Agenda Item Wording:
title
Review select FY 2022/23 and 2023/24 Capital Improvement Program (CIP) Budgets and future capital plans.
body
Deadline for Action: 2/7/2022
Submitting Department: Finance and Technology Services
Contact Name and Phone Number:
Melody Murch, (559)713-4379, melody.murch@visalia.city <mailto:melody.murch@visalia.city>
Renee Nagel, (559)713-4375, renee.nagel@visalia.city <mailto:renee.nagel@visalia.city>
Department Recommendation:
That the City Council receive this first presentation of the City’s draft Capital Improvement Program (CIP) budget and provide direction as appropriate. The Council is scheduled to act upon the CIP budget during the month of June in conjunction with the operating budget. No formal action is required or requested at this time.
Background Discussion:
This is Council’s first opportunity to review the City’s proposed Capital Plan. Portions of the proposed 2022/23 and 2023/24 capital budget will be brought to Council for review at each scheduled meeting during the months of February and March 2022. This allows Council to conduct their review of the proposed CIP budget in manageable groupings.
The Capital Improvement Program presents the two fiscal years 2022/23 and 2023/24 for adoption and appropriation. Four additional years are shown for planning purposes only. This allows Council to plan future projects and consider the near-term impacts of those decisions. However, only the first two years are proposed for appropriation and deserve greater scrutiny. Amounts included in the final four years will not be appropriated in the 2-year budget.
Staff has prepared a Power Point presentation to review the proposed Capital Programs of the various funds discussed below. CIP Project Managers will be available to address Council’s questions on proposed projects. In order to assist Council in reviewing the proposed CIP projects, staff would recommend the following:
• Staff will present a summary of proposed project appropriations and provide Council with the opportunity to request further information on individual projects.
• It is recommended that Council review and either tentatively approve or direct changes to the attached proposed Capital Improvement Program (CIP) budgets for the selected funds.
• No formal action is required at this time. At Council’s direction, staff will return with additional information or changes to the Capital Improvement Program at a following meeting, until all projects have been reviewed, and Council is satisfied with the proposed capital budget for all funds.
• A final Capital Improvement Program document will be prepared, after the review process is completed, and included for adoption with the City’s Operating Budget in June 2022.
The CIP includes all projects and equipment purchases costing $10,000 or more. When possible, Capital Projects are separated from the operating budget, by the use of separate capital funds. This allows a clearer view of capital activities and prevents operating budgets from being artificially inflated by those same capital activities.
Funds for Review- All three funds to be reviewed today are enterprise (business-type) funds. Enterprise funds are meant to be self-sufficient, and revenues are restricted to uses designated within the fund in which they are received. Enterprise funds are typically independent of the General Fund and any subsidy required for the necessary operations of an enterprise fund will be noted in the narrative below. In general, dollars not used for operating in these funds are available for capital projects. The remaining enterprise funds with capital requests will be brought to Council for review as scheduled and shown in Table 2: Capital Funds to be reviewed by Council in Future Sessions, which is shown towards the end of this item.
The Funds to be discussed in today’s meeting include those listed in Table 1: Capital Budget Funds for Review February 7, 2022, below.
Table 1: Capital Budget Funds for Review February 7, 2022
Animal Services, Fund 406 (CIP detail attached): This fund was established to account for the operation of the City’s Animal Control facility and the state mandated services provided there. The revenue in this fund is generated by user fees for pet licensing, adoptions, vaccinations and shelter related fees. This fund receives an annual cash transfer from the General Fund which is used in combination with the fees for services to operate the Animal Services division. Because this fund does not fully cover its own expenses with the revenues it generates, any capital request will increase the transfer amount required from the General Fund.
The Animal Service Center was completed and opened by the City in 2016 and the provision of Animal Services was brought in-house by the City in that same year. With minimal maintenance required on this newer facility, the Animal Services Division has submitted only one capital request for replacement of a vehicle.
Replace one (1) of the existing Animal Control Vehicles ($70,900 - 2022-23): The existing 10-year-old unit has reached the end of its useful life and will be sent to auction, since it has 172,300 miles on it and is not fit for use in another department. In addition, this unit is frequently in the maintenance shop for repair. This is the only Animal Control Vehicle not equipped with air conditioning for the animal boxes mounted on the truck bed. The unit is equipped with a swamp cooling unit and the boxes are rotting from years of use and exposure to animal waste. The replacement unit will be equipped with air conditioning which is important for the safety of the animals in the hot summer months.
