Almost $36 million is planned for the acquisition, construction, and renovation of park and recreation facilities and an additional $37 in reserves and fund balances will be available for future improvements. Some of the parks and recreation facilities to receive significant improvements over the next five-year period include:

Capital Improvement Policies

The Council directed that the following types of projects be considered high priority in developing the Capital Budget:

1. Projects which enhance or maintain public health and safety

2. Projects which reduce or have minimal impact on operating and maintenance costs

3. Projects which leverage effective use of grant funds

4. Projects which stimulate growth in the local economy and yield fiscal benefits to the City

5. Projects which implement prior Council-adopted reports and strategies

6. Projects which prevent additional deterioration of the City's existing infrastructure

Capital projects have been measured against the Capital Improvement Program Priorities. The priority addressed by each project is identified by number on the project detail page.

West Valley Branch Replacement

The Council directed that funds in the Branch Library Reserve be earmarked for the replacement of the West Valley branch library. The cost of a new 20,000 square foot facility with 85 parking spaces is estimated to be $7.9 million. The following sources of funding were identified in the Council’s direction: $3 million from the Construction Excise Tax Fund transferred to the Library Construction and Conveyance Tax Fund, $3.7 million from the General Fund, and $1.2 million in Library Construction and Conveyance Tax funds previously earmarked for the new Biblioteca Latinoamericana, which the Redevelopment Agency absorbed into its budget. The earmarked funding has been programmed for the West Valley Branch in the CIP and construction could begin as early as spring of 2000.

Neighborhood Revitalization

Council directed that up to $1 million of any Construction Excise Tax revenue exceeding the current budget be allocated toward the Neighborhood Revitalization project for the next two years. Revenues for fiscal year 1998-99, however, did not exceed the estimate so no additional funds will be transferred.

Infrastructure Maintenance

In order to address the need for additional funds to preserve components of the City's infrastructure, Council has for the last six years directed that $500,000 from any excess General Fund balance be allocated for infrastructure maintenance. Excess fund balance, if available, is usually identified following the completion of the annual financial audit. In coordination with the Mayor's Office, specific recommendations for the use of any such funds would be presented as part of the 1999-2000 Mid-Year Budget Review.

Direction in the March 17, 1999 message included:

Library Branch Master Plan

The Administration was directed to work with the Mayor’s Office, though the Master Plan process, to evaluate the capital program related to branch library expansion and construction to ensure that facility sizes are established to most effectively serve all of our library patrons. The Library Branch Master Plan is still under development.

Direction in the June 22, 1999 message included:

Master Plans

The City is currently developing master plans for many facilities, including libraries, fire stations, parks and recreation facilities and police and fire training centers. The Council directed that a new policy be developed requiring viable financing options for both capital and operating expenses to be included in each master plan.

Charter Change – Budget Timing

The City Charter requires publication of the Capital Budget ninety days before the end of the fiscal year and the Operating Budget thirty days before the end of the fiscal year. The Council directed the Administration to review the possibility of a charter change to allow the capital budget to be presented at the same time as the operating budget.

Unallocated Funds

A total of $4 million of one-time funds was left unallocated in the budget process. The Administration was directed to report back to the Council in September with a recommendation to allocate these funds to neighborhood infrastructure needs such as sidewalks, tree trimming, streetlights, transportation improvements, street maintenance, public facilities and any other deferred funding priorities in our neighborhoods.

Civic Center Relocation

On June 8, 1999, the City Council/Redevelopment Agency Board approved the relocation of the Civic Center to a new downtown location at an estimated cost of $214 million. The Council also approved budget amendments to provide $20 million in initial variable rate financing for design and financing costs in the first year of the program.

Sidewalk Repair Program

A new sidewalk repair program was approved which will provide grants to homeowners for the full cost of repair. In the past, the City provided grants for only one-third of the repair costs. Additional funding of $1.3 million was added to cover the additional costs of the new program.

New Projects

Other significant new projects or expenditures adjustments directed by the City Council included:

Increased Construction and Conveyance Tax Revenue Estimates

Following the publication of the Proposed CIP, the City experienced an increase in home sale activity which resulted in higher than anticipated Conveyance Tax receipts. As a result, the 1998-99 estimate for Construction and Conveyance Tax receipts was increased by $4.5 million, from the $21 million used in the Proposed CIP to $25.5 million. The additional funds were distributed to various Capital programs according to the Council-approved formula, but primarily benefited the Parks, Library, Service Yards and Fire programs.

