Agenda packet — Foster City City Council, February 27, 2023

CITY OF FOSTER CITY/
ESTERO MUNICIPAL IMPROVEMENT DISTRICT
FOSTER CITY COUNCIL CHAMBERS
620 FOSTER CITY BOULEVARD
FOSTER CITY, CALIFORNIA
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 PROCLAIMED STATES OF EMERGENCY.

THE GOVERNOR OF CALIFORNIA PROCLAIMED A STATE OF EMERGENCY RELATED TO COVID19 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 SO IN PERSON OR BY JOINING THE ZOOM MEETING https://fostercity‐org.zoom.us/j/87333395329PUBLIC COMMENTS WILL BE ACCEPTED BOTH IN PERSON AND 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 in addition to in person. City Councilmembers/District Board and staff will attend in person or via teleconference.

To maximize public safety while still maintaining transparency and public access, members of the public can observe the meeting from home or attend the meeting in person. Below is information on how the public may observe and participate in the meeting.

To Attend the Meeting in Person:

Location: 620 Foster City Blvd, Foster City, California, 94404 To Provide Public Comment in Person:

Members of the public wishing to speak will be asked to fill out a Request to Speak Form. Forms will be accepted until the staff presentation on an agenda item ends, or until the public comment period on non agenda items is closed. For special meetings, public comment is limited to item(s) on the agenda only.

To Observe the Meeting via Teleconference/Video Conference:

To access the meeting by computer / smartphone, go to: https://fostercity‐ org.zoom.us/j/87333395329
To dialin via phone:
16699006833 or
14086380968
And enter Webinar ID: 873 3339 5329
To Participate in the Meeting by Providing Public Comment via Teleconference/Video Conference:

During the Meeting: Live verbal public comments may be made by members of the public joining the meeting via Zoom. Zoom access information is provided above. Use the “raise hand” feature (for those joining by phone, press *9 to “raise hand”) during the public comment period for the agenda item you wish to address. The Zoom Host will call on people to speak by name provided or last 4 digits of phone number for dialin attendees. Please clearly state your full name for the record at the start of your public comment.

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 but will not be read verbally at the meeting. Written public comments submitted by email should adhere to the following:

Clearly indicate the Agenda Item No. or specify “Public” in the Subject Line for items not on the agenda Include the submitter’s full name (Recommended but not required) Written public comments received by 4:00 p.m. the day of the meeting will be provided in their entirety 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.

AGENDA
Monday, February 27, 2023 6:30 PM
SPECIAL MEETING AS CITY COUNCIL/EMID BOARD OF

DIRECTORS

1. CALL TO ORDER

2. PLEDGE OF ALLEGIANCE

3. ROLL CALL
Councilmembers/ex officio EMID Directors Sam Hindi, Stacy Jimenez, Art Kiesel, Patrick Sullivan, and Mayor/President Jon Froomin

4. 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.

5. STUDY SESSION

5.1. 2nd Quarter FY 202223 Financial Update
a) Staff Report
b) Action By Minute Order, Receive and Accept Report

5.2. Preparation of the FY 20232024 Annual Budget and FiveYear Financial Plan
a) Staff Report
b) Action By Minute Order, Provide Policy Direction

6. ADJOURNMENT
The public is invited to attend.

Any attendee wishing special accommodations at the meeting should contact the City Clerk’s Department at (650) 2863250 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) City Council meetings on https://www.fostercity.org/community/page/fctvlivestream:

STREAMED LIVE every 1st and 3rd Monday of the month
City Council meetings ondemand:
https://www.fostercity.org/agendasandminutes

1 CITY OF FOSTER CITY/
ESTERO MUNICIPAL IMPROVEMENT DISTRICT
FOSTER CITY COUNCIL CHAMBERS
620 FOSTER CITY BOULEVARD
FOSTER CITY, CALIFORNIA
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 PROCLAIMED STATES OF EMERGENCY.

To Attend the Meeting in Person:

Location: 620 Foster City Blvd, Foster City, California, 94404 To Provide Public Comment in Person:

To Observe the Meeting via Teleconference/Video Conference:

Written public comments will be posted to the City’s website for review prior to the meeting.

AGENDA
Monday, February 27, 2023 6:30 PM
SPECIAL MEETING AS CITY COUNCIL/EMID BOARD OF

DIRECTORS

1. CALL TO ORDER

2. PLEDGE OF ALLEGIANCE

3. ROLL CALL
Councilmembers/ex officio EMID Directors Sam Hindi, Stacy Jimenez, Art Kiesel, Patrick Sullivan, and Mayor/President Jon Froomin

5. STUDY SESSION

5.1. 2nd Quarter FY 202223 Financial Update
a) Staff Report
b) Action By Minute Order, Receive and Accept Report

5.2. Preparation of the FY 20232024 Annual Budget and FiveYear Financial Plan
a) Staff Report
b) Action By Minute Order, Provide Policy Direction

6. ADJOURNMENT
The public is invited to attend.

Any attendee wishing special accommodations at the meeting should contact the City Clerk’s Department at (650) 2863250 at least 48 hours in advance of the meeting.

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

STREAMED LIVE every 1st and 3rd Monday of the month
City Council meetings ondemand:
https://www.fostercity.org/agendasandminutes

2 CITY OF FOSTER CITY/
ESTERO MUNICIPAL IMPROVEMENT DISTRICT
FOSTER CITY COUNCIL CHAMBERS
620 FOSTER CITY BOULEVARD
FOSTER CITY, CALIFORNIA
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 PROCLAIMED STATES OF EMERGENCY.

To Attend the Meeting in Person:

Location: 620 Foster City Blvd, Foster City, California, 94404 To Provide Public Comment in Person:

To Observe the Meeting via Teleconference/Video Conference:

Written public comments will be posted to the City’s website for review prior to the meeting.

AGENDA
Monday, February 27, 2023 6:30 PM
SPECIAL MEETING AS CITY COUNCIL/EMID BOARD OF

DIRECTORS

1. CALL TO ORDER

2. PLEDGE OF ALLEGIANCE

3. ROLL CALL
Councilmembers/ex officio EMID Directors Sam Hindi, Stacy Jimenez, Art Kiesel, Patrick Sullivan, and Mayor/President Jon Froomin

5. STUDY SESSION

5.1. 2nd Quarter FY 202223 Financial Update
a) Staff Report
b) Action By Minute Order, Receive and Accept Report

5.2. Preparation of the FY 20232024 Annual Budget and FiveYear Financial Plan
a) Staff Report
b) Action By Minute Order, Provide Policy Direction

6. ADJOURNMENT
The public is invited to attend.

Any attendee wishing special accommodations at the meeting should contact the City Clerk’s Department at (650) 2863250 at least 48 hours in advance of the meeting.

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

STREAMED LIVE every 1st and 3rd Monday of the month
City Council meetings ondemand:
https://www.fostercity.org/agendasandminutes

3 DATE: February 27, 2023

TO: Mayor and Members of the City Council President and Members of the Estero Municipal Improvement District (EMID) Board of Directors
VIA: Stefan Chatwin, City/District Manager

FROM: Edmund Suen, Finance Director
DEPARTMENT: Finance
SUBJECT: 2ND QUARTER FY 2022-23 FINANCIAL UPDATE

RECOMMENDATION
It is recommended that the City Council, by Minute Order, receive and accept the report on the 2nd Quarter FY 2022-23 Financial Update.

EXECUTIVE SUMMARY
City staff has prepared the attached Second Quarter FY 2022-23 Financial Update report, also known as the Mid-Year Financial Report. General Fund revenues (Funds 001 to 003) for the six-month period were $35.33 million. Revenue and expenditure projections for the full year are $61.06 million and $57.47 million respectively, inclusive of Transfers in of $21,287 from the Foster City Foundation Fund and Transfers Out of $3.5 million to the City CIP Fund and $9,011 to the Low and Moderate Income Housing Fund, resulting in an estimated $3.61 million surplus. Property Tax revenues, including Educational Revenue Augmentation Fund (ERAF) refunds, are projected to reach $34.45 million. Property tax in lieu of vehicle license fees (VLF) is anticipated to hit $6.80 million with eight verses seven non-basic aid school districts serving as its funding source and the receipt of $2.01 million from the State for its reimbursement of our FY 2020-21 VLF shortfall. Notwithstanding, San Mateo County continues to work with the State for a permanent solution for VLF shortfalls. Staff notes that the State did not include San Mateo County's FY 2021-22 total shortfall of $32.9M (FC's portion is $676,977) in its January 2023 proposed FY 23/24 budget. Transient Occupancy Tax

5.1 5.1 Staff Report

4 (TOT) gains for the six-month period through 12/31/22 was encouraging. As a result, full year projections are now $2.89 million vs. budgeted estimates of $2.46 million. Similarly, sales tax revenues have been revised upwards by $668,000 to $3.84 million as retail, restaurants, and gas stations registered good gains. As the Federal Reserve continues to raise the Discount Rate to tighten money to fight inflation (from

0.25% in March 2022 to 4.75% through February 2023), the City’s investment income is also expected to exceed budgeted estimates.

At the 6-month mark, General Fund (Funds 001 to 003) operating expenditures were $29.68 million, or 55.0% of total FY 2022-23 operating budget. As in previous years, City staff exercised an option to make a $7.51 million prepayment to CalPERS for this year’s mandatory annual unfunded pension liability obligation. The prepayment resulted in a citywide cash savings of $258,000. 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 $2.18 million. Notwithstanding, City staff expects full year General Fund operating expenditures will be well within the City’s operating budget (before Transfers Out) of $53.96 million and once full year staff vacancy savings are tabulated at year end, they will further enhance the General Fund balance. Expenditures of 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 analysis are also provided for those readers desiring more detailed financial information.

CALIFORNIA ENVIRONMENTAL QUALITY ACT
Not Applicable

FISCAL IMPACT
There is no fiscal impact associated with this report.

CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA

5.1 5.1 Staff Report

5 Innovation and Sustainability
ATTACHMENTS:

Attachment 1 - Foster City Financial Update FY 2022-23 Q2 (for the six months ended December 31, 2022)
Attachment 2 - Mid-Year Projections for the Fiscal Year Ended June 30, 2023 Attachment 3 - Comparison of Budget vs. Actual and Prior Year's Revenues (for the six months ended December 31, 2022)
Attachment 4 - Comparison of Budget vs. Actual and Prior Year's Expenditures (for the six months ended December 31, 2022)

5.1 5.1 Staff Report

6 Live, Work & Play
in Foster City
City of Foster City
Financial Services Dept.

The combination of $4.05 million of American Rescue Plan Act (ARPA) relief funds and improved revenues are expected to pull the City’s General Fund from a deficit to a projected surplus of $3.61 million by year-end The FY 22/23 adopted General Fund budget (Funds
001 to 003) included a projected structural deficit
of $3.94 million, inclusive of a $3.5 million transfer
out to the City’s Capital Improvement
Projects Fund. An improvement in several
r
evenue seg-ments in t he 1st half of the fiscal
year combined with the July receipt of the final
tranche of Ameri-can Rescue Plan Act (ARPA)
relief monies for $4.05 m illion (for the
recovery of loss revenues from COVID-19) is
prompting a projected $3.6 1 million General
Fund surplus by year end.

