As a follow-up to the March 5th meeting's first review of the proposed Fiscal Year (FY) 2024/25 Capital Improvement Plan, staff requests that the City Council: 

1) Review questions from Council and the public from the March 5th meeting, with responses (Attachment 1).

2) Review and provide direction on five (5) carry-over or new projects that were refined since March 5^th to reflect changes to implementation strategy or updated cost estimates.

3) Tentatively approve, or provide alternative direction to staff, for the following issues project categories:

• Four (4) projects recommended to be cancelled or modified.
• Fifteen (15) capital projects funded in (or prior to) FY 2023/24 that are recommended to be carried over, with remaining funds, into FY 2024/25.
• Six (6) carry-over paving, drainage, and facility renovation projects requiring supplemental funding for construction.
• Six (6) potential new projects funded by the Vehicle and Equipment Fund.
• Thirteen (13) potential new projects funded by the Capital Improvement Fund.

At the March 5, 2024 meeting, the City Council received a presentation from the Director of Public Works regarding:

• Capital improvements and key operating budget projects completed, or scheduled to be completed, in FY 2023/24.
• Projects recommended to be cancelled or modified.
• Capital projects funded in (or prior to) FY 2023/24 that are recommended to be carried over, with remaining funds, into FY 2024/25.
• Carry-over paving, drainage, and facility renovation projects that require supplemental funding for construction.
• Potential new projects funded by the Vehicle and Equipment Fund.
• Potential new projects funded by the Capital Improvement Fund.
• An introduction of the Updated 5-year Capital Improvement Plan (FY 2024/25 through 2028/29).

The Staff Report and Presentation slides from the March 5, 2024 meeting are enclosed as Attachment 2 and Attachment 3, respectively.

This Staff Report is a follow-up to the March 5^th meeting and focuses on the following three areas, each of which will be discussed at the March 26^th Special Council meeting. Staff requests that City Council:

A) Review questions and comments from Council and the public with responses, included in Attachment 1.

B)   Review and provide direction to staff on five (5) carry-over or new projects that were refined since March 5^th to reflect changes to implementation strategy or updated cost estimates.

C)   Tentatively approve, or provide alternative direction to staff, for the following project categories:

• Four (4) projects recommended to be cancelled or modified.
• Fifteen (15) capital projects funded in (or prior to) FY 2023/24 that are recommended to be carried over, with remaining funds, into FY 2024/25.
• Six (6) carry-over paving, drainage, and facility renovation projects requiring supplemental funding for construction.
• Six (6) potential new projects funded by the Vehicle and Equipment Fund.
• Thirteen (13) potential new projects funded by the Capital Improvement Fund.

For brevity, completed projects, carry-over project descriptions, and general summary of the 5-year Capital Improvement Plan will not be reviewed at this time, but information on these issues is available in the Attachments.

A) Responses to questions and comments from Council and public are included in Attachment 1. 

B) Since the March 5^th first review of the CIP, the following five projects have been refined to reflect changes to strategy, updated cost estimates, or other reasons:

1.  PG&E Rule 20A Project. As noted in Question 6 in Attachment 1, this project will be included in the list of carry over projects into FY 2024/25.

2. Reconstruction of the San Antonio/Ocean Intersection. This intersection was designed as part of the FY 23 Concrete Streets Project, but it can be extracted and moved up into the FY 24 Paving Project with minor modifications to the design plans, specifications, and contract documents. As noted on March 5th, the FY 24 Paving project is proposed to be constructed in FY 25 and be combined with the four FY 22 paving bid additives that were deferred. The bid additives include paving along San Antonio Avenue, between Fourth and Ocean Avenues, and along San Antonio, between Ocean and Eighth Avenues. Thus, if this intersection is included, the FY 25 paving project would resurface the entire length of San Antonio between Fourth and Eighth Avenues.

The estimated cost to reconstruct the intersection is $254,000, and the estimated cost to incorporate the intersection into the FY 24 project is $39,000.  This intersection can be funded by advancing all remaining funding from the FY 23 Concrete Streets project into the FY 24 project. The total cost of the revised, combined project would be $2.8M.

3.  Lincoln/Fourth Trestle Bridge. At the March 5^th meeting, this new project was identified with a proposed initial budget of $175,000 for design and environmental review. However, it may be premature to advance this project into design without an initial condition assessment. Staff now recommends that this project be deleted from the FY 2024/25 CIP, but requests a $40,000 allocation in the Public Works/Street Maintenance Division Operating Budget to fund a structural engineering evaluation of the bridge. Depending on the results of this evaluate, the extent of repairs, cost estimates, and need for any environmental permitting will be established. If repairs can not be completed by in-house crews, the project may be included back into the CIP in an upcoming fiscal year.

