DATE: November 10, 2026
TO: Honorable Mayor and City Councilmembers
FROM: Development Services Department
TITLE: CAPITAL IMPROVEMENT PROGRAM (CIP) PRIORITIZATION - FISCAL YEAR 2027-28
RECOMMENDATION
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Staff recommends that the City Council receive the Capital Improvement Program (CIP) prioritization presentation and review existing project commitments, staffing capacity constraints, and staff recommended priorities. Feedback from the Council will help guide development of the Fiscal Year (FY) 2027-28 CIP budget and ensure that the CIP is aligned with available resources, existing commitments, and the City’s ability to meet project schedules and delivery timelines. Due to the number of proposed CIP projects and the City's limited staffing and financial resources, staff further recommends that the City Council adopt project evaluation and scoring criteria to objectively rank proposed projects, ensuring that available resources are directed toward projects with the greatest need, urgency, strategic value, and likelihood of successful delivery within established schedules and timelines. Staff would further recommend that such scoring criteria be implemented beginning with the FY 27-28 CIP preparation process.
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BACKGROUND AND ANALYSIS
The CIP is a multi-year planning document that identifies and schedules the City's capital infrastructure investments. The program includes projects involving transportation infrastructure, drainage improvements, parks and recreational facilities, public buildings, public safety facilities, and other municipal infrastructure.
The adopted FY 27-28 CIP budget includes $165.8M in available funding, exclusive of the additional $137.6M included in the Water Utilities CIP budget. Today’s workshop is focused solely on the City’s general CIP budget and excludes the Water Utilities’ CIP budget.
The CIP is developed through the City's annual budgeting process and reflects a combination of infrastructure needs, previously established City Council priorities, available funding sources, regulatory requirements, and the City's ability to deliver projects.
On February 5, 2025, the City Council directed staff to conduct a workshop to prioritize CIP projects and develop criteria for future prioritization. In response, the City retained the services of a consultant, Baker Tilly, to review the existing CIP and assist with developing a more structured prioritization process.
On March 4, 2026, the City Council conducted a CIP Prioritization Workshop that included a review of existing capital projects, funding opportunities and limitations, project evaluation considerations, and the City's CIP budgeting process.
The March 2026 workshop highlighted the importance of establishing a more consistent approach to reviewing project priorities and evaluating existing commitments as part of the annual CIP budget development process. It also demonstrated the need for an additional review of capital improvement priorities in advance of the upcoming fiscal year budget preparation.
As the City begins development of the FY 2027-28 CIP, staff has reviewed the existing capital project workload, available engineering staffing resources, funding limitations, and current project commitments. Based on this review, staff has identified projects recommended for continued advancement, projects recommended to remain on hold, and projects recommended for consideration for removal from the CIP.
Staff has also developed a proposed evaluation framework to assist with establishing a more consistent approach to future CIP prioritization.
Existing CIP Project Commitments
The City currently manages a substantial portfolio of capital improvement projects in various stages of development and construction. While capital improvement projects are managed by various City departments, including Public Works, Traffic Engineering, and Harbor, the primary focus of the CIP prioritization workshop are those projects managed by the City’s Development Services Division (DSD), CIP Engineering Team.
In addition to its assigned projects, CIP Engineering provides technical support and coordination for projects managed by other City departments and has periodically assumed responsibility for additional projects as needed. These responsibilities contribute to the overall engineering workload beyond the projects directly assigned to the team.
Historically, certain Harbor projects have been managed by Public Works. These projects are anticipated to transition to CIP Engineering; however, the number and scope of future assignments have not yet been determined.
As of September 30, 2026, the CIP program dashboard identified 57 active project accounts, distributed as follows:
|
Project Phase |
Number of Projects |
|
Planning and Design |
40 |
|
Bid Procurement |
5 |
|
Construction |
8 |
|
Closeout |
4 |
|
Total Active Projects |
57 |
The CIP is organized through project accounts, which do not necessarily correspond to individual projects on a one-to-one basis. Some projects involve multiple funding sources, separate phases, or related project accounts. Consequently, the number of individual project assignments managed by engineering staff may differ from the number of active projects reported in the CIP dashboard.
Capital projects require engineering involvement throughout their lifecycle. In addition to planning and design, project delivery involves environmental review, permitting, coordination with outside agencies, preparation of construction documents, bidding and procurement, construction administration, inspection coordination, and project closeout.
Even after construction is substantially complete, Engineering staff may continue addressing outstanding contract requirements, final payments, warranty matters, and grant documentation/auditing.
Attachment 2 provides the current project delivery schedules, identifying anticipated project activities from October 2026 through September 2027. These schedules illustrate the overlapping nature of existing project commitments and the demands placed on available engineering staffing resources.
Engineering Resources and Project Delivery Capacity
The CIP Engineering team is responsible for managing and coordinating the delivery of capital improvement projects.