Total General Fund Revenues (Funds 001 to 003)
for t he 6 month period were $35.33 million
com-pared to $30.12 million in FY 21/22.

Property tax revenues including ERAF refunds
were $18.91 mil-l ion com pared t o $17.5 6 million
in the prior year. Property tax in Lieu of Vehicle
License Fes surged from $1.81 million to $4.41.
million as source fund-ing increased from seven
to eight non-basic aid school distr icts and the
City received $2.01 million for its FY 20/21
shortfall. However, in an ominous sign, the State
did not include San Mateo County's FY 2 1/22
total shortfall of $32.9M (FC's portion is
$676,977) in its proposed FY 2 3/24 budget. Sales
tax improved by $300,000 to $1.8 4 million
com-pared to the prior year. Transient Occupancy
Tax-es continued its recovery, improving
from $840,000 to $1.56 million. Planning fees
and recre-ation fees saw double digit year-over-
year gains. As the Feder al Reserve cont inued its
money tight-ening stan ce (the discount rate
increased from 0.25% last year to 4.75% through
Feb 2023), staff is projecting a significant
improvement in its invest-ment income earnings.

General Fund expenditures (Funds 001 to 003) t o-
taled $29.68 million or 55.0 % of the annual
budget compared t o last fiscal year’s mark of
$28.53 mil-lion. T he City made 3 quarterly
payments to San Mateo Consolidated Fire for it s
20% shared costs for fire protection and
prevention services. Based on its labor
agreements with the Police Officers Association
and AFSCME as well as its Man age-ment Group
Compensation and Benefit Plan exe-
cuted last fiscal year, the CPI adjusted wage s for city staff increased by 5% in FY 22/23. Labor agreements
are due to expire on 6/30/23, with focus com pleting
the citywide classification and compe nsation studies
and the initiation of labor negotiations.

In August 2022, the City c ompleted the $7 million
purchase of 22 workforce housing units usin g re-
serves from the Capital Asset Acquisition and Re-
placement Fund. The projected FY 22/23 revenues
for the Workforce Housing Fund h as been marked
down by $359,000 to $319,0 00. While 12 of the 22
units have been rented, full lease up of the building
has been slowed. The original estimate was 5 months
to fill the 22 units and due to a multitude of issues,
many units were not ready to rent until after the sec-
ond week of November 2022. The p roperty manage-
ment company estimates it will take an addit ional 3
to 4 months to fill the remaining units due to chang-
ing circumstances of many applicants since the clo-
sure of the waitlist over one year ago and subsequent
need to reopen the waitlist , allow interested house-
holds sufficient time to apply, and to process applica- tions and income certifications.

While Water Enterprise operating revenues are 4.8%
ahead of last year’s pace, staff is reducing the full year projections based on the carryover of last year’s
strong c onservation effor ts. Wastewater Enterprise
Fund operating revenues totaled $10.40 million or
$1.78 million higher than the pr
ior year as base rates
were increased by 14.25% effective July 1, 2022 pri-
marily to fund the WWTP debt service costs.

The City continues to experience staffing loss, includ- ing the January separation of the Public Works Direc-
tor. With an ongoing tight labor mar ket, recruit-
ments remain very challenging. The projected multi-
year structural deficit, pote ntial cost esc alation from the classification and compe nsation study, the nega-
tive 6.1% CalPERS returns last year, high inflation, the State’s posturing in possibly not backfilling the Coun- ty’s VLF shortfalls, and a potential recession this year are some of the major challenges as City staff pre-
pares the FY 23/24 budget and 5-year financial plan .

Foster City Financial
Update FY 22/23 Q2
ATTACHMENT 1

5.1 Attachment 1 Quarterly Financial Report FY22-23 Q2

7 ATTACHMENT 2

CITY OF FOSTER CITY / EMID
Summary of Resources and Requirements by Funds
For the Fiscal Year Ended June 30, 2023
MID-YEAR PROJECTIONS THROUGH JUNE 30, 2023
Fund Balance
July 1, 2022
Estimated
Revenues Transfers In Transfers Out Total Available
Operating
Expenditures
Capital
Expenditures
Total
Requirements
Net Increase
(Decrease) in
Reserves
Fund Balance
June 30, 2023
Capital Assets,
Non-Spendable,
Restricted,
Committed,
Assigned*
Available
Fund Balance
June 30, 2023*
General Funds
001 General Fund Reserve 42,328,905$ 24,180,777$ 36,908,147 $ (4,087,177) $ 99,330,652$ 51,478,952$ - $ 51,478,952$ 13,697,149 $ 47,851,700 $ (175,387) $ 47,676,313$ 002 General Fund-District 1,913,113$ 35,334,034$ - $ (36,908,147)$ 339,000$ 339,000$ - $ 339,000$ 71,903,181$ - $ - $ - $ 003 General Fund-Special Recreation -$ 1,545,487$ 599,453 $ - $ 2,144,940$ 2,144,940$ - $ 2,144,940$ - $ - $ - $ - $ 005 Community Benefits Program Fund 1,260,075$ 27,651$ - $ - $ 1,287,726$ 540,196$ - $ 540,196$ (512,545) $ 747,530 $ - $ 747,530$ 006 DARE 3,098$ 23,073$ - $ - $ 26,171$ 600$ - $ 600$ 22,473$ 25,571 $ - $ 25,571$ 007 Solar Incentive Grant Program 75,818$ 1,708$ - $ - $ 77,526$ 25,000$ - $ 25,000$ (23,292) $ 52,526 $ - $ 52,526$ 008 Employee Rental Assistance Program 60,063$ 1,400$ - $ - $ 61,463$ 58,000$ - $ 58,000$ (56,600) $ 3,463 $ - $ 3,463$ 009 Asset Seizure 22,759$ 1,913$ - $ - $ 24,672$ 22,175$ - $ 22,175$ (20,262) $ 2,497 $ - $ 2,497$ 010 Discretionary Pension Liability Stabilization Fund 91,769$ 2,116$ - $ - $ 93,885$ -$ - $ -$ 2,116$ 93,885 $ - $ 93,885$ 011 Facilities Replacement Fund 2,403,005$ 54,388$ - $ - $ 2,457,393$ -$ - $ -$ 54,388$ 2,457,393$ - $ 2,457,393$ 012 Sustainable Foster City 165,474$ 7,551$ 50,000 $ - $ 223,025$ 132,602$ - $ 132,602$ (75,051) $ 90,423 $ - $ 90,423$ Subtotal General Funds 48,324,079 $ 61,180,098$ 37,557,600 $ (40,995,324) $ 106,066,453$ 54,741,465$ - $ 54,741,465$ 84,991,557 $ 51,324,988 $ (175,387) $ 51,149,601$ Special Revenue Funds
101 Traffic Safety 11,303$ 60,000$ - $ - $ 71,303$ 60,000$ - $ 60,000$ - $ 11,303$ - $ 11,303$ 102 Measure A 4,038,372$ 847,045$ - $ - $ 4,885,417$ -$ 3,170,267$ 3,170,267$ (2,323,222) $ 1,715,150 $ - $ 1,715,150$ 103 Gas Tax (2103, 2105-2107.5) 756,674$ 837,069$ - $ - $ 1,593,743$ 565,500$ 841,777 $ 1,407,277$ (570,208) $ 186,466 $ - $ 186,466$ 104 Park In-Lieu Fees 2,818,645$ 63,937$ - $ - $ 2,882,582$ -$ 745,435$ 745,435$ (681,498) $ 2,137,147 $ - $ 2,137,147$ 105 Measure M -$ 119,300$ - $ - $ 119,300$ -$ 219,300$ 219,300$ (100,000) $ (100,000) $ - $ (100,000)$ 108 SLESF/COPS Grant -$ 115,000$ - $ - $ 115,000$ 105,000$ - $ 105,000$ 10,000 $ 10,000 $ - $ 10,000$ 114 CalOpps.org 353,299$ 446,629$ - $ - $ 799,928$ 490,358$ - $ 490,358$ (43,729) $ 309,570 $ - $ 309,570$ 116 Foster City Foundation 418,501$ 37,681$ - $ (21,287)$ 434,895$ 111,250$ - $ 111,250$ (52,282) $ 323,645 $ - $ 323,645$ 119 SB1 Road Maintenance and Rehabilitation 1,375,033$ 659,417$ - $ - $ 2,034,450$ -$ 1,408,848$ 1,408,848$ (749,431) $ 625,602 $ - $ 625,602$ 122 Low- and Moderate-Income Housing Fund 2,245,719$ 126,828$ 9,011 $ - $ 2,381,558$ 136,320$ - $ 136,320$ (481) $ 2,245,238$ - $ 2,245,238$ 124 City Affordable Housing Fund 531,318$ 29,000$ - $ - $ 560,318$ 543,636$ - $ 543,636$ (514,636) $ 16,682 $ - $ 16,682$ 125 Sustainable Foster City Fund (Discontinued) -$ -$ - $ - $ -$ -$ - $ -$ - $ - $ - $ - $ 127 BAERS (Discontinued) -$ -$ - $ - $ -$ -$ - $ -$ - $ - $ - $ - $ 128 General Plan Maintenance Fund 1,819,646$ 344,511$ - $ - $ 2,164,157$ 842,679$ - $ 842,679$ (498,168) $ 1,321,478 $ - $ 1,321,478$ 129 Construction & Demolition Recycling Fund 690,009$ 75,708$ - $ (50,000)$ 715,717$ 317,000$ - $ 317,000$ (191,292) $ 398,717 $ - $ 398,717$ 130 Technology Maintenance Fund 214,836$ 207,129$ - $ - $ 421,965$ 105,485$ - $ 105,485$ 101,644 $ 316,480 $ - $ 316,480$ 131 SB 1186 Fund 32,105$ 4,749$ - $ - $ 36,854$ 1,300$ - $ 1,300$ 3,449 $ 35,554 $ - $ 35,554$ 132 SMIP Fee Fund 5,163$ 1,222$ - $ - $ 6,385$ 500$ - $ 500$ 722 $ 5,885$ - $ 5,885$ 133 CRV Grant Fund 8,970$ 8,709$ - $ - $ 17,679$ 14,000$ - $ 14,000$ (5,291) $ 3,679 $ - $ 3,679$ 134 Curbside Recycling Fee Fund 217,835$ 24,775$ - $ - $ 242,610$ 25,000$ - $ 25,000$ (225) $ 217,610$ - $ 217,610$ 135 Green Building Fee Fund 6,139$ 865$ - $ - $ 7,004$ 500$ - $ 500$ 365 $ 6,504$ - $ 6,504$ 136 Measure W 1,050,460$ 378,588$ - $ - $ 1,429,048$ 973,500$ - $ 973,500$ (594,912) $ 455,548 $ - $ 455,548$ 137 Commercial Linkage Fee 571,505$ 827,674$ 1,399,179$ -$ - $ -$ 827,674$ 1,399,179$ - $ 1,399,179$ 138 Tenant Relocation Assistance 227,344$ 56,909$ - $ - $ 284,253$ 51,640$ - $ 51,640$ 5,269 $ 232,613$ - $ 232,613$ 139 Workforce Housing 31,132$ 318,757$ - $ - $ 349,889$ 234,300$ - $ 234,300$ 84,457 $ 115,589 $ - $ 115,589$ 140 Equipment Replacement-Workforce Housing -$ 22,191$ - $ - $ 22,191$ -$ - $ -$ 22,191$ 22,191 $ - $ 22,191$ 141 SB 1383 Implementation 47,347$ 991$ - $ - $ 48,338$ 47,314$ - $ 47,314$ (46,323) $ 1,024 $ - $ 1,024$ 142 Park Facilities Impact Fee -$ 467,000$ - $ - $ 467,000$ 467,000$ - $ 467,000$ - $ - $ - $ - $ 143 Public Safety Impact Fee -$ 72,000$ - $ - $ 72,000$ 72,000$ - $ 72,000$ - $ - $ - $ - $ 144 Transportation Impact Fee -$ 230,000$ - $ - $ 230,000$ 230,000$ - $ 230,000$ - $ - $ - $ - $ Subtotal Special Revenue Funds 17,471,355 $ 6,383,684$ 9,011 $ (71,287)$ 23,792,763$ 5,394,282$ 6,385,627 $ 11,779,909$ (5,315,927) $ 12,012,854 $ - $ 12,012,854$ (Continued on next page)
Fund

