Well, in the interest of everyone's time, and even despite the fact that we Well, in the interest of everyone's time, and even despite the fact that we do not have a quorum yet, our Planning Commission members are still coming in. I would like to go ahead and call this session to order. We are here today for a Planning Commission study session regarding the Improvement Program. We are here today for a Planning Commission study session regarding the 2026 2027 proposed Mid Biennial Capital budget and the 2027 Hopefully everybody's in the right room. 2031 Capital Improvement Program. Hopefully everybody's in the right room. My name is Lisa Bickford. My name is Lisa Bickford. I am the vice chair for the City of San José Planning Commission. I am the vice chair for the City of San José Planning Commission. Welcome to this meeting. Welcome to this meeting. Please remember to turn off your cell phones if you need parking validation. Please remember to turn off your cell phones if you need parking validation. It is in the back. It is in the back. And if I could ask the planning commissioners and people with mics in people can hear you. And if I could ask the planning commissioners and people with mics in front of you to please pull them in front of you in order to speak so that people can hear you. If you're coming up to the mic, please do the same thing. If you're coming up to the mic, please do the same thing. Make sure that you're close to the mic and. We don't have a flag, so I guess we're not going to try to salute that. Let's go ahead and do a roll call. Commissioner Rosario is not here this evening. Commissioner Barocio here. Commissioner Vandal is not here yet. Commissioner Cantrell. Commissioner Cao. Here. Commissioner Kasey. Here. Commissioner Escobar here. Commissioner Nguyen not here yet. Commissioner Oliverio not here yet. And Commissioner Young will not be here this evening. He's in Hawaii. Lucky him. Okay, so with that, I think I'll just hand it over for the presentation. Give us just a minute. I think we're trying to get the zoom going. Recording in progress. Thank you. Good evening commissioners. I am Jennifer Tel. I'm the capital budget manager in the City Manager's budget office. the five year Capital improvement program, or CIP. I will provide an Capital improvement program, or CIP. overview of the proposed budget and funding sources for the five year Then I will turn it over to Public Works Deputy Director Sal Kumar to discuss biennial update. Public Works Deputy Director Sal Kumar to discuss major project changes in this So we have staff here this evening from Airport, environmental services, fire the end of the presentation. So we have staff here this evening from Airport, transportation departments who will be available to answer your questions at environmental services, fire library, parks, recreation, neighborhood services, public Works and the transportation departments who will be available to answer your questions at the end of the presentation. And the staff here are representing their teams who are diligently to city's capital needs with available resources, as presented in this proposed five year CIP. And the staff here are representing their teams who are rebalance the city's capital needs with available resources, as presented in diligently to prepare this biennial update to the capital budget and to this proposed five year CIP. So the five year CIP is composed of 14 capital programs that fall under six fall under six city service areas. We will review the major project changes for the programs in each of the city programs in each of the city service areas, or CSAs. As presented this morning in the overview of the proposed operating budget. Next year's proposed budget reflects a $5.5 billion recommended spending plan recommended spending plan across 152 funds. pie that is made up of the capital funds. This presentation is focusing on capital funds. the 18%, or $1.2 billion slice of the budget pie that is made up of the Here is a historical comparison of the five year CIP over the last ten years. For fiscal years 27 to 31, the CIP totals $3.3 billion, fiscal year 20 to CIP totals $3.3 billion, fiscal year 20 to 24 and 25 to 29 were the largest Cips to date. November 2018. A large contributor to the CIP was the measure T bond passed by voters in November 2018. That measure authorized the city to issue up to $650 million of general protection. That measure authorized the city to issue up to $650 million of facilities and infrastructure, such as roads and flood and water quality general obligation bonds for investments in emergency and disaster response facilities and infrastructure, such as roads and flood and water quality protection. In this proposed CIP, we see exhaustion of measure T funds anticipated in fiscal year 2020 829. In this proposed CIP, we see exhaustion of measure T funds anticipated in fiscal year 2020 829. largely due to rebudget or carry forward of unspent appropriations from the current fiscal year into the next fiscal year. Also note the adopted CIP is always higher than the proposed CIP, which is largely due to rebudget or next fiscal year. carry forward of unspent appropriations from the current fiscal year into the So the proposed CIP captures some of these budgets that could be anticipated year end process that will be presented to City Council as part of budget could be anticipated early in our process, and additional budgets will be as part of budget adoption in June. So, as shown here, historically, budgets tend to increase the CIP by about 200 to $300 million. So, as shown here, historically, budgets tend to increase the CIP by about 200 to $300 million. So new last year was the transition to a two year presentation of the budget. The 2025 to 27 adopted biennial capital budget. Given the long term nature of planning for city infrastructure investments, the planning for city infrastructure investments, the adopted biennial strategic investments, plan to move forward. Given the long term nature of capital budget allowed the administration to highlight strategic investments, plan to move forward. In the first two years of the CIP. In the first two years of the CIP. However, as conditions are never static and funding for the current year must be carried forward into the following year. However, as conditions are never static and funding for the current year must be Adjustments to the previously approved 2020 637 capital budget are necessary. This proposed biennial capital budget update and CIP lays out the changes to included in the 2026 to 2030 adopted CIP. biennial capital budget update and CIP lays out the changes to 2627 previously The changes presented in the proposed biennial update focus on rebalancing the costs, and reallocating funding to address unexpected conditions or needs. grants or updated tax revenue forecasts, addressing unexpected changes in project The changes presented in the proposed biennial update focus on rebalancing the capital funds in response to adjustments in revenue assumptions such as new grants or updated tax revenue forecasts, addressing unexpected changes in project costs, and reallocating funding to address unexpected conditions or needs. This proposed capital budget and CIP also extends the five year CIP horizon five year CIP horizon to fiscal year 2030 31. Of the $3.3 billion in the total five year CIP, $1.2 billion is budgeted in shown for 2627 in the adopted biennial budget. Of the $3.3 billion in the total five year CIP, $1.2 billion is budgeted in 2627 for the proposed adopted biennial budget. biennial update, as compared to 670 million that was shown for 2627 in the The proposed biennial budget is substantially higher than presented in rebudgeting unspent appropriations for multi-year capital projects. The