Agenda Item Wording:
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Continue review of select FY 2022/23 and 2023/24 Capital Improvement Program (CIP) Budgets and future capital plans.
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Deadline for Action: 3/21/2022
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 the fifth presentation of the City’s Capital Improvement Program (CIP) report and provide direction as appropriate. The Council is scheduled to act upon the CIP budget in June in conjunction with the operating budget. No formal action is required or requested at this time.
Background Discussion:
The Review Process- This is Council’s final opportunity to review a portion of the City’s proposed Capital Plan. Portions of the proposed 2022/23 and 2023/24 capital budget have been brought to Council for review at each scheduled meeting during the months of February-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. 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 2022.
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 eight funds to be reviewed today include two Governmental funds, one Impact Fee, one Special revenue and four internal service funds.
• Governmental funds hold the revenue from various taxes including sales and property tax, business tax, and transient occupancy tax as well as fees from governmental services. The revenues in governmental funds are mainly discretionary and can be used for any purpose approved by the City Council.
• 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.
• Internal Service Funds provide a service to various City operations on a cost reimbursement basis. All costs of this type of fund are passed through to the operations benefitting from these services.
The Funds to be discussed in today’s meeting include those listed in Table 1: Capital Budget Funds for Review March 21, 2022, below.
Table 1: Capital Budget Funds for Review March 21, 2022
General Fund, Fund 001 (CIP detail attached):
The General Fund is a governmental fund. Revenues are largely discretionary and can be used for any governmental purpose. This fund consistently receives a large number of requests for funding in every budget cycle. For this reason, project requests are subject to committee review. The General Fund CIP Review Committee (GFC) is made up of all Department Heads (DH) and each DH may designate an employee to serve on the committee in their place. The committee reviews and ranks projects using an established set of criteria to determine which requests represent the most urgent needs. The guidelines for ranking are included as Attachment C of this report.
The General Fund Capital Summary in Attachment A includes 71 projects. The GFC has ranked 36 of these projects which are proposed for funding in the 2-year portion of the budget. These projects are listed in Table 2: General Fund Recommended Projects below.
Table 2: General Fund Recommended Projects 
The remaining projects are in the planning years of the 6-year Capital Plan. Some projects have been scheduled in future years due to the large number of American Recovery Plan Act (ARPA) grant funded projects requiring timely completion. As other projects are completed, and as the resources of the General Fund are updated during the Mid-Year and Mid-Cycle budget reviews, projects currently shown in planning years may be brought back to Council for discussion and possible funding. For a detailed description of each project, please see the Capital Summary in Attachment A.
Police Unclaimed Funds, Fund 012 (CIP detail attached): This governmental fund holds found or seized money in accordance with the requirements of government code section 804.7.2 “Unclaimed Money”. Once the requirements of this section are satisfied, any unclaimed funds are released to this General Fund reserve to be spent for public safety purposes. This fund has 2 projects in the 2-year portion of the budget, which will purchase aerial drones, and replace patrol rifles. The requested drone purchase is discussed below.
• Unmanned Aerial System (UAS) ($26,500, 2022/23) *: Funding for the purchase of six drones, two accessories (extra parts and a speaker for communication), and three Apple iPad minis to enhance Visalia Police Department's (VPD's) competencies during critical incidents, missing person searches and building searches. Some iPad/operating devices are included with the drone purchases, and some will be transferred from older units for use with their replacements. The VPD UAS unit consists of 10 pilots and an inventory of 7 drones. 2 drones are in immediate need of replacement, and four drones will be assigned to new pilots without drones. This purchase will equip all pilots for training and incident response, as well as provide a single backup drone. This purchase will add data plan charges of $1,400 annually to the Police operations budget. Moving forward, drones will be included in the police operating budget for regular replacement with two replacements of drones purchased in 2017 planned in each year of the 2-year budget (total of 4 replacements in operating).
*This is the same project that was brought to council in November 2021 for JAG grant funding, then removed from the JAG grant by council on February 7, 2022, when it was reported this project was not JAG grant eligible.
For a detailed description of each project, please see the Capital Summary in Attachment A.
