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 2026-2027 proposed mid-biannial capital budget and the 2027-2031 capital improvement program.

Hopefully everybody's in the right room.

My name is Lisa Bickford.

I am the vice chair for the City of San Jose Planning Commission.

Welcome to this meeting.

Please remember to turn off your cell phones if you need parking validation.

It is in the back.

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.

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 Barroso?

Here.

Commissioner Bandal is not here yet.

Commissioner Cantrell.

Commissioner Cow.

Here.

Commissioner Casey?

Here.

Commissioner Escobar.

Here.

Commissioner DeWin, 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.

I think we're trying to get the Zoom going.

Okay, thank you.

Good evening, Commissioners.

I am Jennifer Tell and the Capital Budget Manager in the City Manager's Budget Office.

I will provide an overview of the proposed budget and the funding sources for the five-year capital improvement program or CIP.

Then I will turn it over to Public Works Deputy Director Sal Kumar to discuss major project changes in this mid-biannial update.

And so we have staff here this evening from Airport, 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 prepare this mid-biennial update to the capital budget and to rebalance the city's capital needs with available resources as presented in this proposed five-year CIP.

So the five-year CIP is composed of 14 capital programs that fall under six city service areas.

We will review the major project changes for the programs in each of these 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 across 152 funds.

This presentation is focusing on the 18% or $1.2 billion slice of the budget pie that is made up of the capital funds.

Here is a historical comparison of the five-year CIP over the last 10 years.

For fiscal years 27 to 31, the CIP totals $3.3 billion.

Fiscal years 20 to 24 and 25 to 29 were the largest CIPs to date.

A large contributor to these CIPs was the Measure T bond passed by voters in November 2018.

That measure authorized the city to issue up to $650 million of 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 2028-29.

Also of note, the adopted CIP is always higher than the proposed CIP, which is largely due to rebudget or carry forward of unspent project appropriations from the current fiscal year into the next fiscal year.

So the proposed CIP captures some of these rebudgets that could be anticipated early in our process, and additional rebudgets will be captured as part of the year-end process that will be presented to city council as part of budget adoption in June.

So as shown here historically, rebudgets tend to increase the CIP by about 200 to 300 million dollars.

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 adopted biennial capital budget allowed the administration to highlight strategic investments planned to move forward 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, adjustments to the previously approved 2026-27 capital budget are necessary.

This proposed midbiannial capital budget update and CIP lays out the changes to 2627 previously included in the 2026 to 2030 adopted CIP.

The changes presented in the proposed mid-biannial 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 to fiscal year 2030-31.

Of the $3.3 billion in the total five-year CIP, $1.2 billion is budgeted in 20627 for the proposed midbiannial update as compared to $670 million that was shown for 26-27 in the adopted biannual budget.

The proposed mid-biannual budget is substantially higher than presented in last year's adopted CIP, largely due to our process of carrying forward or rebudgeting unspent appropriations for multi-year capital projects.

Here is a breakdown of the funding source categories for the $3.3 billion five-year CIP.