Foster City City Council
February 28, 2022

CITY OF FOSTER CITY/

ESTERO MUNICIPAL IMPROVEMENT DISTRICT

THIS MEETING WILL BE CONDUCTED PURSUANT TO THE PROVISIONS OF GOVERNMENT CODE SECTION 54953 (AS AMENDED BY AB 361) WHICH AUTHORIZES TELECONFERENCED MEETINGS UNDER THE BROWN ACT DURING CERTAIN PRO CLAIMED STATES OF EMERGENCY. THE GOVERNOR OF CALIFORNIA PROCLAIMED A STATE OF EMERGENCY RELATED TO COVID-19 ON MARCH 4, 2020. THIS TELECONFERENCED MEETING IS NECESSARY SO THAT THE CITY CAN CONDUCT ESSENTIAL BUSINESS AND IS PERMITTED UNDER GOVERNMENT CODE 54953 IN ORDER TO PROTECT PUBLIC HEALTH AND SAFETY OF ATTENDEES. MEMBERS OF THE PUBLIC

THAT WISH TO ATTEND AND/OR PARTICIPATE IN A MEETING MAY DO BY JOINING THE ZOOM MEETING HTTPS://FOSTERCITY-ORG.ZOOM.US/J/83904240623 PUBLIC COMMENTS WILL BE ACCEPTED VIA ZOOM MEETING. ANY EMAILS SENT TO
[email protected] WILL BE PROVIDED TO THE CITY COUNCIL PRIOR TO THE MEETING.

Consistent with Government Code Section 54953, this City/District Meeting will be held via teleconference.

City Councilmembers/District Board and staff will attend in person or via teleconference.

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To Observe the Meeting via Teleconference/Video Conference:
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Before the Meeting: Written public comments for the record may be submitted in advance by 4:00 p.m. the day of the meeting by email to: [email protected] and will be made part of the written record
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Written public comments received by 4:00 p.m. the day of the meeting will be provided in their enti rety to the City Council prior to the meeting and will be made part of the written record but will not be read verbally at the meeting. Written public comments will be posted to the City’s website for review prior to the meeting. 1 AGENDA

Monday, February 28, 2022 6:30 PM

SPECIAL MEETING

1. CALL TO ORDER

2. ROLL CALL

Councilmembers/ex officio EMID Directors Jon Froomin, Sanjay Gehani, Sam Hindi, Patrick Sullivan, and Mayor/President Richa Awasthi

3. PUBLIC

Pursuant to Government Code Section 54954.3(a), members of the public wishing to address the Council may do so, and the comments shall be limited to the Special Meeting notice topic(s). Speakers may join the Zoom meeting via the meeting link and using the “raise hand” feature and the Zoom host will call on people.

4. STUDY SESSION

4.1. Mid-Year Financial Review/Council Policy Calendar/Budget Strategies

4.1.1. 2nd Quarter FY 2021-2022 Financial Update
a) Staff Report
b) Action - By Minute Order, Receive and Accept Report

4.1.2. Organizational Assessment - Preliminary Proposals for City Restructuring/Governmental Operations Improvement
a) Staff Report
b) Action - By Minute Order, Receive and Accept Report
c) Action - A Resolution of the City Council of the City of Foster City Authorizing a Budget Appropriation in the Total Amount of $71,131 from the General Fund to Account No. 001-0510-451- 4110 & Account No. 001-0520-452-4110 ($35,566 & $35,565 Respectively) to Fulfill the Parks & Recreation Director Position for the Remainder of Fiscal Year 2021-2022
d) A Resolution of the Board of Directors of the Estero Municipal Improvement District Authorizing a Budget Appropriation in the Total Amount of $71,131 from the General Fund to Account No. 2 001-0510-451-4110 & Account No. 001-0520-452-4110 ($35,566 & $35,565 Respectively) to Fulfill the Parks & Recreation Director Position for the Remainder of Fiscal Year 2021-2022

4.1.3. Preparation of the FY 2022-2023 Annual Budget and Five-Year Financial Plan
a) Staff Report
b) Action - By Minute Order, Provide Policy Direction

5. ADJOURNMENT

The public is invited to attend.

Any attendee wishing special accommodations at the meeting should contact the City Clerk’s Department at (650) 286-3250 at least 48 hours in advance of the meeting.

Any writings or documents provided to a majority of the City Council or EMID Board regarding any item on this agenda after the agenda packet was distributed will be made available for public inspection in the City Clerk Department at City Hall located at 610 Foster City Boulevard during normal business hours and at the meeting.

City Council meetings on FCTV on Comcast Channel 27 and AT&T Channel 99:

LIVE every 1st and 3rd Monday of the month
REPLAY next day at 1:00 pm (that week only)
REPLAY Saturday at 5:00 pm (only on Saturday the week the actual meeting occurs) 3 DATE: February 28, 2022

TO: Mayor and Members of the City Council

VIA: Kevin Miller, Interim City Manager

FROM: Edmund Suen, Finance Director

SUBJECT: 2ND QUARTER FY 2021-2022 FINANCIAL UPDATE

RECOMMENDATION
It is recommended that the City Council, by Minute Order, receive and accept the report on the 2nd Quarter FY 2021-2022 Financial Update.

EXECUTIVE SUMMARY
City staff has prepared the attached Second Quarter FY 2021-2022 Financial Update report, also known as the Mid-Year Financial Report. General Fund revenues (Funds 001 to 003) for the six month period were $30.12 million. Revenue and expenditures projections for the full year are $53.23 million and $50.45 million respectively, inclusive of Transfers Out of $1.5 million to the City Capital Improvement Project (CIP) Fund and $52,679 to the Low and Moderate Income Housing Fund, resulting in an estimated $2.78 million surplus. Property Tax revenues, including Educational Revenue Augmentation Fund (ERAF) refunds, are projected to reach $32.70 million.

Property tax in lieu of vehicle license fees (VLF) is anticipated to hit $3.61 million, exceeding expectations by $669,000 with ERAF and property taxes from six verses five non-basic aid school districts serving as the funding source. Notwithstanding, San Mateo County will continue to work with the State for a future appropriation to cover its $56.55 million countywide VLF shortfall. Transient Occupancy Tax (TOT) is projected to slip $334,000 below 4 original estimates to $2.03 million as the Omicron variant continues to curtail business travel/lodging. Based on strong activity through December 31, building permit revenues have been revised upwards by $554,000 to $1.4 million. In July 2021, the City received $4.05 million of American Rescue Plan Act (ARPA) monies which was $860,000 better than the original Federal provided estimates. Investment income has been reduced by 1/3 due to the low interest rate environment (e.g. 1 year treasuries were 0.30% as of December 31, 2021).

At the 6-month mark, General Fund (Funds 001 to 003) operating expenditures were $28.53 million, or 59.1% of total FY 2021-22 operating budget. During the 2nd quarter, the City finalized two-year agreements, retroactive July 1, 2021 with each of our labor units as well as the unrepresented management unit. The 4% wage increase for FY 2021-22 and associated benefits costs, as well as the retroactive pay have been incorporated onto the Mid-Year Financial Report. As historically the case, City staff exercised an option to make a $6.79 million prepayment to CalPERS for this year’s mandatory annual unfunded pension liability obligation. The prepayment resulted in a citywide cash savings of $233,000. The City also contributed 9 months of funding to San Mateo Consolidated Fire Department for its shared costs for fire protection and prevention services. This amounted to a 3 month "prepayment" of $2.1 million and is the primary reason why that department’s expenditures are at the 76.0% mark through 6 months.

Notwithstanding, City staff expects full year General Fund operating expenditures will be within the City’s operating budget (before Transfers Out) of $48.9 million. Overall, the City’s other Governmental Funds, Internal Service Funds, and the District’s Water and Wastewater Funds are performing generally as expected.

BACKGROUND AND ANALYSIS
The City Council and City staff have committed to providing quarterly financial updates at City Council meetings to review quarterly financial performance and identify general economic trends and specific issues that may affect, positively and negatively, the City’s financial condition.

The report is intended to provide high-level financial information for the City Council, City Departments, and the community as a whole. Supplemental revenue and expenditure analyses are also provided for those readers desiring more detailed financial information.
5 FISCAL IMPACT
There is no fiscal impact associated with this report.

CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
This item is in alignment with City Council's Vision Statement for a "Sustainable Foster City" under the economic sustainability framework. This is a carry-over project from last year and is not directly aligned with our Value/Priority Areas. It indirectly aligns with delivering a balanced budget and promotes transparency.

Attachments:
Attachment 1 - Foster City Financial Update FY 2021-22 Q2 (for the six months ended December 31, 2021)
Attachment 2 - Mid-Year Projections for the Fiscal Year Ended June 30, 2022
Attachment 3 - Comparison of Budget vs. Actual and Prior Year's Revenues (for the six months ended December 31, 2021)
Attachment 4 - Comparison of Budget vs. Actual and Prior Year's Expenditures (for the six months ended December 31, 2021) 6 Live, Work & Play
in Foster City
City of Foster City
Financial Services Dept.

The City Received $4.05 million in American Rescue Plan Act (ARPA) Relief Funds in July. These monies provide for the recovery of lost City revenues from the COVID-19 pandemic and helps negate an otherwise projected General Fund Deficit of $1.73 million
Depressed economic conditions from the COVID-
19 pandemic continued to impact General Fund
revenues, especially our local hotels. As a result,
the FY 21/22 adopted Ge neral Fund budget (Funds
001 to 003) included a re duction of the annual
transfer to the City CIP F und from $3.5 million to
$1.5 million and a $2.07 million deficit. The deficit
was corrected by using American Rescue Plan Act
(ARPA) relief monies (for the recovery of loss rev-
enues from the pandemic). In July, the City re-
ceived the 1st tranche of funding for $4.05 million.

The 2nd and final tranche is expected in July 2022.

Excluding the $4.05 million of ARPA revenues, to-
tal General Fund Revenues (Funds 001 to 003) for
the 6 month period were $26.06 million compared
to $24.09 million in FY 20/ 21. Property tax reve-
nues including ERAF refunds were $17.56 million
compared to $17.48 million in the prior year.

Property tax in Lieu of Vehicle License Fes im-
proved from $1.62 million to $1.81 million as
source funding increased from five to six non-basic
aid school districts. Buil ding permit fees, planning
fees, recreation fees and rentals also saw double
digit year-over-year gains. Although Transient Oc-
cupancy Taxes climbed 94.6% from a very de-
pressed mark of $432,000 to $840,000, it remains
2/3 below the pre-pandemic mark of $2.51 million.

Interest Income sank as th e City portfolio yield fell
from 0.60% to 0.31% year over year. General
Fund expenditures (Funds 001 to 003) totaled
$28.53 million or 59.1% of the annual budget as the
City made a $6.79 million prepayment on its annu-
ally required unfunded accr ued liability payment to
CalPERS. The lump sum payment option repre-
sents a $233,000 citywide savings compared to
making monthly payments. The City also contrib-
uted 9 months of funding obligation to San Mateo
Consolidated Fire for its portion of share costs for
fire protection and prevention services to the City,
which equates to a third quarter prepayment of
$2.1 million. The City agreed to two-year agree-
ments with its AFSCME and POA labor units as
well as its unrepresented management unit. As a def-
icit reduction action, the City pared down it normal
$3.5 million transfer to the City Capital Projects
Fund to $1.5 million.

Water Enterprise Fund operating revenues and ex-
penditures were $8.25 million and $6.35 million re-
spectively. Wastewater Enterprise operating reve-
nues totaled $8.62 million or $740,000 higher than
the same period in the prior year as base rates were
increased by 14.25% effecti ve July 1, 2021, primarily
to fund debt service costs associated with the Dis-
trict’s current and projected debt service for the fi-
nancing of its $153.6 million share of the Wastewater
Treatment Plant Master Improvements (WWTP)
project with the City of San Mateo. Operating ex-
penditures were $3.0 million and within expectations.

On July 1, the District closed the sale on $62.76 mil-
lion of wastewater revenue notes to attain a $1.1
million financing savings before drawing on its WIFIA
loan to pay off the notes in 2025.

As reported at the November 1 City Council meet-
ing, the City closed out FY 2020-21 with a $4.3 mil-
lion rollover surplus. The surplus may help address
one-time needs including, but not limited to unfunded
pension liability, CIP projects (e.g. Recreation Center replacement), and the streng thening of City reserves
(e.g. Facilities Replacement Fund). City staff will also be seeking City Council direction on a pension liabil-
ity reduction policy as well as any revenue enhance-
ment ballot measures to address the General Fund
structural deficit over the course of the next few
months.

Over the past year, the organization experienced its
share of staff departures/retirements. Conditions in
the labor market remain extremely tight and chal-
lenging. An expedited completion of the much need-
ed classification and compensation studies will aid in
the retention of staff and the recruitment of multiple
vacancies. The successful hiring of a permanent City
Manager is also paramount for the organization.

Foster City Financial
Update FY 21/22 Q2
ATTACHMENT 1
7 ATTACHMENT 2

CITY OF FOSTER CITY / EMID
Summary of Resources and Requirements by Funds
For the Fiscal Year Ended June 30, 2022
MID-YEAR PROJECTION THROUGH JUNE 30, 2022
Available
July 1, 2021
Estimated
Revenues Transfers In Transfers Out Total Available
Operating
Expenditures
Capital
Expenditures
Total
Requirements
Net Increase
(Decrease) in
Reserves
Available
June 30, 2022
General Funds
001 General Fund Reserve 50,634,736$ 18,360,304$ 35,431,771 $ 1,938,960 $ 102,487,851$ 46,775,660$ - $ 46,775,660$ 5,077,455 $ 55,712,191 $ 002 General Fund-District 2,344,981$ 33,443,990$ - $ 35,431,771$ 357,200$ 306,000$ - $ 306,000$ (2,293,781)$ 51,200 $ 003 General Fund-Special Recreation -$ 1,430,120$ 386,281 $ - $ 1,816,401$ 1,816,401$ - $ 1,816,401$ - $ - $ 005 Community Benefits Program Fund 1,412,825$ 59,600$ - $ - $ 1,472,425$ 883,320$ - $ 883,320$ (823,720)$ 589,105 $ 006 DARE 2,810$ 10$ - $ - $ 2,820$ 600$ - $ 600$ (590)$ 2,220 $ 007 Solar Incentive Grant Program 87,458$ 200$ - $ - $ 87,658$ 25,000$ - $ 25,000$ (24,800)$ 62,658 $ 008 Employee Rental Assistance Program 59,791$ 50$ - $ - $ 59,841$ 58,000$ - $ 58,000$ (57,950)$ 1,841 $ 009 Asset Seizure 22,013$ 1,100$ - $ - $ 23,113$ 22,175$ - $ 22,175$ (21,075)$ 938 $ 010 Discretionary Pension Liab ility Stabilization Fund 91,353$ -$ - $ - $ 91,353$ -$ - $ -$ - $ 91,353$ 011 Facilities Replacement Fund 2,392,110$ 8,600$ - $ - $ 2,400,710$ -$ - $ -$ 8,600$ 2,400,710$ 012 Sustainable Foster City 208,922$ 3,500$ 50,000 $ - $ 262,422$ 221,562$ - $ 221,562$ (168,062)$ 40,860 $ Subtotal General Funds 57,256,999 $ 53,307,474$ 35,868,052 $ 37,370,731 $ 109,061,794$ 50,108,718$ - $ 50,108,718$ 1,696,077 $ 58,953,076 $ Special Revenue Funds
101 Traffic Safety 11,576$ 60,000$ - $ - $ 71,576$ 60,000$ - $ 60,000$ - $ 11,576$ 102 Measure A 3,252,147$ 720,040$ - $ - $ 3,972,187$ -$ 2,113,596$ 2,113,596$ (1,393,556)$ 1,858,591 $ 103 Gas Tax (2103, 2105-2107.5) 615,535$ 856,600$ - $ - $ 1,472,135$ 554,500$ 919,066 $ 1,473,566$ (616,966) $ (1,431) $ 104 Park In-Lieu Fees 2,805,866$ 8,400$ - $ - $ 2,814,266$ -$ 745,435$ 745,435$ (737,035)$ 2,068,831 $ 105 Measure M (1,908)$ 107,370$ - $ - $ 105,462$ -$ 219,300$ 219,300$ (111,930)$ (113,838) $ 108 SLESF/COPS Grant -$ 100,000$ - $ - $ 100,000$ 100,000$ - $ 100,000$ - $ - $ 114 CalOpps.org 317,165$ 441,400$ - $ - $ 758,565$ 522,003$ - $ 522,003$ (80,603) $ 236,562 $ 116 Foster City Foundation 381,801$ 14,163$ - $ - $ 395,964$ 112,027$ - $ 112,027$ (97,864) $ 283,937 $ 119 SB1 Road Maintenance and Rehab ilitation 972,665$ 660,900$ - $ - $ 1,633,565$ -$ 1,592,850$ 1,592,850$ (931,950) $ 40,715 $ 122 Low- and Moderate-Income Housing Fund 2,032,197$ 85,180$ 52,679 $ - $ 2,170,056$ 134,760$ - $ 134,760$ 3,099 $ 2,035,296$ 124 City Affordable Housing Fund 828,256$ 677,836$ - $ - $ 1,506,092$ 1,043,636$ - $ 1,043,636$ (365,800) $ 462,456 $ 125 Sustainable Foster City Fund (Discontinued) -$ -$ - $ - $ -$ -$ - $ -$ - $ - $ 127 BAERS (Discontinued) -$ -$ - $ - $ -$ -$ - $ -$ - $ - $ 128 General Plan Maintenance Fund 1,790,760$ 151,141$ - $ - $ 1,941,901$ 915,763$ - $ 915,763$ (764,622)$ 1,026,138 $ 129 Construction & Demolition Recycling Fund 742,217$ 54,200$ - $ 50,000$ 746,417$ 331,750$ - $ 331,750$ (327,550)$ 414,667 $ 130 Technology Maintenance Fund 183,472$ 48,678$ - $ - $ 232,150$ 124,418$ - $ 124,418$ (75,740) $ 107,732 $ 131 SB 1186 Fund 25,612$ 4,100$ - $ - $ 29,712$ 1,300$ - $ 1,300$ 2,800 $ 28,412 $ 132 SMIP Fee Fund 4,717$ 1,120$ - $ - $ 5,837$ 500$ - $ 500$ 620 $ 5,337$ 133 CRV Grant Fund 12,251$ 8,540$ - $ - $ 20,791$ 13,000$ - $ 13,000$ (4,460) $ 7,791 $ 134 Curbside Recycling Fee Fund 202,376$ 20,500$ - $ - $ 222,876$ 25,000$ - $ 25,000$ (4,500) $ 197,876$ 135 Green Building Fee Fund 5,246$ 1,820$ - $ - $ 7,066$ 500$ - $ 500$ 1,320$ 6,566 $ 136 Measure W 679,090$ 318,010$ - $ - $ 997,100$ 500,000$ - $ 500,000$ (181,990)$ 497,100 $ 137 Commercial Linkage Fee 568,914$ 1,500$ 570,414$ -$ - $ -$ 1,500$ 570,414$ 138 Tenant Relocation Assistance 95,913$ 120,540$ - $ - $ 216,453$ 164,000$ - $ 164,000$ (43,460) $ 52,453 $ 139 Workforce Housing -$ -$ - $ - $ -$ -$ - $ -$ - $ - $ Subtotal Special Revenue Funds 15,525,868 $ 4,462,038$ 52,679 $ 50,000 $ 19,990,585$ 4,603,157$ 5,590,247 $ 10,193,404$ (5,728,687) $ 9,797,181 $ (Continued on next page)
Fund
8 ATTACHMENT 2