Airport, Fund 411 (CIP detail attached): The Airport Fund’s primary revenue source is airport user fees, such as hangar rentals and fuel sales. These revenues are used to fund the Airport’s operating expenses. Funds not used to pay operating expenses are set-aside for capital. The Airport Fund has recently begun to show the ability to fully cover operating expenses with the revenue it generates, and to also fund smaller capital projects. The airport’s primary source for larger capital projects is Federal Aviation Administration Airport Improvement Program (FAA-AIP) grants. Based upon the Airport Layout Plan, the City submits projects to the FAA for possible funding. According to FAA criteria, the projects are prioritized and ranked resulting in a tentative funding plan. If the City chooses to accept the proposed funding, when it is made available, the projects can move forward. The standard match requirement for Federal Aviation Administration (FAA) funding increased from 5% to 10% when the Visalia Airport was accepted into the Community Flexible Pilot Program in 2016. The Airport is eligible to receive a 5% match from the Caltrans Department of Aeronautics (DOA) which pays a portion of the required 10% local match. The remaining balance of required match amounts must be paid from the Airport fund balance.
Requested appropriations in the 2-year capital plan include three (3) projects planned to receive funding from the FAA-AIP. Only projects which receive a final award of grant funding will move forward. The remaining two (2) projects in the Airport’s capital plan are for general maintenance of the Airport facility and are proposed for funding from the Airport Fund. Proposed projects include an update to the Pavement Maintenance Management Plan, facility maintenance, design of Taxiway A & B and Hangar H3 (Row 10), and the replacement of the Airfield Sweeper. The FAA-AIP funded projects are discussed further below.
Pavement Maintenance Management Plan (PMMP) ($120,000 - 2022-23): The PMMP outlines planned inspection procedures, pavement condition assessment, maintenance protocols and procedures, and the projected pavement lifespan. Federally obligated airports must perform a detailed inspection of airfield pavements and report to the FAA. This plan must be updated every ten (10) years per FAA guidelines for any Grant funded Airport projects as part of the Airport Improvement Program. This project would be funded with $108k FAA-AIP, $5k Cal Trans Aero, and $7k from the Airport Fund (411).
Replacement of Airfield Sweeper ($270,000 - 2022-23): This 20-year-old sweeper has reached the end of its useful life. The excessive age makes costly repairs more difficult and causes extended downtime. The airport is currently using a less efficient pull-behind sweeper attachment with a tractor as a backup which requires significantly more staff time to operate. Keeping airport movement areas clear of foreign object debris (FOD) is of the utmost importance for safe/efficient air travel and this project is planned for FAA-AIP funding which makes replacement of the sweeper more financially feasible than the cost of staffing for the more time-consuming backup equipment. The project will be funded with $243k FAA-AIP, $12k DOA, and $15k from the Airport Fund (411).
Design of Taxiway A & B and Hangar (H3-Row 10) reconstruction project ($455,000 - 2023-24): Design of these airport improvements is planned for 2023-24, with construction to follow in 2024-25. These movement areas have minimal remaining expected life span, and the exact functional lifespan will be verified by the PMMP discussed above. Pavement condition is a critical measure of airport performance and reconstruction before failure occurs is important for both cost effectiveness and safety. The appropriation requested in 2023/24 for project design would be funded with $410k FAA-AIP Grant, $20,500 State DOA, and $25k Airport Fund 411. Construction of these improvements is in planning year 2024-25 and will not be appropriated in the 2-year budget. Construction would be funded with $3.4m in FAA-AIP Grant, $171k State DOA, and $210k from the Airport Fund (411).
This fund is projected to have a sufficient balance to cover the airport portion of all projects requested with no advances from the General Fund during the 6-year plan period. The Airport Fund has a total of five (5) projects in its 6-year capital plan which are included in the Summary of Proposed Capital Projects attached.
Transit, Fund 452 (CIP detail attached):
This fund was established in 2018 to manage the Capital Projects of the City’s Transit Division separately from operating expenditures. The fund receives Local Transportation Funds (LTF), Federal Transportation Agency (FTA) capital funding, Measure R Transit Funds, capital set asides from the National Park Service contract for Sequoia service, and various other State and Federal capital grants. This revenue is to be used for Transit Capital expenditures only.
