Agenda Item Wording:
title
Capital Improvement Program - Continue review of select Fiscal Year 2026/27 and 2027/28 Capital Improvement Program Budgets and future capital projects. Funds to be reviewed are Measure R Bike/Trail, Recreational Facilities, Storm Sewer Construction, Storm Sewer Deficiency, Groundwater Recharge, Waterways, and Storm Sewer Maintenance.
body
Prepared by: Nichol Ritchie, Finance Manager, Nichol.Ritchie@Visalia.gov, (559) 713-4379; Renee Nagel, Finance and Technology Services Director Renee.Nagel@Visalia.gov, (559) 713-4375.
Department Recommendation: It is recommended that the City Council receive this second Capital Improvement Program (CIP) presentation and provide directions as appropriate. This presentation is informational in nature and intended to support Council’s review of the draft CIP budget prior to formal adoption in conjunction with the upcoming two-year operating budget. No formal action is required or requested at this time.
Summary:
The Capital Improvement Program (CIP) represents a comprehensive six-year planning document that outlines the City’s proposed capital investments in infrastructure, facilities, and equipment. The first two fiscal years (FY 2026/27 and FY 2027/28) are proposed for adoption and appropriation, while the subsequent four years are included for long-range planning purposes to provide transparency regarding anticipated infrastructure needs, funding capacity, and future project timing.
Only the first two years of the CIP will be appropriated in the proposed two-year budget and therefore warrant the greatest level of review.
Background Discussion:
Capital Review Process:
This item represents Council’s initial opportunity to review a focused portion of the City’s proposed Capital Improvement Plan for Fiscal Years 2026/27 and 2027/28. The CIP is being presented in a series of meetings from February through April 2026 to allow for a more detailed and manageable review of projects by funding category and infrastructure type.
This CIP includes proposed capital projects that address regulatory requirements, aging infrastructure, system deficiencies, environmental compliance, and growth-related capacity needs. Projects included within the identified funds are primarily associated with stormwater improvements, basin construction and rehabilitation, groundwater recharge, waterways and riparian restoration, parks, and maintenance and replacement of essential stormwater equipment.
The two fiscal years (2026/27 and 2027/28) are proposed for adoption and appropriation. Four additional years are shown for planning purposes only to assist the City Council in evaluating long-term infrastructure needs, funding sustainability, and the potential impacts of future development and environmental requirements. Amounts shown in the outer years are not appropriated within the two-year budget and are subject to change based on funding availability, grant awards, development activity, and updated master plans.
Staff have prepared a detailed PowerPoint presentation summarizing the proposed capital projects within the identified funds discussed below. CIP project managers will be available during the presentation to provide technical information, respond to Council questions, and clarify project scope, funding sources, and implementation timelines.
To assist Council in its review, staff recommends the following:
• Staff will present a summary of proposed project appropriations by fund.
• It is recommended that Council review the proposed capital projects included within the identified funds and provide direction to staff by either tentatively concurring with the proposed appropriations or requesting revisions, prioritization adjustments, or additional information on specific projects.
• No formal action is required this evening. At Council’s direction, staff will incorporate any requested changes and return with updated information, if needed, at subsequent CIP review meetings.
• Upon completion of the review process, a finalized Capital Improvement Plan document will be prepared and presented to the City Council for formal adoption in conjunction with the City’s Operating Budget in June 2026.
The Capital Improvement Plan includes capital projects and equipment purchases of $10,000 or more. Capital projects are budgeted separately from the operating budget using separate capital funds. This separation provides greater transparency into long-term infrastructure investments and ensures that one-time capital costs do not distort ongoing operating expenditure or service-level analysis.
Funds For Review
The seven funds included in this presentation consist of a targeted group of restricted capital funding sources that support stormwater infrastructure, groundwater sustainability, waterways, parks, and trails. The Funds to be discussed in today's meeting are listed in Table 1: Capital Budget Funds for Review March 2, 2026. The table shows the funds and the total recommended capital appropriation for each budget year.
Table 1: Capital Budget Funds for Review - March 2, 2026
Several projects are funded by multiple funds; however, each fund only shows its contribution to the project. Projects that include funding from multiple funds will list each fund’s contribution in the project description. Below is a description of each fund and highlights of proposed projects. A detail project list, by fund, is included in Attachment A.
