Agenda Item Wording:
title
Review Capital Improvement Programs - Continue review of select fiscal year 2026/27 and 2027/28 Capital Improvement Program Budgets and future capital projects. Funds to be reviewed are General Fund Vehicle & Equipment Replacement, Measure T Police Vehicle Replacement, Measure T Fire Vehicle Replacement, Measure N Vehicle Replacement, Fleet Maintenance, Information Services, Risk, and Building Safety.
body
Prepared by:
Nichol Ritchie, Finance Manager, Nichol.Ritchie@Visalia.gov, (559) 713-4379;
Renee Nagel, Finance and Technology Director, Renee.Nagel@Visalia.gov, (559) 713-4375.
Department Recommendation: It is recommended that the City Council receive this fourth Capital Improvement Program (CIP) presentation, provide direction as appropriate, and continue the review of the proposed CIP budget for inclusion in FY 2026/27 and FY 2027/28 budget. No formal action is required at this time.
Summary:
The Capital Improvement Program (CIP) represents a comprehensive six-year plan for capital projects and equipment. The first two fiscal years (FY 2026/27 and FY 2027/28) are proposed for 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.
This CIP includes proposed capital projects that replace general government and public safety vehicles, equipment, technology, and Internal Services Funds capital projects. In addition, this review will revisit the Building Safety Fund which was reviewed in February.
Background Discussion:
Capital Review Process:
This item represents Council’s continued review 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 detailed review and discussion of each funding category and proposed projects.
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 regulatory 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 presentation summarizing proposed capital projects within each fund category. The presentation is intended to highlight key projects, funding sources, and priorities, while providing sufficient detail to support Council discussion and direction. 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.
Staff Recommendation Support:
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 included with the City’s Operating Budget for formal adoption 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 funds included in this section represent a mix of vehicle and equipment replacement funds and internal service funds that support City operations, public safety, technology, risk management, and development-related services.
The first four funds to be reviewed are vehicle and equipment replacement funds. These funds are General Fund Vehicle & Equipment Replacement (502), Measure T Police Vehicle Replacement (503), Measure T Fire Vehicle Replacement (504), and Measure N Vehicle Replacement (505). These funds support the replacement of vehicles and equipment necessary to maintain reliable City operations.
The remaining funds are internal service funds which are Fleet Maintenance (501), Information Services (511), and Risk (551). These funds operate on a cost reimbursement basis where costs are allocated to departments benefiting from the services provided.
The Building Safety Fund (401) was presented to Council on Feb 17th and is being revisited due to the addition of one new project.
The Funds to be discussed in today's meeting are listed in Table 1: Capital Budget Funds for Review April 6, 2026. The table outlines each fund and the total recommended capital appropriation for each budget year.
Table 1: Capital Budget Funds for Review - April 6, 2026
Vehicle Policy - Vehicle Replacement Funds 502-505
The City maintains an administrative vehicle policy that establishes rules and procedures for the purchase, use, and replacement of City owned vehicles. This policy applies to all City, rental, and personal vehicles by employees for City business.
Vehicles are scheduled for replacement based on a combination of age, mileage, condition, and operational use to ensure a safe, reliable, and cost-effective fleet. Replacement schedules are developed using projected useful life standards and are incorporated into the capital budget to support long-term fleet planning. This Vehicle Policy is included in this item as Attachment C.
Once included in the budget, each vehicle or piece of equipment is further evaluated by Fleet staff prior to final replacement. This evaluation considers maintenance history, current condition, performance, and operational needs before final approval for replacement. In some cases, replacement may be delayed, reassigned, or adjusted based on these factors. When appropriate, alternative fuel vehicles may be considered. When possible, vehicles will be downsized if they are found to exceed the needs of the assignment being evaluated. Emergency response vehicles must meet a higher standard, and those found to have additional life left at the end of their public safety assignment may be repurposed to a lower demand (non-emergency response) assignment. As vehicles technology continues to evolve, including the increasing availability and adoption of electric vehicles, staff will continue to evaluate the existing vehicle replacement policy and adjust as appropriate. This includes reviewing lifecycle assumptions, replacement timing, and total cost of ownership to ensure the policy remains aligned with operational needs, regulatory requirements, and emerging industry standards.
Any recommended exception to this procedure is noted in the discussion below.
Appropriation Budget Years (2026-2027): 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 these funds. For this reason, vehicles and equipment with appropriations requested in the 2-year portion of the budget show actual vehicle mileage in the CIP detail in Attachment A. For consistency in the capital budget projections, vehicle age and mileage is provided by Fleet Maintenance at the beginning of each 2-year budget process, and both age and mileage shown in Attachment A is as of September 2025.