Transit’s plan for the next 6 years includes 9 Capital Improvement projects, all of which are requesting appropriations in the 2-Year Budget. The focus of projects planned for the 2-year budget is the construction of a new bus transfer station, maintenance of Transit Facilities and Bus Stops, and Replacement of aging vehicles. Some highlights include:
Bus Transfer Station ($3,500,000 - 2022-2024): This project will acquire the site and construct a satellite bus transfer facility at Woodland and Visalia Parkway allowing passengers to transfer between routes and complete their trip without traveling through the Transit Center. Funding includes design, property acquisition and construction. A transfer station will allow more efficient routes to be designed, reducing route mileage. This project is eligible for LTF, CMAQ competitive grant funds, and $1,000,000 in Measure R funds designated in the original Measure R funding plan for Visalia Transit Center expansion. The City will also apply for any additional grant funding available and any additional grant funding received will reduce the LTF portion of the project, however, the project will move forward even if no additional grant funding is received. This multi-funded project is projected to be paid for with $1 million from Measure R Transit funds and $2.5 million in LTF, including $500k in prior year appropriations.
Transit CNG Station Study and Upgrade ($100,000 - 2022-23): The Transit CNG station services Transit CNG buses, Solid Waste trucks, and operates a fueling island available to other agencies and the general public. The station has been operating 30% above its designed capacity which increases the frequency of station breakdowns. With the State-required conversion to Battery Electric Buses (BEB’s), it is necessary to fully evaluate the City’s future CNG fueling needs prior to the design of CNG station upgrades. The cost of this project will be shared with Solid Waste based upon their percentage of station usage. The 2022-23 appropriation of $100k will be paid $70k by Transit (452) and $30k by Solid Waste (441). The construction cost of $2.4m, if recommended, would be funded with $1.7m from an Transit FTA 5337 grant and a Solid Waste contribution of $660k (441).
Transit Center (TC) Doors (2023-24, $250,000): This project will replace or repair twelve (12) TC wooden doors with commercial grade steels doors and includes replacement of door jambs, installation of two ADA compliant door opening devices on the North and South main doors, de-construction and replacement of sections of the surrounding wall, and painting of the 1st floor building exterior. This project has been pushed out to the 2023-24 capital year based upon the anticipated demand on staff time. The existing doors are suffering from excessive wear and tear. The wood has begun to rot, and they frequently require replacement parts which are difficult to locate, causing doors to remain out of order for months at a time. The special requirements of the Transit Center building make this a challenging project which was originally budgeted to cost $50,000 and bid out in 2019. The bid process found the need for extensive carpentry to be included in the project, due to the need to reconstruct door jams/frames to accommodate the commercial steel doors, and no bids were received. The increased project budget being requested will allow staff to revise the scope of work and rebid this project.
Transit is also planning the replacement of a significant number of vehicles in the capital plan. Seven (7) Fixed Route CNG buses will be replaced with BEB’s in the 2-year budget. Seven (7) Sequoia Kings Shuttle (SEKI) cutaways will be replaced with similar vehicles in the 2-year budget, and six (6) more SEKI cutaways are planned for replacement during the remainder to the 6-Year capital plan. Ten (10) SEKI trailers used to house bus drivers in the Sequoia National Park, are planned for replacement in the 2-year budget. All SEKI vehicles planned for replacement will be paid for with revenues set aside from the National Park Service contract for SEKI services and no local Transit funds will be used. For additional projects and details included in Transit’s proposed capital plan, please see the CIP detail included in Attachment A.
Fiscal Impact:
The City’s Capital Improvement Plan details a six-year plan for the expenditure of funds and the completion of projects (see Attachment A). Information for the years 2022/23 through 2027/28 is provided for informational and planning purposes and will be revised, updated, and adopted in 2-year increments.
The attached spreadsheets summarize each fund and also provide a detailed list of the proposed projects. The fund title and number are followed by a brief explanation of the revenue source(s) and general purpose of the fund. Each fund summary shows projections of the beginning cash, operating revenue (or capital contribution from operating revenue), operating expenditures, proposed CIP expenditures, and ending cash balance for each of the six years.
Prior Council Action: None.
Other:
Table 2: Capital Funds to be reviewed by Council in future Council Sessions, below, is a summary of the capital funds to be reviewed by Council during the months of February and March 2022, prior to their adoption:
Alternatives: None Recommended.
Recommended Motion (and Alternative Motions if expected):
recommendation
No action is required.
end
Environmental Assessment Status: N/A
CEQA Review: N/A
Attachments:
Attachment A: Summary of proposed Capital Projects by Fund
Attachment B: Directory of Map Points and Maps