Attachment 2C A - 1
TOWN OF LOS GATOS
CIVIC CENTER
110 E. MAIN STREET
LOS GATOS, CA 95030
May 6, 2016
Honorable Mayor and Town Council:
I am pleased to submit to you the Proposed Fiscal Year (FY) 2016/17-2020/21 Five-Year Capital
Improvement Program (CIP) for the Town of Los Gatos. The CIP is a comprehensive five-year capital
improvement plan designed to identify projects to develop and maintain the Town’s infrastructure, which
is consistent with the Town Council Core Goal of maintaining the condition and availability of public
facilities. Guidance for developing priorities for capital improvement projects is also derived from key
plans, including the General Plan and the Council’s Strategic Priorities.
This CIP budget message contains:
• Town’s Core Goals and Strategic Priorities
• CIP Financial Summary - Funding Sources
• Proposed FY 2016/17 - 2020/21 CIP Overview
• Proposed FY 2016/17 CIP Overview
• FY 2015/16 Completed Projects
In September 2015, the Town Council reaffirmed its Core Goals and established the 2015-17 Strategic
Priorities. The Town Council identified several new Strategic Priorities that guide the capital budget
priorities in the future, including Almond Grove Street Rehabilitation Project funding, significant work in
the area of downtown parking, traffic and parking around the schools, and other capital initiatives.
Progress in terms of percent complete for the FY 2014-16 and FY 2015-17 Strategic Priorities is
summarized below and on the next page.
Strategic Priorities FY 2014-2016 (Percent Complete)
• Phase I of Almond Grove Streets Project (75%)
• Planned Development Policies & Procedures (75%)
• Facilitate Privately-led Effort to Address Downtown Parking (25%)
• Diversity of Businesses in the Downtown (60%)
• Funding Mechanisms to Provide Ongoing Street Maintenance Funding (50%)
• Complete Streets Policy Implementation Plan/Bicycle Pedestrian Master Plan (10%)
Strategic Priorities FY 2015-2017 (Percent Complete)
• Almond Grove Street Project Funding (95%)
• Transportation and Parking Around Schools (35%)
• Downtown Parking (10%)
CAPITAL IMPROVEMENT PROGRAM
Introduction Section
A - 2
CAPITAL IMPROVEMENT PROGRAM
Introduction Section
A - 3
CIP FINANCIAL SUMMARY – FUNDING SOURCES
As in the past, the Town continues to be challenged in its attempts to find a reliable ongoing source of
revenue for the Capital Improvements Program. The proposed five-year CIP reflects only $2.8 million in
ongoing Gas Tax dedicated sources to help fund the proposed $42.9 million of planned capital
improvements. The balance of CIP funding of $40.1 million is expected to be funded by one–time
appropriations from the General Fund Appropriated Reserves (GFAR), Utility Undergrounds Funds,
Traffic Mitigation Funds, Grant Funds, Storm Drain Funds as follows:
Ongoing Gas Tax 2,750,000$
GFAR 29,796,955
Utility Undeground Funds 6,766,000
Traffic Mitigation Funds 2,412,151
Grant Funds 1,110,000
Storm Drain Funds 65,000
Total Funding Available 42,900,106$
Funding Sources for the FY 2016/17 - 2020/21 CIP
One-Time
GAS TAX
State Gasoline Tax revenue, the only ongoing revenue source for capital improvements, is distributed to
the Town from the State of California and recorded in the Gas Tax Fund. This tax is also known as the
“Highway Users Tax or the “Motor Vehicle Fuel License Tax.” The gasoline tax is an 18-cent per gallon
tax on fuel used to propel a motor vehicle or aircraft. Gas Tax revenue is allocated to the Town based on a
per gallon of gas purchased within the Town limits and based on population and estimated to be $630,000
annually. These funds can only be used for new construction and reconstruction of Town streets.
