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: {{item.number}} 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 21, 2025
SUBJECT:
2025-30 Capital Improvement Program Plan Preview
RECOMMENDATION:
Receive a preview and provide feedback on the 2025-30 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 matched with appropriate funding sources, such as the General Fund or Measure S that can be used for any purpose, special revenues such as those restricted for transportation purposes, or enterprise funds such as the Sewer and Storm funds. 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/or 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 $2.0-3.0 million, respectively, for a total available contribution of $6.25-7.25 million. In 2025-26, the anticipated contribution totals $4.25 million from the General Fund, $2.6 million from Measure S, and $0.9 million from Measure CC for an overall total contribution of $7.7 million. Preliminary General Fund CIP project budget requests, including Measures S and CC, total $8.5 million for 2025-26, with a proposed $6.0 million requested for existing projects and $2.6 million for new projects. This results in a funding gap of $0.8 million, which will be covered by the Capital Projects Fund reserve, composed of unspent funds from completed CIP projects.
With the typical available funding, the five-year CIP projects a total funding of $32.4 million from the General Fund, Measure S, and Measure CC for Capital Projects. Staff works to balance project budget requests to match available funding over the five-year period, recognizing that needs and funding source become less certain further out in the five-year plan.
When looking at projected needs, staff estimates a total of $33.2 million in project budget requests, with funding deficits in 2025-26 and 2029-30. As explained earlier, to balance the 2025-26 CIP budget, available funding from the Capital Projects Fund reserve is proposed to be allocated to align funding contributions with project budget requests, totaling approximately $0.8 million.
Special revenue and restricted funding, including Gas Tax (state gas taxes), Measures A and W (countywide transportation-
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focused sales taxes), Measure M (countywide vehicle license fee), and Road Maintenance and Rehabilitation Account (SB-1 state gas tax) 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 $8.7 million. The proposed project budget requests funded from these special revenue and restricted funding sources total $9.02 million for 2025-26, with $8.99 requested for existing projects and $0.03 million for new projects. The five-year CIP projects a total revenue of $43.4 million from special revenue and restricted funding and a total of $42.4 million in transportation-related project budget requests.
The City also has restricted sewer and storm funding, via ongoing sewer rates and the Community Flood and Storm Protection Fee, imposed this year after property owners voted to approve the new 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 $29.6 million proposed for 2025-26. Of the estimated $4.0 million annual revenue from the new Community Flood and Storm Protection Fee, staff is planning for $3.5 million to be available for capital stormwater needs. Staff continues updating the City’s Storm Drain Master Plan, which will provide a prioritized capital improvement program later in FY 2025-26 that will need to be incorporated into future Council discussions and budgets. For 2025-26, $3.4 million from the Community Flood and Storm Protection Fee revenue will be used to fund stormwater CIP projects.
Parks and Recreation fees, including parks and recreation tax, park impact fees, and park in-lieu fees, are utilized to fund parks and recreation related projects through a transfer to the Capital Project Fund. The estimated contribution to capital projects is $4.5 million in 2025-26 and $2.7 million in subsequent years of the five-year CIP. The proposed project budget requests funded from this funding source total $2.3 million for 2025-26, with $1.9 million requested for existing projects and $0.4 million for new projects. The five-year CIP projects a total revenue of $15.3 million from Parks and Recreation Fees funding and a total of $12.9 million in project budget requests.
The following table details the five-year CIP needs, with $60.7 million proposed for 2025-26 and a total of $267.2 million in project needs over the entire five-year CIP Plan. By project type, the total five-year CIP needs can generally be broken down into $152.3 million (57.00%) for sewer-related projects, including the Clean Water Program (funded by sewer enterprise funds), $61.8 million (23.11%) for transportation projects including street rehabilitation and bicycle/pedestrian improvements (primarily transportation-focused special revenue and restricted funding), $22.1 million (8.28%) for building- and facility-related projects (primarily General Fund and Measure S), $19.9 million (7.45%) for parks-related projects (primarily General Fund, Measure S, and Parks and Recreation fees), $8.3 million (3.10%) for miscellaneous/other project types, $2.6 million (0.97%) for storm-related projects, $0.2 million (0.08%) for bridge improvements. Specific projects included in the proposed five-year CIP are shown in Attachment 1.
