FY 2023-2028 CIP Budget Book

Honorable Mayor and City Council: On behalf of City staff, I am pleased to present the Fiscal Year (FY) 2023-2028 Capital Improvement Program. The Capital Improvement Program, or CIP, is a five-year planning tool used to identify and coordinate the financing and timing of Capital Projects. The first two years of this five-year Program is the Capital Budget and appears in the City's Biennial Budgets for FY 2023/2024 and FY 2024/2025. Capital Projects slated for subsequent years within the CIP are for planning purposes only and do not receive expenditure authority until there is allocated funding in a future capital budget. This document was prepared in accordance with generally accepted accounting principles. The goals of the CIP are to identify and plan for the City’s long-term capital improvement needs and associated capital financing requirements. The CIP outlines all needed facilities and allows the public and City Council to determine priorities based on community needs and safety. The intent of the Program is to prioritize projects and identify sources of funds in a transparent and open way, one of which included multiple public budget workshops inviting community input. Capital Improvements are major physical projects undertaken by the City that generally do not recur on an annual basis. Examples of CIP projects include acquisition of right-of-way, the construction and modification of buildings or facilities, public infrastructure construction or modifications, the preparation of studies and plans associated with Capital Projects, and those projects funded with debt obligations. Menifee continues to be one of the fastest growing communities in California, leading to an increased demand for public safety and municipal services. In September 2021, the City Council adopted an updated Reserve Fund Balance Policy to set aside funds for future emergencies. This Policy establishes a minimum 12.5% fund balance reserve for natural disasters and catastrophic events; a 12.5% reserve for economic slowdown due to the onset of a recession or other economic crisis; and a 10% reserve to offset the timing of grant reimbursements and the collection of property taxes. The proposed FY 2023/2024 and FY 2024/2025 Operating and Capital Budgets maintain adequate funding levels to remain consistent with the 2021 Reserve Fund Balance Policy. Menifee’s Quality of Life Measure fund (Measure DD), approved by voters in 2016, continues to support the City’s commitment to the community with approximately $13 million in funding spent to date on high priority capital projects, and just over $5 million proposed for the FY 2023/2024 and FY 2024/2025 Capital Budget. With the Quality of Life Measure revenue, the FY 2023/2024 and FY 2024/2025 CIP Budget represents a balanced and fiscally prudent spending plan that strives to meet the present and future needs of our community. As costs continue to increase each year, as well as the demand for City services, the City is proud of its efforts and staff in consistently delivering high quality public service, combined with a focus on efficiency, fiscal responsibility, and innovation. Examples of high priority projects funded through Measure DD include the Holland Road Overcrossing, Garbani Interchange, Bradley Road Bridge over Salt Creek, and the Paloma Wash Pedestrian Bridge. Within the current CIP, projects have been divided into nine categories. There are a total of 32 proposed projects for FY 2023/2024, and 21 for FY 2024/2025. The Transportation and Pavement Management Program categories are at the top of the amount requested. Between the first two years, the overall Capital Budget is proposed at approximately $33.5 million in funding devoted to CIP. I am thrilled to present the FY 2023-2028 Capital Improvement Program. The significant increase in funding not only shows the growth within the City of Menifee, but also signifies the City’s commitment to investing in Capital Projects to meet the demands of a fast and thriving community. Respectfully Submitted, Armando G. Villa City Manager City Manager Message 4