GFAR
The primary source of funding for the Town’s capital program is the Town’s General Fund Appropriated
Reserves (GFAR). By Council direction, this fund receives transfers from the General Fund’s designated
Reserve for Future and Special Projects, which receives most of the Town’s annual revenues above
operating expenditures after funding all legally restricted reserves at their required levels, including
receipt of one-time funds from grants, property, and other reserves. Because of the availability of General
Fund “one-time” funding sources identified and allocated at the January 2013 Council study session on
capital priorities, a General Fund transfer to the GFAR fund was recommended in the amount of $2.7
million for FY 2013/14 and an additional “one-time” source allocation of $6.6 million for FY 2014/15.
After these allocations the Reserve for Future Capital and Special Projects forecasted June 30, 2016
balance is $4.8 million. Sufficient balances are anticipated for the following five years of the Plan to
allocate approximately $400,000 from the General Fund Reserve for Capital and Special Projects for FY
2016/17 through FY 2020/21. The other revenue source for GFAR is the Construction Impact Fee. This
fee is assessed on construction projects based on the square foot size of the project at a rate of $1.14 per
square foot. These fees are intended to recover the damage caused to Town streets by construction traffic.
Construction Impact fees generate at least $80,000 annually.
The funding from this reserve greatly enhances the Town’s ability to implement the CIP; however, it is
not enough to support future annual infrastructure maintenance or construct new facilities. Establishing a
reliable, dedicated source of funding for basic capital improvements beyond the use of accumulated
reserves remains a long-term need and important goal for the Town.
CAPITAL IMPROVEMENT PROGRAM
Introduction Section
A - 4
UTILITY UNDERGROUND FUNDS
The Utility Undergrounding Fund serves as a funding source for activities generally undertaken in
conjunction with street improvement projects. The Town receives approximately $15,000 annually in
Utility Undergrounding funding which is derived from a Town construction tax of 18 cents charged for
each square foot of building addition or alteration within the Town. Total cash balances currently on
hand from the utility undergrounding construction tax are approximately $2.7 million at FY 2015/16 year-
end. In addition, the Town may have access to over $3.8 million in Rule 20A funds allocated from a
percentage of electric bills. PG&E retains and tracks these monies. The Town has begun a project to
underground along Los Gatos Boulevard south of Lark Avenue. These projects rely on PG&E for
scheduling and have long lead times. Staff expects a six year project design timeline, and is tracking the
project construction in FY 2020/21.
TRAFFIC MITIGATION FUNDS
The traffic impact mitigation fee assures that each new development or expansion of use pays its fair
share of the transportation improvements needed to accommodate the cumulative traffic impacts. The fee
is paid in full prior to issuance of the building permit for new development or expansion of use. In FY
2013/14, the Town Council approved an increased Traffic Impact Fee, expected to generate $2 million
over five years for local transportation improvements. Traffic Mitigation Funds should be used solely for
construction of identified traffic and transportation improvement projects
GRANT FUNDS
The Town receives several grants from various sources that help address some of the maintenance and
improvement costs associated with Town streets. Grants include federally funded Surface Improvement
Program (STP) funds which pay for general roadway capital improvements, Community Development
Block Grant (CDBG) funds, which pay for improvements that benefit the disadvantaged, and Highway
Safety Improvement Program funds, which are being used to complete the Highway 9 and University
project. Total grant funding for FY 2016/17 is estimated at $645,000.
STORM DRAIN FUNDS
The Town also receives funding from its Storm Drain Fund, which relies on an established charge of
$0.75 per square foot of impervious surface created by new development. Depending on development
activity, this fee produces approximately $100,000 in revenue annually. This fee has not been adjusted
for several years and should be evaluated in the future as part of the NPDES storm water permit process
and as part of a continuous review of development related fees.
The remaining sources are primarily one-time funds from State or Federal government or from special
revenue funds that have often fluctuated in tandem with the economy and the state budget. Examples of
one-time funds include Valley Transportation Authority/Transportation Fund for Clean Air (VTA/TFCA)
funds and State Proposition 42 Gas Tax funds.