5.1 Attachment 2 - Mid-Year Projections for FY ended June 30, 2023  
 
8 ATTACHMENT 2

CITY OF FOSTER CITY / EMID
Summary of Resources and Requirements by Funds
For the Fiscal Year Ended June 30, 2023
(Continued from previous page)
MID-YEAR PROJECTIONS THROUGH JUNE 30, 2023
Fund Balance
July 1, 2022
Estimated
Revenues Transfers In Transfers Out Total Available
Operating
Expenditures
Capital
Expenditures
Total
Requirements
Net Increase
(Decrease) in
Reserves
Fund Balance
June 30, 2023
Capital Assets,
Non-Spendable,
Restricted,
Committed,
Assigned*
Available
Fund Balance
June 30, 2023*
Debt Service Fund
230 Levee Protection Planning's/Improvements 7,667,620$ 3,958,364$ - $ - $ 11,625,984$ -$ 6,378,988$ 6,378,988$ (2,420,624) $ 5,246,996 $ - $ 5,246,996$ Subtotal Capital Projects Funds 7,667,620 $ 3,958,364$ - $ - $ 11,625,984$ -$ 6,378,988$ 6,378,988$ (2,420,624) $ 5,246,996 $ - $ 5,246,996$ Capital Projects Funds
301 Capital Investment - City 78,363,094$ 2,668,222$ 4,627,946 $ - $ 85,659,262$ -$ 11,591,714$ 11,591,714$ (4,295,546) $ 74,067,548 $ (55,560,000) $ 18,507,548 $ 326 Capital Asset Acquisition and Replacement Fund 8,056,572$ 1,585,085$ - $ - $ 9,641,657$ -$ 7,015,009$ 7,015,009$ (5,429,924) $ 2,626,648 $ - $ 2,626,648$ 327 Levee Project Fund 22,387,921$ 270,772$ - $ - $ 22,658,693$ -$ 22,511,272$ 22,511,272$ (22,240,500) $ 147,421 $ - $ 147,421$ Subtotal Capital Projects Funds 108,807,587 $ 4,524,079$ 4,627,946 $ - $ 117,959,612$ -$ 41,117,995$ 41,117,995$ (31,965,970) $ 76,841,617 $ (55,560,000) $ 21,281,617 $ Enterprise Funds
Water Funds
401 Water Revenue 9,553,913$ 17,288,243$ - $ (2,500,000)$ 24,342,156$ 15,571,800$ - $ 15,571,800$ 4,216,443 $ 8,770,356 $ (792,237) $ 7,978,119 $ 405 Capital Investment - Water 26,669,945$ -$ 2,500,000$ 29,169,945$ -$ 7,506,711$ 7,506,711$ (5,006,711) $ 21,663,234 $ (19,552,303) $ 2,110,931 $ 408 Water Equipment Replacement 3,907,547$ 510,436$ - $ 4,417,983$ 342,875$ - $ 342,875$ 167,561 $ 4,075,108$ (161,788) $ 3,913,320 $ 409 Water Connection Fee 1,125,686$ 524,087$ - $ 1,649,773$ -$ - $ -$ 524,087$ 1,649,773$ - $ 1,649,773$ Subtotal Water Funds 41,257,091 $ 18,322,766$ 2,500,000 $ (2,500,000) $ 59,579,857$ 15,914,675$ 7,506,711 $ 23,421,386$ (98,620) $ 36,158,471$ (20,506,328) $ 15,652,143 $ Wastewater Funds
451 Wastewater Revenue 22,698,115$ 20,861,576$ 72,445 $ (13,230,911)$ 30,401,225$ 9,222,485$ - $ 9,222,485$ 24,942,447 $ 21,178,740 $ - $ 21,178,740$ 453 Wastewater Rate Stabilization Fund 2,000,000$ -$ 2,087,125$ (2,087,125) $ 2,000,000$ -$ - $ -$ 4,174,250$ 2,000,000 $ - $ 2,000,000$ 454 San Mateo-Foster City Public Financing Authority Loan (39,284,317)$ -$ 2,087,125$ - $ (37,197,192)$ 1,862,966$ - $ 1,862,966$ 224,159 $ (39,060,158)$ - $ (39,060,158)$ 455 Capital Investment - Wastewater 122,118,883$ -$ 38,139,409$ (69,730) $ 160,188,562$ -$ 40,762,923$ 40,762,923$ (2,553,784) $ 119,425,639$ (115,648,373) $ 3,777,266 $ 456 Wastewater Plant Expansion -$ 2,715$ - $ (2,715)$ -$ -$ - $ -$ 5,430$ - $ - $ - $ 458 Wastewater Equipment Replacement 3,908,835$ 266,126$ - $ - $ 4,174,961$ 359,894$ - $ 359,894$ (93,768) $ 3,815,067$ (1,562,956) $ 2,252,111 $ 459 Wastewater Notes/WIFIA Loan Fund (31,027,890)$ 136,706$ 3,138,000$ (30,133,623)$ (57,886,807)$ 3,144,700$ - $ 3,144,700$ 30,263,629 $ (61,031,507) $ - $ (61,031,507)$ 460 Wastewater Connection Fees 329,365$ 1,208,218$ - $ - $ 1,537,583$ -$ - $ -$ 1,208,218$ 1,537,583 $ - $ 1,537,583$ 461 State Revolving Loan Fund -$ -$ - $ - $ -$ -$ 29,989,399$ 29,989,399$ (29,989,399) $ (29,989,399) $ - $ (29,989,399)$ Subtotal Wastewater Funds 80,742,991 $ 22,475,341$ 45,524,104 $ (45,524,104) $ 103,218,332$ 14,590,045$ 70,752,322 $ 85,342,367$ 28,181,182 $ 17,875,965 $ (117,211,329)$ (99,335,364) $ Subtotal Enterprise Funds 122,000,082 $ 40,798,107$ 48,024,104 $ (48,024,104) $ 162,798,189$ 30,504,720$ 78,259,033 $ 108,763,753$ 28,082,562 $ 54,034,436 $ (137,717,657)$ (83,683,221) $ Internal Service Funds
501 Vehicle Replacement 7,131,701$ 1,887,952$ - $ (327,946)$ 8,691,707$ 2,235,115$ - $ 2,235,115$ (19,217) $ 6,456,592$ (1,550,999) $ 4,905,593 $ 502 Equipment Replacement 8,623,308$ 595,582$ - $ - $ 9,218,890$ 373,100$ - $ 373,100$ 222,482 $ 8,845,790$ (2,268,687) $ 6,577,103 $ 503 Self-Insurance 984,847$ 1,244,229$ - $ - $ 2,229,076$ 1,343,529$ - $ 1,343,529$ (99,300) $ 885,547 $ - $ 885,547$ 504 Information Technology 5,063,953$ 2,678,788$ - $ - $ 7,742,741$ 2,623,392$ - $ 2,623,392$ 55,396 $ 5,119,349$ - $ 5,119,349$ 505 Building Maintenance 7,356,803$ 3,619,225$ - $ (800,000)$ 10,176,028$ 3,748,300$ 3,748,300$ 670,925 $ 6,427,728$ - $ 6,427,728$ 507 Longevity Recognition Benefits 2,544,683$ 287,257$ - $ - $ 2,831,940$ 238,320$ - $ 238,320$ 48,937 $ 2,593,620$ - $ 2,593,620$ 508 PEMHCA Benefits Plan 6,077,496$ 358,480$ - $ - $ 6,435,976$ 229,704$ - $ 229,704$ 128,776 $ 6,206,272$ - $ 6,206,272$ 509 Compensated Absences 3,274,994$ 637,986$ - $ - $ 3,912,980$ 561,036$ - $ 561,036$ 76,950 $ 3,351,944$ - $ 3,351,944$ Subtotal Internal Service Funds 41,057,785 $ 11,309,499$ - $ (1,127,946)$ 51,239,338$ 11,352,496$ - $ 11,352,496$ 1,084,949 $ 39,886,842 $ (3,819,686) $ 36,067,156 $ Agency Fund
604 Successor Agency of Community Development Agency (791,465)$ 284,746$ - $ - $ (506,719)$ 335,997$ - $ 335,997$ (51,251) $ (842,716)$ - $ (842,716)$ 607 Tourism Assessment -$ -$ - $ - $ -$ -$ - $ -$ - $ - $ - $ - $ 608 SMC Fire (1,235)$ 220,860$ - $ - $ 219,625$ 220,860$ - $ 220,860$ - $ (1,235)$ - $ (1,235)$ Subtotal Agency Fund (792,700) $ 505,606$ - $ - $ (287,094)$ 556,857$ - $ 556,857$ (51,251) $ (843,951)$ - $ (843,951)$ Total All Funds 344,535,808 $ 128,659,437 $ 90,218,661 $ (90,218,661) $ 473,195,245 $ 102,549,820 $ 132,141,643 $ 234,691,463 $ 74,405,296 $ 238,503,782 $ (197,272,730) $ 41,231,052 $ Fund
* Available Balance excludes Capital Assets and Non-Spendable, Restricted, Committed, and/or Assigned Funds, including Prepayme nts, Inventory, Garbage Stabilization Reserve, and unrealized investment gains/losses.

