Foster City City Council
March 27, 2023

6.3 Attachment 6 - 15 Year CIP Buildings, Storm Water and Lagoon Projects  
 
115

Capital Improvement Program
Fiscal Year 2023-24 through Fiscal Year 2037-38
ATTACHMENT 7
Category NO. Project Name Funding
Source
TOTAL - Not
Including Prior
Years
2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32 2032-33 2033-34 2034-35 2035-36 2036-37 2037-2038

PARKS PROJECTS
B PK-01 (NEW) EDGEWATER PARK SOFTBALL AND SOCCER SYNTHETIC RESURFACING (2023-2024) CC 900,000 900,000 C PK-02 (NEW) LIGHT INSTALLATION AT BOOTHBAY PARK (2023-2024) CC 250,000 250,000 - B PK-03 (NEW) SEA CLOUD MAINTENA NCE SHED (2023-2024) CC 2,300,000 300,000 2,000,000 C PK-04 (NEW) EAST HILLSDALE AND FOSTER CITY BOULEVARDS MEDIAN REFURBISHMENT (2024- 2025) CC 500,000 500,000
C PK-05 (NEW) CATAMARAN PARK IMPROVEMENTS - FITNESS COURT/PICNIC/SHADE (2024-2025) CC 550,000 550,000 C PK-06 (NEW) INSTALL NEW AMPHITHEATER SHADE STRUCTURE (2025-2026) CC 1,000,000 1,000,000 B PK-07 (NEW) DOG PARK SYNTHETIC TURF REPLACEMENT (2025-2026) CC 500,000 500,000 C PK-08 (NEW) RESURFACING: TENNIS (Boothbay, LRP, Edgewater); BASKETBALL (Shad, Sunfish, Turnstone, Edgewater, Port Royal, Ketch) (2025-2026) CC 320,000 320,000 B PK-09 (NEW) CATAMARAN AND SEA CLOUD S3 SYTHETIC RESURFACING (2026-2027) CC 1,248,000 1,248,000 C PK-10 (NEW) AMPHITHEATER SYNTHETIC TURF RESURFACING (2026-2027) CC 120,000 120,000 B PK-11 (NEW) GULL PARK RENOVATION (2027-2028) PT 3,810,000 3,810,000 PK-XX Funding Source #1 - City CIP Fund CC 3,550,000 3,550,000 PK-XX Funding Source #2 - Equipment Replacement Fund ERF 260,000 260,000 B PK-12 (NEW) MARLIN PARK RENOVATION (2027-2028) PT 3,900,000 3,900,000 PK-XX Funding Source #1 - City CIP Fund CC 3,775,000 3,775,000 PK-XX Funding Source #2 - Equipment Replacement Fund ERF 125,000 125,000 B PK-13 (NEW) BOOTHBAY PARK FAMILY PLAYGROUND AND PICNIC SITE IMPROVEMENTS (2027-2028) PT 4,000,000 500,000 3,500,000 PK-08 Funding Source #1 - City CIP Fund CC 1,840,000 500,000 1,340,000 PK-08 Funding Source #2 - Equipment Replacement Fund ERF 110,000 110,000 PK-08 Funding Source #3 - Parks-in-Lieu Fund PIL 2,050,000 2,050,000 (NEW) TURNSTONE PARK RENOVATION PT 1,722,000 1,722,000 PK-XX Funding Source #1 - City CIP Fund CC 1,622,000 1,622,000 PK-XX Funding Source #2 - Equipment Replacement Fund ERF 100,000 100,000 (NEW) SUNFISH PARK RENOVATION PT 2,708,000 2,708,000 PK-XX Funding Source #1 - City CIP Fund CC 2,508,000 2,508,000 PK-XX Funding Source #2 - Equipment Replacement Fund ERF 200,000 200,000 (NEW) PARKING LOT RESURFACING (Civic Center, South Drive; Police Station; Port Royal; Boat Park; Library/Community Center; Rec. Ctr. & South Parkinglot; Senior Center; Boothbay; Sea Cloud) CC 600,000 600,000 (NEW) PORT ROYAL SYNTHETIC RESURFACING CC 647,000 647,000 (NEW) SEA CLOUD PARK S1, S2, B1 SYNTHETIC RESURFACING CC 800,000 800,000 (NEW) SHAD PARK RENOVATION PT 2,311,000 2,311,000 PK-XX Funding Source #1 - City CIP Fund CC 2,176,000 2,176,000 PK-XX Funding Source #2 - Equipment Replacement Fund ERF 135,000 135,000 (NEW) GATESHEAD PARK RENOVATION CC 894,600 894,600 (NEW) REPLACE CATAMARAN PLAYGROUND ERF 150,000 150,000 (NEW) REPLACE KETCH PLAYGROUND ERF 140,000 140,000 (NEW) SEA CLOUD PARK S4 SYNTHETIC RESURFACING CC 1,294,000 1,294,000 (NEW) RESURFACING: TENNIS (EDGEWATER, CATAMARAN); BASKETBALL (CATAMARAN, VIBE, EDGEWATER) CC 304,800 304,800
(NEW) REPLACE PORT ROYAL PLAYGROUND ERF 125,000 125,000 (NEW) REPLACE SEA CLOUD PLAYGROUND ERF 200,000 200,000 (NEW) ERCKENBRACK PARK RENOVATION PT 4,321,000 4,321,000 PK-XX Funding Source #1 - City CIP Fund CC 4,221,000 4,221,000

6.3 Attachment 7 - 15 Year CIP Parks Projects
 
 
116

Capital Improvement Program
Fiscal Year 2023-24 through Fiscal Year 2037-38
ATTACHMENT 7
Category NO. Project Name Funding
Source
TOTAL - Not
Including Prior
Years
2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32 2032-33 2033-34 2034-35 2035-36 2036-37 2037-2038

PARKS PROJECTS
PK-XX Funding Source #2 - Equipment Replacement Fund ERF 100,000 100,000 (NEW) EDGEWATER PARK SOFTBALL AND SOCCER SYNTHETIC RESURFACING CC 647,000 647,000 (NEW) REPLACE SHOREBIRD PARK FITNESS COURT ERF 200,000 200,000 (NEW) DOG PARK SYNTHETIC RESURFACING CC 300,000 300,000 (NEW) RESURFACING: TENNIS (EDGEWATER, CATAMARAN); BASKETBALL (CATAMARAN, VIBE, EDGEWATER) CC 319,200 319,200
(NEW) REPLACE KILLDEER PARK PLAYGROUND ERF 180,000 180,000 (NEW) REPLACE FARRAGUT PLAYGROUND ERF 180,000 180,000 (NEW) PARKING LOT RESURFACING (Civic Center, South Drive; Police Station; Port Royal; Boat Park; Library/Community Center; Rec. Ctr. & South Parkinglot; Senior Center; Boothbay; Sea Cloud) CC 600,000 600,000 (NEW) CATAMARAN AND SEA CLOUD S3 SYTHETIC RESURFACING CC 1,248,000 1,248,000 39,289,600 1,450,000 3,050,000 1,820,000 1,368,000 8,210,000 9,977,000 2,311,000 894,600 290,000 6,244,800 1,147,000 679,200 600,000 1,248,000 -

6.3 Attachment 7 - 15 Year CIP Parks Projects
 
 
117

Capital Improvement Program
Fiscal Year 2023-24 through Fiscal Year 2037-38
ATTACHMENT 8
Category NO. Project Name Funding
Source
TOTAL - Not
Including Prior
Years
2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32 2032-33 2033-34 2034-35 2035-36 2036-37 2037-2038

STREET / TRAFFIC SIGNAL PROJECTS
A ST-01 (301-698) TRAFFIC SIGNAL SYSTEM UPGRADES (2020-2021) PT 8,925,000 100,000 1,000,000 7,825,000 - - ST-01 Funding Souce #1 - SB1 SB1 1,500,000 1,500,000 ST-01 Funding Souce #2 - Measure W MW 1,053,000 100,000 628,000 325,000 ST-01 Funding Source #3 - Equipment Replacement Fund ERF 372,000 372,000 ST-01 Funding Souce #3 - City CIP CC 6,000,000 6,000,000 B ST-02 (NEW) SUBSTRUCTURE AND SUPERSTRUCTURE BRIDGE IMPROVEMENTS (2023-2024) SB1 850,000 400,000 450,000 A ST-03 (NEW) STREET REHABILITATION AND PARK PATHWAY RESTORATION (2023-2024) PT 1,800,000 1,800,000 ST-04 Funding Souce #1 - Measure A MA 1,500,000 1,500,000 ST-04 Funding Souce #2 - Gas Tax GT - - ST-04 Funding Souce #3 - Meassure M MM - - ST-04 Funding Souce #4 - SB1 SB1 - - ST-04 Funding Source #5 - City CIP (Park Pathways) CC 300,000 300,000 A ST-04 (NEW) STREET REHABILITATION AND PARK PATHWAY RESTORATION (2024-2025) PT 1,800,000 - 1,800,000 ST-06 Funding Souce #1 - Measure A MA 1,000,000 1,000,000 ST-06 Funding Souce #2 - Gas Tax GT 500,000 500,000 ST-06 Funding Souce #3 - Meassure M MM - - ST-06 Funding Souce #4 - SB1 SB1 - - ST-06 Funding Source #5 - City CIP (Park Pathways) CC 300,000 300,000 C ST-05 (NEW) BICYCLE AND PEDESTRIAN IMPROVEMENTS PROJECT (2024-2025) MA 325,000 75,000 250,000 A ST-06 (NEW) STREET REHABILITATION AND PARK PATHWAY RESTORATION (2025-2026) PT 1,800,000 - - 1,800,000 - - ST-07 Funding Souce #1 - Measure A MA 500,000 500,000 ST-07 Funding Souce #2 - Gas Tax GT 500,000 500,000 ST-07 Funding Souce #3 - Meassure M MM 300,000 300,000 ST-07 Funding Souce #4 - SB1 SB1 200,000 200,000 ST-07 Funding Source #5 - City CIP (Park Pathways) CC 300,000 300,000 B ST-07 (NEW) FIRE AND RESCUE BOAT RAMP REHABILITATION (2025-2026) CC 280,000 80,000 200,000 A ST-08 (NEW) STREET REHABILITATION AND PARK PATHWAY RESTORATION (2026-2027) PT 1,800,000 - - - 1,800,000 ST-08 Funding Souce #1 - Measure A MA 800,000 800,000 ST-08 Funding Souce #2 - Gas Tax GT 200,000 200,000 ST-08 Funding Souce #3 - Meassure M MM - - ST-08 Funding Souce #4 - SB1 SB1 500,000 500,000 ST-08 Funding Source #5 - City CIP (Park Pathways) CC 300,000 300,000 A ST-09 (NEW) STREET REHABILITATION AND PARK PATHWAY RESTORATION (2027-2028) PT 1,500,000 1,500,000 ST-08 Funding Souce #1 - Measure A MA 700,000 700,000 ST-08 Funding Souce #2 - Gas Tax GT 325,000 325,000 ST-08 Funding Souce #3 - Meassure M MM 100,000 100,000 ST-08 Funding Souce #4 - SB1 SB1 375,000 375,000 ST-08 Funding Source #5 - City CIP (Park Pathways) CC - - (NEW) STREET REHABILITATION AND PARK PATHWAY RESTORATION (long term) PT 15,000,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 ST-XXX Funding Souce #1 - Measure A MA 7,000,000 700,000 700,000 700,000 700,000 700,000 700,000 700,000 700,000 700,000 700,000 ST-XXX Funding Souce #2 - Gas Tax GT 3,250,000 325,000 325,000 325,000 325,000 325,000 325,000 325,000 325,000 325,000 325,000 ST-XXX Funding Souce #3 - Meassure M MM 1,000,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 ST-XXX Funding Souce #4 - SB1 SB1 3,750,000 375,000 375,000 375,000 375,000 375,000 375,000 375,000 375,000 375,000 375,000 ST-XXX Funding Source #5 - City CIP (Park Pathways) CC - - - - - - - - - - - 34,080,000 2,300,000 3,325,000 9,955,000 1,800,000 1,700,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000

6.3 Attachment 8 - 15 Year CIP Streets Projects
 
 
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DATE: March 27, 2023

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

FROM: Ramon Towne, Interim Public Works Director/City Engineer Edmund Suen, Finance Director
Zaheed Danish, Interim Public Works Maintenance Manager DEPARTMENT: Public Works, Finance
SUBJECT: REVIEW OF PROJECTED WATER RATES FOR FY 2023-2024

AND POLICY DIRECTION FOR RATE NOTIFICATION UNDER
PROPOSITION 218

RECOMMENDATION
It is recommended that the Estero Municipal Improvement District (EMID) Board of Directors review and discuss the proposed water rates for FY 2023-2024 and by Minute Order provide direction on the issuance of a notice to all rate payers under the requirements of Proposition 218 for a public hearing to be held on June 5, 2023.

EXECUTIVE SUMMARY
The EMID water enterprise is in good financial shape; its water service rates remain below the average rates compared to other agencies on the Bay Area Peninsula, and it is debt free. As of July 1, 2022, the Operating Reserve balance was $8,761,676, to be used in case of an operational emergency or to smooth any “rate shocks” to water customers.

However, as much of EMID’s infrastructure enters its fifth decade in service, some of its components are nearing the end of their expected service life. In Fiscal Year 2019- 2020, the District completed a 20-year master plan study which identified and prioritized projects for a 20-year time horizon. The costs for recommended projects have been

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incorporated into the 10-year Water Enterprise projections and the rate model developed by consultant Bartle Wells Associates (BWA). The recommended water rates would provide sufficient revenue for necessary maintenance, operations, and capital improvements for the five-year period including FY 2023-2024.

Included below is a snapshot of Table 3 from Appendix C of the BWA Water and Wastewater Rate Study Updates Results Memo (Attachment 1) This table shows the proposed water rates for FY 2023-2024 and a projection of future water rates necessary to support the operation. As seen in the table, water bills are composed of two components, a fixed monthly charge based on meter size, plus a water consumption charge based on each customer’s metered water use. The fixed monthly charge corresponds to the District’s fixed costs to provide water delivery to customers, based upon the size of the meter.

Included below is Table 5 from Attachment 1, which provides more information about how the proposed new rates impact ratepayers in FY 2023-2024 and projects the impact into the future. The primary driver for the proposed rate increases is to smooth District rate increases due to projected increases in the San Francisco Public Utilities Commission (SFPUC) wholesale water rate. The proposed water rates are designed to cover District operating and capital costs and maintain the operating fund above the 25% target reserve level.

Table 3City of Foster City / Estero Municipal Improvement DistrictProposed Water Rates - Two Tier Hybrid Model Current Rates FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 FY2030 FY2031 FY2032 FY2033 Monthly Meter Charge3/4" $26.05 $27.60 $29.25 $31.00 $32.85 $34.80 $36.20 $37.65 $39.15 $40.70 $42.351" 43.42 46.00 48.75 51.67 54.75 58.00 60.33 62.75 65.25 67.83 70.581-1/2" 104.20 110.40 117.00 124.00 131.40 139.20 144.80 150.60 156.60 162.80 169.402" 138.93 147.20 156.00 165.33 175.20 185.60 193.07 200.80 208.80 217.07 225.873" 303.92 322.00 341.25 361.67 383.25 406.00 422.33 439.25 456.75 474.83 494.084" 547.05 579.60 614.25 651.00 689.85 730.80 760.20 790.65 822.15 854.70 889.356" 1,215.67 1,288.00 1,365.00 1,446.67 1,533.00 1,624.00 1,689.33 1,757.00 1,827.00 1,899.33 1,976.338" or greater 2,084.00 2,208.00 2,340.00 2,480.00 2,628.00 2,784.00 2,896.00 3,012.00 3,132.00 3,256.00 3,388.00 Conservation-Based Water Rate Model (based on bi-monthly allotments)Single Family ResidentialTier 1 0-20 per ccf 6.10 6.36 6.62 6.89 7.18 7.48 7.53 7.59 7.65 7.70 7.74Tier 2 Over 20 ccf 6.64 7.01 7.30 7.59 7.91 8.21 8.24 8.28 8.33 8.36 8.38Multi-Family Residential (per living unit)Tier 1 0-10 ccf per living unit 6.10 6.36 6.62 6.89 7.18 7.48 7.53 7.59 7.65 7.70 7.74Tier 2 Over 10 ccf per living unit 6.68 7.09 7.38 7.68 8.00 8.30 8.33 8.37 8.42 8.44 8.46Irrigation CustomersTier 1 <=100% of annual budget 6.10 6.36 6.62 6.89 7.18 7.48 7.53 7.59 7.65 7.70 7.74Tier 2 >100% of annual budget 6.70 7.22 7.52 7.82 8.14 8.44 8.47 8.50 8.55 8.57 8.59Commercial and Fire Line CustomersBase Consumption Rate 6.21 6.47 6.74 7.01 7.31 7.61 7.66 7.71 7.78 7.82 7.85 Monthly Fire Meter Charge3/4" 36.47 38.64 40.95 43.40 45.99 48.72 50.68 52.71 54.81 56.98 59.291" 36.47 38.64 40.95 43.40 45.99 48.72 50.68 52.71 54.81 56.98 59.291-1/2" 36.47 38.64 40.95 43.40 45.99 48.72 50.68 52.71 54.81 56.98 59.292" 48.71 51.61 54.70 57.97 61.43 65.08 67.69 70.41 73.21 76.11 79.193" 106.28 112.61 119.34 126.48 134.03 141.98 147.70 153.61 159.73 166.06 172.794" 191.47 202.86 214.99 227.85 241.45 255.78 266.07 276.73 287.75 299.15 311.276" 425.40 450.71 477.65 506.23 536.44 568.28 591.15 614.82 639.32 664.63 691.588" or greater 729.40 772.80 819.00 868.00 919.80 974.40 1,013.60 1,054.20 1,096.20 1,139.60 1,185.80(Minimum charge is equivalent to 1-1/2" meter charge)

TWO TIER HYBRID MODEL
Recommended Rates

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Based upon the EMID Board of Directors’ policy direction, the District will mail a notice to all ratepayers prior to the April 21, 2023, statutory deadline for a public hearing as required by Proposition 218. The hearing will be held on June 5, 2023, and, if adopted, the new rates will go into effect on July 1, 2023.

BACKGROUND/ANALYSIS
As of January 29, 2023, the District provides water service to approximately 8,247 water service and fire protection service accounts/meters. Most of the District’s customers are residential.

The primary drivers for the proposed FY 2023-2024 rates include the following:
•Cost of Wholesale Water from the SFPUC. The primary driver for the proposed rate increases is to smooth District rate increases due to projected increases in the SFPUC wholesale water rate. The SFPUC, the sole source of water supply for the District, is projecting the current rate of $4.75 per hundred cubic feet (ccf) in FY 2023 will increase to $5.30 in FY 2024. The proposed water rates are designed to phase in District rate increases over time to avoid sharp increases.
•Bay Area Water Supply and Conservation Agency (BAWSCA) Surcharge.

The District will continue to make annual payments to BAWSCA for capital improvement costs associated with the $4.8 billion Water System Improvement Project (WSIP) to upgrade the Hetch Hetchy Water System. For FY 2023-2024, the payment will be $594,012. For rate setting purposes, the BAWSCA Bond Surcharge is estimated at $0.38 per ccf. The San Francisco portion of the WSIP is 100% complete as of October 2020. The Regional Portion is approximately 99% complete. The current forecasted date to complete the overall WSIP is May 2023, however SFPUC operating costs and debt service are projected to increase over the next five years.
•System Water Losses. Water utilities incur real losses from pipeline leakage and apparent losses when customer water consumption is not properly measured or billed. The current water rates are calculated with 10.0% water loss based on the Water Division’s records. This is down from 11.0% in FY 2022- 2023 because of improvements that have been made and are planned based on Table 5Foster City / Estero Municipal Improvement DistrictProjected Water Rate Impacts Current
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
Two Tier Hybrid ModelSingle Family Residential Monthly Rate $74.85 $78.48 $82.21 $86.12 $90.29 $94.64 $96.44 $98.37 $100.35 $102.30 $104.27$ Increase 3.63 3.73 3.91 4.17 4.35 1.80 1.93 1.98 1.95 1.97% Increase 4.8% 4.8% 4.8% 4.8% 4.8% 1.9% 2.0% 2.0% 1.9% 1.9% Based on Single Family Residential Use of 8 ccf
Fiscal Year Ending June 30 Extended Year ProjectionProjected Water Bills

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the water master plan completed in FY 2020-2021. The proposed water rates are designed to cover the water loss and fund projects, such as water meter replacements, that reduce water loss.
•Capital Funding. EMID's strategy for funding long-term capital water improvements calls for an annual transfer from water operating revenues to the City's Capital Improvement Fund to fund those projects over the next 15 years.

The proposed rate projections include a capital set aside of $1,120,000 annually through the ten-year term.
•Conservation Costs. District staff is recommending that the EMID Board of Directors continue to allocate $200,000 annually to the Water Sustainability Rebate Program to encourage voluntary water conservation efforts and provide funding for the District water leakage detection and repair program. •Operational Costs. Draft operations and maintenance projections assume 4.0% annual increases in personnel costs and 2.5% annual increases in all other costs (excluding wholesale water purchases) to keep revenues in line with operating expenses.

Water/Wastewater Rate Assistance Program
In Rate Year 2020-2021, the District Board approved an assistance program for customers whose income also qualified them for Pacific Gas and Electric Company’s California Alternate Rates for Energy (CARE) discount program. While it is not possible to know exactly how many households qualify, based upon the number of customers enrolled in the PG&E CARE program, BWA estimates that approximately 227 customers may potentially be eligible for the up to $15 per month discount. As of March 1, 2023, there were nineteen (19) customers enrolled in the program. Participation in the Water/Wastewater Rate Assistance Program (W/WRAP) is supported by non-rate sources of revenue such as fines and penalties, to maintain compliance with California Proposition 218, so water rates are unaffected by participation in the program.

The cost of the W/WRAP, based on current enrollment, is $3,420 per year for the Water Enterprise. The maximum potential cost of a $15/month discount for all estimated 227 eligible customers is $41,000 per year. Through the first eight months of FY 2023, revenue from delinquent water payments totaled $41,329, which is sufficient to fund the program. Staff will continue to monitor the funding sources available for the program.

The W/WRAP is authorized by the EMID Board on an annual basis, and authorization to continue the program will be an action item on the agenda with the consideration of rates in June.

Rate Smoothing
The EMID Board of Directors has implemented a long-term rate smoothing model that takes into consideration the long-range wholesale water rate projections by the SFPUC and significant capital improvements that have a profound impact on rates, such as the WSIP program. The rate smoothing model attempts to maintain revenue increases at no greater than 10% per year. The proposed FY 2023-2024 rates use a 10-year model,

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which has proven to be successful in dampening the impacts of significant rate increases imposed by the SFPUC on the ratepayers.

Rate Survey
As shown in Attachment 1 (Appendix C, Table 5), under the proposed rates for both the fixed meter charge and water use, the average monthly water bill for Single Family customers using 8 hundred cubic feet (hcf) of water per month in FY 2023-2024 is $78.48. A survey of communities along the San Francisco Peninsula was conducted to compare the District’s typical residential monthly water bill with neighboring communities. The results of the survey are summarized on the Typical Single Family Residential Monthly Water Charges chart in Appendix B of Attachment 1. Since it is unknown what the comparator agencies will be proposing for FY 2023-2024, the District compares its current monthly residential water bills to the current rates of the neighboring agencies. The survey indicates the District's water rates remain among the lowest on the Peninsula. For FY 2022-2023, the average monthly water bill for the region (based on 6 hcf of water for monthly usage) is $83.35 per month and the District’s FY 2022-2023 average monthly residential water bill is $62.65 per month, or about 25% less than the current average of neighboring communities.

Proposition 218 Notification
District staff requests that the EMID Board of Directors review the information prepared by BWA and staff and provide direction regarding water rates for FY 2023-2024. Based on that direction, District staff will prepare a notice that will be mailed to all ratepayers on or before April 21, 2023, in compliance with the provisions of Proposition 218. A public hearing on and adoption of the proposed rates will be agendized for the June 5, 2023 EMID Board of Directors regular meeting in conjunction with the FY 2023-2024 Annual Budget Public Hearing. If adopted, the new rates will become effective July 1, 2023.

Between the Public Notice mailing date and the public hearing date, the EMID Board of Directors will receive the FY 2023-2024 Preliminary Annual Budget and Five-Year Financial Plan. Any adjustments that occur based upon EMID Board direction at the Budget Study Session will be incorporated into an updated rate model at the time of the public hearing. However, it is the opinion of District staff that conservative assumptions have been employed in the creation of the attached rate models. Accordingly, District staff believes that the rates proposed herein are the maximum rates that would be recommended for FY 2023-2024. At the public hearing, the EMID Board would have the option to adopt rates equal to or lower than what is noticed to rate payers under Proposition 218, but it may not increase the rates above what is noticed. Recent case law and EMID experience with wastewater rates have demonstrated that there are a number of advantages to adopting rate plans that set rates for multiple years, so it is anticipated that staff will bring a multi-year recommendation aligned with the wastewater rate setting process for rate year 2025-2026 and beyond. Under state law, the District may adopt a rate plan that covers a maximum of five years.

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CALIFORNIA ENVIRONMENTAL QUALITY ACT
Not Applicable

FISCAL IMPACT
There is no impact to receiving this report and authorizing the preparation of the Proposition 218 Notice. Further, rate revenue provides all funding for the water distribution service costs in the EMID service area as described in this staff report and its attachment. The costs of these services do not impact the City budget or the General Fund.

CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
•Facilities and Infrastructure
•Innovation and Sustainability
•Smart Planning, Development, and the Local Economy
ATTACHMENTS:

Attachment 1 - Bartle Wells Associates Water and Wastewater Rate Study Update Results Memo dated March 15, 2023

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1 | P a g e
2625 Alcatraz Ave, #602
Berkeley, CA 94705
Tel 510 653 3399
www.bartlewells.com
DATE: March 15th, 2023
TO: City of Foster City/Estero Municipal Improvement District FROM: Bartle Wells Associates
SUBJECT: DRAFT Water and Wastewater Rate Study Update Results

SUMMARY OF FINDINGS AND RECOMMENDATIONS
Introduction and Background
The Estero Municipal Improvement District (District) engaged Bartle Wells Associates (BWA) to develop 10-year financial projections for the District’s Water and Wastewater Enterprises and to recommend water and wastewater rate adjustments for the next five- year period. BWA last conducted formal rate studies in 2022, which resulted in a one-year rate approval for water rates for FY 2023. No public hearing was held for wastewater, as the adopted wastewater rates were determined to be adequate.

Current and projected water service rates are in the lower range compared to other agencies on the Peninsula and wastewater service rates are in the middle-high range compared to other agencies on the Peninsula. The District water and wastewater enterprises face unique infrastructure funding challenges.

Water
The primary driver for the proposed rate increases is to smooth District rate increases due to projected increases in the San Francisco Public Utilities Commission (SFPUC) wholesale water rate. The rate increase is due to a variety of factors including growth in capital spending, continued low water usage due to drought and covid-19 recovery, and repayment of the balancing account.

SFPUC, the sole source of water supply for the District, released updated projections for their wholesale rate for the next five years (FY 2024 to FY 2028). SFPUC is projecting the current rate of $4.75 in FY 2023 per hundred cubic feet (ccf) will increase to $5.30 in FY 2024. The wholesale rate is projected to remain flat at $5.30 per ccf from FY 2024 to FY 2027, with a final increase to $5.54 in FY 2028.

6.4 Attachment 1 - Foster City EMID Draft Water and Sewer Rate Study 3.15.2023

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2 | P a g e
SFPUC rates were historically held level at $4.10/ccf for six years (FY 2017 to FY 2022) despite escalating SFPUC debt service and operating costs through use of a balancing account. The balancing account was built up from SFPUC wholesale water sales exceeding projections used in rate setting. In FY 2023, the wholesale rate was increased 15.9% to $4.75/ccf. The increase in the SFPUC wholesale rates was due to the balancing account fund balance reaching zero. SFPUC rates are projected to increase by 11.6% in FY 2024, 0% in FY 2025, 0% in FY 2026, and 0% in FY 2027 and 4.5% in FY 2028.

During the time that SFPUC wholesale rates were held flat by the balancing account, the District has been gradually increasing its volumetric rates in anticipation of projected wholesale rate increases by SFPUC. While the wholesale rate increases have come to fruition, the District’s rates have been phased to ensure sufficient revenues and avoid sharp increases based on a rate smoothing model.

The District will also continue to make annual payments, projected to be $594,012 in FY 2024, to the Bay Area Water Supply and Conservation Agency (BAWSCA) for the WSIP capital improvements that were funded through the issuance of bonds. The water enterprise’s single largest cost is water purchases from SFPUC.

BWA proposed water rates are designed to maintain the operating fund above target levels (90 days operating expenses in reserves) and cover District operating and capital costs. Excluding water purchase and capital related costs, District operating costs are projected to increase by about 3% per year. Additionally, the District is projected to set aside $2,500,000 for capital improvements in FY 2024 and $1,120,000 each year thereafter. The capital improvement transfer amount is based on funding the District’s water master plan. Proposed water rates are based on 10% water loss, a reduction from 11% water loss used in the previous study. The amount of the losses is projected to decrease due to the District’s efforts to replace aging meters. That is, 90% of the water EMID purchases is sold to retail customers.