Airport Area Transportation Improvements

The Airport is currently conducting a comprehensive Terminal and Transportation Study. The transportation component of this study is anticipated to be completed in the fall of 1999. The completed study will develop and document existing and future transportation demand information, and strategies to achieve greater public transportation utilization, as well as identify roadway improvements both at and near the Airport. In order to begin to address necessary improvements identified in the study, $2 million has been included in the 1999-2000 Capital Budget for the Transportation Improvements project. In addition, a Traffic Mitigation project provides a total of $2,250,000 to begin work toward traffic improvements related to the implementation of the Airport Master Plan. The project will provide initial funding to identify, design, and construct specific projects needed to address the recommendations of the Terminal and Transportation Study.

In addition to these Airport traffic improvements, there are two other projects in the Traffic CIP that will address traffic issues near the Airport. The first project is the Intelligent Transportation Systems (ITS): Airport Area project, which will implement an advanced traffic mitigation system in the area around the Airport, intended to improve traffic flow, reduce emergency vehicle response times, and provide traveler information. The second project is the Route 880/Coleman Interchange project, which will provide for conceptual engineering and preparation of Environmental Impact Studies for a future potential project to upgrade the Coleman Avenue interchange at Route 880. Construction of this upgrade will greatly improve traffic safety and reduce congestion in the vicinity of the Airport.

Airport Noise Attenuation

Approximately $34.5 million is included in the CIP for the Noise Attenuation and Acoustical Testing projects. It is anticipated that the current ACT Program, which includes the treatment of 1,500 dwellings and other noise sensitive land use properties, will be completed by 2000. These dwellings are within the 65 decibel Community Noise Equivalent Level (CNEL) noise contour area of San Jose and Santa Clara. In addition, $7.5 million has been included in the Noise Attenuation project to provide acoustical treatment of several schools that are within the 60 CNEL area. These facilities include the Washington Elementary School, Center for Employment and Training, Sacred Heart education facility, and the Montague Elementary School. The Acoustical Testing Category Area II and III projects provide for the testing of additional dwellings within the projected 60-65 CNEL noise contour to consider their eligibility for treatment based on interior noise standards, as directed by Council.

Communications Equipment

Our latest estimates indicate that without additional funds, the Communications Program will begin experiencing shortfalls in funding required to meet scheduled equipment replacements within the five-year horizon of this CIP. Projected shortfalls begin in 2001-02 ($83,000) and continue for the remaining two years of the plan: $1.1 million in 2002-03, and $683,000 in 2003-04. Without an alternate funding strategy, these shortfalls will severely impact the scheduled replacement of equipment in those years, including the replacement of critical Public Safety Mobile Data System equipment. The shortfalls would continue to increase in future years under the current funding structure. As directed by Council, a strategy to address this gap will be developed as part of the next Capital Improvement Program.

It will also be necessary to monitor impacts on the Communications Program which will result from recent legislation related to the Federal Communications Commission (FCC), called "refarming". Refarming is a new FCC program that will allow for a more efficient use of the radio frequency spectrum. The program is being implemented, in part, by a FCC mandate requiring all radio equipment sold today to be compliant with a new set of equipment standards. Since the majority of all existing radio systems, including the City’s, are based on the older equipment standards, radio manufacturers have been "forced" to design and sell dual standard equipment. This new equipment is more expensive and sophisticated than older equipment with only a single standard, but has to be purchased in order to accommodate the FCC’s "phased in" solution to increasing the efficiency of the radio frequency spectrum. Higher costs for equipment resulting from this change have been included in this plan.

Fire Protection Master Plan

The development of a comprehensive Fire Protection Master Plan was begun in 1998-99 and is anticipated to be completed for presentation to the City Council later this fiscal year. This master plan will analyze the Fire Department’s current delivery of service and identify improvements necessary to provide the most effective and efficient emergency services to meet the City’s current and future needs. It is anticipated that this study may identify the need for several new stations that could have a significant impact on both the Capital and Operating Budgets.

