Agenda Item Wording:
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Capital Improvement Program - Review select FY 2024/25 and 2025/26 Capital Improvement Program (CIP) Budgets and future capital plans for primarily streets and roads.
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Deadline for Action: 3/18/2024
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 third 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. The funds being reviewed primarily cover street and road projects.
Background Discussion:
The Review Process- This is Council’s third opportunity to review a portion of the City’s proposed Capital Plan. Portions of the proposed 2024/25 and 2025/26 capital budget are being brought to Council for review at each scheduled meeting between February 20, and April 15, 2024. This allows Council to conduct their review of the proposed CIP budget in manageable groupings.
The Capital Improvement Program presents the two fiscal years 2024/25 and 2025/26 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. To assist Council in reviewing the proposed CIP projects, staff recommends 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 CIP 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 2024.
The CIP includes all projects and equipment purchases costing $10,000 or more. When possible, capital projects are separated from the operating budget, using separate capital funds. This allows a clear view of capital activities and prevents operating budgets from being artificially inflated by those same capital activities.
Funds for Review- The seven funds to be reviewed today include one impact fee and six special revenue funds.
• Impact Fee funds hold revenue from fees imposed upon new development to pay for the proportionate costs of providing public infrastructure to serve that new development. These funds can only be used for the purchase or construction of new or expanded infrastructure related to the growth from development.
• Special Revenue Funds collect money which must be used for a specific purpose. These funds provide accountability and transparency to tax and rate payers, requiring funding to be spent for an intended purpose.
Transportation Funding: The Funds included in this report represent the majority of revenues available to the City for the construction and maintenance of public roadways within the City of Visalia. Also included is the Measure R Regional Fund which provides funding for projects of regional significance. The only transportation capital funding excluded from this item is the Street Maintenance funding contained in the Measure N budget, which is subject to an additional review by the Measure N committee and is scheduled to be brought to Council for review and discussion on May 6, 2024.
The Citizen’s Advisory Committee annual surveys have shown consistently over the years that maintenance of City roads, traffic signs, and signals is a high priority for the citizens of Visalia, second only to public safety. The Pavement Management System (PMS) is used to prioritize and schedule the maintenance of Visalia’s streets. New construction of City infrastructure, including roads, is driven by development, and the funds to be discussed tonight include projects which have been based upon projections of growth and development in the City of Visalia. Construction of new, and improvement of existing street infrastructure, supports and encourages new development.
The Funds to be discussed in today’s meeting include those listed in Table 1: Capital Budget Funds for Review March 18, 2024, below.
Table 1: Capital Budget Funds for Review March 18, 2024
Gas Tax, Fund 111 (CIP detail attached): This fund receives the local portion of state excise taxes on gasoline and diesel fuel which is allocated through the state Highway Users Tax Account. The highway user’s tax revenues come from special taxes (sales and excise taxes-sections 2103-2107.5) on the sale of transportation fuels which are levied by the State. Gas Tax funds may be used for construction, improvements, and maintenance of streets and roads. To maximize funding for street maintenance, 59% of the projects proposed in the Gas Tax fund are for maintenance projects throughout the City*. Roughly 35% of the Gas Tax fund is currently planned for New Construction, Improvements, and projects to be completed in conjunction with New Construction, with the remaining 6% to be used for the replacement of equipment used by the City Street Maintenance division. However, most projects for construction and improvement of city streets are programmed from Measure R, Transportation Impact Fees and other State and Federal grant programs which are typically housed in the State Transportation Fund (281).
*As noted above, additional street maintenance funding is contained in the Measure N budget, which is subject to an additional review by the Measure N committee and is scheduled to be brought to Council for review and discussion on May 6, 2024, separately from this capital project review process.
Maintenance projects proposed to receive Gas Tax appropriations in the 2-year portion of the budget include:
• Thin skin patching
• Pot hole patching
• Dig outs
• Reclamite
• Minor asphalt overlays
• Pave outs
• Traffic striping
• Traffic signal (TS) maintenance
• TS battery backup maintenance
• Traffic Signal Optimization
• Replacing traffic signs
• Street name sign replacement
• Stop sign installation
• Neighborhood traffic maintenance
The 2-year capital budget proposes funding for the replacement of specialized streets equipment including a street sweeper and two tilt trailers used to haul streets equipment to job sites. The equipment being replaced ranges in age from 24 to 39 years old and has reached the end of its useful life. Also proposed is the purchase of a new Thermoplastic Striper which creates durable and highly reflective street markings. The currently proposed capital budget follows the pattern of past practice for street maintenance with most projects funded annually. Of the 28 proposed projects in this fund, 26 are proposed for funding in the 2-year portion of the budget. For more detail on Gas Tax projects, please see the fund summary included in Attachment A.