Planning Years (2028-2032): Vehicles and equipment included in the planning portion of the capital plan (years 3-6) are based solely upon age and mileage projections which will be reviewed as part of the next budget process in another two years, and actual vehicle mileage is not provided in the document for these vehicles.
The vehicle replacement funds included in today’s discussion are for replacement of the General Fund, Measure T, and Measure N fleet of vehicles and equipment. Vehicles and equipment owned by other funds have been included in the capital budgets of those funds for purchase and replacement.
General Fund Vehicle and Equipment Replacement - Fund 502: The internal service fund is supported by charges to General Fund departments and is used to finance the replacement of City-Owned vehicles and equipment. Funding is collected through annual depreciation charges, allowing departments to ensure sufficient resources are available at the end of each asset’s useful life ensuring that sufficient resources are available at the time replacement is required. The resources of this fund are for replacement of current vehicles and equipment and may not be used to purchase new additions to the fleet. New General Fund vehicles and equipment must be purchased in the General Fund. There are 108 vehicle and equipment purchases projected in this funds 6-year capital plan with 29 replacements proposed for the two-year portion of the budget. These assets span multiple departments and support a wide range of City operations, including public safety, maintenance, and community service. Below is a summary of the proposed replacement by function:
• Building Maintenance (1)
• Engineering (2)
• Fire (3)
• Neighborhood Preservation (1)
• Parks (1)
• Police (20)
• Street Maintenance (1)
The Police Department represents the largest share of replacements due to the high utilization, specialized equipment requirements, and critical nature of public safety vehicles, which typically experience accelerated wear and require more frequent replacement.
Except for the vehicles discussed below, all vehicles included in the capital plan for this fund are projected to meet the age and mileage requirement of the Vehicle Policy at the time of their replacement.
*Exceptions: The vehicles listed below are being recommended for replacement prior to fully meeting standard lifecycle criteria. These exceptions are based on operational necessity, equipment condition, or unforeseen circumstances that impact reliability and service delivery.
• Police Marked Patrol Unit (Vehicle #212583): This vehicle was involved in an accident and deemed a total loss. Replacement is required to maintain operational capacity within the Police Department.
• Fire SUV (Vehicle #222129): This vehicle has been recommended for replacement prior to reaching standard mileage thresholds due to on-going mechanical issues.
• Engineering Hybrid Sedan (Vehicle #413103): This vehicle is recommended for replacement prior to meeting minimum mileage requirements due to ongoing mechanical issues.
• Police Unmarked Detective 4-Door Sedan (Vehicle #215932): This vehicle is recommended for replacement prior to reaching minimum mileage thresholds due to a blown engine. Given the extent of required repairs and associated costs, replacement is considered the most cost-effective and operationally appropriate solution.
Measure T Police Vehicle Replacement Fund - 503: This fund is to replace vehicles originally purchased by Measure T for Police. Funds are generated by setting aside the vehicles annual depreciation amount to be used to replace the vehicles at the end of their useful life. The six-year Capital Improvement Plan includes 13 vehicles proposed for replacement, with 4 vehicles included in the two-year budget. All vehicles included in the capital plan are projected to meet the vehicles replacement criteria set in the policy. Exceptions are listed below:
• Fully Equipped Marked Patrol Unit (Vehicle #212623): This vehicle is 7 years old and was involved in an accident in August 2024. Fleet Maintenance is recommending the vehicle be replaced due to the costs to repair the vehicle exceeding the value of the vehicle. The vehicle replacement cost is estimated to be $108,000 and this fund has $31,000 accumulated for replacement. The remaining $77,000 will be funded from the Measure T Police Fund (121) which will be presented to Council at the next meeting.
Measure T Fire Vehicle Replacement Fund - 504: This fund is to replace the vehicles originally purchased by Measure T for Fire. Funds are generated by setting aside the vehicles annual depreciation amount to be used to replace the vehicles at the end of their useful life. Due to the specialized nature of a fire apparatus, replacement planning requires extended lead times, with typical build timelines ranging from three to four years from order to delivery. The capital improvement plan includes the replacement of one fire engine, with funding programmed for fiscal year 2027/28 and delivery anticipated in 2032.
Measure N Vehicle Replacement Fund - 505: This fund is supported by Measure N and is used for the replacement of operational vehicles funded through Measure N. Funds are generated by setting aside the vehicles annual depreciation amount to be used to replace the vehicles at the end of their useful life. This method allows for planned, lifecycle-based replacements and avoids large one-time impacts when vehicles reach the end of their useful life. One replacement request was included within the two-year budget period and was presented to Council with the Measure N proposed two-year budget on March 16, 2026. The remaining replacement needs are reflected in the outer four years of the Capital Improvement Plan and are included for long-term planning purposes based on established lifecycle criteria.