5.1 Attachment 2 - Mid-Year Projections for FY ended June 30, 2023  
 
9 Attachment 3
FY 2022-23 ACTUAL ACTUAL ACTUAL YR OVER YR % OF BUDGET % OF BUDGET ABOVE (BELOW) FY 2022-23 FY 2021-22 FY 2020-21 FAVORABLE % FY 2022-23 FY 2021-22 ADOPTED ANNUAL BUDGET 6 MONTHS 6 MONTHS 6 MONTHS (UNFAVORABLE) INCREASE 6 MONTHS 6 MONTHS Fund BUDGET PROJECTED $ % AS OF 12/31/2022 AS OF 12/31/2021 AS OF 12/31/2020 VARIANCE (DECREASE) AS OF 12/31/2022 AS OF 12/31/2021 GENERAL FUND (FUNDS 001-003)
002 PROPERTY TAXES
SECURED 30,806,100 $ 30,806,100 $ - $ - 15,823,899 $ 14,698,246 $ 14,290,497 $ 1,125,653 $ 7.7% 51.4% 50.4% UNSECURED 1,304,000 $ 1,304,000 $ - $ - 1,123,088 $ 1,110,211 $ 1,233,333 $ 12,877 $ 1.2% 86.1% 72.2% SUPPLEMENTAL 730,600 $ 730,600 $ - $ - 349,556 $ 150,753 $ 237,630 $ 198,803 $ 131.9% 47.8% 33.1% ERAF 1,526,800$ 1,608,573 $ 81,773 $ 5.4% 1,608,573 $ 1,597,263 $ 1,722,039 $ 11,310 $ 0.7% 105.4% 104.6% 002 PROPERTY TAXES (1) 34,367,500$ 34,449,273 $ 81,773 $ 0.2% 18,905,116 $ 17,556,473 $ 17,483,499 $ 1,348,643 $ 7.7% 55.0% 53.7% 001 PROPERTY TAX IN-LIEU OF VEHICLE LICENSE FEE (2) 4,578,800 $ 6,799,485 $ 2,220,685 $ 48.5% 4,407,088 $ 1,808,653 $ 1,619,797 $ 2,598,435 $ 143.7% 96.2% 50.1% 001 OTHER TAXES
SALES AND USE 3,172,000 $ 3,840,000 $ 668,000 $ 21.1% 1,838,846 $ 1,539,169 $ 1,360,822 $ 299,677 $ 19.5% 58.0% 50.0% TRANSIENT OCCUPANCY 2,460,100 $ 2,886,100 $ 426,000 $ 17.3% 1,564,285 $ 839,710 $ 431,554 $ 724,575 $ 86.3% 63.6% 48.7% FRANCHISE 1,259,700 $ 1,259,700 $ - $ - 611,591 $ 576,445 $ 559,165 $ 35,146 $ 6.1% 48.6% 46.7% REAL PROPERTY TRANSFER 304,900 $ 304,900 $ - $ - 106,011 $ 186,369 $ 144,562 $ (80,358) $ (43.1%) 34.8% 66.6% SUBTOTAL 7,196,700 $ 8,290,700 $ 1,094,000 $ 15.2% 4,120,733 $ 3,141,693 $ 2,496,103 $ 979,040 $ 31.2% 57.3% 49.7% 001 LICENSES & PERMITS
BUSINESS LICENSES 1,481,100 $ 1,481,100 $ - $ - 154,593 $ 116,106 $ 106,143 $ 38,487 $ 33.1% 10.4% 8.0% PERMITS 1,881,524$ 1,881,524 $ - $ - 1,046,013 $ 1,279,891 $ 1,054,157 $ (233,878) $ (18.3%) 55.6% 151.3% SUBTOTAL 3,362,624 $ 3,362,624 $ - $ - 1,200,606 $ 1,395,997 $ 1,160,300 $ (195,391) $ (14.0%) 35.7% 60.8% 001 INTERGOVERNMENTAL
GRANTS, REIMBURSEMENTS, ARPA (POST, SB 90, GRANTS) 4,085,520 $ 4,133,040 $ 47,520 $ 1.2% 4,116,873 $ 4,063,605 $ 6,030 $ 53,268 $ 1.3% 100.8% 99.5% 002 HOMEOWNERS PROPERTY TAX RELIEF 100,000 $ 100,000 $ - $ - 46,453 $ 48,040 $ 49,294 $ (1,587) $ (3.3%) 46.5% 48.0% 003 GRANTS -$ 6,039$ 6,039 $ - 6,039 $ - $ - $ 6,039$ - - - SUBTOTAL 4,185,520 $ 4,239,079 $ 53,559 $ 1.3% 4,169,365 $ 4,111,645 $ 55,324 $ 57,720 $ 1.4% 99.6% 98.2%

CHARGES FOR CURRENT SERVICES
001 SERVICE FEES 329,853 $ 440,706 $ 110,853 $ 33.6% 431,785 $ 379,697 $ 241,374 $ 52,088 $ 13.7% 130.9% 72.7% 003 RECREATION AND LEISURE 1,236,508 $ 1,236,508 $ - $ - 867,824 $ 534,762 $ 209,235 $ 333,062 $ 62.3% 70.2% 46.4% SUBTOTAL 1,566,361 $ 1,677,214 $ 110,853 $ 7.1% 1,299,609 $ 914,459 $ 450,609 $ 385,150 $ 42.1% 83.0% 54.6% 001 FINES & FORFEITURES 14,400$ 14,400 $ - $ - 12,863 $ 7,904 $ 3,714 $ 4,959 $ 62.7% 89.3% 27.2%

INTEREST AND RENTALS
INTEREST (3) 513,100 $ 975,732 $ 462,632 $ 90.2% 415,732 $ 72,179 $ 184,572 $ 343,553 $ 476.0% 81.0% 38.7% RENTS & CONCESSIONS 895,691 $ 895,691 $ - $ - 638,016 $ 608,484 $ 334,099 $ 29,532 $ 4.9% 71.2% 68.8% SUBTOTAL 1,408,791 $ 1,871,423 $ 462,632 $ 32.8% 1,053,748 $ 680,663 $ 518,671 $ 373,085 $ 54.8% 74.8% 36.4% OTHER REVENUES 356,100$ 356,100 $ - $ - 156,453 $ 501,294 $ 304,466 $ (344,841) $ (68.8%) 43.9% 78.6% TOTAL GENERAL FUND (FUNDS 001-003) 57,036,796 $ 61,060,298 $ 4,023,502 $ 7.1% 35,325,581 $ 30,118,781 $ 24,092,483 $ 5,206,800 $ 17.3% 61.9% 57.3% 005 GENERAL FUND - COMMUNITY BENEFITS PROGRAM 1,500$ 27,651 $ 26,151 $ 1743.4% 12,251 $ 62,652 $ 414,894 $ (50,401) $ (80.4%) 816.7% 97.0% 006 GENERAL FUND - DARE AND OPIOID SETTLEMENT 10$ 23,073$ 23,063 $ 230630.0% 22,873 $ 4 $ 11 $ 22,869 $ 571725.0% 228730.0% 40.0% 007 GENERAL FUND - SOLAR INCENTIVE GRANT PROGRAM 200$ 1,708 $ 1,508 $ 754.0% 708 $ 125 $ 405 $ 583 $ 466.4% 354.0% 62.5% 008 GENERAL FUND - RENTAL ASSISTANCE 200$ 1,400 $ 1,200 $ 600.0% 600 $ 91 $ 251 $ 509 $ 559.3% 300.0% 45.5% 009 GENERAL FUND - ASSET SEIZURE 1,100$ 1,913 $ 813 $ 73.9% 1,613 $ 34 $ 7,527$ 1,579 $ 4644.1% 146.6% 3.1% 010 GENERAL FUND - PENSION STABILIZATION FUND 400$ 2,116 $ 1,716 $ 429.0% 916 $ 139 $ 14,872$ 777 $ 559.0% 229.0% 55.6% 011 GENERAL FUND - FACILITIES REPLACEMENT 10,500$ 54,388 $ 43,888 $ 418.0% 23,988 $ 3,632 $ 10,062 $ 20,356 $ 560.5% 228.5% 42.2% 012 SUSTAINABLE FOSTER CITY 1,100$ 7,551 $ 6,451 $ 586.5% 4,751 $ 341 $ 956 $ 4,410 $ 1293.3% 431.9% 42.6% TOTAL ALL GENERAL FUND (FUNDS 001-011) 57,051,806 $ 61,180,098 $ 4,128,292 $ 7.2% 35,393,281 $ 30,185,799 $ 24,541,461 $ 5,207,482 $ 17.3% 62.0% 57.5%

SPECIAL REVENUE FUNDS
101 TRAFFIC SAFETY 60,000 $ 60,000 $ - $ - 12,628 $ 25,027 $ 12,088 $ (12,399) $ (49.5%) 21.0% 41.7% 102 MEASURE "A" 761,400 $ 847,045 $ 85,645 $ 11.2% 521,929 $ 464,672 $ 394,146 $ 57,257 $ 12.3% 68.5% 64.5% 103 GAS TAX 828,100$ 837,069 $ 8,969 $ 1.1% 467,766 $ 416,337 $ 410,100 $ 51,429 $ 12.4% 56.5% 48.7% 104 PARK-IN-LIEU FEES 12,400 $ 63,937 $ 51,537 $ 415.6% 28,137 $ 4,261 $ 11,802 $ 23,876 $ 560.3% 226.9% 50.7% 105 MEASURE "M" 109,500 $ 119,300 $ 9,800 $ 8.9% 119,300 $ 1,908 $ 72,845 $ 117,392 $ 6152.6% 108.9% 1.8% 108 SLESF/COPS GRANT 100,000 $ 115,000 $ 15,000 $ 15.0% 104,058 $ 95,929 $ 92,168 $ 8,129 $ 8.5% 104.1% 95.9% 114 CALOPPS 413,600$ 446,629 $ 33,029 $ 8.0% 405,867 $ 358,714 $ 332,199 $ 47,153 $ 13.1% 98.1% 81.3% 116 FOSTER CITY FOUNDATION 37,681 $ 37,681 $ - $ - 8,600 $ 24,255 $ 11,484 $ (15,655) $ (64.5%) 22.8% 70.8% 119 SB 1 ROAD MAINTENANCE AND REHAB 641,900 $ 659,417 $ 17,517 $ 2.7% 375,683 $ 330,969 $ 299,674 $ 44,714 $ 13.5% 58.5% 52.8% 122 HOUSING SUCCESSOR-LMIHF 99,300 $ 126,828 $ 27,528 $ 27.7% 50,306 $ 181,274 $ 72,487 $ (130,968) $ (72.2%) 50.7% 82.5% 124 FC AFFORDABLE HOUSING FUND 29,000 $ 29,000 $ - $ - 4,943 $ 27,466 $ 25,089 $ (22,523) $ (82.0%) 17.0% 4.1% 125 SUSTAINABLE FOSTER CITY FUND (MOVED TO FUND 012) - $ - $ - $ - - $ - $ - $ - $ - - -

