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Report regarding the proposed Capital Improvement Program for the Fiscal Year 2026-27. (Eunejune Kim, Director of Public Works/City Engineer, and Matthew Ruble, Principal Engineer)
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RECOMMENDATION
Staff recommends that the City Council review and provide feedback on the proposed Capital Improvement Program for the Fiscal Year 2026-27.
BACKGROUND/DISCUSSION
The Capital Improvement Program (CIP) outlines major capital expenditures and infrastructure improvement projects throughout the City. City departments identify necessary improvements and prioritize project implementation as part of the annual CIP development process.
City staff considers the following criteria when selecting projects for inclusion in the CIP:
• Grant-funded projects requiring a City contribution
• Previously approved projects under construction or contract
• Projects required for regulatory compliance
• Projects necessary to maintain or upgrade existing City infrastructure
• Projects with no General Fund allocations
• Projects requested by the community or City departments
• Projects that can be reasonably delayed, are complete, or are no longer necessary
Based on the established guidelines, staff proposes the following Fiscal Year (FY) 2026-27 CIP budget appropriations. The proposed FY 2026-27 CIP budget totals approximately $570.43 million, including $20.15 million of new appropriations and approximately $550.28 million of previously authorized appropriations for continuing projects.
A key enhancement to this year’s CIP is the inclusion of an expanded five-year planning outlook. While the City has historically incorporated multi-year planning, the FY 2026-27 CIP places greater emphasis on forward-looking projections to improve transparency, strengthen long-term infrastructure planning, and provide a clearer understanding of future capital needs. The attached CIP Budget Book includes out-year project forecasts for planning and financial forecasting purposes; however, the requested action associated with this staff report is limited to only the approval of FY 2026-27 appropriations.
In recent fiscal years, the City has incorporated a comprehensive review of Capital Improvement Program (CIP) projects, with particular attention to projects funded through the Citywide Transportation Impact Fee, Sewer Enterprise Fund, and Infrastructure Reserve accounts. This effort has helped ensure that projects are appropriately aligned with available funding and operational priorities. Through this process, several projects were formally closed, allowing remaining unexpended balances to be returned to their respective funding sources for future allocation within the CIP.
The City has continued and expanded this effort to include a broader review of projects for ongoing relevance, funding feasibility, and alignment with current strategic priorities, resulting in the refinement, deferral, closeout, or removal of certain projects, where appropriate. For the FY 2026-27 CIP, the City further expanded this process to include a year-end review of completed projects to ensure the CIP budget and Budget Book reflect the most current and relevant project information.
The proposed FY 2026-27 CIP Budget was presented to the Budget Standing Committee of the City Council on May 13, 2026, for review and discussion. In accordance with Government Code Section 65401, the Planning Commission reviewed the CIP on April 16, 2026, and adopted a resolution finding the proposed CIP consistent with the General Plan.
This staff report and the attached CIP Budget Book incorporate updates and refinements based on the recommendations and feedback provided by the Budget Subcommittee during that meeting.
CIP Project Summary
The CIP is comprised of six (6) project types:
• Parks
• Public Facilities
• Sanitary Sewer
• Storm Drains
• Streets
• Traffic
The FY 2026-27 CIP includes 120 projects, comprising 15 new and 105 continuing projects.
The following overview identifies proposed FY 2026-27 appropriation requests. References to future fiscal years within the CIP Budget Book are included for long-term planning purposes only and are not part of the requested FY 2026-27 appropriation approval.
Parks Projects: These projects replace and improve playgrounds, renovate baseball fields, and expand parks at city-owned public spaces.
New appropriations requests:
• (pk2301) Playground (Fund 523) - OMP Main Playground Replacement - Surfacing and equipment replacement of main playground at Orange Memorial Park. Equipment to be replaced with inclusive elements for all abilities.
§ FY 26-27: $3,800,000
• (pk2302) Centennial Trail Improvements - Construct Park spaces along Centennial Trail.
§ FY 26-27: $600,000
• (pk2310) Aquatic Center - Bond Portion - Bond portion of funding for Aquatics Center (pk2201).