PROPOSED FY 2016/17 – 2020/21 CIP OVERVIEW
The Capital Improvement Program is broadly grouped into the following categories:
Streets Program, which maintains and ensures functional streets, pedestrian, and bike systems.
Parks Program, which repairs or improves parks, park buildings, trails, and urban forestry.
Public Facilities Program, which constructs and repairs public buildings, and purchases
equipment.
CAPITAL IMPROVEMENT PROGRAM
Introduction Section
A - 5
The proposed CIP projects include both new and carry-forward projects from the prior year as part of the
multi-year programming of $42.9 million. Approximately $40.4 million (94%) is allocated to the streets,
retaining walls, sidewalks, and curbs category; $1 million (2%) is allocated to parks and trails projects;
and $1.6 million (4%) is allocated to public facility projects. Allocations are summarized below by type
of major improvements within the program categories.
Carry-forward
from
2015/16 2016/17
Carry-forward
and New FY
2016/17 2017/18 2018/19 2019/20 2020/21
Total By
Category
Total By
Program
Streets
Reconstruct/Resurfacing 9,269,721$ 9,695,592$ 18,965,313$ 1,235,000$ 1,235,000$ 1,235,000$ 1,235,000$ 23,905,313$
Maintenance & Safety 1,028,283 455,000 1,483,283 385,000 385,000 385,000 385,000 3,023,283
Street Improvements 3,565,616 1,436,869 5,002,484 884,895 632,027 42,000 6,635,000 13,196,406
Bridges 235,087 - 235,087 - - - - 235,087 40,360,089$
Parks
Park Improvements 480,838 200,000 680,838 25,000 - 25,000 - 730,838$
Trail Improvements 250,000 - 250,000 - - - - 250,000 980,838$
Public Facilities
Infrastructure Projects 436,889 185,000 621,889 25,000 25,000 - - 671,889$
Equipment Projects 561,538 172,876 734,414 152,876 - - - 887,290 1,559,179$
TOTALS 15,827,972$ 12,145,337$ 27,973,308$ 2,707,771$ 2,277,027$ 1,687,000$ 8,255,000$ 42,900,106$
Five Year CIP Summary
FY 2016/17 - 2020/21 CIP by Program
Total funding for street reconstruction and resurfacing for the next five years is planned at $23.9 million
with approximately $9.2 million allocated in FY 2016/17 including carryovers. Over the five-year period,
the CIP proposes $16.5 million for various other street-related infrastructure improvements including
street maintenance and resurfacing; curb, gutter and sidewalk maintenance; street intersection
improvements; retaining wall reconstruction; crosswalk ramps and safety devices; and storm drain
improvements.
Total funding for parks and trail improvements for the next five years is planned at $1 million with
approximately $0.9 million allocated in FY 2016/17 including carryovers.
Total funding for public facilities infrasturture improvements and equipment projects for the next five
years is planned at $1.6 million with approximately $1.4 million allocated in FY 2016/17 including
carryovers.
Although the Proposed FY 2016/17-2020/21 CIP is a five-year plan, only the first year of the plan is
formally adopted with funds appropriated by the Town Council as part of the budget process. Future year
projects are funded with designated cash reserves on hand, supplemented by estimated annual revenues
for capital funding purposes such as Gas Tax funds and state transportation bond funds. The scope and
funding estimates may change based on the fiscal situation and evolving priorities.
PROPOSED FY 2016/17 CIP OVERVIEW
$27.9 million is being proposed in the first year of the CIP and is comprised of approximately $15.8
million in carryover funds from FY 2015/16 and approximately $12.1 million in new funding including a
transfer in from the Almond Grove Reserve.
The first year of the five year plan, FY 2016/17, continues funding for the Town Council Strategic
Priorities, including basic infrastructure needs. The first phase of the Almond Grove project, the
reconstruction Broadway and Bachman Avenues, is scheduled to begin in the summer of 2016 and
bidding for the remaining eight streets is anticipated in early 2017 to allow for the next phase of
construction in the summer of 2017.