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, 2022

Page 1 of 2 ends

5.1 Attachment 3 - Comparison of Budget vs. Actual and Prior Year's Revenues (for the six months ended December 31, 2022)  
 
10 Attachment 3
FY 2022-23 ACTUAL ACTUAL ACTUAL YR OVER YR % OF BUDGET % OF BUDGET ABOVE (BELOW) FY 2022-23 FY 2021-22 FY 2020-21 FAVORABLE % FY 2022-23 FY 2021-22 ADOPTED ANNUAL BUDGET 6 MONTHS 6 MONTHS 6 MONTHS (UNFAVORABLE) INCREASE 6 MONTHS 6 MONTHS Fund BUDGET PROJECTED $ % AS OF 12/31/2022 AS OF 12/31/2021 AS OF 12/31/2020 VARIANCE (DECREASE) AS OF 12/31/2022 AS OF 12/31/2021

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, 2022
127 BAERS (PROGRAM WAS CLOSED OUT IN FY 2020-21) - $ - $ - $ - - $ - $ - $ - $ - - - 128 GENERAL PLAN MAINTENANCE 310,000 $ 344,511 $ 34,511 $ 11.1% 147,554 $ 134,280 $ 126,440 $ 13,274 $ 9.9% 47.6% 68.1% 129 CONSTRUCTION AND DEMO RECYCLING 54,200 $ 75,708 $ 21,508 $ 39.7% 16,110 $ 19,574 $ 32,676 $ (3,464) $ (17.7%) 29.7% 36.7% 130 TECHNOLOGY MAINTENANCE 203,065 $ 207,129 $ 4,064 $ 2.0% 40,673 $ 72,689 $ 60,482 $ (32,016) $ (44.0%) 20.0% 66.9% 131 SB 1186 4,150$ 4,749 $ 599 $ 14.4% 970 $ 634 $ 1,564 $ 336 $ 53.0% 23.4% 15.5% 132 SMIP FEE 1,130$ 1,222 $ 92 $ 8.1% 54 $ 209 $ 840 $ (155) $ (74.2%) 4.8% 18.8% 133 CRV GRANT FUND 8,560 $ 8,709 $ 149 $ 1.7% 89 $ 18 $ 43 $ 71 $ 394.4% 1.0% 0.2% 134 CURBSIDE RECLYCLING 20,500 $ 24,775 $ 4,275 $ 20.9% 2,175 $ 14,800 $ 851 $ (12,625)$ (85.3%) 10.6% 72.2% 135 GREEN BUILDING FEE 730 $ 865 $ 135 $ 18.5% 175 $ 162 $ 483 $ 13 $ 8.0% 24.0% 22.5% 136 MEASURE W 354,500 $ 378,588 $ 24,088 $ 6.8% 210,385 $ 177,319 $ 175,127 $ 33,066 $ 18.6% 59.3% 55.8% 137 COMMERCIAL LINKAGE FEE 816,869 $ 827,674 $ 10,805 $ 1.3% 5,705 $ 864 $ 360,798$ 4,841 $ 560.3% 0.7% 57.6% 138 TENANT RELOCATION ASSISTANCE 51,790 $ 56,909 $ 5,119 $ 9.9% 2,269 $ 19,677 $ 51,012 $ (17,408) $ (88.5%) 4.4% 16.3% 139 WORKFORCE HOUSING (4) 677,458 $ 318,757 $ (358,701) $ (52.9%) 87,734 $ - $ - $ 87,734$ - 13.0% - 140 EQUIPMENT REPLACEMENT-WORKFORCE HOUSING 22,000 $ 22,191 $ 191 $ 0.9% 11,071 $ - $ - $ 11,071$ - 50.3% - 141 SB1383 IMPLEMENTATION - $ 991$ 991 $ - 451 $ - $ - $ 451 $ - - - 142 PARK FACILITIES IMPACT FEE 467,000 $ 467,000 $ - $ - - $ - $ - $ - $ - - - 143 PUBLIC SAFETY IMPACT FEE 72,000 $ 72,000 $ - $ - - $ - $ - $ - $ - - - 144 TRANSPORTATION IMPACT FEE 230,000 $ 230,000 $ - $ - - $ - $ - $ - $ - - - TOTAL SPECIAL REVENUE FUNDS 6,386,833 $ 6,383,684 $ (3,149) $ (0.0%) 2,624,632 $ 2,371,038 $ 2,544,398 $ 253,594 $ 10.7% 41.1% 49.2% 230 LEVEE DEBT SERVICE FUND 3,932,650$ 3,958,364 $ 25,714 $ 0.7% 2,110,072 $ 5,114 $ 6,633,156$ 2,104,958 $ 41160.7% 53.7% 0.1%

CAPITAL PROJECTS FUNDS
301 CIP PROJECTS-CITY (3) 151,250 $ 2,668,222 $ 2,516,972 $ 1664.1% 1,540,822 $ 63,728 $ 825,514 $ 1,477,094 $ 2317.8% 1018.7% 22.3% 326 CAPITAL ASSET ACQUISITION AND REPLACEMENT FUND (3) 1,116,000$ 1,585,085 $ 469,085 $ 42.0% 585,122 $ 622,118 $ 735,239 $ (36,996) $ (5.9%) 52.4% 49.1% 327 LEVEE PROJECT FUND (3) 20,000$ 270,772 $ 250,772 $ 1253.9% 192,622 $ 57,648 $ 84,976,855$ 134,974 $ 234.1% 963.1% 64.1% TOTAL CAPITAL PROJECTS FUNDS 1,287,250 $ 4,524,079 $ 3,236,829 $ 251.5% 2,318,566 $ 743,494 $ 86,537,608$ 1,575,072 $ 211.8% 180.1% 45.2%

ENTERPRISE FUNDS
401 WATER REVENUE (5) 18,080,000 $ 17,288,243 $ (791,757) $ (4.4%) 8,642,386 $ 8,247,979 $ 9,567,423 $ 394,407 $ 4.8% 47.8% 46.4% 405 WATER CIP -$ - $ - $ - - $ 300$ - $ (300)$ (100.0%) - - 408 WATER EQUIPMENT REPLACEMENT 510,436 $ 510,436 $ - $ - 255,218 $ 316,766 $ 221,983 $ (61,548) $ (19.4%) 50.0% 50.0% 409 WATER CONNECTION FEES 497,855 $ 524,087 $ 26,232 $ 5.3% 57,865 $ 224,033 $ - $ (166,168)$ (74.2%) 11.6% 49.5% 451 WASTEWATER REVENUE 20,007,000 $ 20,861,576 $ 854,576 $ 4.3% 10,397,470 $ 8,617,926 $ 7,877,821 $ 1,779,544 $ 20.6% 52.0% 48.9% 453 WASTEWATER RATE STABILIZATION - $ - $ - $ - - $ - $ - $ - $ - - - 454 SM-FC PUBLIC FINANCING AUTHORITY LOAN - $ - $ - $ - - $ 59 $ 647 $ (59) $ (100.0%) - 59.0% 455 WASTEWATER CIP - $ - $ - $ - - $ - $ 11,027$ - $ - - - 456 WASTEWATER PLANT EXPANSION 636 $ 2,715 $ 2,079 $ 326.9% 2,715 $ 5,367 $ 948 $ (2,652) $ (49.4%) 426.9% 99.4% 458 WASTEWATER EQUIPMENT REPLACEMENT 266,126 $ 266,126 $ - $ - 133,063 $ 127,341 $ 134,673 $ 5,722 $ 4.5% 50.0% 50.0% 459 WASTEWATER NOTES/WIFIA LOAN/SRF LOAN - $ 136,706$ 136,706 $ - 124,506 $ 21,547 $ - $ 102,959$ 477.8% - 0.0% 460 WASTEWATER CONNECTION FEES 1,200,496 $ 1,208,218 $ 7,722 $ 0.6% 11,441 $ 92,757 $ - $ (81,316)$ (87.7%) 1.0% 30.7% 461 STATE REVOLVING LOAN FUND - $ - $ - $ - - $ - $ - $ - $ - - - TOTAL ENTERPRISE FUNDS 40,562,549 $ 40,798,107 $ 235,558 $ 0.6% 19,624,664 $ 17,654,075 $ 17,814,522 $ 1,970,589 $ 11.2% 48.4% 12.9%

INTERNAL SERVICE FUNDS
501 VEHICLE RENTAL FUND 1,772,634 $ 1,887,952 $ 115,318 $ 6.5% 944,246 $ 888,592 $ 861,903 $ 55,654 $ 6.3% 53.3% 49.3% 502 EQUIPMENT REPLACEMENT FUND 471,688 $ 595,582 $ 123,894 $ 26.3% 305,160 $ 362,559 $ 288,386 $ (57,399) $ (15.8%) 64.7% 52.2% 503 SELF INSURANCE FUND 1,237,329 $ 1,244,229 $ 6,900 $ 0.6% 600,912 $ 291,343 $ 269,783 $ 309,569 $ 106.3% 48.6% 49.9% 504 INFORMATION TECHNOLOGY 2,539,669 $ 2,678,788 $ 139,119 $ 5.5% 1,310,752 $ 1,205,239 $ 1,118,240 $ 105,513 $ 8.8% 51.6% 50.6% 505 BUILDING MAINTENANCE 3,439,966 $ 3,619,225 $ 179,259 $ 5.2% 1,808,091 $ 1,703,524 $ 1,694,706 $ 104,567 $ 6.1% 52.6% 50.0% 507 LONGEVITY RECOGNITION PLAN 254,250$ 287,257 $ 33,007 $ 13.0% 140,197 $ 118,458 $ 122,443 $ 21,739 $ 18.4% 55.1% 49.5% 508 PEMHCA FUND 281,126 $ 358,480 $ 77,354 $ 27.5% 171,127 $ 111,823 $ 122,559 $ 59,304 $ 53.0% 60.9% 48.8% 509 COMPENSATED ABSENCES FUND 594,137 $ 637,986 $ 43,849 $ 7.4% 314,553 $ 252,006 $ 226,010 $ 62,547 $ 24.8% 52.9% 49.8% TOTAL INTERNAL SERVICE FUNDS 10,590,799 $ 11,309,499 $ 718,700 $ 6.8% 5,595,038 $ 4,933,544 $ 4,704,030 $ 661,494 $ 13.4% 52.8% 50.1%