Fire Station Construction

The construction of a new facility for Station One on property adjacent to the existing Fire Station One was started in the spring of 1999 with the new facility scheduled to open in May 2000. The Redevelopment Agency is providing most of the funding for the construction of this station.

The relocation of Fire Station 27 to a new facility at Bernal Road and San Ignacio Avenue is anticipated to be completed in February 2000. The City, the Redevelopment Agency, Shea Homes, and other developers will share the cost of the station. The new location will provide better coverage in the Edenvale area due to improved access to major roads.

Construction of a new Fire Station 31 in the Evergreen area is nearly complete. The construction costs of this new station are being entirely paid for by the Evergreen Specific Plan developers.

The Communications Hill Specific Plan states that developers must build a turnkey fire station in order to complete development of Communications Hill. In addition to the fire station, the developers have agreed to purchase fire apparatus for the new station. The contribution from the developers to purchase the apparatus has been included in the CIP. The operating and maintenance costs of this new station will exceed $1 million per year.

Redevelopment Agency Library Projects

The Redevelopment Agency’s Capital Improvement Plan for the Neighborhood Business Districts includes $6.2 million towards the development of a new branch library and youth center in the Alum Rock neighborhood of East San Jose. Preliminary discussions have been initiated with the East Side Union School District and Santa Clara County as potential partners. Exploration of this concept was included as part of the Library’s Facilities Master Plan.

Parking

Plans are currently being developed to construct two new parking facilities in the downtown area with Redevelopment Agency funding. The first facility will be located on the northeast corner of Fourth and San Fernando Streets. The second facility will be located on the southeast corner of San Fernando and Second Streets (Block 3). These facilities are targeted to become operational in 2001-02 and 2002-03, respectively.

A third facility, targeted for completion in 2003-04, will be located in the South of First Street Area (SoFA) and is planned to be, if feasible, constructed with City Parking Funds, with the Redevelopment Agency funding land acquisition for the project. An $8 million reserve is in the CIP to be used to partially fund this facility. Once site acquisition plans have been further developed, City staff, in conjunction with the Downtown Parking Board and the Redevelopment Agency, will bring forth recommendations for the remainder of the funding necessary for this facility to the City Council. Cost estimates will depend on the specific location and size of the facility. Preliminary cost estimates for the structure alone total $23-27 million. Conceptual plans call for construction costs beyond the $8 million reserve to be financed through revenue bonds supported by future revenues in the Parking Fund. The impact of Phase Two of the new Free Parking Program and other operational issues will, however, need to be closely evaluated in terms of their impact on the ability of the Parking Fund to meet the bonding requirements of a new parking facility. The preliminary estimates now indicate, for example, that a shortfall in meeting the bonding requirements could exist due to reduced revenues from the Phase Two Free Parking Program.

Storm Sewer Program

The Storm Sewer Capital Fund receives revenue from the Storm Sewer Operating Fund for capital expenditures. The Storm Sewer Capital Fund provides for capital improvement projects, street sweeping, storm system maintenance, the Storm Drain Management System (SDMS), and the federally mandated Non-Point Source Pollution Control Program. The Storm Sewer Fees are derived from annual charges imposed on properties for these services. Each year, funding ($1.6 to $3.3 million in this plan) is reserved for capital improvements. Only the capital portion of this fund is displayed in the Capital Improvement Program. A $100,000 annual reduction in the amount of funding previously scheduled to be transferred from the Storm Sewer Operating Fund to the capital fund was reflected in the Proposed CIP. This reduction reflected an estimate of the effects of possible revisions to the Storm Sewer Fee structure then under consideration by the City Council. Subsequent to the release of the Proposed CIP, the City Council directed an additional reduction of $1.1 million in 1999-2000. In order to accommodate the additional reduction, it was necessary to delay the Julian-Guadalupe project by two years and shift other project expenditures to the Storm Drainage Fee Fund.

Other sources of funds for the Storm Sewer Capital Program include Redevelopment Agency contributions for the Rincon storm sewer improvements, developer contributions, interest earnings, and loan repayments. The Redevelopment Agency has committed in its budget a total of $24,225,000 over a three-year period for the construction of storm sewer improvements in the North San Jose - Rincon De Los Esteros area. This amount is needed to construct pump stations and major pipeline improvements to alleviate recurring drainage problems experienced in the area bounded by Guadalupe River and Coyote Creek between Highway 101 and Montague Expressway. The improvements were identified in the Storm Drain Master Plan completed in January 1999. The Rincon Storm System Improvement project, the second phase of activity in this area, is fully funded from the Redevelopment Agency contribution. The first phase of activity was construction of the Rincon Pump Station, which was funded by both the Redevelopment Agency and the City.