The team consists of five authorized Engineering positions: one Principal Civil Engineer, one Senior Civil Engineer, two Associate Engineers, and one Assistant Engineer. The team operates under the direction of the City Engineer, whose responsibilities also include Land Development Engineering and coordination and oversight of engineering matters involving other City departments.
The Principal Civil Engineer provides overall program management, supervision, coordination of priorities, and project delivery oversight. The Senior Civil Engineer manages complex or high-profile projects and provides technical guidance, while the Associate and Assistant Engineers perform much of the day-to-day project management and coordination.
The CIP Engineering team is currently operating with a staffing vacancy, which reduces the resources available to manage the existing workload. Additional temporary staffing absences may further affect available capacity.
Beyond scheduled CIP assignments, Engineering staff must also respond to emergency infrastructure repairs, urgent requests, unforeseen field conditions, and other assignments that arise throughout the year.
Project schedules may also be affected by environmental and regulatory permitting, consultant coordination, outside agency reviews, construction conditions, and other factors beyond the City's direct control.
Because multiple projects rely on the same Engineering personnel, changes or delays affecting one project may influence the delivery schedules of other projects.
As part of the process to deliver project City staff utilizes specialized technical consultants for services such as structural engineering, geotechnical investigations, environmental studies, architectural design, and other professional disciplines. These services are necessary for the development and delivery of many capital improvement projects.
Consultant project managers may also provide supplemental capacity during staffing vacancies or periods of increased workload. However, consultant project management services do not eliminate the City's responsibility for project oversight, contract administration, coordination, and day to day decision making.
Given the existing project workload and available engineering resources, staff must carefully evaluate additional project assignments against current commitments. Advancing new projects may require adjusting existing project schedules, deferring other assignments, or reconsidering/eliminating projects currently included in the CIP.
CIP Funding Sources and Restrictions
The City's CIP is supported by multiple funding sources, each with its own eligibility requirements, limitations, and authorized purposes.
Major funding sources include TransNet, Senate Bill 1 (aka gas tax), Development Impact Fees (DIFs), Measure X, General Fund resources, and state and federal grants.
TransNet provides funding for eligible transportation improvements, while SB 1 primarily supports roadway maintenance and rehabilitation. Development Impact Fees are used for eligible infrastructure improvements related to the impacts of new development, including transportation, drainage, parks, and certain public facilities.
Measure X provides a local revenue source supporting a variety of City priorities, including public safety, infrastructure, and other municipal services.
General Fund resources may support a broader range of capital needs but must compete with other essential municipal services.
State and federal grants can provide additional funding opportunities for eligible projects, although they often come with matching requirements, deadlines, and ongoing compliance obligations.
These funding sources are not interchangeable. A project may be identified as a priority without having an immediately available or eligible funding source.
As staff develops the FY 2027-28 CIP, project recommendations will require consideration of funding eligibility, existing commitments, anticipated project costs, and available engineering resources.
It should be noted that as of the publication date of this staff report, the disposition of Measure S, a potential half-cent sales tax with a 10-year duration, remains unknown. Should Measure S pass, the City could use the estimated $20M in associated annual revenue to fund a significant portion of the City’s critical infrastructure needs. Should Measure S fail, then certain lower priority CIP projects may need to be eliminated or deferred in order to help fund high priority projects such as the Pier Bridge reconstruction.
Review of Existing CIP Priorities
Staff has reviewed the existing capital improvement projects and organized them into five categories: absolute priorities, previously expressed City Council priorities, additional staff recommended priorities, projects currently on hold, and projects recommended for consideration for termination.
The categorization is intended to provide a clearer understanding of existing project commitments and assist with evaluating potential adjustments to the CIP.
Attachment 1 provides the detailed list of projects within each category.
Absolute Priorities
Staff has identified nine projects as absolute priorities due to considerations such as ensuring public safety, funding commitments (i.e., grant obligations), regulatory requirements, or other significant reasons.
These projects include major bridge and transportation improvements, the Coast Highway Corridor Complete Street project, Supul Park (El Corazon Park Site 1), RE:BEACH, the Oceanside Police Department Training Facility, and critical Oceanside Pier structural improvements. Staff recommends that these projects continue advancing in recognition of their existing commitments and delivery requirements.
Previously Expressed City Council Priorities
Staff has identified 13 projects reflecting priorities previously expressed by the City Council.
These projects include park and recreational improvements, pedestrian safety enhancements, Crown Heights Pedestrian Lighting, the “Welcome to Oceanside” Sign, the Coastal Rail Trail, Oceanside Police Department Headquarters, and Fire Station No. 8.
These projects remain important considerations in developing the FY 2027-28 CIP, subject to applicable funding requirements, project readiness, and delivery resources.