CAPITAL IMPROVEMENT PROGRAM
Introduction Section
A - 6
The CIP also continues ongoing funding in areas that require consistent investments to ensure the stability
of existing infrastructure, such as retaining walls, sidewalk repair, and street maintenance. The latter
item, street maintenance, warrants specific attention as the Town Pavement Condition Index (PCI), a
standard rating of street conditions, has fallen. The PCI reached a recent high rating of 74 in 2008 due to
concentrated investments and is now at the level of 67 (2015 data). At the current investment level, the
PCI is estimated continue to decrease by one to two points a year. An additional annual investment in
excess of $1,075,000 is necessary to retain the current condition level.
The complete list of the proposed FY 2016/17 carry-forward and proposed projects (categorized by funds
and programs) can be found on page A-8 of the Transmittal Letter. Projects are listed in the Financial
Summary section and further described in the project detail pages by category. Below is a summary by
category.
Grant and Total
Awards Estimated
Strret Projects 22,976,938$ 685,000$ 550,000$ 1,474,229$ 25,686,168$
Park Projects 930,838 - - - 930,838$
Public Facilities Projects 1,356,303 - - - 1,356,303$
TOTAL OF CARRY-FORWARD & NEW PROJECTS 25,264,079$ 685,000 $ 550,000 $ 1,474,229$ 27,973,308$
* Other Funds include Storm Drain Fund, Traffic Mitigation Funds, Utility Underground Funds
GFAR Gas Tax Other *
Carry-forward & New FY 2016/17 CIP Projects
The reconstruction of the Almond Grove streets is a high priority. The concrete pavement of all ten streets
is estimated to cost $16.7 million (see February 16, 2016 Report to Town Council). Based on Council’s
interest to bid the remaining eight streets in FY 2016/17, funding for the entire balance must be budgeted.
Below is a table summarizing the proposed sources to fund the entire project.
Almond Grove Reserve (Includes Existing Funding)12,155,973$
Current Projects on Hold 2,107,700
Additional from FY 2014/15 Savings to AG 1,000,000
Additional from GFAR 1,478,034
Total 16,741,707$
Proposed Funding Sources for Almond Grove Street
Rehabilitation Project
A significant amount of the funding for the Almond Grove Street Rehabilitation project has been set aside
from reserves and from year end savings. In addition to the currently available Almond Grove Reserve,
staff recommends using the funding balance of projects currently on-hold, additional FY 2014/15 savings,
and additional new funding from GFAR to fund fully the Almond Grove Street Rehabilitation project in
FY 2016/17.
In FY 2015/16, the Council placed several CIP projects on hold. To meet the funding needs of Almond
Grove, the projects are now proposed to be moved to an unfunded needs list (see table on the next page
for details).
CAPITAL IMPROVEMENT PROGRAM
Introduction Section
A - 7
Projects Estimated
Cost
Current
Status
Recommended
FY 2016/17 - 2020/21CIP
Added to the
Unfunded List
Parking Lot #4 400,000 $ On Hold Add to unfunded needs list.400,000$
Street Repair - 1/2 2014/15 allocation 900,000 $ On Hold Add to unfunded needs list.900,000
Building Replacement at Corp Yard 200,000 $ On Hold Add to unfunded needs list.200,000
Worchester Park Improvements 28,150$ On Hold Add to unfunded needs list.28,150
Downtown Parking Sign Enhancements 50,000$ On Hold Add to unfunded needs list.50,000
Montebello Way Island Removal 19,550$ On Hold Add to unfunded needs list.19,550
Oak Meadow Park 330,000 $ On Hold Add to unfunded needs list.330,000
Los Gatos Creek Trail Improvements - Charter Oaks 30,000$ On Hold Add to unfunded needs list.30,000
Civic Center Improvements 150,000 $ On Hold Add to unfunded needs list.150,000
Total Estimated Project Cost 2,107,700$
Proposed Unfunded Project List
In addition to Almond Grove, the FY 2016/17 CIP includes projects carried forward from the previous
CIP and new projects as listed in the detailed table on the next page. The total FY 2016/17 CIP is $27.9
million.
