future improvements. (One‐time savings: $350,000)
‐$ (350,000)$
Capital PE‐13014 Streetlight Condition Assessment
This action defers $220,000 of funding for comprehensive assessment from FY 2026 to FY 2028 while retaining funding in the Street Light Improvements project (PO‐05054) to replace street light poles, foundations, luminaries, and wiring as needed. (One‐time savings: $220,000)
‐$ (220,000)$
Capita
l PL‐04010 Bicycle and Pedestrian Transportation Plan
Implementation
This action adds $2.4 million of approved Measure B Local Streets and Roads (LSR) revenue from the Valley Transportation Agency (VTA). (One‐time savings: $2,400,000)
2,400,000$ ‐$
Capit
al AS‐10000 Capital Improvement Fund Administration Capital Program Staffing
This action freezes 1.00 FTE Engineer in the Engineering Services Division. This position is one of six positions involved in construction of streets, sidewalks, and transportation capital projects. As part of the overall $6 million reduction in FY 2026, $3.2 million of capital projects are recommended to be deferred from FY 2026 to future yea rs of the 5‐
year CIP, and the proposed FY 2026 capital budget included a one‐year reduction in the sidewalks project. Workload needs should not be impacted in FY 2026; however, impacts to projects in future years of the 5‐year CIP may happe n due to reduced staff capacity to manage projects. (Annual savings: $220,000)
‐$ (217,267)$
Capital AS‐10000 Capital Improvement Fund Administration This action removes the $3.2 million placeholder reduction that had been included in the FY 2026 Adopted Capital Budget. (Annual savings: $1.0 million)
‐$ 3,200,000$
Fund Balance Adjustment to Fund Balance (Infrastructure Reserve) This action adjusts the fund balance to offset adjustments recommended in this report .
‐$ 850,267$
CAPITAL IMPROVEMENT FUND (471) SUBTOTAL 2,400,000$ 2,400,000$