CITY OF FOSTER CITY / EMID
Summary of Resources and Requirements by Funds
For the Fiscal Year Ended June 30, 2022
(Continued from previous page) MID-YEAR PROJECTION THROUGH JUNE 30, 2022 Available
July 1, 2021
Estimated
Revenues Transfers In Transfers Out Total Available
Operating
Expenditures
Capital
Expenditures
Total
Requirements
Net Increase
(Decrease) in
Reserves
Available
June 30, 2022
Debt Service Fund
230 Levee Protection Planning's/Improvements 9,937,849$ 8,693,523$ - $ - $ 18,631,372$ -$ 6,492,688$ 6,492,688$ 2,200,835 $ 12,138,684 $ Subtotal Capital Projects Funds 9,937,849 $ 8,693,523$ - $ - $ 18,631,372$ -$ 6,492,688$ 6,492,688$ 2,200,835 $ 12,138,684 $ Capital Projects Funds
301 Capital Investment - City 21,301,277$ 143,250$ 1,800,000$ - $ 23,244,527$ -$ 5,811,476$ 5,811,476$ (3,868,226)$ 17,433,051 $ 326 Capital Asset Acquisition and Replacement Fund 43,578,469$ 1,279,000$ - $ 44,857,469$ -$ 7,000,000$ 7,000,000$ (5,721,000)$ 37,857,469 $ 327 Levee Project Fund 50,162,053$ 50,000$ - $ - $ 50,212,053$ -$ 50,052,978$ 50,052,978$ (50,002,978)$ 159,075 $ Subtotal Capital Projects Funds 115,041,799 $ 1,472,250$ 1,800,000 $ - $ 118,314,049$ -$ 62,864,454$ 62,864,454$ (59,592,204)$ 55,449,595 $ Enterprise Funds
Water Funds
401 Water Revenue 7,293,780$ 17,761,142$ - $ 1,358,698$ 23,696,224$ 15,808,228$ - $ 15,808,228$ 594,216 $ 7,887,996$ 405 Capital Investment - Water 7,657,975$ -$ 680,000$ 8,337,975$ -$ 5,588,889$ 5,588,889$ (4,908,889)$ 2,749,086 $ 408 Water Equipment Replacement 3,167,431$ 633,532$ - $ 3,800,963$ 219,500$ - $ 219,500$ 414,032 $ 3,581,463$ 409 Water Connection Fee -$ 452,500$ 678,698 $ 1,131,198$ -$ 450,000$ 450,000$ 681,198 $ 681,198 $ Subtotal Water Funds 18,119,186 $ 18,847,174$ 1,358,698 $ 1,358,698 $ 36,966,360$ 16,027,728$ 5,588,889 $ 22,066,617$ (3,219,443) $ 14,899,743 $ Wastewater Funds
451 Wastewater Revenue 15,832,252$ 17,635,668$ 8,839 $ 8,109,679$ 25,367,080$ 8,275,200$ - $ 8,275,200$ 1,259,628 $ 17,091,880 $ 453 Wastewater Rate Stabilization Fund 2,000,000$ -$ 2,087,125$ 2,087,125 $ 2,000,000$ -$ - $ -$ - $ 2,000,000$ 454 San Mateo-Foster City Public Financing Authority Loan (37,861,871)$ 100$ 2,087,125$ 2,202,478 $ (37,977,124)$ 1,869,091$ - $ 1,869,091$ (1,984,344)$ (39,846,215)$ 455 Capital Investment - Wastewater 4,926,004$ -$ 61,842,828 8,203$ 66,760,629$ -$ 62,240,347$ 62,240,347$ (405,722) $ 4,520,282 $ 456 Wastewater Plant Expansion -$ 636$ - $ 636 $ -$ -$ - $ -$ - $ - $ 458 Wastewater Equipment Replacement 3,613,941$ 254,683$ - $ 1,415,000$ 2,453,624$ 179,044$ - $ 179,044$ (1,339,361)$ 2,274,580 $ 459 Wastewater Notes/WIFIA Loan Fund -$ 33,676,585$ 3,624,583 $ 55,975,350 $ (18,674,182)$ 223,600$ - $ 223,600$ (18,897,782)$ (18,897,782) $ 460 Wastewater Connection Fees -$ 302,000$ 147,971 $ - $ 449,971$ -$ 300,000$ 300,000$ 149,971 $ 149,971 $ Subtotal Wastewater Funds (11,489,674) $ 51,869,672$ 69,798,471 $ 69,798,471 $ 40,379,998$ 10,546,935$ 62,240,347 $ 73,087,282$ (21,217,610)$ (32,707,284) $ Subtotal Enterprise Funds 6,629,512 $ 70,716,846$ 71,157,169 $ 71,157,169 $ 77,346,358$ 26,574,663$ 67,829,236 $ 95,153,899$ (24,437,053)$ (17,807,541) $ Internal Service Funds
501 Vehicle Replacement 4,871,167$ 1,802,082$ - $ - $ 6,673,249$ 2,524,098$ - $ 2,524,098$ (722,016) $ 4,149,151 $ 502 Equipment Replacement 6,003,030$ 695,119$ - $ - $ 6,698,149$ 381,662$ - $ 381,662$ 313,457 $ 6,316,487$ 503 Self-Insurance 1,293,198$ 584,332$ - $ - $ 1,877,530$ 862,232$ - $ 862,232$ (277,900)$ 1,015,298 $ 504 Information Technology 4,484,457$ 2,384,155$ - $ - $ 6,868,612$ 2,483,898$ - $ 2,483,898$ (99,743) $ 4,384,714$ 505 Building Maintenance 6,634,126$ 3,403,877$ - $ 300,000$ 9,738,003$ 3,272,159$ 3,272,159$ (168,282) $ 6,465,844 $ 507 Longevity Recognition Benefits 2,492,351$ 239,090$ - $ - $ 2,731,441$ 238,320$ - $ 238,320$ 770 $ 2,493,121$ 508 PEMHCA Benefits Plan 6,027,317$ 229,280$ - $ - $ 6,256,597$ 214,320$ - $ 214,320$ 14,960 $ 6,042,277$ 509 Compensated Absences 3,149,376$ 505,923$ - $ - $ 3,655,299$ 474,368$ - $ 474,368$ 31,555 $ 3,180,931$ Subtotal Internal Service Funds 34,955,022 $ 9,843,858$ - $ 300,000$ 44,498,880$ 10,451,057$ - $ 10,451,057$ (907,199) $ 34,047,823$ Agency Fund
604 Successor Agency of Community Development Agency (815,781)$ 287,495$ - $ - $ (528,286)$ 549,591$ - $ 549,591$ (262,096)$ (1,077,877)$ 607 Tourism Assessment -$ 85,868$ - $ - $ 85,868$ 85,868$ - $ 85,868$ - $ - $ 608 SMC Fire -$ 138,000$ - $ - $ 138,000$ 138,000$ - $ 138,000$ - $ - $ Subtotal Agency Fund (815,781) $ 511,363$ - $ - $ (304,418)$ 773,459$ - $ 773,459$ (262,096)$ (1,077,877)$ Total All Funds 238,531,268 $ 149,007,352 $ 108,877,900 $ 108,877,900 $ 387,538,620 $ 92,511,054 $ 142,776,625 $ 236,037,679 $ (87,030,327) $ 151,500,941 $ Fund
9 Attachment 3
FY 2021-22 ACTUAL ACTUAL ACTUAL YR OVER YR % OF BUDGET % OF BUDGET ABOVE (BELOW) FY 2021-22 FY 2020-21 FY 2019-20 FAVORABLE % FY 2021-22 FY 2020-21 ADOPTED ANNUAL BUDGET 6 MONTHS 6 MONTHS 6 MONTHS (UNFAVORABLE) INCREASE 6 MONTHS 6 MONTHS Fund BUDGET PROJECTED $ % AS OF 12/31/2021 AS OF 12/31/2020 AS OF 9/30/2019 VARIANCE (DECREASE) AS OF 12/31/2021 AS OF 12/31/2020 GENERAL FUND (FUNDS 001-003)
002 PROPERTY TAXES
SECURED 29,181,200$ 29,181,200 $ - $ - 14,698,246 $ 14,290,497 $ 13,265,951 $ 407,749 $ 2.9% 50.4% 52.5% UNSECURED 1,537,000 $ 1,537,000 $ - $ - 1,110,211 $ 1,233,333 $ 1,300,508 $ (123,122) $ (10.0%) 72.2% 79.5% SUPPLEMENTAL 385,100 $ 385,100 $ - $ - 150,753 $ 237,630 $ 265,373 $ (86,877) $ (36.6%) 39.1% 62.6% ERAF 1,526,800$ 1,598,000 $ x 71,200 $ 4.7% 1,597,263 $ 1,722,039 $ 1,312,441 $ (124,776) $ (7.2%) 104.6% 166.3% 002 PROPERTY TAXES (1) 32,630,100$ 32,701,300 $ x 71,200 $ 0.2% 17,556,473 $ 17,483,499 $ 16,144,273 $ 72,974 $ 0.4% 53.8% 57.9% 001 PROPERTY TAX IN-LIEU OF VEHICLE LICENSE FEE (1) 2,943,400 $ 3,612,700 $ x 669,300 $ 22.7% 1,808,653 $ 1,619,797 $ 1,731,834 $ 188,856 $ 11.7% 61.4% 43.3% 001 OTHER TAXES
SALES AND USE 3,079,800 $ 3,079,800 $ x - $ - 1,539,169 $ 1,360,822 $ 1,630,225 $ 178,347 $ 13.1% 50.0% 48.6% TRANSIENT OCCUPANCY (2) 2,361,000 $ 2,027,000 $ x (334,000) $ (14.1%) 839,710 $ 431,554 $ 2,505,400$ 408,156 $ 94.6% 35.6% 17.8% FRANCHISE 1,135,820 $ 1,135,820 $ x - $ - 576,445 $ 559,165 $ 577,203 $ 17,280 $ 3.1% 50.8% 52.0% REAL PROPERTY TRANSFER 279,890 $ 279,890 $ - $ - 186,369 $ 144,562 $ 134,013 $ 41,807 $ 28.9% 66.6% 52.7% SUBTOTAL 6,856,510 $ 6,522,510 $ (334,000) $ (4.9%) 3,141,693 $ 2,496,103 $ 4,846,841 $ 645,590 $ 25.9% 45.8% 38.0% 001 LICENSES & PERMITS
BUSINESS LICENSES 1,452,100 $ 1,452,100 $ x - $ - 116,106 $ 106,143 $ 89,103 $ 9,963 $ 9.4% 8.0% 6.7% PERMITS 845,802$ 1,400,000 $ x 554,198 $ 65.5% 1,279,891 $ 1,054,157 $ 1,019,463 $ 225,734 $ 21.4% 151.3% 76.8% SUBTOTAL 2,297,902 $ 2,852,100 $ 554,198 $ 24.1% 1,395,997 $ 1,160,300 $ 1,108,566 $ 235,697 $ 20.3% 60.8% 39.2% 001 INTERGOVERNMENTAL
GRANTS, REIMBURSEMENTS, ARPA (POST, SB 90, GRANTS) (3) 3,220,000$ 4,110,697 $ 890,697 $ 27.7% 4,063,605 $ 6,030 $ 44,363 $ 4,057,575 $ 67289.8% 126.2% 20.1% 002 HOMEOWNERS PROPERTY TAX RELIEF 100,000 $ 100,000 $ - $ - 48,040 $ 49,294 $ 49,241 $ (1,254) $ (2.5%) 48.0% 49.3% SUBTOTAL 3,320,000 $ 4,210,697 $ 890,697 $ 26.8% 4,111,645 $ 55,324 $ 93,604 $ 4,056,321 $ 7331.9% 123.8% 42.6%

CHARGES FOR CURRENT SERVICES
001 SERVICE FEES 522,397 $ 522,397 $ - $ - 379,697 $ 241,374 $ 338,124 $ 138,323 $ 57.3% 72.7% 43.2% 003 RECREATION AND LEISURE (4) 1,152,920 $ 1,152,920 $ - $ - 534,762 $ 209,235 $ 917,568 $ 325,527 $ 155.6% 46.4% 16.8% SUBTOTAL 1,675,317 $ 1,675,317 $ - $ - 914,459 $ 450,609 $ 1,255,692$ 463,850 $ 102.9% 54.6% 24.9% 001 FINES & FORFEITURES 36,100$ 36,100 $ - $ - 7,904 $ 3,714 $ 13,649 $ 4,190 $ 112.8% 21.9% 10.3%