Several additional items are not included in the CIP at this time, including new green bike lanes,
improvements to manage traffic around the schools, and Civic Center wayfinding signs. Once specific
projects are identified through the Bicycle and Pedestrian Master Plan (underway), and the Traffic and
Parking around Schools Study (underway), projects are expected to be proposed in future CIPs with
funding identified at that time.
CAPITAL IMPROVEMENT PROGRAM
Introduction Section
A - 8
GFAR Grants and Gas Tax Other TotalCARRY-FORWARD PROJECTS Awards
Streets Street Repair & Resurfacing 910,933$ -$ 550,000$ -$ 1,460,933$ *
Almond Grove Street Rehabilitation Project 16,741,710 - - - 16,741,710 *
Pavement Rehabilitation - Crack Seal 674,107 - - - 674,107 *
Hillside Road Repair & Resurfacing Project 88,563 - - - 88,563
Traffic Calming Projects 32,941 - - - 32,941 *
Curb, Gutter & Sidewalk Maintenance 601,264 - - - 601,264 *
Retaining Wall Repairs 343,304 - - - 343,304 *
Annual Street Restriping 96,002 - - 96,002 *
Public Access Infrastructure Improvement Projects - 70,000 - - 70,000 *
Guardrail Replacement Projects 100,143 - - - 100,143
Electrical Panel Replacement on Pageant Way 45,000 - - - 45,000
Winchester Blvd/Lark Ave. Intersection - - - 316,194 316,194
Downtown Parking Lots Seal Coat & Restriping 100,000 - - 100,000
Hernandez Avenue Storm Drain Improvements - - - - -
Los Gatos Blvd/Shannon Improvements - - - 20,000 20,000
224 W. Main Street Property Acquisition (Parking Lot 6)1,196,000 - - - 1,196,000
Shannon/LGB/Cherry Blossom Sidewalk Improvements 129,896 - - - 129,896
Stonybrook & Kennedy Sidewalk Improvements 287,192 - - - 287,192
Intersection Safety & Traffic Flow Improvements 11,304 - - 8,038 19,342
Sidewalk Improvements - Multiple Locations 60,000 - - - 60,000
Montebello Way Island Removal - - - - -
LED Streetlights 504,648 - - - 504,648
Pageant Way Parking Lot Reconstruction 175,550 - - - 175,550
PG&E Undergrounding - - - 70,000 70,000 *
Bicycle & Pedestrian Master Plan 7,500 40,000 - 72,500 120,000
Traffic Around Schools 78,794 - - - 78,794
Quito Road - Bridge Replacement 235,087 - - - 235,087
Blossom Hill Rd/Cherry Ln Intersection - - - 500,000 500,000
Monument Control Network Update 20,000 - - 10,000 30,000
Downtown Parking Signs Enhancements - - - - -
Parking Lot 4 - - - - -
Crosswalk Add - Santa Cruz Ave 60,000 - - 50,000 110,000 Crosswalk Lighting Upgrade 50,000 - - 34,629 84,629 Parks Oak Meadow Park Upgrades - - - - -
Open Space Trail Upgrades 250,000 - - - 250,000
Parks Playground Fibar Project 32,501 - - - 32,501
Plaza Park Improvements 33,338 - - - 33,338
Park Rehabilitation - Bachman Park 325,000 - - - 325,000
Blossom Hill Park Restroom Building Upgrades 40,000 - - - 40,000
Los Gatos Creek Trail Improvements at Charter Oaks - - - - -
Worcester Park - - - - -
Blossom Hill Park Little League Backstop 110,000 - - - 110,000 *
Public Facilities Town Beautification Projects 10,160 - - - 10,160
Audio/Video System Upgrade 58,160 - - - 58,160
Information System Upgrade 82,019 - - - 82,019
Town-wide Document Imaging Project 16,990 - - - 16,990
Tiburon CAD/RMS Upgrade 42,000 - - - 42,000
Building Replacement at Corporation Yard 208,443 - - - 208,443
Old Library Re-use Project 28,286 - - - 28,286