proposed biennial budget is substantially higher than presented in rebudgeting unspent appropriations for multi-year capital projects. last year's adopted CIP, largely due to our process of carrying forward or Here's a breakdown of the funding source categories for the $3.3 billion, five a breakdown of the funding source categories for the $3.3 billion, five year CIP will go into more depth for the top five categories listed here. Revenue from other agencies is the largest source of funds in the CIP, CIP. Revenue from other agencies is the largest source of funds in the CIP, representing approximately $738 million of funding, up 4% from the last adopted CIP. The increase is largely attributable to increases in contributions from the local user agencies served by the regional wastewater facility. increase is largely attributable to increases in contributions from the The increases aligns the contributions with the scope, timing and cost of proposed CIP. contributions with the scope, timing and cost of capital projects included in the Revenue from the state is higher due to recognizing additional gas tax and road additional gas tax and road rehabilitation funding. Based on updated forecasting, revenue from the federal government is down to funds that are still eligible for reimbursement, and those will be grant award that is not expected to move forward, and the need to rebudget grant captured as part of the year end cleanup process. Based on updated forecasting, revenue from the federal government is down to the removal of a US Department of Transportation Safe Streets for all grant award that is not expected to move forward, and the need to rebudget grant funds that are still eligible for reimbursement, and those will be captured as part of the year end cleanup process. The next largest source of funding is contributions, loans and transfers between city funds. The next largest source of funding is contributions, loans and transfers between city funds. The largest transfers of funds are from the sewer Service, Sewer Service and Use Service and Use Charge Fund to the water pollution control and sanitary sewer programs. The largest transfers of funds are from the sewer Service, Sewer capital programs. Fees paid by the users of the sanitary sewer system are used for capital of the sanitary sewer system are used for capital projects in these programs, as well as operating costs. The proposed CIP includes approximately $61 million in contributions from the general fund contributions in the proposed CIP is substantially lower than replacement and replacement of the 911 dispatch backup generator, the amount of the last adopted CIP, because we do not carry forward existing general fund appropriations for capital projects in the proposed CIP. The proposed CIP includes approximately $61 million in contributions from the general Fund, with the largest allocations for fire apparatus replacement and replacement of the 911 dispatch backup generator, the amount of general fund contributions in the proposed CIP is substantially lower than the last adopted CIP, because we do not carry forward existing general fund appropriations for capital projects in the proposed CIP. These will be brought forward as part of the year end cleanup These will be brought forward as part of the year end cleanup process, and at process, and at that point, the general fund contribution will likely increase. beginning fund balance is made up of money carried over from prior year that point, the general fund contribution will likely increase. The prior year allocations. allocations. The beginning fund balance is made up of money carried over from There are plans for most of this money, pending the determination of final scope for projects, final project locations and or availability of future funding. There are plans for most of this money, pending the determination of final scope The amount of beginning fund balance in the proposed CIP is 1% above what was proposed CIP is 1% above what was included in the last adopted CIP. This amount will increase as part of the year in clean up process. Capital appropriations not spent this year. Return to fund balance. The increase in beginning fund balance is largely due to the final issuance of largely due to the final issuance of measure T bonds in 2020 526. Those funds will be carried over until fully spent, which is anticipated in anticipated in 2020 eight. million. 29 taxes, fees and charges funding is up slightly from 572 million to about 579 million. million. Airport passenger facility charges are estimated to be down by Airport passenger facility charges are estimated to be down by about $15 about $15 million. However, construction, excise tax and building and structure construction tax and structure construction tax are estimated to be up compared to the last construction of data centers. However, construction, excise tax and building adopted CIP due to anticipated construction of data centers. Finally, financing proceeds are anticipated to provide about hundred and financing proceeds are anticipated to provide about hundred and $20 million in the proposed CIP, down 40% from the last adopted CIP. So similar to the last CIP, the largest use of financing proceeds is in the notes and bond proceeds for the implementation of capital projects identified in the Master plan. So similar to the last CIP, the largest use of financing proceeds is in the Water Pollution Control Capital program, with $392 million wastewater revenue notes and bond proceeds for the implementation of capital projects identified in the Master plan. The Sanitary Sewer Capital program anticipates increasing its use of financing in this CIP to support capacity improvement projects. Sanitary Sewer Capital program anticipates increasing its use of As mentioned earlier, the final issuance of measure T bombs was completed in the was completed in the current fiscal year, so measure T financing proceeds the proposed CIP. As mentioned earlier, the final issuance of measure T bombs dropped to zero in the proposed CIP. The airport has also deferred the $200 million short term parking garage financed. The airport has also deferred the $200 million short term parking garage project beyond the five year horizon of the CIP in that project would have been financed. Those were the main funding sources for the capital program. Now we will talk about the expenditure or use of funds. This chart shows where the $3.3 billion of investments will be made by Capital up over 56% of the dollars in the CIP, followed by the airport and parks, both about 11%. This chart shows where the $3.3 billion of investments will be made by Capital Program, the water pollution control and traffic capital programs together make up over 56% of the dollars in the CIP, followed by the airport and parks, both about 11%. And now I will turn it over to Public Works Deputy Director Sal Kumar to discuss major project changes. And now I will turn it over to Public Works Deputy Director Sal Kumar to discuss major project changes. Thank you, Jennifer. Thank you, Jennifer. Good members, thank you for joining me today. Good members, thank you for joining me today. Before I begin my presentation, the development of the capital program is projects and priorities with that. Before I begin my presentation, the development of the capital program is truly a team effort, and the work closely with public works in delivery of projects and priorities with that. So I have about 5 or 6 slides to go over, and I'll be covering the key areas areas and highlighting projects and highlighting the changes for this fiscal year. So I have about 5 or 6 slides to go over, and I'll be covering the key year. microphone closer? Thank you. Thank you. Would you mind showing the microphone closer? Would