Project Budget requests by Project Type (All Funding Sources) Project Type 2025-26
Proposed
2026-27
Need
2027-28
Need
2028-29
Need
2029-30
Need
5-year
Total
Sewer 29,089,000 28,996,805 37,544,930 25,384,035 31,311,652 152,326,422 Streets/Transportation 15,364,293 15,931,636 10,928,000 10,118,000 9,418,000 61,759,929 Buildings/Facilities 5,878,742 4,110,000 2,460,000 3,110,000 6,575,000 22,133,742 Parks & Recreation 6,391,822 2,695,000 6,345,000 1,845,000 2,625,000 19,901,822 Miscellaneous 4,492,000 1,002,000 927,000 927,000 927,000 8,275,000 Stormwater (550,000) 1,050,000 700,000 700,000 700,000 2,600,000 Bridges 75,000 75,000 75,000 - - 225,000
TOTAL 60,740,857 53,860,441 58,979,930 42,084,035 51,556,652 267,221,915 In addition to the proposed five-year CIP, there are many projects City staff has identified that are not included due to insufficient funds, as shown in Attachment 2. These projects have high-level cost estimates that would need to be further refined at the point of becoming a funded project. Notable projects from the unfunded list include Central Park
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Improvements Phases 2-4, renovation of the King Resiliency Center, a new Fire Station #27, Central Park Parking Garage, Corporation Yard, improvements to the Lakeshore Community Center, a Class IV bike lane at Fashion Island, and over 30 projects from the Bike Master Plan.
Staff is also in the process of implementing or developing a number of planning studies that are expected to identify new capital project needs in addition to the known project needs. These efforts include:
•Comprehensive Facilities Assessment: Currently underway, staff is evaluating all City facilities and preliminary needs for improvements are well over $100 million (in 2030 dollars). Staff anticipates a Council study session to present the findings in the fall.
•Storm Drain Master Plan: Currently underway and will provide a comprehensive, prioritized CIP for the City’s storm drainage/flood control infrastructure by the end of the calendar year. Total need is still to be determined. •Citywide Bridge Assessment: Currently in early planning stages to review deficiencies in the City’s existing bridge inventory and will make recommendations to improve the overall condition through maintenance, repairs, and/or replacement of critical structures. The study should be complete within 6-12 months and the current preliminary estimate for potential replacement or repairs is up to $20 million. There are grant funding programs for these types of CIP projects through the Caltrans Bridge Program. •Parks Amenities and Condition Assessment: This evaluation will assess and document the physical conditions, amenities, structures, features, and maintenance requirements of all City parks. This process will help the Parks and Recreation Department objectively plan future maintenance needs and replacement priorities. Potential CIP needs are currently unknown.
•Sewer Collection System Flow Study and Hydraulic Model Updates: With the 10-year, $1 billion Clean Water Program closing out in 2027, updated flow studies and hydraulic models reflecting all the various improvements will be developed to 1) determine if any additional capacity improvements are needed within the sanitary sewer collection system and 2) calibrate the sewer hydraulic model so the City has an accurate picture of system performance which supports development and planning. Potential CIP needs are currently unknown. •Sewer Pump Station and Forcemain Condition Assessment: This future study will identify mechanical and electrical equipment, structural, architectural, and civil improvements required to ensure reliable pump station operations and evaluate the physical condition of forcemains to determine if repairs are needed to ensure reliability and proper operation. Potential CIP needs are currently unknown. •Wastewater Treatment Plant Biogas and Biosolids Evaluation: Currently underway, this study will assess ways to improve the operation and maintenance of the City’s two digesters, beneficial use biogas energy, explore potential options for producing Class A biosolids, and analyze their impact on overall energy production and costs.
Additionally, it will evaluate needed upgrades to the digestion infrastructure. Potential CIP needs are currently unknown.
BUDGET IMPACT:
There is no direct budgetary impact resulting from this report. The 2025-30 CIP Preview identifies $267.2 million in capital 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 2025-26 Proposed CIP Budget and 2025-30 five-year CIP Plan.
ENVIRONMENTAL DETERMINATION:
This budget preview is not a project subject to 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 - 2025-30 CIP Preview by Project Type
Att 2 - Unfunded Project Needs
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STAFF CONTACT
Matt Fabry, Public Works Director
[email protected]
650-522-7309
Jamie Perez, Business Manager
[email protected]
650-522-7242