Measure R Trailways - Fund 132
The Measure R Trailway Fund is supported by a voter-approved one-half cent transportation sales tax originally established in 2006 for a 30-year term. The City of Visalia receives an allocated share of Measure R revenues, with approximately fourteen percent (14%) dedicated specifically to bicycle, pedestrian and multi-use trail improvements after required funding for regional transit and eligible countywide transportation programs. Measure R Trailway funds are legally restricted and may only be used for eligible planning, design, construction, and rehabilitation of multi-use trails, active transportation corridors, and related safety improvements. All projects must be consistent with the adopted Measure R Expenditure Plan and are administered on a reimbursement basis through the Tulare County Association of Governments (TCAG).
Measure R Trailway revenues are programmed to preserve existing trail infrastructure, address aging trail conditions, and expand the City’s trail network in alignment with the General Plan, Active Transportation goals, and community mobility priorities.
For the FY 2026/27 and FY 2027/28 budget period, the primary emphasis of Measure R Trailway funding is the preservation and structural maintenance of aging trail infrastructure, along with strategic coordination of trail improvements within larger roadway, park, and regional infrastructure projects. This approach ensures that limited Measure R funding is utilized efficiently while maximizing connectivity and long-term system value.
The fund has six projects proposed in the two-year budget, including ongoing appropriations for trail preservation and rehabilitation activities. These efforts focus on pavement maintenance treatments such as crack sealing, slurry sealing, asphalt overlay, and full-depth repairs which are necessary to extend the useful life of existing trail infrastructure and maintain safe conditions for public use.
The largest project proposed in this fund is summarized below and is supported by multiple funding sources:
• East Side Regional Park On-Site Streets & Infrastructure ($1.5M): This project includes the design of interior streets and supporting infrastructure within the East Side Regional Park site, including McKinley Avenue and Villoy Avenue. Improvements encompass utilities (water, sewer, gas, and electrical), roadway alignments, drainage improvements, lighting, parking analysis, and preliminary engineering necessary to refine the park’s master plan layout. While primarily an infrastructure and site development project, it also supports long-term trail connectivity, internal circulation, and safe public access throughout the park. The project establishes the foundational infrastructure required for phased park development and future recreational amenities. Excluded in this project is the design of play fields, buildings, and other public recreation facilities. This project is multi-funded for a total of $24 million.
o $1.5m from Measure R Trailways (132)
o $16.8m from Recreational Facilities Impact Fee (211) including prior year funding of $1.9m
o $5.5m from Transportation Impact (241) including prior year funding of $621k
o $307k from Wastewater Trunkline (231).
Funding identified in the outer planning years is based on development projections and regional funding assumptions and will be re-evaluated during future budget cycles to ensure alignment with available revenues, project readiness, and Council priorities.
Recreational Facilities Impact Fee - Fund 211
The Recreational Facilities Impact Fee Fund is derived from developer impact fees paid by developers of residential property in lieu of providing parks and open space improvements. These fees are restricted to the acquisition, design and construction of new parks, park expansions, and recreational facilities necessary to serve growth within the City of Visalia.
Revenue collected in this fund is directly tied to development activity and must be used in accordance with the City’s adopted Parks and Recreation General Plan and nexus requirements. As growth continues in Visalia and surrounding areas, the demand for neighborhood and regional park infrastructure has increased, requiring strategic allocation of limited impact fee resources.
Funds are programmed exclusively for capital improvements that expand recreational capacity, including park acquisition, site development, infrastructure installation, and related amenities such as trails, open space, playgrounds, and passive recreation areas.
Impact Fee funding cannot be used for routine maintenance or operational costs. A comprehensive study of the fees will be conducted once the recreation and park master plan is completed.
Over the next several fiscal years, the primary focus of this fund will be the design and phased construction of East Side Regional Park improvements, including basin infrastructure, internal streets, and site planning necessary to support future recreational amenities. Additional funding is also allocated toward technology and facility improvements that enhance park operations and community access to recreational services.
Given the number of planned park projects and escalating construction costs, available funding does not fully meet long-term capital needs. As a result, projects are prioritized based on growth impacts, grant opportunities, and alignment with the City’s adopted master plans. Staff will continue to pursue state and federal grant funding and evaluate project phasing to maximize the use of available impact fee revenues while ensuring recreational facilities keep pace with community growth.
