Approve Fiscal Year 2021/22 and Fiscal Year 2022/23 carry-over projects, approve proposed Fiscal Year 2023/24 Capital Improvement Plan Projects, and provide direction to staff

Receive a report regarding:

• A summary of the April 5, 2023 Capital Improvement Plan (CIP) Workshop focusing on changes to the CIP since the Workshop

• Updates and project descriptions for 16 proposed Fiscal Year (FY) 2023/24 CIP Projects

• Update on the 5-year CIP

Council to:

• Confirm completed projects
• Confirm cancellation and deferral of three previously-identified CIP projects, and approval of anticipated projects to be provided or donated by others 
• Tentatively approve FY 2021/22 and FY 2022/23 carry-over projects and associated funding into the FY 2023/24 Capital Budget 
• Tentatively approve 16 proposed FY 2023/24 Projects to be included in the FY 2023/24 Capital Budget
• Direct staff to present the proposed projects to the Planning Commission on May 10, 2023 for a General Plan consistency review as required by the California Government Code Section 65401 and the City Municipal Code Section 17.52.060

I)             Summary of the April 5, 2023 CIP Workshop focusing on changes to the CIP since the Workshop

A.           The following 14 projects were noted as completed, or anticipated to be completed, in FY 2022/23:

May 2, 2023 Update: Project #12 - A Purchase Order for the electric street sweeper was approved in July 2022, and the sweeper is currently being manufactured overseas. However, delivery is currently three months behind schedule. While delivery and commissioning are still hoped to be completed in FY 2022/23, staff recommends that this project be shifted from the Completed to Carry-Over Projects.

B.           The following 3 projects were recommended to be cancelled or deferred:

• Ocean Avenue Split Rail Zig-Zag Fence ($55,000): Cancel - Application by Carmel Resident’s Association was withdrawn.

• Vista Lobos Interior Remodel ($25,000): Defer – Pending results of the Police Building Project evaluation.

• Wayfinding Signs ($18,500): Cancel – The project envisioned by TAMC staff per the funding agreement and the proposed project by City staff cannot be reconciled, and the project would well exceed the budget either way.

May 2, 2023 Update: No changes.

C.           The following projects, with external funding, donations, and by volunteers, were recommended:

• Carmel Cares Projects: Anticipated projects may include: Forest Theater picnic tables including an ADA-accessible space, Ocean Avenue Median Islands landscaping, and Post Office parking lot landscaping. 

• Scout House Renovation: A Request for Proposal has been issued for an interested contractor to renovate the facility, at an estimated cost of $500,000, followed by activities programming and facility management. 

May 2, 2023 Update: North Dunes - Interpretive Signage and Split Railing has been moved to a CIP carryover project. The status of the Scout House Renovation project will be provided at the May 2nd meeting.

D.         The following 25 capital improvement projects, funded in FY 2021/22 or 2022/23 but not completed, were recommended to be carried over to FY 2023/24:

May 2, 2023 Updates: Project #3 Beautification project carryover has been moved to the Forestry operating budget.

For Projects #7-8, funds for the Drainage Project have been allocated to date for the Master Drainage Plan Update, contract project management, and preliminary design on several repairs. As requested by Council on April 5th, a portion of the remaining funds will be used to construct minor drainage improvements that are not associated with the major trunk line drainage system along Junipero Street.

Project #25 Wildfire Risk Assessment carryover has been moved to Fire operating budget.

Project #26 for the Street Sweeper was moved from the Completed List to the Carry-Over List due to delays in manufacturing.

At the April 5th CIP Workshop, Carry-Over funding was estimated at $6,676,000 in City Funds and $1,122,000 external funds, all to be carried into the CIP Budget for FY 2023/24 for a total of $7,798,000. The Finance Department updated these carry-over figures to be reduced by actual costs incurred for the May 2nd meeting. Thus, the updated carry-over amount, reflecting City funds of $6,736,000 and external funds of $1,365,000, is now $8,088,000.  An increase over April 5th CIP due to the reclassification of the Street Sweeper and a Carryover project.

