CalPERS projections assume a long-term rate of return of 6.8%. If that rate of return is achieved, the forecasts from CalPERS indicate that the City’s funded ratio will not be less than the current 83.5% funded amount. This demonstrates the City is in a strong position related to unfunded pension liabilities. This budget does not include allocating additional funds to the Section 115 Trust, nor does it propose utilizing funds from the trust. CAPITAL IMPROVEMENT PROGRAM (CIP) Paving a pathway to excellence includes a continued and intentional commitment to maintaining and improving the City’s infrastructure. As such, the updated Strategic Plan continues to identify infrastructure as a priority. It is critical that we continue to provide appropriately designed and well-maintained infrastructure and amenities. The proposed FY 2024-2025 Capital Improvement Program totals $10.2 million. The general categories and proposed capital appropriations for new projects for FY 2024-2025 are listed below: Capital Expenditures Proposed FY 2024-2025 Budget Streets & Roads $ 8,215,269 Neighborhood Parks $ 1,500,000 Trail Improvements $ 310,000 EV Charging Stations $ 121,870 TOTAL $ 10,147,139 A variety of funding sources support the capital plan, including funds such as Measure M2, AQMD, Gas Tax, CDBG, other grants, the General Fund, and the City’s infrastructure reserves. This budget does not include any American Rescue Plan Act (ARPA) funding, although there are some ongoing projects being funded by ARPA funds. This budget, and the five-year outlook provide approximately $2 million per year from General Fund operational surplus to fund critical capital improvement projects. This focused effort to provide adequate funding will truly pave the pathway for the City now, and into the future. vii