4.  San Antonio Pathway Reconstruction, Second to Fourth Avenues. At the March 5^th meeting, the construction cost estimate was projected at $275,000. Recently, Ausonio and staff met with the structural engineer who explained how the original design was substandard and proposed a new design which utilizes all 44 existing, buried concrete piers. The proposed design requires excavating at each pier, constructing a concrete pier cap, erecting a column, replacing wood lagging, installing a drainage device, restoring the Pathway, and reinstalling the grape stake fence. As a result, the revised cost estimate has increased to $550,000. Refer to Question 12 in Attachment 1.

5.  Ocean Avenue Paving Project, Carpenter to Highway 1. This new project could be incorporated into the FY 2024/25 CIP as a new project entirely funding by Monterey County. While there may be no direct costs to the City, this large-scale project would require City staff and a project management consultant, to develop an interagency funding agreement with the County, manage third party development of design plans and specifications, coordinate with CalTrans, the County, and impacted residents, and perform other project implementation tasks. While this is a worthwhile project, the impact on staff resources must be considered. Alternatively, further requests could be made to the County to implement their own project in a timely manner.

C) Council will be requested to tentatively approve, or provide alternative direction to staff, for the following issues project categories:

1. The four (4) Prior Projects recommended to be cancelled or modified are:

• Harrison Memorial Library Backup Generator. Include in the Library Master Plan renovation projects and cancel as a separate project.

• Harrison Memorial Library Carpet Replacement. Include in the Library Master Plan renovation projects and cancel as a separate project.

• North Dunes Habitat Restoration Interpretive Signage and Split Rail Fence.  The split rail fence will be installed by Public Works this spring, and ongoing restoration and environmental monitoring are covered by the operating budget. However, until specific funding has been committed for upgraded interpretive signage, this project should be canceled.

• Resilience Infrastructure Planning and Design. Since this project has been integrated with the Police Building Project, the remaining balance of $83,000 should be reallocated into that project account.

2. The fifteen (15) Prior Projects recommended to be carried over, with remaining funds, into FY 2024/25 are listed in the table below:

2. The six (6) carry-over paving, drainage, and facility renovation projects requiring supplemental funding for construction are listed in the table below:

4. The six (6) potential new FY 2024/25 projects funded by the Vehicle and Equipment Fund are listed in the table below:

5. The thirteen (13) potential new FY 2024/25 projects funded by the Capital Improvement Fund are listed in the table below:

The preliminary amount of CIP project funding available to be carried over into FY 24/25 is approximately $5.9M. This amount will be refined during the remainder of the current FY23/24. For comparison purposes, approximately $6.8M was carried over from prior fiscal years into the FY 23/24 CIP budget.

The additional fiscal impact for FY 24/25 cannot yet be assessed until specific projects are selected or deferred by the City Council.

Carry-Over Paving, Drainage, and Facility Renovation Projects requiring Supplemental Funding: Staff recommends that the FY22 bid additives, FY24 paving project, and San Antonio/Ocean Avenue intersection, as well as two drainage projects, and two facility renovation projects, most of which have been designed, bid, and/or are “shovel ready” for bidding and construction, be funded before allocating capital funds to new projects that have not yet been started. A total amount of $1,667,000 of City funds are needed to complete these six important projects.

Potential New Projects-Vehicle & Equipment Fund: Six (6) new vehicle and equipment projects are proposed at an estimated cost of $545,000. The City recognizes a 10% reserve in the Vehicle and Equipment fund balance for replacements. For FY 24/25, the Vehicle & Equipment Fund reserve balance is estimated to be $310,000.

Potential New Projects – Capital Improvement Fund: 13 additional projects were listed above with a total estimated cost of $3,030,000. Staff recommends that this list be slimmed down to fit into the available budget.

On March 5, 2024, Council received a presentation regarding:

• Capital Improvements and key operating budget projects completed, or scheduled to be completed, in FY 2023/24.
• Projects recommended to be cancelled or modified.
• Capital projects funded in (or prior to) FY 2023/24 that are recommended to be carried over, with remaining funds, into FY 2024/25.
• Carry-over paving, drainage, and facility renovation projects requiring supplemental funding for construction.
• Potential new projects funded by the Vehicle and Equipment Fund.
• Potential new projects funded by the Capital Improvement Fund.
• Introduction of the Updated 5-year Capital Improvement Plan (FY 2024/25 through 2028/29).