INTEREST AND RENTALS
INTEREST (5) 280,500 $ 186,500 $ (94,000) $ (33.5%) 72,179 $ 184,572 $ 430,460 $ (112,393) $ (60.9%) 25.7% 42.5% UNREALIZED MARK-TO-MARKET GAIN (LOSS) ON INVESTMENTS - $ - $ - $ - - $ - $ - $ - $ - - - RENTS & CONCESSIONS (4) 884,190 $ 884,190 $ - $ - 608,484 $ 334,099 $ 556,310 $ 274,385 $ 82.1% 68.8% 37.0% SUBTOTAL 1,164,690 $ 1,070,690 $ (94,000) $ (8.1%) 680,663 $ 518,671 $ 986,770 $ 161,992 $ 31.2% 58.4% 48.4% OTHER REVENUES 353,000$ 553,000 $ 200,000 $ 56.7% 501,294 $ 304,466 $ 225,939 $ 196,828 $ 64.6% 142.0% 86.3% TOTAL GENERAL FUND (FUNDS 001-003) 51,277,019 $ 53,234,414 $ 1,957,395 $ 3.8% 30,118,781 $ 24,092,483 $ 26,407,168 $ 6,026,298 $ 25.0% 58.7% 51.1% 005 GENERAL FUND - COMMUNITY BENEFITS PROGRAM (6) 59,600$ 59,600 $ - $ - 62,652 $ 414,894 $ 67,773 $ (352,242) $ (84.9%) 105.1% 2305.0% 006 GENERAL FUND - DARE 10$ 10 $ - $ - 4 $ 11 $ 23 $ (7) $ (63.6%) 40.0% - 007 GENERAL FUND - SOLAR INCENTIVE GRANT PROGRAM 200$ 200 $ - $ - 125 $ 405 $ 1,152$ (280) $ (69.1%) 62.5% 67.5% 008 GENERAL FUND - RENTAL ASSISTANCE 50$ 50 $ - $ - 91 $ 251 $ 657 $ (160) $ (63.7%) 182.0% 55.8% 009 GENERAL FUND - ASSET SEIZURE 1,100$ 1,100 $ - $ - 34 $ 7,527$ 542 $ (7,493) $ (99.5%) 3.1% 627.3% 010 GENERAL FUND - PENSION STABILIZATION FUND -$ - $ - $ - 139 $ 14,872$ - $ (14,733)$ (99.1%) - - 011 GENERAL FUND - FACILITIES REPLACEMENT 8,600$ 8,600 $ - $ - 3,632 $ 10,062 $ 7,611 $ (6,430) $ (63.9%) 42.2% 143.7% 012 SUSTAINABLE FOSTER CITY 3,500$ 3,500 $ - $ - 341 $ 956 $ - $ (615)$ (64.3%) 9.7% 35.4% TOTAL ALL GENERAL FUND (FUNDS 001-011) 51,350,079 $ 53,307,474 $ 1,957,395 $ 3.8% 30,185,799 $ 24,541,461 $ 26,484,926 $ 5,644,338 $ 23.0% 58.8% 52.0%

SPECIAL REVENUE FUNDS
101 TRAFFIC SAFETY 60,000 $ 60,000 $ - $ - 25,027 $ 12,088 $ 23,092 $ 12,939 $ 107.0% 41.7% 14.3% 102 MEASURE "A" 720,040 $ 720,040 $ - $ - 464,672 $ 394,146 $ 448,976 $ 70,526 $ 17.9% 64.5% 48.1% 103 GAS TAX 856,600$ 856,600 $ - $ - 416,337 $ 410,100 $ 433,570 $ 6,237 $ 1.5% 48.6% 46.7% 104 PARK-IN-LIEU FEES 11,200 $ 8,400 $ (2,800) $ (25.0%) 4,261 $ 11,802 $ 511,411 $ (7,541) $ (63.9%) 38.0% 33.0% 105 MEASURE "M" 107,370 $ 107,370 $ - $ - 1,908 $ 72,845 $ 63,698 $ (70,937) $ (97.4%) 1.8% 61.1% 108 SLESF/COPS GRANT 100,000 $ 100,000 $ - $ - 95,929 $ 92,168 $ 90,291 $ 3,761 $ 4.1% 95.9% 92.2% 114 CALOPPS 441,400$ 441,400 $ - $ - 358,714 $ 332,199 $ 382,637 $ 26,515 $ 8.0% 81.3% 69.5% 116 FOSTER CITY FOUNDATION 14,163 $ 14,163 $ - $ - 24,255 $ 11,484 $ 28,697 $ 12,771 $ 111.2% 171.3% 13.4% 119 SB 1 ROAD MAINTENANCE AND REHAB 660,900 $ 660,900 $ - $ - 330,969 $ 299,674 $ 317,609 $ 31,295 $ 10.4% 50.1% 51.8%

CITY OF FOSTER CITY/ESTERO MUNICIPAL IMPROVEMENT DISTRICT COMPARISON OF BUDGET VS. PROJECTED ACTUAL REVENUES

BUDGET VS ACTUAL & CURRENT VS PRIOR
FOR THE SIX MONTHS ENDED DECEMBER 31, 2021

10 Attachment 3
FY 2021-22 ACTUAL ACTUAL ACTUAL YR OVER YR % OF BUDGET % OF BUDGET ABOVE (BELOW) FY 2021-22 FY 2020-21 FY 2019-20 FAVORABLE % FY 2021-22 FY 2020-21 ADOPTED ANNUAL BUDGET 6 MONTHS 6 MONTHS 6 MONTHS (UNFAVORABLE) INCREASE 6 MONTHS 6 MONTHS Fund BUDGET PROJECTED $ % AS OF 12/31/2021 AS OF 12/31/2020 AS OF 9/30/2019 VARIANCE (DECREASE) AS OF 12/31/2021 AS OF 12/31/2020

CITY OF FOSTER CITY/ESTERO MUNICIPAL IMPROVEMENT DISTRICT COMPARISON OF BUDGET VS. PROJECTED ACTUAL REVENUES

BUDGET VS ACTUAL & CURRENT VS PRIOR
FOR THE SIX MONTHS ENDED DECEMBER 31, 2021
122 HOUSING SUCCESSOR-LMIHF 85,180 $ 85,180 $ - $ - 181,274 $ 72,487 $ 137,016 $ 108,787 $ 150.1% 212.8% 63.5% 124 FC AFFORDABLE HOUSING FUND (7) 34,200 $ 677,836 $ 643,636 $ 1882.0% 27,466 $ 25,089 $ 34,652 $ 2,377 $ 9.5% 80.3% 39.1% 125 SUSTAINABLE FOSTER CITY FUND (MOVED TO FUND 012) - $ - $ - $ - - $ - $ 1,456$ - $ - - - 127 BAERS (PROGRAM WAS CLOSED OUT IN FY 2020-21) - $ - $ - $ - - $ - $ 210,507$ - $ - - - 128 GENERAL PLAN MAINTENANCE 151,141 $ 151,141 $ - $ - 134,280 $ 126,440 $ 93,856 $ 7,840 $ 6.2% 88.8% 80.6% 129 CONSTRUCTION AND DEMO RECYCLING 54,200 $ 54,200 $ - $ - 19,574 $ 32,676 $ 29,594 $ (13,102) $ (40.1%) 36.1% 39.8% 130 TECHNOLOGY MAINTENANCE 48,678 $ 48,678 $ - $ - 72,689 $ 60,482 $ 22,542 $ 12,207 $ 20.2% 149.3% 65.1% 131 SB 1186 4,100$ 4,100 $ - $ - 634 $ 1,564$ 1,560 $ (930) $ (59.5%) 15.5% 38.1% 132 SMIP FEE 1,120$ 1,120 $ - $ - 209 $ 840 $ 533 $ (631) $ (75.1%) 18.7% 76.4% 133 CRV GRANT FUND 8,540 $ 8,540 $ - $ - 18 $ 43 $ 108 $ (25) $ (58.1%) 0.2% 0.5% 134 CURBSIDE RECLYCLING 20,500 $ 20,500 $ - $ - 14,800 $ 851 $ 20,873$ 13,949 $ 1639.1% 72.2% 3.9% 135 GREEN BUILDING FEE 1,820 $ 1,820 $ - $ - 162 $ 483 $ 1,174$ (321) $ (66.5%) 8.9% 26.0% 136 MEASURE W 318,010$ 318,010 $ - $ - 177,319 $ 175,127 $ 169,556 $ 2,192 $ 1.3% 55.8% 49.8% 137 COMMERCIAL LINKAGE FEE 1,500 $ 1,500 $ - $ - 864 $ 360,798$ - $ (359,934)$ (99.8%) 57.6% 37.3% 138 TENANT RELOCATION ASSISTANCE 120,540 $ 120,540 $ - $ - 19,677 $ 51,012 $ - $ (31,335)$ (61.4%) 16.3% - 139 WORKFORCE HOUSING - $ - $ - $ - - $ - $ - $ - $ - - - TOTAL SPECIAL REVENUE FUNDS 3,821,202 $ 4,462,038 $ 640,836 $ 16.8% 2,371,038 $ 2,544,398 $ 3,023,408 $ (173,360) $ (6.8%) 62.0% 47.9% 230 LEVEE DEBT SERVICE FUND 8,693,523$ 8,693,523 $ - $ - 2,129,777 $ 8,909,534 $ - $ (6,779,757)$ (76.1%) 24.5% 60.1%

CAPITAL PROJECTS FUNDS
301 CIP PROJECTS-CITY 143,250 $ 143,250 $ - $ - 63,728 $ 825,514 $ 256,266 $ (761,786) $ (92.3%) 44.5% 370.4% 326 CAPITAL ASSET ACQUISITION AND REPLACEMENT FUND 1,279,000$ 1,279,000 $ - $ - 622,118 $ 735,239 $ 984,296 $ (113,121) $ (15.4%) 48.6% 43.7% 327 LEVEE PROJECT FUND 50,000$ 50,000 $ - $ - 57,648 $ 84,976,855$ - $ (84,919,207)$ (99.9%) 115.3% 100.0% TOTAL CAPITAL PROJECTS FUNDS 1,472,250 $ 1,472,250 $ - $ - 743,494 $ 86,537,608$ 1,240,562 $ (85,794,114) $ (99.1%) 50.5% 99.6%

ENTERPRISE FUNDS
401 WATER REVENUE 17,761,142 $ 17,761,142 $ - $ - 8,247,979 $ 9,567,423 $ 8,789,761 $ (1,319,444) $ (13.8%) 46.4% 56.2% 405 WATER CIP -$ - $ - $ - 300 $ - $ - $ 300 $ - - - 408 WATER EQUIPMENT REPLACEMENT 633,532 $ 633,532 $ - $ - 316,766 $ 221,983 $ 228,351 $ 94,783 $ 42.7% 50.0% 50.0% 409 WATER CONNECTION FEES 452,500 $ 452,500 $ - $ - 224,033 $ - $ - $ 224,033$ - 49.5% - 451 WASTEWATER REVENUE 17,635,668 $ 17,635,668 $ - $ - 8,617,926 $ 7,877,821 $ 7,014,140 $ 740,105 $ 9.4% 48.9% 52.2% 453 WASTEWATER RATE STABILIZATION - $ - $ - $ - - $ - $ - $ - $ - - - 454 SM-FC PUBLIC FINANCING AUTHORITY LOAN 100 $ 100 $ - $ - 59 $ 647 $ 211,462$ (588) $ (90.9%) 59.0% 5.4% 455 WASTEWATER CIP -$ - $ - $ - - $ 11,027$ - $ (11,027)$ (100.0%) - - 456 WASTEWATER PLANT EXPANSION 636 $ 636 $ - $ - 5,367 $ 948 $ 920 $ 4,419 $ 466.1% 843.9% 149.1% 458 WASTEWATER EQUIPMENT REPLACEMENT 254,683 $ 254,683 $ - $ - 127,341 $ 134,673 $ 141,581 $ (7,332) $ (5.4%) 50.0% 50.0% 459 WASTEWATER NOTES/WIFIA LOAN 33,676,585 $ 33,676,585 $ - $ - 21,547 $ - $ - $ 21,547$ - 0.1% - 460 WASTEWATER CONNECTION FEES 302,000 $ 302,000 $ - $ - 92,757 $ - $ - $ 92,757$ - 30.7% - TOTAL ENTERPRISE FUNDS 70,716,846 $ 70,716,846 $ - $ - 17,654,075 $ 17,814,522 $ 16,386,215 $ (160,447) $ (0.9%) 25.0% 53.5%

INTERNAL SERVICE FUNDS
501 VEHICLE RENTAL FUND 1,802,082 $ 1,802,082 $ - $ - 888,592 $ 861,903 $ 939,225 $ 26,689 $ 3.1% 49.3% 50.0% 502 EQUIPMENT REPLACEMENT FUND 695,119 $ 695,119 $ - $ - 362,559 $ 288,386 $ 395,007 $ 74,173 $ 25.7% 52.2% 54.4% 503 SELF INSURANCE FUND 494,670 $ 584,332 $ 89,662 $ 18.1% 291,343 $ 269,783 $ 240,284 $ 21,560 $ 8.0% 58.9% 49.7% 504 INFORMATION TECHNOLOGY 2,384,155 $ 2,384,155 $ - $ - 1,205,239 $ 1,118,240 $ 1,009,636 $ 86,999 $ 7.8% 50.6% 50.3% 505 BUILDING MAINTENANCE 3,403,877 $ 3,403,877 $ - $ - 1,703,524 $ 1,694,706 $ 1,763,022 $ 8,818 $ 0.5% 50.0% 50.4% 507 LONGEVITY RECOGNITION PLAN 239,090 $ 239,090 $ - $ - 118,458 $ 122,443 $ 137,015 $ (3,985) $ (3.3%) 49.5% 49.1% 508 PEMHCA FUND 229,280 $ 229,280 $ - $ - 111,823 $ 122,559 $ 150,278 $ (10,736) $ (8.8%) 48.8% 48.0% 509 COMPENSATED ABSENCES FUND 505,923 $ 505,923 $ - $ - 252,006 $ 226,010 $ 215,051 $ 25,996 $ 11.5% 49.8% 49.4% TOTAL INTERNAL SERVICE FUNDS 9,754,196 $ 9,843,858 $ 89,662 $ 0.9% 4,933,544 $ 4,704,030 $ 4,849,518 $ 229,514 $ 4.9% 50.6% 50.3%

FIDUCIARY FUNDS
604 SUCESSOR ANGENCY 287,495 $ 287,495 $ - $ - 275,342 $ 61,672 $ 6,535 $ 213,670 $ 346.5% 95.8% 16.7% 607 TOURISM ASSESSMENT 85,868 $ 85,868 $ - $ - 31,430 $ - $ - $ 31,430$ - 36.6% - 608 SMC FIRE 138,000$ 138,000 $ - $ - 74,081 $ - $ - $ 74,081$ - 53.7% - TOTAL CITY / EMID FUNDS 146,319,459 $ 149,007,352 $ 2,687,893 $ 1.8% 58,398,580 $ 145,113,225 $ 51,991,164 $ (86,714,645) $ (59.8%) 39.9% 73.6% 1 The majority of property tax revenues are distributed by San Mateo County in December and April of each fiscal year. 2 In the latest month (Dec 2021), TOT revenues were st ill less than 40% of pre-pandemic levels. As a result, projections for the remaining 6 months and full year have to reduced accordingly. 3 Projected Intergovernmental revenues include a $4,054,920 ARPA payment ($864,920 higher than original Federal estimates) and a $25,777 carryover of Measure K grant reimbursements. 4 FY 21/22 revenues for the Parks and Recreation Dept. are expected to improve year-over-year as more Recreation Center programm ing and facility rentals resumed over the course of the year. 5 Although short term interest rates have started to improve, they were st ill much lower than projected (e.g. our investment portfolio yield was 0.31% as of 12/31/21). As a result, full year revenues forecast have been lowered. 6 FY 21/22 revenues Include $57,500 from Gilead to support non-profits 7 Includes $643,646 of PLHA grant for relocation services and housing subsidies in FY 21/22.

