TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Javier Carcamo, Finance Director
PREPARED BY: RN Mendoza, Financial Analyst
SUBJECT:
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Consideration of the Fiscal Year 2026/27 Capital Improvement Plan Budget and Approval of the Capital Improvement Plan for Fiscal Years 2026/27 to 2030/31
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ABSTRACT
This report presents the City of Murrieta’s proposed Capital Improvement Plan (CIP) Budget for Fiscal Year (FY) 2026/27 and the five-year CIP for Fiscal Years 2026/27 through 2030/31, outlining strategic investments in infrastructure, public facilities, technology, and other improvements. It includes $86.2 million in carryover funding for ongoing projects and $37 million in new appropriations, covering new initiatives, such as City Council Tier 1 Priority Projects, as well as adjustments to existing construction and maintenance projects. The plan is supported by multiple revenue sources. Overall, the CIP prioritizes long‑range planning, fiscal sustainability, strategic alignment with the City’s General Plan, and the City Council Goals and Priorities. The proposed FY 2026/27 Capital Improvement Program (CIP) Budget commits $123,229,261 in restricted and unrestricted funding to support 105 active capital projects.
RECOMMENDATION
recommendation
Conduct a public hearing; and
Adopt Joint Resolution No. 26-4962, MLB 26-201, CSD 26-289, RSA 26-230, entitled: A Joint Resolution of the City Council of the City of Murrieta and the Boards of Directors of the Murrieta Library District, Murrieta Community Services District, and the Successor Agency to the Murrieta Redevelopment Agency, Approving the Capital Improvement Plan Budget for Fiscal Year 2026/27, Approving the Fiscal Years 2026/27 to 2030/31 Capital Improvement Plan, Authorizing the Operating Transfers for Various Funds; Authorizing the Use of Unassigned Fund Balances, and Committed Fund Balances.
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PRIOR ACTION/VOTE
On June 23, 2026, the City Council held a workshop to discuss and provide direction to City staff on the Proposed Capital Improvement Plan and Budget for Fiscal Year 2026/27 through Fiscal Year 2030/31 (Non-Action Item).
On May 27, 2026, the Planning Commission adopted a Resolution, recommending to the City Council that the City Council find that the proposed Capital Improvement Plan FY 2025/26-2029/30 was in conformance with the City of Murrieta General Plan (Vote: 4-0).
On June 3, 2025, a joint resolution of the City Council of the City of Murrieta and the Boards of Directors of the Community Services District, Murrieta Fire District, and the Successor Agency for the Murrieta Redevelopment Agency adopted a series of Resolution Nos. (25-4836, MLB-25-200, CSD 25-284, and RSA 25-34) approving the Capital Improvement Budget for FY 2025/26 and approving the FY 2025/26-2029/30 Capital Improvement Plan (Vote: 5-0).
STRATEGIC ALIGNMENT
The City Council’s goal of maintaining a high performing organization that values fiscal sustainability, transparency, accountability and organizational efficiency is associated with this administrative priority.
DISCUSSION
This report presents to the City Council the proposed Capital Improvement Plan (CIP) budget for Fiscal Years (FY) 2026/27 to 2030/31, which provides funding for the City’s capital projects for FY 2026/27 and planning for the following four years.
The City of Murrieta’s (City) Capital Improvement Plan establishes a master plan and long-term funding strategy for implementing major recurring and nonrecurring construction or repair projects. CIP projects may include:
1. Acquisition of land and right-of-way;
2. Construction of buildings, roadways, bridges, drainage, and parks, including major repair, reconstruction, and/or replacement of existing Capital Assets; and
3. Purchase of major equipment.
For FY 2026/27, the proposed CIP includes a request to appropriate $37,033,549 for new projects and changes to existing projects. This is in addition to $86,195,712 in remaining committed funds for previously approved, ongoing projects, bringing the total CIP budget for FY 2026/27 to $123,229,261. Exhibit A of this report provides a summary of the new and existing projects that make up the $37,033,549 in new and budget adjustment requests as part of the proposed CIP budget. Funding for these projects is provided by a variety of revenue sources, including Development Impact Fees, transportation funds, grants, and special revenue funds restricted to the purposes for which they are budgeted. For the most part, these funds are restricted and cannot be used to support general City operations. The table below summarizes the proposed FY 2026/27 CIP budget, including both the proposed new appropriations and the reallocation of previously approved appropriations to higher-priority projects.
Fiscal Year 2026/27 Proposed Appropriations
FY 2025/26 Carryover Amount Items
Staff recommends carrying forward $86,195,712 in unspent appropriations from prior fiscal years. These funds support existing, ongoing capital improvement projects that were previously approved by the City Council. Some of these projects are fully funded, while others are planned to receive additional appropriations in future fiscal years as funding becomes available through future revenue allocations.
