Adopt Joint Resolution 2026-138, 2026-09UA, and 2026-03SA
As part of the annual operating budget acted on by the City Council, the City of Banning also includes a 5-year Capital Improvement Program (CIP) that identifies the capital needs of the City over the 5-year planning horizon and appropriates funding to implement the capital projects during the adopted budget cycle. For this current fiscal year, the City Council adopted the operating budget at the September 22nd City Council meeting without the CIP component. This item will identify the projects proposed for funding in Fiscal Year 2026/2027. Future needs for Fiscal Years 2028 through 2031 are identified but not funded in this proposal.
CIP Format
The CIP is formatted based on the accounting funds that each project would utilize for its construction. The General Fund (Fund 001) is listed first, with special revenue funds and utility funds following. Any fund or department not listed means that no capital expenses are anticipated over the 5-year planning horizon. The CIP sheet lists previously appropriated monies from past budget cycles and City Council authorizations that are necessary to complete the project, for information only. No Council action is required regarding the Remaining Previously Appropriated Budget column. Requested appropriations for Fiscal Year 2027 are identified in their own column. Planned, but not appropriated funds, for fiscal years 2028-2031 are identified in their own columns as well. Staff has determined that there are necessary projects to complete that do not have a funding source in the 5-year planning horizon, and those are listed for reference in the Unfunded Capital Improvement Projects columns and excluded from the 5-Year CIP project totals. If there is money for a project from outside the accounting fund for a capital project, those outside funds are identified in the Non-Reserves Funding Totals. The last column represents the amount of fund reserves required to complete a particular project.
General Fund (001)
Given the negative fund balance in the General Fund, staff removed all Capital Improvement Projects that require appropriation from the General Fund to complete them. In this budget cycle, no projects are proposed for funding from the General Fund. However, one project is listed under the General Fund for the Refuse Program to purchase Big Belly Containers, which are waste and recycling stations that compact discarded items to hold up to five times more volume than a standard trash can. The project will be funded by a Beverage Container Recycling Grant. The estimated project cost is $27,016.
If other grant opportunities arise that may implement a future item within this fund, the CIP can be amended to authorize that project, dependent on future City Council direction and action.
Special (Restricted) Revenue Funds (Funds 100, 101, 102, 110, 132, 451)
Projects in these funds utilize restricted revenues to construct capital projects. For this CIP program, the identified projects are proposed to use grants and other restricted non-reserve funding sources to complete the work. The requested appropriations are offset from outside funding sources, generally on a reimbursement basis, that do not require allocation from the individual fund balances. Significant new projects include the following:
• San Gorgonio/URPP Railroad Safety Upgrade (offset by State Section 130 funding)
• HSIP Citywide Traffic Signal Upgrades (offset by HSIP grant and Measure A funding)
• HSIP Citywide Crosswalk Upgrades (offset by HSIP grant and Measure A funding)
• HSIP Wilson/12th Crosswalk Safety Upgrade (offset by HSIP grant and Measure A funding)
• Sun Lakes Boulevard Extension (offset by Measure A funding)
• Roadway maintenance project (offset by Measure A and SB1 Funding)
• CDBG funded parks projects at Sylvan, Dysart, Senior Center, and Nutrition Site
• Electric vehicle purchases offset by AQMD revenues
The proposed appropriation for the Special Revenue Funds is $6,031,723.
Enterprise Funds (610, 660, 661, 670, 673, 680, 681, 682, 683)
The Transit Fund (Fund 610) requests appropriations for several projects identified in the Short-Range Transit Plan and STA funding plans, including vehicle purchases, vehicle upgrades, operations support, and facilities upgrades. Each request includes an offset from State sources (TIRCP, STA, Caltrans) and regional funding (RCTC, WRCOG). No funding request would require allocation from the proposed fund reserve. Most grants are reimbursement-based. The proposed appropriation for the Transit Fund is $7,845,012.
The Water Utility (Funds 660, 661) requests appropriation of rate-supported projects totaling $775,000. These projects were included in the previous rate study and complete work identified and supported by current water rates. Those projects include:
• Well M-7 repairs
• San Gorgonio Flume Support
• Well C-4 Repairs
• Well C-3 Repairs
The following requested appropriations use reserves from Fund 660, totaling $1,785,000, from the current fund balance of $49,992,000.