Route 87

The highest priority regional project for the City of San Jose is the upgrade of Route 87 to a freeway between Julian Street and Route 101. The project will convert the existing four-lane Guadalupe Parkway to a six-lane freeway. The purpose of the project is to relieve the severe congestion that occurs along Guadalupe Parkway and to improve access to Downtown San Jose, the Civic Center area, and the San Jose International Airport. The City of San Jose and Caltrans are jointly implementing the project. The majority of the project funding has been committed from state, federal, and other sources in the amount of $149.2 million. The City has previously committed to providing $22.3 million to help implement the project, the majority of which will be repaid to the City by the Redevelopment Agency.

The estimated cost of the Route 87 project has increased significantly over the past year, primarily due to the substantial escalation in property costs for project land acquisition. A total funding increase of $29.85 million is needed to complete the project. The City is working with Valley Transportation Authority to obtain an increase in State funding for the project in the amount of $22.0 million. Additionally, an increase in the City and Redevelopment Agency funding for the project in the amount of $7.85 million has been included in this CIP. In order to fund the City’s portion of the increased cost ($4.47 million), three projects were required to be deferred by one or two years. The Senter Road: Capitol to Monterey project and the Berryessa Road: Commercial to Mabury project were deferred one year. The Berreyessa Road: Commercial to Jackson project was deferred two years. These projects were selected based on the significant amount of funding required in the first three years of the CIP. The increase in local funding is necessary to fulfill the City’s project implementation responsibilities and to support Caltrans with project design and management to assure a timely project completion. The City’s completion goal for the Route 87 freeway is December 2001.

Transportation Infrastructure Needs

The General Plan assumes a build out of the City’s planned land uses by the year 2010. The local transportation infrastructure improvements needed to support the build out are estimated at $670 million (in current dollars). The majority of this need, $500 million, is the cost of building out the major street system to meet the adopted level of service policy goals. The following chart lists the City’s various needs by type.

There continues to be a substantial disparity between available resources and the identified City transportation needs for both infrastructure development and maintenance. In order to support a complete build out of the General Plan land uses by the year 2010, the prorated infrastructure need over the next five-year period would be approximately $305 million; but only $226 million in funding is currently available. Additionally, street maintenance needs over the five-year period are estimated to be $112 million, with only $84 million in funding available. If these shortfalls are not eventually addressed, over time the City’s infrastructure will deteriorate and economic growth could be slowed by restraints on development imposed by regional authorities with jurisdiction over traffic congestion and air quality.

Street Maintenance

A significant effort has been made in this CIP to increase funding for street maintenance. The CIP includes $15.3 million for slurry seal and resurfacing, $29.6 million for Measure "A/B" funded street maintenance, and $6.3 million for TEA 21 funded street maintenance. In order to receive Measure "A/B" funds for street maintenance, the program requires agencies to comply with the maintenance of effort (MOE) component. This requirement assures the VTA that the grant funds are not used to replace local funds currently allocated for pavement maintenance. To meet this requirement, the Street Maintenance program was increased by $2.0 million per year. The CIP also reflects transfers to the General Fund for Maintenance ($6.7 million) and Slurry Seal ($2.0 million), debt service payments for street improvements already completed ($4.5 million) and a Reserve for TEA 21 Grant Projects – Cycle II Projects ($15 million). The total annual Street Maintenance is approximately $22 million based on a ten-year backlog elimination strategy. The additional funding provides almost all that is needed to meet this goal in the first three years of the program, however, significant shortfalls occur in the final two years as the Measure "A/B" funding is no longer available.

Parkland Dedication Fees and Turnkey Projects

In March of 1998, the City Council completed a comprehensive review of the fee structures for both the Parkland Dedication Ordinance and the Park Impact Fee Ordinance. This program requires dedication of land and/or payment of fees from developers to meet the needs for park and recreation facilities generated by new housing development. Fees collected through this program are accumulated in the Park Trust Fund.

