Redwood City outlines capital improvement plan for fiscal year 2026-27

In the upcoming fiscal year, city staff recommends appropriating $40 million for a total of 46 identified projects throughout the city. The need is estimated as much as $58 million, though, requiring certain projects to be deferred, Finance Director Beth Goldberg said. 

“While we don’t have a lot of money and as much money as we would like to have, we are making an impact and are able to make some important investments,” Goldberg said.  

Projects were identified and prioritized based on need and their impact on equity priority communities.

The city dedicates a certain percentage of its projects specifically in areas that serve disadvantaged communities, to make sure to “spread the wealth,” Tanisha Werner, director of Engineering and Transportation, said. 

“I’m very excited to see these things go into place,” Councilmember Isabella Chu said. “I’m really, really grateful and excited to see many of the projects going to high-needs areas to really see us go after equity there.” 

Half of the budgeted capital improvement plan, or approximately $20.13 million, will go toward strengthening and maintaining the city’s water and sewer systems. Both of these systems have functional revenue sources, funded by utility rates that must be used in these areas. 

While utility rates fund water and sewer systems, the city’s communication users tax and utility users tax can be allocated to a broader range of capital improvement projects. 

The pot of money from these taxes is referred to as the Capital Outlay Fund, which is estimated at approximately $13.9 million of the $40 million budgeted overall. It’s identified to fund 21 projects across departments. 

The $13.9 million includes staff time, insurance, administration and other costs, leaving a total of $9.4 million available for specific capital projects to be prioritized by discretion. Also, the two tax sources have stagnated as a revenue source in recent years while needs only continue to grow, Goldberg said. 

The battle of developing a capital improvement plan was described by Goldberg as a “pick your pain point decision-making process” as staff investigates how to allocate limited resources. 

“If we’ve got 11 million a year, are you making one or two big investments, or are you spending it on smaller investments where we also know there are needs?” Goldberg said. 

Proposed for Fiscal Year 2026-27, the largest allocation of improvements from the Capital Outlay Fund will go toward transportation, at 15.6% of the budget, stormwater systems at 5.4% and parks at 4.2%. 

Projects identified for funding in the next year include further developing bike boulevard networks throughout the city, synthetic turf replacement including at Red Morton Park, public art, replacing sewer pump stations to prevent backups, and maintenance of city buildings, among many others.  

An upgrade of bathrooms in the downtown library was also proposed, which would transform each bathroom area into a handful of single occupancy stalls for any gender with a shared sink space. 

As the city budgets its limited resources, there are other economic factors also at play that make options limited. 

The construction industry is facing challenges related to increasing costs of material and labor, compounded with a restricted labor supply. Werner said there are far fewer skilled workers available for construction jobs, so competition has decreased and folks can charge more for services as options are limited. 

As the city finalizes its upcoming budget and what to spend its money on, Councilmember Jeff Gee and colleagues emphasized the importance of a longer term maintenance plan for city facilities. 

A new senior center is slated to be unveiled May 4, and while Gee said the building is beautiful, he questioned what will be necessary to make sure it stays that way — a question that should be considered for every capital improvement project, he said. 

“It is a nice spectacular addition to our city, but do we have a capital renewal fund to replace the chiller in 30 years?” Gee said. “We haven’t had a conversation at the council about how spectacular do we want to keep it? Does that mean we have to replace carpets every 10 years? The floor every 20 years? And how do we fund that replacement?” 

City staff will return and present a holistic budget to be studied at the City Council meeting June 8, and adoption, including the capital improvement plan allocations, would be up for a vote June 22.