II)           Updates and project descriptions for 16 proposed FY 2023/24 CIP Projects

May 2, 2023 Update: At the April 5, 2023 CIP Workshop, Council tentatively approved funding for four (4) potential maintenance-oriented projects in the Public Works Department Operating Budget for FY 2023/24, rather than in the Capital Budget, as follows:

a.     Beautification - $25,000 to be added into the Forestry Division budget. A portion of the funding will be used for tree planting and tree well improvements in the downtown area. Funding may also supplement the Ocean Avenue Median Islands Landscaping Project which is currently being planned by Carmel Cares.

b.     North Dunes Habitat Restoration - $15,000 to be added into the Environmental Programs Division budget for biological monitoring and reporting activities for the North Dunes by a consultant.

c.   Mission Trail Nature Preserve (MTNP) Invasive Removal - $15,000 to be added into the Environmental Programs Division budget for a contractor to remove invasive species in the MTNP in coordination with the Friends of the MTNP.

d.   Council requested an appropriation of $75,000 for tree removals in the MTNP and to reduce fire fuel loads. During the storms, 15 trees fell, 21 trees were heavily damaged or are now leaning, and 7 trees need safety pruning. This appropriation will be added into the Forestry Division operating budget. Work will be completed by tree contractors and Forestry crews.

• ADA Upgrades, Year 6 ($20,000): This project would continue the City’s annual program of modifying public facilities, as identified in the City’s 2018 Americans with Disabilities Act Transition Plan, to provide access to the disabled. For the past few years, the City allocated $15,000 per year for this initiative. To continue to demonstrate good faith efforts to implement these improvements and to reflect higher costs due to inflation, staff is recommending that this year’s allocation be increased to $20,000. As has been the case in the past, the project will be managed, and improvements will be installed, by the Facilities Maintenance Division supplemented by vendors as needed. Tentative projects will include installing additional ADA-compliant railings and water fountains.

•  Annual Paving Project, FY 2023/24 ($657,000 City, $438,000 External Funds): At the April 4, 2023 meeting, Council adopted a list of streets to be included in the FY 2023/24 annual paving project. The City’s Maintenance of Effort (MOE) contribution of $657,329 would leverage $438,570 of external funds via TAMC from Measure X, Gas Tax, SB 1, and RSTP. The project will include the design and construction of asphalt pavement overlays of five roadway segments, including Upper Ocean Avenue and Santa Lucia Avenue between Dolores Street and Rio Road, removal of failed pavement sections and providing a slurry seal on up to 20 road segments predominately in residential neighborhoods, and replacing broken concrete, asphalt, and brick sidewalks with permeable pavers along seven road segments in the downtown area. The project will be supplemented with ADA ramps, new trees, bike route markings, and other amenities as appropriate.

•  CIP Contingency Fund ($500,000): While used by other municipalities, this fund would be a new tool for Carmel. This proposed “project” would provide contingency funds when needed to award construction contracts that may have outdated cost estimates, such as for carry-over projects, the scope of essential work has increased, and/or when construction bids are competitive, but higher than available funds. For example, at the April 4^th meeting, Council appropriated an additional $113,600 from General Fund End Balance to the CIP Fund to be able to award the City Hall Retaining Wall Emergency Repair Project. The proposed fund may be needed in upcoming construction projects in FY 2023/24 including: MTNP 3 Drainage Projects, MTNP Well Abandonment and Tank Removal Project, FY 20/21 Paving Project, Sunset Center Cottage Window Repairs, and/or City Hall Roof Replacement. These funds would be appropriated only by Council authorization at the time construction contracts are awarded, and any remaining balance would carry forward to the subsequent year and used when needed.

•  Coastal Engineering Study, Phase 2 ($100,000):  In August 2022, Council adopted the City of Carmel-by-the-Sea's Climate Adaptation Plan and Climate Action Plan. Council commented that implementation of these Plans is imperative. In November 2022, Council awarded a Professional Services Agreement to EMC Planning Group, with subconsultants Integral Corporation and Haro Kashunich & Associates, for a not-to-exceed fee of $175,000, to conduct the Coastal Engineering and Adaptation Planning Project, Phase I. Phase I consists of four (4) tasks. The first task was the Shoreline Condition Assessment which has been completed and presented to the Forest and Beach Commission in March 2023. The results of that assessment triggered the proposed Shoreline Infrastructure Repairs Project described below. Tasks 2 and 3 are currently in progress.

