TO: Mayor and City Council
FROM: Philippe Eskandar, City Manager
BY: Amber Shah, Parks & Public Works Director/City Engineer Hillary Guirola-Leon, Finance Director
DATE: March 27, 2026
SUBJECT: REVIEW DRAFT FY 2026-27 CAPITAL EQUIPMENT AND
CONSTRUCTION PLANS AND 5-YEAR FORECAST
STRATEGIC PLAN CRITICAL SUCCESS FACTORS
Efficient, Responsive, and Effective City Services
Engaged and Connected Residents
Fiscally Responsible and Transparent City Government
Inviting and Relevant City Facilities
Safe Community
Well-Maintained Infrastructure
BACKGROUND
Overall Budget Process
At the February 27, 2026, City Council meeting, staff presented an overview of the Fiscal Year (FY) 2026-27 budget process, including proposed priority principles, and received Council feedback regarding key focus areas. Today’s workshop represents the next stage of that process with staff presenting the proposed Capital Equipment and Capital Construction budgets.
On April 24, 2026, staff will return to present each department’s work plans and operating budgets. Throughout this process, staff will continue to coordinate with the City Council's Finance Liaisons to ensure alignment with Council priorities and expectations.
While additional refinements may occur prior to final budget adoption, today’s discussion is critical in providing direction for the preparation of the proposed Tony Chou, Mayor
Calvin Lo, Vice Mayor
Hunter Chang, Council Member
John Chou, Council Member
Gretchen Shepherd Romey, Council Member
FY 2026-27 Capital Improvement Program (CIP) budget.
DISCUSSION
As part of the City’s annual budget adoption, planned capital expenditures are compiled and presented to the City Council for review and policy direction.
Approved projects and programs are then incorporated into the City’s Capital Improvement Program budget for adoption.
This workshop includes:
• Review of the draft FY 2026-27 Capital Equipment and Construction budgets
• An update to the City’s five-year (5) capital forecast Capital Equipment
The Capital Equipment Program is presented in a format consistent with prior fiscal years. Supporting documentation includes:
• Attachment 1 – Status of FY 2025-26 capital equipment expenditures. • Attachment 2 – Summary of recommended FY 2026-27 capital equipment purchases.
• Attachment 3 – Detailed descriptions and cost estimates for proposed expenditures.
Capital equipment requests were initially developed by department heads based on operational needs and approved work plans. These requests were subsequently reviewed and prioritized by Parks & Public Works Director Shah, Finance Director Guirola-Leon and City Manager Eskandar, in consideration of City Council priorities and funding availability. The resulting program reflects a balanced and prioritized list of near-term and future equipment needs.
Attachment 2 identifies recommended purchases for FY 2026-27, while Attachment 3 outlines future-year needs for Council awareness and long-term planning. Items listed in Attachment 3 will be revisited in the following year and may be moved between future Fiscal Years as operational priorities and/or budget necessitate.
Capital Construction
The draft Capital Improvement Program (CIP) is similarly organized and includes:
• Attachment 4 – Status of FY 2025-26 capital construction projects and programs.
• Attachment 5 – Summary of recommended FY 2026-27 capital construction projects.
• Attachments 6-8 – Detailed project descriptions and cost estimates by category (right-of-way, park and grounds, civic facilities, wastewater collection, and stormwater).
Capital construction projects have been developed by the Parks and Public Works Department based on the City’s five-year (5) CIP, infrastructure conditions, regulatory requirements and operational priorities. Projects are categorized as:
1. Annual/Recurring Programs
2. Proposed New Projects (FY 2026-27)
3. Future Projects (FY 2027-28 and beyond)
The proposed FY 2026-27 CIP reflects continued investment in the City’s core infrastructure systems, with an emphasis on transportation, safety and longterm asset management. Key projects proposed for the upcoming fiscal year include:
• Measure R 710 North Projects ($335,000) – Upon execution of a funding agreement with Metro, the City will initiate preliminary engineering using Measure R funds to evaluate and advance potential corridor improvements along Huntington Drive. The project focuses on traffic calming, improving access to schools and local businesses, and enhancing pedestrian safety within this heavily utilized corridor. • Street Rehabilitation Program ($1,100,000 in new funding) – This annual program addresses pavement conditions citywide and remains a cornerstone of the City’s infrastructure maintenance program.
Beginning this cycle, the program will transition to a biennial approach for more intensive roadway rehabilitation, while also launching a preventative maintenance component for streets previously rehabilitated since 2018. This approach is intended to maximize pavement lifecycle performance and reduce long-term repair costs. • Annual Sidewalk Improvements ($508,445) – This program prioritizes the repair and replacement of damaged, uneven, and uplifted sidewalks throughout the City. Improvements will enhance pedestrian safety, improve accessibility, and support compliance with ADA requirements, while reducing potential liability exposure.
