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Page 1 of 5 Item #15.b CITY COUNCIL AGENDA REPORT March 19, 2024 Public Works - Engineering Division TITLE: PROVIDE DIRECTION REGARDING STAFF RECOMMENDATIONS FOR MID- TERM BUDGET REALLOCATION OF EXISTING NON-RESTRICTED FUNDS WITHIN THE CAPITAL IMPROVEMENT PROGRAM TO FUND RECENTLY IDENTIFIED SAFETY-RELATED PROJECTS SUMMARY The Mid-Term Capital Budget for FY 2024/25 is being revised to add critical projects that address safety issues, including issues that arose during the 2023/24 winter storm impacts and the West Las Positas Boulevard reconstruction. The existing unrestricted CIP reserves and the current two-year budget cannot absorb the additional costs to make these improvements. Therefore, at this time and based on new information, staff is making a recommendation to delete, defer, or partially defund approximately $18.9 million of existing non-restricted funds from CIP projects to address these needs and create a balanced Mid-Term Capital Budget. The Mid-Term operating and capital budgets will be presented to the City Council for review and approval in May and June 2024. RECOMMENDATION Review staff recommendations regarding CIP projects that could be deleted, deferred, or partially defunded and provide direction toward development of the mid-term capital budget and updates to the four-year capital improvement program. BACKGROUND On March 21, 2023, the City Council provided direction to modify the existing CIP carry forward process and perform detailed reviews of all existing general fund projects within the CIP to reprioritize projects. As a result, approximately $8 million in identified projects were deleted or deferred. The reprioritized funding was used to develop the four-year CIP for FY 2023/34-FY 2026/27 and was approved by the City Council on June 6, 2023. Through the mid- term process, the second year of the funded program, FY 2024/25, is being reviewed for any necessary adjustments and to add projects that are necessary to address more recently identified safety-related issues. Severe winter storms from December 2022-March 2023 caused damage throughout the city. To address the issues, projects were programmed in the current CIP, but the funding is insufficient for all necessary permanent repairs. The existing infrastructure was cleaned, and temporary repairs were completed to restore the storm drain systems to service before this winter's storm season. The City’s application for federal assistance was approved, and the City is in the process of obtaining project approvals and reimbursements from FEMA. During this process, the extent of FEMA's coverage is determined. Currently, it has been determined that some of the damage and improvements will not be eligible for federal assistance. For the FEMA projects determined to be eligible for FEMA assistance, the City will be responsible for approximately 25 percent of the total project costs. The City is also applying for competitive Page 221 of 228