Milpitas council reviews $206M five-year CIP and flags $22.6M funding gap

City staff presented a proposed five-year Capital Improvement Program (CIP) that includes 138 projects with an estimated total cost of $206,000,000 and a first-year budget request of $35.7 million. The presentation, led by Public Works staff and City Engineer Michael Svera, said $183.4 million is projected to be funded across the five years, leaving an identified shortfall of $22.6 million for later years.

The CIP highlights for the coming year include two major resurfacing contracts (Dempsey Road and Greatmoor Parkway Phase 2, estimated at $4.2 million, and a Yellowstone/Yosemite-area project estimated at $4.5 million), a proactive pavement preservation program intended to keep the citywide pavement condition index (PCI) near or above 70, and park investments including design funding for a nearly five-acre Tango Park (design estimate presented; construction estimated at roughly $11 million). Staff also described a $1.5 million inclusive playground renovation and a library elevator modernization project (estimated $510,000) slated for completion in the coming year.

Council members pressed staff on schedule and prioritization questions. Engineering staff said the Dempsey Road water-main replacement is complete and resurfacing work is scheduled for spring with completion by summer. Staff explained the PCI metric and tradeoffs between preservation techniques (slurry or cape seals that extend life at lower cost) and full reconstruction (higher PCI gains but larger up-front cost), and said the city relies on PTAP/MTC condition assessments and a 3-year moving average for planning.

Large, multi-year items in the CIP carry separate funding challenges: a planned force-main sewer replacement to San Jose was estimated at about $20 million and a recurring annual contribution to San Jose's treatment capital program is expected to be roughly $9 million in the coming year. Staff outlined potential financing strategies for major projects including grants, development impact fees, rate adjustments, and financing (bonds or loans). Michael Svera told the council the long-term infrastructure need identified through master planning amounts to roughly $656 million, encompassing both backlog and new infrastructure demands.

Staff recommended funding 39 projects totaling $35.7 million in FY27 and returning to council with final budget adoption in May. The presentation closed with an explicit ask for council feedback and direction on project priorities, grant pursuit, and whether to advance design work for shovel-ready projects in order to improve competitiveness for federal grants.

The council did not take formal action tonight; staff will return with additional details, draft resolutions, and the public hearing on the CIP for adoption at a later meeting.