§ FY 26-27: $865,073
• (pk2404) Common Green Rehab Study & Implementation - Pre-design study and implementation of common greens rehabilitation.
§ FY 26-27 - $2,000,000
Total New FY 26-27 Parks Appropriation Requests = $7,265,073
Public Facilities Projects: These projects renovate, construct, and improve city buildings and infrastructure.
New appropriations requests:
• (pf2207) Library, Parks & Recreation - Phase II (Bonds) - Phase II of the construction of the Library, Parks & Recreation building site.
§ FY 26-27: $214,000
• New project (pf2701) Fire Station 61 Dorm Reconfiguration (480 North Canal Street) - Addresses the shortage of sleeping quarters for on-duty personnel during large-scale incidents by expanding and improving accommodations.
§ FY 26-27: $100,000
• New project (pf2702) Fire Station 65 Roof Replacement (1151 SSF Drive) - Replaces the aging, leaking roof at Fire Station 65 to prevent water damage and maintain facility integrity.
§ FY 26-27: $125,000
• New project (pf2703) Fire Station 65 HVAC Installation (1151 SSF Drive) - Replaces undersized HVAC system.
§ FY 26-27: $75,000
• New project (pf2704) EV Chargers at LPR and Orange Memorial Park Pool - Installation of replacement EV chargers at LPR and new charger installation at OMP Pool.
§ FY 26-27: $100,000
Total New FY 26-27 Public Facilities Appropriation Requests = $614,000
Sanitary Sewer Projects: Projects maintain the Water Quality Control Plant (WQCP), Collection System Pumps Stations, and sanitary sewer lines within the City.
New appropriations requests:
• (ss2601) Sanitary Sewer Rehab FY 2025-26 - Annual systematic rehabilitation of the sewer system gravity lines by sewer basins as determined by the sewer master plan and recent video inspection efforts prior to Surface Seal Area 2.
§ FY 26-27: $1,000,000
Total New FY 26-27 Sanitary Sewer Appropriation Requests = $1,000,000
Storm Drain Projects: Projects repair and improve storm drains and infrastructure to reduce pollution run-off into the San Francisco Bay.
New appropriations requests:
• (sd2201) Francisco Terrace Flood Protection Levy - Flood protection improvements in the vicinity of Terrace Drive. A floodwall is proposed to extend along the property line from Terrance Dr to the elevated bike/pedestrian trail with parallels the BART alignment.
§ FY 26-27: $100,000
Total New FY 26-27 Storm Drain Appropriation Requests = $100,000
Streets Projects: These projects repair bridges, resurface streets, improve medians and sidewalks, and study the feasibility of proposed roadway and rail extensions.
New appropriations requests:
• (st1004) South Linden Avenue Grade Separation - This project will provide coordination for the South Linden Grade Separation. This is the last remaining at-grade Caltrain/Union Pacific railroad crossing in South San Francisco. Separating vehicles and trains will prevent crossing accidents and improve traffic flow.
§ FY 26-27: $1,000,000
• (st2401) Complete Streets Improvement - Design & construct pedestrian and storm drain improvements at Elm Court, Hillside Blvd, Park Way, and Ponderosa Road.
§ FY 26-27: $200,000
• (st2601) Tanforan Avenue Reconstruction Project - Reconstruction of Tanforan Ave between San Mateo Ave and Railroad Place.
§ FY 26-27: $1,000,000
• (st2604) 2027 Surface Seal Project - Street surface treatments with base repairs in preparation of 2027 surface seal project.
§ FY 26-27: $3,000,000
• New project (st2701) 2028 Surface Seal Project - Street surface treatments with base repairs in preparation of 2028 surface seal project.
§ FY 26-27: $500,000
• New project (st2702) SSF Pedestrian Bridges Rehabilitation Project - This project will rehabilitate 7 pedestrian bridges.
§ FY 26-27: $500,000
• New project (st2703) 2028 Pavement Rehabilitation - This project will rehabilitate various City streets in accordance with the City's pavement management program.