New Projects for Appropriation in FY 2026/27
Staff recommends adding several new projects and an appropriation for the first year of the CIP budget (FY 2026/27). The proposed appropriation for new projects is $4,467,000. New projects include a Fire Department Tiller Truck, Equestrian Center Phase 1 (maintenance projects), and the Clinton Keith and the Nutmeg Traffic Signal Modification Project. Staff also recommends new recurring maintenance projects and appropriation for the first year of the CIP budget. The proposed appropriation is $3,092,226. The new recurring maintenance projects consist of the FY 2026/27 Pavement Resurfacing-Asphalt Overlay and the FY 2026/27 Pedestrian Safety Enhancement.
Changes to Existing Projects
As part of regular budget monitoring and project management, the CIP budget requires certain major and minor construction projects, along with changes to existing annual maintenance projects, to be amended. Staff proposes a total of $1,361,707, in additional funding for FY 2026/27 for completion of analysis, construction, design, and adjustments to the various construction phases of existing CIP projects. Nine (9) projects, including citywide annual maintenance-related projects, are included in this appropriation.
City Council Tier 1 Priority Projects
In the fall 2025, the City Manager and staff conducted a series of project prioritization meetings with departments responsible for implementing projects identified as priorities by the City Council. The objective of these meetings was to develop a coordinated funding and staffing strategy to advance City Council priorities.
Working collaboratively with project managers across the organization, staff reviewed the existing Capital Improvement Program portfolio and identified projects that were duplicative, completed, or appropriate for closeout or consolidation. Based on this review, staff is proposing modifications to 83 existing projects, resulting in a net reappropriation of $32,566,549 that would be redirected to higher-priority capital projects in FY 2026/27. This will ensure additional funding, as the completion of right-of-way acquisition, design, and adjustments across the various construction phases of existing CIP projects relies on these appropriations.
In February 2026, the City Council held its priority and goal setting workshop to establish and prioritize strategic initiatives. Several of these initiatives are supported through the CIP. Based on the City Council’s strategic direction, staff established a comprehensive three-tiered ranking system to ensure funding is prioritized for the most impactful projects that align with the City Council’s goals and vision. As part of these efforts, a total of 22 projects were identified as completed, and 64 projects were consolidated.
Based on the initiatives discussed during the City Council Goals Workshop, staff focused on prioritizing funding for nine (9) top projects listed below. The projects include the I-215/Keller Road Interchange Project, Fire Station 6, Life F Drainage Channel, Cal Oaks Revitalization, Municipal Services Department (MSD) Yard Offices and Fire Department Training Tower and Classroom, Citywide Beautification Improvements Project, City Hall First Floor Improvements Project, and Phase 1 of the Police Department Building Expansion (parking lot expansion).
As summarized in the table below, the estimated total cost of these top-priority projects is approximately $161.9 million. These estimates are preliminary and intended for planning purposes. The CIP funding plan identifies approximately $40.8 million in currently committed funding sources, along with an additional $38.6 million in proposed funding resulting from the project consolidation and project close-out efforts. If the City Council approves the FY 2026/27 CIP Plan and Budget, the proposed reappropriation of funds will continue to support the City's efforts to strategically allocate available resources and move priority projects closer to full funding.
FY 2026/27 CIP Budget Workshop
In June 2026, the City Council held a CIP Budget Workshop to review and discuss the proposed five-year CIP. During the workshop, the City Council directed staff to return at a future date to further refine the capital projects that advance City Council priorities. The City Council also elevated two (2) additional projects as priority initiatives: 1) Madison Avenue construction improvements and Specific Plan, and 2) the Warm Springs Parkway Project.
The City currently has an active CIP project for construction of Madison Avenue improvements. For the Madison Corridor Specific Plan, staff will be completing a request for proposals process to identify a consultant, and at the time of contract award, will request the City Council to appropriate funding to the operating budget for this expense.
For the Warm Springs Parkway Project, staff is continuing to evaluate the proposed segment between Baxter Road and Keller Road, including the project scope and associated cost estimates. These analyses will help inform future funding recommendations and project scheduling.
Summary of Operating Transfers and Authorized Use of Reserve and Fund Balance
The table below summarizes the proposed FY 2026/27 net appropriation of $37,033,549, to be funded from unassigned and committed fund balances.
FY 2026/27 CIP Summary
In summary, the proposed FY 2026/27 CIP Budget commits $123,229,261 in restricted and unrestricted funding to support 105 active capital projects.
PUBLIC NOTICING
The public hearing for this agenda item has been noticed as required by Government Code Sections 65090 & 66002. Notice was published in the Press Enterprise, Daily Bulletin, and San Bernardino Sun on June 26, 2026.
CEQA AND REGULATORY OVERVIEW
This action is exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because this action will not result in a physical change to the environment, directly or indirectly.
FISCAL IMPACT
The proposed Capital Improvement Plan budget for FY 2025/26 includes a carryover of $86,195,712, $37,033,549 in new appropriations, and changes to appropriations from various funding sources for new and existing projects, with a total budget of $123,229,261.
ATTACHMENTS
ATT 1 - Joint Resolution No. 26-4962 et. al.