FIDUCIARY FUNDS
604 SUCESSOR ANGENCY 281,600 $ 284,746 $ 3,146 $ 1.1% 283,448 $ 275,342 $ 61,672 $ 8,106 $ 2.9% 100.7% 99.9% 607 TOURISM ASSESSMENT - $ - $ - $ - - $ 31,430$ - $ (31,430)$ (100.0%) - 36.6% 608 SMC FIRE 220,860$ 220,860 $ - $ - 77,597 $ 74,081 $ - $ 3,516$ 4.7% 35.1% 53.7% TOTAL CITY / EMID FUNDS 120,314,347 $ 128,659,437 $ 8,345,090 $ 6.9% 68,027,298 $ 56,273,917 $ 142,836,847 $ 11,753,381 $ 20.9% 56.5% 26.8% 1 2 The City received its FY 20/21 VLF shortfall of $2.01M in Aug and is expecting $4.79M of "organic" VLF for it's FY 2022/23 yea r. However, the State chose not to include San Mateo County's FY 2021-22 total shortfall of $32.9M (FC's portion is $676,977) in its proposed FY 2023-24 budget. 3 With multiple discount rate increases by the Federal Reserve from 0.25% to 4.75% through February 2023, investment income is a nticipated to exceed budgeted estimates for City/EMID Funds 4 Due to a combination of the late closing for the purchase of the 22 workforce housing units and a softening of demand for the units, only 11 of the 22 units have thus far been rented. As a result, full year rental revenues have been reduced accordingly. 5 Since FYE 22's total water enterprise revenues were 10.6% lower than expected due to reduced consumption as a result of water conservation, anticipated FYE 23 revenues have been recalibrated.

Notes and Explanation of Variances:

The majority of property tax revenues are distributed by San Mateo County in December and April of each fiscal year.

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5.1 Attachment 3 - Comparison of Budget vs. Actual and Prior Year's Revenues (for the six months ended December 31, 2022)  
 
11 Attachment 4
ACTUAL ACTUAL ACTUAL INCREASE / % OF BUDGET % OF BUDGET PROJECTED FY 2022-23 FY 2021-22 FY 2020-21 DECREASE / % FY 2022-23 FY 2021-22 AMENDED (INCLUDING CIP 6 MONTHS 6 MONTHS 6 MONTHS FROM INCREASE 6 MONTHS 6 MONTHS Fund BUDGET CARRYOVERS) $ % AS OF 12/31/2022 AS OF 12/31/2021 AS OF 12/31/2020 PRIO R YEAR (DECREASE) AS OF 12/31/2022 AS OF 12/31/2021 GENERAL FUND (FUNDS 001-003)
DEPARTMENTS:

COUNCIL/BOARD (1) 517,520$ 517,520 $ - $ 0.0% 356,648 $ 228,999 $ 248,515 $ 127,649 $ 55.7% 68.9% 67.0% CITY MANAGER (1) 2,063,764$ 2,063,764 $ - $ 0.0% 1,245,086 $ 869,085 $ 726,997 $ 376,001 $ 43.3% 60.3% 77.2% COMMUNICATIONS/CITY CLERK (1) 1,042,891$ 1,042,891 $ - $ 0.0% 514,803 $ 409,611 $ 415,526 $ 105,192 $ 25.7% 49.4% 49.8% CITY ATTORNEY 607,490$ 607,490 $ - $ 0.0% 243,172 $ 218,804 $ 226,066 $ 24,368 $ 11.1% 40.0% 37.1% HUMAN RESOURCES (1) 742,684$ 742,684 $ - $ 0.0% 290,606 $ 415,001 $ 279,588 $ (124,395) $ (30.0%) 39.1% 53.8% FINANCIAL SERVICES (1) 1,328,417$ 1,328,417 $ - $ 0.0% 644,947 $ 599,497 $ 448,135 $ 45,450 $ 7.6% 48.6% 60.0% PARKS & RECREATION (1) 8,397,573$ 8,397,573 $ - $ 0.0% 4,668,718 $ 4,351,898 $ 4,432,868 $ 316,820 $ 7.3% 55.6% 52.9% POLICE (1) 16,700,323$ 16,700,323 $ - $ 0.0% 9,397,732 $ 8,718,273 $ 8,079,598 $ 679,459 $ 7.8% 56.3% 56.0% FIRE (1) 11,424,131$ 11,424,131 $ - $ 0.0% 7,663,478 $ 8,544,856 $ 7,719,262 $ (881,378) $ (10.3%) 67.1% 76.0% COMMUNITY DEVELOPMENT (1) 3,966,412$ 3,966,412 $ - $ 0.0% 1,797,761 $ 1,739,333 $ 1,656,710 $ 58,428 $ 3.4% 45.3% 53.8% PUBLIC WORKS 4,184,003$ 4,184,003 $ - $ 0.0% 1,459,982 $ 1,264,222 $ 1,037,125 $ 195,760 $ 15.5% 34.9% 41.3% LIBRARY 503,744$ 503,744 $ - $ 0.0% 251,872 $ 273,809 $ 250,486 $ (21,937) $ (8.0%) 50.0% 50.0% 001 SUBTOTAL 51,478,952$ 51,478,952 $ - $ - 28,534,805 $ 27,633,388 $ 25,520,876 $ 901,417 $ 3.3% 55.4% 59.4% 002 PROPERTY TAX ADMINISTRATION 339,000$ 339,000 $ - $ 0.0% 152,731 $ 152,731 $ 138,847 $ - $ 0.0% 45.1% 49.9% 003 SPECIAL RECREATION 2,144,940$ 2,144,940 $ - $ 0.0% 996,398 $ 741,600 $ 673,701 $ 254,798 $ 34.4% 46.5% 40.8% 53,962,892$ 53,962,892 $ - $ - 29,683,934 $ 28,527,719 $ 26,333,424 $ 1,156,215 $ 4.1% 55.0% 58.6% 005 GENERAL FUND - COMMUNITY BENEFITS PROGRAM 540,196$ 540,196 $ - $ 0.0% 49,591 $ 184,844 $ 41,564 $ (135,253) $ (73.2%) 9.2% 20.9% 006 GENERAL FUND - DARE 600$ 600 $ - $ 0.0% - $ - $ - $ - $ - - - 007 GENERAL FUND - SOLAR INCENTIVE GRANT PROGRAM 25,000$ 25,000 $ - $ 0.0% 7,000 $ 8,000 $ 5,000 $ (1,000) $ (12.5%) 28.0% 32.0% 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 132,602$ 132,602 $ - $ 0.0% 3,500 $ 87,536 $ 7,477 $ (84,036) $ (96.0%) 2.6% 39.5% TOTAL ALL GENERAL FUND (FUNDS 001-011) 54,741,465$ 54,741,465 $ - $ - 29,744,025$ 28,808,099 $ 26,387,465 $ 935,926 $ 3.2% 54.3% 57.8%

SPECIAL REVENUE FUNDS
101 TRAFFIC SAFETY 60,000$ 60,000 $ - $ 0.0% 30,000 $ 30,000 $ 41,500 $ - $ 0.0% 50.0% 50.0% 102 MEASURE "A" 3,170,267$ 3,170,267 $ - $ 0.0% 381,257 $ - $ 249,301$ 381,257 $ - 12.0% - 103 GAS TAX 1,407,277$ 1,407,277 $ - $ 0.0% 834,527 $ 277,250 $ 585,967 $ 557,277 $ 201.0% 59.3% 32.8% 104 PARK-IN-LIEU FUND 745,435$ 745,435 $ - $ 0.0% - $ - $ - $ - $ - - - 105 MEASURE "M" 219,300$ 219,300 $ - $ 0.0% 119,300 $ - $ - $ 119,300$ - 54.4% - 108 SLESF/COPS GRANT 100,000$ 105,000 $ (5,000) $ (5.0%) 104,058 $ 95,929 $ 92,168 $ 8,129 $ 8.5% 104.1% 95.9% 114 CALOPPS (2) 564,135$ 490,358 $ 73,777 $ 13.1% 217,144 $ 232,893 $ 228,149 $ (15,749) $ (6.8%) 38.5% 44.6% 116 FOSTER CITY FOUNDATION 111,250$ 111,250 $ - $ 0.0% 12,113 $ 17,888 $ 6,996 $ (5,775) $ (32.3%) 10.9% 92.2% 119 SB 1 ROAD MAINTENANCE AND REHAB 1,408,848$ 1,408,848 $ - $ 0.0% 1,285,709 $ 62,362 $ 300,091 $ 1,223,347 $ 1961.7% 91.3% 5.0% 122 HOUSING SUCCESSOR-LMIHF 136,320$ 136,320 $ - $ 0.0% 34,988 $ 36,408 $ 54,088 $ (1,420) $ (3.9%) 25.7% 27.0% 124 FC AFFORDABLE HOUSING FUND 543,636$ 543,636 $ - $ 0.0% 66,429 $ 159,538 $ - $ (93,109)$ (58.4%) 12.2% 39.9% 125 -$ - $ - $ - - $ - $ - $ - $ - - - 127 BAERS (PROGRAM CLOSED OUT IN FY 20/21) (3) -$ - $ - $ - - $ - $ 45,883$ - $ - - - 128 GENERAL PLAN MAINTENANCE 842,679$ 842,679 $ - $ 0.0% 161,969 $ 105,778 $ 19,365 $ 56,191 $ 53.1% 19.2% 19.8% 129 CONSTRUCTION AND DEMO RECYCLING 317,000$ 317,000 $ - $ 0.0% 29,944 $ 31,170 $ 3,555 $ (1,226) $ (3.9%) 9.4% 9.4% 130 TECHNOLOGY MAINTENANCE 105,485$ 105,485 $ - $ 0.0% 60,371 $ 40,274 $ 71,759 $ 20,097 $ 49.9% 57.2% 32.4% 131 SB 1186 1,300$ 1,300 $ - $ 0.0% - $ - $ 50 $ - $ - - - 132 SMIP FEE 500$ 500 $ - $ 0.0% - $ - $ - $ - $ - - - 133 CRV GRANT FUND 14,000$ 14,000 $ - $ 0.0% 82 $ 1,699$ 3,229 $ (1,617) $ (95.2%) 0.6% 13.1% 134 CURBSIDE RECLYCLING 25,000$ 25,000 $ - $ 0.0% - $ - $ - $ - $ - - - 135 GREEN BUILDING FEE 500$ 500 $ - $ 0.0% - $ - $ - $ - $ - - - 136 MEASURE W 973,500 $ 973,500 $ - $ 0.0% - $ - $ - $ - $ - - - 137 COMMERCIAL LINKAGE GEE - $ - $ - $ - - $ - $ - $ - $ - - - 138 TENANT RELOCATION ASSISTANCE 51,640 $ 51,640 $ - $ 0.0% - $ - $ - $ - $ - - - 139 WORKFORCE HOUSING (4) 329,136$ 234,300 $ 94,836 $ 28.8% 47,827 $ - $ - $ 47,827$ - 14.5% - 140 EQUIPMENT REPLACEMENT-WORKFORCE HOUSING - $ - $ - $ - - $ - $ - $ - $ - - - 141 SB 1383 IMPLEMENTATION 47,314 $ 47,314 $ - $ 0.0% 3,538 $ - $ - $ 3,538$ - 7.5% - 142 PARK FACILITIES IMPACT FEE 467,000 $ 467,000 $ - $ 0.0% - $ - $ - $ - $ - - -