§ FY 26-27: $100,000
Total New FY 26-27 Streets Appropriation Requests = $6,300,000
Traffic Projects: These projects focus on arterials, corridors, and key intersections within the City including adaptive traffic signals to provide better traffic flow, improve pedestrian safety, traffic calming, and better bicycle rider safety on City streets.
New appropriations requests:
• (tr2301) Misc Traffic Improvements FY 2022-23 - Design & construct any traffic related improvements in the City, such as striping, signs, and other traffic calming measures from the Traffic Advisory Committee, Neighborhood meetings or as needed.
§ FY 26-27: $310,000
• (tr2405) Citywide School Traffic Calming Improvements - Design & construct traffic calming improvements at grades Kindergarten through 12 schools, including 15mph speed reduction.
§ FY 26-27: $15,000
• (tr2406) Traffic Studies & Grant Support - Support for any traffic-related studies from the Traffic Advisory Committee, neighborhood meetings or as needed, and support for grant applications.
§ FY 26-27: $200,000
• (tr2408) Signalized Intersection Battery Backup - Upgrade signalized intersection Citywide with Battery Backup Systems. Approx 50 intersections in the City are without BBS.
§ FY 26-27: $1,000,000
• New project (tr2701) Streetlight Replacement Project - Replacement of over 30 streetlight poles and their foundation in the Avalon and Brentwood neighborhoods.
§ FY 26-27: $600,000
• New project (tr2702) Corridor Signal Visibility, Capacity, and Operational Improvement Project - Replace and reconfigure median-mounted signal poles and mast arms to improve signal visibility, optimize signal operations, and support efficient traffic flow. Improvements may include pole relocation, mast arm extensions, and upgraded signal equipment to meet current operational standards. The project enhances intersection capacity, reduces delay, and supports safe and efficient movement of increased traffic volumes.
§ FY 26-27: $300,000
• New project (tr2703) Spruce & Canal Intersection Operational and Capacity Modernization - Modernize signal equipment and phasing at the Spruce Avenue and Canal Street intersection to improve safety and operational efficiency. Improvements may include updated signal controllers, revised phasing, and detection upgrades to reduce delay and improve throughput. The project supports increased traffic demand and maintains acceptable intersection performance.
§ FY 26-27: $200,000
• New project (tr2704) Priority Corridor Signal Detection and Operations Upgrade Program - Upgrade signal detection systems at key intersections along priority corridors to improve reliability and multimodal detection. Enhancements support signal coordination, reduce delay, and improve corridor progression. The project maintains system performance and accommodates additional travel demand on high-volume corridors.
§ FY 26-27: $250,000
• New project (tr2705) Orange Avenue Corridor Capacity, Circulation, and Multimodal Improvements - Implement multimodal and operational improvements along Orange Avenue, including signal coordination, intersection upgrades, and pedestrian/bicycle enhancements. The project improves circulation, reduces delay, and enhances corridor capacity to accommodate future development-related trips.
§ FY 26-27: $400,000
• New project (tr2706) Oyster Point / Airport Boulevard Interchange Capacity and Multimodal Access - Evaluate and advance intersection and interchange improvements to reduce congestion and improve safety and access between Oyster Point, Airport Boulevard, and surrounding employment areas. Improvements may include geometric modifications, traffic control changes, and multimodal access enhancements. The project improves system capacity, reduces delay, and supports regional travel demand.
§ FY 26-27: $400,000
• New project (tr2707) Downtown to the Bay Project - This project will support preliminary engineering and design for a direct, car-free connection between Downtown and the Bay Trail, advancing a key gap in the City’s active transportation network.
§ FY 26-27: $600,000
• New project (tr2708) Trains to Technology - This project will initiate preliminary engineering and design for a multimodal connection between the Caltrain station and major employment centers east of US-101, improving access to jobs and supporting mode shift.
§ FY 26-27: $600,000
Total New FY 26-27 Traffic Appropriation Requests = $4,875,000
Project Closeouts and Fund Reallocation
The City conducted a comprehensive review of active and completed Capital Improvement Program projects as part of the FY 2026-27 CIP development process to ensure alignment with current funding availability, operational needs, and strategic priorities. Through this review, several projects were identified as appropriate for formal closeout due to project completion, scope changes, funding realignment, inactivity, no longer being required, or deferral to future years.