 If Phase 2 is approved, an Amendment to the Agreement with EMC will be submitted to Council to incorporate the previously-scoped services and negotiated fee into the overall Study. These two phases will then be considered one combined project. Phase 2 will include three additional tasks focusing on: hazards policy review and revisions, public outreach and engagement, and adaptation monitoring and pathway development. Phase 2 may be eligible for a California Coastal Conservancy grant of $100,000, and staff will work with the consultants to develop and submit the grant application.

• IT Servers ($50,000):  This project funding would be used to purchase hardware intended to enable our transition to running a majority of our workload in the cloud. Per the vendor, our existing Nutanix system will be at the end of its useful life by October 2023. This means support and security updates may become unavailable. We will purchase new hardware, software, and retain vendor services to provide a local copy of our critical data to be used in certain emergencies when and if cloud access is interrupted for extended periods. The hardware will also serve as a local cache for our data, making access faster and allowing for local backups to be kept onsite without incurring data charges.

• Library Master Plan – Additional Scope ($100,000):  This project complements the Library’s Strategic Plan objective to develop facility plans for the Harrison Memorial and Park Branch library buildings. In January 2023, Council awarded a $55,000 Professional Services Agreement to Jayson Architecture to prepare the Master Plan. The Plan is anticipated to be substantially complete by the end of the Fiscal Year.

May 2, 2023 Update: Previously, staff identified using the $100,000 to design the first specific improvement project identified in the Plan. That project description is outdated. Library staff now requests that this funding be used to Amend the Agreement with Jayson Architecture to provide additional master planning services for Phases 2: Conceptual Design and Community Outreach, Phase 3: Schematic Design, and Phase 4: Design Development as we work our way through the Master Planning Process.

• Police Radios Lease, Year 3 ($30,000): Twenty-two (22) radios were purchased in 2021 with a payment schedule of $30,000 per year payments for six years, with funding from the Vehicle and Equipment Fund.

• Scenic Pathway Hardscape Renovations ($100,000 City, $100,000 Donations): Carmel Cares requested to continue our Scenic Pathway Renovation Project following the upcoming repairs to the barrier rails, for which a Purchase Order for $50,000 for lumber and materials is expected to be awarded by the City Council on May 2^nd. The proposed renovations will include Pathway signage, irrigation repairs, pathway trim edging, decomposed granite repairs, and other hardscape improvements. Council requested staff and Carmel Cares to develop a holistic game plan to cover the complete renovation of the Pathway. This game plan will need to be carefully developed over the next year since co-mingling public and private funds on publicly-owned infrastructure triggers state public works contracting regulations. For example, for the Scenic Pathway Barrier Rails, City funds are only being used to provide materials, and Carmel Cares will hire a contractor and pay for the costs for installation, under guidance of the Community Planning & Building and Public Works Departments.

May 2, 2023 Update: At the April 5, 2023 CIP Workshop, Council requested this new project for FY 2023/24.

• Shoreline Infrastructure Repairs ($250,000): As noted above in the Coastal Engineering Study, the first task of Phase 1 was the Shoreline Condition Assessment. The Assessment concluded that of the 11 existing seawalls, 2-4 need repairs, with one (the Fourth Avenue Outfall Wall) as a high priority repair. Similarly, of the 11 beach access stairs, 9 need repairs with 3 considered to be high priority (two of these have been closed due to damage resulting from the winter storms). Finally, of the 6 rock revetments, 4 need repairs, 3 of which are high priority. The total cost for engineering design, environmental permits, and construction for all of these repairs will likely exceed $2 million over the next few years, as outlined in the attached 5-Year CIP spreadsheet; however, this project will initiate the engineering and design of the highest priority repairs, as well as to repair the closed and damaged beach access stairs, with like materials, as a maintenance project which is expected to streamline the regulatory approval process. This starting point will also allow the City to better estimate future costs and phasing to complete all needed shoreline infrastructure repairs.