In addition, several previously approved projects are included as reappropriations/re-budgets. These projects do not require new FY 2026-27 funding but will continue into the next fiscal year. These projects include:
• City Hall Campus – Emergency Generator Connection
• City Hall Re-Carpeting
• Rio Hondo Load Reduction Strategy
For transparency, project forms will be included for these projects in the final adopted budget book.
Commission Review
The proposed capital equipment plan for the Police, Fire, and Parks and Public Works Departments was presented to the Public Safety Commission on March 16, 2026. The Commission received and filed the report and recommended forwarding the plan to the City Council for consideration.
FISCAL IMPACT & PROCUREMENT REVIEW
Capital Equipment
All FY 2025-26 City Council-approved equipment purchases have either been completed or are anticipated to be completed by the end of the fiscal year, as detailed in Attachment 1.
For FY 2026-27, staff recommend seven (7) new capital equipment purchases.
The proposed budget is summarized below by funding sources:
Funding Source FY 2026-27 Proposed
Budget
Capital Equipment (Fund
591) $1,632,500
COPS $87,500
Donations $5,300
Total $1,725,300
This total includes a $450,000 re-appropriation associated with the Engine 791 replacement initiated in FY 2025-26.
All capital equipment purchases will be conducted in accordance with the City’s purchasing ordinance.
Capital Construction
The proposed Capital Construction Projects for FY 2026-27 total $8,289,359, inclusive of re-appropriations from prior fiscal years. The proposed budget is summarized below by funding sources:
Funding Source FY 2026-27 Proposed
Budget
Special Revenue Funds $2,717,681
Capital Projects (Fund 394) $5,379,845
Sewer Enterprise (Fund 700) $191,833
Total $8,289,359
As of July 1, 2025, $8,236,193 of funding was available in the Capital Projects Fund (Fund 394). At the November 12, 2025, City Council meeting, Council approved a transfer of $2,300,000 to the Capital Projects Fund reserves from the General Fund reserves for future capital improvement projects.
Of the $3,416,913 in new FY 2026-27 funding requests:
• $2,280,440 is funding allocated from the Capital Projects Fund (Fund 394)
• $1,136,473 is derived from special revenue sources, including Proposition A (Fund 207), TDA Article 3 (Fund 214), Enterprise Sewer Fund (Fund 700), Measure R Fund (Fund 243), and Measure W (Fund 246).
Additionally, special revenue funds will be re-appropriated from FY 2025-26 to continue to support ongoing and new projects as appropriate. Special fund rollovers include Gas Tax (Fund 202), Proposition C (Fund 215), Measure R (Fund 243), Measure M (Fund 247), and Measure W (Fund 246).
Projects currently underway but not completed will be carried forward into FY 2026-27 through re-appropriations/re-budgets.
Reserve Balance Impact
Capital Projects Fund (Fund 394)
If all proposed FY 2026-27 projects are approved, the Capital Projects Fund (Fund 394) is projected to end Fiscal Year 2026–27 with a reserve balance of $864,376.
Capital Equipment Fund (Fund 591)
Approval of all proposed capital equipment purchases will require a transfer from the General Fund to provide sufficient funding for Fiscal Year 2026–27 equipment expenditures in the amount of $1,153,495.
General Fund (Fund 101)
The General Fund is projected to have a beginning reserve balance of $16.8 million as of July 1, 2026, representing 46.7% of General Fund revenues. If a transfer of $1,153,495 is approved to fund the proposed equipment purchases, General Fund reserves would be reduced to approximately $15.7 million or 43.5% of revenues.
LEGAL REVIEW
The City Attorney's office has reviewed and approved as to form.
RECOMMENDATION
Staff recommends that the City Council:
1. Review the draft FY 2026-27 capital equipment and capital construction budgets and five-year (5) plans;
2. Provide direction on the proposed FY 2026-27 expenditures, including approval or modification; and
3. Identify any FY 2027-28 or future equipment and/or projects that should be advanced into FY 2026-27.
Staff will incorporate City Council direction into the proposed budget for formal adoption.
ATTACHMENTS
1. Status Update on the FY 2025-26 Capital Equipment Plan
2. Summary Table of Recommended FY 2026-27 Capital Equipment Purchases and Five-Year (5) Plan
3. Capital Equipment Request Forms - All Departments (FY 2026-27 and future years)
4. Status Update on the FY 2025-26 Capital Construction Programs and Projects
5. Summary Table of Recommended FY 2026-27 Capital Construction Projects and Five-Year (5) Plan
6. Capital Construction Request Forms - Annual/Recurring Projects/Programs
7. Capital Construction Request Forms - Proposed New FY 2026-27 Capital Construction Projects
8. Capital Construction Request Forms - Future Projects (FY 2027-28 and beyond)