• SCADA (system communications and operations) upgrades
• Chromium 6 Compliance – Dynamic Well Profiling
The following projects are proposed to use the Water Development Impact Fee (DIF) Fund 661, which has a current fund balance of $2,021,000, for a total of $550,000.
• Well C9 Siting Study and Planning/Design services
The Electric Improvement Fund (Fund 673) requests appropriation of projects that are rate, grant, or development deposit supported. Rate-funded projects are appropriated from a component of the user rates assessed within Fund 670. The FY 2026/27 budget transfer of $3,000,000 from Fund 670 to Fund 673 supports capital maintenance and improvements. The CIP proposes $1,982,500 in projects, and the remaining revenue balance will partially address a negative fund balance in Fund 673. Projects proposed include:
- • System Studies, Equipment, Maintenance, and Testing
- • Distribution System Automation
- • Underground Cabling Replacement
- • Transmission and Distribution Pole Replacement
- • Grid Hardening in Banning Canyon
- • Airport Substation Decommissioning
Additional projects proposed in Fund 673 include grant-supported projects and projects associated with a developer deposit. Contributions in Aid of Construction are direct payments received by development projects from the Electric Utility, where the Electric Utility will construct facilities that will be accepted as capital improvements by the utility. These act as pass-through costs and do not have a rate impact or a fund balance impact. These projects include:
- • Transmission Pole Replacement
- • Indian Health Clinic Design and Service Support
- • Mias Canyon Line Hardening and Wildfire Mitigation (Department of Homeland Security Grant)
The proposed appropriation for the Electric Capital Fund is $4,408,000. No capital projects are proposed from Fund 670 (Electric Fund) or Fund 675 (Public Benefits).
The Wastewater Utility (Funds 680, 681, 682, 683) requests appropriation of projects that are rate supported, grant supported, and DIF supported. The requested appropriation for these projects is $6,500,000. The following projects were included in the previous rate study and complete work identified and supported by current wastewater rates. Those projects include:
• Wastewater Treatment Plant Upgrades (Design)- • Equipment Replacement and Rehabilitation
The requested appropriations use reserves from Fund 680, totaling $1,575,000, from the current fund balance of $22,660,000. The Equalization Basin also includes a federal EPA grant to offset $1,250,000 of anticipated construction expenses.
• Equalization Basin
• Westward Lift Station Rehabilitation
The following projects are proposed to utilize the Wastewater Development Impact Fee (DIF) Fund 681 in the amount of $2,000,000 from the current fund balance of $10,868,000.
• Equalization Basin
The following projects are proposed to use the Wastewater Tertiary Fund (Fund 682), supported by a portion of current Wastewater Rates from the current rate study, in the amount of $4,500,000, from a current fund balance of $8,064,000.
• Wastewater Treatment Plant Upgrades
Interservice Funds (702, 703, 704)
Interservice Funds (Fleet, IT, Building Maintenance) utilize funding from all departments that pay a portion of the overall project cost that can be reasonably allocated to them, including the General Fund. Given the negative fund balance within the General Fund, staff has removed all Capital Improvement Projects that require any appropriation from the General Fund in order to complete them. In this current budget cycle, there are no proposed projects from the Interservice Funds.
If a grant opportunity arises that may implement a future item within this fund, the CIP can be amended to authorize that project, dependent on future City Council direction and action.
Adoption of the Capital Improvement Program is a necessary component of the City’s Annual Budget. City Council can approve revisions to the CIP throughout the year as project scopes, costs, or needs emerge.
The fiscal impact of adopting the Fiscal Year 2026/2027 Capital Improvement Program varies for each of the representative funds. In total, the CIP proposes $35,996,751 in new appropriations for Fiscal Year 2026/2027, with $32,636,751 offset by grants, utility rates, restricted funds, and DIF, and fund reserve appropriations totaling $3,360,000 from Fund 660 (Water Operations) and Fund 680 (Wastewater Operations).
The CIP proposes no General Fund appropriations, except for grant-funded Refuse Program big-belly trash containers that are fully offset.
Expenditures for each Project will be authorized in accordance with City of Banning Purchasing Policy B-30 and will likely require City Council approval of contractor and professional service agreements.