This fund has seven projects proposed in the two-year budget. The two largest projects are listed below:
• East Side Regional Park On-Site Streets & Infrastructure: Project is multi-funded as described above in the Measure R Trailways Fund (132).
• City Inclusive Park ($1.6M): Development of an inclusive community park funded primarily through the State of California Prop 68 Grant Program. Original amount from Prop 68 grant funding was $7,829,352 and $51,000 to be absorbed by Parks & Rec, however due to inflationary construction cost increases since the original 2021 application. This project currently reflects a $1.9M shortfall that staff is actively evaluating. The park will provide accessible recreational amenities and community space in the Oak Street corridor between Burke St. and Imagine U Children's Museum, supporting equity, accessibility, and neighborhood revitalization goals. Project total of $9.75M.
o $7.4M State Grant in General Fund (001)
o $1.6M Parks & Rec (211) including $51K prior year funding
o $300K from NE Capital Improvement (291)
Storm Sewer - Fund 221
This fund is primarily funded by Storm Sewer developer impact fees collected at the time of development, along with a portion of the monthly storm sewer user fee allocated to capital infrastructure. These revenues are used exclusively for the design and construction of new storm sewer infrastructure needed to support growth, address drainage deficiencies, and implement the City’s Storm Sewer Master Plan.
In addition to impact fees, this fund shares $.84 of the $2.70 monthly storm sewer fee with the Wastewater Trunk line Construction Fund (231). Storm basin projects are often coordinated with neighborhood parks, trails, and regional basin sites where it is feasible to maximize land use efficiency and reduce overall project costs. Landscaping for basin projects is maintained at a functional level consistent with current City standards and fiscal constraints. Funds are to be used only for construction of new storm drain systems, regional basins, trunklines, and associated infrastructure that address drainage capacity, flooding risks, and long-term system reliability. A storm master plan is currently being developed. Once the master plan is approved a nexus study will be conducted to potentially increase fees. This fee study is for all storm fees which include the Storm Sewer Construction Fund (221 Fund), the Storm Deficiency Fund (222 Fund), and the Storm Sewer Maintenance Fund (481). To balance the fund in the two years proposed, projects were deferred to outer years.
This fund has twelve projects proposed in the two-year budget. The three largest projects are listed below:
• Modoc Basin / Linwood Embankment Improvements ($1.8M): This project includes construction of a multi-use trail around Modoc Basin, basin improvements, and preparation for the future extension of Linwood Street north of Riggin Avenue. The trail will be approximately 3,900 fee (10-12 feet) and include landscaping, solar lighting, benches, trach receptacles, signage, and perimeter fencing consistent with City standards. Basin improvements will define the ultimate footprint, support flood control and groundwater recharge, and accommodate future Tier II urban development. Work also includes embankment construction and rough grading of the future Linwood Street alignment. Multi-funded project supporting long-term drainage, mobility, and regional growth.
• Linwood Street Extension - North of Riggin ($1.4M): This project is the design and construction of roadway and storm drainage improvements along the future Linwood Street alignment to provide access to developing areas and integrate with the City’s broader stormwater and transportation infrastructure network.
• Northside Scenic Corridor - Shirk & Hillsdale Storm Basin ($1.2M): This project will deepen and enhance the existing storm basin within the SR198 Open Space setback area to increase capacity and improve regional drainage. Improvements include landscaping, fencing, and pedestrian trail connection. The project supports long-term stormwater management and community amenities.
Storm Sewer Deficiency - Fund 222
This fund receives $.67 of the $2.70 monthly storm sewer fee. The funds are to be used for construction of storm sewer facilities to correct existing deficiencies as identified in the Storm Sewer Master Plan. The projects in this fund reduce the potential of flooding during storm events.
A storm master plan is currently being developed. Once the master plan is approved a nexus study will be conducted to potentially increase fees. This fee study is for all storm fees which include the Storm Sewer Construction Fund (221 Fund), the Storm Deficiency Fund (222 Fund), and the Storm Sewer Maintenance Fund (481).
The Storm Sewer Deficiency Fund has 3 projects in its capital plan, two of which are proposed for funding in the two-year budget and the most significant project proposed for funding in the next two years is discussed below.
