Public works staff told the City Council on May 29 that Capitola's capital improvements program (CIP) contains seven active projects, most funded with a blend of state and federal grants and local formula funds, and that staff did not propose adding new large projects for FY25–26.

Key projects and funding

- Cliff Drive resiliency: staff said the project is a complex, multi-agency effort with Federal Highway Administration funding in hand for design (about $743,000) and an expected construction cost of roughly $10,000,000 to be released in phases by FHWA. The Coastal Commission is providing the local match. Staff are working on design and permitting and anticipate requesting construction funds later this year.

- Stockton Bridge debris mitigation: sponsored by state Sen. Laird and funded through the State Water Board, staff said approximately $785,000 is available and that additional structural evaluation and inspections are scheduled (inspections expected in July with a late-summer report back).

- Treasure Cove / Jade Street Park playground: a community center renovation is under construction and a Treasure Cove playground project is advancing toward construction; staff noted roughly $1,000,000 in fundraising committed by local "friends" groups and an outstanding CDBG application the city hopes will be awarded before budget adoption.

- 40 First Avenue corridor and multimodal improvements: projects are in design and permitting, with construction anticipated next spring and a mix of Measure D, SB 1, and an RTC grant proposed as funding sources.

- Bay Avenue corridor and Park Avenue traffic-calming: both projects have modest general-fund allocations in the draft budget (about $80,000 each in early scopes). Staff recommended delaying Park Avenue striping/curb changes until the Regional Transportation Commission (RTC) finalizes design decisions for the coastal rail-trail segment that runs near Park Avenue.

Why Park Avenue is contentious: several councilmembers and multiple public commenters pressed staff to proceed with Park Avenue safety work despite staff's caution. Staff said the hold is to avoid potential duplication or conflict with the RTC's evolving plan for the rail-trail alignment; staff also noted that the detailed striping/striping construction option previously scoped would cost roughly $120,000 to construct. Staff said the city could proceed this calendar year if council appropriated the additional funds and authorized construction; if funded now, staff estimated a potential early-fall construction window.

Grants and match requirements: staff outlined several near-term grant opportunities — Land and Water Conservation Fund (50% match), state Coastal Conservancy grants (public access), Measure Q county grants (anticipated annual pool), active transportation grants (Caltrans) and various federal disaster funds. Staff recommended using smaller city match amounts to leverage larger grant awards where feasible.

Next steps and council direction: council requested follow-ups on Stockton Bridge inspection timing and more detailed cost and funding scenarios for Park Avenue. Staff committed to return detailed Park Avenue plans and timing if council chooses to appropriate the needed construction funds.