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Page 6 of 9 Asset Management Plan estimated at $900 million in infrastructure needs, including $500 million in General Fund-supported assets. Annual Core Projects The CIPPP established Annual Core Projects, a recurring program essential to public safety, regulatory compliance, and the reliable delivery of City services. These projects involve the planned replacement of critical assets at the end of their service life and are excluded from general prioritization due to their pre-established need and predictable nature. Core projects are primarily funded from restricted sources tied to enterprise operations, with the Annual Facility Replacement Program being the only General Fund-supported core project. Unlike discretionary or one-time capital projects, core projects are systematic, planned reinvestments that support the City's foundational infrastructure. Their recurring nature and clearly defined purpose make them unsuitable for ranking through the broader prioritization process; instead, their necessity is assumed based on operational mandates, industry standards, asset life cycles, and past performance data. This approach ensures that the City proactively addresses known infrastructure needs and avoids costly emergency repairs, extends asset life, and ensures continuity of service. The proposed CIP includes eight new core projects totaling $36.6 million, plus $21.0 million in enterprise-funded core projects and $2.2 million for the Annual Facility Replacement Program. Two new core programs are recommended for inclusion: • Annual Traffic Button and Lane Marker Installation (CIP FY507) – Enhances roadway safety and visibility. • Annual Bicycle and Pedestrian Improvements (CIP FY543) – Advances projects in the Bicycle and Pedestrian Master Plan using Measure BB funds. Enterprise-Funded Capital Improvement Program Projects for the City’s water and sewer utilities are funded through enterprise revenues and are therefore excluded from the general prioritization process. These projects are defined and prioritized through the Water System Management Plan and Sewer System Management Plan. The recently adopted Water System Management Plan and the in-process Sewer System Management Plan identify significant capital needs over the next decade, including deferred projects that will require new revenue sources and debt issuance. Rate studies are currently underway to determine appropriate utility rate adjustments. The proposed enterprise-funded projects totaling $70.8 million for water and $39.5 million for sewer reflect funding levels based on staff-recommended rate scenarios, which will be presented to the City Council for consideration. Final project approval and budget allocations will depend on the adopted rates. Additionally, existing enterprise projects are proposed to be restructured and reallocated under the updated plans. Although the stormwater utility is structured as an enterprise program, it does not currently generate sufficient revenue to be self-sustaining and has historically relied on General Fund support. To address this, $1.7 million is proposed in the CIP to fund the development of a comprehensive Storm System Master Plan and associated field investigations. These efforts Page 269 of 682