• County Center/Evans SD Lift Station Overhaul ($530k): Funding for evaluation, design, and reconstruction/retrofit of the existing storm drain lift station at County Center and Evans Ditch, just north of Walnut Ave. The existing lift station is poorly designed and constructed leading to poor utilization of existing pumps and flooding on County Center, Demaree, Tulare, and local streets in the surrounding neighborhoods. This project has been identified by Water Collections as a high priority existing deficiency. Existing pumps will be removed and returned to service once the wet well is redone. Project total of $900k, includes prior year funding of $370k.
Ground Water Recharge - Fund 224
This fund is derived from a portion of the monthly City utility bill. The fees for this fund are based on the size of the water service line and range from $.63 to $72.27 a month per water connection. In 2002, the City Council adopted this additional fee as part of an agreement with the Tulare Irrigation District and the Kaweah Delta Water Conservation District for the acquisition of water and other activities to improve groundwater levels. This fund contributes to projects which create opportunities to improve groundwater levels and increase the supply of water to the city. Contributions from this fund for basin projects are contingent upon geotechnical testing to determine the soil infiltration qualities of the basin and any necessary testing will be completed prior to the expenditure of any ground water recharge funds.
Projects with requested appropriations in the 2-year budget are mainly focused on the design and construction for the East Side Regional Park (ESRP) Basin E masterplan to cover approximately 12-13 acres and will include grading, 3-4 drywells, a hydroseed finish and amenities such as trails and landscaping and the design and construction on Basin F Phase 1 and Phase 2. Also included in the proposed two-year plan is the Ground Water Recharge portion of the Modoc Basin/Linwood Embankment project mentioned above in the Storm Sewer fund
This fund has seven projects proposed for funding in the two-year budget. The largest project requested in the two years is listed below:
• Modoc Basin / Linwood Embankment Improvements ($1M): This project includes construction of a multi-use trail around Modoc Basin, basin improvements, and preparation for the future extension of Linwood Street north of Riggin Avenue. The trail will be approximately 3,900 fee (10-12 feet) and include landscaping, solar lighting, benches, trach receptacles, signage, and perimeter fencing consistent with City standards. Basin improvements will define the ultimate footprint, support flood control and groundwater recharge, and accommodate future Tier II urban development. Work also includes embankment construction and rough grading of the future Linwood Street alignment. Multi-funded project supporting long-term drainage, mobility, and regional growth.
Waterways - Fund 261
This fund is derived from developer impact fees. The funds are restricted for acquisition and development of setbacks along waterways designated in the Visalia General Plan and restoration of riparian vegetation along the setback areas. The Waterways Fund has five (5) projects included in the capital plan, all of which are proposed for funding in the 2-year portion of the budget. The largest project is listed below:
• Annual Acquisition and Restoration Riparian Area Right of Way - ($3.1M): This project will work with developers to purchase Right-of-Way along waterways as part of development to preserve and restore native riparian vegetation. This project is meant to occur in conjunction with any development in these areas. Project total $3.6M including $500K from prior year.
Storm Sewer Maintenance - Fund 481
This proprietary fund receives monies generated from storm sewer user fees. The fees for this fund are collected with the monthly utility bill, and each parcel is charged $.24 per 1,000 sq. ft. In addition, this fund shares a portion of the monthly flat storm sewer rate. Funds are to be used only for operation, maintenance, and storm sewer improvements, including equipment and vehicle acquisitions related to collection and disposal of storm runoff. Storm sewer maintenance is needed to maximize drainage and prevent water damage during storm events.
In April of 2013, Resolution 2013-25 was adopted making local storm channel maintenance an eligible use of the Kaweah Lake Enlargement/Storm Sewer Maintenance portion of the fee. This has allowed funding to be shifted from the Kaweah Lake fund (223) to the Storm Sewer Maintenance Fund (481). This infusion of funding provided for an increase in staffing; however, it did not provide for any significant increase in capital projects, and the Storm Sewer Maintenance Fund remains unable to fund capital improvements which are needed for the repair and maintenance of the City storm drainage system. These projects which continue to be pushed out to the budget planning years, where they create significant deficits, are evidence of this on-going challenge. Without additional funding, projects will again need to be reduced in years 3-6 of the capital plan to prevent deficits.