Fleet Maintenance - Fund 501: City departments reimburse this internal service fund for the operation, maintenance, and repair costs associated with City-owned vehicles and equipment. As an internal service fund, costs of any capital projects approved in Fleet Maintenance will be passed through to the City operations which benefit from Fleet services. Capital projects within this fund are limited to the purchase of tools and equipment necessary to support fleet operations. These items are directly related to maintaining and servicing the City’s fleet and are funded through departmental charges. While these items support operational needs, they are included in the capital budget due to their cost threshold and useful life.
Information Services - Fund 511: City Departments reimburse this internal services fund for costs associated with the operation, maintenance, and replacement of the City’s technology and communication systems. This includes computer hardware, network infrastructure, Geographic Information Systems (GIS), telephone system, and other critical information technology services that support daily City operations. The fund is structured to allocate costs to departments based on usage, ensuring that technological investments are supported by the operations that benefit from them. This approach provides a sustainable funding model for ongoing system maintenance and replacement. The six-year capital improvement plan includes 17 project requests with 10 projects requested within the two-year budget. These projects focus on the replacement of aging equipment and software, as well as system upgrades necessary to maintain network reliability, data security, and operational efficiency.
Risk - Fund 551: This fund was established to account for the City of Visalia’s liability insurance and risk related projects. Costs are allocated to all funds that benefit from the insurance coverage provided, ensuring that risk-related expenses are distributed across City operations. The capital improvement plan includes a project to address accessibility improvements within the downtown area. This project is intended to improve compliance with the American with Disabilities Act (ADA).
The project focuses on the design and construction of accessibility improvements in the downtown area. Current conditions in the downtown area could be viewed as crating barriers to accessibility, particularly for individuals with disabilities. The project addresses these deficiencies through targeted improvements, including concrete shaving, sidewalk removal and replacement, and tree removal or grinding where necessary.
The proposed improvements prioritize areas with the greatest accessibility challenges and are intended to enhance safety, accessibility, and overall usability of downtown pedestrian infrastructure. This project is multi funded with Community Development Block Grant (CDBG) funds for a total of $2.85 million. The funding share is the following:
• Risk Fund - $1.5 million
• CDBG Fund - $1.35 million
Building Safety - Fund 401 (Revised)
This fund was established for the operation of the Building Safety Division. Revenues are provided by fees charged for Building Permits. This revenue is used to fund both the operational expenses and capital needs and does not maintain a separate capital reserve.
Subsequent to the initial Council review in February, one additional project has been identified within the Building Safety Fund. The additional project is listed below:
• Pre-Approved Accessory Dwelling Unit Plans - $14,000: This project includes developing two permit-ready accessory dwelling units (ADUs) plan sets that can be made available to the public for free to encourage production of localized affordable housing. The program is intended to streamline the permitting process, reduce design costs for residents, and encourage the development of affordable housing within the community. This effort builds on the Planning Division’s successful implementation of three permit-ready plan sets approved in 2022. The additional plan sets will accommodate sizes & configurations that are lacking in the existing three plan sets, specifically a medium size 750 square foot plan and a large size 1200 square foot plan. Plan sets will incorporate universal design standards and elevation options.
All other projects within the Building Safety Fund were previously presented to Council.
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 2: Capital Funds Reviewed. The table shows the date the funds were reviewed by Council.
Table 2: Capital Funds Reviewed at Prior Council Sessions
The proposed presentation schedule is listed below in Table 3: Capital Funds to be reviewed by Council in future Council Sessions.
Table 3: Capital Funds to be Reviewed by Council in Future Council Sessions
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 and do not constitute an authorization to spend. 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.
The CIP is developed to ensure that planned capital investments are aligned with available funding sources and that each fund remains financially sustainable over the planning period. Where applicable, projects are supported by restricted revenues, internal service fund charges, or external funding sources to minimize impacts to the General Fund. 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: None
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: 4/6/2026
Attachments:
Attachment A - Summary of proposed Capital Projects by Fund
Attachment B - Directory of Map Points and Maps
Attachment C - City of Visalia’s Vehicle Policy
Strategic Goal: Indicates which City Strategic Goal(s) this item supports. Check all that apply.
|
☒  Economic Vitality |
☒  Organizational Excellence |
☒ Fiscal Strength |
☒  Infrastructure & Growth |
☒  Quality of Life |