To maintain the operating reserves, fund the capital set aside, and phase in volumetric rates, BWA recommends the District implement a 4.3% volumetric rate increase and a 6% meter charge increase in FY 2024. The average bill for a single family home would increase by 4.8% or $3.63 per month.

Detailed water rate calculations are shown in APPENDIX C.

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Wastewater
The District has entered into a Joint Powers Agreement with the City of San Mateo where the District receives treatment of its wastewater via the San Mateo Wastewater Treatment Plant (WWTP). The District is responsible for its share of operating and maintenance costs that San Mateo (as the lead agency and the contracting party) incurs treating the District’s wastewater, as well as approximately 24% of the WWTP improvement costs incurred as part of the Clean Water Program (CWP), a 10-year comprehensive capital improvement project initiated in 2014. The Cities of San Mateo and Foster City (District) are expanding the jointly owned WWTP at an estimated cost of $670 MM with $152 MM of that falling under Foster City’s contributions. This is in addition to local capital projects for the District’s own wastewater collection system. The wastewater enterprise intends to fund collection system capital expenditures through annual transfers from the operating fund to the capital improvement fund.

In June 2020, to fund the anticipated costs of the WWTP CWP improvements, the District Board approved 5 years of wastewater rate increases: three 14.25% per increases in FY 2021 through FY 2023, a 10% wastewater rate increase in FY 2024, and a 2% increase in FY 2025. BWA’s 2023 analysis shows that the District has adequate financing capacity for projected debt issuances in the next several years and recommends spreading the remaining rate increases out over a longer period. BWA proposes reducing the 10% increase in FY 2024 to 3% and implementing the adopted 2% increase in FY 2025. BWA recommends conducting a 5-year rate study analysis in FY 2025, which would result in an adopted rate schedule for next 5 year period.

Detailed wastewater rate calculations are shown in APPENDIX E.

Rate Surveys
A survey of communities along the San Francisco Peninsula was conducted to compare the District’s typical residential monthly water and wastewater bills with neighboring communities. The results of the water survey are summarized in APPENDIX B and the results of the wastewater survey are summarized in APPENDIX D.

The water survey compares a median monthly water bill for 6 units of water which would be a common residential consumption. Including the recommended increase, the

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District’s median monthly water bill proposed for FY 2024 is $65.76. Since it is unknown what the comparator agencies are proposing for FY 2024, the District compares its FY 2023 monthly residential water bills to the FY 2023 monthly residential water bills for the neighboring agencies. The survey indicates that the District’s water rates are among the lowest on the Peninsula. The average monthly water bill for the region based on 6 ccf is $83.35 per month and the District’s average monthly residential water bill is $62.65 per month, or about 25% less. Since the proposed increase is also less than the FY 2023 average, it is likely that EMID customers will continue to pay much lower than average water bills.

Including the recommended increase, the District’s proposed monthly wastewater bill for FY 2024 is $130.87. Since it is unknown what the comparator agencies are proposing for FY 2024, the District compares its FY 2023 monthly residential wastewater bills to the FY 2023 monthly residential wastewater bills for the neighboring agencies. The survey indicates that the District’s current wastewater rates are above the average amongst its comparator agencies. The average monthly bill for the region is $106.09 and the District’s rate is $127.06 per month, or about 20% more.

APPENDIX F shows how the combined water and wastewater bills compare to regional agencies based on FY 2023 rates. The District’s total combined water and wastewater bill is $189.71 per month. The average monthly combined water and wastewater bill for the region is $189.63 per month or approximately the same.

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Water Enterprise Fund
The District currently provides water service to a population of approximately 36,500.

Most of the District’s customers are residential. Table 1 shows the approximately 8,247 accounts/meters that allow for water service and fire protection service.

Table 1
City of Foster City / Estero Municipal Improvement District Water Meters By Size
Data as of: 01/29/23
Water Service
3/4" 6,825 1.00 6,825
1" 453 1.67 755
1-1/2" 169 4.00 676
2" 379 5.33 2,021
3" 89 11.67 1,038
4" 57 21.00 1,197
6" 29 46.67 1,353
8" or greater 19 80.00 1,520
Subtotal 8,020 15,385
Private Fire Protection Service
3/4" 1 1.40 1
1" 7 1.40 10
1-1/2" 3 1.40 4
2" 0 1.87 0
3" 2 4.08 8
4" 35 7.35 257
6" 96 16.33 1,568
8" or greater 83 28.00 2,324
Subtotal 227 4,172
Total 8,247 19,557
Source: Foster City/Estero Municipal Improvement District water use records [2] Private fire protection service ratio based on the fire service line; Resolution No. 2715 [3] Equals the number of accounts multiplied by the meter ratio for each meter size.

Meter Size Accounts Meter Ratio1,2 Est. Meter Equivalents3 [1] The meter ratios shall be based on meter size in compliance with ratios established by the American Water Works Association (AWWA) Sizing Water Service Lines and Meters M22, Second Edition, 2004 (M22 Manual)

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Table 2 illustrates the current reserves that the District can draw down in case of emergency or to smooth any “rate shocks” to its customers. In recent years reserves were used as a buffer due to unexpected increases in system water losses.

The District is meeting its 90-day operating fund reserve target in FY 2023 (estimated to be $4.18 million.) The target is based on the District’s long standing reserve policy and is an industry standard minimum target to maintain adequate short term liquidity in case of emergencies.

The wholesale water purchase rates that SFPUC is projecting through FY 2028 are shown graphically in CHART A. The SFPUC rates are projected to increase from $4.75/ccf in FY 2023 to $5.54/ccf in FY 2028.

Table 2
City of Foster City / Estero Municipal Improvement District Water Enterprise Operating Reserves
July 1, 2022
Fund Reserve Component Reserve Balance
Reserved for Maintenance & Operation (401) $8,761,676
Total $8,761,676
operating expenditures.

Note: Rate model only includes fund reserve components available to fund ongoing Source: City of Foster City/Estero Municipal Improvement District Staff

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CHART A

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Table 3 summarizes the District’s projected operating expenditures which are anticipated to increase over the next five years by about 8.9%.

Table 3City of Foster City / Estero Municipal Improvement District Water Enterprise O&M Projection RevisedBudgetFY2023 FY2024 FY2025 FY2026 FY2027 FY2028Employee Services 2,631,141 2,591,329 2,694,982 2,802,781 2,914,893 3,031,488 4.0%Internal Services - Others 952,510 1,010,581 1,035,846 1,061,742 1,088,285 1,115,492 2.5%Internal Services - ERF 510,436 510,436 523,197 536,277 549,684 563,426 2.5%Services & Supplies 706,362 750,362 769,121 788,349 808,058 828,259 2.5%SFPUC Water Purchases 10,246,000 10,289,000 10,326,000 10,363,000 10,400,000 10,907,000 variesBAWSCA Bond Repayment 645,785 594,012 594,012 594,012 594,012 594,012 Reallocation [2] 1,255,133 1,288,230 1,320,436 1,353,447 1,387,283 1,421,965 2.5%Water Sustainability 200,000 200,000 200,000 200,000 200,000 200,000 Capital Outlay/Vehicles 5,500 600,000 15,000 15,375 15,759 16,153 2.5% TOTAL O&M Expenditures 17,152,867 17,833,950 17,478,593 17,714,983 17,957,974 18,677,7964.0% -2.0% 1.4% 1.4% 4.0% [1] Based on City/District Staff direction[2] Costs allocated to the Water Enterprise from other departments based on the City's cost allocation study.

Five Year Projection Annual % Increase [1]Expenditures

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Table 4 summarizes the current water rates. The District has variable expenditures which are expenditures that are impacted by the amount of water its customers consume. These costs must be recouped via its volumetric water charge, $6.10 per ccf in FY 2023. Likewise, the District’s meter charges recover fixed expenditures, expenditures that are fixed regardless of amount of water that is consumed, $26.05 for a ¾” meter in FY 2023.

The District has a two-tiered model for its residential customers where higher levels of water consumption are subject to higher water rates based on a proportionate share of conservation program costs. Commercial customers are charged a uniform rate, which includes commercial customer’s proportionate share of conservation program costs.

Conservation costs of $200,000 per year are allocated to each customer class based on their percentage of total usage. Residential and irrigation customers pay conservation costs on Tier 2 usage only, while commercial customers pay their share of conservation costs on each unit of water usage.

For its irrigation customers, the District has worked with John Whitcomb of Waterfluence to assign each irrigation customer a water budget. Any water consumed above the irrigation customers allotted amount is subject to a higher Tier 2 rate based on each customer’s share of conservation program costs.

APPENDIX A shows the District’s historical water use trends from the prior year. The recent trend has been a decrease in irrigation usage and residential usage, and an increase in commercial usage. BWA’s proposed rates are designed to match volumetric expenses (such as water purchases) with volumetric revenue. The rate structure mitigates over or under collecting revenue due to fluctuations in water use.

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Table 4
City of Foster City / Estero Municipal Improvement District Current Rates
Current Rates 2023
Fixed Meter Charge
Monthly Meter Charge
Meter Size
3/4" $26.05
1" $43.42
1-1/2" $104.20
2" $138.93
3" $303.92
4" $547.05
6" $1,215.67
8" or greater $2,084.00
Bi-Monthly Water Consumption Tiers and Rates
Single Family Residential
Tier 1 0-20 per ccf $6.10
Tier 2 Over 20 ccf $6.64
Multi-Family Residential
Tier 1 0-10 ccf per living unit $6.10
Tier 2 Over 10 ccf per living unit $6.68
Irrigation Customers
Tier 1 <=100% of annual budget $6.10
Tier 2 >100% of annual budget $6.70
Commercial and Fire Line
All usage $6.21
Monthly Private Fire Protection Charge
Meter Size
3/4" $36.47
1" $36.47
1-1/2" $36.47
2" $48.71
3" $106.28
4" $191.47
6" $425.40
8" or greater $729.40

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Low Income Discount
Currently Foster City has 13 customers enrolled in the Water/Wastewater Rate Assistance Program (WWRAP), which was implemented in 2020. Customers meeting the eligibility and qualification requirements below are granted a discount of up to $15 per month each on their qualifying Water and Wastewater accounts, not to exceed a $30 per month discount per customer. To be eligible for the WWRAP, customers must show that they qualify for the PG&E CARE Program or other public assistance program or submit proof of income eligibility.

According to Pacific Gas & Electric, 680 customers are enrolled in the PG&E CARE Program in Foster City. BWA estimates that approximately 227 of these customers are single family residential and therefore would be eligible for the discount. Multifamily units would not be eligible for the discount because water service is often not separately metered for each unit and the bill is typically not paid by the individual units.

The District funds the current low income discount through non-rate sources of revenue such as fines and penalties, cell tower lease and general fund revenue to maintain compliance with California Proposition 218.

The estimated maximum potential cost of a $30/month discount for 227 customers amounts to $82,000 per year. Since the low income discount revenue sources cannot be funded with rates, rates are unaffected by the decision on the terms of the program and hence are not required to be included in the Proposition 218 notification.

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APPENDIX A

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APPENDIX B

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APPENDIX C
Table 1City of Foster City / Estero Municipal Improvement District Water Enterprise Cash Flow Projection - Residential Two Tier Rate Structure Hybrid Model Fiscal Year Ending June 30 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033Assumptions:Interest Earnings Rate 0.50% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%Revenue Increase from Growth [1] 0.00% 0.37% 0.37% 0.37% 0.37% 0.37% 0.37% 0.37% 0.37% 0.37% 0.37%Fixed Charge $26.05 $27.60 $29.25 $31.00 $32.85 $34.80 $36.20 $37.65 $39.15 $40.70 $42.35Fixed Rate Adjustment 6.0% 6.0% 6.0% 6.0% 5.9% 4.0% 4.0% 4.0% 4.0% 4.1%SFR Variable Charge $6.10 $6.36 $6.62 $6.89 $7.18 $7.48 $7.53 $7.59 $7.65 $7.70 $7.74Variable Rate Adjustment 4.3% 4.1% 4.1% 4.2% 4.2% 0.7% 0.8% 0.8% 0.7% 0.5%Monthly Service Charge Single Family (8 ccf) $74.85 $78.48 $82.21 $86.12 $90.29 $94.64 $96.44 $98.37 $100.35 $102.30 $104.27Rate Adjustment 4.8% 4.8% 4.8% 4.8% 4.8% 1.9% 2.0% 2.0% 1.9% 1.9% Beginning Fund Balance $8,761,676 $6,329,000 $5,275,100 $5,477,500 $6,406,500 $8,137,500$10,256,700$12,327,700$14,363,700$16,371,700$18,313,700 RevenuesWater Sales & Service ChargesMeter Charge Revenue Estimate 6,114,000 6,501,000 6,915,000 7,356,000 7,823,000 8,318,000 8,684,000 9,065,000 9,460,000 9,871,000 10,309,000Volumetric Revenue Estimate 10,725,000 11,222,000 11,730,000 12,248,000 12,808,000 13,386,000 13,515,000 13,660,000 13,820,000 13,947,000 14,059,000Connection Fees [1] 336,949 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000Interest Earnings - Operating Reserve [2] 44,000 127,000 106,000 110,000 128,000 163,000 205,000 247,000 287,000 327,000 366,000Other 0 0 0 0 0 0 0 0 0 0 0Operating Revenues 17,219,949 17,900,000 18,801,000 19,764,000 20,809,000 21,917,000 22,454,000 23,022,000 23,617,000 24,195,000 24,784,000 ExpensesEmployee Services 2,631,141 2,591,329 2,694,982 2,802,781 2,914,893 3,031,488 3,153,000 3,279,000 3,410,000 3,546,000 3,688,000Internal Services - Others 952,510 1,010,581 1,035,846 1,061,742 1,088,285 1,115,492 1,143,000 1,172,000 1,201,000 1,231,000 1,262,000Internal Services - ERF 510,436 510,436 523,197 536,277 549,684 563,426 578,000 592,000 607,000 622,000 638,000Services & Supplies 706,362 750,362 769,121 788,349 808,058 828,259 849,000 870,000 892,000 914,000 937,000SFPUC Water Purchases 10,246,000 10,289,000 10,326,000 10,363,000 10,400,000 10,907,000 11,271,000 11,648,000 12,037,000 12,440,000 12,855,000BAWSCA Bond Repayment 645,785 594,012 594,012 594,012 594,012 594,012 594,012 594,012 594,012 594,012 594,012Reallocation 1,255,133 1,288,230 1,320,436 1,353,447 1,387,283 1,421,965 1,458,000 1,494,000 1,531,000 1,569,000 1,608,000Capital Outlay / Vehicles 5,500 600,000 15,000 15,375 15,759 16,153 17,000 17,000 17,000 17,000 17,000Operating Expenses 16,952,867 17,633,950 17,278,593 17,514,983 17,757,974 18,477,796 19,063,012 19,666,012 20,289,012 20,933,012 21,599,012 Operating Net Revenues 267,082 266,050 1,522,407 2,249,017 3,051,026 3,439,204 3,390,988 3,355,988 3,327,988 3,261,988 3,184,988 Water Sustainability Fund Transfer 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000Capital Improvement Transfer [3] 2,500,000 1,120,000 1,120,000 1,120,000 1,120,000 1,120,000 1,120,000 1,120,000 1,120,000 1,120,000 1,120,000 Total Expenses 19,652,867 18,953,950 18,598,593 18,834,983 19,077,974 19,797,796 20,383,012 20,986,012 21,609,012 22,253,012 22,919,012 Revenues Less O&M Expenses 267,082 266,050 1,522,407 2,249,017 3,051,026 3,439,204 3,390,988 3,355,988 3,327,988 3,261,988 3,184,988 Revenues Less Total Expenses (2,432,918) (1,053,950) 202,407 929,017 1,731,026 2,119,204 2,070,988 2,035,988 2,007,988 1,941,988 1,864,988 Ending Fund Balance 6,328,758 5,275,050 5,477,507 6,406,517 8,137,526 10,256,704 12,327,688 14,363,688 16,371,688 18,313,688 20,178,688 Revenue Test: Annual Revenues > O&M ExpensesAnnual Revenues Less O&M Expenses 267,082 266,050 1,522,407 2,249,017 3,051,026 3,439,204 3,390,988 3,355,988 3,327,988 3,261,988 3,184,988Pass/fail PASS PASS PASS PASS PASS PASS PASS PASS PASS PASS PASS Fund Reserve Test: Minimum Fund Balance > 25% O&M ExpensesYear-end fund balance 6,328,758 5,275,050 5,477,507 6,406,517 8,137,526 10,256,704 12,327,688 14,363,688 16,371,688 18,313,688 20,178,68825% operating expenses 4,180,000 4,350,000 4,260,000 4,320,000 4,380,000 4,560,000 4,700,000 4,850,000 5,000,000 5,160,000 5,330,000# of Days O&M in Reserves 136 109 116 134 167 203 236 267 295 319 341Pass/fail PASS PASS PASS PASS PASS PASS PASS PASS PASS PASS PASS [1] Estimated for planning purposes [2] Calculated as 2% of the Beginning Fund Balance of the Water Revenue Fund[3] Capital Improvements are funded through the Long-Term Capital Improvement Project Fund Five Year Projection Extended Year Projection

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Table 2City of Foster City / Estero Municipal Improvement DistrictWater Rate Calculation - Two Tier Hybrid Model Fiscal Year Ending June 30 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Fixed Meter Charge Increase 6.00% 6.00% 6.00% 6.00% 6.00% 4.00% 4.00% 4.00% 4.00% 4.00%Fixed Revenues +/- 5% of Fixed Costs? YES YES YES YES YES YES YES YES YES YES Reserves % Above (Below) Reserve Target 121.3% 128.6% 148.3% 185.8% 224.9% 262.3% 296.2% 327.4% 354.9% 378.6%Reserve Target Met? YES YES YES YES YES YES YES YES YES YES Revenue EstimatesMeter Charge Revenue 6,114,000$ 6,501,000$ 6,915,000$ 7,356,000$ 7,823,000$ 8,318,000$ 8,684,000$ 9,065,000$ 9,460,000$ 9,871,000$ 10,309,000$ Other Fixed Revenue 380,949$ 177,000$ 156,000$ 160,000$ 178,000$ 213,000$ 255,000$ 297,000$ 337,000$ 377,000$ 416,000$ Volumetric Revenue 10,725,000$ 11,213,000$ 11,728,000$ 12,239,000$ 12,807,000$ 13,386,000$ 13,520,000$ 13,654,000$ 13,833,000$ 13,951,000$ 14,052,000$ Total Projected 17,219,949$ 17,891,000$ 18,799,000$ 19,755,000$ 20,808,000$ 21,917,000$ 22,459,000$ 23,016,000$ 23,630,000$ 24,199,000$ 24,777,000$ Total Projected Revenue (Rounded '000's) 17,220,000$ 17,891,000$ 18,799,000$ 19,755,000$ 20,808,000$ 21,917,000$ 22,459,000$ 23,016,000$ 23,630,000$ 24,199,000$ 24,777,000$ $17,219,949 $17,900,000 $18,801,000 $19,764,000 $20,809,000 $21,917,000 $22,454,000 $23,022,000 $23,617,000 $24,195,000 $24,784,000 Revenue AllocationFixed 37.7% 37.3% 37.6% 38.0% 38.5% 38.9% 39.8% 40.7% 41.5% 42.3% 43.3%Variable 62.3% 62.7% 62.4% 62.0% 61.5% 61.1% 60.2% 59.3% 58.5% 57.7% 56.7% Costs EstimatesFixed Costs [1] $8,561,082 $7,870,938 $7,478,581 $7,677,971 $7,883,962 $8,096,784 $8,318,000 $8,544,000 $8,778,000 $9,019,000 $9,270,000Variable Costs [2] $11,091,785 $11,083,012 $11,120,012 $11,157,012 $11,194,012 $11,701,012 $12,065,012 $12,442,012 $12,831,012 $13,234,012 $13,649,012Total Projected Costs $19,652,867 $18,953,950 $18,598,593 $18,834,983 $19,077,974 $19,797,796 $20,383,012 $20,986,012 $21,609,012 $22,253,012 $22,919,012 Net Revenue Fixed Charges -$2,066,133 -$1,192,938 -$407,581 -$161,971 $117,038 $434,216 $621,000 $818,000 $1,019,000 $1,229,000 $1,455,000Volumetric Charges -$366,785 $129,988 $607,988 $1,081,988 $1,612,988 $1,684,988 $1,454,988 $1,211,988 $1,001,988 $716,988 $402,988Total -$2,432,918 -$1,062,950 $200,407 $920,017 $1,730,026 $2,119,204 $2,075,988 $2,029,988 $2,020,988 $1,945,988 $1,857,988 Cost AnalysisFixed 43.6% 41.5% 40.2% 40.8% 41.3% 40.9% 40.8% 40.7% 40.6% 40.5% 40.4%Variable 56.4% 58.5% 59.8% 59.2% 58.7% 59.1% 59.2% 59.3% 59.4% 59.5% 59.6% Meter Charge CalculationMonthly charge per meter equivalent 26.05$ 27.60$ 29.25$ 31.00$ 32.85$ 34.80$ 36.20$ 37.65$ 39.15$ 40.70$ 42.35$ (Rounded to nearest $0.05)Annual charge per meter equivalent 312.60$ 331.20$ 351.00$ 372.00$ 394.20$ 417.60$ 434.40$ 451.80$ 469.80$ 488.40$ 508.20$ Meter equivalents [3] 19,557 19,629 19,701 19,773 19,845 19,918 19,991 20,064 20,137 20,211 20,285 Meter Charge Revenue Estimate 6,114,000$ 6,501,000$ 6,915,000$ 7,356,000$ 7,823,000$ 8,318,000$ 8,684,000$ 9,065,000$ 9,460,000$ 9,871,000$ 10,309,000$ Volumetric Rate CalculationEMID Proposed Uniform Rate $6.21 6.47$ 6.74$ 7.01$ 7.31$ 7.61$ 7.66$ 7.71$ 7.78$ 7.82$ 7.85$ Projected annual water sales (ccf) [4] 1,727,000 1,733,000 1,740,000 1,746,000 1,752,000 1,759,000 1,765,000 1,771,000 1,778,000 1,784,000 1,790,000Variable revenue estimate $10,725,000 $11,213,000 $11,728,000 $12,239,000 $12,807,000 $13,386,000 $13,520,000 $13,654,000 $13,833,000 $13,951,000 $14,052,000 % Spread between EMID and SFPUC Surcharge 30.7% 22.1% 27.2% 32.3% 37.9% 37.4% 34.2% 31.2% 28.5% 25.4% 22.2%SFPUC PROJECTED RATES $4.75 $5.30 $5.30 $5.30 $5.30 $5.54 $5.71 $5.88 $6.05 $6.24 $6.42Increase (Decrease) % 11.6% 0.0% 0.0% 0.0% 4.5% 3.0% 3.0% 3.0% 3.0% 3.0% BAWSCA Surcharge $0.31 $0.31 $0.31 $0.31 $0.31 $0.31 $0.31 $0.31 $0.31 $0.31 $0.31 SFPUC Rate + BAWSCA Surcharge $5.06 $5.61 $5.61 $5.61 $5.61 $5.85 $6.02 $6.19 $6.36 $6.55 $6.73 EMID Fixed Meter Charge Increase (Decrease) 6.0% 6.0% 6.0% 6.0% 5.9% 4.0% 4.0% 4.0% 4.0% 4.1%EMID Volumetric Rate Increase (Decrease) 4.2% 4.2% 4.0% 4.3% 4.1% 0.7% 0.7% 0.9% 0.5% 0.4% Note:[1] Includes: Employee Services, Internal Services - Other, Internal Services - ERF, Services & Supplies, Reallocation, Capital Outlay, Capital Improvement Fund Transfers, Debt Service, and net revenues for the operating fund.[2] Includes: SFPUC Water Purchases, BAWSCA Bond Repayment, and Water Sustainability Fund Transfers.[3] 0.37% growth estimated for planning purposes [4] Includes 10% water loss factor Five Year Projection Extended Year Projection

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Table 3City of Foster City / Estero Municipal Improvement DistrictProposed Water Rates - Two Tier Hybrid Model Current Rates FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 FY2030 FY2031 FY2032 FY2033 Monthly Meter Charge3/4" $26.05 $27.60 $29.25 $31.00 $32.85 $34.80 $36.20 $37.65 $39.15 $40.70 $42.351" 43.42 46.00 48.75 51.67 54.75 58.00 60.33 62.75 65.25 67.83 70.581-1/2" 104.20 110.40 117.00 124.00 131.40 139.20 144.80 150.60 156.60 162.80 169.402" 138.93 147.20 156.00 165.33 175.20 185.60 193.07 200.80 208.80 217.07 225.873" 303.92 322.00 341.25 361.67 383.25 406.00 422.33 439.25 456.75 474.83 494.084" 547.05 579.60 614.25 651.00 689.85 730.80 760.20 790.65 822.15 854.70 889.356" 1,215.67 1,288.00 1,365.00 1,446.67 1,533.00 1,624.00 1,689.33 1,757.00 1,827.00 1,899.33 1,976.338" or greater 2,084.00 2,208.00 2,340.00 2,480.00 2,628.00 2,784.00 2,896.00 3,012.00 3,132.00 3,256.00 3,388.00 Conservation-Based Water Rate Model (based on bi-monthly allotments)Single Family ResidentialTier 1 0-20 per ccf 6.10 6.36 6.62 6.89 7.18 7.48 7.53 7.59 7.65 7.70 7.74Tier 2 Over 20 ccf 6.64 7.01 7.30 7.59 7.91 8.21 8.24 8.28 8.33 8.36 8.38Multi-Family Residential (per living unit)Tier 1 0-10 ccf per living unit 6.10 6.36 6.62 6.89 7.18 7.48 7.53 7.59 7.65 7.70 7.74Tier 2 Over 10 ccf per living unit 6.68 7.09 7.38 7.68 8.00 8.30 8.33 8.37 8.42 8.44 8.46Irrigation CustomersTier 1 <=100% of annual budget 6.10 6.36 6.62 6.89 7.18 7.48 7.53 7.59 7.65 7.70 7.74Tier 2 >100% of annual budget 6.70 7.22 7.52 7.82 8.14 8.44 8.47 8.50 8.55 8.57 8.59Commercial and Fire Line CustomersBase Consumption Rate 6.21 6.47 6.74 7.01 7.31 7.61 7.66 7.71 7.78 7.82 7.85 Monthly Fire Meter Charge3/4" 36.47 38.64 40.95 43.40 45.99 48.72 50.68 52.71 54.81 56.98 59.291" 36.47 38.64 40.95 43.40 45.99 48.72 50.68 52.71 54.81 56.98 59.291-1/2" 36.47 38.64 40.95 43.40 45.99 48.72 50.68 52.71 54.81 56.98 59.292" 48.71 51.61 54.70 57.97 61.43 65.08 67.69 70.41 73.21 76.11 79.193" 106.28 112.61 119.34 126.48 134.03 141.98 147.70 153.61 159.73 166.06 172.794" 191.47 202.86 214.99 227.85 241.45 255.78 266.07 276.73 287.75 299.15 311.276" 425.40 450.71 477.65 506.23 536.44 568.28 591.15 614.82 639.32 664.63 691.588" or greater 729.40 772.80 819.00 868.00 919.80 974.40 1,013.60 1,054.20 1,096.20 1,139.60 1,185.80(Minimum charge is equivalent to 1-1/2" meter charge)

TWO TIER HYBRID MODEL
Recommended Rates

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Table 4
Foster City / Estero Municipal Improvement District
Projected Water Rate Impacts
Current FY2024
Rates Two Tier Hybrid Model
Monthly meter charge $26.05 $27.60
% Change 6.0%
Single Family Residential
Bi-Monthly Tiers
Tier 1: 0 to 20 ccf $6.10 $6.36
Tier 2: over 20 ccf $6.64 $7.01
Water Monthly
Use Level Use (ccf) Monthly Bill
Low User 5 $56.55 $59.40
$ Increase 2.85
% Increase 5.0%
Median User 6 $62.65 $65.76
$ Increase 3.11
% Increase 5.0%
Average User 8 $74.85 $78.48
$ Increase 3.63
% Increase 4.8%
High User 10 $87.05 $91.20
$ Increase 4.15
% Increase 4.8%
Very High User 20 $148.05 $161.30
$ Increase 13.25
% Increase 8.9%
Excessive User 50 $347.25 $371.60
$ Increase 24.35
% Increase 7.0%

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Table 5
Foster City / Estero Municipal Improvement District
Projected Water Rate Impacts
Current
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
Two Tier Hybrid Model
Single Family Residential Monthly Rate $74.85 $78.48 $82.21 $86.12 $90.29 $94.64 $96.44 $98.37 $100.35 $102.30 $104.27 $ Increase 3.63 3.73 3.91 4.17 4.35 1.80 1.93 1.98 1.95 1.97 % Increase 4.8% 4.8% 4.8% 4.8% 4.8% 1.9% 2.0% 2.0% 1.9% 1.9% Based on Single Family Residential Use of 8 ccf
Fiscal Year Ending June 30 Extended Year ProjectionProjected Water Bills

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Wastewater Enterprise Fund
There are approximately 13,966 wastewater accounts serviced by the District. The majority of accounts are residential with the remainder consist of commercial and institutional accounts as shown in Table 1.

The District has approximately $22,698,115 in its wastewater maintenance and operations reserve fund as shown in Table 2. The District’s minimum operating reserve target is 25% of operating and maintenance expenses (est. to be about $2.3 million).

