CITY OF SAN MATEO
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CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 12 Section Name: {{section.name}} Account Number: 10-4651 File ID: {{item.tracking_number}} TO: City Council
FROM: Alex Khojikian, City Manager
PREPARED BY: Public Works Department
MEETING DATE: April 15, 2024
SUBJECT:
2024-29 Capital Improvement Plan Preview
RECOMMENDATION:
Receive a preview and provide feedback on the 2024-29 Capital Improvement Plan.
BACKGROUND:
As part of the Capital Improvement Program (CIP) budget development process, City departments prepare funding requests that capture five-year capital project needs. Total project costs are developed and tied to appropriate funding sources, such as the General Fund, Measure S, or special revenues such as those restricted to transportation purposes or the sewer enterprise fund. New and ongoing capital project requests are prioritized and recommended for funding through review and analysis by the City Manager, Assistant City Manager, Public Works Director, Parks and Recreation Director, and Finance Director. The prioritization process includes evaluating the criticality of a project with regard to public health and safety, maintaining the viability of a City asset or facility, whether projects are already underway with existing investments, and whether a project can be phased to spread costs over a longer period of time.
A primary focus of the five-year CIP budget development process is balancing available General Fund and Measure S funding with project budget needs, while determining if future deficits require additional revenue sources. Annually, capital project contributions from the General Fund and Measure S typically total $4.25 million and $3.0 million, respectively, for a total available contribution of $7.25 million. After closing out completed projects with remaining balances from these sources, the 2024-25 amount available for allocation is greater at $9.95 million. Preliminary General Fund CIP project budget requests, including Measure S, total $9.6 million for 2024-25, with a proposed $6.5 million requested for existing projects and $3.1 million for new projects.
With the typical available funding, the five-year CIP projects a total revenue of $39.0 million from the General Fund and Measure S for Capital Projects. When looking at projected needs, staff estimates a total of $70.3 million in project budget requests, resulting in a five-year deficit of $31.4 million. As part of the current budget process, staff will continue prioritizing the outer years of the five-year CIP to develop a plan that matches available revenue but wanted to provide the Council with the full picture of capital needs. Consistent with the Council’s adopted Blue Sky priority to have a comprehensive review of capital needs, staff will be coming back to Council in the coming fiscal year to dive deeper into the challenges of meeting the needs of maintaining and upgrading City facilities with limited available revenue.
Special revenue and restricted funding, including Gas Tax, Measure A, Measure W, Measure M, and Road Maintenance and Rehabilitation Account (RMRA) funds, are restricted for specific purposes. For example, use of Gas Tax revenues is generally limited to public streets and highways, while Measure A is typically the City’s sole non-General Fund grant matching fund source for transportation projects. The average annual revenue allocated to Capital Projects from these funding sources totals $8.3 million; however, after closing out completed projects with remaining balances from these
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sources, the 2024-25 amount available for allocation is greater at $11.1 million. The proposed project budget requests funded from these special revenue and restricted funding sources total $11.0 million for 2024-25, with $10.4 million requested for existing projects and $0.6 million for new projects. The five-year CIP projects a total revenue of $44.3 million from special revenue and restricted funding and a total of $42.8 million in transportation-related project budget requests.
The City also has restricted sewer and storm funding, via ongoing sewer rates and the newly approved Community Flood and Stormwater Protection Fee. For the sanitary sewer system, the CIP includes significant sewer system improvement projects, primarily all part of the 10-year, $1 billion Clean Water Program. Sewer CIP projects are fully funded from the rate revenue, with $27.8 million proposed for 2024-25. With the new Stormwater Protection Fee, which generates approximately $4.0 million annually, staff is establishing a new restricted fund to include operational and CIP needs. The ongoing annual revenue available for stormwater CIP projects will need to be established over time, but staff are currently planning for $3.5 million available for capital needs. Staff will be updating the City‘s Storm Drain Master Plan during 2024- 25, which will provide a prioritized capital improvement program for 2025-26 and beyond that will need to be incorporated into future Council discussions and budgets. For 2024-25, $0.5 million from the Stormwater Protection Fee revenue will be used to fund stormwater CIP projects.
The following table details the five-year CIP needs, with 2024-25 as a proposed CIP that matches available revenue/funds and years two through five as total needs irrespective of available revenue. The five-year needs total $269.4 million with $65.7 million proposed for 2024-25. By project type, the total five-year CIP needs can generally be broken down into $103.3 million (38.4%) for sewer-related projects, including the Clean Water Program (funded by sewer enterprise funds), $67.4 million (25.0%) for building- and facility-related projects (primarily General Fund and Measure S), $54.2 million (20.1%) for transportation projects including street rehabilitation and bicycle/pedestrian improvements (primarily transportation-focused special revenue and restricted funding), $23.2 million (8.6%) for parks-related projects (primarily General Fund, Measure S, and Parks and Recreation fees), $9.9 million (3.7%) for miscellaneous/other project types, $9.8 million (3.6%) for bridge improvements, and $1.6 million (0.6%) for storm-related projects.
Project Budget Requests by Project Type (All Funding Sources) Project Type 2024-25
Proposed
2025-26
Need
2026-27
Need
2027-28
Need
2028-29
Need
Bridges $8,930,000 $800,000 $20,000 - -
Buildings/Facilities $9,543,600 $32,425,000 $21,010,000 $3,210,000 $1,210,000 Parks & Recreation $4,833,000 $13,406,828 $1,895,000 $1,775,000 $1,275,000 Sewer $27,806,000 $7,812,000 $27,660,000 $20,725,000 $19,320,000 Stormwater $1,000,000 $150,000 $150,000 $150,000 $150,000 Streets & Transportation $9,281,420 $11,275,319 $15,018,636 $9,725,000 $8,875,000 Miscellaneous/Other $4,307,000 $2,139,000 $1,227,000 $1,227,000 $1,027,000 TOTAL $65,701,020 $68,008,147 $66,980,636 $36,812,000 $31,857,000 As indicated above, there is a significant projected CIP deficit with regard to projects that rely on General Fund and Measure S. Some of the major contributors to the deficit include structural upgrades to the 2nd and El Camino Real parking garage ($18.0 million), multiple recreation center and City Hall roof replacements ($3.9 million), structural repair of the Main Library Garage ($4 million), City Council Chamber improvements ($6.5 million), waterproofing and painting the Main Street, Central, and Transit Parking Garages ($5.7 million), and Phase VI of park restroom refurbishment ($1.3 million), all of which highlight the significant need related to City facilities due to aging infrastructure. Staff will be implementing a comprehensive facilities assessment during 2024-25, which may identify additional capital needs for the dozens of City facilities.
BUDGET IMPACT:
There is no direct budgetary impact resulting from this report. The 2024-29 CIP Preview identifies $269.4 million in capital
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improvement needs, predominantly reflecting sewer, building/facilities, and streets and transportation projects. Any feedback and/or direction received from the Council as a result of this report and supporting presentation will be incorporated into the FY 2024-25 proposed CIP budget and the 2024-29 five-year capital improvement program.
ENVIRONMENTAL DETERMINATION:
This budget preview is not a project subject CEQA because it is a government fiscal activity, which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. (CEQA Guidelines Section 15378(b)(4).)
NOTICE PROVIDED
All meeting noticing requirements were met.
ATTACHMENTS
Att 1 - 2024-29 CIP Preview by Project Type
STAFF CONTACT
Matt Fabry, Public Works Director
[email protected]
650 522 7309