Notes and Explanation of Variances:

11 Attachment 4
ACTUAL ACTUAL ACTUAL INCREASE / % OF BUDGET % OF BUDGET FY 2021-22 FY 2020-21 FY 2019-20 DECREASE / % FY 2021-22 FY 2020-21 AMENDED 6 MONTHS 6 MONTHS 6 MONTHS FROM INCREASE 6 MONTHS 6 MONTHS Fund BUDGET PROJECTED $ % AS OF 12/31/2021 AS OF 12/31/2020 AS OF 9/30/2019 PRIOR YEAR (DECREASE) AS OF 12/31/2021 AS OF 12/31/2020 GENERAL FUND (FUNDS 001-003)
DEPARTMENTS:

COUNCIL/BOARD (1) 341,883$ 341,883 $ - $ 0.0% 228,999 $ 248,515 $ 289,044 $ (19,516) $ (7.9%) 67.0% 65.9% CITY MANAGER (1) 1,345,478$ 1,345,478 $ - $ 0.0% 869,085 $ 726,997 $ 598,508 $ 142,088 $ 19.5% 64.6% 53.8% COMMUNICATIONS/CITY CLERK 822,944$ 822,944 $ - $ 0.0% 409,611 $ 415,526 $ 406,580 $ (5,915) $ (1.4%) 49.8% 45.6% CITY ATTORNEY 589,767$ 589,767 $ - $ 0.0% 218,804 $ 226,066 $ 231,302 $ (7,262) $ (3.2%) 37.1% 39.6% HUMAN RESOURCES (1) 771,091$ 771,091 $ - $ 0.0% 415,001 $ 279,588 $ 250,878 $ 135,413 $ 48.4% 53.8% 62.4% FINANCIAL SERVICES (1) 998,940$ 998,940 $ - $ 0.0% 599,497 $ 448,135 $ 559,636 $ 151,362 $ 33.8% 60.0% 45.3% PARKS & RECREATION (1) 8,221,157$ 8,221,157 $ - $ 0.0% 4,351,898 $ 4,432,868 $ 3,862,123 $ (80,970) $ (1.8%) 52.9% 55.8% POLICE (1) 15,597,332$ 15,597,332 $ - $ 0.0% 8,718,273 $ 8,079,598 $ 8,007,243 $ 638,675 $ 7.9% 55.9% 53.3% FIRE (1) 11,247,899$ 11,247,899 $ - $ 0.0% 8,544,856 $ 7,719,262 $ 7,259,046 $ 825,594 $ 10.7% 76.0% 75.4% COMMUNITY DEVELOPMENT (1) 3,232,865$ 3,232,865 $ - $ 0.0% 1,739,333 $ 1,656,710 $ 1,584,446 $ 82,623 $ 5.0% 53.8% 53.6% PUBLIC WORKS 3,058,686$ 3,058,686 $ - $ 0.0% 1,264,222 $ 1,037,125 $ 1,417,689 $ 227,097 $ 21.9% 41.3% 39.3% LIBRARY 547,618$ 547,618 $ - $ 0.0% 273,809 $ 250,486 $ 254,526 $ 23,323 $ 9.3% 50.0% 50.0% 001 SUBTOTAL 46,775,660$ 46,775,660 $ - $ - 27,633,388 $ 25,520,876 $ 24,721,021 $ 2,112,512 $ 8.3% 59.1% 57.7% 002 PROPERTY TAX ADMINISTRATION 306,000$ 306,000 $ - $ 0.0% 152,731 $ 138,847 $ 126,224 $ 13,884 $ 10.0% 49.9% 49.0% 003 SPECIAL RECREATION 1,816,401$ 1,816,401 $ - $ - 741,600 $ 673,701 $ 1,112,220 $ 67,899 $ 10.1% 40.8% 34.8% 48,898,061$ 48,898,061 $ - $ - 28,527,719 $ 26,333,424 $ 25,959,465 $ 2,194,295 $ 8.3% 58.3% 56.7% 005 GENERAL FUND - COMMUNITY BENEFITS PROGRAM 883,320$ 883,320 $ - $ 0.0% 184,844 $ 41,564 $ 42,353 $ 143,280 $ 344.7% 20.9% 4.1% 006 GENERAL FUND - DARE 600$ 600 $ - $ 0.0% - $ - $ - $ - $ - - - 007 GENERAL FUND - SOLAR INCENTIVE GRANT PROGRAM 25,000$ 25,000 $ - $ 0.0% 8,000 $ 5,000 $ 11,000 $ 3,000 $ 60.0% 32.0% 10.0% 008 GENERAL FUND - RENTAL ASSISTANCE 58,000$ 58,000 $ - $ 0.0% - $ - $ - $ - $ - - - 009 GENERAL FUND - ASSET SEIZURE 22,175$ 22,175 $ - $ 0.0% - $ - $ - $ - $ - - - 010 GENERAL FUND - PENSION STABILIZATION FUND -$ - $ - $ - - $ - $ - $ - $ - - - 011 GENERAL FUND - FACILITIES REPLACEMENT -$ - $ - $ - - $ - $ - $ - $ - - - 012 SUSTAINABLE FOSTER CITY 221,562$ 221,562 $ - $ 0.0% 87,536 $ 7,477 $ - $ 80,059$ 1070.7% 39.5% 3.1% TOTAL ALL GENERAL FUND (FUNDS 001-011) 50,108,718$ 50,108,718 $ - $ - 28,808,099$ 26,387,465 $ 26,012,818 $ 2,420,634 $ 9.2% 57.5% 55.2%

SPECIAL REVENUE FUNDS
101 TRAFFIC SAFETY 60,000$ 60,000 $ - $ 0.0% 30,000 $ 41,500 $ 49,345 $ (11,500) $ (27.7%) 50.0% 50.0% 102 MEASURE "A" 2,113,596$ 2,113,596 $ - $ 0.0% - $ 249,301$ 37,953 $ (249,301) $ (100.0%) - 31.4% 103 GAS TAX 1,473,566$ 1,473,566 $ - $ 0.0% 277,250 $ 585,967 $ 307,197 $ (308,717) $ (52.7%) 18.8% 67.3% 104 PARK-IN-LIEU FUND 745,435$ 745,435 $ - $ 0.0% - $ - $ 1,167,232$ - $ - - - 105 MEASURE "M" 219,300$ 219,300 $ - $ 0.0% - $ - $ - $ - $ - - - 108 SLESF/COPS GRANT 100,000$ 100,000 $ - $ 0.0% 95,929 $ 92,168 $ 90,291 $ 3,761 $ 4.1% 95.9% 92.2% 114 CALOPPS 522,003$ 522,003 $ - $ 0.0% 232,893 $ 228,149 $ 216,463 $ 4,744 $ 2.1% 44.6% 43.3% 116 FOSTER CITY FOUNDATION 112,027$ 112,027 $ - $ 0.0% 17,888 $ 6,996 $ 2,923 $ 10,892 $ 155.7% 16.0% 6.2% 119 SB 1 ROAD MAINTENANCE AND REHAB 1,592,850$ 1,592,850 $ - $ 0.0% 62,362 $ 300,091 $ 39,653 $ (237,729) $ (79.2%) 3.9% 87.5% 122 HOUSING SUCCESSOR-LMIHF 134,760$ 134,760 $ - $ 0.0% 36,408 $ 54,088 $ 25,988 $ (17,680) $ (32.7%) 27.0% 40.6% 124 FC AFFORDABLE HOUSING FUND 1,043,636$ 1,043,636 $ - $ 0.0% 159,538 $ - $ - $ 159,538$ - 15.3% - 125 -$ - $ - $ - - $ - $ 18,609$ - $ - - - 127 BAERS (PROGRAM CLOSED OUT IN FY 20/21) (2) -$ - $ - $ - - $ 45,883$ 120,497 $ (45,883) $ (100.0%) - 15.2% 128 GENERAL PLAN MAINTENANCE 915,763$ 915,763 $ - $ 0.0% 105,778 $ 19,365 $ 12,456 $ 86,413 $ 446.2% 11.6% 37.0% 129 CONSTRUCTION AND DEMO RECYCLING 331,750$ 331,750 $ - $ 0.0% 31,170 $ 3,555 $ 3,241 $ 27,615 $ 776.8% 9.4% 4.6% 130 TECHNOLOGY MAINTENANCE 124,418$ 124,418 $ - $ 0.0% 40,274 $ 71,759 $ 19,588 $ (31,485) $ (43.9%) 32.4% 62.1% 131 SB 1186 1,300$ 1,300 $ - $ 0.0% - $ 50 $ - $ (50) $ (100.0%) - 3.8% 132 SMIP FEE 500$ 500 $ - $ 0.0% - $ - $ - $ - $ - - - 133 CRV GRANT FUND 13,000$ 13,000 $ - $ 0.0% 1,699 $ 3,229 $ 4,602 $ (1,530) $ (47.4%) 13.1% 24.8% 134 CURBSIDE RECLYCLING 25,000$ 25,000 $ - $ 0.0% - $ - $ - $ - $ - - - 135 GREEN BUILDING FEE 500$ 500 $ - $ 0.0% - $ - $ - $ - $ - - - 136 MEASURE W 500,000 $ 500,000 $ - $ 0.0% - $ - $ - $ - $ - - - 137 COMMERCIAL LINKAGE GEE - $ - $ - $ - - $ - $ - $ - $ - - - 138 TENANT RELOCATION ASSISTANCE 164,000 $ 164,000 $ - $ 0.0% - $ - $ - $ - $ - - - 139 WORKFORCE HOUSING - $ - $ - $ - - $ - $ - $ - $ - - - TOTAL SPECIAL REVENUE FUNDS 10,193,404$ 10,193,404 $ - $ - 1,091,189 $ 1,702,101 $ 2,116,038 $ (610,912) $ (35.9%) 10.7% 46.4%

SAVINGS (EXCESS) FROM

ADOPTED BUDGET
TOTAL GENERAL FUND (FUNDS 001-003)
SUSTAINABLE FOSTER CITY (MOVED TO FUND 012)
FY 2021-22

CITY OF FOSTER CITY/ESTERO MUNICIPAL IMPROVEMENT DISTRICT COMPARISON OF BUDGET VS. PROJECTED ACTUAL EXPENDITURES

BUDGET VS ACTUAL & CURRENT VS PRIOR
FOR THE SIX MONTHS ENDED DECEMBER 31, 2021

12 Attachment 4
ACTUAL ACTUAL ACTUAL INCREASE / % OF BUDGET % OF BUDGET FY 2021-22 FY 2020-21 FY 2019-20 DECREASE / % FY 2021-22 FY 2020-21 AMENDED 6 MONTHS 6 MONTHS 6 MONTHS FROM INCREASE 6 MONTHS 6 MONTHS Fund BUDGET PROJECTED $ % AS OF 12/31/2021 AS OF 12/31/2020 AS OF 9/30/2019 PRIOR YEAR (DECREASE) AS OF 12/31/2021 AS OF 12/31/2020

SAVINGS (EXCESS) FROM

ADOPTED BUDGET
FY 2021-22

CITY OF FOSTER CITY/ESTERO MUNICIPAL IMPROVEMENT DISTRICT COMPARISON OF BUDGET VS. PROJECTED ACTUAL EXPENDITURES

BUDGET VS ACTUAL & CURRENT VS PRIOR
FOR THE SIX MONTHS ENDED DECEMBER 31, 2021
230 DEBT SERVICE FUND (3) 6,492,688$ 6,492,688 $ - $ 0.0% 5,230,656 $ - $ - $ 5,230,656$ - 80.6% -

CAPITAL PROJECTS FUNDS
301 CIP PROJECTS-CITY 5,811,476$ 5,811,476 $ - $ 0.0% 29,944 $ 683,389 $ 463,170 $ (653,445) $ (95.6%) 0.5% 273.4% 326

CAPITAL ASSET ACQUISITION AND
REPLACEMENT FUND 7,000,000$ 7,000,000 $ - $ 0.0% - $ - $ - $ - $ - - - 327 LEVEE PROJECT FUND 50,052,978$ 50,052,978 $ - $ 0.0% 15,562,473 $ 10,108,303 $ - $ 5,454,170$ 54.0% 31.1% - TOTAL CAPITAL PROJECTS FUNDS 62,864,454$ 62,864,454 $ - $ - 15,592,417 $ 10,791,692 $ 463,170 $ 4,800,725 $ 44.5% 24.8% 4316.7%

ENTERPRISE FUNDS
401 WATER REVENUE 15,808,228$ 15,808,228 $ - $ 0.0% 6,352,649 $ 6,774,224 $ 6,789,278 $ (421,575) $ (6.2%) 40.2% 45.1% 405 CIP-WATER 5,588,889$ 5,588,889 $ - $ 0.0% 515,396 $ 195,089 $ 134,954 $ 320,307 $ 164.2% 9.2% - 408 WATER EQUIPMENT REPLACEMENT 219,500$ 219,500 $ - $ 0.0% 16,306 $ 22,220 $ 18,228 $ (5,914) $ (26.6%) 7.4% 41.5% 409 WATER CONNECTION FEES 450,000$ 450,000 $ - $ 0.0% - $ - $ - $ - $ - - - 451 WASTEWATER REVENUE 8,275,200$ 8,275,200 $ - $ 0.0% 3,007,700 $ 2,132,564 $ 2,792,647 $ 875,136 $ 41.0% 36.3% 27.1% 453 WASTEWATER RATE STABILIZATION - $ - $ - $ - - $ - $ - $ - $ - - - 454 SM-FC PUBLIC FINANCING AUTHORITY LOAN 1,869,091$ 1,869,091 $ - $ 0.0% 1,322,875 $ 1,305,750 $ - $ 17,125$ 1.3% 70.8% 62.5% 455 CIP-WASTEWATER 62,240,347$ 62,240,347 $ - $ 0.0% 3,975,165 $ 192,581 $ 4,658,528 $ 3,782,584 $ 1964.2% 6.4% 0.9% 456 WASTEWATER PLANT EXPANSION - $ - $ - $ - - $ - $ - $ - $ - - - 458 WASTEWATER EQUIPMENT REPLACEMENT 179,044$ 179,044 $ - $ 0.0% - $ - $ - $ - $ - - - 459 WASTEWATER NOTES/WIFIA LOAN (4) 223,600$ 223,600 $ - $ 0.0% 216,656 $ - $ - $ 216,656$ - 96.9% - 460 WASTEWATER CONNECTION FEES 300,000$ 300,000 $ - $ 0.0% - $ - $ - $ - $ - - - TOTAL ENTERPRISE FUNDS 95,153,899 $ 95,153,899 $ - $ - 15,406,747 $ 10,622,428 $ 14,393,635 $ 4,784,319 $ 45.0% 16.2% 22.7%

INTERNAL SERVICE FUNDS
501 VEHICLE RENTAL FUND 2,524,098$ 2,524,098 $ - $ 0.0% 862,347 $ 490,111 $ 963,609 $ 372,236 $ 75.9% 34.2% 21.6% 502 EQUIPMENT REPLACEMENT FUND 381,662$ 381,662 $ - $ 0.0% 13,765 $ 16,416 $ 229,420 $ (2,651) $ (16.1%) 3.6% 1.9% 503 SELF INSURANCE FUND (1) 862,232$ 862,232 $ - $ 0.0% 796,053 $ 505,495 $ 424,266 $ 290,558 $ 57.5% 92.3% 73.3% 504 INFORMATION TECHNOLOGY 2,483,898$ 2,483,898 $ - $ 0.0% 910,834 $ 784,658 $ 743,526 $ 126,176 $ 16.1% 36.7% 38.4% 505 BUILDING MAINTENANCE 3,272,159$ 3,272,159 $ - $ 0.0% 1,108,616 $ 1,084,032 $ 1,236,421 $ 24,584 $ 2.3% 33.9% 33.2% 507 LONGEVITY RECOGNITION PLAN 238,320$ 238,320 $ - $ 0.0% 99,220 $ 91,553 $ 91,415 $ 7,667 $ 8.4% 41.6% 39.3% 508 PEMHCA FUND 214,320$ 214,320 $ - $ 0.0% 89,713 $ 82,722 $ 82,503 $ 6,991 $ 8.5% 41.9% 40.6% 509 COMPENSATED ABSENCES FUND 474,368$ 474,368 $ - $ 0.0% 167,248 $ 5,270 $ 94,938 $ 161,978 $ 3073.6% 35.3% 1.2% TOTAL INTERNAL SERVICE FUNDS 10,451,057 $ 10,451,057 $ - $ - 4,047,796 $ 3,060,257 $ 3,866,098 $ 987,539 $ 32.3% 38.7% 30.6%

FIDUCIARY FUND
604 SUCESSOR ANGENCY 549,591 $ 549,591 $ - $ 0.0% 11,091 $ 2,263 $ 16,178 $ 8,828 $ 390.1% 2.0% 0.6% 607 TOURISM ASSESSMENT 85,868 $ 85,868 $ - $ 0.0% 26,058 $ 26,058 $ - 30.3% - 608 SMC FIRE FEES 138,000 $ 138,000 $ - $ 0.0% 67,398 $ 67,398 $ - 48.8% - TOTAL CITY / EMID FUNDS 236,037,679 $ 236,037,679 $ - $ 0.0% 70,281,451 $ 52,566,206 $ 46,867,937 $ 17,715,245 $ 33.7% 29.8% 26.8% 1 2
Notes and Explanation of Variances:

Expenditures for various departments exceeded 50% of the annual budget as various payments were made that covered costs for the full year, including annual insurance premiums and required employer unfunded accrued liability pension payments (e.g. the City elected to prepay the entire year's monthly unfunded liability obligations to CalPERS in July). These July payments totaled $6.79M, $6.21M, and $5.59M for FY 20/21, FY 20/21, and FY 19/20 respectively. The citywide cash savings from the early payments were $233,000, $214,000, and $199,000 respectively.

In September 2020, the City discontinued hosting the Bay Area Employee Relations Services (BAERS) program and transferred the remaining Fund Balance to the General Fund

13 DATE: February 28, 2022

TO:

Mayor and Members of the City Council
President and Members of the Estero Municipal Improvement District (EMID) Board of Directors

FROM: Kevin Miller, Interim City Manager

SUBJECT: ORGANIZATIONAL ASSESSMENT – PRELIMINARY

PROPOSALS FOR CITY RESTRUCTURING/GOVERNMENTAL

OPERATIONS IMPROVEMENT

RECOMMENDATION
It is recommended that the City Council/EMID Board (hereinafter referred to as “City”):

1. By Minute Order, receive and accept this report providing an assessment of the City’s organizational structure and proposed personnel/staffing exceptions as it relates to service level expectations; and

2. Adopt the attached Resolutions, authorizing funding/a budget appropriation in the total amount of $71,131 from the General Fund to Account No. 001-0510-451-4110 & Account No. 001-0520-452-4110 ($35,566 & $35,565 respectively) to fulfill the Parks & Recreation Director position for the remainder of the current fiscal year (FY 2021- 2022), with an immediate recruitment to be led internally by the Human Resources Department.