T a b l e 1
F o s t e r C i t y / E s t e r o M u n i c i p a l I m p r o v e m e n t D i s t r i c t W a s t e w a t e r S e r v i c e A c c o u n t s
D a t a a s o f : 0 2 / 0 1 / 2 2
N u m b e r o f A c c o u n t s
R e s i d e n t i a l
S i n g l e F a m i l y 4 , 5 3 5
T o w n h o u s e / D u p l e x 2 , 2 7 7
A p a r t m e n t / C o n d o m i n i u m ( P o o l s w / R e s t r o o m s ) 6 , 9 0 6 R e s i d e n t i a l T o t a l 1 3 , 7 1 8
C o m m e r c i a l
R e s t a u r a n t s 4 2
C o m m e r c i a l / H o t e l s / O f f i c e s / I n d u s t r i a l / L a u n d r o m a t s 1 7 1 C o m m e r c i a l T o t a l 2 1 3
I n s t i t u t i o n a l
I n s t i t u t i o n a l / S c h o o l s 3 5
I n s i t u t i o n a l T o t a l 3 5
T o t a l 1 3 , 9 6 6
S o u r c e : C o g n o s S e w e r C u s t o m e r C o u n t R e p o r t C u s t o m e r C l a s s

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Table 3 summarizes the current wastewater service rates.

Table 2
Foster City / Estero Municipal Improvement District
Wastewater Operating Fund Reserves
July 1, 2022
Fund Reserve Component Balance
Reserved for Maintenance & Operation $22,698,115
Total $22,698,115
operating and capital expenditures.

Note: Rate model only includes fund reserve components available to fund ongoing Source: City of Foster City/Estero Municipal Improvement District Staff Table 3
Foster City / Estero Municipal Improvement District
Current Wastewater Rates
Current
Fiscal Year Ending June 30 2023
Residential (flat monthly rate)
Single Family $127.06
Townhouse/Duplex 106.73
Apartment/Condominium (Pools w/ Restrooms) 106.73
Commercial (rate per ccf of water use)
Restaurants 23.09
Commercial/Hotels/Offices/Industrial/Laundromats 8.12
Institutional (rate per ccf of water use)
Institutional/Schools 5.34

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Table 4 summarizes the operating expenditures of the enterprise. Costs are expected to remain relatively stable over the next five years.

Projected operating expenditures are anticipated to increase over the next five years by about 30%.

Table 4
City of Foster City / Estero Municipal Improvement District Wastewater Enterprise O&M Projection
Revised
Budget
FY2023 FY2024 FY2025 FY2026 FY2027 FY2028
Employee Services $2,883,682 $2,838,710 $2,952,258 $3,070,348 $3,193,162 $3,320,888 4.0% Internal Services (from City) 1,116,826 1,167,852 1,197,048 1,226,974 1,257,648 1,289,089 2.5% Internal Services -ERF 266,126 266,126 272,779 279,598 286,588 293,753 2.5% Services & Supplies 661,550 733,550 751,889 770,686 789,953 809,702 2.5% EMID Share WWTP O&M 3,400,000 3,700,000 3,700,000 4,000,000 4,200,000 5,200,000 N/A Reallocation [2] 894,301 976,739 1,001,157 1,026,186 1,051,841 1,078,137 2.5% TOTAL O&M Expenditures $9,222,485 $9,682,977 $9,875,131 $10,373,792 $10,779,192 $11,991,569

5.0% 2.0% 5.0% 3.9% 11.2%
[1] Based on historical results
[2] Costs allocated to the Wastewater Enterprise from other departments based on the City's cost allocation study.

Annual %
Increase [1]Expenditures Five Year Projection

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Wastewater Financial Projections
Wastewater projections are shown in APPENDIX E.

San Mateo-Foster City Public Financing Authority:

Projections anticipate $60.65 million of debt issuances between FY 2023 and FY 2024 ($27.6 MM of WIFIA proceeds and $33 MM of SRF loans) to fund WWTP expansion costs. BWA projects that the approved rate increases are adequate to secure projected debt issuances over the next several years.

Table 5 shows debt service estimates for the District’s share of WWTP costs. Annual debt service for the combined total debt issuances is estimated to amount to $5.96 MM by FY 2026.

Table 5
City of Foster City / Estero Municipal Improvement District Debt Service Estimates
Debt Service FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 2020 WIFIA Loan $0 $298,110 $2,269,977 $2,616,824 $2,616,839 $2,616,857 $2,616,878 $2,616,901 $2,616,928 $2,616,958 2019 Bonds 2,084,250 2,085,000 2,084,250 2,086,875 2,087,750 2,086,875 2,084,250 2,084,750 2,088,125 2,084,375 2023 SRF Loan/Bonds 0 0 134,332 1,259,604 1,259,573 1,259,540 1,259,508 1,259,475 1,259,443 1,259,410 Total Debt Service $2,084,250 $2,383,110 $4,488,559 $5,963,303 $5,964,162 $5,963,273 $5,960,636 $5,961,127 $5,964,496 $5,960,742

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CHART B

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Wastewater Cost of Service Analysis
Bartle Wells performed a Wastewater Cost of Service Analysis to determine equitable cost allocation to the various user classes. BWA recommends continuing the practice of placing commercial customers into three wastewater strength categories, (low, medium and high) based on the State Water Resources Control Board (SWRCB) Wastewater Revenue Program Guidelines. Low strength wastewater (Class A) customers include banks, laundromats, retail stores, schools, churches and others as shown in Table 6.

Medium strength wastewater (Class B) customers have wastewater strength factors that are assumed to be similar to residential wastewater strength factors. They include typical commercial activities such as libraries, spas, nail salons, gas stations and bars.

High strength wastewater (Class C) customers primarily include food-related businesses such as restaurants, bakeries, dairies, wineries, catering, butcher shops and fish markets.

Table 6
City of Foster City/Estero Municipal Improvement District Strength Classifications into Low, Medium/Domestic, and High Strength Dischargers

Low Strength Banks & Financial Institutions
Barber Shops/Hair Salons (hair cutting only)
Post Offices/Government
Retail Stores
Libraries
Schools
Churches, Halls & Lodges
Parking Garages
Warehouses

Medium/Commercial/ Residential - All
Domestic Strength Appliance Repair
Beauty Shops (hair cutting w/additional treatments)
Dry Cleaners
Nail Salons
Pet Groomers
Commercial Laundromats
Bars & Taverns

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Tasting Rooms
Hospitals - General, Convalescent & Veterinarian
Hotels, Motels, B&Bs, and Vacation Rentals
Offices - Business and Professional
Offices - Medical/Dental
Pools with Restrooms (Clubhouse)
Theaters
Car Washes
High Tech Medical Manufacturing
Light Manufacturing/Industrial
Gym or Health Club
Machine Shops
Service Stations, Garages, Auto Repair Shops
Mini Marts - W/O Dish Washer or Garbage Disposal
Mini Mart with Gas Pumps - W/O Dish Washer or Garbage Disposal Spa with Various Beauty Treatments

High Strength Restaurants
Coffee Shops
Ice Cream Parlors
Catering
Eatery
Bakeries
Butcher Shops
Fish Market/Shop

Markets - with Dish Washer or Garbage
Disposal
Markets - with Bakeries or Butcher Shops
Mini Marts - with Dish Washer or Garbage Disposal
Wineries
Market
Dairies (milk producers, yogurt, ice cream maker)
Specialty Foods Manufacturing (e.g., cheese or olive oil maker)

Note: Wastewater users who have Fats, Oils, and Grease (FOG) waste will be put into the High Strength user category

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Table 7 summarizes the assumed wastewater strength factors for the low, medium and high strength groups that are based on typical strengths provided in the SWRCB’s Revenue Program Guidelines. The strength factor for medium strength customers is equivalent to residential or “domestic” strength, of 1.00. The strength factor for low strength is calculated at 0.66 and for high strength is calculated at 2.85 based on the SWRCB guidelines.

Table 7
City of Foster City/Estero Municipal Improvement District Assumed Wastewater Strength Factors
Strength Class LOW LOW-MEDIUM MEDIUM HIGH
Examples: Institutional Residential Restaurant
Bank Offices Bakery
Flow (gpd) 200 168 200 200
BOD1 (mg/l) 135 240 240 1000
TSS2 (mg/l) 100 240 240 800
Strength Factor 0.66 0.84 1.00 2.85
Strength Factor Formula SF=(Flow(gpd)/200)*(0.33+(0.34*BOD(mg/l)/240)+(0.33*TSS(mg/l)/240)) WW flows and strengths based on State Water Resources Control Board's Revenue Program Guidelines 1 "BOD" stands for Biochemical Oxygen Demand
2 "TSS" stands for Total Suspended Solids
Townhouse, Duplex,
Apartment, Condo

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Table 8 summarizes the mass-balance analysis for the City’s wastewater system and calculates the wastewater rates for each customer class. Single family residences are assumed to have an average daily (dry weather) flow of 200 gallons per day (gpd). The flow estimate is based on the State Water Resources Control Board Revenue Program Guidelines Table G-1, which estimates flow in gallons per day per person for residential dwelling units to be up to 75 gallons.

Based on residential occupancy data provided by the City of Foster City, single family residences are estimated to have an average of 2.67 residents per household and multi-family residences are estimated to have an average of 2.25 residents per household (84% of a single family household).

Multi-family dwellings are billed based on an estimated flow of 168 gpd or 0.84 times the single family flow. As a check, the mass balance in Table 8 compares the total calculated and measured daily wastewater flows for Foster City (average dry weather flow).

The results agree well with the estimated daily flow at 2.61 million gallons per day (mgd) and the measured flow at 2.37 mgd.

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Table 8
City of Foster City/Estero Municipal Improvement District Summary of Wastewater Users by Customer Class
FY 2023 Estimate
Customer Class EDU x Flow Calculated
EDUs1 ADWF Flow ADWF Flow BOD3 TSS4 Current
(gal/day) (gal/day) (mg/l) (mg/l) Rate
Residential
Single Family Residential 4,535 200 907,000 240 240 127.06 Townhouse/Duplex 2,277 168 382,536 240 240 106.73
Apartment/Condos 6,906 168 1,160,208 240 240 106.73
Subtotal 2,449,744
Use Estimated Calculated
Accounts (gal/day) Flow Factor ADWF Flow BOD3 TSS4 Current Commercial (gal/day) (mg/l) (mg/l) Rate
Low Strength 35 40,655 65% 26,426 135 100 5.34
Medium/Domestic Strength 171 198,866 52% 103,329 240 240 8.12 High Strength 42 48,957 70% 34,270 1000 800 23.09
Subtotal 288,478 164,024
Totals 2,613,768
Check Against Lowest Actual Monthly Avg. Day Flow (May 2014 from LS 59 Flow Log): 2,367,806 1 "EDU" stands for Equivalent Dwelling Unit
2 "ADWF" stands for Average Dry Weather Flow
3 "BOD" stands for Biochemical Oxygen Demand
4 "TSS" stands for Total Suspended Solids

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APPENDIX E
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Table 1City of Foster City / Estero Municipal Improvement District Wastewater Enterprise Cash Flow Projection 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033Assumptions:Interest Earnings Rate 0.50% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%Revenue Increase from Growth 0.00% 0.37% 0.37% 0.37% 0.37% 0.37% 0.37% 0.37% 0.37% 0.37% 0.37%Rate Adjustment 3.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%Monthly Service Charge for Single Family $127.06 $130.87 $133.49 $136.16 $138.88 $141.66 $144.49 $147.38 $150.33 $153.34 $156.41 Beginning O&M Fund Balance $22,698,115$25,800,900 $12,471,000 $5,118,900 $7,188,000 $10,350,600 $12,892,800 $15,709,000 $18,706,600 $21,992,000 $25,484,300 Operating RevenuesService Charges 20,121,293 20,799,000 21,291,000 21,795,000 22,311,000 22,839,000 23,379,000 23,932,000 24,498,000 25,078,000 25,671,000Connection Fees [1] 45,500 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000Interest Earnings [2] 113,491 516,000 249,000 102,000 144,000 207,000 258,000 314,000 374,000 440,000 510,000Other Revenue 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000Operating Revenue 20,281,283 21,366,000 21,591,000 21,948,000 22,506,000 23,097,000 23,688,000 24,297,000 24,923,000 25,569,000 26,232,000 Non Operating RevenueBond / Loan [3] 46,418,785 14,235,063 0 0 0 0 0 0 0 0 0Non Operating Revenue 46,418,785 14,235,063 0 0 0 0 0 0 0 0 0 Total Revenue 66,700,068 35,601,063 21,591,000 21,948,000 22,506,000 23,097,000 23,688,000 24,297,000 24,923,000 25,569,000 26,232,000 Operating ExpensesEmployee Services 2,883,682 2,838,710 2,952,258 3,070,348 3,193,162 3,320,888 3,453,724 3,591,873 3,735,548 3,884,970 4,040,369Internal Services (from City) 1,116,826 1,167,852 1,197,048 1,226,974 1,257,648 1,289,089 1,321,316 1,354,349 1,388,208 1,422,913 1,458,486Internal Services -ERF 266,126 266,126 272,779 279,598 286,588 293,753 301,097 308,624 316,340 324,249 332,355Services & Supplies 661,550 733,550 751,889 770,686 789,953 809,702 829,945 850,694 871,961 893,760 916,104EMID Share WWTP O&M 3,400,000 3,700,000 3,700,000 4,000,000 4,200,000 5,200,000 5,300,000 5,500,000 5,600,000 5,800,000 6,000,000Reallocation 894,301 976,739 1,001,157 1,026,186 1,051,841 1,078,137 1,105,090 1,132,717 1,161,035 1,190,061 1,219,813Operating Expenses 9,222,485 9,682,977 9,875,131 10,373,792 10,779,192 11,991,569 12,311,172 12,738,257 13,073,092 13,515,953 13,967,127 Operating Net Revenue 11,058,798 11,683,023 11,715,869 11,574,208 11,726,808 11,105,431 11,376,828 11,558,743 11,849,908 12,053,047 12,264,873 Capital ExpensesTransfer Out - Capital Improvement Fund 5,250,000 11,500,000 11,500,000 2,600,000 2,600,000 2,600,000 2,600,000 2,600,000 2,600,000 2,600,000 2,600,000EMID Share WWTP Expansion 47,040,566 25,364,852 3,079,383 941,812 0 0 0 0 0 0 0Capital Expenses 52,290,566 36,864,852 14,579,383 3,541,812 2,600,000 2,600,000 2,600,000 2,600,000 2,600,000 2,600,000 2,600,000 Annual Debt Service 2,084,250 2,383,110 4,488,559 5,963,303 5,964,162 5,963,273 5,960,636 5,961,127 5,964,496 5,960,742 5,959,868Debt Service 2,084,250 2,383,110 4,488,559 5,963,303 5,964,162 5,963,273 5,960,636 5,961,127 5,964,496 5,960,742 5,959,868 Debt Coverage [4] 5.31 4.90 2.61 1.94 1.97 1.86 1.91 1.94 1.99 2.02 2.06 Total Expenditures 63,597,301 48,930,939 28,943,073 19,878,907 19,343,354 20,554,842 20,871,808 21,299,384 21,637,588 22,076,695 22,526,995 Revenues Less Total Expenditures 3,102,767 (13,329,876) (7,352,073) 2,069,093 3,162,646 2,542,158 2,816,192 2,997,616 3,285,412 3,492,305 3,705,005 Ending O&M Fund 25,800,882 12,471,024 5,118,927 7,187,993 10,350,646 12,892,758 15,708,992 18,706,616 21,992,012 25,484,305 29,189,305 Cash Fund Reserve Test: Minimum Fund Balance > 25% O&M ExpensesYear-end O&M Fund 25,800,882 12,471,024 5,118,927 7,187,993 10,350,646 12,892,758 15,708,992 18,706,616 21,992,012 25,484,305 29,189,30525% Operating Expenses 2,305,621 2,420,744 2,468,783 2,593,448 2,694,798 2,997,892 3,077,793 3,184,564 3,268,273 3,378,988 3,491,782# of Days O&M in Reserves 1,021 470 189 253 350 392 466 536 614 688 763 Pass/fail PASS PASS PASS PASS PASS PASS PASS PASS PASS PASS PASS [1] Growth projections for planning purposes [2] Projected interest calculated as 2% of the Beginning Fund Balance of the Wastewater O&M Fund.[3] Calculated by William Euphrat Municipal Finance, Inc. [4] Minimum requirement debt service covereage requirement = 1.25x Five Year Projection Extended Year Projection

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Table 2
City of Foster City / Estero Municipal Improvement District Projected Wastewater Rate Impacts
Current
FY2023 FY2024 FY2025 FY2026 FY2027 FY2028
% Rate Increase 3.00% 2.00% 2.00% 2.00% 2.00%
Residential (flat monthly rate)
Single Family $127.06 $130.87 $133.49 $136.16 $138.88 $141.66 Increase (Decrease) 3.81 2.62 2.67 2.72 2.78
Townhouse/Duplex $106.73 $109.93 $112.13 $114.37 $116.66 $118.99 Increase (Decrease) 3.20 2.20 2.24 2.29 2.33
Apartment/Condominium (Pools w/ Restrooms) $106.73 $109.93 $112.13 $114.37 $116.66 $118.99 Increase (Decrease) 3.20 2.20 2.24 2.29 2.33
Commercial (rate per ccf of water use)
High Strength $23.09 $23.78 $24.26 $24.75 $25.25 $25.76 Increase (Decrease) per ccf 0.69 0.48 0.49 0.50 0.51
Medium/Domestic Strength $8.12 $8.36 $8.53 $8.70 $8.87 $9.05 Increase (Decrease) per ccf 0.24 0.17 0.17 0.17 0.18
Low Strength $5.34 $5.50 $5.61 $5.72 $5.83 $5.95
Increase (Decrease) per ccf 0.16 0.11 0.11 0.11 0.12
Projected - Fiscal Year Ending June 30Projected Rates

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CHART C

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APPENDIX F
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DATE: March 27, 2023

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

FROM: Ramon Towne, Interim Public Works Director/City Engineer Edmund Suen, Finance Director
Zaheed Danish, Interim Public Works Maintenance Manager DEPARTMENT: Public Works, Finance
SUBJECT: REVIEW OF PROJECTED WASTEWATER RATES FOR FY 2023- 2024

RECOMMENDATION
It is recommended that the Estero Municipal Improvement District (EMID) Board of Directors accept this report regarding Wastewater Rates based upon the attached Draft Water and Wastewater Rate Study Update Results Memo dated March 15, 2023, prepared by Bartle Wells Associates (BWA).

EXECUTIVE SUMMARY
EMID is responsible for its share of operating and maintenance costs that San Mateo (as the lead agency and the contracting party) incurs treating the District’s wastewater, as well as 24.12% of the capital improvement costs incurred as part of the Clean Water Program (CWP), a 10-year comprehensive capital improvement project initiated in 2014 to replace aging infrastructure and meet regulatory requirements at the Wastewater Treatment Plant (WWTP). The District’s total share of the project is approximately $157 million.

In March 2018, the EMID Board of Directors adopted a rolling five-year annual wastewater rate increase of 14.25% on all wastewater rates for the period between FY 2018-2019 to FY 2022-2023 in order to ensure that the wastewater enterprise

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generates enough revenue to pay for its share of the future capital improvement costs of the WWTP and to strengthen the District’s position to obtain low-cost long-term financing for that purpose. In June 2019, the District Board approved a 10% wastewater rate increase for FY 2023-2024, and in June 2020, a 2% increase for FY 2024-2025.

Based upon an updated review of the District’s financial projections, the consultant finds that the EMID Board should increase rates by only 3% in FY 2023-2024 and for 2% in FY 2024-2025. The consultant and staff then recommend that the District re- evaluate rates and adopt a new five year rate plan beginning in FY 2025-2026.

Since the EMID Board of Directors already held a public hearing and approved the maximum wastewater rates for FY 2023-2024, the District is not required to hold a public hearing to implement the recommended increase. However, Staff recommends that information about the new Wastewater rates be included in the Proposition 218 notice that will be mailed for the Water Rate public hearing.

BACKGROUND/ANALYSIS
There are approximately 13,966 wastewater accounts serviced by the District. The majority are residential with the remainder consisting of commercial and institutional accounts.

The operational costs for wastewater treatment services are borne jointly by the District and the City of San Mateo via the San Mateo Wastewater Treatment Plant Joint Exercise of Powers Agreement executed in June 1974. Those costs include recurring operations and maintenance, as well as capital improvement costs.

The rates that residential wastewater customers pay are based on a fixed charge for the category or type of residential unit (single family, townhouse/duplex, or apartment/condominium). Commercial customers are charged a variable rate based upon the amount of water consumed by their business and the business wastewater strength category.

EMID has historically set rates on a “Pay As You Go” basis, meaning that rates are increased only based upon budgeted current operating expenditures in order to meet minimum operations reserve requirements equal to 25% of annual operating expenditures and $2 million for unanticipated capital expenditures, consistent with the EMID Board of Directors’ reserve policy.

The City of San Mateo and EMID are expanding the jointly owned WWTP at an estimated cost of about $698 million, of which the District is responsible for approximately $157 million. This is in addition to local capital projects for the District’s own wastewater collection system. The wastewater enterprise intends to fund collection system capital expenditures through annual transfers from the operating fund to the capital improvement fund of $11,500,000 in FY 2023-2024 and FY 2024-2025 and $2,600,000 annually through the remainder of the 10-year term.

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As of June 2020, to fund the anticipated costs of the WWTP CWP improvements, the District Board had approved 5 years of wastewater rate increases to ensure adequate funds to cover debt service: three 14.25% per year increases in FY 2020-2021 through FY 2022-2023, a 10% wastewater rate increase in FY 2023-2024, and a 2% increase in FY 2024-2025. BWA’s 2023 analysis shows that the District has adequate funding such that the EMID Board should increase rates by only 3%, rather than the maximum 10%, in FY 2023-2024 and for 2% in the following year. Since the EMID Board of Directors already held a public hearing and approved the maximum wastewater rates for FY 2023-2024, the District is not required to hold a public hearing to implement the recommended increase. However, Staff recommends that information about the new Wastewater rates be included in the Proposition 218 notice that will be mailed for the Water Rate public hearing.

Wastewater Rate Impact
Single Family Residential and Multi-Family Residential class customers are billed using a flat rate. Commercial customers are billed at a variable volumetric rate based on water usage and strength classification. The new wastewater rate projections propose an overall rate increase of 3.0% for FY 2023-2024 and 2% thereafter through FY 2027- 2028. Included below is Table 2 from the Appendix E of the BWA Rate Study Results Memo (Attachment 1), which provides a comparison of current rates to proposed rates.

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Water/Wastewater Rate Assistance Program (W/WRAP)
In Rate Year 2020-2021, the District Board approved an assistance program for customers whose income also qualified them for Pacific Gas and Electric Company’s California Alternate Rates for Energy (CARE) discount program. While it is not possible to know exactly how many households qualify, based upon the number of customers enrolled in the PG&E CARE program, BWA estimates that approximately 227 customers may potentially be eligible for the up to $15 per month discount. As of March 1, 2023, there were nineteen (19) customers enrolled in the program. Participation in the W/WRAP is supported by non-rate sources of revenue such as fines and penalties, to maintain compliance with California Proposition 218, so water rates are unaffected by participation in the program.

The cost of the W/WRAP, based on current enrollment, is $3,420 per year for the Wastewater Enterprise. The maximum potential cost of a $15/month discount for all estimated 227 eligible customers is $41,000 per year. Through the first eight months of FY 2023, revenue from delinquent water payments totaled $38,686, which is sufficient to fund the program. Staff will continue to monitor the funding sources available for the program.

The W/WRAP is authorized by the EMID Board on an annual basis, and authorization to continue the program will be an action item on the agenda with the consideration of rates in June.

Rate Survey
A survey of communities along the San Francisco Peninsula was conducted to compare the District’s typical residential wastewater bill with neighboring communities. The results of the survey are summarized in the Wastewater Rate Survey Comparison Chart that appears as Appendix D in Attachment 1. The average monthly bill among comparator agencies based upon a flat rate or 5 hundred cubic feet (hcf) of monthly winter water use is $106.09. The District’s average rate is $127.06 per month, or about 20% higher than the average.

Proposition 218 Notification
Since the EMID Board of Directors already held a public hearing and approved maximum wastewater rates for FY 2023-2024, the District is not required to hold a public hearing to approve the recommended 3% increase. While EMID Board will receive the complete Wastewater Fund budget at a later meeting, it is the opinion of District staff that conservative assumptions have been employed in the creation of the rate model. As such, staff recommends that the Board affirm its intention to approve the recommended 3% increase for FY 2023-2024. In the interest of transparency, Staff further recommends that information about the new Wastewater rates be included in the Proposition 218 notice that will be mailed for the Water Rate public hearing.

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Recent case law and EMID experience have demonstrated that there are a number of advantages to adopting rate plans that set rates for multiple years, so it is anticipated that staff will bring a multi-year recommendation aligned with the water rate setting process for rate year 2025-2026 and beyond. Under state law, the District may adopt a rate plan that covers a maximum of five years.

California Environmental Quality Act
Not Applicable

FISCAL IMPACT
There is no impact to receiving this report. Further, wastewater collection service costs in Foster City are covered by the rates paid by the users as described in this staff report and its attachment. The costs of these services do not impact the City budget or the General Fund.

CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Facilities and Infrastructure
Innovation and Sustainability
Smart Planning, Development, and the Local Economy
ATTACHMENTS:

Attachment 1 - Bartle Wells Associates Water and Wastewater Rate Study Update Results Memo including 2023-2024 Rate Study dated March 15, 2023

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2625 Alcatraz Ave, #602
Berkeley, CA 94705
Tel 510 653 3399
www.bartlewells.com
DATE: March 15th, 2023
TO: City of Foster City/Estero Municipal Improvement District FROM: Bartle Wells Associates
SUBJECT: DRAFT Water and Wastewater Rate Study Update Results

SUMMARY OF FINDINGS AND RECOMMENDATIONS
Introduction and Background
The Estero Municipal Improvement District (District) engaged Bartle Wells Associates (BWA) to develop 10-year financial projections for the District’s Water and Wastewater Enterprises and to recommend water and wastewater rate adjustments for the next five- year period. BWA last conducted formal rate studies in 2022, which resulted in a one-year rate approval for water rates for FY 2023. No public hearing was held for wastewater, as the adopted wastewater rates were determined to be adequate.

Current and projected water service rates are in the lower range compared to other agencies on the Peninsula and wastewater service rates are in the middle-high range compared to other agencies on the Peninsula. The District water and wastewater enterprises face unique infrastructure funding challenges.

Water
The primary driver for the proposed rate increases is to smooth District rate increases due to projected increases in the San Francisco Public Utilities Commission (SFPUC) wholesale water rate. The rate increase is due to a variety of factors including growth in capital spending, continued low water usage due to drought and covid-19 recovery, and repayment of the balancing account.

SFPUC, the sole source of water supply for the District, released updated projections for their wholesale rate for the next five years (FY 2024 to FY 2028). SFPUC is projecting the current rate of $4.75 in FY 2023 per hundred cubic feet (ccf) will increase to $5.30 in FY 2024. The wholesale rate is projected to remain flat at $5.30 per ccf from FY 2024 to FY 2027, with a final increase to $5.54 in FY 2028.

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SFPUC rates were historically held level at $4.10/ccf for six years (FY 2017 to FY 2022) despite escalating SFPUC debt service and operating costs through use of a balancing account. The balancing account was built up from SFPUC wholesale water sales exceeding projections used in rate setting. In FY 2023, the wholesale rate was increased 15.9% to $4.75/ccf. The increase in the SFPUC wholesale rates was due to the balancing account fund balance reaching zero. SFPUC rates are projected to increase by 11.6% in FY 2024, 0% in FY 2025, 0% in FY 2026, and 0% in FY 2027 and 4.5% in FY 2028.

During the time that SFPUC wholesale rates were held flat by the balancing account, the District has been gradually increasing its volumetric rates in anticipation of projected wholesale rate increases by SFPUC. While the wholesale rate increases have come to fruition, the District’s rates have been phased to ensure sufficient revenues and avoid sharp increases based on a rate smoothing model.

The District will also continue to make annual payments, projected to be $594,012 in FY 2024, to the Bay Area Water Supply and Conservation Agency (BAWSCA) for the WSIP capital improvements that were funded through the issuance of bonds. The water enterprise’s single largest cost is water purchases from SFPUC.

BWA proposed water rates are designed to maintain the operating fund above target levels (90 days operating expenses in reserves) and cover District operating and capital costs. Excluding water purchase and capital related costs, District operating costs are projected to increase by about 3% per year. Additionally, the District is projected to set aside $2,500,000 for capital improvements in FY 2024 and $1,120,000 each year thereafter. The capital improvement transfer amount is based on funding the District’s water master plan. Proposed water rates are based on 10% water loss, a reduction from 11% water loss used in the previous study. The amount of the losses is projected to decrease due to the District’s efforts to replace aging meters. That is, 90% of the water EMID purchases is sold to retail customers.

To maintain the operating reserves, fund the capital set aside, and phase in volumetric rates, BWA recommends the District implement a 4.3% volumetric rate increase and a 6% meter charge increase in FY 2024. The average bill for a single family home would increase by 4.8% or $3.63 per month.

Detailed water rate calculations are shown in APPENDIX C.