you mind showing the Apologies. Apologies. So as I mentioned earlier, the program that was approved in 2018 authorized and community and emergency centers. So as I mentioned earlier, the program that repairs, pavement public safety projects, flood protection replacements work on completing city street repairs, pavement public safety projects, flood was approved in 2018 authorized $600 million in general obligation bonds to protection replacements and community and emergency centers. One of the major changes we have for this fiscal year is that the Emergency temporary Hvac system to stabilize the near-term operations. One of the major changes we have for this fiscal year is that the Emergency Operations Center and Training Center, the funding is being used to deploy a temporary Hvac system to stabilize the near-term operations. While the permanent system is designed constructed. and will be constructed. While the permanent system is designed and will be City is pursuing costs through claims and legal actions. City is pursuing costs through claims and legal actions. More to come in the future. More to come in the future. And then also the bond proceeds is expected to wind down over the next two also the bond proceeds is expected to wind down over the next two years, which which is a smaller overall CIP compared to prior cycles. Next slide is the the Community Economic Development CSA, which has the developer developer program. Under the program, we have the Underground Utility program, which is. The goal of the. Is to convert overhead into underground and working closely with utilities such closely with utilities such as Comcast and AT&T. The rule 28 program is managed by companies, which is PG&E and the program is. developer assisted the City Manager program where undergrounding. The developer assisted the City Manager program where undergrounding. The The developer. The developer. Fees. Fees. Underground project. Underground project. this time. There are no major changes for this time. There are no major changes for Around. services. The next two slides will be on environmental, environmental and utility services. The first two are is the. storm system. The two collection system in San José, which is sanitary sewer system and the storm system. The sanitary sewer system includes about about 2000 miles of pipeline serving San of pipeline serving San José and three other jurisdictions, conveying wastewater facility. The sanitary sewer system includes about about 2000 miles wastewater to regional wastewater facility. The program priorities include preventing sanitary sewer overflows, aging infrastructure. The program priorities include preventing sanitary sewer overflows, managing system capacity and condition, as well as rehabilitating and upgrading aging infrastructure. where this this project will address both the capacity and replacement of aging sewer system. So one of the major changes you can see is the chess board is a good example where this this project will address both the capacity and replacement of aging sewer system. And then the last change that we have is through master planning. And then the last change that we have is through master planning. The project is no longer needed as a downstream improvement along Fountain improvement along Fountain Road was addressed. Addresses the capacity. Addresses the capacity. Issue. The next program is the Storm Sewer System, which is a smaller program which next program is the Storm Sewer System, which is a smaller program which stormwater system to our major waterways called the River and Coyote Creek. The includes about 1100 miles of storm system, 31 pump stations that convey stormwater system to our major waterways called the River and Coyote Creek. The major, major focus, which also made changes are. The major, major focus, which also made changes are. You can see installation of trash capture devices, basically capturing all basically capturing all the trash before the trash. The water system is discharged into waterways. Completion of major projects. As you can see in the picture, there is the recently completed Green Stormwater Stormwater project. And then also we are focusing on flood and drainage improvements. The next two slides are for the utility service CSA, the water pollution control. The original wastewater facility serves eight cities and four special districts. The CIP is guided by the master plan which was updated. Master plan was updated in 2025. This is one of the largest programs in the city. It's about $1 billion plan in the next five years. And the key changes and key updates include focus on project delivery. In the photo is upgrade project pump station improvements and enhancements. And to the right is the water utility system. No major updates, but I would like to highlight the. The water system. Approximately 26,000 customers across five service areas which. Is an evergreen. The CIP focus on maintaining existing infrastructure, constructing new management building that was opened last. The CIP focus on maintaining existing infrastructure, constructing new facilities and do want to highlight the recently completed Water resource management building that was opened last. Year. Year. The next CSA is the Neighborhood Services CSA, which includes library and which includes library and parks and community facilities. and digital materials, support automated support, public and invest in facility maintenance. The library program provides funding to maintain facilities, acquire physical and digital materials, support automated support, public and invest in facility maintenance. The one major change is the Building Forward Library Grant round two funding, lighting retrofits, Hvac controls, renewal and replacement. The one major that Doctor Martin Library, which includes elevator modernization, on support and repair, repair and refurbishment of projects that Doctor change is the Building Forward Library Grant round two funding, which focuses Martin Library, which includes elevator modernization, lighting retrofits, Hvac controls, renewal and replacement. The other one is the park and community facilities. The other one is the park and community facilities. This program, led by parks, Rec and Neighborhood Services, delivers parks, emphasis on maintenance and improvements include projects such as Park Improvement and Camden Park all inclusive Park, as well as replacement. This program, led by parks, Rec and Neighborhood Services, delivers parks, trails and community centers, and the major changes for the CIP program is the emphasis on maintenance and improvements include projects such as Park Improvement and Camden Park all inclusive Park, as well as replacement. Project. Project. Under the Public Safety Project, the objective of the Public Safety program effective emergency services to residents and visitors. Under the Public Safety Project, the objective of the Public Safety program is to provide and maintain and improve facilities, that support the delivery of effective emergency services to residents and visitors. The public safety is focused on delivering. The public safety is focused on delivering. Mentioned earlier, we have been focusing on building fire stations and police installation of privacy walls at a legacy fire stations. Mentioned change to report out is the Emergency medical services replacement, as well as earlier, we have been focusing on building fire stations and police training facilities for the last few years, and the current change, major change to report out is the Emergency medical services replacement, as well as installation of privacy walls at a legacy fire stations. On the next slide is on transportation. On the next slide is on transportation. Aviation services includes airport parking and traffic