SB1-Road Maintenance and Rehabilitation Act (RMRA), Fund 113 (CIP detail attached): This fund, which was established under Section 2032(H)(2) of the Streets and Highway Code with the adoption of SB1, addresses maintenance on local streets and roads. The funding may be spent on road maintenance and rehabilitation, safety projects, railroad grade separations, complete street components, and traffic control devices. Projects eligible for SB1 funding are required to be identified in detail and passed through local government channels with binding resolutions before applying for the state funds. As was intended, this funding has allowed the City to begin addressing deferred maintenance on its transportation infrastructure. This fund has a single annual project in each of the 6 years of the capital plan which is for pavement rehabilitation. This project is discussed below.
• Annual Pavement Rehabilitation: Rehabilitation of various streets throughout the City of Visalia based on priority list established by the Pavement Management System (PMS). Street rehabilitation is done to improve the ride quality, add structural strength, and extend the life expectancy of a street. This project is a longer lasting and important maintenance project for City streets that will be coordinated with the Public Works Department through analysis from Pavement Management System. $3.6 million is programmed for this project annually, funded 100% from SB1 (113).
For more detail on the SB1-RMRA fund resources and projects, please see the fund summary included in Attachment A.
Measure R Local, Fund 131 (CIP detail attached): This fund receives monies from the local portion of the Measure R 1/2 cent Transportation Sales Tax approved by voters of Tulare County in November of 2006. Local agencies collectively receive 1/3 of all Measure R revenues for local projects. These funds may be expended on transportation projects as determined by each local jurisdiction. The Measure R Local fund is proposing 23 projects, with 20 requesting appropriations in the 2-year portion of the budget. These projects include various roadway improvements, traffic control signals, and fiber-optic connections for the Intelligent Transportation System (ITS) which connects traffic signals and cameras to the Traffic Management Center (TMC) at the Visalia Emergency Communications Center (VECC). The two largest projects included in the 2-year portion of the capital budget are discussed below:
• Mill Creek Parkway - Lovers Lane to McAuliff: Collection of data for preparation of traffic study for the intersection of Mill Creek Parkway and McAuliff Street to design (2024/25) and construct (2025/26) an intersection control treatment which may include a traffic signal; Cape seal along Mill Creek Parkway; Striping Mill Creek Parkway to convert from 2 lanes to 4-lanes and planned replacement of existing wooden median lights. Data collection to include intersections at Lovers Lane/Mill Creek Parkway; McAuliff/E. Mineral King Ave; McAuliff/Murray; McAuliff/Douglas; and McAuliff/Houston. Multi funded project total of $2.25m from $1.98m Measure R Local (131), and $275k LTF Funds (281-LTF).
• Cameron Avenue Median Extension: Project will extend the existing median within Cameron Avenue from Stonebrook Street approximately 1,100 feet west connecting to the existing median within Cameron Avenue. Project will also include installation of a traffic signal at the main drive into the Costco shopping center to align with the development located at the northwest corner of Cameron Avenue and Stonebrook Street. Cameron Avenue will also be restriped to accommodate the constructed median and traffic signal. Project total of $850k from 100% Measure R Local.
For more detail on the remaining projects proposed for Measure R Local funding, please see the fund summary included in Attachment A.
Measure R Regional, Fund 133 (CIP detail attached): This fund receives monies from the regional portion of the Measure R 1/2 cent Transportation Sales Tax approved by voters of Tulare County in November of 2006. Regional projects in Tulare County collectively receive 1/2 of all Measure R revenues. The Tulare County Transportation Authority (TCTA) administers the Measure R expenditure plan which restricts how this money can be spent. The Measure R Regional fund is proposing 6 projects, with 5 requesting appropriations in the 2-year portion of the budget. The largest project proposed for this fund is discussed below.
• Shirk Street Widening - Walnut to Noble: Widen Shirk from 2-lanes to 4-lanes including center median from Noble to Walnut Avenue. Install master storm trunk line, ditch culvert extension, curb & gutter, pavement, bike lanes, street lighting, utility pole relocations, median landscaping, and other necessary infrastructure. Project is necessary to continue widening Shirk and alleviate traffic congestion for future development. Sanitary and Storm Sewer improvements are funded by a separate project. Multi funded total of $13.4m from $44K Wastewater Trunkline (231), $2m Storm Sewer Construction (221), $5.18m Transportation Impact (241), $136k Measure R Local (131), $1m Measure R Trails (132), $5m Measure R Regional (133).
For more detail on the remaining projects proposed for Measure R Regional funding, please see the fund summary included in Attachment A.
Transportation Impact Fees (TIF), Fund 241 (CIP detail attached): This fund is derived from developer fees collected at the time of building permit issuance or, if the developer requests, at the time of occupancy. Funds can be used only for construction of new street improvements and expansion of transportation facilities related to growth as included in the Circulation Element of the City’s General Plan.