This item is a companion report to the City budget. If accepted, these preliminary proposals in regards to personnel/staffing will be incorporated in the FY 2022-2023 Budget. The report details, by City Department, positions being requested, eliminated, or reclassified, including financial impacts identified by department. A summary of these personnel/staffing exceptions 14 (as of February 24, 2022) alongside the financial impact of each is outlined in Attachment 3. The FY 2021-2022 organizational charts for each department versus those now being proposed are also provided as Attachment 4.

Furthermore, the attached resolution would authorize for the City to begin the immediate recruitment and fill the Parks & Recreation Director position in the current fiscal year (FY 2021-2022).

City Council consideration of any additional resources (including personnel/staffing) will ultimately be approved concurrently with adoption of the City budget.

EXECUTIVE SUMMARY/BACKGROUND
In January 2021, the then City Manager had consolidated the Public Works and Parks Departments into a single department. Then in July 2021, the restructuring entailed the transition of the Recreation Division as a newly formed Community Services Division under the City Manager Department.

The intent was to support an expansion of duties to incorporate a broader “community services” focus. In lieu of the Assistant City Manager position, a Deputy City Manager was introduced to oversee and support the transition of the Community Services Division into the City Manager Department. This is how the organizational structure is currently reflected in the FY 2021-2022 Budget.

The overarching goals of the previous consolidation and attempt at restructuring was to improve the coordination and efficiency in operations and service delivery, and to optimize opportunities to coordinate revenue resources to accomplish City Council priorities. Staff has had the opportunity to work under that structure for the past year and, having evaluated the existing organizational structure and operations of these departments, is now proposing a few permanent changes to that structure going forward.

Namely, it includes these primary transitions:
City Manager Department, comprised of Administration and Information Technology Divisions
Parks & Recreation Department (as a separate department), comprised of Recreation and Parks Maintenance Divisions
15 Public Works Department, comprised of Engineering, Public Works Maintenance (Streets/Lagoon, Water, Wastewater), and Building/Vehicle Maintenance Divisions
Organizational assessment, particularly on a continual and ongoing basis, is good practice to identify areas of improvement in governmental operations. It presents the City an opportunity to make meaningful changes to the organization and its culture by instilling and promoting an operationally sustainable structure that aims to bring stability, accountability, transparency, efficiency, effectiveness, fiscal discipline, as well as a sense of collaboration and teamwork from the top down. It is also an opportunity to communicate any needed behavioral, structural, and technical improvements to better position the City for success.

In the City’s budget process, after a thorough review of their respective departments, each Department Head makes recommendations to the City Manager for additional resources (or variances from the current year’s budget) needed to maintain appropriate levels of service. The City Manager, after conferring with both the Finance Director and Human Resources Director, will consider each request and determine which will be transmitted in the budget proposal. Details of all variance requests that are approved by the City Manager will then be included in the FY 2022-2023 Preliminary Budget when presented to City Council for consideration.

Given the transition the City is undergoing at this time, the Interim City Manager is also providing the City Council with a preliminary preview of potential budget exceptions and associated budgetary cost impacts as they relate to the maintenance of high service levels to the community. These recommendations are being posed early on with the goal of providing the next, permanent City Manager a stable and well-supported organization to lead.

In summary, the personnel/staffing exceptions conditionally approved by the Interim City Manager include:
Eliminating One (1) Sr. Systems Analyst
Adding Two (2) Technology Analyst I
Adding One (1) Senior Planner (5-Year Limited Term)
Adding One (1) Housing Services Coordinator
Reclassifying One (1) Building Permit Technician I to Building Permit Technician II
Restoring One (1) Parks and Recreation Director
16 Reclassifying One (1) Management Coordinator to Management Analyst
Adding One (1) Part-Time Benefitted Building Service Coordinator Adding One (1) Irrigation Technician
Eliminating One (1) Public Works Maintenance Manager (Parks/Facility Maintenance Manager)
Adding One (1) Police Records Specialist
Adding One (1) Public Works Maintenance Worker I/II
As mentioned in a separate staff report at this evening’s Budget Study Session, defining the types and levels of services expected in a given year includes a process of public engagement, understanding current services, identifying the City’s mission, long-term vision, and goals of the community.

Based on the goals established by the City Council, the City Manager identifies the resources required to deliver services, how best to organize those resources to achieve the City Council’s vision for the community and presents those recommendations in the Preliminary Budget for City Council review, consideration, and direction.

In a service-oriented organization such as a city, it takes staff to provide services. Foster City’s personnel costs represent approximately 60.9% of the General Fund annual operating budget (excludes Fire personnel which now belong to the San Mateo Consolidated Fire Department JPA and counted as contract services). As important as it is for a city to invest in its physical capital, it is just as important for a city to ensure it is investing appropriately in its human capital and to determine what is the proper level of staffing and the necessary skill sets required to deliver on the city’s mission. City staff has and continues to evaluate potential needs for additional personnel and resources necessary to accomplish tasks related to the established priorities.

ANALYSIS
In FY 2021-2022, services are being provided by 164 FTE (Full-Time Equivalent) City employees and 2.71 partially benefited and 12.62 unbenefited part-time/seasonal staff. The following table provides a personnel summary by department:
17 For the FY 2022-2023 Budget, the City is evaluating the current level of staffing to meet City Council’s strategic directives in the six (6) City Council Value/Priority Areas, specifically the key projects/initiatives that were reconfirmed at the Vision & Policy Summit on January 12, 2022, and to continue to provide excellent core services to the community. Detailed in the next section are preliminary personnel/staffing proposals by department, including fiscal impacts of each, if any. If approved, it would reflect full-time staffing levels at 170 FTE City employees for FY 2022-2023.

City/District Manager Department

The City/District Manager Department is currently comprised of two divisions:

Administration and Community Services, and is currently made up of 18.00 FTE. The proposed change to the City/District Manager Department for FY 2022-2023 would be to separate the Community Services Division to reinstate it as a Parks & Recreation Department, restoring the City/District Manager Department to the Administration and Information Technology Divisions only. It would also include eliminating one (1) Sr. Systems Analyst, adding two (2) Technology Analyst I, for a net add of one new position. This would equate to

10.00 FTE in the City/District Manager Department for FY 2022-2023.

In the Administration Division, there are no proposed changes for FY 2022- 2023. It is highly recommended that organizational structure remain in place, including the Deputy City Manager position to provide administrative guidance/support to departments in general, serving a key role in strategic planning alongside tactical decision-making in support of the City Manager for administrative and legislative/policy support to the City Council, and specific citywide oversight in the areas of Budget, Economic Development, Environmental Sustainability, Information Technology, Animal Control, 18 Transportation, joint oversight with the cities of Belmont and San Mateo of the San Mateo Consolidated Fire Department, and Emergency Preparedness. It is also important to note that while both the Deputy City Manager and Principal Management Analyst roles have interim assignments, the Interim City Manager and/or the next, permanent City Manager may seek to fill these roles on a permanent basis. The Human Resources Department would assist internally with a recruitment process.

As for the Information Technology Division, a redistribution of general IT assignments from the IT Manager and Sr. Systems Analysts to the Technology Analyst I positions will allow the IT Manager and Sr. Systems Analysts to focus on project management and implementation of technology upgrades and new software. Meanwhile, the Technology Analyst I positions would focus on addressing the volume of day-to-day support requests and other routine responsibilities. Costs for the added position will be offset by the vacant Sr. Systems Analyst in the current fiscal year, as well as in anticipated increased revenues from the agreement with San Mateo Consolidated Fire Department for IT services in the following years.

This is an overall increase in the City/District Manager Department budget of $91,141 for FY 2022-2023, or $600,758 over the next five years.

Communications/City Clerk Department

The Communications/Clerk Department is comprised of two divisions:

Communications and City Clerk. It is currently made up of 4.75 FTE. There are no proposed changes to the Communications/City Clerk Department for FY 2022-2023.

Community Development Department

The Community Development Department is currently made up of 14.00 FTE.

The proposed changes to the Community Development Department for FY 2022-2023 include adding one (1) Senior Planner, adding one (1) Housing Services Coordinator, and reclassifying one (1) Building Permit Technician I to Building Permit Technician II. This would equate to 16.00 FTE in the Community Development Department for FY 2022-2023.

The proposed addition of a Senior Planner would be for a limited 5-year term.

It would address various needs including support for day-to-day counter services, minor permits, major development projects, as well as long-range 19 planning initiatives, especially in light of all the new state mandates.

A dedicated, full-time Housing Services Coordinator additionally would help manage the City’s below-market rate housing programs and meet the City’s long and short-term housing goals. The cost for this position would be funded in part by revenue generated from the City’s Workforce Housing Program.

The Building Permit Technician position is being recommended for reclassification from a level I to a level II to reflect a role with minimal supervision, exercising independent judgement, and experience with TRAKit software and Community Development Department procedures.

This is an overall increase in the Community Development Department budget of $384,941 for FY 2022-2023, or $2,032,441 over the next five years.

Financial Services/City Treasurer Department

The Financial Services/City Treasurer Department is currently made up of

9.00 FTE. There are no proposed changes to the Financial Services/City Treasurer Department for FY 2022-2023.

Human Resources Department

The Human Resources Department is currently made up of 4.00 FTE. There are no proposed changes to the Human Resources Department for FY 2022- 2023.

Parks & Recreation Department

The Parks & Recreation Department is currently not reflected as a separate department, but rather as divisions under both the City/District Manager and Public Works Departments. The primary change for FY 2022-2023 would be to separate the Community Services Division and Parks Maintenance Division from the City/District Manager and Public Works Departments, respectively.

The proposed change would include reinstating Parks & Recreation as its own department, with two divisions those being Recreation and Parks Maintenance. The other proposed changes include restoring one (1) Parks and Recreation Director, reclassifying one (1) Management Coordinator to Management Analyst, adding one (1) Part-Time Benefitted Building Service Coordinator, adding one (1) Irrigation Technician, and and eliminating one (1) Parks/Facility Maintenance Manager. The Parks/Facility Maintenance 20 Manager is a shared position – 1/3 Parks, 1/3 ISF-Building and 1/3 ISF- Vehicle. This would equate to 39.41 FTE in the Parks & Recreation Department for FY 2022-2023.

In lieu of the City Manager overseeing the Recreation and Parks Maintenance Divisions (as it stands with the Interim City Manager), it is recommended that the Parks & Recreation Director position be reinstated to manage the divisions as a whole, excluding the Building/Vehicle Maintenance Division which would transfer back to the Public Works Department. Foster City has 24 parks, the most per capita within San Mateo County, and along with Recreation hosts a broad variety of sports, activities, events, classes, and general programming.

The Parks & Recreation Director position would streamline processes and allow for operations to run more efficiently and cohesively.

Reclassifying the existing Management Coordinator position to Management Analyst to more accurately reflect the range of duties handled administratively, as this position is the primary support and backup for the Recreation Manager, with supervisory and signing authority, serving as a key role in the Parks and Recreation Department’s strategic planning, decision making, and operations.

The addition of a part-time benefited Building Services Coordinator would be to support oversight of building attendants and address a long-standing issue of filling morning & evening shifts, including after hours and on weekends.

Moreover, the addition of an Irrigation Technician is to manage the City’s irrigation and watering practices to help reduce errors, ensure uniformity for scheduling and demonstrate the City’s commitment to efficient water management. This position would monitor water usage more closely in all parks, medians, cul-de-sacs as well as act as an inspector when City irrigation systems conflict with other projects.

Approval of the resolution proposed for City Council consideration at today’s meeting would authorize a budget appropriation of approximately $71,131 for FY 2021-2022 to restore and immediately fill the Parks & Recreation Director position. This estimate is based on an assumption that the Parks & Recreation Director position would be filled starting April 2022 at the top step. It is likely, however, that recruitment of this executive-level position will take longer to fill, thus reducing the actual costs incurred in FY 2021-2022. The recruitment for this position would be led internally by the Human Resources Department. For reference, the latest approved pay plan (effective January 1, 2022) and job classification for the Parks & Recreation Director is provided (Attachments 5 & 21 6). The total fiscal impact associated with restoring the Parks & Recreation Director position is estimated at $297,581 for FY 2022-2023 or $1,607,394 over the next five years (including the FY 2021-2022 budget appropriation).

This is an overall fiscal impact in the Parks & Recreation Department budget of $479,554 for FY 2022-2023, or $2,530,740 over the next five years.

Police Department

The Police Department is currently made up of 54.00 FTE. The proposed change to the Police Department for FY 2022-2023 include adding one (1) Police Records Specialist. This would equate to 55.00 FTE in the Police Department for FY 2022-2023.

The proposed addition of a Police Records Specialist would aid workload constraints for the existing Records Specialists and the Records Supervisor.

This is in response to the steady increase of case reviews, involving handling of all processing, review, release and retention of Police Department records, including cases, citations, and court documents over the past several years.

Records requests and processing have strict time constraints that have the potential for financial sanctions and with an added Police Records Specialist position, it would ensure the City is able to comply with all legal requirements.

This is an overall increase in the Police Department budget of $137,284 for FY 2022-2023, or $710,604 over the next five years.

Public Works Department

The Public Works Department is currently comprised of three divisions:

Engineering, Public Works Maintenance (Streets/Lagoon, Water, Wastewater), and Parks/Facility Maintenance (Building/Vehicle Maintenance), and made up of 61.00 FTE. However, as mentioned throughout this report, the proposed change to the Public Works Department for FY 2022-2023 would be to separate the Parks Maintenance Division as part of reinstating the Parks & Recreation Department, retaining the Building/Vehicle Maintenance Division as a component of the Public Works Department, to then be comprised of Engineering, Public Works Maintenance (Streets/Lagoon, Water, Wastewater), and Building/Vehicle Maintenance Divisions. It would also include adding one (1) Public Works Maintenance Worker I/II and eliminating one (1) shared position Public Works Maintenance Manager (Parks/Facility Maintenance Manager). This would equate to 44.00 FTE in the Public Works Department for 22 FY 2022-2023.

The recommendation to have the Building/Vehicle Maintenance Division remain in the Public Works Department is to ensure adequate oversight and centralized leadership over capital projects, to maintain vital public infrastructure, facilities, and equipment in a safe, reliable, and attractive manner for the health and welfare of the Foster City community.

The proposed addition of a Public Works Maintenance Worker I/II position will allow the City to accomplish on-going maintenance at a level that will better ensure the long-term quality of the City’s infrastructure. The position would be assigned to address areas such as the Citywide catch basin cleaning program, catch basin replacement, street asphalt repair and legend marking, lagoon water quality maintenance and testing, as well as emergency response.

When the Parks and Recreation and Public Works Departments were combined, a second Public Works Maintenance Manager (working title Parks/Facility Maintenance Manager) was added to oversee the Parks Maintenance and Building/Vehicle Maintenance divisions. However, the position was never filled. Because the Parks Maintenance division will move back to the Parks and Recreation Department, staff is proposing to eliminate the second Public Works Maintenance Manager. The Parks Maintenance Division will report directly to the proposed Parks and Recreation Director and the Building/Vehicle Maintenance Division will report directly to the Public Works Director.

With this said, there may be other proposals evaluated and/or brought forward throughout this budget process, taking into account the forthcoming Recreation Center Replacement Project among other Capital Improvement Projects.

This is an overall decrease in the Public Works Department budget of $9,651 for FY 2022-2023, or $52,224 over the next five years.

Conclusion

The organizational structure and proposed personnel/staffing exceptions were developed based on several factors: an organizational assessment of strengths, weaknesses, and risks, consideration of City management best practices, the history of the City’s organizational structures, as well as lessons learned from previous administrations. City staff is confident that the new 23 structure being proposed will provide the City and City Council with the necessary framework to develop, articulate, and successfully execute its evolving priorities.

It is important to note that these personnel/staffing exceptions are preliminary proposals that the Interim City Manager have determined merit consideration to-date. This is also to acknowledge that the next, permanent City Manager would also have the ability to reassess, structure, and make changes related to governmental operations should it allow the City to be a more proactive, responsive, and sustainable organization. The City is also currently conducting a citywide Classification Study as well as a citywide Compensation Sudy that may result in other changes that aren't reflected in the preliminary personnel/staffing exceptions outlined in this report. Once completed, it will help frame a City Council compensation philosophy/policy for the organization.

The intent and fundamental goal would be for the City of Foster City to find alignment with key principles of a well-run organization with an established framework to lead City operations and service delivery to residents, businesses, and visitors.