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Wastewater
The District has entered into a Joint Powers Agreement with the City of San Mateo where the District receives treatment of its wastewater via the San Mateo Wastewater Treatment Plant (WWTP). The District is responsible for its share of operating and maintenance costs that San Mateo (as the lead agency and the contracting party) incurs treating the District’s wastewater, as well as approximately 24% of the WWTP improvement costs incurred as part of the Clean Water Program (CWP), a 10-year comprehensive capital improvement project initiated in 2014. The Cities of San Mateo and Foster City (District) are expanding the jointly owned WWTP at an estimated cost of $670 MM with $152 MM of that falling under Foster City’s contributions. This is in addition to local capital projects for the District’s own wastewater collection system. The wastewater enterprise intends to fund collection system capital expenditures through annual transfers from the operating fund to the capital improvement fund.

In June 2020, to fund the anticipated costs of the WWTP CWP improvements, the District Board approved 5 years of wastewater rate increases: three 14.25% per increases in FY 2021 through FY 2023, a 10% wastewater rate increase in FY 2024, and a 2% increase in FY 2025. BWA’s 2023 analysis shows that the District has adequate financing capacity for projected debt issuances in the next several years and recommends spreading the remaining rate increases out over a longer period. BWA proposes reducing the 10% increase in FY 2024 to 3% and implementing the adopted 2% increase in FY 2025. BWA recommends conducting a 5-year rate study analysis in FY 2025, which would result in an adopted rate schedule for next 5 year period.

Detailed wastewater rate calculations are shown in APPENDIX E.

Rate Surveys
A survey of communities along the San Francisco Peninsula was conducted to compare the District’s typical residential monthly water and wastewater bills with neighboring communities. The results of the water survey are summarized in APPENDIX B and the results of the wastewater survey are summarized in APPENDIX D.

The water survey compares a median monthly water bill for 6 units of water which would be a common residential consumption. Including the recommended increase, the

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District’s median monthly water bill proposed for FY 2024 is $65.76. Since it is unknown what the comparator agencies are proposing for FY 2024, the District compares its FY 2023 monthly residential water bills to the FY 2023 monthly residential water bills for the neighboring agencies. The survey indicates that the District’s water rates are among the lowest on the Peninsula. The average monthly water bill for the region based on 6 ccf is $83.35 per month and the District’s average monthly residential water bill is $62.65 per month, or about 25% less. Since the proposed increase is also less than the FY 2023 average, it is likely that EMID customers will continue to pay much lower than average water bills.

Including the recommended increase, the District’s proposed monthly wastewater bill for FY 2024 is $130.87. Since it is unknown what the comparator agencies are proposing for FY 2024, the District compares its FY 2023 monthly residential wastewater bills to the FY 2023 monthly residential wastewater bills for the neighboring agencies. The survey indicates that the District’s current wastewater rates are above the average amongst its comparator agencies. The average monthly bill for the region is $106.09 and the District’s rate is $127.06 per month, or about 20% more.

APPENDIX F shows how the combined water and wastewater bills compare to regional agencies based on FY 2023 rates. The District’s total combined water and wastewater bill is $189.71 per month. The average monthly combined water and wastewater bill for the region is $189.63 per month or approximately the same.

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Water Enterprise Fund
The District currently provides water service to a population of approximately 36,500.

Most of the District’s customers are residential. Table 1 shows the approximately 8,247 accounts/meters that allow for water service and fire protection service.

Table 1
City of Foster City / Estero Municipal Improvement District Water Meters By Size
Data as of: 01/29/23
Water Service
3/4" 6,825 1.00 6,825
1" 453 1.67 755
1-1/2" 169 4.00 676
2" 379 5.33 2,021
3" 89 11.67 1,038
4" 57 21.00 1,197
6" 29 46.67 1,353
8" or greater 19 80.00 1,520
Subtotal 8,020 15,385
Private Fire Protection Service
3/4" 1 1.40 1
1" 7 1.40 10
1-1/2" 3 1.40 4
2" 0 1.87 0
3" 2 4.08 8
4" 35 7.35 257
6" 96 16.33 1,568
8" or greater 83 28.00 2,324
Subtotal 227 4,172
Total 8,247 19,557
Source: Foster City/Estero Municipal Improvement District water use records [2] Private fire protection service ratio based on the fire service line; Resolution No. 2715 [3] Equals the number of accounts multiplied by the meter ratio for each meter size.

Meter Size Accounts Meter Ratio1,2 Est. Meter Equivalents3 [1] The meter ratios shall be based on meter size in compliance with ratios established by the American Water Works Association (AWWA) Sizing Water Service Lines and Meters M22, Second Edition, 2004 (M22 Manual)

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Table 2 illustrates the current reserves that the District can draw down in case of emergency or to smooth any “rate shocks” to its customers. In recent years reserves were used as a buffer due to unexpected increases in system water losses.

The District is meeting its 90-day operating fund reserve target in FY 2023 (estimated to be $4.18 million.) The target is based on the District’s long standing reserve policy and is an industry standard minimum target to maintain adequate short term liquidity in case of emergencies.

The wholesale water purchase rates that SFPUC is projecting through FY 2028 are shown graphically in CHART A. The SFPUC rates are projected to increase from $4.75/ccf in FY 2023 to $5.54/ccf in FY 2028.

Table 2
City of Foster City / Estero Municipal Improvement District Water Enterprise Operating Reserves
July 1, 2022
Fund Reserve Component Reserve Balance
Reserved for Maintenance & Operation (401) $8,761,676
Total $8,761,676
operating expenditures.

Note: Rate model only includes fund reserve components available to fund ongoing Source: City of Foster City/Estero Municipal Improvement District Staff

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CHART A

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Table 3 summarizes the District’s projected operating expenditures which are anticipated to increase over the next five years by about 8.9%.

Table 3City of Foster City / Estero Municipal Improvement District Water Enterprise O&M Projection RevisedBudgetFY2023 FY2024 FY2025 FY2026 FY2027 FY2028Employee Services 2,631,141 2,591,329 2,694,982 2,802,781 2,914,893 3,031,488 4.0%Internal Services - Others 952,510 1,010,581 1,035,846 1,061,742 1,088,285 1,115,492 2.5%Internal Services - ERF 510,436 510,436 523,197 536,277 549,684 563,426 2.5%Services & Supplies 706,362 750,362 769,121 788,349 808,058 828,259 2.5%SFPUC Water Purchases 10,246,000 10,289,000 10,326,000 10,363,000 10,400,000 10,907,000 variesBAWSCA Bond Repayment 645,785 594,012 594,012 594,012 594,012 594,012 Reallocation [2] 1,255,133 1,288,230 1,320,436 1,353,447 1,387,283 1,421,965 2.5%Water Sustainability 200,000 200,000 200,000 200,000 200,000 200,000 Capital Outlay/Vehicles 5,500 600,000 15,000 15,375 15,759 16,153 2.5% TOTAL O&M Expenditures 17,152,867 17,833,950 17,478,593 17,714,983 17,957,974 18,677,7964.0% -2.0% 1.4% 1.4% 4.0% [1] Based on City/District Staff direction[2] Costs allocated to the Water Enterprise from other departments based on the City's cost allocation study.

Five Year Projection Annual % Increase [1]Expenditures

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Table 4 summarizes the current water rates. The District has variable expenditures which are expenditures that are impacted by the amount of water its customers consume. These costs must be recouped via its volumetric water charge, $6.10 per ccf in FY 2023. Likewise, the District’s meter charges recover fixed expenditures, expenditures that are fixed regardless of amount of water that is consumed, $26.05 for a ¾” meter in FY 2023.

The District has a two-tiered model for its residential customers where higher levels of water consumption are subject to higher water rates based on a proportionate share of conservation program costs. Commercial customers are charged a uniform rate, which includes commercial customer’s proportionate share of conservation program costs.

Conservation costs of $200,000 per year are allocated to each customer class based on their percentage of total usage. Residential and irrigation customers pay conservation costs on Tier 2 usage only, while commercial customers pay their share of conservation costs on each unit of water usage.

For its irrigation customers, the District has worked with John Whitcomb of Waterfluence to assign each irrigation customer a water budget. Any water consumed above the irrigation customers allotted amount is subject to a higher Tier 2 rate based on each customer’s share of conservation program costs.

APPENDIX A shows the District’s historical water use trends from the prior year. The recent trend has been a decrease in irrigation usage and residential usage, and an increase in commercial usage. BWA’s proposed rates are designed to match volumetric expenses (such as water purchases) with volumetric revenue. The rate structure mitigates over or under collecting revenue due to fluctuations in water use.

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Table 4
City of Foster City / Estero Municipal Improvement District Current Rates
Current Rates 2023
Fixed Meter Charge
Monthly Meter Charge
Meter Size
3/4" $26.05
1" $43.42
1-1/2" $104.20
2" $138.93
3" $303.92
4" $547.05
6" $1,215.67
8" or greater $2,084.00
Bi-Monthly Water Consumption Tiers and Rates
Single Family Residential
Tier 1 0-20 per ccf $6.10
Tier 2 Over 20 ccf $6.64
Multi-Family Residential
Tier 1 0-10 ccf per living unit $6.10
Tier 2 Over 10 ccf per living unit $6.68
Irrigation Customers
Tier 1 <=100% of annual budget $6.10
Tier 2 >100% of annual budget $6.70
Commercial and Fire Line
All usage $6.21
Monthly Private Fire Protection Charge
Meter Size
3/4" $36.47
1" $36.47
1-1/2" $36.47
2" $48.71
3" $106.28
4" $191.47
6" $425.40
8" or greater $729.40

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Low Income Discount
Currently Foster City has 13 customers enrolled in the Water/Wastewater Rate Assistance Program (WWRAP), which was implemented in 2020. Customers meeting the eligibility and qualification requirements below are granted a discount of up to $15 per month each on their qualifying Water and Wastewater accounts, not to exceed a $30 per month discount per customer. To be eligible for the WWRAP, customers must show that they qualify for the PG&E CARE Program or other public assistance program or submit proof of income eligibility.

According to Pacific Gas & Electric, 680 customers are enrolled in the PG&E CARE Program in Foster City. BWA estimates that approximately 227 of these customers are single family residential and therefore would be eligible for the discount. Multifamily units would not be eligible for the discount because water service is often not separately metered for each unit and the bill is typically not paid by the individual units.

The District funds the current low income discount through non-rate sources of revenue such as fines and penalties, cell tower lease and general fund revenue to maintain compliance with California Proposition 218.

The estimated maximum potential cost of a $30/month discount for 227 customers amounts to $82,000 per year. Since the low income discount revenue sources cannot be funded with rates, rates are unaffected by the decision on the terms of the program and hence are not required to be included in the Proposition 218 notification.

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APPENDIX A

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APPENDIX B

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APPENDIX C
Table 1City of Foster City / Estero Municipal Improvement District Water Enterprise Cash Flow Projection - Residential Two Tier Rate Structure Hybrid Model Fiscal Year Ending June 30 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033Assumptions:Interest Earnings Rate 0.50% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%Revenue Increase from Growth [1] 0.00% 0.37% 0.37% 0.37% 0.37% 0.37% 0.37% 0.37% 0.37% 0.37% 0.37%Fixed Charge $26.05 $27.60 $29.25 $31.00 $32.85 $34.80 $36.20 $37.65 $39.15 $40.70 $42.35Fixed Rate Adjustment 6.0% 6.0% 6.0% 6.0% 5.9% 4.0% 4.0% 4.0% 4.0% 4.1%SFR Variable Charge $6.10 $6.36 $6.62 $6.89 $7.18 $7.48 $7.53 $7.59 $7.65 $7.70 $7.74Variable Rate Adjustment 4.3% 4.1% 4.1% 4.2% 4.2% 0.7% 0.8% 0.8% 0.7% 0.5%Monthly Service Charge Single Family (8 ccf) $74.85 $78.48 $82.21 $86.12 $90.29 $94.64 $96.44 $98.37 $100.35 $102.30 $104.27Rate Adjustment 4.8% 4.8% 4.8% 4.8% 4.8% 1.9% 2.0% 2.0% 1.9% 1.9% Beginning Fund Balance $8,761,676 $6,329,000 $5,275,100 $5,477,500 $6,406,500 $8,137,500$10,256,700$12,327,700$14,363,700$16,371,700$18,313,700 RevenuesWater Sales & Service ChargesMeter Charge Revenue Estimate 6,114,000 6,501,000 6,915,000 7,356,000 7,823,000 8,318,000 8,684,000 9,065,000 9,460,000 9,871,000 10,309,000Volumetric Revenue Estimate 10,725,000 11,222,000 11,730,000 12,248,000 12,808,000 13,386,000 13,515,000 13,660,000 13,820,000 13,947,000 14,059,000Connection Fees [1] 336,949 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000Interest Earnings - Operating Reserve [2] 44,000 127,000 106,000 110,000 128,000 163,000 205,000 247,000 287,000 327,000 366,000Other 0 0 0 0 0 0 0 0 0 0 0Operating Revenues 17,219,949 17,900,000 18,801,000 19,764,000 20,809,000 21,917,000 22,454,000 23,022,000 23,617,000 24,195,000 24,784,000 ExpensesEmployee Services 2,631,141 2,591,329 2,694,982 2,802,781 2,914,893 3,031,488 3,153,000 3,279,000 3,410,000 3,546,000 3,688,000Internal Services - Others 952,510 1,010,581 1,035,846 1,061,742 1,088,285 1,115,492 1,143,000 1,172,000 1,201,000 1,231,000 1,262,000Internal Services - ERF 510,436 510,436 523,197 536,277 549,684 563,426 578,000 592,000 607,000 622,000 638,000Services & Supplies 706,362 750,362 769,121 788,349 808,058 828,259 849,000 870,000 892,000 914,000 937,000SFPUC Water Purchases 10,246,000 10,289,000 10,326,000 10,363,000 10,400,000 10,907,000 11,271,000 11,648,000 12,037,000 12,440,000 12,855,000BAWSCA Bond Repayment 645,785 594,012 594,012 594,012 594,012 594,012 594,012 594,012 594,012 594,012 594,012Reallocation 1,255,133 1,288,230 1,320,436 1,353,447 1,387,283 1,421,965 1,458,000 1,494,000 1,531,000 1,569,000 1,608,000Capital Outlay / Vehicles 5,500 600,000 15,000 15,375 15,759 16,153 17,000 17,000 17,000 17,000 17,000Operating Expenses 16,952,867 17,633,950 17,278,593 17,514,983 17,757,974 18,477,796 19,063,012 19,666,012 20,289,012 20,933,012 21,599,012 Operating Net Revenues 267,082 266,050 1,522,407 2,249,017 3,051,026 3,439,204 3,390,988 3,355,988 3,327,988 3,261,988 3,184,988 Water Sustainability Fund Transfer 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000Capital Improvement Transfer [3] 2,500,000 1,120,000 1,120,000 1,120,000 1,120,000 1,120,000 1,120,000 1,120,000 1,120,000 1,120,000 1,120,000 Total Expenses 19,652,867 18,953,950 18,598,593 18,834,983 19,077,974 19,797,796 20,383,012 20,986,012 21,609,012 22,253,012 22,919,012 Revenues Less O&M Expenses 267,082 266,050 1,522,407 2,249,017 3,051,026 3,439,204 3,390,988 3,355,988 3,327,988 3,261,988 3,184,988 Revenues Less Total Expenses (2,432,918) (1,053,950) 202,407 929,017 1,731,026 2,119,204 2,070,988 2,035,988 2,007,988 1,941,988 1,864,988 Ending Fund Balance 6,328,758 5,275,050 5,477,507 6,406,517 8,137,526 10,256,704 12,327,688 14,363,688 16,371,688 18,313,688 20,178,688 Revenue Test: Annual Revenues > O&M ExpensesAnnual Revenues Less O&M Expenses 267,082 266,050 1,522,407 2,249,017 3,051,026 3,439,204 3,390,988 3,355,988 3,327,988 3,261,988 3,184,988Pass/fail PASS PASS PASS PASS PASS PASS PASS PASS PASS PASS PASS Fund Reserve Test: Minimum Fund Balance > 25% O&M ExpensesYear-end fund balance 6,328,758 5,275,050 5,477,507 6,406,517 8,137,526 10,256,704 12,327,688 14,363,688 16,371,688 18,313,688 20,178,68825% operating expenses 4,180,000 4,350,000 4,260,000 4,320,000 4,380,000 4,560,000 4,700,000 4,850,000 5,000,000 5,160,000 5,330,000# of Days O&M in Reserves 136 109 116 134 167 203 236 267 295 319 341Pass/fail PASS PASS PASS PASS PASS PASS PASS PASS PASS PASS PASS [1] Estimated for planning purposes [2] Calculated as 2% of the Beginning Fund Balance of the Water Revenue Fund[3] Capital Improvements are funded through the Long-Term Capital Improvement Project Fund Five Year Projection Extended Year Projection

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Table 2City of Foster City / Estero Municipal Improvement DistrictWater Rate Calculation - Two Tier Hybrid Model Fiscal Year Ending June 30 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Fixed Meter Charge Increase 6.00% 6.00% 6.00% 6.00% 6.00% 4.00% 4.00% 4.00% 4.00% 4.00%Fixed Revenues +/- 5% of Fixed Costs? YES YES YES YES YES YES YES YES YES YES Reserves % Above (Below) Reserve Target 121.3% 128.6% 148.3% 185.8% 224.9% 262.3% 296.2% 327.4% 354.9% 378.6%Reserve Target Met? YES YES YES YES YES YES YES YES YES YES Revenue EstimatesMeter Charge Revenue 6,114,000$ 6,501,000$ 6,915,000$ 7,356,000$ 7,823,000$ 8,318,000$ 8,684,000$ 9,065,000$ 9,460,000$ 9,871,000$ 10,309,000$ Other Fixed Revenue 380,949$ 177,000$ 156,000$ 160,000$ 178,000$ 213,000$ 255,000$ 297,000$ 337,000$ 377,000$ 416,000$ Volumetric Revenue 10,725,000$ 11,213,000$ 11,728,000$ 12,239,000$ 12,807,000$ 13,386,000$ 13,520,000$ 13,654,000$ 13,833,000$ 13,951,000$ 14,052,000$ Total Projected 17,219,949$ 17,891,000$ 18,799,000$ 19,755,000$ 20,808,000$ 21,917,000$ 22,459,000$ 23,016,000$ 23,630,000$ 24,199,000$ 24,777,000$ Total Projected Revenue (Rounded '000's) 17,220,000$ 17,891,000$ 18,799,000$ 19,755,000$ 20,808,000$ 21,917,000$ 22,459,000$ 23,016,000$ 23,630,000$ 24,199,000$ 24,777,000$ $17,219,949 $17,900,000 $18,801,000 $19,764,000 $20,809,000 $21,917,000 $22,454,000 $23,022,000 $23,617,000 $24,195,000 $24,784,000 Revenue AllocationFixed 37.7% 37.3% 37.6% 38.0% 38.5% 38.9% 39.8% 40.7% 41.5% 42.3% 43.3%Variable 62.3% 62.7% 62.4% 62.0% 61.5% 61.1% 60.2% 59.3% 58.5% 57.7% 56.7% Costs EstimatesFixed Costs [1] $8,561,082 $7,870,938 $7,478,581 $7,677,971 $7,883,962 $8,096,784 $8,318,000 $8,544,000 $8,778,000 $9,019,000 $9,270,000Variable Costs [2] $11,091,785 $11,083,012 $11,120,012 $11,157,012 $11,194,012 $11,701,012 $12,065,012 $12,442,012 $12,831,012 $13,234,012 $13,649,012Total Projected Costs $19,652,867 $18,953,950 $18,598,593 $18,834,983 $19,077,974 $19,797,796 $20,383,012 $20,986,012 $21,609,012 $22,253,012 $22,919,012 Net Revenue Fixed Charges -$2,066,133 -$1,192,938 -$407,581 -$161,971 $117,038 $434,216 $621,000 $818,000 $1,019,000 $1,229,000 $1,455,000Volumetric Charges -$366,785 $129,988 $607,988 $1,081,988 $1,612,988 $1,684,988 $1,454,988 $1,211,988 $1,001,988 $716,988 $402,988Total -$2,432,918 -$1,062,950 $200,407 $920,017 $1,730,026 $2,119,204 $2,075,988 $2,029,988 $2,020,988 $1,945,988 $1,857,988 Cost AnalysisFixed 43.6% 41.5% 40.2% 40.8% 41.3% 40.9% 40.8% 40.7% 40.6% 40.5% 40.4%Variable 56.4% 58.5% 59.8% 59.2% 58.7% 59.1% 59.2% 59.3% 59.4% 59.5% 59.6% Meter Charge CalculationMonthly charge per meter equivalent 26.05$ 27.60$ 29.25$ 31.00$ 32.85$ 34.80$ 36.20$ 37.65$ 39.15$ 40.70$ 42.35$ (Rounded to nearest $0.05)Annual charge per meter equivalent 312.60$ 331.20$ 351.00$ 372.00$ 394.20$ 417.60$ 434.40$ 451.80$ 469.80$ 488.40$ 508.20$ Meter equivalents [3] 19,557 19,629 19,701 19,773 19,845 19,918 19,991 20,064 20,137 20,211 20,285 Meter Charge Revenue Estimate 6,114,000$ 6,501,000$ 6,915,000$ 7,356,000$ 7,823,000$ 8,318,000$ 8,684,000$ 9,065,000$ 9,460,000$ 9,871,000$ 10,309,000$ Volumetric Rate CalculationEMID Proposed Uniform Rate $6.21 6.47$ 6.74$ 7.01$ 7.31$ 7.61$ 7.66$ 7.71$ 7.78$ 7.82$ 7.85$ Projected annual water sales (ccf) [4] 1,727,000 1,733,000 1,740,000 1,746,000 1,752,000 1,759,000 1,765,000 1,771,000 1,778,000 1,784,000 1,790,000Variable revenue estimate $10,725,000 $11,213,000 $11,728,000 $12,239,000 $12,807,000 $13,386,000 $13,520,000 $13,654,000 $13,833,000 $13,951,000 $14,052,000 % Spread between EMID and SFPUC Surcharge 30.7% 22.1% 27.2% 32.3% 37.9% 37.4% 34.2% 31.2% 28.5% 25.4% 22.2%SFPUC PROJECTED RATES $4.75 $5.30 $5.30 $5.30 $5.30 $5.54 $5.71 $5.88 $6.05 $6.24 $6.42Increase (Decrease) % 11.6% 0.0% 0.0% 0.0% 4.5% 3.0% 3.0% 3.0% 3.0% 3.0% BAWSCA Surcharge $0.31 $0.31 $0.31 $0.31 $0.31 $0.31 $0.31 $0.31 $0.31 $0.31 $0.31 SFPUC Rate + BAWSCA Surcharge $5.06 $5.61 $5.61 $5.61 $5.61 $5.85 $6.02 $6.19 $6.36 $6.55 $6.73 EMID Fixed Meter Charge Increase (Decrease) 6.0% 6.0% 6.0% 6.0% 5.9% 4.0% 4.0% 4.0% 4.0% 4.1%EMID Volumetric Rate Increase (Decrease) 4.2% 4.2% 4.0% 4.3% 4.1% 0.7% 0.7% 0.9% 0.5% 0.4% Note:[1] Includes: Employee Services, Internal Services - Other, Internal Services - ERF, Services & Supplies, Reallocation, Capital Outlay, Capital Improvement Fund Transfers, Debt Service, and net revenues for the operating fund.[2] Includes: SFPUC Water Purchases, BAWSCA Bond Repayment, and Water Sustainability Fund Transfers.[3] 0.37% growth estimated for planning purposes [4] Includes 10% water loss factor Five Year Projection Extended Year Projection

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Table 3City of Foster City / Estero Municipal Improvement DistrictProposed Water Rates - Two Tier Hybrid Model Current Rates FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 FY2030 FY2031 FY2032 FY2033 Monthly Meter Charge3/4" $26.05 $27.60 $29.25 $31.00 $32.85 $34.80 $36.20 $37.65 $39.15 $40.70 $42.351" 43.42 46.00 48.75 51.67 54.75 58.00 60.33 62.75 65.25 67.83 70.581-1/2" 104.20 110.40 117.00 124.00 131.40 139.20 144.80 150.60 156.60 162.80 169.402" 138.93 147.20 156.00 165.33 175.20 185.60 193.07 200.80 208.80 217.07 225.873" 303.92 322.00 341.25 361.67 383.25 406.00 422.33 439.25 456.75 474.83 494.084" 547.05 579.60 614.25 651.00 689.85 730.80 760.20 790.65 822.15 854.70 889.356" 1,215.67 1,288.00 1,365.00 1,446.67 1,533.00 1,624.00 1,689.33 1,757.00 1,827.00 1,899.33 1,976.338" or greater 2,084.00 2,208.00 2,340.00 2,480.00 2,628.00 2,784.00 2,896.00 3,012.00 3,132.00 3,256.00 3,388.00 Conservation-Based Water Rate Model (based on bi-monthly allotments)Single Family ResidentialTier 1 0-20 per ccf 6.10 6.36 6.62 6.89 7.18 7.48 7.53 7.59 7.65 7.70 7.74Tier 2 Over 20 ccf 6.64 7.01 7.30 7.59 7.91 8.21 8.24 8.28 8.33 8.36 8.38Multi-Family Residential (per living unit)Tier 1 0-10 ccf per living unit 6.10 6.36 6.62 6.89 7.18 7.48 7.53 7.59 7.65 7.70 7.74Tier 2 Over 10 ccf per living unit 6.68 7.09 7.38 7.68 8.00 8.30 8.33 8.37 8.42 8.44 8.46Irrigation CustomersTier 1 <=100% of annual budget 6.10 6.36 6.62 6.89 7.18 7.48 7.53 7.59 7.65 7.70 7.74Tier 2 >100% of annual budget 6.70 7.22 7.52 7.82 8.14 8.44 8.47 8.50 8.55 8.57 8.59Commercial and Fire Line CustomersBase Consumption Rate 6.21 6.47 6.74 7.01 7.31 7.61 7.66 7.71 7.78 7.82 7.85 Monthly Fire Meter Charge3/4" 36.47 38.64 40.95 43.40 45.99 48.72 50.68 52.71 54.81 56.98 59.291" 36.47 38.64 40.95 43.40 45.99 48.72 50.68 52.71 54.81 56.98 59.291-1/2" 36.47 38.64 40.95 43.40 45.99 48.72 50.68 52.71 54.81 56.98 59.292" 48.71 51.61 54.70 57.97 61.43 65.08 67.69 70.41 73.21 76.11 79.193" 106.28 112.61 119.34 126.48 134.03 141.98 147.70 153.61 159.73 166.06 172.794" 191.47 202.86 214.99 227.85 241.45 255.78 266.07 276.73 287.75 299.15 311.276" 425.40 450.71 477.65 506.23 536.44 568.28 591.15 614.82 639.32 664.63 691.588" or greater 729.40 772.80 819.00 868.00 919.80 974.40 1,013.60 1,054.20 1,096.20 1,139.60 1,185.80(Minimum charge is equivalent to 1-1/2" meter charge)

TWO TIER HYBRID MODEL
Recommended Rates

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Table 4
Foster City / Estero Municipal Improvement District
Projected Water Rate Impacts
Current FY2024
Rates Two Tier Hybrid Model
Monthly meter charge $26.05 $27.60
% Change 6.0%
Single Family Residential
Bi-Monthly Tiers
Tier 1: 0 to 20 ccf $6.10 $6.36
Tier 2: over 20 ccf $6.64 $7.01
Water Monthly
Use Level Use (ccf) Monthly Bill
Low User 5 $56.55 $59.40
$ Increase 2.85
% Increase 5.0%
Median User 6 $62.65 $65.76
$ Increase 3.11
% Increase 5.0%
Average User 8 $74.85 $78.48
$ Increase 3.63
% Increase 4.8%
High User 10 $87.05 $91.20
$ Increase 4.15
% Increase 4.8%
Very High User 20 $148.05 $161.30
$ Increase 13.25
% Increase 8.9%
Excessive User 50 $347.25 $371.60
$ Increase 24.35
% Increase 7.0%

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Table 5
Foster City / Estero Municipal Improvement District
Projected Water Rate Impacts
Current
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
Two Tier Hybrid Model
Single Family Residential Monthly Rate $74.85 $78.48 $82.21 $86.12 $90.29 $94.64 $96.44 $98.37 $100.35 $102.30 $104.27 $ Increase 3.63 3.73 3.91 4.17 4.35 1.80 1.93 1.98 1.95 1.97 % Increase 4.8% 4.8% 4.8% 4.8% 4.8% 1.9% 2.0% 2.0% 1.9% 1.9% Based on Single Family Residential Use of 8 ccf
Fiscal Year Ending June 30 Extended Year ProjectionProjected Water Bills

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Wastewater Enterprise Fund
There are approximately 13,966 wastewater accounts serviced by the District. The majority of accounts are residential with the remainder consist of commercial and institutional accounts as shown in Table 1.

The District has approximately $22,698,115 in its wastewater maintenance and operations reserve fund as shown in Table 2. The District’s minimum operating reserve target is 25% of operating and maintenance expenses (est. to be about $2.3 million).

