CITY COUNCIL REGULAR MEETING AGENDA PACKET

Page 3 of 15 • Restricted Funds: Approximately $69.9 million of the $86.5 million recommended carryforwards to FY 2024/25 belong in this category. Their use is governed by federal and state laws, grants, and local measures. Common sources include Park Development Impact fees, Facility Development Impact fees, enterprise funds (e.g., water, sewer, and golf course), and transportation funds (e.g., Measure BB and Vehicle Registration Fee). Because these funds are often limited to specific purposes only, projects may receive only partial funding initially and may need to be supplemented with additional grants or even non-restricted funds. As such, most of these project budgets are carried forward until fully funded. • Non-Restricted Funds: The remaining $16.6 million carryforward funds belong in the non-restricted category. These funds are more flexible and general-purpose in nature, and, as a result, can be used to fund all types of capital projects although they are primarily used to support critical infrastructure and safety projects that cannot be funded with restricted funding sources. Primarily sourced from the General Fund, many streets, parks, and storm drain replacements are funded using this source. It should be noted that the Storm Drain Capital Fund, similar to its Operating Fund, is currently heavily subsidized by the General Fund. This approach is not sustainable. Staff is exploring options to address this issue and will present options to the City Council at a later date. The City maintains several reserves within its CIP funds, which are specifically allocated for designated purposes. These reserves act as holding accounts for upcoming projects that need additional funding or serve as emergency funds. Details of these reserves at the project category level are summarized in Table 2 below. Of the $86.5 million total recommended carryforwards, $61.4 million supports active projects, $19.7 million is reserved or on hold, and $5.4 million is for projects that have a budget but have not yet started. There are many reasons for project delays, and these include lack of adequate funding, cost increases, project coordination with private developer projects, or priority shifts. Many reserves are earmarked for emergency needs, upcoming developments, and future projects, ensuring flexibility and long-term planning. Table 2 below summarizes the CIP Reserves/On-Hold by project category. Table 2 – Summary of CIP Reserve/On-Hold by Project Category FY 2023/24 Project Delivery Summary: Challenges and Adjustments The project delivery team faced significant challenges in FY 2023/24 that impacted the schedule and capacity for additional projects: 1. Staffing Shortages The project delivery team, composed of four engineers and four inspectors in Public Works, along with one staff member in Community Development, experienced a 25 percent vacancy Page 260 of 658