The projects identified below are recommended for formal closeout as part of the FY 2026-27 CIP. This includes select projects without remaining encumbered balances that still require administrative closure to ensure accurate accounting and reporting. The closeout of these projects will return any remaining unexpended balances to their respective funding sources for future allocation within the CIP, while supporting improved fiscal transparency and maintaining an accurate and current CIP Budget Book.
• (pf1704) Training Tower Maintenance - $36,667
• (pk2309) Orange Memorial Park Sports Field Renovation (Bonds 522) - $12,281
• (pk2402) Dundee Park Remodel - $109,859
• (pk2403) Brentwood Park Irrigation Infrastructure Upgrade - $13,889
• (sd2401) Storm Drain Repairs - $0
• (ss2407) SB 1383 Organic Diversion Mandate - $0
• (st1403) Grand Boulevard Project (Chestnut Ave. to Arroyo Dr.) - $678
• (st1502) GBI Phase 2 (Kaiser Way to BART) - $328,104
• (st1702) UUD Rule 20A Antoinette Ln. - $382,128
• (st1703) Bridge Preventive Maintenance Program - $14,911
• (tr1404) US-101 Produce Ave Interchange (TIF#39) - $2,800,000
• (tr1501) Junipero Serra Blvd./King Dr. Intersection Improvements - $103,698
• (tr1903) North Connectivity Bicycle Lanes Project - $143,968
• (tr1902) East of 101 Traffic Signal IDEA Grant - $81,451
• (tr1907) South Connectivity Bicycle Lanes - $48,427
• (tr2001) West Orange and Hillside Pedestrian Crossing Improvements - $48,523
• (tr2101) Utah and Harbor Intersection Improvement - $2,511,419.58
• (tr2201) Grand Avenue Off-Ramp Realignment - $3,760,307
• (tr2202) HSIP - Curb Ramp Improvements - $477,343
• (tr2203) East 101 Transit Shelter & Bulb Turnout-MTC - $148,456
• (tr2302) Right of Way Infrastructure Assessment & Upgrades - $0
• (tr2407) Bay Trail Centennial Way Trail Gap Closure - $61,578
• (tr2408) Signalized Intersection Battery Backup - $1,000,000
• (tr2410) Spruce Ave Corridor Study Bike/Ped/Streets - $14,181
• (tr2502) Junipero Serra Blvd Buffered Bike Lanes - $24,884
Total FY 26-27 Project Closeouts (All Funds) = $12,122,752
FISCAL IMPACT
The staff report outlines the proposed FY 2026-27 CIP budget allocations, totaling $570.43 million. This amount includes $20.15 million in new FY 2026-27 appropriations and approximately $550.28 million in previously authorized appropriations for ongoing projects.
In addition, the report identifies approximately $12.12 million in funding available through the closeout of completed, inactive, or deferred projects across all funding sources. These closeouts allow unexpended balances to be returned to their respective funds and reallocated to support current and future CIP priorities.
Detailed funding allocations for each project, organized by funding source, are included in the attached documents. The attached CIP budget Book also includes a five-year planning outlook to support long-term infrastructure planning and forecasting; however, only FY 2026-27 appropriations are being requested for approval through this action.
This strategic financial planning approach supports the City’s continued commitment to responsible infrastructure investment and effective stewardship of public resources.
RELATIONSHIP TO CITY COUNCIL PRIORITIES ACTION PLAN
Approval of this action will contribute to the City Council Priorities Action Plan outcome of improved Quality of Life by maintaining and improving infrastructure to serve the public.
CONCLUSION
Staff will amend the FY 2026-27 CIP based upon direction received and will present the revised CIP at the June 10, 2026, City Council meeting for adoption.
ASSOCIATED DOCUMENTS
1. Proposed Capital Improvement Program Requests by Funding Source FY 2026-27
2. Proposed CIP Budget Book FY 2026-27
3. PowerPoint presentation