T a b l e 1
F o s t e r C i t y / E s t e r o M u n i c i p a l I m p r o v e m e n t D i s t r i c t W a s t e w a t e r S e r v i c e A c c o u n t s
D a t a a s o f : 0 2 / 0 1 / 2 2
N u m b e r o f A c c o u n t s
R e s i d e n t i a l
S i n g l e F a m i l y 4 , 5 3 5
T o w n h o u s e / D u p l e x 2 , 2 7 7
A p a r t m e n t / C o n d o m i n i u m ( P o o l s w / R e s t r o o m s ) 6 , 9 0 6 R e s i d e n t i a l T o t a l 1 3 , 7 1 8
C o m m e r c i a l
R e s t a u r a n t s 4 2
C o m m e r c i a l / H o t e l s / O f f i c e s / I n d u s t r i a l / L a u n d r o m a t s 1 7 1 C o m m e r c i a l T o t a l 2 1 3
I n s t i t u t i o n a l
I n s t i t u t i o n a l / S c h o o l s 3 5
I n s i t u t i o n a l T o t a l 3 5
T o t a l 1 3 , 9 6 6
S o u r c e : C o g n o s S e w e r C u s t o m e r C o u n t R e p o r t C u s t o m e r C l a s s

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Table 3 summarizes the current wastewater service rates.

Table 2
Foster City / Estero Municipal Improvement District
Wastewater Operating Fund Reserves
July 1, 2022
Fund Reserve Component Balance
Reserved for Maintenance & Operation $22,698,115
Total $22,698,115
operating and capital expenditures.

Note: Rate model only includes fund reserve components available to fund ongoing Source: City of Foster City/Estero Municipal Improvement District Staff Table 3
Foster City / Estero Municipal Improvement District
Current Wastewater Rates
Current
Fiscal Year Ending June 30 2023
Residential (flat monthly rate)
Single Family $127.06
Townhouse/Duplex 106.73
Apartment/Condominium (Pools w/ Restrooms) 106.73
Commercial (rate per ccf of water use)
Restaurants 23.09
Commercial/Hotels/Offices/Industrial/Laundromats 8.12
Institutional (rate per ccf of water use)
Institutional/Schools 5.34

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Table 4 summarizes the operating expenditures of the enterprise. Costs are expected to remain relatively stable over the next five years.

Projected operating expenditures are anticipated to increase over the next five years by about 30%.

Table 4
City of Foster City / Estero Municipal Improvement District Wastewater Enterprise O&M Projection
Revised
Budget
FY2023 FY2024 FY2025 FY2026 FY2027 FY2028
Employee Services $2,883,682 $2,838,710 $2,952,258 $3,070,348 $3,193,162 $3,320,888 4.0% Internal Services (from City) 1,116,826 1,167,852 1,197,048 1,226,974 1,257,648 1,289,089 2.5% Internal Services -ERF 266,126 266,126 272,779 279,598 286,588 293,753 2.5% Services & Supplies 661,550 733,550 751,889 770,686 789,953 809,702 2.5% EMID Share WWTP O&M 3,400,000 3,700,000 3,700,000 4,000,000 4,200,000 5,200,000 N/A Reallocation [2] 894,301 976,739 1,001,157 1,026,186 1,051,841 1,078,137 2.5% TOTAL O&M Expenditures $9,222,485 $9,682,977 $9,875,131 $10,373,792 $10,779,192 $11,991,569

5.0% 2.0% 5.0% 3.9% 11.2%
[1] Based on historical results
[2] Costs allocated to the Wastewater Enterprise from other departments based on the City's cost allocation study.

Annual %
Increase [1]Expenditures Five Year Projection

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Wastewater Financial Projections
Wastewater projections are shown in APPENDIX E.

San Mateo-Foster City Public Financing Authority:

Projections anticipate $60.65 million of debt issuances between FY 2023 and FY 2024 ($27.6 MM of WIFIA proceeds and $33 MM of SRF loans) to fund WWTP expansion costs. BWA projects that the approved rate increases are adequate to secure projected debt issuances over the next several years.

Table 5 shows debt service estimates for the District’s share of WWTP costs. Annual debt service for the combined total debt issuances is estimated to amount to $5.96 MM by FY 2026.

Table 5
City of Foster City / Estero Municipal Improvement District Debt Service Estimates
Debt Service FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 2020 WIFIA Loan $0 $298,110 $2,269,977 $2,616,824 $2,616,839 $2,616,857 $2,616,878 $2,616,901 $2,616,928 $2,616,958 2019 Bonds 2,084,250 2,085,000 2,084,250 2,086,875 2,087,750 2,086,875 2,084,250 2,084,750 2,088,125 2,084,375 2023 SRF Loan/Bonds 0 0 134,332 1,259,604 1,259,573 1,259,540 1,259,508 1,259,475 1,259,443 1,259,410 Total Debt Service $2,084,250 $2,383,110 $4,488,559 $5,963,303 $5,964,162 $5,963,273 $5,960,636 $5,961,127 $5,964,496 $5,960,742

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CHART B

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Wastewater Cost of Service Analysis
Bartle Wells performed a Wastewater Cost of Service Analysis to determine equitable cost allocation to the various user classes. BWA recommends continuing the practice of placing commercial customers into three wastewater strength categories, (low, medium and high) based on the State Water Resources Control Board (SWRCB) Wastewater Revenue Program Guidelines. Low strength wastewater (Class A) customers include banks, laundromats, retail stores, schools, churches and others as shown in Table 6.

Medium strength wastewater (Class B) customers have wastewater strength factors that are assumed to be similar to residential wastewater strength factors. They include typical commercial activities such as libraries, spas, nail salons, gas stations and bars.

High strength wastewater (Class C) customers primarily include food-related businesses such as restaurants, bakeries, dairies, wineries, catering, butcher shops and fish markets.

Table 6
City of Foster City/Estero Municipal Improvement District Strength Classifications into Low, Medium/Domestic, and High Strength Dischargers

Low Strength Banks & Financial Institutions
Barber Shops/Hair Salons (hair cutting only)
Post Offices/Government
Retail Stores
Libraries
Schools
Churches, Halls & Lodges
Parking Garages
Warehouses

Medium/Commercial/ Residential - All
Domestic Strength Appliance Repair
Beauty Shops (hair cutting w/additional treatments)
Dry Cleaners
Nail Salons
Pet Groomers
Commercial Laundromats
Bars & Taverns

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Tasting Rooms
Hospitals - General, Convalescent & Veterinarian
Hotels, Motels, B&Bs, and Vacation Rentals
Offices - Business and Professional
Offices - Medical/Dental
Pools with Restrooms (Clubhouse)
Theaters
Car Washes
High Tech Medical Manufacturing
Light Manufacturing/Industrial
Gym or Health Club
Machine Shops
Service Stations, Garages, Auto Repair Shops
Mini Marts - W/O Dish Washer or Garbage Disposal
Mini Mart with Gas Pumps - W/O Dish Washer or Garbage Disposal Spa with Various Beauty Treatments

High Strength Restaurants
Coffee Shops
Ice Cream Parlors
Catering
Eatery
Bakeries
Butcher Shops
Fish Market/Shop

Markets - with Dish Washer or Garbage
Disposal
Markets - with Bakeries or Butcher Shops
Mini Marts - with Dish Washer or Garbage Disposal
Wineries
Market
Dairies (milk producers, yogurt, ice cream maker)
Specialty Foods Manufacturing (e.g., cheese or olive oil maker)

Note: Wastewater users who have Fats, Oils, and Grease (FOG) waste will be put into the High Strength user category

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Table 7 summarizes the assumed wastewater strength factors for the low, medium and high strength groups that are based on typical strengths provided in the SWRCB’s Revenue Program Guidelines. The strength factor for medium strength customers is equivalent to residential or “domestic” strength, of 1.00. The strength factor for low strength is calculated at 0.66 and for high strength is calculated at 2.85 based on the SWRCB guidelines.

Table 7
City of Foster City/Estero Municipal Improvement District Assumed Wastewater Strength Factors
Strength Class LOW LOW-MEDIUM MEDIUM HIGH
Examples: Institutional Residential Restaurant
Bank Offices Bakery
Flow (gpd) 200 168 200 200
BOD1 (mg/l) 135 240 240 1000
TSS2 (mg/l) 100 240 240 800
Strength Factor 0.66 0.84 1.00 2.85
Strength Factor Formula SF=(Flow(gpd)/200)*(0.33+(0.34*BOD(mg/l)/240)+(0.33*TSS(mg/l)/240)) WW flows and strengths based on State Water Resources Control Board's Revenue Program Guidelines 1 "BOD" stands for Biochemical Oxygen Demand
2 "TSS" stands for Total Suspended Solids
Townhouse, Duplex,
Apartment, Condo

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Table 8 summarizes the mass-balance analysis for the City’s wastewater system and calculates the wastewater rates for each customer class. Single family residences are assumed to have an average daily (dry weather) flow of 200 gallons per day (gpd). The flow estimate is based on the State Water Resources Control Board Revenue Program Guidelines Table G-1, which estimates flow in gallons per day per person for residential dwelling units to be up to 75 gallons.

Based on residential occupancy data provided by the City of Foster City, single family residences are estimated to have an average of 2.67 residents per household and multi-family residences are estimated to have an average of 2.25 residents per household (84% of a single family household).

Multi-family dwellings are billed based on an estimated flow of 168 gpd or 0.84 times the single family flow. As a check, the mass balance in Table 8 compares the total calculated and measured daily wastewater flows for Foster City (average dry weather flow).

The results agree well with the estimated daily flow at 2.61 million gallons per day (mgd) and the measured flow at 2.37 mgd.

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Table 8
City of Foster City/Estero Municipal Improvement District Summary of Wastewater Users by Customer Class
FY 2023 Estimate
Customer Class EDU x Flow Calculated
EDUs1 ADWF Flow ADWF Flow BOD3 TSS4 Current
(gal/day) (gal/day) (mg/l) (mg/l) Rate
Residential
Single Family Residential 4,535 200 907,000 240 240 127.06 Townhouse/Duplex 2,277 168 382,536 240 240 106.73
Apartment/Condos 6,906 168 1,160,208 240 240 106.73
Subtotal 2,449,744
Use Estimated Calculated
Accounts (gal/day) Flow Factor ADWF Flow BOD3 TSS4 Current Commercial (gal/day) (mg/l) (mg/l) Rate
Low Strength 35 40,655 65% 26,426 135 100 5.34
Medium/Domestic Strength 171 198,866 52% 103,329 240 240 8.12 High Strength 42 48,957 70% 34,270 1000 800 23.09
Subtotal 288,478 164,024
Totals 2,613,768
Check Against Lowest Actual Monthly Avg. Day Flow (May 2014 from LS 59 Flow Log): 2,367,806 1 "EDU" stands for Equivalent Dwelling Unit
2 "ADWF" stands for Average Dry Weather Flow
3 "BOD" stands for Biochemical Oxygen Demand
4 "TSS" stands for Total Suspended Solids

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APPENDIX E
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Table 1City of Foster City / Estero Municipal Improvement District Wastewater Enterprise Cash Flow Projection 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033Assumptions:Interest Earnings Rate 0.50% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%Revenue Increase from Growth 0.00% 0.37% 0.37% 0.37% 0.37% 0.37% 0.37% 0.37% 0.37% 0.37% 0.37%Rate Adjustment 3.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%Monthly Service Charge for Single Family $127.06 $130.87 $133.49 $136.16 $138.88 $141.66 $144.49 $147.38 $150.33 $153.34 $156.41 Beginning O&M Fund Balance $22,698,115$25,800,900 $12,471,000 $5,118,900 $7,188,000 $10,350,600 $12,892,800 $15,709,000 $18,706,600 $21,992,000 $25,484,300 Operating RevenuesService Charges 20,121,293 20,799,000 21,291,000 21,795,000 22,311,000 22,839,000 23,379,000 23,932,000 24,498,000 25,078,000 25,671,000Connection Fees [1] 45,500 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000Interest Earnings [2] 113,491 516,000 249,000 102,000 144,000 207,000 258,000 314,000 374,000 440,000 510,000Other Revenue 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000Operating Revenue 20,281,283 21,366,000 21,591,000 21,948,000 22,506,000 23,097,000 23,688,000 24,297,000 24,923,000 25,569,000 26,232,000 Non Operating RevenueBond / Loan [3] 46,418,785 14,235,063 0 0 0 0 0 0 0 0 0Non Operating Revenue 46,418,785 14,235,063 0 0 0 0 0 0 0 0 0 Total Revenue 66,700,068 35,601,063 21,591,000 21,948,000 22,506,000 23,097,000 23,688,000 24,297,000 24,923,000 25,569,000 26,232,000 Operating ExpensesEmployee Services 2,883,682 2,838,710 2,952,258 3,070,348 3,193,162 3,320,888 3,453,724 3,591,873 3,735,548 3,884,970 4,040,369Internal Services (from City) 1,116,826 1,167,852 1,197,048 1,226,974 1,257,648 1,289,089 1,321,316 1,354,349 1,388,208 1,422,913 1,458,486Internal Services -ERF 266,126 266,126 272,779 279,598 286,588 293,753 301,097 308,624 316,340 324,249 332,355Services & Supplies 661,550 733,550 751,889 770,686 789,953 809,702 829,945 850,694 871,961 893,760 916,104EMID Share WWTP O&M 3,400,000 3,700,000 3,700,000 4,000,000 4,200,000 5,200,000 5,300,000 5,500,000 5,600,000 5,800,000 6,000,000Reallocation 894,301 976,739 1,001,157 1,026,186 1,051,841 1,078,137 1,105,090 1,132,717 1,161,035 1,190,061 1,219,813Operating Expenses 9,222,485 9,682,977 9,875,131 10,373,792 10,779,192 11,991,569 12,311,172 12,738,257 13,073,092 13,515,953 13,967,127 Operating Net Revenue 11,058,798 11,683,023 11,715,869 11,574,208 11,726,808 11,105,431 11,376,828 11,558,743 11,849,908 12,053,047 12,264,873 Capital ExpensesTransfer Out - Capital Improvement Fund 5,250,000 11,500,000 11,500,000 2,600,000 2,600,000 2,600,000 2,600,000 2,600,000 2,600,000 2,600,000 2,600,000EMID Share WWTP Expansion 47,040,566 25,364,852 3,079,383 941,812 0 0 0 0 0 0 0Capital Expenses 52,290,566 36,864,852 14,579,383 3,541,812 2,600,000 2,600,000 2,600,000 2,600,000 2,600,000 2,600,000 2,600,000 Annual Debt Service 2,084,250 2,383,110 4,488,559 5,963,303 5,964,162 5,963,273 5,960,636 5,961,127 5,964,496 5,960,742 5,959,868Debt Service 2,084,250 2,383,110 4,488,559 5,963,303 5,964,162 5,963,273 5,960,636 5,961,127 5,964,496 5,960,742 5,959,868 Debt Coverage [4] 5.31 4.90 2.61 1.94 1.97 1.86 1.91 1.94 1.99 2.02 2.06 Total Expenditures 63,597,301 48,930,939 28,943,073 19,878,907 19,343,354 20,554,842 20,871,808 21,299,384 21,637,588 22,076,695 22,526,995 Revenues Less Total Expenditures 3,102,767 (13,329,876) (7,352,073) 2,069,093 3,162,646 2,542,158 2,816,192 2,997,616 3,285,412 3,492,305 3,705,005 Ending O&M Fund 25,800,882 12,471,024 5,118,927 7,187,993 10,350,646 12,892,758 15,708,992 18,706,616 21,992,012 25,484,305 29,189,305 Cash Fund Reserve Test: Minimum Fund Balance > 25% O&M ExpensesYear-end O&M Fund 25,800,882 12,471,024 5,118,927 7,187,993 10,350,646 12,892,758 15,708,992 18,706,616 21,992,012 25,484,305 29,189,30525% Operating Expenses 2,305,621 2,420,744 2,468,783 2,593,448 2,694,798 2,997,892 3,077,793 3,184,564 3,268,273 3,378,988 3,491,782# of Days O&M in Reserves 1,021 470 189 253 350 392 466 536 614 688 763 Pass/fail PASS PASS PASS PASS PASS PASS PASS PASS PASS PASS PASS [1] Growth projections for planning purposes [2] Projected interest calculated as 2% of the Beginning Fund Balance of the Wastewater O&M Fund.[3] Calculated by William Euphrat Municipal Finance, Inc. [4] Minimum requirement debt service covereage requirement = 1.25x Five Year Projection Extended Year Projection

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Table 2
City of Foster City / Estero Municipal Improvement District Projected Wastewater Rate Impacts
Current
FY2023 FY2024 FY2025 FY2026 FY2027 FY2028
% Rate Increase 3.00% 2.00% 2.00% 2.00% 2.00%
Residential (flat monthly rate)
Single Family $127.06 $130.87 $133.49 $136.16 $138.88 $141.66 Increase (Decrease) 3.81 2.62 2.67 2.72 2.78
Townhouse/Duplex $106.73 $109.93 $112.13 $114.37 $116.66 $118.99 Increase (Decrease) 3.20 2.20 2.24 2.29 2.33
Apartment/Condominium (Pools w/ Restrooms) $106.73 $109.93 $112.13 $114.37 $116.66 $118.99 Increase (Decrease) 3.20 2.20 2.24 2.29 2.33
Commercial (rate per ccf of water use)
High Strength $23.09 $23.78 $24.26 $24.75 $25.25 $25.76 Increase (Decrease) per ccf 0.69 0.48 0.49 0.50 0.51
Medium/Domestic Strength $8.12 $8.36 $8.53 $8.70 $8.87 $9.05 Increase (Decrease) per ccf 0.24 0.17 0.17 0.17 0.18
Low Strength $5.34 $5.50 $5.61 $5.72 $5.83 $5.95
Increase (Decrease) per ccf 0.16 0.11 0.11 0.11 0.12
Projected - Fiscal Year Ending June 30Projected Rates

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CHART C

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DATE: March 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 Manager

FROM: Edmund Suen, Finance Director
DEPARTMENT: Finance
SUBJECT: Internal Service Funds Summary

RECOMMENDATION
City staff seeks reaffirmation of the City Council’s policy on reserve levels and funding methodologies for its Internal Service Funds in the preparation of its FY 2023-24 budget

EXECUTIVE SUMMARY
As indicated in Attachment 1, each of the Internal Service Funds (Vehicle Replacement Fund, Equipment Replacement Fund, Information Technology Fund, Building Replacement Fund, and Water Equipment Replacement Fund) is projected to meet targeted reserve levels as of 6/30/2023. The Self-Insurance Fund and Wastewater Equipment Fund are $10,453 and $7,086 shy of its target of $1.0 million and $2.26 million respectively. The Longevity Benefit and PEHMCA Benefit Internal Service Funds reserve balances represent set asides for post-employment liability. Based on the current practice, City staff recommends the continuation of assessments for estimated benefit charges to applicable departments in FY 2023-24. Lastly, the Compensated Absences Internal Service Fund reserve balance represents the estimated accrued value of earned leave (vacation and sick) upon General Fund employee separation from the City. As such, earned leave payout is charged to this Fund at such time.

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BACKGROUND
Internal Service Funds are the mechanism by which the City accumulates funding over time in preparation for known future large purchases and/or other future liabilities. Internal Service funding is a conservative budgeting strategy that has helped Foster City proactively fund necessary expenditures.

The City of Foster City has established six (6) Internal Service Funds to which it transfers funds in preparation for future large expenses. These funds are:
•Vehicle Replacement Fund (501) – For staffing costs and purchases related to the vehicle fleet including vehicles and repair equipment.
•Equipment Replacement Fund (502) – For the purchase of operations equipment with a cost of at least $1,000.
•Self-Insurance Fund (503) – For the costs associated with the Insurance and Risk Management program.
•Information Technology Fund (504) – For staffing costs and purchases of equipment related to information technology including computers, servers, phone systems, routers, etc.
•Building Maintenance Fund (505) – For staffing costs and the upkeep of all City buildings, including paint, HVAC, roofing, equipment, and building maintenance. •Compensated Absences (509) – For payouts of accrued leave upon termination of employment based upon provisions of various employee Memoranda of Understanding (MOUs) and the City’s Compensation and Benefits Plan. •Water Enterprise Equipment Replacement Fund (408) – For the purchase of operations equipment with a cost of at least $1,000.
•Wastewater Enterprise Equipment Replacement Fund (458) – For the purchase of operations equipment with a cost of at least $1,000.

Funding is set aside in these funds based on an annual analysis of each Fund’s needs. Balances are impacted by various factors, including interest accumulation on reserves, estimates of replacement values, actual timing of asset replacements compared to scheduled timing of such replacements, and/or disparities (if any) on the cost of replacement items compared to accumulated funding. The Compensated Absences Fund Balance tends to vary from year to year depending upon actual vacation accruals, vacation time taken by staff, annual elected vacation payouts, the number of retirements, and/or separations from service.

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The City also has two (2) Internal Service Funds that collect assessments of estimated retiree benefit payments to applicable departments, namely:
•Longevity Recognition Benefits Fund (507) – For the payment of Longevity Recognition Benefits post-employment benefits to qualified individuals •PEMHCA Benefits Fund (508) – For the payment of Public Employees Medical and Hospital Care Act post-employment benefits to qualified individuals.

City staff recommends the continuation of this practice in FY 2023-24.

ANALYSIS
Internal Service Fund balances are analyzed periodically to ensure that funding is adequate based upon the requirements of each Fund and to determine the scope of any available balances above the calculated requirements.

Over the course of the past months, each Internal Service Fund was analyzed and after deducting funding dedicated for the replacement of equipment and/or the accrued liability, the reserve established by policy is then applied. The resulting balance is considered available Unassigned Fund Balance (reserve balance).

Over the past several years, City staff implemented a 15% chargeback discount in the Vehicle Replacement Fund and Equipment Replacement Fund and have continued to hold adequate reserves. Staff recommends the continuation of this practice for FY 2023-24. This discount methodology is expected to limit each Fund’s reserve build-up in future years while still maintaining targeted reserves.

The analysis of Internal Service Fund balances is an integral step in financial and fiscal sustainability management and is done annually as part of the budget process.

Detailed discussion about each Internal Service Fund can be found in the separate staff reports presented this evening.

California Environmental Quality Act
Not Applicable

FISCAL IMPACT
City Staff seeks reaffirmation of the City Council’s policy on reserve levels and funding methodologies for its Internal Service Funds in the preparation of its FY 2023-24 budget. A reaffirmation helps maintain the City’s fiscal sustainability.

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

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ATTACHMENTS:

Attachment 1 - Analysis of Internal Service Funds Balances

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ATTACHMENT 1 - ANALYSIS OF INTERNAL SERVICE FUND BALANCES Fund Balance Analysis
Vehicle
Replace-
ment
Fund 501
Equipment
Replace-
ment Fund
502
Self
Insurance
Fund 503
Information
Tech-
nology Fund
504
Building
Main-
tenance
Fund 505
Longevity
Recognition
Fund 507
PEMHCA
Fund 508
Compensated
Absences Fund
509 Total
Water
Enterprise
Equipment
Replacement
Fund 408
Wastewater
Enterprise
Equipment
Replacement
Fund 458
Estimated Ending Fund Balance at 6/30/23 1 4,905,593$ 6,577,103 $ 989,547 $ 5,119,349$ 6,427,728 $ 2,593,620 $ 6,206,270 $ 3,350,443 $ 36,169,653 $ 3,913,320 $ 2,252,111 $ Funds required per detail analysis of each Internal
Service Fund2 3,705,927$ 5,456,126 $ 1,000,000 $ 3,528,165 $ 4,718,456 $ 2,509,051 6,093,699 3,214,032 $ 30,225,456 3,903,554 2,259,197 Projected funds available (required) at 6/30/202 before minimum reserves 1,199,666 1,120,977 (10,453) 1,591,184 1,709,272 84,569 112,571 136,411 5,944,197 9,766 (7,086) Equipment Replacement/Building Maintenance
Reserves (minimum $100,000 per fund) (100,000) (100,000) - (100,000) (100,000) - - - (400,000) - - Fund Surplus (Deficit) available after Vehicles,
Equipment Replacement, Building Maintenance
Reserves 1,099,666$ 1,020,977 $ (10,453) $ 1,491,184$ 1,609,272 $ 84,569 $ 112,571 $ 136,411 $ 5,544,197$ 9,766 $ (7,086) $ Fund Reallocation To (From) Internal Service Funds - - - - - - - - - $ - - Adjusted Unassigned Fund Balance above Reserves 1,099,666$ 1,020,977 $ (10,453) $ 1,491,184$ 1,609,272 $ 84,569 $ 112,571 $ 136,411$ 5,544,197$ 9,766 $ (7,086) $ 1 Estimated Available General Ledger Fund Balance, 6/30/23 2 For Fund 509 (Compensated Absences), this represents the projected accrued liability for earned leave in the General Fund.

City of Foster City
Analysis of Internal Service Funds Balances
Projected as at June 30, 2023
For Funds 501 (Vehicle Replacement), 502 (Equipment Replacement), 504 (Information Technology), and Fund 505 (Building Maintenance), these amounts are estimated resources committed to fund asset replacements/building maintenance as of June 30, 2022
For Fund 503 (Self-Insurance), the targeted reserve is $1 million.

For Fund 507 (Longevity Recognition) and Fund 508 (PEMHCA Benefit), this represents the projected balance accumulated as of 6/30/23.

6.6 Attachment 1 - Analysis of Internal Service Funds Balances &nbsp;
&nbsp;
200

DATE: March 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 Manager

FROM: Edmund Suen, Finance Director
Waqas Hassan, Assistant Finance Director
DEPARTMENT: Finance
SUBJECT: COMPENSATED ABSENCES INTERNAL SERVICE FUND

RECOMMENDATION/EXECUTIVE SUMMARY
City/EMID (“City”) staff seeks reaffirmation of the City Council/EMID Board of Directors' (“City Council”) policy to fully fund the Compensated Absences Internal Service Fund (CA ISF) for General Fund and Special Revenue Funds accrued liability of employee leave balances. City staff estimates that FY 2023-24 CA ISF charges to the General Fund and Special Revenue Funds will be $501,829, a decrease of $59,207 from the current budget of $561,036.

BACKGROUND/ANALYSIS
The City provides vacation and sick leave benefits to current employees based upon the two (2) memoranda of understanding (MOU) with AFSCME and FCPOA, and the Compensation and Benefits Plan (C&B Plan) for Management Employees. These benefits are collectively referred to as “compensated absences.” When an employee separates from employment with the City, either through termination, resignation, or retirement, the City is required to pay the final compensated absences balances to the employee based on the provisions within the MOUs or C&B Plan applicable to the employee. For some employees, this payout may be less than $2,000, but for long-term or highly compensated employees, these payouts can be over $50,000.

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The City Council created the “Compensated Absences Internal Service Fund” as of July 1, 2012 through a transfer of available reserves totaling $2.65 million from the General Fund to the new Compensated Absences Internal Services Fund. City staff estimates that the reserve balance at 6/30/2023 will be $3.35 million. Staff also reviewed both recent and historical trends of year-end accrued liability and has determined the current rate of 3.25% can be decreased to 2.74% to maintain a full reserve balance through FY 2023-24.

California Environmental Quality Act
Not Applicable

FISCAL IMPACT
City staff recommends decreasing the current rate of 3.25% to 2.74% in FY 2023-24.

The resulting CA ISF charges to the General Fund and Special Revenue Funds are estimated to be $498,726 and $3,103 respectively, for a total of $501,829.

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

Attachment 1 – Compensated Absences Budget Comparison
Attachment 2 – Compensated Absence Internal Service Charges Comparison

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ATTACHMENT 1 ‐  COMPENSATED ABSENCES BUDGET COMPARISON
Projected
FY 2022-23
Proposed
FY 2023-24 Variance Notes
Fund Balance, Beginning of Year 3,274,994 3,350,443 Assessments charged 561,036 501,829 (59,207) 1 Interest Income 75,449 117,300 41,851 2 Benefit payments (561,036) (501,829) (59,207) 3 Projected Fund Balance, End of Year 3,350,443 3,467,743 Detailed Analysis:

Note 1 (Assessments charged)
Variance
Rounded to
nearest
$1,000
(59,000)
Note 2 (Interest Income)
Increase in projected investment return from 2.3% to 3.5% 42,000 Note 3 (Benefit Payments)
(59,000)
Compensated Absences Internal Service Fund
Lower overall assessments charged to departments from estimated decrease in the assessment rate
This amount varies greatly depending on payouts that occur each year. Staff estimates that assessments charged in FY 23/24 will match the benefit payments.