Fire Impact Fees, Fund 106 (CIP detail attached): This impact fee fund is derived from Fire Impact fees collected at the time of building permit issuance. Funds are to be used for new facilities and equipment and are not for operations or maintenance. During the 2020/21 fiscal year, this fund fully repaid the balance of a General Fund advance that was the result of funding portions of the construction of Station 55 (Northwest Fire Station) and Station 53 (Southwest Fire Station). This fund will now begin to build up a cash balance to be used for future fire-related capital projects. This fund has one project requested for funding in the 2-year portion of the budget for the installation of traffic signal pre-emption for emergency services on 3 traffic signals. This is an ongoing project which is planned for every other year in the 6 -year capital plan. For a detailed description of this project, please see the Capital Summary in Attachment A.
Visalia Baseball, Fund 157 (CIP detail attached): This special revenue fund tracks the revenues and expenses related to the agreement between First Pitch and the City for the lease of the Rawhide Baseball stadium. The lease agreement includes a $100,000 annual allowance for minor maintenance and utilities, as well as $200,000 annually for capital projects to enhance fan experience. First Pitch has not yet identified the project(s) that will make use of these capital funds during the next 2-year budget. The one proposed project in this fund is for major maintenance of the “Red Zone” flooring at the stadium, which is discussed below. This major maintenance project is the sole responsibility of the City, and will be a General Fund expense.
• Rawhide "Red Zone" Flooring Replacement ($200,000, 2022/23): This project will remove and replace the composite deck material and any damaged or rotten support members at the Rawhide Ballpark Redzone seating area. This deck is over 15 years old and is damaged from heavy traffic and constant exposure to the weather. This replacement will provide for safer use of the area as the current material is becoming weak and brittle with age.
If this project is approved, a $200,000 General Fund transfer to the Visalia Baseball fund will be included in the budget. For a detailed description of this project, please see the Capital Summary in Attachment A.
Vehicle Policy - Vehicle Replacement Funds
The City maintains an administrative policy to establish rules and procedures for the purchase and use of City, rental, and personal vehicles by employees. In accordance with this policy, all vehicles and equipment included in the vehicle replacement budgets for review today have been scheduled based upon their projected useful lives, age, and mileage. Once the replacement budget is approved, each vehicle or piece of equipment will be replaced when recommended by Fleet, based upon the vehicle’s performance and maintenance history. Replacements are projected in the capital budget to ensure each fund is maintaining adequate resources to provide for a dependable and well-functioning fleet. Any recommended exception to this procedure is noted in the discussion below.
Capital requests in the 2-year budget, for vehicle replacement, have received additional scrutiny compared to those in the planning years to protect the resources of this fund. Vehicles and equipment included in the planning portion of the capital plan (2024-2028) are based solely upon projections which will be reviewed as part of the next budget process in another 2 years. For this reason, only vehicles and equipment with appropriations requested in the 2-year portion of the budget show actual vehicle mileage (as of December 2021).
Vehicles and equipment included in the vehicle replacement fund appropriations will receive a full evaluation of their condition prior to replacement, and replacement of vehicles found to be in good condition and capable of continuing their current assignment will be delayed. To be replaced, a vehicle must receive an evaluation from the Fleet division that justifies replacement. Emergency response vehicles must meet a higher standard, and those found to have additional life left at the time of replacement may be repurposed to a lower demand (non-emergency response) assignment.
The vehicle replacement funds included in today’s discussion are for replacement of the General Fund fleet of vehicles and equipment. Vehicles and equipment owned by enterprise and special revenue funds have been included in the capital budgets of those funds for purchase and replacement.
Vehicle and Equipment Replacement, Fund 502 (CIP detail attached): This internal service fund is supported by General Fund Departments which pay for replacement of the current operational fleet with an annual use charge based upon depreciation of the current fleet. This fund is responsible for the replacement of City General Fund vehicles and equipment. Only vehicles owned by the General Fund can be replaced by this fund. The resources of this fund may not be used to purchase new additions to the fleet. New General Fund vehicles and equipment must be purchased in the General Fund capital budget.