FISCAL IMPACT
With approval of the attached resolution, City Council would be authorizing a budget appropriation of approximately $71,131 for FY 2021-2022 to restore and immediately fill the Parks & Recreation Director position. The total fiscal impact associated with restoring the Parks & Recreation Director position is estimated at $297,581 for FY 2022-2023 or $1,607,394 over the next five years (including the FY 2021-2022 budget appropriation).

The total fiscal impact associated with all restructure components identified across the organization (including restoring the Parks & Recreation Director position) is an overall increase estimated at $1,092,269 in FY 2022-2023 or $5,822,319 over the next five years. Attachment 3 provides a summary detailing financial impacts by personnel/staffing exceptions and fiscal year costs.

A detailed line item budget will be submitted for City Council review at their Budget Study Session Meeting on May 9, 2022.
24 CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA This item is in alignment with the "Staff Empowerment and Operational Excellence" Value/Priority Area, in that City staff remains committed to exploring ways in which it may ensure continued delivery of exceptional service to our community while also streamlining the organization so that it may operate efficiently, effectively, and ensure that taxpayer funds are expended appropriately.

Attachments:
Attachment 1 – City Resolution
Attachment 2 – EMID Resolution
Attachment 3 – Summary of Personnel/Staffing Exceptions and Financial Impacts (as of February 24, 2022)
Attachment 4 – Current Versus Proposed Organizational Charts (By Department)
Attachment 5 – Pay Plan (Effective January 1, 2022)
Attachment 6 – Parks & Recreation Director Job Classification (As Approved)
25 RESOLUTION NO.___________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FOSTER CITY AUTHORIZING A BUDGET APPROPRIATION IN THE TOTAL AMOUNT OF $71,131 FROM THE GENERAL FUND TO ACCOUNT NO. 001-0510-451-4110 & ACCOUNT NO. 001-0520-452-4110 ($35,566 & $35,565 RESPECTIVELY) TO FULFILL THE PARKS & RECREATION DIRECTOR POSITION FOR THE REMAINDER OF FISCAL YEAR 2021- 2022

CITY OF FOSTER CITY
WHEREAS, Foster City has 24 parks, the most per capita within San Mateo County, and a Parks & Recreation Department exists to build and create community through people, parks, and programs; and
WHEREAS, as part of an organizational assessment and identifying areas for governmental operations improvement, reinstating Parks & Recreation as its own department (comprised of Recreation and Parks Maintenance Divisions) will require restoration of the Parks & Director position; and
WHEREAS, the Parks & Recreation Director position would be restored to manage the divisions as a whole, allowing for operations to run more efficiently and cohesively; and
WHEREAS, the Parks and Recreation Director would provide key leadership and management over providing safe, clean, and attractive parks throughout the community, in addition to offering high quality recreation programs that meet a variety of age groups and interests; and
WHEREAS, by approval, the City Council intends to restore the Parks & Recreation Director position with an immediate recruitment to be led internally by the City, specifically the Human Resources Department; and
WHEREAS, the estimated financial impact of this action in FY 2021-2022 for the remainder of the fiscal year should not exceed $71,131 with funding for this position to be requested as part of the FY 2022-2023 Budget and beyond; and WHEREAS, this action is consistent with the "Staff Empowerment and Operational Excellence" Value/Priority Area, in that the City remains committed to exploring ways in which it may ensure continued delivery of exceptional service to the community.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Foster City does hereby authorize a budget appropriation in the total amount of $71,131 from the General Fund to Account No. 001-0510-451-4110 & Account No. 001-0520-452-4110 ($35,566 & $35,565 respectively) to restore and fulfill the Parks & Recreation Director position starting FY 2021-2022.
26 PASSED AND ADOPTED as a resolution of the City Council of the City of Foster City at the special meeting held on the 28th day of February, 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

RICHA AWASTHI, MAYOR
ATTEST:

PRISCILLA SCHAUS, CITY CLERK
27 RESOLUTION NO.___________

A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ESTERO MUNICIPAL

IMPROVEMENT DISTRICT AUTHORIZING A BUDGET APPROPRIATION IN THE TOTAL AMOUNT OF $71,131 FROM THE GENERAL FUND TO ACCOUNT NO. 001- 0510-451-4110 & ACCOUNT NO. 001-0520-452-4110 ($35,566 & $35,565

RESPECTIVELY) TO FULFILL THE PARKS & RECREATION DIRECTOR POSITION FOR THE REMAINDER OF FISCAL YEAR 2021-2022

ESTERO MUNICIPAL IMPROVEMENT DISTRICT
WHEREAS, Foster City has 24 parks, the most per capita within San Mateo County, and a Parks & Recreation Department exists to build and create community through people, parks, and programs; and
WHEREAS, as part of an organizational assessment and identifying areas for governmental operations improvement, reinstating Parks & Recreation as its own department (comprised of Recreation and Parks Maintenance Divisions) will require restoration of the Parks & Director position; and
WHEREAS, the Parks & Recreation Director position would be restored to manage the divisions as a whole, allowing for operations to run more efficiently and cohesively; and
WHEREAS, the Parks and Recreation Director would provide key leadership and management over providing safe, clean, and attractive parks throughout the community, in addition to offering high quality recreation programs that meet a variety of age groups and interests; and
WHEREAS, by approval, the EMID Board intends to restore the Parks & Recreation Director position with an immediate recruitment to be led internally by the District, specifically the Human Resources Department; and WHEREAS, the estimated financial impact of this action in FY 2021-2022 for the remainder of the fiscal year should not exceed $71,131 with funding for this position to be requested as part of the FY 2022-2023 Budget and beyond; and WHEREAS, this action is consistent with the "Staff Empowerment and Operational Excellence" Value/Priority Area, in that EMID remains committed to exploring ways in which it may ensure continued delivery of exceptional service to the community.

NOW, THEREFORE, BE IT RESOLVED that the Board of Directors of the Estero Municipal Improvement District does hereby authorize a budget appropriation in the total amount of $71,131 from the General Fund to Account No. 001-0510-451-4110 & Account No. 001-0520-452-4110 ($35,566 & $35,565 respectively) to restore and fulfill the Parks & Recreation Director position starting FY 2021-2022.
28 PASSED AND ADOPTED as a resolution of the Board of Directors of the Estero Municipal Improvement District at the special meeting held on the 28 th day of February, 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

RICHA AWASTHI, BOARD PRESIDENT
ATTEST:

PRISCILLA SCHAUS, DISTRICT SECRETARY
29 SUMMARY OF PERSONNEL/STAFFING EXCEPTIONS AND FINANCIAL IMPACTS (as of February 24, 2022)
Attachment 3
Description Department FY 2021-2022 FY 2022-2023 Five Year Total Cost Notes Eliminate 1 Sr. Systems Analyst; Add 2 Technology Analyst I City Manager/IT 91,141.00$ 600,758.00$ Add Senior Planner Community Development 199,814.00$ 1,031,828.00$ Add Housing Coordinator Community Development 185,126.00$ 953,926.00$ Combination of General Fund and Workforce Housing Fund
Reclassify 1 Building Permit Tech I to Building Permit Tech II Community Development 9,001.00$ 46,687.00$ Restore Parks & Recreation Director Parks & Recreation 71,131.00$ 297,581.00$ 1,607,394.00$ To be filled in FY 2021/2022; Five- Year cost includes estimated
FY2021/2022 costs
Reclassify Management Coordinator to Management Analyst Parks & Recreation 17,587.00$ 151,483.00$ Add Part-Time (30 hr) Building Service Coordinator Parks & Recreation 96,351.00$ 495,174.00$ Add Irrigation Technician Parks & Recreation 149,065.00$ 768,245.00$ Add Police Records Specialist Police Department 137,284.00$ 710,604.00$ Eliminate Public Works Maintenance Manager
(Parks/Facility Maintenance Manager)
Public Works (243,044.00)$ (1,261,025.00)$ Combination of General Fund, Building Maintenance, and Vehicle
Rental Fund
Add Public Works Maintenance Worker I/II Public Works 152,363.00$ 788,376.00$ TOTAL (ACROSS ALL DEPARTMENTS) 1,092,269.00$ 5,893,450.00$ 30 CITY MANAGER DEPARTMENT
ORGANIZATION CHART FOR FY 2021/2022
City
Manager
Principal
Management
Analyst
Management
Analyst
Management
Coordinator
Information Technology
Manager
Sr. Systems
Analyst (3)
Deputy City Manager
(Community Services)
Recreation Manager
Management
Coordinator
Administrative Assistant
I/II (FTE 2)
Office Assistant II
(PB FTE 0.75)
Recreation Coordinator
I/II
(FTE 4)
Recreation Leaders I -III
(PT FTE 5.20
PB FTE 0.75)
Building Services
Coordinator
Building Service
Assistant
(PT FTE 3.32)

LE GEND
New Position
City Manager
FY 2021/2022
31 CITY MANAGER’S OFFICE
FY 2022/2023 (Effective July 1, 2022)
City Manager
Deputy City
Manager
Info Technology
Manager
Sr. Systems
Analyst (2)
*Technology
Analyst I (2)
Management
Analyst
Principal
Management
Analyst
Management
Coordinator
LEGEND
New Position
*One position is new; the other position is a
reclassification of one Sr. Systems Analyst
City Manager
Proposed
FY 2022/2023
32 Communications/City Clerk
FY 2021/2022
33 Communications/City Clerk
Proposed
FY 2022/2023
32 34

COMMUNITY DEVELOPMENT DEPARTMENT
*On January 13,2019, the Belmont, Foster City and San Mateo Fire Departments joined as a Joint Powers Authority (JPA). During the transition, the Administrative Assistant, who did not transfer with the JPA was retained by CDD to fill a vacant Office Assistant position until an Administrative Assistant position became available at other departments.

Community Development
FY 2021/2022
35 Community
Development
Director
Planning Manager
Senior Planner
(limited 5 year term)
Associate/Senior
Planner
Assistant/Associate
Planner
Housing Services
Coordinator
Code Enforcement
Officer
Management
Analyst
Management
Assistant
Admin
Assistant/Office
Assistant*
Chief Building
Official
Plans Examiner
Sr. Building
Inspector
Building Inspector
Permit Tech II
Permit Tech I
*On January 13, 2019, the Belmont, Foster City and San Mateo Fire Departments joined together as a Joint Powers Authority (JPA). During the transition, the Administrative Assistant who did not transfer with the JPA was retained by CDD to fill a vacant Office Assistant position until an Administrative Assistant position becomes available at other departments.

Community Development
Proposed
FY 2022/2023
36 Financial Services
FY 2021/2022
37 Financial Services/City Treasurer Department
Finance Director
Financial Services
Manager
Sr. Accounting
Specialist
Administrative
Assistant II
Assistant
Finance Director
Accountant I/II
Accounting /
Sr. Accounting
Specialist
Senior
Accountant
Sr. Accounting
Specialist
Financial Services
Proposed
FY 2022/2023
38 Human Resources
FY 2021/2022
39 Human Resources Department
FY 2022-2023
HR Director
Senior HR
Analyst
HR Analyst
HR
Technician
Human Resources
Proposed
FY 2022/2023
40 Parks and Recreation
Department FY 2022/2023
Parks and Recreation
Director
Administrative
Assistant I/II (FTE 3)
Management
Analyst
Recreation
Leader I-III PB PT
(5.20 FTE; PB .75)
Maintenance
Worker I/II
(FTE 11)
Parks Manager
Maintenance
Worker PT
(PT .64 FTE)
Recreation
Coordinator I/II
(FTE 4)
Recreation
Manager
Building
Attendant PT
(PT 3.32 FTE)
Office
Assistant I (PB .75)
Building Services Coordinator
(FB 1.00 & PB.75)
• Reinstate Director of Parks and Recreation position
• A
ddition of an Irrigation Technician
• Addition of a Part Time Benefit 30 hr Building Services Coordinator Irrigation
Technician
Lead Worker
(FTE 4)
Parks and Recreation
Proposed
FY 2022/2023
41 Police Department
FY 2021/2022
42 













 










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сǀŽůƵŶƚĞĞƌƉŽƐŝƟŽŶ
Police
Proposed
FY 2022/2023
43 Public Works
FY 2021/2022
44 PW
Director
Engineering
Manger
Sr Engineer
Assoc/Asst
Engineer
Sr Engineering
Tech.

Assoc/Asst
Engineers (3)
Department
Interns
Bldg/Vehicle
Maint Manager
Bldg Maint Lead
Worker
Bldg Maint
Workers I/II (3)
Mechanic I
Equip Maint
Worker I/II
PT Office
Assistant (0.5)
Public Works
Maintenance
Manager
PW Maint.

Superintendent
Street/Lagoon
PW Lead
Maintenance
Worker
PW
Maintenance
Workers (4)
PW Maint.

Superintendent
Water
PW Lead
Maintenance
Workers (2)
PW
Maintenance
Workers (6)
PW Maint.

Superintendent
Wastewater
PW Lead
Maintenance
Workers (2)
PW
Maintenance
Workers (6)
Administrative
Assistant
PT Office
Assistant (0.5)
Management
Coordinator
Administrative
Assistant
Principal
Management
Analyst

PUBLIC WORKS DEPARTMENT
Fiscal Year 2022-2023
Public Works
Proposed
FY 2022/2023
45 ATTACHMENT 5
City of Foster City / Estero Municipal Improvement District FY 2021-2022 Pay Plan
Effective January 01, 2022
Hourly
Position Step 1 Step 2 Step 3 Step 4 Step 5
Executive Management
City Manager 19,583$
Chief of Police 15,972$ 16,771$ 17,610$ 18,490$ 19,414$ Assistant City Manager 15,132$ 15,888$ 16,683$ 17,517$ 18,393$ Community Development Director 14,411$ 15,132$ 15,888$ 16,683$ 17,517$ Director of Public Works 14,411$ 15,132$ 15,888$ 16,683$ 17,517$ Communications Director / City Clerk 14,008$ 14,708$ 15,444$ 16,216$ 17,027$ Deputy City Manager 14,008$ 14,708$ 15,444$ 16,216$ 17,027$ Finance Director 14,008$ 14,708$ 15,444$ 16,216$ 17,027$ Human Resources Director 14,008$ 14,708$ 15,444$ 16,216$ 17,027$ Parks & Recreation Director 14,008$ 14,708$ 15,444$ 16,216$ 17,027$ Other Management
Police Captain 13,779$ 14,468$ 15,191$ 15,951$ 16,748$ Police Lieutenant 11,903$ 12,498$ 13,123$ 13,779$ 14,468$ Assistant Finance Director 10,888$ 11,432$ 12,004$ 12,604$ 13,234$ Economic Development Manager 10,888$ 11,432$ 12,004$ 12,604$ 13,234$ Information Technology Manager 10,888$ 11,432$ 12,004$ 12,604$ 13,234$ Chief Building Official 10,731$ 11,267$ 11,830$ 12,422$ 13,043$ Planning Manager 10,731$ 11,267$ 11,830$ 12,422$ 13,043$ Engineering Manager 10,731$ 11,267$ 11,830$ 12,422$ 13,043$ Public Works Maintenance Manager 10,459$ 10,982$ 11,531$ 12,108$ 12,713$ Senior Civil Engineer 10,459$ 10,982$ 11,531$ 12,108$ 12,713$ Principal Management Analyst 10,372$ 10,891$ 11,435$ 12,007$ 12,607$ Financial Services Manager 10,372$ 10,891$ 11,435$ 12,007$ 12,607$ Accounting Manager 9,878$ 10,372$ 10,891$ 11,435$ 12,007$ Sr. Systems Analyst 9,113$ 9,569$ 10,047$ 10,550$ 11,077$ Senior Management Analyst 9,113$ 9,569$ 10,047$ 10,550$ 11,077$ Management Analyst II 9,037$ 9,488$ 9,963$ 10,461$ 10,984$ Associate Civil Engineer 9,037$ 9,488$ 9,963$ 10,461$ 10,984$ Building and Vehicle Maintenance Manager 9,013$ 9,464$ 9,937$ 10,434$ 10,956$ Parks Maintenance Manager 9,013$ 9,464$ 9,937$ 10,434$ 10,956$ Public Works Maintenance Superintendent 9,013$ 9,464$ 9,937$ 10,434$ 10,956$ Recreation Manager 9,013$ 9,464$ 9,937$ 10,434$ 10,956$ Senior Accountant 8,868$ 9,311$ 9,777$ 10,266$ 10,779$ Senior Planner 8,768$ 9,207$ 9,667$ 10,150$ 10,658$ Senior Human Resources Analyst 8,651$ 9,083$ 9,538$ 10,014$ 10,515$ Associate Planner 8,351$ 8,768$ 9,207$ 9,667$ 10,150$ Human Resources Manager 8,351$ 8,768$ 9,207$ 9,667$ 10,150$ Management Analyst I 8,196$ 8,606$ 9,037$ 9,488$ 9,963$ Assistant Engineer 8,196$ 8,606$ 9,037$ 9,488$ 9,963$ Assistant Planner 7,574$ 7,953$ 8,351$ 8,768$ 9,207$ Junior Engineer 7,434$ 7,806$ 8,196$ 8,606$ 9,037$ Accountant II 7,296$ 7,660$ 8,043$ 8,446$ 8,868$ Human Resources Analyst 7,167$ 7,525$ 7,902$ 8,297$ 8,712$ Technology Analyst II 7,167$ 7,525$ 7,902$ 8,297$ 8,712$ Deputy City Clerk 7,046$ 7,399$ 7,769$ 8,157$ 8,565$ Communications Manager 7,046$ 7,399$ 7,769$ 8,157$ 8,565$ Police Records Supervisor 6,984$ 7,333$ 7,700$ 8,084$ 8,489$ Accountant I 6,617$ 6,948$ 7,296$ 7,660$ 8,043$ Management Assistant to the City Manager 6,506$ 6,831$ 7,172$ 7,531$ 7,908$ Management Coordinator 6,506$ 6,831$ 7,172$ 7,531$ 7,908$ Records Analyst II 6,391$ 6,711$ 7,046$ 7,399$ 7,769$ Technology Analyst I 6,191$ 6,501$ 6,826$ 7,167$ 7,525$ Payroll Technician 6,191$ 6,501$ 6,826$ 7,167$ 7,525$ Management Assistant 5,901$ 6,196$ 6,505$ 6,831$ 7,172$ Human Resources Technician 5,901$ 6,196$ 6,505$ 6,831$ 7,172$ Records Analyst I 5,797$ 6,087$ 6,391$ 6,711$ 7,046$ AFSCME - Maintenance Unit
Monthly