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ATTACHMENT 2 ‐ COMPENSATED ABSENCES ISF CHARGES COMPARISON

COMPENSATED ABSENCES ISF CHARGES COMPARISON
Approved Requested Increase
Fund Dept Division FY 2022-23 FY 2023-24 (Decrease) Notes 001 0110 CM ADMINISTRATION $ 27,318 $ 25,197 $ (2,121) 1 001 0210 CITY CLERK ADMINISTRATION $ 8,986 $ 7,494 $ (1,492) 1 001 0230 CITY CLERKCOMMUNICATIONS $ 10,065 $ 11,440 $ 1,375 1 001 0510 REC ADMINISTRATION $ 16,085 $ 15,233 $ (852) 1 001 0520 PARKS MAINTENANCE $ 59,279 $ 53,578 $ (5,701) 1 003 0525 FACILITY OPERATIONS $ 10,048 $ 6,937 $ (3,111) 1 003 0534 YOUTH CAMPS $ - $ - 1 003 0535 ADULT CLASSES $ 1,703 $ 1,464 $ (239) 1 003 0538 YOUTH CONTRACT CLASSES $ 1,703 $ 1,464 $ (239) 1 003 0540 SENIOR PROGRAMS $ 3,406 $ 2,929 $ (477) 1 003 0541 TEEN PROGRAMS $ 4,422 $ 2,929 $ (1,493) 1 001 0610 PD CHIEF'S OFFICE $ 12,030 $ 10,345 $ (1,685) 1 001 0620 PD FIELD OPERATIONS $ 144,630 $ 124,635 $ (19,995) 1 001 0630 PD ADMINISTRATION $ 85,981 $ 73,519 $ (12,462) 1 001 0710 ADMINISTRATION $ - $ - 1 001 0730 Operations $ - $ - 1 001 0810 PLANNING ADMINISTRATION $ 9,396 $ 9,753 $ 357 1 001 0811 ADVANCE PLANNING $ 11,573 $ 8,112 $ (3,461) 1 001 0812 CURRENT PLANNING $ 12,844 $ 10,128 $ (2,716) 1 001 0813 ORDINANCE ENFORCEMENT $ 1,811 $ 4,232 $ 2,421 1 001 0814 ECONOMIC DEVELOPMENT $ - $ 4,660 $ 4,660 001 0820 BLDG SAFETY,CODE,PLN CHK $ 30,403 $ 24,525 $ (5,878) 1 001 0910 PW ADMIN & ENGINEERING $ 28,636 $ 26,011 $ (2,625) 1 001 0920 PW LAGOON & LEVEES $ 11,776 $ 10,338 $ (1,438) 1 001 0930 PW STREET $ 11,776 $ 10,338 $ (1,438) 1 001 1110 FIN ADMINISTRATION $ 10,386 $ 8,931 $ (1,455) 1 001 1120 FIN GENERAL ACCOUNTING $ 21,309 $ 18,611 $ (2,698) 1 001 1130 FIN UTILITY ACCOUNTING $ 4,844 $ 4,166 $ (678) 1 001 1140 FIN TAXES & LICENSES $ 2,435 $ 2,094 $ (341) 1 001 1210 HR ADMINISTRATION $ 15,005 $ 19,664 $ 4,659 1 114 1210 CALOPPS $ 2,778 $ 2,752 $ (26) 1 139 0846 WORKFORCE HOUSING $ 408 $ 351 $ (57) 1 $ 561,036 $ 501,829 $ (59,207)
Note 1 The Compensated Absences rate reduced from 3.25% to 2.74%. Other factors impacting the variance are wages and authorized positions in FY 2023-24

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DATE: March 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 Manager

FROM: Edmund Suen, Finance Director
Waqas Hassan, Assistant Finance Director
DEPARTMENT: Finance
SUBJECT: LONGEVITY RECOGNITION BENEFITS PLAN AND PUBLIC

EMPLOYEES' MEDICAL AND HOSPITAL CARE ACT (PEMHCA)

BENEFITS PLAN INTERNAL SERVICE FUNDS

RECOMMENDATION
It is recommended that the City Council/EMID Board of Directors (“City Council”) receive and accept this report on the City/EMID’s (“City”) Longevity Recognition Benefits Plan and the Public Employees Medical and Hospital Care Act (PEMHCA) Benefits Plan Internal Service Funds.

EXECUTIVE SUMMARY
The City has internal services funds for both its Longevity Recognition Benefits and its PEMHCA Benefits Plans. The Fund Balances in each of these funds represent set- asides for post-employment liability. The current practice is to assess estimated annual benefit charges to applicable departments. Fiscal year 2023-24 Longevity and PEMHCA assessment charges to the General Fund are $228,420 and $191,785 respectively. In addition, PEMHCA assessments to the Water and Wastewater Enterprise Funds, and the Vehicle, Information Technology, and Building Maintenance Internal Service Funds are $18,883; $13,411; $2,234; $5,472; and $4,058 respectively; resulting in an aggregate total of $235,843 of PEMHCA assessment charges.

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BACKGROUND
The City offers its employees two types of post-employment benefits other than the pension plans offered through CalPERS. The two benefits plans are as follows:

1. Longevity Recognition – This benefit plan, negotiated under memoranda of understanding with the City’s externally represented bargaining groups and the compensation and benefits plan for Management Employees, provides monthly benefit payments based upon an employee’s length of service with the City at the time of their retirement from the City and in recognition that the City does not otherwise provide for post-employment medical benefits other than the minimum amounts required under PEMHCA (see below). In FY 2007-08, all AFSCME and non-public safety management employees employed with the City voluntarily eliminated the Longevity Recognition plan from their employee agreements.

Current FCPOA, legacy IAFF, and public safety management employees will continue to participate in the program, but new employees in those groups hired after January 1, 2012, are no longer eligible to participate in the program.

2. PEMHCA Plan – City employees participate in a medical benefits plan provided through CalPERS under the PEMHCA medical benefit plan. In accordance with the provisions of the state law, employers must contribute a minimum fixed monthly amount towards the medical benefits costs for current and retired employees participating in the plan. Effective January 1, 2023, the minimum monthly employer contribution is $151 for each retiree, an increase of $2 from calendar year 2022. The contribution amount is subject to cost of living increases as determined by the State Legislature.

In order to fund each plan’s benefits, the City Council had previously established Internal Service Funds and authorized initial transfers from the General Fund, Enterprise Funds, and other Internal Service Funds to the Longevity Recognition Benefits and PEMHCA Benefits Internal Service Funds. Currently, internal service charges are assessed to the applicable departments “receiving” Longevity and/or PEMHCA benefits.

ANALYSIS
Every two years, both the Longevity Recognition and the PEMHCA plans are subject to individual actuarial studies, with “roll-forward” work for the interim years. The studies determine the actuarially calculated liabilities, normal costs, and contributions of each plan which under Government Accounting Standards are required to be disclosed in the City/District annual financial statements. As of June 30, 2023, the City’s Longevity Benefit Plan liability and PEMHCA OPEB liability were $3.15 million and $9.40 million respectively compared to the Internal Service Fund balances of $2.54 million and $6.08

6.8 6.8 Staff Report

206

million respectively. Accounting standards do not allow Internal Service Fund assets to be used as offsets against our Longevity and PEMHCA OPEB liabilities. Therefore, the City’s Balance Sheet includes the “full” obligations.

The City Council previously expressed an interest in establishing and funding IRC Section 115 irrevocable trusts for its Longevity and PEMHCA OPEB plans. Therefore, City staff plans to bring forth providers for City Council’s consideration by Q4 of this current fiscal year.

California Environmental Quality Act
Not Applicable

FISCAL IMPACT
The proposed FY 2023-24 expenditure budget for the Longevity Recognition and PEMHCA Benefit Internal Service Funds are $238,420 and $245,843 respectively, inclusive of actuarial valuations preparation expenditures. The proposed Internal Service charges to City departments are $228,420 (Attachment 2) and $235,843 respectively (Attachment 3). They represent a decrease of $900 for the Longevity Plan and a $15,137 increase for the PEMHCA plan from the prior year.

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

Attachment 1 - Longevity Recognition and PEMHCA Benefit Fund Budget Comparison Attachment 2 - Longevity Assessment Charges to Departments Attachment 3 - PEMHCA Assessment Charges to Departments

6.8 6.8 Staff Report

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Projected
FY 2022-23
Proposed
FY 2023-24
Increase
(Decrease) Notes
Fund Balance, Beginning of Year
2,544,683$ 2,593,620$
Assessments charged for benefits earned 229,320 228,420 (900) 1 Investment Income 57,937 90,780 32,843 2 Benefits payments (229,320) (228,420) (900) 3 Actuarial valuation (9,000) (10,000) 1,000 4 Projected Fund Balance, End of Year 2,593,620$ 2,674,400$ Detailed Analysis:

Increase
(Decrease)
Rounded to
nearest $100
Note 1 (Assessments charged)
(900)
Note 2 (Investment Income)
32,800
Note 3 (Benefit Payments)
(900)
Note 4 (Actuarial Valuation)
1,000
Projected
FY 2022-23
Proposed
FY 2023-24
Increase
(Decrease) Notes
Fund Balance, Beginning of Year 6,077,496 $ 6,206,270 $ Assessments charged for benefits earned 220,704 235,843 15,139 $ 1 Investment Income 137,776 217,220 79,444 2 Benefits payments (220,706) (235,843) 15,137 3 Actuarial valuation (9,000) (10,000) 1,000 4 Projected Fund Balance, End of Year 6,206,270$ 6,413,490$ Detailed Analysis:

Increase
(Decrease)
Rounded to
nearest $100
Note 1 (Assessments charged)
15,100
Note 2 (Investment Income) 79,400
Assumes an improvement of investment returns
from an estimated 2.28% to 3.5%
Note 3 (Benefit Payments)
15,100
Note 4 (Actuarial Valuation)
1,000
Increase in the estimated number of retirees receiving benefits Assumes increase in the cost of actuarial valuation report preparation Longevity Benefits Plan Comparison - Fund 507
Anticipated reduction in the number of participants from the prior year Anticipated reduction in the number of participants from the prior year Assumes increase in the cost of actuarial valuation report preparation Public Employees' Medical and Hospital Care Act (PEMHCA) Benefits Plan Comparison - Fund 508
Increase in assessment is based on increase in benefit payments Assumes an improvement of investment returns from an
estimated 2.28% to 3.5%

6.8 Attachment 1 - Longevity and PEMHCA Plan Proposed Budget - Annual Comparison

208

LONGEVITY RECOGNITION BENEFITS PLAN ISF ASSESSMENT CHARGES FY 2023-24 Department Charged
Approved
FY 2022-23
Proposed
FY 2023-24
Increase
(Decrease)
0510 RECREATION ADMIN 5,550 $ 5,550 -
0520 PARKS MAINTENANCE
750 $ 750 -
0610 PD CHIEF'S OFFICE
16,740 $ 16,740 -
0620 PD FIELD OPS
76,560 $ 74,760 (1,800)
0630 PD ADMIN
20,520 $ 23,820 3,300
0750 FIRE 94,800 $ 94,800 -
0810 CDD PLANNING ADMIN
4,200 $ 4,200 -
0920 PW LAGOONS & LEVEES
6,300 $ 6,300 -
1110 FINANCE ADMIN
3,900 $ 1,500 (2,400)

TOTAL ALL FUNDS
229,320 228,420 (900)
Note: Charges are based on an estimate of retirees receiving benefits in FY 2023-24. Above changes reflect changes in the number of employees receiving benefits.

6.8 Attachment 2 - Longevity Assessment Charges

209

Approved
Proposed Increase
Department Charged FY 2022-23 FY 2023-24 (Decrease)
0110 CITY/DISTRICT MANAGER $ 7,296 $ 7,296 $ - 0210
COMMUNICATIONS/CITY CLERK 3,648 5,472 1,824 0510 RECREATION 3,648 7,296 3,648 0520 PARKS 20,064 21,888 1,824
0610 POLICE 7,296 7,296 -
0620
POLICE 29,184 29,184 -
0630
POLICE 14,592 16,416 1,824
0750 FIRE 38,304 38,304 -
0810
COMMUNITY DEVELOPMENT 7,296 7,296 -
0811
COMMUNITY DEVELOPMENT 1,094 1,094 -
0812
COMMUNITY DEVELOPMENT 1,733 1,733 -
0813
COMMUNITY DEVELOPMENT 365 365 - 0820
COMMUNITY DEVELOPMENT 5,928 5,928 -
0910
PUBLIC WORKS 8,199 8,199 -
0920
PUBLIC WORKS 2,828 2,873 45
0930
PUBLIC WORKS 3,740 3,785 45
1027
COUNCIL/BOARD 1,824 1,824 -
1110
FINANCIAL SERVICES 7,296 7,296 -
1120
FINANCIAL SERVICES 7,296 9,120 1,824 1140 FINANCIAL SERVICES 1,824 1,824 - 1210
HUMAN RESOURCES 5,472 7,296 1,824 SUBTOTAL (GENERAL FUND) $ 178,927 $ 191,785 $ 12,858 0960 WATER ENTERPRISE 18,974 18,883 (91) 0970 WASTEWATER ENTERPRISE 13,411 13,411 - 0560
VEHICLE REPLACEMENT ISF 1,961 2,234 273 0160 INFORMATION TECHNOLOGY ISF 3,648 5,472 1,824 0550 BUILDING MAINTENANCE ISF 3,785 4,058 273 TOTAL ALL FUNDS $ 220,706 $ 235,843 $ 15,137
NOTES:

PUBLIC EMPLOYEES' MEDICAL AND HOSPITAL
CARE ACT (PEMHCA) ISF CHARGES, FY 2023-24

1. The assumed average PEMHCA monthly rate for FY 2022-23 and 2023-24 is $152 for both years. Charges are also affected by the estimated number of retirees receiving benefits in FY 2023-24

6.8 Attachment 3 - PEMHCA Assessment Charges

210

DATE: March 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 Manager

FROM: Edmund Suen, Finance Director
Andra Lorenz, Principal Management Analyst
DEPARTMENT: Finance
SUBJECT: Equipment Replacement Fund Budget and Internal Service Charges for FY 2023-2024

RECOMMENDATION
It is recommended that the City Council review this report and its attachments and provide policy direction on the proposed Equipment Replacement Fund budget, including the scheduled replacement purchases and Equipment Replacement Fund charges in the Fiscal Year 2023-2024 Preliminary Budget as outlined.

EXECUTIVE SUMMARY
The Equipment Replacement Fund was developed for the purpose of reserving the funding needed to replace high-value assets. These assets are listed along with their replacement costs and estimated useful lives and then funding is set aside each year in an amount adequate to fund the replacement at the identified time. Every asset was reviewed and replacement values and useful life estimates were adjusted with the best information currently available about each asset. The total budget for the replacement of individual items in FY 2023-2024 is $1,120,350 and the total budget transfer to the Equipment Replacement Funds is $1,230,246. There is sufficient fund balance available for these items.

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BACKGROUND
The Equipment Replacement Fund was developed for the purpose of reserving the funding needed to replace high-value assets. There are three Equipment Replacement Fund lists, one each for the General Fund, Water Enterprise Fund, and Wastewater Enterprise Fund. General Fund Equipment Replacements reside in the Internal Services fund group. The Water and Wastewater Equipment Replacements reside in their respective Enterprise Fund groups. All changes to the fund asset listings are summarized in the attachments to this report

ANALYSIS
Every asset on each of the three Equipment Replacement Fund lists was carefully reviewed by the Fund Administrator and the Department that uses the asset. Staff did an analysis of all assets, adjusting replacement values and useful life estimates to accurately reflect the best information currently available about each asset. Assets that are no longer needed were removed from the list and existing assets were added to the lists as appropriate. The attached lists represent staff’s recommendation for the most efficient maintenance and replacement of equipment assets.

Attached are the summary spreadsheets for the Equipment Replacement Fund. There are not significant changes to the fund assets.

California Environmental Quality Act
Not Applicable

FISCAL IMPACT
There are two budget impacts associated with the Equipment Replacement Fund:
• Budgeted cost to replace assets that have reached the end of their useful lives • Annual transfer to reserve funding for future replacements (replacement charge) Purchase of Assets Scheduled for Replacement
The funding to replace assets that have reached the end of their useful lives is appropriated in the respective Equipment Replacement Funds. The replacement value of assets that are scheduled for replacement in FY 2023-2024 is summarized in Table

1. 6.9

6.9 Staff Report

212

Annual Replacement Charges
Replacement charges are the functional mechanism by which funding for assets is transferred from the General, Water and Wastewater Operating Funds to the respective Equipment Replacement Funds so that funding is available for replacement when an asset reaches the end of its useful life. Replacement charges are budgeted in the Department line items for those assets assigned to them. Replacement charges vary by year, based on purchase cycles and annual analysis of the asset costs.

Since FY 2013-14, only 85% of the total projected replacement cost has been charged back to departments for the General Fund. Because the annual replacement charge calculation does not take into consideration interest earnings in the fund and cost savings associated with purchases, this fund tends to experience a growing reserve balance. Using an 85% charge-back methodology reduces the impact to the General Fund while maintaining a sufficient balance to accomplish the necessary equipment purchases. Staff believes this is a sustainable and reasonable approach to implement on an on-going basis. For Fiscal Year 2023-2024, the difference between 100% and 85% chargeback methodologies is approximately $77,500. Based on a similar fund balance analysis for the Water and Wastewater Enterprise Funds, balances were not excessive, so staff does not propose a replacement charge reduction in these funds.

Table 2 summarizes the annual replacement charges for Fiscal Year 2023-2024, and a general overview of the reasons for the changes in Replacement Charge is included below.
• General Fund. The most significant adjustment in the General Fund is the extension of the replacement of a number of Recreation assets to align with the rebuild of the Recreation Center, which is scheduled in the Capital Improvement Plan. These savings are offset by the addition of a few assets to the fund and the adjustment in cost of a number of assets to reflect recent price increases.

6.9 6.9 Staff Report

213

• Water Fund. The most significant adjustment in the Water Fund was the elimination of the Leak Detection System, which is no longer needed. The accumulated funding from this asset were applied to other assets in the fund, which reduces the overall replacement requirement.
• Wastewater Fund. The Wastewater Fund replacement increased due to the significant increases in the cost to replace pumps as well as the need to accelerate the replacement of the Mag Meter to align with a related Capital Improvement Project.

Fund Balances
Table 3 shows that there is sufficient funding for the amount committed to the replacement of identified equipment through the end of FY 2022-2023 based upon a Finance Department Mid-Year Financial analysis.

Based on the above discussion of the fund balance, the Equipment Replacement Fund is adequately funded. While the Wastewater Fund is slightly under the funding requirement, staff advises a “wait and see” approach over the next fiscal year. Staff will continue to monitor the Fund balances to ensure that adequate funding remains available to address the needs of the operation.

CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
•Facilities and Infrastructure
•Public Safety and Social Equity
•City Council Operations and Improved Community Engagement •Innovation and Sustainability
•Staff Empowerment and Operational Excellence
ATTACHMENTS:

General Fund Details
- Attachment 1 – Equipment Replacement Fund Budget Narrative - Attachment 2 - Equipment Replacement Fund Expenses
- Attachment 3 – Equipment Replacement Fund – General Fund Variance Analysis - Attachment 4 –Internal Service Fund Charges Equipment Replacement Fund 502

6.9 6.9 Staff Report

214

- Attachment 5 - Items to be Replaced
- Attachment 6 - Items Added To or Deleted From the Equipment Replacement List - Attachment 7 - Changes to Estimated Useful Lives
- Attachment 8 - Changes to Replacement Values
Water Enterprise Fund Details
- Attachment 9 - Water - Equipment Replacement Fund Expenses - Attachment 10 – Equipment Replacement Fund – Water Fund Variance Analysis - Attachment 11 - Internal Service Fund Charges Equipment Replacement Fund 408 - Attachment 12 - Items to be Replaced
- Attachment 13 - Items Added To or Deleted From the Equipment Replacement List - Attachment 14 - Changes to Estimated Useful Lives
- Attachment 15 - Changes to Replacement Values
Wastewater Collection Enterprise Fund
- Attachment 16 - Wastewater - Equipment Replacement Fund Expenses - Attachment 17 - Equipment Replacement Fund – Wastewater Fund Variance Analysis - Attachment 18 - Internal Service Fund Charges Equipment Replacement Fund 458 - Attachment 19 - Items to be Replaced
- Attachment 20 - Items Added To or Deleted From the Equipment Replacement List - Attachment 21 - Changes to Estimated Useful Lives
- Attachment 22 - Changes to Replacement Values

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215

Attachment 1

Equipment Replacement Fund

This fund was established to provide for the timely and orderly replacement of equipment valued over $1,000. This internal service f und allows the City to plan ahead for the replacement of its equipment. The expenditu re figure represents the schedule of equipment to be replaced during the fiscal year and deemed to be in need of replacement.

A consistent methodology is used to capture replacement funds for operating department replacement needs. Individually significant a ssets (over $1,000), or a pool of assets (which may be less than $1,000 individual ly, but when pooled together exceed $1,000) are assigned replacement values and estimated useful lives. Operating departments are then charged an annual replacement charge such that the replacement value is available upon expiration of the asset. Any changes to replacement values and/or estimated useful lives that occur subsequent to the asset being placed on the Equipment Replacement list are handled on a prospective (or “go-forward”) basis.

This fund accounts for replacement of assets other than those assets related to Water Operations or Wastewater O perations (which are accounted for in those respective Enterprise funds), or those assets specifical ly relating to the activities of Vehicle Replacement, Information Technology, and Building Maintenance

6.9 Attachment 01 - ERF Budget Narrative FY 2023-24

216

Attachment 2
Account Name Account String 2022-23
Approved
2023-2024
Recommended Itemization status Difference
TOOLS & EQUIP(<5000@ITEM) 502-0110-413-42-45 25,100 16,900 Non-Itemized Account (8,200) MACHINERY & EQUIP >5000 502-0110-413-43-85 239,600 437,300 Itemized Account Equipment Replacement - GF 502-0110-413-43-85 189,600 387,300 Itemization 197,700 Emergency Replacement 502-0110-413-43-85 50,000 50,000 Itemization - Carryover - SCP Scoreboards 502-0110-413-43-85 100,000 0 Itemization (100,000) FC PEG CHANNEL CAPITAL 502-0110-413-43-87 8,400 75,300 Non-Itemized Account 66,900 373,100 529,500 156,400
Meta Information:

Expenses
Worksheet: 502 - Equipment Replacement Fund Expense
s
Proposal: 502 - Equipment Replacement Fund
Budget: FY 2023-24 5 YEAR EXPENDITURE BUDGET

6.9 Attachment 02 - ERF Expenses - General Fund 2023-2024

217

Attachment 3
Equipment Replacement Fund - General Fund
Account Description
Approved
FY 2022-2023
Requested
FY 2023-2024
Increase
(Decrease) Notes
4245 Tools and Equipment 25,100 16,900 (8,200) 1 4385 Equipment Replacement - General Fund 339,600 437,300 97,700 1 4387 Equipment Replacement - PEG Equipment 8,400 75,300 66,900 1 373,100 529,500 156,400
Detailed Analysis:

Note 1 Detailed list of items for replacement in ERF packet

6.9 Attachment 03 - ERF General Fund Variance Analysis FY 2023-2024

218

Attachment 4

INTERNAL SERVICE FUND CHARGES
EQUIPMENT REPLACEMENT FUND 502
Approved
FY 2022-23
Requested
FY 2023-24 Variance Notes
0230 Comm/Clerk Communications 23,641 23,215 (426) 1 0510 Park & Rec Admin 20,266 15,573 (4,693) 2 0520 Parks Maint 154,139 160,211 6,072 3 0525 Facilities 9,418 5,974 (3,444) 4 0620 PD Field Ops 29,263 38,086 8,823 5 0630 PD Admin 55,008 43,484 (11,524) 6 0740 City Manager EOC 8,773 2,924 (5,849) 7 0920 PW Lagoons & Levees 56,960 63,143 6,183 8 0930 PW Streets 14,993 76,132 61,139 9 1010 Council 5,723 8,911 3,188 10 1110 Finance Administration 181 181 - 11 1210 HR Admin 1,360 1,360 - 12 Total General Fund 379,725 439,194 59,469
Detailed Analysis
Note 1
Minor adjustments to useful lives and replacement costs Note 2 Pushed back replacement of a number of items to complement Recreation Center project schedule Note 3 Minor adjustments to useful lives and replacement costs Note 4 Pushed back replacement of a number of items to complement Recreation Center project schedule Note 5 Added In-Car AED's to list.

Note 6 Pushed back replacement of fully-funded Communications Infrastructure Note 7 Extended the Useful Lives of all assets in the Department (2) Note 8 Significantly increased the replacement cost of the pontoon boat Note 9 Added 6 new Signal Controllers
Note 10 Increased replacement cost of Council Chambers Dais Chairs and Conf. Room Tables Note 11 No change
Note 12 No change
Department Charged (Receiving
Goods/Services)

6.9 Attachment 04 - Internal Service Fund Charges ERF - General Fund FY 2023-24

219

Attachment 5
City of Foster City Equipment Replacement Fund - General Fund Items to be Replaced
For the Year Ended June 30, 2024
Department Item Description
Replacement
Cost
12-10 Citywide Gym Equipment - City Hall Location 3,500 12-10 Citywide Gym Equipment - PD Location 4,500 05-10 Double oven (Vibe) 4,200
05-20 Makita Jackhammer 2,300
06-20 Tactical Assault Vest 2,400 Total Tools and Equipment up to $5,000 16,900 $
Department Item Description
Replacement
Cost
10-10 Council Chambers Dais Chairs (10) 15,000 05-20 John Deere Field Groomer/ SCP (TS) 13,500 05-20 Playground Equipment - SHAD PARK 135,000 05-20 Playground Equipment - SUNFISH PARK 200,000 06-20 Less Lethal Weapons (DefTec) (11) 13,000 06-20 Lidar Guns (3) 10,800
Total Capital Outlay - Machinery and Equipment Over $5,000 387,300 $ Department Item Description
Replacement
Cost
02-30
Control Panel (Video Signal Routing, Conversion and
Distribution) 7,800
02-30 Converters (Video Signal Routing, Conversion and Distribution) 12,500 02-30 Document Camera 8,400
02-30 Lectrosonics Wireless Mics, Receivers and Antennae 11,000 02-30 Production Switching and Graphics 27,000 02-30 Router - Blackmagic Design Smart Videohub 20x20 6G-SCI 8,600 Total PEG Funding Eligible Items 75,300 $
TOTAL (ALL ITEMS) 479,500$

6.9 Attachment 05 - Replacement List - General Fund FY 2023-24

220

Attachment 6
City of Foster City
Description Dept
Purchased
Fiscal Year
Beginning
(xxxx)
Replacement
Value Comments (if any)
Items Added
Recreation Center Freezer (Double) 05-10 2014 5,000 Outdoor Movie Kit 05-10 2022 6,500
In-Car AED's 06-20 2022 38,000
Total $ 49,500
Description
Depart
ment
Date
Purchased
Replacement
Value
Comments (if any)
Items Deleted
Portable Toilet-White/ CY 05-20 2008 7,000 PORTABLE AIR COMPRESSOR 09-30 2011 15,000
Total $ 22,000
Total Replacement Value Impact 27,500 $
Equipment Replacement Fund (General Fund)
Items Added To or Deleted From the Equipment Replacement List For FY 2023-2024

6.9 Attachment 06 - Items Added and Deleted - General Fund FY 2023-24

221

Attachment 7
City of Foster City
Equipment Replacement Fund (General Fund)
Changes to Estimated Useful Lives
Description Dept
Purchased
Fiscal Year
Beginning
(xxxx)
Previous
Useful
Life
(Years)
Revised
Useful
Life
(Years)
Increase
(Decrease)
EOC Chairs 07-40 2002 22 24 2 EOC Tables 07-40 2013 11 13 2 Citywide Gym Equipment - City Hall Locatio
n 12-10 2017 5 6 1 Citywide Gym Equipment - PD Location 12-10 2017 5 6 1 Council Chambers Dais Chairs (10) 10-10 2017 5 6 1 Control Panel (Video Signal Routing, Conversion and
Distribution) 02-30 2017 7 6 (1) Document Camera 02-30 2017 5 6 1 Lectrosonics Wireless Mics, Receivers and Antennae 02-30 2007 23 16 (7) Production Switching and Graphic
s 02-30 2017 7 6 (1) Room Cameras 02-30 2017 7 8 1 Router - Blackmagic Design Smart Videohub 20x20 6G-SCI 02-30 2017 10 6 (4) Audio/Visual Equipment - Wind Room 05-10 2017 8 9 1 Bailey Gas Kiln 05-10 2009 13 17 4 Dishwasher-Lagoon 05-10 2010 13 16 3 Double oven (Vibe
) 05-10 2009 12 14 2 Marquee 05-10 2015 10 11 1 Oven/Stove - Bluebird 05-10 2014 11 12 1 Oven/Stove - Lagoon 05-10 2014 11 12 1 Security Camera System (RC, Sr Ctr, Vibe
) 05-10 2014 9 12 3 Volt Byer Elct Kiln 05-10 2013 9 13 4 50-GALLON TURF SPRAYER - C
Y 05-20 2010 15 18 3 Aerator (Tow) / CY 05-20 2014 10 12 2 Blue Bird Sod Cutter/ SCP 05-20 2014 10 12 2 Drain (Snake) Cleaning Machin
e 05-20 2015 10 11 1 Graco Field Lazer SCP #1 05-20 2020 4 6 2 Graco Field Lazer SCP #2 05-20 2013 10 12 2 John Deere Elec. Utility Vehicle/ Ryan Park (TE
) 05-20 2015 9 10 1 Magnum Water Tank Trailer 500 Gal CY Bay/ CY 05-20 2004 19 21 2 Makita Jackhammer 05-20 2020 5 3 (2) Office Furniture - C
Y 05-20 2018 6 9 3 Playground Equipment - RECREATION CENTER TOT LOT 05-20 2000 25 26 1 Playground Equipment - SHAD PARK 05-20 2004 25 19 (6) Playground Equipment - SUNFISH PARK 05-20 2004 24 19 (5) Table Saw-Delta Wood Shop/ CY 05-20 2000 25 27 2 Turfco-Top Dresser/ CY 05-20 2008 16 18 2 8-foot Tables - Gull/Spirit 05-25 2016 7 10 3 8-foot Tables - Lagoon 05-25 2017 6 9 3 8-foot Tables - Crane/Mis
t 05-25 2013 11 13 2 8-foot Tables - Bluebird/Spray 05-25 2014 8 12 4 8-foot Tables - Mallard 05-25 2015 9 11 2 6-foot tables (15) – (Vibe) 05-25 2016 7 10 3 6-foot tables (12) - (Sr. Wing) 05-25 2016 6 8 2 Regular use chairs (80) – (Vibe
) 05-25 2016 7 8 1 Community Center Wind Room Tables (15) 05-25 2012 13 14 1 For FY 2023-2024