May 2, 2023 Update: At the April 5, 2023 CIP Workshop, Council requested that a portion of these funds be used to repair the beach access stairs to the extent possible.

• Sunset Center – 7 Bollards ($20,000): Our Sunset Center Cultural Center partners requested this project. There are currently 11 vehicle bollards along the edge of the center parking lot in the vicinity of the box office. Over time, these bollards get hit by trucks and cars. Sometimes, staff is able to repair the bollards for continued use; however, several bollards are no longer useable. This budget would be used to replace at least three bollards at this time and keep four in stock and used when bollards are damaged in the future. Each bollard costs between $2,000 - $3,000 depending on their specific size and lighting features.

• Sunset Center – Carpenter Hall Heater ($45,000): Sunset Center requested this project. The existing system provides radiant heating from the boiler but is at the end of its useful life. While the outdated system still provides heat, the heat quickly escapes on colder days as soon as the entry doors are open. HVAC technicians were unable to make significant improvements to properly heat the space. The problem was evident at the Council Strategic Initiative Workshop held at Carpenter Hall in January 2023. This project would include hiring a contractor to replace the heating system.

• Sunset Center - North Lot Electrical Panel ($100,000): This project is a supplement to the carry-over project entitled Electrical Panel Upgrades for City Hall, Public Works, Sunset Center, and Vista Lobos. Staff is finalizing a Professional Services Agreement with an electrical/mechanical engineering consultant to evaluate and design these panel upgrades. Since the Public Works panel will be evaluated in conjunction with the Police Building project, this panel upgrade has been switched with the Fire Station panel. The existing funding of $75,000 appears to be sufficient for the design of all panels and repair certain panels. However, the electrical panel at the Sunset Center North Parking Lot is not only the most expensive to rebuild but also the most urgent because it is already over capacity and has been tagged by the Building Official. Staff has already been coordinating with PG&E to upsize the power conductors to this panel, with Chargepoint for additional EV charging stations to be installed along the west wall at a later date, and with 3CE for possible grants associated with the EV facilities. The Sunset Center panel also services the north parking lot lighting system and power to the CERT container.

• Sunset Center – Portico Design ($40,000): Sunset Center requested this project. Located at the promenade and concessions exterior, this project would provide for the architectural design of a new portico cover. This project will replace an ornamental garden trellis that was demolished in 2017 and eliminate the remaining columns that are an eyesore and have succumbed to dry rot. The proposed portico may consist of an approximately 1,000 square foot roof structure to provide a functional outdoor concession space, enhance patron experience, eliminate water intrusion into the concession stand, and provide weather protection for wood framed doors and windows at the lobby entrance.

• Sunset Center Retaining Wall Repairs – Design ($40,000): Sunset Center requested this project. This project would provide funding to hire an engineering firm to design repairs for four retaining walls around Sunset Center. In the north lot, a 100-foot long, Carmel stone wall along Eight Avenue is leaning, and there are significant cracks in the wall along Mission Street. In the south parking lot off of Tenth Avenue, there is 50-feet of rotted wooden wall on top of a granite wall. These and other walls require replacements of such as fencing, posts, and railings. Repairs are tentatively programmed in FY 2024/25. The same structural engineering firm will be retained to restore the pathway on the west side of San Antonio Avenue, between Second and Fourth Avenues, which was damaged by the winter storms.

• Urban Forest Master Plan- Additional Services ($37,000): The Urban Forest Master Plan (UFMP) is one of Council's high priority strategic initiatives. During FY 2021/22, the City was awarded a Cal Fire reimbursement grant of $150,000. In August 2022, Council awarded a $150,000 Professional Services Agreement with Davey Resources Group to prepare the UFMP. The tree inventory is complete, about half of the 10 technical studies are currently in progress, and public outreach will launch this summer.

 The original Agreement estimated 6,000 City-owned trees to be inventoried; however, the actual count was 9,820. The additional cost to complete all trees is $28,550. Also, a Supplemental Service that was included in the Agreement, but not awarded initially, was to prepare a Tree Palette for $6,520. Based on the tree damage due to the winter storms, staff recommends proceeding with this task. An additional contingency budget of $1,930 is also included for an additional outreach meeting and/or other extra service.

