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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Fiscal Year 2026/27 Capital Improvement Budget Proposed Budget Adjustments
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ABSTRACT
This proposed update to the Fiscal Year (FY) 2026/27 Capital Improvement Budget (CIP) requests City Council approval to fund certain annual maintenance projects that were omitted in the original CIP budget adopted in July 2026. The proposed budget adjustments will be funded through a combination of de-obligated funds from projects being closed and unassigned fund balance within the respective special revenue funds. A portion of the unassigned fund balance was made available through the City Council’s original action on July 7, 2026, adopting the CIP budget. By making this adjustment, current service levels associated with CIP projects are ensured, optimal alignment with the capital improvement plan is maintained, and funding sources for proposed capital expenditures are effectively balanced. The proposed CIP budget adjustment has no fiscal impact to the General Fund or Measure T Fund.
RECOMMENDATION
recommendation
Approve the amendments to the Fiscal Year 2026/27 Capital Improvement Budget as referenced in the Fiscal Impact section of this report.
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PRIOR ACTION/VOTE
On July 7, 2026, a joint resolution of the City Council of the City of Murrieta and the Boards of Directors of the Community Services District, and the Successor Agency for the Murrieta Redevelopment Agency adopted a series of Resolution Nos. (26-4962, MLB 26-201, CSD 26-289, RSA 26-230) approving the Capital Improvement Budget for FY 2026/27 and approving the FY 2026/27-2030/31 Capital Improvement Plan (Vote: 4-0).
On June 23, 2026, the City Council held a workshop to discuss and provide direction to 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).
STRATEGIC ALIGNMENT
This item aligns with the City Council goal to maintain a high performing organization that values fiscal sustainability, transparency, accountability and organizational efficiency. This item is a coordinated funding and staffing strategy to advance City Council priorities.
DISCUSSION
Fiscal Year 2026/27 Proposed CIP Budget Amendment
The report presents an amendment to the adopted CIP budget that the City Council approved on July 7, 2026. Staff identified 21 projects that require budget amendments following CIP Budget adoption. The projects in this proposed budget amendment include:
1. Additional appropriation to projects
During the CIP budget process, project managers identified four (4) projects that required additional appropriations but were omitted during budget adoption. The requested appropriations are necessary to maintain funding for projects that are either completing critical pre-construction activities, proceeding into construction, or require funding to support the next phase of work. Specifically, funding is needed to complete the remaining mitigation activities for the Guava Bridge project, advance the Menifee Road and In-Pavement LED projects through final design and into construction, and pre-fund the City's next slurry seal program. The net total additional appropriation required is $2,350,000. The table below identifies the projects and their respective additional appropriation requests:
A. CIP 8323 Guava Bridge over Murrieta Creek $200,000
B. CIP 13030 Menifee Road Improvements $250,000
C. CIP 13034 In-Pavement LED Lighted Crosswalks $500,000
D. CIP 13085 FY 2027/28 Citywide Slurry Seal $1,400,000
2. Consolidation/Reallocation of appropriation to current year projects
Staff identified fourteen (14) projects requiring additional appropriations. The total net appropriation is $2,573,674. The additional appropriation will be funded by funds left over from closed projects. Staff also identified that the funding source of one project should be moved to a more appropriate grant funding source. This ensures that current active projects are funded appropriately. The table below summarizes the projects and the related appropriation adjustments:
A. CIP 13028 MHSR and Madison Avenue Enhancements ($108,710)
B. CIP 13040 Pedestrian Safety Enhancements FY 2020/21 ($166,164)
C. CIP 13044 Pedestrian Safety Enhancements FY 2022/23 ($419,090)
D. CIP 13045 Pedestrian Safety Enhancements FY 2021/22 ($201,085)
E. CIP 13046 Pedestrian Safety Enhancements FY 2023/24 $584,323
F. CIP 13059 Line F Channel - change in grant funding source
G. CIP 13072 Asphalt Overlay $102,442
H. CIP 13074 Neighborhood Traffic Management Program $91,061
I. CIP 13077 Citywide Signal Modification Project $236,188
J. CIP 13078 Traffic Signal Optimizations/Congestions $34,966
K. CIP 13079 Priority Traffic Signal $297,144
L. CIP 13080 Citywide Slurry Seal Project $1,681,019
M. CIP 13081 Pavement Management Program $189,564
N. CIP 13084 Pedestrian Safety Enhancements FY 2026/27 $252,016
3. Decrease of appropriations to balance the CIP budget and fund balance
Staff identified three (3) projects whose appropriations need to be amended to balance the overall CIP budget and align with expected FY 2026/27 revenues and budgeted appropriations, ensuring that each respective fund maintains a positive fund balance. The total net appropriation reduction is $5,315,492. The table below identifies the projects and the related budget adjustments:
A. CIP 8345 Murrieta Creek Design ($954,536)
B. CIP 8449 Keller Road at I-215 Interchange ($3,730,956)
C. CIP 21042 PD Building-Expansion Project Phase 1 ($630,000)
Summary
In summary, the net budget adjustment to the CIP budget is a net reduction of $391,818. The proposed budget adjustments have no fiscal impact on the General Fund and Measure T Fund. The funding sources affected by the proposed budget adjustments are the development impact fees, transportation funds, other special revenue funds, and grant funds. The aforementioned funds are restricted and cannot be used to support general City operations. The tables below summarize the proposed amendment to the FY 2026/27 CIP budget, including changes to previously approved appropriations to higher-priority projects.
Summary of the CIP Budget Adjustment and Funding Sources
PUBLIC NOTICING
The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item).
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 Capital Improvement Plan budget for FY 2026/27 includes an adopted budget of $123,229,261, restatement of project carryover appropriation of $900,000, and this report requests an adjustment of $391,818 in net reduction in appropriations, and changes to appropriations from various funding sources for new and existing projects, with a total CIP budget of $123,737,443.
ATTACHMENTS
None.