sips for the airport. Aviation services includes airport parking and traffic sips for the airport. International airport classified as a medium hub airport at the San José. International airport classified as a medium hub airport at the San José. Airport. Airport. Master plan and capital improvements. Master plan and capital improvements. The CIP focus on safety, passenger experience and service expansion, and. The key updates include. Changes include is improvements, which is. Expansions and rehabs. Also purchase of zero emission busses. And as Jennifer mentioned earlier, there was a deferred referral of the short garage providing sustained passenger growth. mentioned earlier, there was a deferred referral of the short term parking Parking. There is no update to report as far as traffic control. Capital. The traffic control supports a safe, efficient and multi-modal transportation transportation system. and General Plan 2040. Investments aligned with initiatives such as Better Bike 2025, Vision Zero and General Plan 2040. Safety System Pilot, which includes installing speed cameras, EV charging mobility needs, such as allowing EV charging stations and parking for stations at city facilities, and enhanced care management by managing scooters. The key projects and changes include is focused on pavement maintenance, Speed Safety System Pilot, which includes installing speed cameras, EV charging stations at city facilities, and enhanced care management by managing mobility needs, such as allowing EV charging stations and parking for scooters. And this is the last slide, we. And this is the last slide, we. Supportive communication, municipal improvements and service yards. Supportive communication, municipal improvements and service yards. So there's no change for communication. So there's no change for communication. Just want to mention that the CIP continues to focus on providing safety fire municipal improvements. Just want to mention that the CIP continues to focus on providing safety critical systems for city staff, such as radios, replacing radios for police and fire municipal improvements. Includes the key programs. Includes the key programs. included. Maintains the facility to maintain operational needs, and the key Maintains the facility to maintain operational needs, and the key projects projects included. The changes are the convention center, lighting and restroom upgrades and the convention center, lighting and restroom upgrades and the City Hall Water project, and the last is the service yard. CIP program. There's no changes. There's no changes. So this concludes our presentation are shown. Here is the photo of San José Police Department Air Support Unit building Support Unit building which is near completion. We should be going to finance and commissioning and should be here opening here opening here pretty. Soon. Any questions? Thank you very much, Commissioner Kasey, if you have a quick question, I wanted have a quick question, I wanted to go to public comment first. I do want to note for the record that Commissioner Cantrell, Commissioner want to note for the record that Commissioner Cantrell, Commissioner Oliverio and Commissioner Vandal did come in during the presentation. So I believe that does mean we have a quorum. So I believe that does mean we have a quorum. Thank you. Thank you. So I'd like to move to public comment. At this point, I don't think we have cards. So if you would like to just step up to the mic. Anybody has any comment hearing no comments, we'll go to Commissioner Kasey. Thank you, Vice Chair. Thank you, Vice Chair. The first question I had was around airport. I do realize it makes sense to prefer the short term parking garage because of it makes sense to prefer the short term parking garage because of air traffic, but still, the construction projects in 26 through 28. traffic is not recovered yet? Are there other were there other major things that Then there's a substantial drop off. Then there's a substantial drop off. We don't know what it's gonna look like yet. we postponed since their traffic is not recovered yet? At this point. Yeah. Acting deputy director of Planning Department report. So one of the other major projects that we're currently it's the parking currently it's the parking garages, terminal C expand. So that would be the other major project that we're holding off on because that we're holding off on because passenger numbers here to support. And I guess with the with the budget numbers of 26, 27, 28, then dropped off dropped off substantially. Are we expecting new revenue sources to come in by the time we get to those time we get to those years to increase it? Or it seems like, should we be saving more for rainy day to cover needs out? are holding off on larger capital projects until the passenger numbers are increase, ideally in a situation, but we are holding off on larger capital there to support that going forward. So we are expecting passenger numbers to projects until the passenger numbers are there to support that going forward. But we are looking at other revenue sources. But we are looking at other revenue sources. Obviously, outside of passenger numbers, so we're all different possible. Okay. Obviously, outside of passenger numbers, All right. All right. Thank you. Thank you. the upgrades. On page 16, the sewer system, the upgrades. On page 16, the sewer system, You talked about some of the sewer lines. You talked about some of the sewer lines. Planning commission. A couple weeks ago, we had a development in Willow Glen that came before the Planning commission. There was a lot of discussion about the sewers not being well from the There was a lot of discussion about the sewers not being well from the standpoint, sewer lines not being adequate from the sanitation department. They were adequate. They were adequate. Does any of this work encompass some of the neighborhoods in that area? Is it. Is it for the neighborhood? Project? Project? Maybe I can ask. An engineer division. So to answer your question, yes, our master plan does take into account it's account it's citywide. So our master plan for sanitary sewer system. I think we've modeled everything from eight inches up. We are looking at also the larger trunks. plant. And we're also doing assessment on larger interceptors which leads to the plant. So yes, it included a project. Okay. I think subsequent to their meeting here, they filed suit against the city. For that. Okay. Page seven. The water pollution control area. We mentioned that it's for six different cities. I think if I understood that correctly, so is the billion dollars the entire entire thing, or is that San Jose's portion, San Jose's portion between the cities? I think if I understood that correctly, so is the billion dollars the six cities? Do we determine San Jose's allocation for. Do we determine San Jose's allocation for. That? I'm the general manager for the full amount is just for the complete program, San José. The allocations are based manager for the full amount is just for the complete program, the portion for With the other About 20%, and then the rest goes to other agencies based on the flow that flow that they send. Okay. So based on actual usage. So based on actual usage. Could you would you mind reminding which are the six cities we. We have, we have agreements with the city of Milpitas, West Valley Sanitation covers Los Gatos, Monte Sereno and Saratoga. agreements with the city of Milpitas, West Valley Sanitation District that And then we have Cupertino, Cupertino, sanitary, Campbell And then we have Cupertino, Cupertino, sanitary, Campbell Saint Joseph. Saint Joseph. Thank you From anywhere from all the way to Thank you From anywhere from all the way to I have one question about the water pollution