May 2, 2023 Update: At the April 5, 2023 CIP Workshop, the Public Works Director noted that these additional services were recently identified to be included into the UFMP, but it was not yet provided in the April 5^th staff report.

• Vehicles ($175,000 City, $25,000 Grant): The Public Works Forestry Division uses a 2000 Dodge Dakota with 87,100 miles for landscape maintenance. The truck is in poor condition, has an undersized flatbed, and is only capable of carrying tools and hauling a very small load. This vehicle will be replaced with a full-sized electric pickup truck. Forestry also uses a 2002 Dodge Dakota with 62,700 miles for tree services. Despite a slightly larger bed capable of hauling larger debris loads, this truck is also in poor condition. This will also be replaced by a full-sized electric pickup truck. The Police Department's 2006 Ford Fusion Administrative vehicle has 106,500 miles and is used for traveling to court appearances, meetings, training, and conferences.  This vehicle will be replaced with an electric sedan. Electric Vehicle grants from 3CE will be pursued for all new electric vehicles. While the amount of any grants are unknown at this time, staff estimates that up to $25,000 may be funded by 3CE for qualifying vehicles. The existing gas-powered vehicles will ultimately be sold at a public auction.

May 2, 2023 Update: Refer to the Vehicle & Equipment Fund summary in the Fiscal Impact Section below.  

New CIP Projects Summary: The above 16 proposed projects are valued at $2,264,000 for City Funds plus $538,570 in external funds and donations. Please refer to the Fiscal Impact section below for discussion on available funding.

 III)             Update on the 5-year CIP

The updated 5-year CIP Exhibit is shown in Attachment 1. Although only the first Fiscal Year (2023/24) would be funded as part of the City Budget, the remaining 4 years serve as a planning tool to identify, well in advance, anticipated future projects. The 5-year CIP is a “snap shot” in time of anticipated needs for future infrastructure revitalization funding in the outer years. As a dynamic planning document, the CIP for Years 2-5 is subject to change as updated information becomes available.

A.     Changes to the 5-year CIP Exhibit

The updated 5-year CIP Exhibit is shown in Attachment 1. Changes made to the Exhibit since the April 5^th CIP Workshop are shown in brown text. Key changes include:

• The Street Sweeper was modified to be a carry-over project.

• For Years 2 and 3, the drainage project referred to as Reconstruction of the Fourth Avenue Outfall was deleted since it is included in the Shoreline Infrastructure Repair projects, now shown in the Environmental/Climate Change category.

• Based on the new estimate for the City’s MOE contribution and TAMC matching funds for the FY 2023/24 Annual Paving Project, the MOE and matching fund estimates for Years 2-5 have been increased accordingly.

• Completed project #3 was for a new Facilities Condition Assessment Report for City Hall, Fire Station, and Vista Lobos facilities. Some of the most critical and urgent repairs and building code corrections noted in this Report have been included in the Exhibit as follows: FY 2025/26 – City Hall fire alarm system, doors, lighting $150k, FY 2026/27 Vista Lobos fire system, lighting, and roof drains $250k, and FY 2026/27 Fire Station roof replacement, windows, and alarm system for $500k.

• Ongoing maintenance and operations-oriented projects, such as Beautification and North Dunes Habitat Restoration, remain on the Exhibit for reference with notes to include future funding in the applicable department Operating Budgets.

B.      The following are key projects, by asset category and preliminary budget estimates (including probable grants), for Years 2-5 only:

• Drainage: Includes: drainage pipe repairs and upsizing for 20-year storm events, bottleneck reconfigurations, and CDS reconstruction = $2.93M.

• Streets: Paving overlays, micro-surfacing treatments, slurry seals, sidewalk repairs, parking lot resurfacing, retaining walls, and bicycle master plan = $3.24M City plus $1.79M external funds.

• Facilities: ADA upgrades, electrical panel repairs, painting, critical repairs/code corrections to City Hall, Vista Lobos, Fire Station, and park restrooms, Flanders structural repairs, resilience and energy upgrades, and equipment replacements = $2.8M.