46 City of Foster City / Estero Municipal Improvement District FY 2021-2022 Pay Plan
Effective January 01, 2022
Hourly
Position Step 1 Step 2 Step 3 Step 4 Step 5
Monthly
Public Works Lead Maintenance Worker 6,621$ 6,952$ 7,299$ 7,664$ 8,047$ Building Lead Maintenance Worker 6,500$ 6,825$ 7,166$ 7,524$ 7,901$ Parks Lead Maintenance Worker 6,500$ 6,825$ 7,166$ 7,524$ 7,901$ Mechanic I 6,425$ 6,746$ 7,083$ 7,438$ 7,810$ Building Maintenance Worker II 6,119$ 6,425$ 6,747$ 7,084$ 7,438$ Public Works Maintenance Worker II 6,005$ 6,305$ 6,621$ 6,952$ 7,299$ Parks Maintenance Worker II 5,895$ 6,190$ 6,500$ 6,825$ 7,166$ Equipment Maintenance Worker 5,828$ 6,119$ 6,425$ 6,746$ 7,083$ Building Maintenance Worker I 5,550$ 5,828$ 6,119$ 6,425$ 6,747$ Public Works Maintenance Worker I 5,447$ 5,719$ 6,005$ 6,305$ 6,621$ Parks Maintenance Worker I 5,347$ 5,615$ 5,895$ 6,190$ 6,500$ Public Works Maintenance Worker 4,940$ 5,187$
Parks Maintenance Worker 4,850$ 5,093$
AFSCME - General Unit
Plans Examiner 9,490$ 9,964$ 10,462$ 10,986$ 11,535$ Sr. Bldg Inspector 8,607$ 9,038$ 9,490$ 9,964$ 10,462$ Building Inspector 7,807$ 8,198$ 8,607$ 9,038$ 9,490$ Sr. Engineering Technician 6,926$ 7,272$ 7,636$ 8,018$ 8,418$ Recreation Coordinator II 6,843$ 7,185$ 7,544$ 7,921$ 8,317$ Social Media / Communitcation Assistant 6,506$ 6,831$ 7,172$ 7,531$ 7,908$ Administrative Assistant II 6,341$ 6,658$ 6,991$ 7,341$ 7,708$ Recreation Coordinator I 6,206$ 6,517$ 6,843$ 7,185$ 7,544$ Code Enforcement Officer II 6,196$ 6,506$ 6,831$ 7,172$ 7,531$ Senior Accounting Specialist 5,840$ 6,132$ 6,439$ 6,761$ 7,099$ Administrative Assistant I 5,752$ 6,039$ 6,341$ 6,658$ 6,991$ Sr. Comm. Services Officer 5,620$ 5,901$ 6,196$ 6,506$ 6,831$ Code Enforcement Officer I 5,620$ 5,901$ 6,196$ 6,506$ 6,831$ Accounting Specialist 5,562$ 5,840$ 6,132$ 6,439$ 6,761$ Building Services Coordinator 5,550$ 5,828$ 6,119$ 6,425$ 6,747$ Police Records Specialist 5,479$ 5,753$ 6,041$ 6,343$ 6,660$ Building Permit Technician 5,479$ 5,753$ 6,041$ 6,343$ 6,660$ Office Assistant II 5,084$ 5,338$ 5,605$ 5,885$ 6,180$ Office Assistant I 4,611$ 4,842$
FCPOA
Police Sergeant 10,456$ 10,979$ 11,527$ 12,104$ 12,709$ Police Corporal 9,553$ 10,031$ 10,533$ 11,059$ 11,612$ Police Dispatch Supervisor 8,800$ 9,240$ 9,702$ 10,187$ 10,697$ Police Officer 8,651$ 9,084$ 9,538$ 10,015$ 10,515$ Lead Police Dispatcher 8,303$ 8,718$ 9,154$ 9,612$ 10,092$ Police Officer Recruit 7,847$ 8,239$
Police/Fire Dispatcher 7,531$ 7,907$ 8,303$ 8,718$ 9,154$ Hourly / Part-Time / Seasonal
Building Services Coordinator Assistant 17.21$ 17.81$ 18.44$ 19.08$ 19.75$ Recreation Leader III 17.21$ 17.81$ 18.44$ 19.08$ 19.75$ Recreation Leader II 16.07$ 16.63$ 17.21$ 17.81$ 18.44$ Building Serv.Assistant 15.00$ 15.53$ 16.07$ 16.63$ 17.21$ Clerical Assistant 15.00$ 15.53$ 16.07$ 16.63$ 17.21$ Recreation Leader I 15.00$ 15.53$ 16.07$ 16.63$ 17.21$ Department Intern 15.00$ 30.00$
Videographer 20.00$ 30.00$
Hourly

47 City of Foster City
Estero Municipal Improvement District
Job Specification
DEFINITION:

Under administrative direction of the City Manager
, is responsible for the overall planning,
organizing, staffing, directing and evaluation of activities of the Parks & Recreation Departments; and does other related work as required.

IMPORT
ANT AND ESSENTIAL DUTIES:

Plans, coordinates, administers reviews and evaluates a comprehensive program of recreational and parks activities. Formulates general policies, reviews specific policies and procedures prepared by staff, and approves all departmental policies, practices and operating procedures.

Supervises the departmental personnel administration including training, employee relations, performance reports, salary increases and discipline. Is responsible for the preparation of the annual budge; analyzes special problem areas; reviews preliminary budges with staff; determines fund allocations; represents the department in budget hearings. Handles requests for facilities use requiring special consideration; resolves difficult problems on fees, damages and contract violations. Serves as secretary to the Recreation Committee; informs the committee on personnel and operational activities; coordinates agenda preparation and committee meetings. Works with citizen and other public groups and with other public agencies to bring about coordinated, effective use of public parks and recreation areas. Supervises the making of studies and reports, including advance planning, capital improvements, fund allocations and other special activities.

JOB-RELA
TED QUALIFICATIONS:

Knowledge, Skills and Abilities:

Knowledge of:

The philosophy, trends, principles and techniques of community recreational and parks maintenance services administration. The principles, practices and methods used in the field of administration. Program planning techniques related to recreation planning. The principles of personnel management, supervision and training. Budgeting techniques. Public facility management, operation and maintenance.

Ability to:

Apply management principles and techniques to the solution of various problems; meet and deal effectively with a variety of community, private and governmental groups and individuals; comprehend major policy, operational and personnel problems and draw valid conclusions; plan and organize work effectively; make decisions at the department head level; evaluate the Published on Foster City California (
https://www.fostercity.org)
Parks And Recreation Director
ATTACHMENT 6
48 effectiveness of departmental activities, and recommend and implement changes as necessary; supervise professional and clerical personnel and direct the work of others. Resolve differences between persons of conflicting interests; effectively communicated, orally and in writing.

EDUCATION AND TRAINING GUIDELINES:

Any combination equivalent to experience and education that could likely provide the required knowledge, skills and abilities would be qualifying. A typical way would be:

Education: Graduation from a recognized college or university with a B.S. or B.A. degree in recreation administration, public administration or other related field of specialization.

Experience: Five years of experience which would demonstrate application of the knowledge, skills and abilities listed.

LICENSES, CERTIFICATES, REGISTRATION:

Licenses: Possession of a valid California Class C Driver's License.

Source URL: https://www.fostercity.org/hr/page/parks-and-recreation-director 49 DATE: February 28, 2022

TO:

Mayor and Members of the City Council
President and Members of the Estero Municipal Improvement District (EMID) Board of Directors

FROM: Kevin Miller, Interim City Manager
Jennifer Phan, Interim Deputy City Manager
Edmund Suen, Finance Director

SUBJECT: POLICY DIRECTION REGARDING PREPARATION OF THE FY 2022-2023 ANNUAL BUDGET AND FIVE-YEAR FINANCIAL
PLAN

RECOMMENDATION
It is recommended that the City Council/EMID Board (City and EMID are hereinafter referred to as “City”) by Minute Order, provide policy direction relative to the development of the FY 2022-2023 Annual Budget and Five- Year Financial Plan.

EXECUTIVE SUMMARY
The City’s General Fund and other funds (including Special Revenue Funds, Capital Improvement Funds, Water and Wastewater Enterprise Funds, and Internal Service Funds) are critical in ensuring reliable service delivery funded through those resources. As indicated in the Mid-Year Financial Report discussed earlier this evening, the initial budget forecasts a $2.07 million structural deficit. However, after applying the 1st tranche of American Rescue Plan Act (ARPA) relief monies (for the recovery of loss revenues from the pandemic), a $2.32 million General Fund (Funds 001 to 003) surplus is projected at year end. As of June 30, 2021, General Fund Reserves totaled 50 $52.98 million, which is $4.33 million above operating expenditures of $48.65 million as approved in our FY 2021-2022 adopted budget. The $4.33 million (i.e. Rollover Surplus) may be used for various one-time expenditures including, but not limited to unfunded pension liability, CIP projects, and the strengthening of City reserves (e.g. Facilities Replacement Fund). At the January 31, 2022 Special Meeting, the City Council authorized via Minute Order No. 1832 to rebuild the Recreation Center with a not-to-exceed build- to-budget of $55 million. Direction was also given to use $36 million from the Capital Asset Acquisition and Replacement Fund (CAAR Fund) and $19 million from General Fund Reserves for this project. Staff plans to bring forth a Recreation Center Project timeline update as well as a resolution to formalize a budget appropriation at the March 7, 2022 City Council Meeting.

As part of the budget development process, the City Council has had a long held principle in remaining committed to providing excellent service to the community while maintaining its ability to address unforeseen operating or capital needs, unfunded pension liabilities, unexpected fiscal hardships (such as local disasters), and economic downturns. The COVID-19 pandemic has caused a contraction of economic activity, specifically declines in hotel occupancy, business license tax, sales tax, and recreation programs/rentals, each of which has adversely impacted General Fund revenues for the City.

With this in mind, City staff seeks policy direction in several areas as outlined in the Analysis section. Once policy direction is received, City staff will proceed with preparing the FY 2022-2023 budget in accordance with the budget schedule shown at the end of the report.

BACKGROUND
The City Council’s policy direction for the last several years may be summarized in two key points:

1. Achieve a General Fund balanced budget (revenues meeting or exceeding expenditures net of transfers) without the use of reserves.

2. Maintain reserves above the City Council’s General Fund reserve policy of 33-1/3% to 50% (4 to 6 months) of annual operating expenditures; this has been informally established in recent years as 100% reserves.

City staff will prepare an updated Five-Year Financial Plan as part of the FY 2022-2023 Preliminary Budget. City staff believes that given the current economic conditions and projected costs associated with maintaining a high service level to the community, immediate need to address state-mandated impacts around housing, rebuild of the Recreation Center, increase personnel 51 costs from year two of the labor MOUs, fiscal impacts from the completion of the classification and compensation studies, anticipated adoption of a pension liability reduction policy, personnel exception requests under consideration by the Interim City Manager, and uncertainty regarding the State’s appetite to provide a permanent fix to Property Tax in Lieu of Vehicle License Fee revenues, the City Council may want to consider revenue measure options this November to minimize/cure the anticipated structural deficits over the five-year financial forecast period.

ANALYSIS
This staff report will identify various alternatives and policy options that the City Council may consider in ensuring a balanced budget for FY 2022-2023 and in the five-year financial forecast. The direction that the City Council provides will determine the level of services provided to this community in the context of maintaining the sustainable financial and economic vibrancy of the City and the community.

Policy Considerations

There are six primary policy considerations that the City Council will want to consider in this budget cycle. While this may not be an exhaustive list, it represents key policy considerations that City staff believes are important in establishing sound fiscal policy for the future of the City’s operations.

1. Service Level Expectations

2. Revenue Models

3. Employee Compensation Policies

4. Long-Term Capital Improvement Project Funding

5. Funding Internal Service Funds

6. Reserve Policy
These various policy considerations are discussed below as a means of starting the conversation subject to City Council and City staff dialogue at the Budget Study Session.

1. Service Level Expectations

Defining the types and levels of services expected in a given year includes a process of public engagement, understanding current services, identifying the City’s mission, long-term vision, and goals of the community. Based on the 52 goals established by the City Council, the City Manager identifies the resources required to deliver services, how best to organize those resources to achieve the City Council’s vision for the community and presents those recommendations in the Preliminary Budget for City Council review, consideration, and direction. In a service-oriented organization such as a city, it takes staff to provide services. In fact, Foster City’s personnel costs represent approximately 60.9% of the General Fund annual operating budget (excludes Fire personnel which now belong to the San Mateo Consolidated Fire Department JPA and counted as contract services). As important as it is for a city to invest in its physical capital, it is just as important for a city to ensure it is investing appropriately in its human capital and to determine what is the proper level of staffing and the necessary skill sets required to deliver on the city’s mission. City staff is currently evaluating potential needs for additional personnel and resources necessary to accomplish tasks related to the established priorities.

In FY 2021-2022, services are being provided by 164 FTE (Full-Time Equivalent) City employees and 2.71 partially benefited and 12.62 unbenefited part-time/seasonal staff. For the FY 2022-2023 Budget, the City will evaluate the current level of staffing to meet City Council’s strategic directives in the six (6) City Council Value/Priority Areas, specifically the key projects/initiatives that were reconfirmed at the Vision & Policy Summit on January 12, 2022, and to continue to provide excellent core services to the community. In a separate item on today's meeting agenda, a report is provided on an assessment of the City's organizational structure, as well as a preliminary overview of proposed personnel/staffing exceptions and associated budgetary cost impacts as they relate to the maintenance of high service levels to the community. In that same report, staff is also requesting funding in order to immediately restore and fill a Parks & Recreation director position in the current fiscal year (FY 2021-2022). The personnel/staffing exceptions presented are those conditionally approved by the Interim City Manager to-date. A detailed line item budget will be submitted for City Council review at the Budget Study Session on May 9, 2022 and will ultimately be approved concurrently with adoption of the City budget which is scheduled for June 20, 2022.

2. Revenue Models

Approximately 91.3% of the City’s General Fund budgeted revenues (excluding one-time ARPA relief monies) come from taxes that are set in accordance with state or municipal law that, under the provisions of 53 Proposition 218, require voter approval to be modified. Tax measures, such as the hotel Transient Occupancy Tax (TOT) measure in November 2018, and the business license tax measure in November 2013, were taken to the voters and approved. City staff plans to provide an informational staff report at the March 7, 2022 City Council Meeting to elaborate on Business License Tax, TOT, and Sales Tax enhancement options as potential alternatives to minimize/eliminate our anticipated General Fund structural deficits in the Five-Year Financial Plan. Other concepts such as business improvement districts, assessment districts, and other models of assessing a tax on some or all property owners within the city are options available through State law, but have not been identified as necessary in the last 20+ years.

The other 8.7% of General Fund revenues are based upon City Council action, typically in the form of a resolution, and usually after a public hearing.