control. In 30 to 31, there's an increase of 120%. What we have in. There is a reason for that. One of the things that we're doing this year, and that was mentioned in the we have a specific changes in legislation coming. things that we're doing this year, and that was mentioned in the presentation, The water control plant, the way that we call it, the regional wastewater water control plant, the way that we call it, the regional wastewater facility, discharges to the Lower South Bay, the whole San Francisco Bay. It has a new permit coming. It has a new permit coming. It will come into effect in 2034. It will come into effect in 2034. So we need to have a lot of construction happening before that. That requires a major increase in the process, capacities and the type of increase in the process, capacities and the type of processes that we have. So we actually have 300 million To be able to address the new permit requirements. So that's the big change that you will is a little Okay. Okay. Thank you all for now. Now, Commissioner Cantrell. I gotta remember, it's live in this room. Okay. So I just had a couple of questions. One has to do with something I really I question every time we do this process. And that's the re budgeting process. It seems like maybe you can explain how or why that happens. Because it seems like you could reasonably predict the amount of funds we may be cutting too much to get to a number that we don't have to get to. Because it seems like you could reasonably predict the amount of funds that would go back into the budget at the end of the process, which means that we may be cutting too much to get to a number that we don't have to get to. Or that, you know, it could lead to, I'll just call it political gaming, it could lead to, I'll just call it political gaming, where someone wants to delete something so they delete it. And then we did have funding and it comes back later, but it never gets gets refunded. So I'm just curious, why do we do it that way? Is it an accounting practice, some type of legal reason? Why do we do it that way? Yeah. This has as far as I know, this has been an accounting practice of the city for the city for some time. funding sources. I will note for the capital projects, almost all of them have dedicated funding sources. And so it is our practice that until the multi-year capital project is completed, rebudget the full amount into the next fiscal year. practice that until the multi- year capital project is completed, we And so we do that through either the early budgets that show up in the that show up in the proposed CIP before you. We do that in the year end process, and then we also have an annual report year. We do that in the year end process, and then we also have an annual report process in September where we do a true up based on the actuals for the prior year. So for almost all of the capital projects, that full amount is being full amount is being carried over into the next year. place where we might not see that full budget is the general fund projects, and we true up the budget in September, I would say that the one place where we that is based on the availability of those general fund support. By the time might not see that full budget is the general fund projects, and that is based on the availability of those general fund support. And I think that's my thought more about the general fund process is that funds And I think that's my thought more about the general fund process is that funds block, that rounding errors that maybe shouldn't be, but that's not your focus. an awful lot of services and programs that I've noticed are on the chopping block, that rounding errors that maybe shouldn't be, but that's not your focus. But at any rate, so is there a is there a chance to revisit this process, maybe little more accurately, or is that a possibility? As far as I know, it's not currently proposed to change. As far as I know, it's not currently proposed to change. I think our our budgeting practices, but it's, I think, something that should be considered as we perhaps update our financial systems. our our budgeting practices, but it's, I think, something that should certainly But as far as I know, this is currently how we are tracking our projects over projects over time. So in terms of the percentage, the amount that comes back, how would you budget? the amount that comes back, how would you characterize that over the entire What would that be either in sum or percentage. For the capital funded projects? I would say it is. It is near 100%. We do track that the total project budget does not change over time, but that the total project budget does not change over time, but the general fund projects, those are very targeted investments. And those projects also tend to be encumbered such that the funding stays encumbered such that the funding stays with the project year over year. Except those that get cut. Except those that get cut. Yeah. Yeah. I'm not aware of any that have been cut recently, but I. Looking at the budget, there's some on the slate. Okay. So thank you for that. I appreciate you can't fully answer the question, but I'm always curious why we always curious why we do it this way. safety system pilot is does that represent the camera pilot or. The there was a graph on the traffic component and it talked about speed safety system pilot is does that represent the camera pilot or. I think that's correct. I think that's correct. High. High. Division manager over. Division manager over. Dot yes, the safety system pilot is our speed camera program. I thought that. Was being cut, am I wrong? No. You may be referring to the federal funds. We were awarded a grant, but we never received. Okay, okay. Okay. So the remaining what's in the budget now is absent the flock camera systems systems then. So the federally funded. So the federally funded. It doesn't include the federal fund. It doesn't include the federal fund. Okay. Okay. Okay, cool. Okay, cool. Thank you. Thank you. I think that's it. I think that's it. Thank you. Thank you. Other commissioners questions? Hi. I submitted some questions about a week ago, but I haven't checked the city haven't checked the city email in 24 hours. Those come back. Those come back. Yes. Yes. We returned responses yesterday. Copy the whole commission. I returned them to to the PBCE staff. Thank you. Did you want to address any of those questions? Because I haven't seen the responses. I don't have my email on my phone, so I just have it on the laptop. But long. Sorry. Yeah, sure. I've got the time. Go ahead and summarize. Thank you. So the questions involved how the city is currently integrated with operating currently integrated with operating budget and long range forecast. And so the operating and maintenance costs for new facilities and public committed additions to the general fund forecast, which we publish in our five year forecast and revenue projections for the General Fund in five year CIP. And so the operating and maintenance costs for new facilities and public infrastructure, as well as estimated revenues are considered as part of our committed additions to the general fund forecast, which we publish in our five year forecast and revenue projections for the General Fund in five year CIP. And so those dollars are set aside in reserve for the upcoming fiscal year. And so those dollars are set aside in reserve for the upcoming fiscal year. And as part of the proposed budget process, the reserve is liquidated and operating and maintenance of those facilities and committed additions also involve future operating expenses for capital projects that have been And as part of the proposed budget process, the reserve is liquidated and previously approved by the City Council. operating and maintenance of