As discussed above, for a vehicle or piece of equipment to be replaced, it should be fully depreciated and be evaluated and approved by the Fleet Maintenance Division, following the City of Visalia Vehicle Policy. Also, before any vehicle is replaced with a new car or truck, staff will evaluate the vehicle assignment to determine if the purchase of an alternative fuel vehicle is appropriate. There are 94 vehicle and equipment purchases projected for this fund in the 6-year capital plan, with 30 replacements proposed for the 2-year portion of the budget. A summary of the vehicles and equipment included in these 30 requests is below.
Building Maintenance (2): 1 platform lift, and 1 utility welding trailer, both for use in building maintenance.
Fire (2): 1 fire ladder truck (discussed in detail below*), and 1 fire engine.
Parks (7): 4 electric utility vehicles (contingent upon grant funding), 1 skidsteer loader, 1 ½ ton pickup, and 1 ¾ ton pickup, all for use in park maintenance.
Police Vehicles (19): 17 fully marked patrol vehicles and 2 unmarked detective units.
With the exception of the fire truck, which is discussed below, all vehicles included in the capital plan for this fund are projected to be at the end of their useful life at the time of replacement.
*Replacement of Ladder Truck 51: The Fire Department has requested the early replacement of the one ladder truck owned by the city to create a reserve unit for this vital piece of equipment. This truck is 13 years old, and not due to be replaced for 4 years. To understand the request for a reserve unit, it is necessary to look at the current firefighting fleet. The City owns ten (10) fire engines, one (1) truck, and two (2) Quints. Each of these fire vehicles serves a unique purpose.
• Engines (10): Fire engines, sometimes called “pumpers”, carry water, a pump, and hoses to fight fires.
• Trucks (1): Fire trucks have aerial ladders and typically don’t have pumps, which leaves extra space to carry rescue equipment and tools to support firefighting activities and victim rescue.
• Quints (2): Quintuple Combination Pumpers, or “Quints” are a combination of an engine and a truck, combining the best of both (ladder and pump), but without the extra space to carry large rescue tools and additional rescue equipment.
Each of the City’s six fire stations is assigned a frontline fire engine and in the best of conditions, also has an older, reserve engine available when the frontline engine is out for service or for response to extraordinary “all calls” requiring multiple engines. Reserve engines are interchangeable among stations. The 10 engines and 2 Quints fill these vehicle assignments, however, two of the reserve engines are “ghost” vehicles and will be disposed of should they begin to have maintenance issues. Also, one of the “reserves” is the State’s Office of Emergency Services (OES) engine that we can use as a reserve if we make it ready, with people, when they call for it during fire season. Currently the average age of Fire’s frontline vehicles is 7 years, and the average reserve unit is 17 years old.
In addition to the frontline and reserve assignments, the one fire truck owned by the City is strategically housed at Station 51 which is centrally located, allowing it to work in tandem with engines throughout the City when necessary. The truck is used to carry heavy duty hydraulic extrication tools, and a full complement of large air struts and air bags to lift and stabilize heavy objects during vehicle accidents, structure collapse, and other rescue incidents. This truck also carries the department’s rope rescue equipment and shoring materials used for trench rescue and/or other incidents requiring the stabilization of a building which has been compromised. This truck, and the equipment it carries, is an essential part of the emergency response to any structure fire and/or victim rescue incident.
As the population of the city continues to grow and additional large commercial and industrial buildings are constructed, the need to prepare for larger fire and rescue incidents increases. When the fire truck is out for service, or down for repairs, most of the equipment it carries is kept on the floor of Station 51, and much less available for emergency response. As part of life after Covid-19, repair time for large equipment like this has increased and repairs that used to require weeks can now take months. Early replacement of this vehicle, while it still has useful life left, will provide a second vehicle of this type as a (ghost) reserve, which can also be housed at another station to improve response coverage for rescue incidents.
For a detailed description of all vehicles planned for replacement by this fund, please see the Capital Summary in Attachment A.