A brief discussion of the types of taxes and fees imposed by the City follows:
Transient Occupancy Tax (TOT) - A TOT measure was last taken to the voters in November 2018 and was approved. It raised the TOT rate from 9.5% to 12.0% bringing it in line with many jurisdictions in San Mateo County. Several agencies in San Mateo County are either already above or currently at a TOT rate of 12%. Should the City Council want to increase the TOT rate in the future, the ballot measure may be an unrestricted general tax that can be placed at the time of a regularly scheduled election (on November of even numbered years, e.g. November 2022).

Franchise Fees– Fees charged to utility or service providers for the privilege of providing services in the community using the City’s rights of way are known as Franchise Fees. These fees are typically within the purview of the City Council to change, but in some cases are dictated by federal or state law. Examples of these fees that the City currently collects are as follows:
oCable / Video Franchise – Comcast and AT&T UVerse pays the City the federally-allowed maximum franchise fee of 5% of gross revenues.
oGas and Electric Franchise – The existing franchise agreement with PG&E dates back to 1971, which was adopted as an
ordinance. Franchise fees are established by state law in the Public Utilities Code (Section 6231) for which the franchise fee rates are the greater of 2% of gross receipts based on usage of the rights of way for transmission purposes, or 1% of the gross 54 revenues derived within the community. These rates are not changeable through a local franchise agreement. As such, there is no potential for the City to extract greater franchise fees from PG&E.
oSolid Waste Franchise - The City of Foster City entered into a franchise agreement with Recology San Mateo County for
collection of solid waste, recyclables, and organic materials effective January 1, 2011 and the City Council approved an Amended and Restated Franchise agreement in November 2017 that went into effect on January 1, 2021. On November 15, 2021, the City Council approved an increase to the 2022 collection rates for general services and “unscheduled services” of 4.5% and 1.947%, respectively, over the 2021 rates. The franchise fee rate can be established by City Council resolution during the term of the current franchise agreement. While the franchise rate can legally be set as high as the City wants, practically speaking the franchise fees are passed along to customers in their bills. As such, there is the need to consider the impact that any such fees may have on customers’ bills.
oFees for Services – The City charges fees to the community based on the costs of services provided. These fees are documented in the City’s Master Fees & Charges Schedule. The Master Fees & Charges schedule is approved annually by the City Council, and individual fees may be amended from time to time during a fiscal year. Such fees include building permits, planning charges, recreation programs, facilities rentals, police reports, fire inspections (Foster City collects fees on behalf of San Mateo Consolidated Fire Department), encroachment
permits, park-in-lieu fees, and subscription fees for CalOpps, etc.

The City Council has the authority to change these fees at its discretion. However, there must be a nexus to the costs of the provision of those services.
Water and Wastewater Rates– A subset of the Fees for Services mentioned above are the rates established for water and wastewater ratepayers in Foster City (and the 94404 portion of San Mateo for water). The revenues and the costs associated with providing those services are accounted for in Enterprise Funds for which there are strict guidelines in State law that specify that the rates must be directly relevant to the costs provided by those services. Those rates cannot subsidize other non-Enterprise fund uses. The District Board has the 55 authority to establish these rates, which are typically set based upon annual rate studies. Moreover, the District may establish rate- smoothing models to smooth rate increases over time based on planned/projected long-term costs such as significant capital improvement projects.
oWater Rates - The District currently uses a rate model for water customers that implements two types of charges: a fixed cost is established as a meter charge based on the meter size provided to a property for the availability of water service to that property; the volumetric charge is established based on the consumption of water using the meter charge plus consumption as the base rate and creating a second tier by adding conservation program charges. The second tier applies directly to residential units and is implemented through a water budget rate structure for irrigation customers. Revenue generated from the second tier charges are used to fund water conservation programs. Commercial
customers pay a blended consumption rate that includes a conservation program component.
oWastewater Rates – These rates are implemented based on the customer type: residential customers are charged a fixed cost based on the type of residential unit (single-family vs. multi- family); commercial customers are charged a variable cost based upon the amount of water consumed by their business and the wastewater strength category for the business.
Concession Agreements – The City enters into concession agreements with private companies to provide recreation services using City parks or other amenities. These concession agreements are typically structured on a percentage-of-revenue basis whereby the City receives a “cut” of the revenues generated by the concessionaire. The City Council has the authority to establish concession agreements and their revenue structures by the agreements entered into with those organizations.

3. Sustainable Employee Compensation Models

In the winter of 2021, the City entered into two-year agreements with ASFCME, FCPOA, and the unrepresented management unit retroactive July 1, 2021. A 4% wage increase was approved for the 1st year and the 2nd year adjustment is based on the CPI-U as measured for April 2022. The Human Resources Department undertook a citywide Classification Study as well as a 56 citywide Compensation Sudy; the results of each will help frame a City Council compensation philosophy/policy later this fiscal year. New labor negotiations are anticipated to commence in December 2022/January 2023.

4. Long-Term Capital Improvement Project (CIP) Funding

Prior City Councils approved the implementation of a long-term capital improvement project funding model whereby annual transfers from the City’s General Fund to the City’s Capital Investment Fund are made in order to ensure that long-term capital improvement needs are funded.

The City reviews its annual CIP funding needs on an annual basis as part of the Long-Term Capital Improvement Project funding analysis, and will do so again at the March 28, 2022 budget study session. Based on direction from the City Council, the long-Term model will be expanded from a 10-year to a 15-year outlook. The City has had a philosophy of “pay as you go” with respect to its funding of capital improvements.

The City Council created a Capital Asset Acquisition and Replacement Fund (CAAR Fund) for the acquisition of new capital assets and construction/replacement of significant assets. The proceeds from the sale of the North Peninsula Jewish Campus and the sale of the 15-acre site are deposited into this fund. The fund balance as of June 30, 2021 is approximately $43.5 million, of which $7 million has been earmarked for 22 workforce housing apartment units in the Pilgrim Triton Phase C project expected to be completed by the 4th quarter of FY 2021-2022. At the January 31, 2022 meeting, the City Council unanimously authorized by minute order to use $36 million of the CAAR Fund for the rebuild of the $55 million build-to- budget Recreation Center (the remaining $19 million coming from General Fund reserves). Per City Resolution No. 2012-75, a 4/5ths vote of the City Council is required to expend those funds.

Other capital improvement funding options could include the use of debt financing for the replacement of long-term capital assets. In fact, the City/District has used debt financing the Levee Protection Planning and Improvements project (Levee Project) as well as the Wastewater Treatment Plant project (WWTP Project) that is jointly owned by San Mateo and Foster City. A General Obligation Bond (GO Bond) ballot measure was passed by the voters on the June 5, 2018 ballot and $85 million of bonds were issued in August 2020 to fund the Levee Project. With regards to the WWTP Project, the District and the City of San Mateo established a Joint Powers Financing 57 Authority (JPFA) whereby both agencies work cooperatively towards common financings. Revenue bonds were issued jointly in June 2019, with EMID's portion being $33.82 million plus $6.58 million in bond premiums. In November 2020, EMID received formal approval of a $66.86 million, 1.16% 30 year loan from the Environmental Protection Agency’s (EPA) Water Infrastructure Finance and Innovation Act (WIFIA) program. On July 1, 2021, $62.76 million of 0.47% 4-year revenue notes were issued to capture the low interest rate market conditions. Foster City and San Mateo are currently negotiating with the State Water Resources Board for a State Revolving Loan funds that if approved would provide further financing slightly less than 1% for 30 years.

5. Funding Internal Service Funds

Another example of the City’s conservative fiscal approach is the set-aside of funds to ensure that the City’s self-insurance requirements and equipment needs in the areas of vehicle fleet, technology, buildings and other department-specific equipment are fully funded at the time of replacement.

Currently, equipment replacement costs are being funded at an 85% level, assuming that expenditure savings and interest income will make up the difference when replacement is necessary. The City has set aside $1 million for self-insurance purposes based on its insurance arrangement through Pooled Liability Assurance Network Joint Powers Authority (PLAN JPA), which utilizes a third party administrator to provide pooled liability services to member agencies. The preliminary estimates for general liability and property insurance are projected to increase by 40% in FY 2022-23 and can be attributed to the insurance industry’s nationwide losses over the past several years associated with flooding, wildfires, and other natural disasters. Finally, the City has Internal Service Funds for its Longevity Recognition, post- retirement medical requirements under State law, and compensated absences (e.g., vacation leave, sick leave) payable to employees upon separation of employment.

The establishment and prior funding of internal service funds have been decisions of prior City Councils. It is entirely within the current City Council’s discretion to determine the appropriate level of funding, if any, for the purposes mentioned above.

6. Reserve Policy and Prior Fiscal Year Excess Revenue Rollover 58 The current City Council policy is that the General Fund shall maintain a minimum 33-1/3% to 50% of operating expenditures in its reserves (in essence, 4 to 6 months of operating expenditures) for its 5-Year Financial Plan. The City has accumulated over 100% General Fund reserve levels over the past few years and utilized surpluses above that level for one-time expenditures, including paying down its CalPERS unfunded accrued liability, enhancing its reserves in its City CIP Fund and Building Maintenance Internal Service Fund, and establishing a Facilities Replacement Fund. As discussed earlier in this report, the City Council authorized using $19 million of General Fund reserves ($48.6 million, excluding $4.3 million of rollover surplus as of June 30, 2021) for the rebuild of the Recreation Center. Even after setting aside this amount, General Fund reserves are still well above the 50% level. Reserves have also been established in the Water and Wastewater Operating Funds equal to 25% of annual operating expenses. In the City Capital Investment (CIP) fund, the Water CIP Fund, and Wastewater CIP Fund Finally, fixed-amount reserve thresholds have been established at $2 million each.

Policy Assumptions and Questions
The six areas identified above require policy direction from the City Council such that the City Manager has the direction necessary to prepare a preliminary budget for City Council consideration. If, in the course of dialogue at this Budget Study Session, there are other policy areas identified that require direction, it would be helpful for the City Council to identify those policy areas and the direction necessary.

It is recommended that the City Council confirm the following assumptions or otherwise provide policy direction to the City Manager regarding the following:

1.Service Level Expectations – Unless directed otherwise, the preliminary budget projections will assess the current level of staffing for FY 2022-2023 to meet City Council’s strategic directives and continue to provide the same level of services to the community. A report providing an organizational assessment , as well as a preliminary overview of proposed personnel/staffing exceptions and associated budgetary cost impacts as they relate to the maintenance of high service levels to the community is a separate item on today's meeting agenda. The personnel/staffing exceptions presented are those conditionally approved by the Interim City Manager to-date. A detailed 59 line item budget will be submitted for City Council review at the May 9, 2022 Budget Study Session and will ultimately be approved concurrently with adoption of the City budget which is scheduled for June 20, 2022.

2.Sustainable Employee Compensation Policies – Unless directed otherwise, for the preliminary budget, personnel services costs will include a 5% wage increase (the labor agreements call for a range of no less than 3% and no more than 5% as measured by the April 2022 CPI-U) placeholder pending the actual April 2022 CPI-U which is not scheduled for release until mid-May, 2022.

3.Long-Term Capital Improvement Project Funding – The current funding strategy entails a detailed analysis of the long-term capital improvement project funding needs based on a 15-year forecast. This strategy assumes a “pay as you go” philosophy that does not anticipate the use of debt financing except as noted with the Levee Protection Planning and Improvements Project (CIP 327-657) and the Wastewater Treatment Plant Project (CIP 455-652). City staff expects to provide the long-term capital improvement project funding analysis to the City Council at its March 28, 2022 Budget Study Session. With the exception of the Levee Improvements and Wastewater Treatment Plant projects currently in progress, does the City Council agree that a “pay as you go” funding model be employed that proactively funds long-term capital improvement projects from existing resources and operating transfers into capital improvement reserves?

4.Funding Internal Service Funds – The internal service funds analyses are also scheduled to be presented at the March 28, 2022 Budget Study Session. In anticipation of that session, there are three policy considerations identified for City Council consideration:

a. Equipment Replacement Funding – In regards to equipment related replacement funds (vehicle, equipment, information technology and building), the current funding strategy employs a “pay as you go” philosophy of proactively setting aside funds for replacements such that full funding of replacements is available at the time an asset is replaced. This is achieved by ongoing transfers from operating budgets at an amount equal to 85% of the required contribution, and the use of expenditure savings in those funds as well as interest income to make up the difference. The preliminary FY 2022-2023 budget projections 60 continue this philosophy. Are there other funding methods that the City Council wishes to explore or employ in regards to the use of these funds?

b. Unfunded Obligations – The City typically performs an actuarial analysis of its Longevity Recognition defined benefit liability and Public Employees' Medical and Hospital Care Act (PEMHCA) retiree medical liability bi-annually. As of June 30, 2021, these liabilities were $3.94 million and $11.08 million respectively. The City continues to maintain internal service funds for both the Longevity Recognition and PEMHCA retiree medical funds on a cash benefit basis. As of June 30, 2021, the balance of these Funds were $2.49 million and $6.03 million respectively. While City Councils have previously declined to establish an Other Post Employment Benefit (OPEB) irrevocable trust for its PEMHCA liability, City staff is aware that San Mateo Consolidated Fire Department is considering to fully fund its Actuarially Determined Contribution (ADC) into a trust. Should the Fire Board be interested in bringing forth this item to each member agency’s City Councils, a FY 2021-2022 budget augmentation of approximately $324,000 is anticipated for Foster City and future contributions (amounts pending) would need to be added to the City’s FY 2022-2023 budget and Five- Year Financial Plan.

c. Self-Insurance Funding – The current policy assumes that a $1 million self-insurance reserve is maintained in order to provide funding for the self-insured retention component of claims against the City. This level has provided adequate funding the prior years to ensure that funds are readily available to pay claims against the City.

5.Reserve Policy – The current General Fund reserve policy is to maintain a minimum General Fund reserve of 33-1/3% to 50% of annual operating expenditures. The Water and Wastewater Operating Funds have minimum reserve levels of 25% of annual operating expenses, and $2 million reserve levels in each of the City, Water, and Wastewater CIP Funds. Unless directed otherwise, City staff will continue to use this policy in budget projections.

6.Non-Profit Funding– The City Council has previously entertained requests from non-profit organizations for funding. Assuming the City Council wishes to entertain these requests in the FY 2022-2023 Budget, City staff will follow a similar schedule as established in 61 previous years. However, it should be noted that City staff will be seeking City Council policy direction on the non-profit funding process at its regular meeting on March 21, 2022 and expects to propose a slightly modified approach and process. The chart below identifies the important dates of the non-profit funding process milestones.

NON-PROFIT FUNDING PROCESS SCHEDULE
March 21,
2022
City staff seeks City Council policy direction on non-profit agency funding process.

April 1, 2022 City staff provides notice of funding availability and opens the non-profit funding application period.

May 1, 2022 All requests for funding are due from non-profit agencies no later than 5:00 PM.

June 6, 2022 City Council determines funding levels by agency which staff incorporates into the Final FY 2021-2022 Budget document.

June 20, 2022 Final FY 2022-2023 Budget is adopted by the City Council.

July 1, 2022 Non-profit funding program year begins.

7.Water and Wastewater Rates – On March 28, 2022, the City Council and EMID District Board will receive an updated water and wastewater rate study report, including financial projections and preliminary rate recommendations for both enterprises.

Budget Schedule and Next Steps

The following dates and topics have been established in developing the FY 2022-23 annual budget:
Monday, February 28 at 6:30 PM: Mid-Year Financial Review, Council Policy Calendar, and direction for the preparation of the FY 2022-23 preliminary budget and Five-Year Financial Plan.
Monday, March 28 at 6:30 PM: Enterprise Funds, Internal Service Funds, Capital Improvement Projects, Water and Wastewater Rates, Preliminary Master Fee Schedule, and Special Reports.
Monday, April 18 at 6:30 PM: Public Hearing on Master Fee Schedule for FY 2022-23.
62 Monday, May 9 at 6:30 PM: Preliminary Annual Budget and Five-Year Financial Plan (All Funds).
Monday, June 6 at 6:30 PM: Budget Public Hearing and follow-up from prior study sessions, Public Hearing and adoption of Water and Wastewater Rates, and Award of Non-Profit Agency Funding Monday, June 20 at 6:30 PM: Annual Budget Adoption
Thursday, June 30: Annual Budget and Five-Year Financial Plan Publication
Conclusion

The decisions that will be made in the FY 2022-23 Annual Budget process will continue the City’s history of thoughtful stewardship of the public’s resources and establish the path towards our long-term financial health.

On behalf of the City staff, we look forward to working with you in the months ahead as you discuss, deliberate, and decide on the important policy decisions necessary to secure our financial future and that make Foster City that great place where people want to live, work and play.

CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREAS
This item is in alignment with City Council’s Vision and Mission Statements for a "Sustainable Foster City" under the economic sustainability framework.

It is illustrative of the City's commitment to fiscal prudence and responsibility, in delivering a balanced budget, and to promote transparency throughout all its processes.
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