those facilities and committed additions also funds are allocated to the operating budget for the respective departments, involve future operating expenses for capital projects that have been previously approved by the City Council. The next question involved how far we can reliably model capital spending, funding sources and ongoing operating impacts. The next question involved how far we can reliably model capital spending, funding sources and ongoing operating impacts. mentioned. And so we model those as part of our five year forecast, as previously And so we model those as part of our five year forecast, as previously mentioned. And those are updated annually to refine the estimates and extend the modeling modeling modeling horizon to a new fifth year, which currently extends to fiscal 2030 31. And those are updated annually to refine the estimates and extend the year 2030 31. Next question asked if City Council would delay, accelerate or prioritize years? Next question asked if City Council would delay, accelerate or prioritize capital projects, how difficult is it to show council financing impacts across years? And so the impact of that can be quickly updated in our our source and use quickly shown in our system generated reports. impact of that can be quickly updated in our our source and use statements and However, it is challenging to estimate what a delayed project will cost is. Labor and material costs tend to be higher in the future. Next question is on how we track and validate capital funding sources such as grants and restricted funds across projects and over time. question is on how we track and validate capital funding sources such as bonds, And so we reconcile these annually as part of our annual report process I year actuals. And so we reconcile these annually as part of our annual report process I mentioned earlier, which is where we reconcile every fund based on the prior year actuals. And as we receive new grants, those are programed in the capital budget once recognized within each fiscal year, and then those estimates ar trued up in the annual report and the annual budget process. And as we receive new grants, sources are allocated by the amounts estimated to be recognized within each those are programed in the capital budget once executed and the funding fiscal year, and then those estimates are trued up in the annual report and the annual budget process. Next question is how clearly we can see downstream operating costs created by operating costs created by today's capital decisions. And so those are captured in detail up to five years before the projects come of that committed additions process. captured in detail up to five years before the projects come online as part And the capital projects in the five year forecast show that net operating reflected across budget forecasts and reports? And the capital projects in the five year forecast show that net operating impact and then when changes occur mid-cycle, how confident are we that updates reflected across budget forecasts and reports? So the capital budget database is updated to reflect all of those actions. So the capital budget database is updated to reflect all of those actions. So City Council approved actions as part of annual reports, the mid-year update Council memo actions. actions as part of annual reports, the mid-year update year end update and City And then we cross-reference those across all of our systems. Let's see the next question. How easy to explain capital plan changes years later about what assumptions were later about what assumptions were made and why decisions changed. So we document all major cost changes. So we document all major cost changes. More than 10% of the total project budget in our capital budget book detail book detail pages. And so those those will be documented in our next annual capital budget. Finally, if the capital plan had to support faster decisions with fewer support faster decisions with fewer surprises, what would need to change? So we noted that surprises that result in the need for fast deision making are federal funding. So we noted that surprises that result in the need for conditions that impact cost estimates or availability of materials or changes in fast decision making are often the result of factors beyond the control of the city, such as economic conditions that impact cost estimates or availability of materials or changes in federal funding. So we try to stay apprized of these factors, and we can effectively bring change the budget as needed. So we try to stay apprized of these factors, and we can effectively bring forth a memorandum to City Council on any given Tuesday to seek approval or change the budget as needed. Thank you. Thank you. Commissioner. Yeah. Thank you very much for the presentation. In my day job, I work for the county and I'm in the middle of doing budget work. I've been doing that for a few years, and now I'm shifting over to learning different, at least initially looking at the budget. I've been doing that for a few years, and now I'm shifting over to learning about how the city does initially looking at the budget. budgeting, and I am quickly learning that it is quite different, at least So to help with my general understanding of at least this portion, the CIP, I see least this portion, the CIP, I see that the capital funds budget is 1.2 billion, to what is on the next slide. So to help with my general understanding of at and I'm trying to compare that to what is on the next slide. That slide three I'm referencing. That slide three I'm referencing. CIP, which ranges anywhere between 3 and 4 billion. And then slide four is And then slide four is historic historical comparison of the five year historic historical comparison of the five year CIP, which ranges anywhere between 3 and 4 billion. So I guess if you can help me understand really it's this. So I guess if you can help me understand really it's this. Slide four. Slide four. the dots. That's maybe I'm not connecting the dots. That's maybe I'm not connecting And my first go around with this. And my first go around with this. Are we taking what we anticipate for next year and layering on what like for next year and layering on what like modeling what the next four years look like. And we're adding that together. And we're adding that together. And that's where we're getting our 3 to $4 billion in the proposed and adopted adopted CIP. I think I'm just trying to wrap my head around that first. Sure. I think I'm just trying to wrap my head around that first. Sure. So. So. Yes, the $1.2 billion is capturing just next year's budget, less internal next year's budget, less internal contributions and loans and transfers. And then the $3.3 billion is the full five year amount added together. years of the CIP, because of how we carry forward the project budgets. So often that first year amount is much larger than the last four years or out years of the CIP, because of how we carry forward the project budgets. But in general, the. But in general, the. forward. Rather than just that, there are some ongoing appropriations we will model forward. But the CIP also captures a great deal of one time projects, and so we are we can predict them at this time. But the CIP also captures a great deal of one time projects, and so we are attempting to capture those investments over the five year period, to the extent we can predict them at this time. And so that 3.3 billion is balancing the available resources with those balancing the available resources with those anticipated investments over the five year period. Got it. Got it. Thank you very much for that. Thank you very much for that. So maybe just another general question for my own situational awareness, my for my own situational awareness, my understanding