Police Vehicle Replacement Measure T Fund, 503 (CIP detail attached): This internal service fund is supported by Measure T which pays for replacement of the current Measure T operational fleet with an annual use charge. This fund is maintained to ensure no Measure T funding is used to supplement General Fund police vehicles. This fund currently owns 23 marked police vehicles, and none are proposed for replacement in the 2-year portion of the budget. All vehicles included in the capital plan for this fund are projected to be at the end of their useful life at the time of replacement. For a detailed description of the ten (10) vehicles included in the planning portion of the capital plan for this fund, please see the Capital Summary in Attachment A.
Fire Vehicle Replacement Measure T Fund, 504 (CIP detail attached): This internal service fund is supported by Measure T which pays for replacement of the current Measure T operational fleet with an annual use charge. This fund is maintained to ensure no Measure T funding is used to supplement General Fund fire vehicles. This fund currently owns 2 fire engines with one planned for replacement in the 2-year portion of the budget. This vehicle is projected to be at the end of its useful life for frontline service at the time of replacement. For a detailed description of this project, please see the Capital Summary in Attachment A.
Information Services, Fund 511 (CIP detail attached): City Departments reimburse this internal services fund for the operation and replacement costs associated with the organization's computer and communications technology, including Geographic Information Systems and Telephone Services. Information Services proposes 17 capital projects, 8 of which require funding in the 2-year budget. These proposed projects are for scheduled replacements of, and upgrades to, existing equipment and software as well as improvements to the City’s fiber optic network and Traffic Management Conduit System. For a detailed description of each project, please see the Capital Summary in Attachment A.
Staff Response to February 22, 2022 Council Question
Q: (Greg Collins) How much did we settle for on the Mission Linen soil remediation?
A: Mission Linen Soil Remediation- In 2016, underground pollution was found to originate from a dry-cleaning facility operated in the City of Visalia by Mission Linen Supply. At that time, the City of Visalia was found to share responsibility for the soil contamination based upon numerous defects and poor maintenance of the sewer lines leading from the facility (Mission Linen Supply v. City of Visalia). The City appealed this finding, however, the courts conclusion that the City of Visalia and Mission Linen should share remediation costs equally (50/50) was ultimately upheld by the United States 9th Circuit Court of Appeals, in June of 2020.
In February of 2020, the City appropriated $1.7m from the Wastewater Treatment fund (431) for the design and construction of necessary repairs to the sewer lines along Tipton Street and Mineral King Avenue, in compliance with a court order to comply with the requirements of the Department of Toxic Substances Control (DTSC). This sewer line project is not part of the shared remediation cost. It is for the repair of sewer lines that are exclusively the responsibility of the city to operate and maintain. The $1.7m budgeted for this project is not included in the remediation costs discussed below.
Because the City’s Mission Linen soil remediation obligation is the result of a court order, there is no specific remediation amount identified, but rather, the City must pay 50% of the actual cost. In May of 2021, $250,000 was appropriated from the Wastewater Treatment fund for the City’s portion of the first phase of the Mission Linen Soil Remediation Project. An additional $1,223,800 has been requested in the proposed 2-year Wastewater Capital budget which was reviewed by Council on February 22, 2022. Approval of this request will bring the project budget to $1,473,800, which is the current estimate of the City’s full share of the cost for this remediation. The City has received insurance settlements to offset this cost from three separate insurance companies which total $1,250,000, leaving an estimated balance of $223,800 to paid from the Wastewater Fund.
Proposed Changes to Capital Reviewed in Prior Meetings
Public Works Wastewater FOG Inspector Vehicle: Staff will be recommending the addition of a new Fat, Oil, and Grease (FOG) Inspector in the second year of the Wastewater Funds operating budget. This position, if approved, will require the purchase of a new vehicle in the 2023/24 budget year. With council’s agreement, the following item will be added to the Wastewater Fund 431 (4330) Capital Summary to be brought back for council adoption in June 2022.
If this position is not approved as part of the operating budget review and adoption in June, this vehicle will be removed from the budget as well.
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 2024/25 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 provide a detailed list of the proposed projects. 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: This session today is expected to complete the full Capital Budget Request review, with the following exceptions.
Alternatives: None Recommended.
Recommended Motion (and Alternative Motions if expected):
recommendation
No motion is required or requested at this time.
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
Attachment C: GF Capital Review and Ranking