SAVINGS (EXCESS) FROM

AMENDED BUDGET
TOTAL GENERAL FUND (FUNDS 001-003)
SUSTAINABLE FOSTER CITY (MOVED TO FUND 012)
FY 2022-23

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, 2022

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5.1 Attachment 4 - Comparison of Budget vs. Actual and Prior Year's Expenditures  
 
12 Attachment 4
ACTUAL ACTUAL ACTUAL INCREASE / % OF BUDGET % OF BUDGET PROJECTED FY 2022-23 FY 2021-22 FY 2020-21 DECREASE / % FY 2022-23 FY 2021-22 AMENDED (INCLUDING CIP 6 MONTHS 6 MONTHS 6 MONTHS FROM INCREASE 6 MONTHS 6 MONTHS Fund BUDGET CARRYOVERS) $ % AS OF 12/31/2022 AS OF 12/31/2021 AS OF 12/31/2020 PRIO R YEAR (DECREASE) AS OF 12/31/2022 AS OF 12/31/2021

SAVINGS (EXCESS) FROM

AMENDED BUDGET
FY 2022-23

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, 2022
143 PUBLIC SAFETY IMPACT FEE 72,000 $ 72,000 $ - $ 0.0% - $ - $ - $ - $ - - - 144 TRANSPORTATION IMPACT FEE 230,000 $ 230,000 $ - $ 0.0% - $ - $ - $ - $ - - - TOTAL SPECIAL REVENUE FUNDS 11,943,522$ 11,779,909 $ 163,613 $ 0 $ 3,389,256$ 1,091,189 $ 1,702,101 $ 2,298,067 $ 210.6% 28.4% 18.4% 230 DEBT SERVICE FUND (5) 6,378,988$ 6,378,988 $ - $ 0.0% 5,198,056 $ 5,230,656 $ - $ (32,600)$ (0.6%) 81.5% 80.6%

CAPITAL PROJECTS FUNDS
301 CIP PROJECTS-CITY 11,591,714$ 11,591,714 $ - $ 0.0% 648,092 $ 29,944 $ 683,389 $ 618,148 $ 2064.3% 5.6% 3.1% 326

CAPITAL ASSET ACQUISITION AND REPLACEMENT
FUND (6) 7,050,000$ 7,015,009 $ 34,991 $ 0.5% 7,015,009 $ - $ - $ 7,015,009$ - 99.5% - 327 LEVEE PROJECT FUND 22,511,272$ 22,511,272 $ - $ 0.0% 9,810,660 $ 15,562,473 $ 10,108,303 $ (5,751,813) $ (37.0%) 43.6% 729.9% TOTAL CAPITAL PROJECTS FUNDS 41,152,986$ 41,117,995 $ 34,991 $ 0.1% 17,473,761 $ 15,592,417 $ 10,791,692 $ 1,881,344 $ 12.1% 42.5% 154.6%

ENTERPRISE FUNDS
401 WATER REVENUE (7) 17,206,366$ 15,571,800 $ 1,634,566 $ 9.5% 6,933,928 $ 6,352,649 $ 6,774,224 $ 581,279 $ 9.2% 40.3% 40.2% 405 CIP-WATER 7,506,711$ 7,506,711 $ - $ 0.0% 81,224 $ 515,396 $ 195,089 $ (434,172) $ (84.2%) 1.1% 39.3% 408 WATER EQUIPMENT REPLACEMENT 342,875$ 342,875 $ - $ 0.0% 193,484 $ 16,306 $ 22,220 $ 177,178 $ 1086.6% 56.4% 7.9% 409 WATER CONNECTION FEES -$ - $ - $ - - $ - $ - $ - $ - - - 451 WASTEWATER REVENUE 9,222,485$ 9,222,485 $ - $ 0.0% 3,273,404 $ 3,007,700 $ 2,132,564 $ 265,704 $ 8.8% 35.5% 36.4% 453 WASTEWATER RATE STABILIZATION - $ - $ - $ - - $ - $ - $ - $ - - - 454 SM-FC PUBLIC FINANCING AUTHORITY LOAN (5) 1,862,966$ 1,862,966 $ - $ 0.0% 1,334,250 $ 1,322,875 $ 1,305,750 $ 11,375 $ 0.9% 71.6% 70.8% 455 CIP-WASTEWATER 40,762,923$ 40,762,923 $ - $ 0.0% 13,208,409 $ 3,975,165 $ 192,581 $ 9,233,244 $ 232.3% 32.4% 7.2% 456 WASTEWATER PLANT EXPANSION - $ - $ - $ - - $ - $ - $ - $ - - - 458 WASTEWATER EQUIPMENT REPLACEMENT 359,894$ 359,894 $ - $ 0.0% 46,774 $ - $ - $ 46,774$ - 13.0% - 459 WASTEWATER NOTES/WIFIA LOAN/SRF LOAN (5) 3,144,700$ 3,144,700 $ - $ 0.0% 1,570,920 $ 216,656 $ - $ 1,354,264$ 625.1% 50.0% 3610.9% 460 WASTEWATER CONNECTION FEES -$ - $ - $ - - $ - $ - $ - $ - - - 461 STATE REVOLVING LOAN FUND 29,989,399$ 29,989,399 $ - $ 0.0% - $ - $ - $ - $ - - - TOTAL ENTERPRISE FUNDS 110,398,319 $ 108,763,753 $ 1,634,566 $ 1.5% 26,642,393 $ 15,406,747 $ 10,622,428 $ 11,235,646 $ 72.9% 24.1% 18.4%

INTERNAL SERVICE FUNDS
501 VEHICLE RENTAL FUND 2,235,115$ 2,235,115 $ - $ 0.0% 808,981 $ 862,347 $ 490,111 $ (53,366) $ (6.2%) 36.2% 44.0% 502 EQUIPMENT REPLACEMENT FUND 373,100$ 373,100 $ - $ 0.0% 75,693 $ 13,765 $ 16,416 $ 61,928 $ 449.9% 20.3% 3.7% 503 SELF INSURANCE FUND (1) 1,343,529$ 1,343,529 $ - $ 0.0% 1,097,466 $ 796,053 $ 505,495 $ 301,413 $ 37.9% 81.7% 103.0% 504 INFORMATION TECHNOLOGY 2,623,392$ 2,623,392 $ - $ 0.0% 1,087,453 $ 910,834 $ 784,658 $ 176,619 $ 19.4% 41.5% 36.7% 505 BUILDING MAINTENANCE 3,748,300$ 3,748,300 $ - $ 0.0% 1,160,328 $ 1,108,616 $ 1,084,032 $ 51,712 $ 4.7% 31.0% 33.9% 507 LONGEVITY RECOGNITION PLAN 238,320$ 238,320 $ - $ 0.0% 93,098 $ 99,220 $ 91,553 $ (6,122) $ (6.2%) 39.1% 41.6% 508 PEMHCA FUND 229,704$ 229,704 $ - $ 0.0% 93,853 $ 89,713 $ 82,722 $ 4,140 $ 4.6% 40.9% 41.9% 509 COMPENSATED ABSENCES FUND 561,036$ 561,036 $ - $ 0.0% 305,491 $ 167,248 $ 5,270 $ 138,243 $ 82.7% 54.5% 35.3% TOTAL INTERNAL SERVICE FUNDS 11,352,496 $ 11,352,496 $ - $ - 4,722,363 $ 4,047,796 $ 3,060,257 $ 674,567 $ 16.7% 41.6% 41.3%

FIDUCIARY FUND
604 SUCESSOR ANGENCY 335,997 $ 335,997 $ - $ 0.0% 10,610 $ 11,091 $ 2,263 $ (481) $ (4.3%) 3.2% 2.0% 607 TOURISM ASSESSMENT - $ - $ - $ - - $ 26,058$ (26,058) $ (100.0%) - 30.3% 608 SMC FIRE FEES 220,860 $ 220,860 $ - $ 0.0% 26,204 $ 67,398 $ (41,194) $ (61.1%) 11.9% 48.8% TOTAL CITY / EMID FUNDS 236,524,633 $ 234,691,463 $ 1,833,170 $ 0.8% 87,206,668 $ 70,281,451 $ 52,566,206 $ 16,925,217 $ 24.1% 36.9% 42.1% 1 2 Full year contract support costs for CalO PPS were reviewed in Q2 of FY 22/23 and reduced as a result of the analysis 3 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 4 Since the 22 workforce housing units were acquired later than anticipated, management and O&M costs have been reduced for FY 22/23. 5 The City and District's debt service payments are made in August and February of each fiscal year 6 The City acquired 22 units of workforce housing in August 2022 7 Since FYE 22's total water consumption was reduced due to water conservation, anticipated FYE 23 expenditures have been recalibrated.

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 $7.51M, $6.79M, and $6.21M for FY 22/23, FY 21/22, and FY 20/21 respectively. The citywide cash savings from the early payments were $258,000, 233,000, and $214,000 respectively. The City paid 2 quarterly 1st, 2nd, and 3rd quarter contributions of $2.18M each to SMC Fire Dept. JPA during the 1st half of FYE 23.

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5.1 Attachment 4 - Comparison of Budget vs. Actual and Prior Year's Expenditures  
 
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DATE: February 27, 2023

TO: Mayor and Members of the City Council President and Members of the Estero Municipal Improvement District (EMID) Board of Directors
VIA: Stefan Chatwin, City/District Manager

FROM: Stefan Chatwin, City/District Manager
Edmund Suen, Finance Director
DEPARTMENT: City Manager
SUBJECT: POLICY DIRECTION REGARDING PREPARATION OF THE FY 2023-24 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 2023-24 Annual Budget and Five- Year Financial Plan.

EXECUTIVE SUMMARY
The health of 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 these various resources. As indicated in the Mid-Year Financial Report discussed earlier this evening, the combination of $4.05 million of American Rescue Plan Act (ARPA) relief funds and improved revenues are expected to pull the City’s General Fund from a deficit to a projected surplus of $3.61 million by the end of the current fiscal year.

As of June 30, 2022, General Fund Reserves totaled $44 million, which is 82% of this year’s adopted expenditures budget.