of any kind of modeling. Predictive modeling depends on the assumptions that are made in that model. And I guess my question is, given past budgets and all, how how accurate do we all, how how accurate do we expect these models to be? Like? Like? Are we what kind of variance are we looking at? Are we what kind of variance are we looking at? Like generally speaking, I don't, I don't know if it's possible to give out projections that we see, like say, slide four, that would be helpful. Like help, maybe in layman's terms, like me, understand how confident we are in those generally speaking, I don't, I don't know if it's possible to give out numbers, percentages or some kind of confidence interval, but if you can help, maybe in layman's terms, like me, understand how confident we are in those projections that we see, like say, slide four, that would be helpful. Yeah, I source involved. Yeah, I would, I would say that our confidence really depends would, I would say that our confidence really depends on the type of funding on the type of funding source involved. So for example, with financing proceeds, that's largely driven by the city where proceeds, that's largely driven by the city where we are determining the amount one time investments on taxes, fees and charges. So for example, with financing of debt service needed to cover certain large one time investments on taxes, fees and charges. Some of those can be quite volatile. Some of those can be So we have construction and conveyance tax is one of our very large capital quite volatile. and conveyance tax is one of our very large capital funding sources that can funding sources that can vary widely year to year. So we have construction vary widely year to year. And so we're always updating those estimates. And so we're always updating those estimates. And that can can impact our availability to invest in projects this year or into projects this year or into the next five years. Similarly, for building and structure, building structure, construction tax and structure, building structure, construction tax and construction excise program, those can really vary year to year. Similarly, for building and tax, which are large funding sources for traffic capital program, those can really vary year to year. And as we discussed for for the airport, their passenger facility charges are discussed for for the airport, their passenger facility charges are expected to not recover as quickly as we had previously anticipated. So we revisit those kind of estimates every year because there are a great estimates every year because there are a great deal of economic factors that can impact those. Okay. Okay. Thank you very much. Thank you very much. seven. And you you started touching on my next question, which was related to slide seven. I was going to ask to help walk through this slide in greater detail, but given on it, thank you for that. walk through this slide in greater detail, but given that you just touched If I wanted to learn more about these sources of funding, do we have documents of funding, do we have documents or information available for someone like these things in greater detail? If I wanted to learn more about these sources me first time around to learn about these things in greater detail? generally? And maybe as an extension to that question, like content in this And maybe as an extension to that question, like content in this packet packet generally? Yeah, absolutely. Yeah, absolutely. I would point you to the capital revenue forecast on the Budget Office's website. I would point you to the capital revenue forecast on the Budget Office's website. And so that is one of the sections of the five year forecast that we publish we publish each February. And so that will go into describing each of those funding sources and also the assumptions that we made around our projections for that five year forecast. And so that will go into describing each of those funding sources and also the Okay. Okay. Thank you very much. Thank you very much. Two questions for me. Two questions for me. Anybody else? Anybody else? Okay. One of them is I always like to see budget to actual. And I didn't see that here. And so I expected to see it in the package somewhere. I'd like to know where I can go see it. Is that also in the budget offices? Yes. I would point you to our last biennial capital budget, which will show the actuals for all of the capital projects in the CIP. point you to our last biennial capital budget, which will show the prior year So what we are not presenting this year because it's our biennial capital mini update is our detail pages. presenting this year because it's our biennial capital budget, sort of our So typically our capital budget is about 1300 pages. This year it's 300 pages, which saves all of us staff quite a bit of time and time and effort. So because those projects do not change that much year to year, I if you are available on the Budget Office website. So because those projects do not change referring back to our last adopted biennial capital budget, which is any particular projects, I suggest referring back to our last adopted that much year to year, I if you are curious about the prior year actuals for biennial capital budget, which is available on the Budget Office website. Thank you. Thank you. And then the next question is, I understand the bring forward of CIP not utilized, you allocated $100 million, you've spent 20 of it, and you're 30% done with the project, and you have two more years left. And then the next in that budget that where I would see the percentage utilized, you allocated you have two more years left. Is that a project wise where you can see those $100 million, you've spent 20 of it, and you're 30% done with the project, and dollars? Is that a project wise where you can see those dollars? Yeah. Yeah. Excuse me. Yes. Excuse me. Yes. Our detail pages will provide the start date Our estimated completion date, the total project budget. Our estimated of the project. Our detail pages will provide the start date of the project. project budget. And we also note the initial project budget. completion date, the total project budget. And we also note the initial So that was going to be my next question. So that was going to be my next question. So you can see if the project has increased. So you can see if the project has increased. And then we have a section on those major cost changes. Explain why the costs have increased. Thank you. Mr. Thank you. And thank you to the City Manager's Budget Office and the Public Works of having a foundation of where we're headed and where we're going and why we're headed that direction. And thank you to the City Manager's Budget Office and the Public Works Department for is a really important, you know, going into the future and kind of having a foundation of where we're headed and where we're going and why we're headed that direction. So. So. So thank you for all your hard work. So thank you for all your hard work. My question was, I understand that this is going future in time. Just wondering, is there any kind of practice that maybe your office does or improving this project. Just wondering, is there any kind of practice that maybe your office does or different office does that goes back in time, meaning year. This is how it's going after year. like capital was spent on improving this project. This is how it's going after This is how it's going after five years. This is how it's going after five years. Do we ever go back in time or more of a future practice, I guess, are you in practice, I guess, are you in terms of looking backwards? Are you talking about refresh, perhaps rehabilitation of old projects or the rehabilitation of old projects or the operations of those projects? That