The result of the 1998 review was the first upward adjustment of fees in the ten-year history of the program. In addition to the fee changes, revisions were made to address other needed adjustments in the ordinances. With this new fee structure and program changes, activity in the Park Trust Fund is already beginning to increase, as indicated by the number of allocations for projects in the Park and Community Facilities Development Capital Program.

It is anticipated in future years that the bulk of the contributions under the Parkland Dedication Ordinance will be in the form of parkland dedication and development that occurs as part of new housing projects. Nevertheless, in many cases in-lieu fees will be accepted and there will be a significant increase in this fund over time. The Council-approved methodology for the allocation of these fees is to budget actual receipts, since it is not possible to accurately project whether the developer will choose to develop a facility or pay the in-lieu fee.

Unfunded Projects

A list of unfunded projects that would require General Fund support is included in the Municipal Improvements section of the document to more completely catalogue critical maintenance needs. Funding all 21 projects on this list would require General Fund allocations of over $14.7 million over the five year period. Based on recent five-year General Fund forecasts, of course, this level of funding will not be possible. The list is included to provide a set of projects that could be considered should additional funding become available.

A more comprehensive list of unfunded capital needs was prepared for informational purposes and given to Council as part of the 1996-97 Mid-Year Budget Review. The list represented the unfunded needs identified by departments with responsibility for capital facilities. Enterprise facilities such as the Airport and Water Pollution Control Plant were not included since these facilities are funded directly from user fees. In compiling the lists of unfunded needs, departments identified the approximate cost of meeting service level goals identified in the General Plan or other strategic planning documents. Most of the service level goals do not include specific sites or facilities, but rather reflect an estimate of facilities needed based on population. Most of the costs reflect an order of magnitude estimate, based on average land acquisition or construction costs at this time. Actual costs of capital facilities acquisition and development would vary in the future due to factors such as inflation, location or design. The total cost of the unfunded capital needs identified in that report exceeded $1.9 billion. This list will be updated for use in the next Capital Improvement Program to include the results of strategic plans currently under development.

The needs were categorized into the following seven groups:

 

Park and Community Facilities	$ 743,500,000
Traffic	662,904,000
Conventions, Arts and Entertainment	206,405,000
Storm Drainage	185,000,000
Municipal Improvements	72,678,000
Fire	25,109,900
Library	23,690,000
Communications	11,455,000
TOTAL	$ 1,930,741,900

Although the unfunded list appears overwhelming, many items on the list represent long-term, rather than short-term, needs. It is intended that this information be used to develop strategies for upcoming five-year Capital Improvement Programs. Each year, as funding becomes available, projects from these lists are reviewed and proposed to address needs.

Central Service Yard

The recently completed first phase of construction at the new Central Service Yard remodeled facilities for vehicle maintenance functions, General Services’ Administration, the Public Works Engineering Services Division, and maintenance operations previously located at the Empire Street Yard. Phase I of the project also moved the Purchasing and Stores operation from its previous location at the Las Plumas Warehouse. Archive and storage facilities have also been made available for the Historical Museum collection, the Fire Muster Team, and Christmas in the Park exhibits. Improvements include paving, security, and other site improvements. In order to provide sufficient funding to complete the first phase of the project on schedule, an interfund loan of $2.9 million from the Sanitary Sewer Connection Fee Fund to the Service Yard Construction and Conveyance Tax Fund was approved. The loan will be repaid, at the pooled investment rate of return, using the proceeds from the sale of the Las Plumas and the Stockton and Julian warehouses anticipated in 1999-2000. In December 1998, the City Council approved Phase II of the Central Service Yard Master Plan, as well as an accompanying financing strategy. The second phase of construction will accommodate the relocation of all Main Yard functions to the Central Service Yard. These improvements, totaling $19 million, are being funded by the sale of bonds and the sale of surplus City land, including the Main Yard and the Roberts Road Children’s Shelter site. The proceeds for the Roberts Road Children’s Shelter site used for this project are above the $2 million already committed toward a swimming pool project in South/Central San Jose.

Water Pollution Control Plant Expansion

Due to extensive efforts in water conservation, water recycling and technology improvements in flow metering, the 1998 dry weather flow was reduced by 6 million gallons per day (mgd). As a result, the plant expansion project first included in the Adopted 1999-2003 CIP is now projected to be deferred beyond 2004.