• Forestry, Parks, Beach: Construct MTNP stream stability projects, Scenic Pathway and other Carmel Cares joint projects = $0.8M City plus donations to be determined. 

• Fleet: Replace outdated heavy equipment, including dump truck, water truck, asphalt patch truck, speed radar trailer, and other vehicles nearing the end of their useful lives with electric vehicles when possible, and fund balances for Police radios lease and ambulance purchase = $1.24M plus $0.1M grants.

• Environmental: Shoreline infrastructure repairs, Coastal Engineering Study, Phase 3, and climate action change initiatives = $2.0M plus $0.5M grants.

• IT: Equipment replacements, security upgrades, Police records management system, and GIS applications expansion = $0.63M.

• Libraries: The Exhibit is based on renovations as prioritized in the Master Plan = $1.1M plus $2.0M donations. Note: The Library Foundation will be embarking on a fundraising campaign to be able to advance the design and construction of significant improvements to both library buildings based on the Master Planning program.

Years 2 - 5 Needs Summary:

The total estimated investment of City funds, identified for Years 2-5, is $14.7M. This amount clearly exceeds anticipated CIP fund revenues over those four years of $4.5M plus any ending fund balance that may be available in those future years. However, without proper investment, the City's infrastructure noted will further decline into worsening conditions with more costly deferred repairs. Therefore, additional revenue sources should be considered.

C.       Finally, the overall CIP Program summary Pie Chart, including carry-over projects plus all projects identified in Years 1-5, is shown in Attachment #2. This updated chart identifies only proposed and needed City funding (not any external funding), which aggregates to a total of $32.3M.

The primary purpose of the Pie Chart is to evaluate whether or not the City’s earmarked future capital investment is in proper proportion to the City’s values. As shown in the chart:

• Hard infrastructure (drainage and streets) accounts for 34% of the pie.

• Buildings accounts for 29%; of which 10% reflects the $3.3M budgeted for the Police Building project.

• Green infrastructure and amenities (forestry, environmental, libraries) accounts for 21%.

• Internal City needs (fleet, IT) accounts for 16%.

Carry-Over Funding:

At the April 5^th CIP Workshop, Carry-Over funding was estimated at $6,676,000 in City Funds and $1,122,000 in external funds, all to be carried into the CIP Budget for FY 2023/24 for a total of $7,798,000. The Finance Department updated these carry-over figures by reducing the carryover balance by actual costs incurred for the May 2^nd meeting. Thus, the updated carry-over amount, reflecting City funds of $6,736,000 and external funds of $1,365,000, is now $8,088,000. An increase over the April 5^th CIP is due to the reclassification of the Street Sweeper as a carry-over project.

The new carry-over amount, reflecting City and external funds, is now $8,088,000.

The final estimates will be included in June at the time the Operating and CIP Budgets for FY2023/24 are adopted.

New CIP Projects Summary:

The above 16 proposed projects for FY 2023/24 are valued at $2,264,000 for City Funds plus $564,000 in external funds and donations, for a total of $2,828,000.

The combined total CIP investment for carry-over plus new projects, assuming all 16 new projects are approved, would be $10,916,000.

Vehicle & Equipment Fund:

The total vehicle acquisition costs is approximately $3M, and the City's 10% reserve target is being implemented beginning in FY 24/25 for $304,00. Currently, the Vehicle & Equipment Fund balance is $366,000, and therefore, no additional funds are being budgeted for FY 2023/24.

At the April 5, 2023 CIP Workshop, Council received a report regarding:

• Capital projects completed, or are scheduled to be completed, in FY 2022/23
• Projects to be cancelled or deferred
• Capital projects funded in FY 2021/22 and/or FY 2022/23 that are recommended to be carried over, with remaining funds, into FY 2023/24

• Potential FY 2023/24 projects with external funding, donations, and by volunteers
• Potential new capital improvement projects for FY 2023/24
• Introduction of the 5-year Capital Improvement Plan update

Council’s comments and direction to staff have been reflected in this Agenda Report.