5.2 5.2 Staff Report

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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. Although abated, full recovery from the COVID-19 pandemic has yet to materialize in the City’s hotel Transient Occupancy Tax (TOT) and recreation programs/rentals. The expiration of ARPA relief assistance of $4.05 million over each of the past and current year will impact General Fund structural deficits if not addressed. 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 2023-24 budget in accordance with the budget schedule shown at the end of the report.

BACKGROUND
The City Council’s policy general direction over the past years can 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 2023-24 Preliminary Budget. Based on the current economic conditions and the City’s current priorities, including the completion of the Levee CIP project, a rebuild of the Recreation Center, anticipated increase in personnel costs from wage inflation and expiring MOUs, potential fiscal impacts from the completion of the classification and compensation studies, the increase in pension costs and liability as a result of a 12.9% CalPERS underperformance in FY 2021-22, personnel and service and supplies exception requests under consideration by the City Manager, and uncertainty regarding the State’s appetite to provide a permanent fix to Property Tax in Lieu of Vehicle License Fee revenues, and an off-cycle revenue measure ballot year (the next opportunity to do a tax ballot measure is at the November 2024 general election), the City Council may want to consider policy options to ensure a balanced budget for FY 2023-24 and 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 2023-24 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.

5.2 5.2 Staff Report

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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 each 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. In fact, Foster City’s budgeted personnel costs for FY 2022-23 represent approximately 62.4% of the General Fund annual operating budget (Fire personnel costs are excluded from the calculation as they are personnel of the San Mateo Consolidated Fire Department JPA and counted as contract services in the City’s budget).

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.

In FY 2022-23, services are being provided by an authorized 172 FTE (Full-Time Equivalent) City employees as well as various part time and seasonal staff. Over the course of the current fiscal year, under the leadership of the new City Manager and his assessment of the organizational structure, additional reorganizational changes were implemented to improve efficiency in operations and service delivery. These changes were approved by the City Council for the current fiscal year with the understanding that there would be an ongoing impact to the General Fund.

For the FY 2023-24 Budget, the City will continue to evaluate the current level of staffing to meet City Council’s strategic directives. A detailed line item budget will be submitted for City Council review at the Budget Study Session on May 8, 2023 and will ultimately

5.2 5.2 Staff Report

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be approved concurrently with adoption of the City budget which is scheduled for June 19, 2023.

2. Revenue Models
Approximately 89.9% 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 Proposition 218, require voter approval to be modified.

Tax measures, such as the hotel TOT measure in November 2018, and the Business License Tax (BLT) measure in November 2013, were taken to the voters and approved.

The City does not currently have a local add-on sales tax. As indicated earlier in this staff report, the next opportunity for a revenue ballot measure to address the City’s General Fund structural deficits in the five-year financial plan is November 2024. 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 10.1% 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 at that time. 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 (in November of even-numbered years, e.g. November 2024).
Business License Tax (BLT) – Last year, the City Council considered a potential November 2022 BLT ballot measure, but ultimately decided to postpone that option. The City Manager received direction to continue to analyze the current BLT methodology and bring options and recommendations to the City Council early next year.
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:

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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 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 21, 2022, the City Council approved an increase to the 2023 collection rates for general services and “unscheduled services” of 5.0% and

4.184%, respectively, over the 2022 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, but not-to-exceed the cost of the services provided. These fees are approved by the City County and 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. City 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. As part of this fiscal year’s work plan, City staff engaged a consultant to provide a cost allocation plan and user fee study that is anticipated to be completed in March 2023.
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

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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 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 that was based on the April 2022 CPI-U resulted in a 5% wage increase. The Human Resources Department undertook a citywide Classification Study in June 2021 and a citywide Compensation Study in February 2022. Both studies are anticipated to be completed in March/April. The results of each will help frame a City Council compensation philosophy/policy with labor negotiations also anticipated to commence in the upcoming months.

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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 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 27, 2023 budget study session. Based on direction from the City Council, the long-Term model has 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 were deposited into this fund. The Fund Balance as of December 31, 2022 is approximately $2.6 million after having spent $7 million for the acquisition of 22 workforce housing apartment units in the Pilgrim Triton Phase C project in August 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 $90 million 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. City staff plans to seek formal authorization form the City Council for the City to issue the remaining $5 million of bonds as well as providing access up to $10 million from the City CIP Fund in March 2023 to complete the Levee project. With regards to the WWTP Project, the District and the City of San Mateo established a Joint Powers Financing 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 4-year revenue notes at 0.47% were issued to capture the low interest rate market conditions as a bridge loan prior to activating the WIFIA loan in 2025. On May 11, 2022, the District entered into an agreement with The San Mateo-Foster City Public Financing Authority (PFA) and the California State Water Resources Control Board for a $33,583,004 30-year loan for the

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WWTP project. The loan bears interest at 0.8 percent per year and the final installment payment is due August 31, 2054.

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 generally sets 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, property, and cyber insurance are projected to increase by 17.5% in FY 2023-24 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 Benefits Fund, post- retirement medical requirements under State law (PEMHCA Fund), 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
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 well over the policy target levels over the years and utilized surpluses above the 100% 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 for the rebuild of the Recreation Center last year. Even after setting aside this amount, General Fund reserves were $44 million or 82%. 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.

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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 2023-24 to meet City Council’s strategic directives and continue to provide the same level of services to the community. A detailed line-item budget will be submitted for City Council review at the May 8, 2023 Budget Study Session and will ultimately be approved concurrently with adoption of the City budget which is scheduled for June 19, 2023.

2.Sustainable Employee Compensation Policies – Unless directed otherwise, the City Manager recommends that personnel services costs for the preliminary budget to include a 2% placeholder for annual wage increases and associated benefit costs.

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 27, 2023 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 27, 2023 Budget Study Session. In anticipation of that session, there are three policy considerations identified for City Council consideration:

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a.Equipment Replacement Funding – In regard 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 2023-24 budget projections will continue using this philosophy. Are there other funding methods that the City Council wishes to explore or employ for 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, 2022, these liabilities were $3.15 million and $9.40 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, 2022, the balances of these Funds were $2.54 million and $6.08 million respectively. Last year, the City Council gave direction for City staff to add to their FY 2022-23 work plan the consideration of Section 115 irrevocable trusts for both its Longevity and PEMHCA liabilities. Staff plans to provide such information to the City Council in Q4 of this fiscal year.
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
Non-profit Funding – The City Council has previously entertained requests from non-profit organizations for funding. During the FY 2022-2023 budget cycle, City Council approved an updated Non-Profit Grant Program, which identified

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Community Needs Categories and associated Eligible Activities. The new Non- Profit Funding Process is as follows:

I. At the February/March Council Budget Study Session, City Council reconfirms the process it wants to solicit and award non-profit grant funding. It also provides direction on the funding placeholder for the Preliminary Budget document. (An additional City Council meeting may be needed if changes or updates are requested to the Non-Profit Grant Program and Policy.)
II. City staff advertises the non-profit funding process on the City’s website, issues a press release, and e-mails non-profits that received funding in the prior year, any additional non-profits identified by the Council, and any non-profit that requests the information, outlining the timelines and requirements.

III. Non-profits submit applications by the identified due date.

IV. Staff evaluates the non-profit applications, scoring all applications based on the evaluation criteria (administrative capacity, identification and/or analysis of local needs, and program purpose). Each non-profit is asked to self-identify which Community Needs Category they fall under. Staff also reviews the Community Needs Category for non-profits to ensure they are in the correct category for funding based on the category criteria. The Community Needs categories are:

Basic Services – Activities include, but are not limited to, services for the homeless, seniors, youth, and low-income individuals and families, such as subsistence programs, healthcare initiatives, and rental assistance.

Non-profits submitting applications in this Community Needs Category are eligible for 60% of the total amount allocated by the City Council. City staff will evaluate each application and submit recommended funding amounts to City Council for approval.

Community Enrichment – Activities that promote community enrichment, including, but not limited to, educational and recreational programs and initiatives that promote social equity and engagement.

Non-profits submitting applications in this Community Needs Category are eligible for 25% of the total amount allocated by the City Council. City staff will evaluate each application and submit recommended funding amounts to City Council for approval.

Community Health – Activities include, but are not limited to, programs or projects that support Foster City residents’ well-being, preserve city resources, or increase community environmental sustainability.

Non-profits submitting applications in this Community Needs Category are eligible for 15% of the total amount allocated by the City Council. City staff

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will evaluate each application and submit recommended funding amounts to City Council for approval.

V. A staff report is prepared for the May Budget Study Session, which will include copies of the proposals submitted by the non-profit agencies and staff funding recommendations based on their community needs category and the evaluation criteria. Council considers Staff’s recommendations on how much funding to allocate to each non-profit.

VI. Council direction is incorporated into the Final Budget, which is adopted at the second meeting in June.

VII. After July 1, staff sends a notice to all applicants, notifying them of their status and describing the process for receiving funding for those approved.

Assuming the City Council wishes to entertain these requests in the FY 2023-2024 Budget, City staff will follow a similar schedule as established in previous years.

However, it should be noted that if City Council desires a modified or different Non- Profit Funding Program, City staff will seek policy direction on the Non-Profit Funding Process at its regular meeting on March 20, 2023.

The chart below identifies the important dates of the Non-Profit Funding Process milestones.

7.Water and Wastewater Rates – On March 27, 2023, 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.

NON-PROFIT FUNDING PROCESS SCHEDULE
March 20,
2023
City Council provides policy direction if changes or updates are needed/requested to the Non-Profit Funding Program (optional).

April 3, 2023 City staff provides notice of funding availability and opens the Non- profit funding application period.

May 1, 2023 All funding requests are due from non-profit agencies no later than 5:00 PM.

June 5, 2023 City Council determines funding levels by agency which staff incorporates into the Final FY 2023-2024 Budget document.

June 19, 2023 Final FY 2023-2024 Budget is adopted by the City Council.

July 1, 2023 Non-profit funding program year begins.

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Budget Schedule and Next Steps

The following dates and topics have been established in developing the FY 2023-24 annual budget:
Monday, February 27 at 6:30 PM: Mid-Year Financial Review and direction from the City Council for the preparation of the FY 2023-24 preliminary budget and Five-Year Financial Plan.
Monday, March 27 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 17 at 6:30 PM: Public Hearing on Master Fee Schedule for FY 2023-24.
Monday, May 8 at 6:30 PM: Preliminary Annual Budget and Five-Year Financial Plan (All Funds).
Monday, June 5 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 19 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 2023-24 Annual Budget process will continue the City’s history of thoughtful stewardship of the public’s resources and preserve its path towards our long-term financial health.

Staff looks forward to working with the City Council in the months ahead as the Council discusses, deliberates, and decides 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.

CALIFORNIA ENVIRONMENTAL QUALITY ACT
Not Applicable

FISCAL IMPACT
There is no immediate fiscal impact from this report.

CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Innovation and Sustainability

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Foster City City CouncilFebruary 27, 2023

Foster City City Council
February 27, 2023