A storm master plan is currently being developed. Once the master plan is approved a nexus study will be conducted to potentially increase fees. This fee study is for all storm fees which include the Storm Sewer Construction Fund (221 Fund), the Storm Deficiency Fund (222 Fund), and the Storm Sewer Maintenance Fund (481).
The Storm Sewer Maintenance Fund has 20 projects in its capital plan, 7 of which are proposed for funding in the 2-year budget. Proposed funding is focused on much needed annual repair and replacement of storm drainage system components and vehicle replacement.
Each Funds proposed projects is listed in detail in Attachment A.
Next Capital Funds to be Reviewed
As mentioned earlier, Capital Funds will be presented to Council during the months of February through May. This allows Council to conduct their review of the proposed CIP budget in manageable groupings. Funds listed at prior Council meetings are listed in Table 3: Capital Funds Reviewed. The table shows the date the funds were reviewed by Council.
Table 3: Capital Funds Reviewed
The proposed presentation schedule is listed below in Table 4: Capital Funds to be reviewed by Council in future Council Sessions.
Table 4: Capital Funds Reviewed at Prior Council Session
Fiscal Impact:
The Capital Improvement Plan is presented as a six-year planning document, with FY 2026/27 and FY 2027/28 proposed for adoption and appropriation, and the remaining four years are provided for long-term planning purposes only. The attached financial schedules (Attachment A) provide a comprehensive summary of each fund, including beginning cash balances, projected revenues, operating expenditures, proposed capital expenditures, and estimated ending fund balances over the six-year planning forecast. These projections are based on current revenue trends, adopted fee structures, development activity assumptions, grant funding availability, and known capital project commitments.
For the two-year proposed budget period, total recommended capital appropriations across the funds under review are as follows:
FY 2026/27: $11.2M
FY 2027/28: $4.7M
An additional $58.4M is identified in the outer planning years to reflect anticipated future capital needs; however, these amounts are not appropriated and are subject to change based on funding availability, project prioritization, and Council direction during future budget cycles.
Several of the proposed capital projects are multi-funded and leverage a combination of impact fees and special revenue sources, and grant funding. In such cases each fund included in this report reflects only its proportional share of the total project cost, consistent with the City’s capital budgeting practices and nexus requirements.
Operating and maintenance impacts associated with the proposed capital projects are expected to be minimal in the near term and, where applicable, are incorporated into the respective operating budgets of the departments responsible. May projects included in this CIP focus on rehabilitation, replacement, regulatory, compliance, and infrastructure preservation (such as storm drainage system repairs, life station rehabilitation culvert improvements, and groundwater recharge, which are intended to reduce long-term maintenance liabilities, improve system reliability, and mitigate the risk of emergency repair cost.
Certain projects, particularly storm sewer infrastructure improvements, basin development, and waterway-related capital investments, may result in incremental future maintenance obligations once fully constructed. These costs will be evaluated during project design and prior to construction completion and will be incorporated into future operating budget requests as needed. In addition, ongoing annual programs funded through the Storm Sewer Maintenance Fund represent planned lifecycle maintenance activities that support regulatory compliance, flood risk reduction, and preservation of existing infrastructure assets.
No immediate General Fund impact is anticipated in the proposed CIP projects included in this review, as the identified funds are either restricted revenue sources (impact fees and special revenue funds) or enterprise-related funding streams dedicated to specific infrastructure purposes. All expenditures are programmed in accordance with fund restrictions and applicable legal and nexus requirements.
No appropriation or budget action will result from this review item. The final CIP will be presented for adoption and appropriation with the City’s Operating Budget in June 2026.
Prior Council Action: None
Other: None
Alternatives: Click or tap here to enter text.
Recommended Motion (and Alternative Motions if expected):
recommendation
No motion is requested or required at this time.
Environmental Assessment Status: N/A
CEQA Review: N/A
Deadline for Action: 3/2/2026
Attachments:
Attachment A - Summary of proposed Capital Projects by Fund
Attachment B - Directory of Map Points and Maps
Strategic Goal:
|
☒ Economic Vitality |
☒  Organizational Excellence |
☒ Fiscal Strength |
☒  Infrastructure & Growth |
☒  Quality of Life |