was just one project out of here. That was just one project out of here. For example, the fire station that's getting improved. Does anybody ever go back and see what was that money well worth spent? Or how is that project going? Maybe we can learn something from it and say, hey, that wasn't I'm not targeting wasn't I'm not targeting the fire department. I'm just saying one project, you know, do you understand my question? Yeah. Sure I do. Sure I do. I can answer the question. I can answer the question. So I'll practice. So I'll practice. That has been is that the project is completed. We do go back and review the expenditure the project, what went wrong, what went wrong, what lessons learned. And then we also have presentations from staff. And then we also have presentations from staff. So we have that. So we have that. And what's the timeline. And what's the timeline. Is it how many years back after a year after five years after ten? Well, we look at individual project individually. So as soon as project completed, then we go back and then we go back and review then we go back and review the project is dot here. I can ask you this question. Okay. Thank you. So the question. Okay, okay. Just making sure. traffic and bike lanes, it's very vital. So, you know, obviously roadside safety and investing dollars into improving traffic and bike lanes, it's very vital. It's important. It's important. need different types of transportation, not just car, right? We need different types of transportation, not just car, right? We Bus lanes, bikes and such. Bus lanes, bikes and such. So I my question is I see an 877 million year spent on traffic bike lanes. A portion of that. Yes, it is okay. And I love the bike lanes, love bikes. I don't bike enough. I should bike a little bit more, but I don't see bikes on the street. So I do not predict or project the biking usage going up. Of those. Any thoughts about that? Thank you. Your question. Director of Transportation. And we we quite often get those kind of questions when we're designing roadways questions when we're designing roadways for the multiple users that we take. We take into consideration that we're we're making that for all the users, that we're we're making that for all the users, whether it be vehicles, bicyclists, and pedestrians. before and after studies of many of the major changes in the roadways that we do that corridor that we've done some improvements. And actually, maybe it not some of the minor ones, but the major ones, to see what has happened in goes back to your first question, we actually also look at before and after studies of many of the major changes in the roadways that we do not some of the minor ones, but the major ones, to see what has happened in that corridor that we've done some improvements. An example is Hillsdale. An example is Hillsdale. A couple of years ago, we did a pretty major change, most of it paint and we did a pretty major change, most of it paint and plastic, but changed the configuration of that roadway. And then we did a before study in terms of how much traffic, the speeds, crashes speeds, crashes and usage. pedestrian use went up, crashes went down, speeds went down, volume stayed about the same. And we did two years of study past that and found that both bicycle and pedestrian use went up, crashes went down, speeds went down, volume stayed about the same. So we do do that. So we do do that. to forecast what the usage is going to be on those roads. We do try to forecast what the usage is going to be on those roads. We do try We don't always get it right, but quite often we're hitting that. And yes, there's people using bike lanes and walking. So the bike lanes are beautiful. Very well constructed. They even have pylons. Now it would seem much, much safer. Yeah, it's beautifully constructed. I love it, but what's your projection numbers. You'd see them going up. Oh yes. The whole point that we put forward is for council to approve. have bike lanes on, and a description of the level of protection that we're trying to get the highest level of protection, which is a more than just a buffered bike lane, but actually protected bike lane. You know, we do a on, and a description of the level of protection that we're trying to get the five year plan that identifies the routes that we want to have bike lanes actually protected bike lane. We're trying to get those up to roughly about highest level of protection, which is a more than just a buffered bike lane, but 500 miles of roadway system on the major routes. We're trying to get those up to roughly about 500 miles of roadway system on the major routes. And we're a ways into it, about 17%. And we're a ways into it, about 17%. But that's the whole point, is to actually provide that real protection actually provide that real protection for bicyclists and pedestrians as well. Actually, I live downtown. I've seen a lot of bike lanes. I think it's beautiful. I mean, it's amazing work. funding. I'm wondering if it seems like an awful lot of work, if that was federal funding. did you know that? How did you know that? I know there was maybe some. I know there was maybe some. Yeah. Yeah. How So will this story continue or should we expect it to? So with our partners, public works, who are actually managing that construction. construction. Yeah. When we first built those facilities downtown on third and fourth in San on third and fourth in San Fernando, they were paying plastic. And we actually were lucky enough to get some pretty substantial federal grants time ago. to get some pretty substantial federal grants through MTC and VTA there a long That's how long it takes to manage those projects. That's how long it takes to manage those projects. of those projects. But yes, those are pretty substantial federal grants that allowed us to do all of those projects. Will it continue? Will it continue? I don't I don't know about the next couple of years because the the trend of they the administration wants to spend money is not on those things. don't I don't know about the next couple of years because the the trend of where Well, great work anyway. Well, great work anyway. It's good. It's good. While it lasted. While it lasted. Any other questions? Any other questions? Commissioners. Commissioners. Okay. So thank you very much for the presentation. And thank you all for coming to help answer questions for us. I appreciate the time. The proposal here is to recommend to the City Council the adoption of the 2026 Improvement Program and transmit a memorandum memorandum to the City Council providing comments, including a finding of consistency with the Envision San José 2040 General Plan. The proposal here is to recommend to the City Council the adoption of the 2026 2027 proposed biennial capital Budget update and the 2027 to 2031 Capital Improvement Program and transmit a memorandum memorandum to the City Council providing comments, including a finding of consistency with the Envision San José 2040 General Plan. Second. Second. Second. Second. Thank you. Thank you. Okay, I'll do a roll call. Okay, I'll do a roll call. Vote yes. Okay. Vote yes. Okay. So we have a motion from Commissioner Oliverio, second from Commissioner Cao. So we have a motion from Commissioner Oliverio, second from Commissioner Cao. And we will go to a roll call vote. And we will go to a roll call vote. Commissioner Barocio. Commissioner Barocio. Yes, Commissioner. Yes, Commissioner. Yes. Yes. Yes. Yes. Commissioner Cantrell. Commissioner Cantrell. Yes. Yes. Commissioner. Commissioner. Kasey. Kasey. Yes. Yes. Commissioner. Commissioner. Escobar. Escobar. Yes. Yes. Commissioner Nguyen's not here. Commissioner. Yes. And myself. Yes. That motion passes. Commissioner, Commissioner and Chair. Rosario, just to capture it all