TIF Program: When the City approves a project for development, it is committing to provide the necessary community-wide public improvements, including transportation infrastructure, to support that development. When setting the price of development impact fees, staff projects the development need based upon the current General Plan and its elements, namely the Circulation Element. All available sources of funding for required infrastructure are considered when TIF fees are reviewed. Impact fees are the funding of last resort and are set equal to the transportation plan’s revenue shortfall. The intent of impact fees is to ensure the necessary funding for the proportionate costs associated with new development and its impact on City infrastructure.
The City’s TIF Fund continues to project a large deficit in the 6-year capital plan with needs that outweigh the resources unless projected development actually happens, bringing additional TIF revenues with it. Projects are planned and prioritized based upon projected development and must be chosen based upon the need to support new development as it occurs. Over the next two years, staff will continue to evaluate the projects included in the planning years and recommendations for which projects to move forward will be brought back in the next capital plan. The largest project with appropriations in the 2-year portion of the budget is for reimbursement of developers for construction of eligible streets, under formal agreements with the City, in conjunction with their own development projects. The next largest project with appropriations in this fund is discussed below.
Goshen Widening (South) Ben Maddox to Burke: Widen South Half of Goshen Avenue from Ben Maddox to Burke Street. Project includes widening Goshen to a full 84 foot, 2-lane collector. Improvements include paving, curb, gutter, sidewalk, ADA ramps, streetlights, bike lanes, landscaping, and irrigation conduit. This project will require coordination with utilities to relocate poles, property owners to relocate and install drive approaches, and acquisition of ROW. Improves traffic circulation and pedestrian accessibility. Widening will also have a positive impact on development for the Civic Center and commercial parcels within the area. Project total of $1.49 million from 100% TIF (241).
The TIF fund has 20 projects in the 6-year plan with 14 of those projects proposed for appropriations in the 2-year portion of the budget. For more detail on proposed TIF projects, please see the fund summary included in Attachment A.
Landscape and Lighting, Fund 273 (CIP detail attached): This fund receives property tax assessments on property owned within each Landscape and Lighting (L&L) District to be used for maintenance of common areas, street maintenance and landscaping. Funds may be used only within each individual L&L District for costs included in the engineer's report prepared at the time of the creation of the L&L District.
The 6-Year Capital Plan includes projects for eligible street maintenance and enhancements for L&L districts with available funding that include landscaping, sidewalk repair, and irrigation controller replacements. The operating portion of this fund which provides for the regular maintenance of the L&L districts will be brought to Council in June along with the operating budget. In 2005, newly formed L&L Districts began to include street maintenance in their engineer’s reports and assessment amounts. There are now 65 L&L districts that include street maintenance. Based upon the street maintenance schedule included in the individual L&L’s engineer’s reports, reclamite, crack seal, overlay, and cape seal projects are proposed during the 2-year portion of the CIP budget.
All L&L’s which include street maintenance also include an automatic inflation of the annual assessment amount. The cash balance of each L&L is evaluated annually and automatic increases only take effect if they are found to be necessary. Street maintenance projects for individual L&L’s will be grouped together annually and combined with other like projects for bidding to achieve any available economies of scale. For more detail on Landscape and Lighting projects, please see the fund summary included in Attachment A.
State Transportation, Fund 281 (CIP detail attached): This fund is derived from 1/4 cent of statewide sales tax collected and returned to each County in compliance with the Local Transportation Development (LTD) Act. These funds are administered by the Tulare County Association of Governments (TCAG) and the first priority for use of the funds is public transit (buses). After transit needs are met, the remaining monies, as well as various discretionary revenues, may be used for road and street purposes, including bike/pedestrian facilities. Transportation-related grants awarded to the City of Visalia are also housed in this fund. These monies are to be used only for approved transportation projects in compliance with the requirements of their individual funding sources. This fund has 13 proposed projects in the 6-Year Capital Plan with 9 projects proposed to receive appropriations in the 2-year budget. These projects include a combination of traffic signal installations and fiber optic connections to the Intelligent Transportation System (ITS), as well as an active transportation project (Greenway Trail from Mill Creek to St John’s) and Local Transportation funding for the Mill Creek Parkway improvements from Lover Lane to McAuliff that is discussed above in the Measure R Local section.
For more detail on State Transportation Fund projects, please see the fund summary 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 2026/27 through 2029/30 is provided for information and planning purposes and will be revised, updated, and adopted in 2-year increments.
The attached spreadsheets summarize each fund and provide a detailed list of the proposed project. The fund title and number are followed by a brief explanation of the revenue source 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 the projected ending cash balance for each of the six years.
Prior Council Action: The following is a list of Capital Funds reviewed at prior Council Sessions: 
Other: Table 3 is a summary of the remaining capital funds to be reviewed by Council on the dates indicated.
Alternatives: None recommended.
Recommended Motion (and Alternative Motions if expected):
recommendation
No motion is required or requested at this time.
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Environmental Assessment Status: N/A
CEQA Review: N/A
Attachments:
Attachment A: Summary of Proposed Capital Projects by Fund
Attachment B: Directory of Map Point and Maps