Former Library Roof Improvements 90,000 - - - 90,000
Fuel System Enhancement 75,000 - - - 75,000
Police Interoperability Radio Project 150,000 - - - 150,000
Engineering Document Archiving 59,093 - - - 59,093 *
Civic Center Energy Assessment 25,000 - - - 25,000
PPW Interoperability Radio Project 150,000 - - - 150,000 Silicon Valley Interoperability Project (SVRIP) Service Fee 176,152 - - - 176,152 *
Civic Center Improvements - - - - -
TOTAL OF CARRY-FORWARD PROJECTS (INCLUDES NEW ALLOCATIONS)24,512,079$ 110,000$ 550,000$ 1,081,361$ 26,253,440$
NEW PROJECTS
Streets Traffic Signal Modernization - 75,000 - 177,869 252,869
Intelligent Parking Infrastructure 427,000 500,000 - - 927,000
Cut-Through Traffic Mitigation - - - 215,000 215,000
Parks Tennis Courts Repairs - Various Town Parks 140,000 - - - 140,000
Public Facilities HVAC System Upgrade - Civic Center 100,000 - - - 100,000
Exterior Lighting Replacement - Civic Center 25,000 - - - 25,000
Civic Center Fountain Modification 35,000 - - - 35,000
Energy Efficiency Upgrade - Town-wide 25,000 25,000
TOTAL OF NEW PROJECTS 752,000$ 575,000$ -$ 392,869$ 1,719,869$
TOTAL OF CARRY-FORWARD & NEW PROJECTS 25,264,079$ 685,000$ 550,000$ 1,474,229$ 27,973,308$
* These carry-forward projects include new money for FY 2016/17 in the amount of $10,425,468.
Carry-forward & FY 2016/17 CIP Projects
CAPITAL IMPROVEMENT PROGRAM
Introduction Section
A - 9
FY 2015/16 COMPLETED PROJECTS
Several projects are expected to be completed by the end of FY 2015/16. The table below outlines the
projects, funding source, and total expense of the completed projects, which is estimated to be $223,664.
Grant & Traffic Total
Awards Mitigation Estimated
Street Program
Frank Avenue Storm Drain -$ -$ -$ 94,270$ 94,270$
Park Program
- - - - -$
Public Facilities Program
Cartegraph System Updates 5,763 - - - 5,763$
PPW Building Improvement 16,302 - - - 16,302$
Town Digital Aerial Photo/Topographic Map 32,187 - 25,142 - 57,329$
Youth Recreation Center - Cable & Control System Repair 25,000 - - - 25,000$
Civic Center Imp (Noise)25,000 - - - 25,000$
TOTAL OF COMPLETED PROJECTS 104,252$ -$ 25,142$ 94,270$ 223,664$
* Other Funds include Storm Drain Fund, Gas Tax Funds, Utility Underground Funds
Projects Completed in FY 2015/16
GFAR Other *
CONCLUSION
The challenge of finding a reliable ongoing revenue stream available for capital projects continues to be a
Town priority. Recognizing the realities of funding challenges and uncertain local economic trends, the
Town’s FY 2016/17 – 2020/21 Capital Improvement Plan continues a strategy of funding the Town’s
most urgent capital needs.
I wish to thank all of the Departments, in particular Department Directors and members of their
management and support staff, for their many hours of work and tireless efforts to present this Capital
Improvement Program to the Town Council, as well as the following staff members:
Stephen Conway, Finance Director
Gitta Ungvari, Administrative Analyst
Matt Morley, Parks & Public Works Director
Lisa Petersen, Town Engineer
Linda Isherwood, Accountant/Administrative Analyst
Mark Gaeta, Accountant
Bobby Gonzalez, Administrative Analyst
Melissa Ynegas, Account Technician
Respectfully submitted,
Laurel Prevetti
Town Manager
CAPITAL IMPROVEMENT PROGRAM
Introduction Section
A - 10