Additional Staff Recommended Priorities
In addition to the absolute priorities and previously expressed Council priorities, staff has identified 20 additional projects recommended to continue advancing.
These include roadway rehabilitation, traffic signal improvements, drainage infrastructure, public facility improvements, park improvements, and public safety facilities.
Together, the three advancing priority categories represent approximately 42 projects or project groupings recommended for continued consideration and advancement.
These recommendations reflect existing commitments and staff's assessment of project needs. They are not intended to establish a final ranking among all CIP projects.
Projects Currently on Hold
Staff has identified 12 projects currently on hold and recommends that these projects generally remain deferred as the City develops the FY 2027-28 CIP.
Projects may be placed on hold for various reasons, including funding limitations, permitting requirements, unresolved project issues, or available engineering staffing resources.
Maintaining a project on hold does not necessarily indicate that the improvement is no longer needed. Rather, it allows staff to concentrate available resources on existing commitments and projects better positioned to advance.
Projects on hold will be reevaluated for prioritization during future budget and CIP prioritization discussions.
Projects Recommended for Termination
Staff has identified three projects for consideration for removal from the CIP: Ron Ortega Dog Park, Fire Mountain Underground, and the balance of planned Ron Ortega Park Improvements.
These projects are being presented as preliminary staff recommendations for consideration during development of the FY 2027-28 CIP.
Any proposed removal would require evaluation of existing funding commitments, contractual obligations, and other applicable requirements before being incorporated into a future budget recommendation.
Unfunded Capital Improvement Projects
In addition to projects currently included in the active CIP, the City's FY 2026-27 CIP budget identifies approximately 50 entries representing future unfunded capital needs.
These projects encompass transportation improvements, municipal facilities, parks and recreational infrastructure, public safety facilities, and other infrastructure needs.
The unfunded list serves as a reference for projects that may warrant future consideration but do not currently have a complete funding or delivery plan.
The list should be reviewed periodically to determine whether individual projects remain necessary, whether their scopes or costs require updating, and whether appropriate funding opportunities may become available.
Some entries may also require further review to identify potential duplication, changes in project status, or improvements that have been incorporated into other capital projects.
Moving a project from the unfunded list into the active CIP would require consideration of its relative priority, potential funding sources, and the engineering staffing resources necessary for delivery.
At the time of staff report preparation, staff was still in the process of refining the unfunded projects list but it will be shared with Council and the public prior to the workshop.
Proposed CIP Project Evaluation Framework
During the March 4, 2026 CIP Prioritization Workshop, the City Council discussed and endorsed the development of a more consistent approach to evaluating and prioritizing capital improvement projects. In response, staff has developed a proposed CIP project evaluation framework to be implemented, if approved, beginning in FY 27-28.
The framework includes nine evaluation criteria, with a maximum possible score of 100 points:
|
Evaluation Criterion |
Maximum Points |
|
Health, Safety and Environmental Risk |
20 |
|
Regulatory, Legal and Mandated Requirements |
15 |
|
Funding Leverage and Financial Benefit |
15 |
|
Project Readiness and Deliverability |
15 |
|
Community Benefit |
10 |
|
Asset Condition and Deferred Maintenance and Lifecycle |
10 |
|
Strategic Alignment |
5 |
|
Economic and Community Investment |
5 |
|
Sustainability and Resilience |
5 |
|
Total |
100 |
The framework is intended to provide a more consistent and transparent method of evaluating capital improvement needs while recognizing that individual projects may involve unique circumstances or existing obligations.
The project priorities identified in this report were developed based on existing commitments, previous Council feedback, project conditions, funding considerations, and staff's assessment of infrastructure needs. They were not established through application of the proposed scoring framework.
Staff intends to use the framework as a tool to assist with future CIP evaluations and budget recommendations, subject to further refinement and Council feedback.
The proposed framework would not replace priority Council direction, existing contractual commitments, grant obligations, or the need to consider available funding and project delivery capacity.
Staff will further evaluate existing project commitments, potential funding sources, project schedules, and available engineering resources in preparing recommendations for the upcoming fiscal year.
No final project ranking, individual project termination, or budget adjustment is being requested as part of this item.
Any proposed funding changes or project adjustments will be addressed through the City's established budget development and approval process.
FISCAL IMPACT
There is no direct fiscal impact associated with this item at this time. Any future funding allocations, project adjustments, or other budgetary actions resulting from the CIP prioritization process will be considered as part of the regular FY 27-28 budget process.
CITY ATTORNEY’S ANALYSIS
Not Applicable
Prepared by: Victor Velasco, Principal Civil Engineer
Reviewed by: Lillian Doherty, Development Services Department Director
Submitted by: Jonathan Borrego, City Manager
ATTACHMENTS:
1. CIP Project Priorities and Recommended Actions
2. CIP Project Delivery Schedule