6.9 Attachment 07 - Changes to Useful Lives - General Fund FY 2023-24

222

City of Foster City
Equipment Replacement Fund (General Fund)
Changes to Estimated Useful Lives
Description Dept
Purchased
Fiscal Year
Beginning
(xxxx)
Previous
Useful
Life
(Years)
Revised
Useful
Life
(Years)
Increase
(Decrease)
For FY 2023-2024
Community Center Classroom Tables (15) 05-25 2018 7 8 1 Community Center Wind Room Chairs (120) 05-25 2012 13 14 1 Community Center Regular Use Chairs (100) 05-25 2018 7 8 1 Oval Tables -- Pool B (4) 05-25 2010 14 16 2 Oval Tables -- Pool C (2) 05-25 2019 6 7 1 Body-Worn Cameras 06-20 2017 6 7 1 Communications Infrastructure 06-30 2001 22 23 1 CRANE 09-20 1965 60 62 2 PONTOON BOAT 09-20 2013 12 14 2 PONTOON BOAT MOTOR 09-20 2013 12 14 2 PONTOON BOAT CHEMICAL SPRAY RIG 09-20 2013 12 14 2

METROTECH PIPE & CABLE LOCATO
R 09-30 2017 8 10 2 PORTABLE GENERATOR 09-30 2017 7 9 2 RIGID AUTO PIPE CUTTER 09-30 2002 23 25 2 Signal Controllers (31) 09-30 2006 17 18 1

6.9 Attachment 07 - Changes to Useful Lives - General Fund FY 2023-24

223

Attachment 8
City of Foster City
Equipment Replacement Fund (General Fund)
Changes to Replacement Values
Description Dept
Purchased
Fiscal Year
Beginning
(xxxx)
Previous
Replacement
Value
Revised
Replacement
Value
Increase
(Decrease)
Council Chambers Dais Chairs (10) 10-10 2017 10,000 15,000 5,000 Council Chambers Tables (6) 10-10 2002 5,000 7,000 2,000 Production Switching and Graphics 02-30 2017 30,000 27,000 (3,000) Recreation Center Freezer (Single) 05-10 2021 4,500 5,000 500 Recreation Center Refrig 05-10 2020 4,000 4,500 500 Recreation Center Refrig 05-10 2019 4,000 4,500 500 Recreation Center Refrig 05-10 2019 4,000 4,500 500 John Deere Elec. Utility Vehicle/ Ryan Park (TE) 05-20 2015 20,000 23,000 3,000 John Deere Field Groomer/ SCP (TS) 05-20 2018 13,000 13,500 500 Makita Jackhammer 05-20 2020 2,000 2,300 300 Less Lethal Weapons (DefTec) (11) 06-20 2001 12,000 13,000 1,000 Tactical Assault Vest 06-20 2020 2,000 2,400 400 PONTOON BOAT 09-20 2013 45,000 85,000 40,000 Signal Controllers (31) 09-30 2006 300,000 372,000 72,000 T
OTAL 455,500 57 8,700 123,200
For FY 2023-2024

6.9 Attachment 08 - Changes to Replacement Values - General Fund FY 2023-24

224

Attachment 9
Account Name Account String 2022-23
Approved
2023-2024
Recommended Itemization status Difference
MACHINERY & EQUIP >5000 408-0110-413-43-85 192,875 249,000 Non-Itemized Account 56,125 192,875 249,000 56,125
Meta Information:

Expenses
Worksheet: 408 - Water - Equipment Replacement Fund Expenses Proposal: 408 - Water - Equipment Replacement Fund
Budget: FY 2023-24 5 YEAR EXPENDITURE BUDGET

6.9 Attachment 09 - ERF Expenses - Water Fund 2023-2024

225

Attachment 10
Equipment Replacement Fund - Water Fund
Account Description
Approved
FY 2022-2023
Requested
FY 2023-2024
Increase
(Decrease) Notes
4385 Machinery and Equipment - Water Fund 192,875 249,000 56,125 1 192,875 249,000 56,125
Detailed Analysis:

Note 1 Detailed list of items for replacement in ERF packet

6.9 Attachment 10 - WF ERF Variance Analysis FY 2023-2024

226

Attachment 11

INTERNAL SERVICE FUND CHARGES
WATER EQUIPMENT REPLACEMENT FUND 408
Approved
FY 2022-23
Requested
FY 2023-24 Variance Notes
401-0960 Water Distribution System 510,436 448,097 (62,339) 1 Total Water Fund 510,436 448,097 (62,339) Detailed Analysis
Note 1
Extended useful lives of several assets.

Department Charged (Receiving Goods/Services)

6.9 Attachment 11 - Variance Analysis ERF - Water Fund FY 2023-2024

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Attachment 12
City of Foster City -- Equipment Replacement Fund (Water) Items to be Replaced
For the Year Ended June 30, 2024
Department Item Description
Replacement
Cost
09-60* 2" Submersible Pumps (2) 3,000
09-60* CORP YARD GYM EQUIPMENT (1/2 WF, 1/2 WWF) 1,500
TOTAL Tools and Equipment up to $5,000 Per Unit 4,500
Department Item Description
Replacement
Cost
09-60* METER READ TOWER RECEIVER (City Hall) 45,000
09-60* WATER METER REPLACEMENT - EMERGENCY POOL E 42,000 09-60* Large (4" 6" 8") Meter with Radio Heal Pool C 157,500 Total Capital Outlay - Machinery and Equipment Over $5,000 244,500 TOTAL (ALL ITEMS) 249,000

6.9 Attachment 12 - Replacement List - Water Fund FY 2023-2024

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Attachment 13
City of Foster City
Equipment Replacement Fund (Water Fund)
Items Added To or Deleted From the Equipment Replacement List Description Dept
Purchased
Fiscal Year
Beginning
(xxxx)
Replacement
Value Comments (if any)
Items Added
WACKER RAMMER 09-60* 2021 5,000
Added Total $ 5,000
Items Deleted
LEAK COROLLATION SYSTEM 09-60* 2014 57,000
Removed Total $ 57,000
Total Replacement Value Impact (52,000) $
For FY 2023-2024

6.9 Attachment 13 - Items Added and Deleted - Water Fund FY 2023-24

229

Attachment 14
City of Foster City
Equipment Replacement Fund (Water Fund)
Changes to Estimated Useful Lives
Description Dept
Purchased
Fiscal Year
Beginning
(xxxx)
Previous
Useful Life
(Years)
Revised
Useful Life
(Years)
Increase
(Decrease)
2" Submersible Pumps (2) 09-60* 2009 15 14 (1) ALUMINUM SHORING 09-60* 2007 17 18 1 BRIDGE CRANE 15000# 09-60* 1965 60 61 1 CORP YARD GYM EQUIPMENT (1/2
WF, 1/2 WWF) 09-60* 2017 8 6 (2) PROPANE GAS UNIT 09-60* 2008 16 19 3

SCADA PROGRAM LOGIC
CONTROLLER 09-60* 2014 10 13 3 SHORING TRAILER 09-60* 2009 15 17 2 For FY 2023-2024

6.9 Attachment 14 - Changes to Useful Lives - Water Fund FY 2023-24

230

Attachment 15
City of Foster City
Equipment Replacement Fund (Water Fund)
Changes to Replacement Values
Description Dept
Purchased
Fiscal Year
Beginning
(xxxx)
Previous
Replacement
Value
Revised
Replacement
Value
Increase
(Decrease)
2" Submersible Pumps (2) 09-60* 2022 2,000 3,000 1,000$ 2-EMERG BATTERY BANKS (Pump House) 09-60* 2000 20,000 22,000 2,000$ ALUMINUM SHORING 09-60* 2007 14,000 16,000 2,000$
METER READ TOWER RECEIVER (City Hall) 09-60* 2008 30,000 45,000 15,000$ RECTIFIER (SEAL SLOUGH BRIDGE) 09-60* 2022 5,000 15,000 10,000$ SHORING TRAILER 09-60* 2009 10,000 11,000 1,000$

WATER METER REPLACEMENT -
EMERGENCY POOL A 09-60* 2019 42,000 46,000 4,000$

WATER METER REPLACEMENT -
EMERGENCY POOL B 09-60* 2020 42,000 46,000 4,000$

WATER METER REPLACEMENT -
EMERGENCY POOL C 09-60* 2021 42,000 46,000 4,000$

WATER METER REPLACEMENT -
EMERGENCY POOL D 09-60* 2022 41,375 46,000 4,625$
3/4" Measuring Chamber Register with Radio
Read Heads POOL A 09-60* 2007 641,552 673,629$ 32,078 $ 3/4" Measuring Chamber Register with Radio
Read Heads POOL B 09-60* 2008 605,681 635,965$ 30,284 $ 3/4" Measuring Chamber Register with Radio
Read Heads POOL C 09-60* 2009 392,026 411,628$ 19,601 $ 3/4" Measuring Chamber Register with Radio
Read Heads POOL D 09-60* 2010 551,328 578,894$ 27,566 $ 3/4" Measuring Chamber Register with Radio
Read Heads POOL E 09-60* 2011 823,169 864,328$ 41,158 $ 3/4" Measuring Chamber Register with Radio
Read Heads POOL F 09-60* 2012 861,482 904,556$ 43,074 $ 1" Meter with Radio Head POOL A 09-60* 2007 6,237 6,549$ 312 $ 1" Meter with Radio Head POOL B 09-60* 2008 14,552 15,279$ 728 $ 1" Meter with Radio Head POOL C 09-60* 2009 67,977 71,376$ 3,399 $ 1" Meter with Radio Head POOL D 09-60* 2010 43,774 45,963$ 2,189 $ 1" Meter with Radio Head POOL E 09-60* 2011 67,747 71,134$ 3,387 $ 1" Meter with Radio Head POOL F 09-60* 2012 66,506 69,831$ 3,325 $ 1-1/2" Meter With Radio Head POOL B 09-60* 2008 8,053 8,455$ 403 $ 1-1/2" Meter With Radio Head POOL C 09-60* 2009 55,514 58,289$ 2,776 $ 1-1/2" Meter With Radio Head POOL D 09-60* 2010 12,221 12,832$ 611 $ 1-1/2" Meter With Radio Head POOL E 09-60* 2011 4,373 4,592$ 219 $ 1-1/2" Meter With Radio Head POOL F 09-60* 2012 2,618 2,749$ 131 $ 2" Meter With Radio Head POOL A 09-60* 2007 9,674 10,158$ 484 $ 2" Meter With Radio Head POOL B 09-60* 2008 193,478 203,152$ 9,674 $ 2" Meter With Radio Head POOL C 09-60* 2009 132,523 139,150$ 6,626 $ For FY 2023-2024

6.9 Attachment 15 - Changes to Replacement Values - Water Fund FY 2023-24

231

City of Foster City
Equipment Replacement Fund (Water Fund)
Changes to Replacement Values
Description Dept
Purchased
Fiscal Year
Beginning
(xxxx)
Previous
Replacement
Value
Revised
Replacement
Value
Increase
(Decrease)
For FY 2023-2024
2" Meter With Radio Head POOL D 09-60* 2010 47,217 49,577$ 2,361 $ 2" Meter With Radio Head POOL E 09-60* 2011 36,326 38,142$ 1,816 $ 2" Meter With Radio Head POOL F 09-60* 2012 20,843 21,886$ 1,042 $ 3" Meter with Radio Head POOL B 09-60* 2008 10,763 11,301$ 538 $ 3" Meter with Radio Head POOL C 09-60* 2009 33,493 35,167$ 1,675 $ 3" Meter with Radio Head POOL D 09-60* 2010 49,097 51,552$ 2,455 $ 3" Meter with Radio Head POOL E 09-60* 2011 49,097 51,552$ 2,455 $ 3" Meter with Radio Head POOL F 09-60* 2012 108,077 113,481$ 5,404 $ Large (4" 6" 8") Meter with Radio Heal Pool A 09-60* 2021 157,500 200,000$ 42,500 $ Large (4" 6" 8") Meter with Radio Heal Pool B 09-60* 2022 150,000 200,000$ 50,000 $ Extra Large (10") Meter with Radio Head Pool A 09-60* 2011 23,100 24,255$ 1,155 $ 5,494,372$ 5,881,422 $ 387,050 $
*Water Meters are calculated to increase by 5% per year.

6.9 Attachment 15 - Changes to Replacement Values - Water Fund FY 2023-24

232

Attachment 16
Account Name Account String 2022-23
Approved
2023-2024
Recommended Itemization status Difference
MACHINERY & EQUIP >5000 458-0110-413-43-85 308,850 391,850 Non-Itemized Account 83,000 308,850 391,850 83,000
Meta Information:

Expenses
Worksheet: 458 - Wastewater - Equipment Replacement Fund Expenses Proposal: 458 - Wastewater - Equipment Replacement Fund Budget: FY 2023-24 5 YEAR EXPENDITURE BUDGET

6.9 Attachment 16 - ERF Expenses - Wastewater Fund 2023-2024

233

Attachment 17
Equipment Replacement Fund - Wastewater Fund
Account Description
Approved
FY 2022-2023
Requested
FY 2023-2024
Increase
(Decrease) Notes
4385 Machinery and Equipment - Wastewater Fund 308,850 391,850 83,000 1 308,850 391,850 83,000
Detailed Analysis:

Note 1 Detailed list of items for replacement in ERF packet

6.9 Attachment 17 - WWF ERF Variance Analysis FY 2023-2024

234

Attachment 18

INTERNAL SERVICE FUND CHARGES
WASTEWATER EQUIPMENT REPLACEMENT FUND 458
Department Charged (Receiving Goods/Services)
Approved
FY 2022-23
Requested
FY 2023-24 Variance Notes
451-0970 Wastewater Collection System 266,126 342,955 76,829 1 Total Wastewater Fund 266,126 342,955 76,829 Detailed Analysis
Note 1 Removal of mobile radios from the list.

6.9 Attachment 18 - Variance Analysis ERF - Sewer Fund FY 2023-24

235

Attachment 19
Equipment Replacement Fund (Wastewater Collection System) Items to be Replaced
For the Year Ended June 30, 2024
Department Item Description
Replacement
Cost
09-70* Corporation Yard Gym Equipment (1/2 WF, 1/2 WWF) 1,500 TOTAL Tools and Equipment up to $5,000 1,500 $
Department Item Description
Replacement
Cost
09-70* 150 KW MOBIL GEN 120,000
09-70* AIR SCRUBBER/BLOWER - LS #22 8,000 09-70* DRY DECK PUMPS - LS 10 60,000
09-70* MAG METER (with portion of installation) 60,000 09-70* PLUG AND CHECK VALVES Pool B 32,350 09-70* Pumps (Non-LS 59) Pool H 50,000 09-70* VFD Pool A 60,000
TOTAL Capital Outlay - Machinery and Equipment Over $5,000 390,350 TOTAL (ALL ITEMS) 391,850$

6.9 Attachment 19 - Replacement List Wastewater Fund FY 2023-24

236

Attachment 20
City of Foster City
Equipment Replacement Fund (Wastewater Fund)
Items Added To or Deleted From the Equipment Replacement List Description Department
Purchased
Fiscal Year
Beginning
(xxxx)
Replacement
Value Comments (if any)
Items Added
NONE
Total -
Items Deleted
DRY DECK LS FLOW METERS 09-70* 2009 25,000
Total 25,000 $
Total Replacement Value Impact (25,000)$
For FY 2023-2024

6.9 Attachment 20 - Items Added and Deleted - Wastewater Fund FY 2023-24

237

Attachment 21
City of Foster City
Equipment Replacement Fund (Wastewater Fund)
Changes to Estimated Useful Lives
Description Dept
Purchased
Fiscal Year
Beginning
(xxxx)
Previous
Useful Life
(Years)
Revised
Useful Life
(Years)
Increase
(Decrease)
150 KW MOBIL GEN 09-70* 2002 20 21 1 Corporation Yard Gym Equipment (1/2
WF, 1/2 WWF) 09-70* 2017 8 6 (2) MAG METER (with portion of installation) 09-70* 2015 14 8 (6) Pumps (Non-LS 59) Pool F 09-70* 2021 20 10 (10) For FY 2023-2024

6.9 Attachment 21 - Changes to Useful Lives - Wastewater Fund FY 2023-24

238

Attachment 22
City of Foster City
Equipment Replacement Fund (Wastewater Fund)
Changes to Replacement Values
Description Dept
Purchased
Fiscal Year
Beginning
(xxxx)
Previous
Replacement
Value
Revised
Replacement
Value
Increase
(Decrease)
185 COMPRESSOR 09-70* 2011 11,500 30,000 18,500$ Pumps (Non-LS 59) Pool A 09-70* 2016 50,000 70,000 20,000$ Pumps (Non-LS 59) Pool B 09-70* 2017 50,000 70,000 20,000$ Pumps (Non-LS 59) Pool C 09-70* 2018 50,000 70,000 20,000$ Pumps (Non-LS 59) Pool D 09-70* 2019 50,000 70,000 20,000$ Pumps (Non-LS 59) Pool E 09-70* 2020 50,000 70,000 20,000$ Pumps (Non-LS 59) Pool F 09-70* 2021 50,000 70,000 20,000$ Pumps (Non-LS 59) Pool G 09-70* 2022 50,000 70,000 20,000$ Pumps (Non-LS 59) Pool I 09-70* 2014 50,000 70,000 20,000$ Pumps (Non-LS 59) Pool J 09-70* 2015 50,000 70,000 20,000$ TOTAL 461,500 660,000 198,500 For FY 2023-2024

6.9 Attachment 22 - Changes to Replacement Values - Wastewater Fund FY 2023-24

239

DATE: March 27, 2023

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

FROM: Ramon Towne, Interim Public Works Director/City Engineer Kurt Zander, Buildings and Vehicles Maintenance Manager DEPARTMENT: Public Works
SUBJECT: VEHICLE REPLACEMENT FUND OVERVIEW AND INTERNAL SERVICE FUND ALLOCATIONS FOR FISCAL YEAR 2023-2024

RECOMMENDATION
It is recommended that the City Council review this report and its attachments and direct that the budget be prepared as outlined or provide alternate policy direction regarding the development of the Vehicle Replacement Internal Service Fund budget for Fiscal Year 2023-2024.

EXECUTIVE SUMMARY
There are two budget impacts associated with the Vehicle Replacement Fund: (1) expenditures associated with the Vehicle Maintenance Division operation, including the purchase of replacement vehicles (Attachment 1) and (2) the transfer of funding to support the Vehicle Maintenance operation and for the future replacement of vehicles, which are reallocated to each user department’s budget based upon the assignment of the vehicle.

The total fiscal impact of the Vehicle Maintenance Operation, if the budget is prepared as detailed in this report, is $2,334,566 as shown in Table 1, which is approximately 34% more than FY 2022-2023, due largely to the sharply escalating cost to replace

6.10 6. 10 Staff Report

240

vehicles in the current economy. Details of the costs and distribution of those costs are discussed in the attachments to this report.

BACKGROUND
The vehicle maintenance and replacement program was created to provide proactive and effective management, maintenance, inspection, repair, and replacement of all City/District vehicles in order to ensure a consistently efficient and safe vehicle fleet of all service vehicle types through established vehicle maintenance protocols. A reliable fleet allows staff to continue to provide the highest quality service to the Foster City community.

The Vehicle Replacement Fund provides for the distribution of costs for fleet management among user departments and funds. It also serves as a funding mechanism for the replacement of vehicles. Setting aside replacement funding and planning for replacement over the life of the vehicles provides for an orderly replacement process.

As a guideline, vehicles in the City’s fleet are expected to achieve at least the following minimum useful lives, and funding is planned according to this replacement schedule, although it is expected for most vehicles to significantly exceed these minimums by twice the minimum life or more.

ANALYSIS
The Vehicle Maintenance Division continually monitors the fleet to ensure that each vehicle continues to effectively serve the needs of the City. The vehicles are subject to on-going comprehensive evaluation of factors such as safety, life expectancy, performance, maintenance record, mileage, condition, fuel efficiency and sustainability, integrated technology, lighting, and customization to suit department operations.

Regardless of assigned useful life, vehicles are only recommended to be replaced when

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this analysis has demonstrated that replacement is warranted.

In the notes to Attachment 3, Internal Service Fund Charges, the distribution of the 79 vehicles in the City’s fleet is detailed in parenthesis. The Vehicle Maintenance Division also maintains approximately 400 pieces of small equipment.

Based on their age, twenty-three (23) vehicles had adequate funding for replacement in Fiscal Year 2023-2024. However, Staff is not recommending the replacement of any vehicles in FY 2023-2024, instead recommending to increase the useful lives of many vehicles as shown in Attachment 4, Changes to Estimated Useful Lives. This recommendation is based on a thorough review of the maintenance history, usage and condition of the vehicles in question as well as an assessment of the availability in the marketplace of the types of vehicles needed. Staff does not anticipate that deferring the remaining vehicles will have a significant negative impact on City operations or on future scheduled replacements based on the overall condition of the fleet.

In the future, when vehicles are recommended for replacement, Vehicle Maintenance staff will continue to evaluate fuel efficient fleet alternatives when assessing the choice of replacement vehicles. The vehicle inventory currently includes four (4) Toyota Prius hybrids, two (2) Ford C-Max hybrids, one (1) Ford Escape hybrid and one (1) Ford Focus electric vehicle. The California Air Resources Board is currently in the rule- making process for legislation that will require that an increasing percentage of medium- and heavy-duty Zero Emission Vehicles (ZEV) will need to be purchased for the fleet. Staff will continue to monitor the regulatory process, the resulting regulations and how those regulations impact vehicles purchasing choices, costs and the purchase and installation of charging infrastructure for City use.

Staff routinely monitors fuel costs, and despite the affect that the economy is having on fuel prices, Staff anticipates that the current fuel budget is adequate. The average fuel cost per gallon in 2022 was $3.97 (unleaded) and $4.05 (diesel), which was 58% higher (unleaded) and 85% higher (diesel) than 2021 prices.

California Environmental Quality Act
Not Applicable

FISCAL IMPACT
There are two budget impacts associated with the Vehicle Replacement Fund.

The expenditures for the Vehicle Maintenance operation are found in the Vehicle Maintenance Division budget, including staffing, maintenance supplies, replacement of vehicles and insurance and fuel for the vehicle fleet. The total recommended budget for the Vehicle Maintenance operation is $1,435,307.

The second budget impact are transfers required to fund the Vehicle Maintenance operation. The cost for the Vehicle Maintenance Division operations is distributed

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242

among the various departments and funds based upon the number of vehicles that are assigned to them.

Transfers are also recommended to account for the future replacement of vehicles. The total recommended transfer for future replacement of vehicles is $999,259. This cost is distributed among the various departments and funds based upon the number and type of vehicles that are assigned to them.

Since FY 2014-15, only 85% of the total projected vehicle replacement costs are charged back to departments. Because of interest earnings, cost savings associated with purchases and revenue from the sale of replaced vehicles, this fund experiences a growing reserve balance. Employing a discounted charge-back methodology reduces the impact to the General Fund while maintaining a sufficient balance to accomplish the necessary vehicle and vehicle maintenance division equipment purchases.

The cost of vehicles and the cost to outfit those with specialized uses has skyrocketed in recent years with supply severely affected by supply chain issues, especially in the market for heavier duty trucks of the type used by the maintenance operations. For the FY 2023-2024 budget, Vehicle Maintenance staff undertook a comprehensive review and update of vehicle replacement costs, which resulted in an overall increase in the replacement cost of the fleet by approximately 33%. This can be seen in the sharp increase in Vehicle Replacement Charges assessed to many user departments, especially the maintenance divisions.

A summary of the total fiscal impact as distributed among funds is shown in Table 3.

Details are shown in the attachments to this report.

The significant increase in allocation charges shown in Table 3 is due largely to the increase in vehicle replacement costs shown in Attachment 5, Changes to Replacement Values, and discussed above.

In contrast, Attachment 6, Vehicle Replacement Fund Budget Comparisons, shows that the cost of the vehicle maintenance operation budget decreased by 28% ($556,623) due to the following changes:

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($140,000) A decrease of approximately $140,000 due to the change in methodology used to allocate overhead costs, which removed the overhead allocation from the Vehicle Replacement Fund.
($515,000) A decrease of approximately $515,000 for vehicle purchases since no vehicles are recommended for replacement in FY 2023-2024. $12,300 An increase of approximately $12,300 in personnel costs related to the overall cost for personnel services and the reallocation of administrative staff.
$35,000 An increase of approximately $35,000 in insurance costs. $50,000 Addition of a new line item of $50,000 for costs associated with accident repairs that are under the City’s insurance deductible. $1,700 An increase of approximately $1,700 in other minor adjustments.

Staff routinely monitors fund balances to ensure that adequate funds are available.

Based on the Mid-Year Financial Review calculations from the Finance Department outlined in the Internal Service Fund Overview also contained in this agenda packet, the Vehicle Replacement Fund is expected to end Fiscal Year 2022-2023 with an available fund balance of $4,905,593. The amount reserved for the replacement of vehicles and equipment through the end of FY 2022-2023 is $3,705,927, and the contingency reserve is $100,000 leaving an excess balance of $1,099,666 in the fund.

CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
•Facilities and Infrastructure
•Public Safety and Social Equity
•Smart Planning, Development, and the Local Economy
•Staff Empowerment and Operational Excellence
ATTACHMENTS:

Attachment 1 - Vehicles to be Replaced / Equipment to be Replaced Attachment 2 - 501-Vehicle Replacement Fund Expenses
Attachment 3 - Internal Service Fund Charges
Attachment 4 - Changes to Estimated Useful Lives
Attachment 5 - Changes to Replacement Values
Attachment 6 - Vehicle Replacement Fund Budget Comparisons (501-0560) Attachment 7 - Vehicles/Equipment Added or Deleted
Attachment 8 - Vehicle Replacement Fund Budget Narrative

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6.10 6. 10 Staff Report

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Attachment 1
City of Foster City -- Vehicle Replacement Fund
Vehicles to be Replaced
For the Year Ended June 30, 2024
Dept / DivVehicle # Vehicle Make / Model Replacement Cost None
-$
Dept / Div Equipment Description Replacement Cost
NONE
-$
TOTAL - $
Equipment to be Replaced
For the Year Ended June 30, 2024
City of Foster City -- Vehicle Replacement Fund

6.10 Attachment 1 - Vehicles to be Replaced

246

Attachment 2
Account Name Account String FY 22-23 Budget
by Account
FY 22-23
Line Items
FY 23-24 Budget
by Account
FY 23-24
Line Items Line Item Description Itemization status
PERMANENT SALARIES 501-0560-431-41-10 287,061 321,769 Non-Itemized Account HOURLY & PART TIME SALARY501-0560-431-41-11 19,467 0 Non-Itemized Account OVERTIME 501-0560-431-41-12 1,000 1,400 Non-Itemized Account PERS RETIREMENT 501-0560-431-41-21 29,524 34,427 Non-Itemized Account FLEX ALLOWANCE 501-0560-431-41-35 46,926 54,221 Non-Itemized Account WORKERS COMPENSATION501-0560-431-41-36 33,153 34,548 Non-Itemized Account OTHER FRINGE BENEFITS 501-0560-431-41-39 12,156 12,812 Non-Itemized Account COMPENSATED ABSENCES501-0560-431-41-40 9,245 8,726 Non-Itemized Account GASB68 PENSION EXP-PERS501-0560-431-41-41 70,000 70,000 Non-Itemized Account GASB75 OPEB EXP-PEMHCA501-0560-431-41-42 4,000 4,000 Non-Itemized Account PEMHCA 501-0560-431-41-54 1,961 2,234 Non-Itemized Account EMPLOYEE BENEFIT-PERS UAL501-0560-431-41-61 93,679 76,290 Non-Itemized Account GENERAL OFFICE SUPPLIES501-0560-431-42-43 1,200 1,200 Itemized Account GENERAL OFFICE SUPPLIES501-0560-431-42-43 600 600BOOTS Itemization GENERAL OFFICE SUPPLIES501-0560-431-42-43 400 400SMALL TOOLS Itemization GENERAL OFFICE SUPPLIES501-0560-431-42-43 200 200OFFICE & JANITORIAL SUPPLIES Itemization MAINT-FACILITY & EQUIP 501-0560-431-42-46 413,500 463,500 Itemized Account MAINT-FACILITY & EQUIP 501-0560-431-42-46 10,000 10,000RETROFIT EXHAUST SYSTEMS ON DIESEL VEHICLES Itemization MAINT-FACILITY & EQUIP 501-0560-431-42-46 2,500 2,500RECYCLING, TIRES DISPOSAL, BATTERIES, FILTERS Itemization MAINT-FACILITY & EQUIP 501-0560-431-42-46 260,000 260,000GASOLINE Itemization MAINT-FACILITY & EQUIP 501-0560-431-42-46 56,000 56,000DIESEL FUEL Itemization MAINT-FACILITY & EQUIP 501-0560-431-42-46 30,000 30,000AUTO PARTS Itemization MAINT-FACILITY & EQUIP 501-0560-431-42-46 3,000 3,000WASH, DETAIL, TOUCH UP STAFF VEHICLES Itemization MAINT-FACILITY & EQUIP 501-0560-431-42-46 32,000 32,000VEHICLE REPAIRS Itemization MAINT-FACILITY & EQUIP 501-0560-431-42-46 20,000 20,000TIRES (REPLACEMENT, REPAIR, FRONT END WORK) Itemization MAINT-FACILITY & EQUIP 501-0560-431-42-46 0 50,000EXCEPTION REQUEST - INCREASE COST - ACCIDENT BELOW DEDUCTIBLE REPAIRSItemization RENTS AND LEASES 501-0560-431-42-47 800 800 RENTS AND LEASES - RENTAL OF MISCELLANEOUS EQUIPMENT Non-Itemized Account UTILITIES & COMMUNICATION501-0560-431-42-48 4,000 4,000 UTILITIES & COMMUNICATION - RADIO MAINTENANCE Non-Itemized Account CONTRACT, PROF, SPEC SVCS501-0560-431-42-51 3,500 5,000 CONTRACT, PROF, SPEC SVCS - UNIFORM SERVICES Itemized Account CONTRACT, PROF, SPEC SVCS501-0560-431-42-51 3,500 3,500UNIFORM SERVICES Itemization CONTRACT, PROF, SPEC SVCS501-0560-431-42-51 0 1,500EXCEPTION REQUEST - ADD SVCS Itemization MEMBERSHIP,DUES,SUBSCRIPT501-0560-431-42-53 500 500 MEMBERSHIP,DUES,SUBSCRIPT - NATIONAL AUTOMOBILE FLEET ASSOCIATION (NAFA)Non-Itemized Account TRAVEL,CONFERENCE,MEETING501-0560-431-42-54 500 500 TRAVEL,CONFERENCE,MEETING - FLEET MAINTENANCE/NOR CAL CONFERENCESNon-Itemized Account TRAINING 501-0560-431-42-55 750 750 TRAINING - FORD & TOYOTA DIAGNOSTIC CERT TRAINING Non-Itemized Account EQUIP REPLACEMENT CHARGES501-0560-431-42-56 30,771 30,771 Non-Itemized Account COMM & INFO SERVICES CHGS501-0560-431-42-57 18,088 18,207 Non-Itemized Account INSURANCE & OTHER COSTS501-0560-431-42-62 155,120 189,652 Non-Itemized Account ALLOCATION OF OVERHEAD501-0560-431-42-63 140,453 0 Non-Itemized Account CONTRIBUTION TO FIRE JPA501-0560-431-42-92 0 0 Non-Itemized Account MOTOR VEHICLES 501-0560-431-43-84 614,578 100,000 Itemized Account MOTOR VEHICLES 501-0560-431-43-84 74,814 0 CITYWIDE VEHICLES Itemization MOTOR VEHICLES 501-0560-431-43-84 100,000 100,000CONTINGENCY Itemization MOTOR VEHICLES 501-0560-431-43-84 439,764 0 CARRYOVER-Hoist Truck and Dump Truck Replacement Itemization MACHINERY & EQUIP >5000501-0560-431-43-85 0 0 Non-Itemized Account 1,991,932 1,435,307
Worksheet: 501 - Vehicle Replacement Fund Expenses
Proposal: 501 - Vehicle Replacement Fund
Budget: FY 2023-24 5 YR EXPENDITURES BUDGET

6.10 Attachment 2 - 501 Vehicle Replacement Fund Expenses

247

Attachment 3

INTERNAL SERVICE FUND CHARGES
VEHICLE REPLACEMENT FUND 501
Approved
FY 2022-2023
Requested
FY 2023-2024 Variance Notes
0110 CMO Admin 22,627 22,482$ (145) 1 0510 Park & Rec Admin 60,283 97,036$ 36,753 2 0520 Parks Maint 369,131 564,501$ 195,370 3 0610 PD Chief's Office 21,632 25,096$ 3,464 4 0620 PD Field Ops 369,474 456,932$ 87,458 5 0630 PD Admin 102,312 122,451$ 20,139 6 0740 Disaster Preparedness 17,359 -$ (17,359) 7 0810 Planning Admin 38,239 37,809$ (430) 8 0830 Building 73,275 70,937$ (2,338) 9 0910 PW Admin & Engineering 55,902 53,179$ (2,723) 10 0920 PW Lagoons & Levees 22,371 39,234$ 16,863 11 0930 PW Streets 78,385 115,930$ 37,545 12 401 Water Enterprise 160,398 198,050$ 37,652 13 451 Wastewater Enterprise 283,449 427,534$ 144,085 14 505 Building Maint 67,797 103,394$ 35,597 15 Total All Funds 1,742,634 2,334,565 591,931 Detailed Analysis
Note 1
Note 2 (3) 33% increase in replacement cost for division fleet (Ford Transit vehicles) Note 3
Note 4
Note 5
Note 6
Note 7
Note 8
Note 9
Note 10
Note 11
Note 12
Note 13
Note 14
Note 15
(2 Vehicle Maintenance Division vehicles are distributed as part of the VM operations costs) (1) 85% increase in replacement cost of the one vehicle in this division fleet, including build- up costs (F-250)
(7) 24% increase in replacement cost for division fleet (F-150, F-350) (11) 50% increase in replacement cost for division fleet (Hybrid, F-250, F-350, Sewer Jet, Sewer Vac)
(3) 47% increase in replacement cost for division fleet (Ford Transits) (3) Minor increase in replacement costs offset by extending useful lives and reduction in overhead costs
(4) 16% increase in replacement cost for division fleet (F-250, F-450) Department Charged
(Receiving Goods/Services)
(5) 20% increase in replacement cost for division fleet (Police Interceptor Utilitie, Van) (1) Minor adjustment due to reduction in overhead costs (17) 34% increase in replacement cost for division fleet (Ford Ranger and F-250) (2) Minor increase in replacement costs offset by extending useful lives and reduction in overhead costs
(4) Minor increase in replacement costs offset by extending useful lives and reduction in overhead costs
(1) 16% increase in replacement cost for division fleet (Ford sedan) (15) 22% increase in replacement cost for division fleet (Police Interceptor Utilities, F-250) (0) CARES Vehicle removed from fleet

6.10 Attachment 3 - Internal Service Fund Charges

248

Attachment 4
City of Foster City
Vehicle Replacement Fund
Changes to Estimated Useful Lives
For FY 2023-2024
Description Department
Purchased
Fiscal Year
Beginning
(xxxx)
Previous
Useful
Life
(Years)
Revised
Useful
Life
(Years)
Increase
(Decrease)
Vehicles
10 FORD RNGR 05-10 2010 13 14 1
08 HI RANGER 05-20 2008 16 18 2
08 FORD RANGER XLT 05-20 2007 16 17 1
09 FORD F250 05-20 2009 14 15 1
10 FORD F250 05-20 2009 14 15 1
08 FORD 750 05-20 2007 16 17 1
11 FORD F250 05-20 2010 13 14 1
10FORD F250 05-20 2009 14 15 1
14 FORD F-250 05-20 2013 10 11 1
16 BMW 06-20 2016 7 8 1
15 BMW 06-20 2014 9 10 1
11 FORD ESCAPE HYBRID 06-30 2010 13 14 1
07 FORD E-250 VAN 06-30 2006 17 18 1
15 FORD FOCUS 08-10 2014 9 10 1
09 FORD RNGR 08-30 2008 15 16 1
10 TOYOTA PRIUS 08-30 2009 14 15 1
12 TOYOTA PRIUS 08-30 2012 11 12 1
09 FORD RNGR 08-30 2008 15 16 1
13 TOYOTA PRIUS 09-10 2013 10 11 1
09 TOYOTA PRIUS 09-10 2008 15 16 1
09 FORD RANGER 09-10 2008 15 16 1
08 FORD F450 09-30 2007 16 17 1
06 FORD F350 KUV Body 09-70 2005 18 19 1
Equipment
None

6.10 Attachment 4 - Changes to Estimated Useful LIves

249

Attachment 5
City of Foster City
Vehicle Replacement Fund
Changes to Replacement Values
For FY 2023-2024
Description Department
Purchased
Fiscal Year
Beginning
(xxxx)
Previous
Replacement
Value
Revised
Replacement
Value
Increase
(Decrease)
VEHICLES*
19 FORD EXPLORER XLT 01-10 2019 40,800 41,616 816
10 FORD RNGR 05-10 2010 40,000 40,800 800
20 TRANSIT 150 05-10 2014 40,800 60,000 19,200
17 FORD TRANSIT 150 05-10 2016 40,000 60,000 20,000
08 HI RANGER 05-20 2008 107,801 140,000 32,199
08 FORD F250 05-20 2022 55,000 85,000 30,000
08 FORD RANGER XLT 05-20 2007 40,000 40,800 800
09 FORD F250 05-20 2009 34,814 45,000 10,186
10 FORD F250 05-20 2009 35,511 45,000 9,489
08 FORD 750 05-20 2007 107,801 150,000 42,199
11 FORD F250 05-20 2010 55,000 85,000 30,000
08 FORD F250 05-20 2022 55,000 85,000 30,000
17 FORD F250 05-20 2017 55,000 85,000 30,000
13 FORD F250 05-20 2012 34,680 35,374 694
17 FORD F250 05-20 2016 55,000 85,000 30,000
08 FORD F250 05-20 2022 55,000 85,000 30,000
10FORD F250 05-20 2009 55,000 85,000 30,000
11 JD LL 05-20 2020 91,800 93,636 1,836
14 CASE 580M 05-20 2013 142,881 145,739 2,858
14 FORD F-250 05-20 2013 51,000 85,000 34,000
09 FORD F550 05-20 2008 66,300 100,000 33,700
16 FORD TAURUS 06-10 2015 35,700 40,000 4,300
21 POLICE INTERCEPTOR UTILITY 06-20 2021 61,200 75,000 13,800 21 POLICE INTERCEPTOR UTILITY 06-20 2021 61,200 75,000 13,800 18 POLICE INTERCEPTOR UTILITY 06-20 2017 61,200 75,000 13,800 20 POLICE INTERCEPTOR UTILITY 06-20 2019 61,200 75,000 13,800 20 POLICE INTERCEPTOR UTILITY 06-20 2019 61,200 75,000 13,800 20 POLICE INTERCEPTOR UTILITY 06-20 2019 61,200 75,000 13,800 20 POLICE INTERCEPTOR UTILITY 06-20 2019 61,200 75,000 13,800 21 POLICE INTERCEPTOR UTILITY 06-20 2021 61,200 75,000 13,800 21 POLICE INTERCEPTOR UTILITY 06-20 2021 61,200 75,000 13,800 20 POLICE INTERCEPTOR UTILITY 06-20 2019 61,200 75,000 13,800 16 BMW 06-20 2016 35,000 40,000 5,000
09 BMW 06-20 2001 31,706 32,340 634
15 BMW 06-20 2014 35,000 40,000 5,000
16 FORD F250 06-20 2015 36,965 60,000 23,035
10 FORD ESCAPE 06-20 2017 41,031 41,852 821
11 FORD ESCAPE HYBRID 06-30 2010 39,315 40,102 786
13 FORD POLICE INTERCEPTOR UTILITY 06-30 2020 40,800 65,000 24,200 17 FORD C-MAX 06-30 2016 34,243 34,927 685
13 FORD TAURUS 06-30 2015 35,700 36,414 714
07 FORD E-250 VAN 06-30 2006 40,800 60,000 19,200
17 FORD C-MAX 08-10 2016 34,243 34,927 685
15 FORD FOCUS 08-10 2014 33,571 34,243 671

6.10 Attachment 5 - Changes to Replacement Values

250

Attachment 5
City of Foster City
Vehicle Replacement Fund
Changes to Replacement Values
For FY 2023-2024
Description Department
Purchased
Fiscal Year
Beginning
(xxxx)
Previous
Replacement
Value
Revised
Replacement
Value
Increase
(Decrease)
09 FORD RNGR 08-30 2008 40,800 41,616 816
10 TOYOTA PRIUS 08-30 2009 35,000 35,700 700
12 TOYOTA PRIUS 08-30 2012 32,913 33,571 658
09 FORD RNGR 08-30 2008 40,800 41,616 816
13 TOYOTA PRIUS 09-10 2013 35,000 35,700 700
09 TOYOTA PRIUS 09-10 2008 35,000 35,700 700
09 FORD RANGER 09-10 2008 40,800 41,616 816
16 FORD F250 09-20 2015 45,900 85,000 39,100
13 FORD F250 09-30 2012 31,084 45,000 13,916
08 FORD F450 09-30 2007 71,400 90,000 18,600
16 FORD F250 09-30 2015 45,900 85,000 39,100
02 HOIST TRUCK VEHICLE+EQUIP 09-30 2022 350,000 357,000 7,000 19 FORD F150 09-70 2018 34,814 50,000 15,186
17 FORD F350 09-60 2016 55,204 90,000 34,796
17 FORD F350 09-60 2016 55,204 90,000 34,796
16 FORD F350 09-60 2015 55,204 90,000 34,796
21 DUMP TRUCK 09-60 2021 193,214 197,078 3,864
17 FORD F150 (Meter Read) 09-60 2016 30,600 40,000 9,400 20 CAT 420 ST HRC 09-60 2021 142,800 145,656 2,856
17 FORD ESCAPE 09-70 2016 30,463 35,000 4,537
15 FORD F250 09-60 2014 30,600 45,000 14,400
19 FORD F350 09-70 2018 51,691 90,000 38,309
17 FORD F350 09-70 2016 55,204 90,000 34,796
15 SEWER JET 09-70 2014 253,242 440,000 186,758
99 HOIST TRUCK 09-70 2013 193,324 197,190 3,866
06 FORD F350 KUV Body 09-70 2005 48,193 49,157 964
FORD F550 (Hydro Flush - Truck Portion Only) 09-70 2012 55,952 57,071 1,119 HYDRO FLUSH UNIT (Equipment Portion Only) 09-70 2008 58,507 59,677 1,170 19 FORD F350 09-70 2018 54,122 90,000 35,878
18 FORD E350-CCTV VAN 09-70 2017 63,270 64,535 1,265
16 FREIGHTLINER SEWER VAC 09-70 2015 354,362 660,000 305,638 18 FORD TRANSIT 250 05-50 2017 40,800 60,000 19,200
16 FORD TRANSIT 05-50 2016 40,800 60,000 19,200
16 FORD TRANSIT 05-50 2016 40,800 60,000 19,200
18 FORD F250 05-60 2017 51,000 85,000 34,000
15 FORD F250 05-20 2014 35,700 45,000 9,300
Subtotal - Changes to Vehicle Replacement
Values 5,174,928 6,805,653 1,630,725

6.10 Attachment 5 - Changes to Replacement Values

251

Attachment 5
City of Foster City
Vehicle Replacement Fund
Changes to Replacement Values
For FY 2023-2024
Description Department
Purchased
Fiscal Year
Beginning
(xxxx)
Previous
Replacement
Value
Revised
Replacement
Value
Increase
(Decrease)
EQUIPMENT^
5 STATION FLUID DISPENSER 05-60 1996 8,025 8,125 100 AIR COMPRESSOR - CY Garage 05-60 2016 8,100 8,201 101 AIR COMPRESSOR - VM Truck 05-60 2017 3,153 3,192 39 DIESEL DISPENSER 05-60 2020 11,210 11,351 140 DIESEL MONITOR SYST 05-60 2020 34,808 35,243 435 DIESEL TANK (X2) 05-60 2020 107,040 108,378 1,338 FORD SCAN / SCOPE 05-60 2012 12,455 12,611 156 JACK HYDRAULIC 20T 05-60 2004 5,591 5,661 70 PETROCARD FUELING SYSTEM 05-60 2020 28,163 28,515 352 TESTER-AMP/VOLT 05-60 2001 2,293 2,322 29 TIRE BALANCING MACHINE 05-60 2013 7,088 7,176 89 TIRE CHANGING MACHINE 05-60 2013 7,088 7,176 89 UNLEADED GAS DISPENSER 05-60 2020 11,232 11,372 140 UNLEADED GAS DISPENSER 05-60 2020 11,232 11,372 140 UNLEADED GAS MONITORING SYST 05-60 2020 34,808 35,243 435 UNLEADED FUEL TANK 05-60 2020 62,139 62,916 777 UNLEADED GAS DISPENSER 05-60 2020 63,330 64,121 792 VEHICLE LIFT - DRIVE ON 05-60 2018 50,625 51,258 633 VEHICLE LIFT - SIDE POST 05-60 2004 50,625 51,258 633 Subtotal - Changes to Equipment
Replacement Values 519,003 525,491 6,488 Grand Total - Changes to all Replacement Values 5,693,931 7,331,144 1,637,213 * Vehicles are assumed to increase by 2% per year unless otherwise adjusted ^ Equipment is assumed to increase by 1.25% per year unless otherwise adjusted.

6.10 Attachment 5 - Changes to Replacement Values

252

Attachment 6
Vehicle Replacement Fund Budget Comparisons (501-0560)
Account Description
Approved
FY 2022-2023
Requested
FY 2023-2024
Increase
(Decrease) Notes
4110 Permanent Salaries 287,061 321,769 34,708 1 4111 Hourly & Part Time Salaries 19,467 - (19,467) 2 4112 Overtime 1,000 1,400 400 3 4121 PERS Retirement 29,524 34,427 4,903 4 4135 Flex Allowance 46,926 54,221 7,295 5 4136 Workers Compensation 33,153 34,548 1,395 6 4139 Other Fringe Benefits 12,156 12,812 656 7 4140 Compensated Absences 9,245 8,726 (519) 8 4141 GASB 68 Pension Exp 70,000 70,000 - 9 4142 GASB75 OPEB EXP-PEMHCA 4,000 4,000 - 10 4154 PEMHCA 1,961 2,234 273 11 4161 EMPLOYEE BENEFIT-PERS U 93,679 76,290 (17,389) 12 4243 General Office Supplies 1,200 1,200 - 13 4246 Maint-Facility&Equip 413,500 463,500 50,000 14 4247 Rents and Leases 800 800 - 15 4248 Utilities & Communication 4,000 4,000 - 16 4251 Contract, Prof, Spec Svcs 3,500 5,000 1,500 17 4253 Membership,Dues,Subscript 500 500 - 18 4254 Travel,Conference,Meeting 500 500 - 19 4255 Training 750 750 - 20 4256 Equip Maintenance Charges 30,771 30,771 - 21 4257 Comm & Info Services Charges 18,088 18,207 119 22 4262 Insurance & Other Costs 155,120 189,652 34,532 23 4263 Allocation of Overhead 140,453 - (140,453) 24 4384 Motor Vehicles 614,578 100,000 (514,578) 25 4385 Machinery & Equip >5000 - - - 26 1,991,930 1,435,307 (556,623)
Detailed Analysis:

Note 1 Personnel charges calculated by Finance Department Note 2 Restructure of part time personnel to full time (shared with PW Maintenance) Note 3 Adjusted for personnel costs
Note 4 Employee Benefits calculated by Finance Department Note 5 Employee Benefits calculated by Finance Department Note 6 Employee Benefits calculated by Finance Department Note 7 Employee Benefits calculated by Finance Department Note 8 Employee Benefits calculated by Finance Department Note 9 Employee Benefits calculated by Finance Department Note 10 Employee Benefits calculated by Finance Department Note 11 Employee Benefits calculated by Finance Department Note 12 Employee Benefits calculated by Finance Department Note 13 No Change
Note 14 Line item added for accident repairs below insurance deductible Note 15 No Change
Note 16 No Change
Note 17 Increase cost of uniform services
Note 18 No Change
Note 19 No Change
Note 20 No Change
Note 21 No Change
Note 22 Detailed explanation of charges in IT Budget
Note 23 Detailed explanation of charges in SIF Budget
Note 24 New methodology of calculating overhead costs does not allocate to Vehicle Fund Note 25
Note 26 List of equipment to be replaced is included in budget submittal No vehicles scheduled for replacement, only contingency in budget \\MILHOUSE\Tier1-Shared\groups\Budget\Budget 2023-2024\ISF\VRF 2023-24\Attachment 6 - VRF Variance Analysis FY 2023-24\Attachment D Variance Analysis

6.10 Attachment 6 - Vehicle Replacement Fund Budget Comparisons 501-0560

253

Attachment 7
City of Foster City
Vehicle Replacement Fund
Items Added To or Deleted From the Replacement Lists
For FY 2023-2024
Description Department
Purchased
Fiscal Year
Beginning
(xxxx)
Replacement
Value Comments (if any)
Items Added
NONE
Total Added -
Items Deleted
99 EOC VAN (CARES) 01-20 1998 0 No replacement cost was set aside for this vehicle Total Deleted -
Grand Total Added/(Deleted) -

6.10 Attachment 7 - Vehicles-Equipment Added or Deleted

254

Attachment 8
Vehicle Replacement Fund

The mission and goal of the Vehicle Maintenance program is to provide management, maintenance, and inspection of all City/District vehicles and provide an efficient and safe vehicle fleet through established vehicle maintenance procedures. The Vehicle Maintenance Division develops ongoing maintenance programs for City vehicles and works to develop a cost-effective inventory system. The Vehicle Replacement Fund provides for the distribution of costs among user departments and replacement of vehicles in a timely manner to accomplish program goals.

Although the Vehicle Maintenance Division has experienced a number of significant changes in the division’s reporting relationships and organizational structure since FY 2019-2020, the day-to-day operations and goals have not changed for the Division’s staff, which consists of the Building/Vehicle Manager (50%), one full-time Mechanic I, and one full-time Small Engine Mechanic with supervisory and administrative support.

6.10 Attachment 8 - VRF Narrative FY 2023-2024

255

DATE: March 27, 2023

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

FROM: Ramon Towne, Interim Public Works Director/City Engineer Kurt Zander, Buildings and Vehicles Maintenance Manager DEPARTMENT: Public Works
SUBJECT: Building Maintenance Fund Budget and Internal Service Charges for FY 2023-2024

RECOMMENDATION
It is recommended that the City Council review this report and its attachments and provide policy direction regarding the development of the Building Maintenance Internal Service Fund Budget for Fiscal Year 2023-2024.

EXECUTIVE SUMMARY
There are two budget impacts associated with the Building Maintenance Fund: (1) expenditures related to the Building Maintenance operation, including scheduled replacement projects (Attachment 1, Items to be Replaced) and (2) funding transfers to support the Building Maintenance Operation and future replacement of building components.

Table 1: Budget Impact of Building Maintenance Fund
Category Amount (All Funds)
(1) Building Maintenance Fund Expenditures (Attachment 2) $2,940,520

(2) Transfers (Attachment 3) $3,527,145
Building Maintenance Fund Expenditures, less replacement costs $2,860,520 Transfer for Future Replacements $666,625

6.11 6.11 Staff Report

256

Details of the cost and distribution of operation are contained in the attachments to this report.

BACKGROUND
The building maintenance program was created to ensure that all City facilities are safe, clean, and comfortable through management, maintenance, inspection, repair, and replacement of all of the systems that comprise the City/District’s seven City facilities totaling 150,748 square feet. Established maintenance protocols allow City staff to continue to provide the highest quality service to the Foster City community.

The Division’s staff complete work requests, emergency and routine repairs in a timely manner with the support of outside contractors to assist with preventative maintenance and special projects.

Building Maintenance Division Staff duties include but are not limited to:
•Emergency Repairs – such as gas leaks or water pipe breaks •Work Requests – such as electrical outlet failure or carpet stain removal •Regular Repairs – such as lighting ballast replacement or restroom plumbing •Supplies/Inventory – such as ordering and organizing regularly stocked supplies and materials
•Preventative Maintenance – such as maintaining industry standards with respect to fire extinguisher and other inspections
•Special Projects – such as resurfacing floors, refurbishing building areas and upgrading and deploying the Lagoon Holiday Tree
•Administration – such as managing and overseeing division budget and replacement funds
In FY 2022-2023, Building Maintenance staff completed the following significant projects in addition to emergency and routine repair and preventative maintenance:
• • Remodeled the City Manager and City Council offices •Installed shut-off valves at the Corporation Yard employees’ bathrooms •Upgraded the holiday floating tree platform
•Renovated the Recreation Center kitchen to receive a permit to operate •Replaced the metal tracks at the employees’ gate at the Corporation Yard •Retrofit exterior lights at the teen Center to energy-efficient LED •Deployed compost recycling receptacles and signage in all City buildings in compliance with SB 1383
•Installed cleanups at Edgewater Park bathrooms
The Building Maintenance Fund provides for the distribution of costs for building management among user departments and funds. It also serves as a funding mechanism

6.11 6.11 Staff Report

257

for the replacement of building components such as roofs, flooring, paint, HVAC, lighting and elevators. Setting aside replacement funding and planning for replacement over the life of the building components provides for an orderly replacement process.

ANALYSIS
The Building Maintenance Fund relies on anticipation of maintenance costs for known assets. Regular replacement of lighting, elevators, paint, flooring, HVAC and roofs are identified and the cost is spread over the life of the assets. Staff actively monitors and adjusts estimated useful life (Attachment 4, Changes to Estimated Useful Lives) and replacement cost (Attachment 5, Changes to Replacement Values) of each item to ensure that funding will be available as replacement is needed.

California Environmental Quality Act
Not Applicable

FISCAL IMPACT
There are two budget impacts associated with the Building Maintenance Fund.

Expenditures for the Building Maintenance operation are found in the Building Maintenance Fund budget. The total recommended Building Maintenance Division budget is $2,940,520, which includes staffing, maintenance supplies, insurance, utilities and funding for scheduled large maintenance projects to be performed during the year.

Building Maintenance expenditures, other than those for building assets scheduled for replacement, are reallocated through transfers from divisions and funds based upon the percentage of total City facility space used by them. When removing the $80,000 replacement value of assets that are scheduled for replacement in FY 2023-2024, the amount of the annual transfer is $2,860,520 ($2,940,520 expenditures, less $80K replacement costs).

Budget transfers are also used to accumulate funding for the future replacement of building components and equipment used to maintain the organization’s buildings. The total recommended transfer for future replacement of building components is $666,625.

A summary of the total fiscal impact of these two components of the budget as distributed among funds is shown in detail in Attachment 3 and summarized below in Table 2.

6.11 6.11 Staff Report

258

Building Maintenance Fund Budget Analysis
The FY 2023-2024 Building Maintenance Fund line item budget reflects a decrease of approximately $790,000 (21%) compared to FY 2022-2023 (Attachment 6, Building Maintenance Fund Comparisons 505-0550). The primary drivers of the decrease are:
• A decrease of $720,000 for scheduled building projects compared to FY 2022- 2023
• A decrease of approximately $205,000 due to the change in methodology used to allocate overhead costs, which removed the overhead allocation from the Building Maintenance Fund.
• An increase of approximately $13,000 in personnel items related to the overall cost for personnel services and the reallocation of administrative staff. • An increase of $81,500 to reflect the growing cost of HVAC repair/maintenance, and janitorial supplies and services.
• An increase of $35,500 in the replacement cost for vehicles assigned to the division.
• An increase of approximately $4,000 in other minor adjustments.

Staff routinely monitors fund balances to ensure that adequate funds are available.

Based on calculations from the Finance Department, the Building Maintenance Fund is expected to end Fiscal Year 2022-2023 with an available fund balance of $6,427,728.

The amount directly attributable to the replacement of equipment and to scheduled building projects through the end of FY 2022-2023 is $4,718,456, and the Council-set minimum contingency reserve is $100,000, leaving a balance of $1,609,272.

CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
•City Council Operations and Improved Community Engagement •Facilities and Infrastructure
•Innovation and Sustainability
•Public Safety and Social Equity
•Smart Planning, Development, and the Local Economy
ATTACHMENTS:

6.11 6.11 Staff Report

259

Attachment 1 - Items to be Replaced
Attachment 2 - 505 – Building Maintenance Fund Expenses Attachment 3 - Internal Service Fund Charges
Attachment 4 - Changes to Estimated Useful Lives
Attachment 5 - Changes to Replacement Values
Attachment 6 - Building Maintenance Fund Comparisons
Attachment 7 - Items Added To or Deleted From the Building Maintenance List Attachment 8 - Building Maintenance Fund Narrative

6.11 6.11 Staff Report

260

Attachment 1
Category Facility / Description
Replacement
Amount
Paint Police Station - Interior 80,000
TOTAL 80,000
City of Foster City
Building Maintenance Fund
Items to be Replaced
For the Year Ended June 30, 2024

6.11 Attachment 1 - Items to be Replaced

261

Worksheet: 505 - Building Maintenance Fund Expenses
Account Name Account String FY 22-23 Budget
by Account
FY 22-23
Line Items
FY 23-24 Budget
by Account
FY 23-24
Line Items Line Item Description Itemization status
PERMANENT SALARIES 505-0550-419-41-10 514,161 557,962 Non-Itemized Account HOURLY & PART TIME SALARY505-0550-419-41-11 19,467 0 Non-Itemized Account OVERTIME 505-0550-419-41-12 5,300 5,300 Non-Itemized Account PERS RETIREMENT 505-0550-419-41-21 52,100 60,909 Non-Itemized Account FLEX ALLOWANCE 505-0550-419-41-35 85,445 96,571 Non-Itemized Account WORKERS COMPENSATION505-0550-419-41-36 58,419 60,873 Non-Itemized Account OTHER FRINGE BENEFITS 505-0550-419-41-39 21,216 22,141 Non-Itemized Account COMPENSATED ABSENCES505-0550-419-41-40 16,422 15,058 Non-Itemized Account GASB68 PENSION EXP-PERS505-0550-419-41-41 84,000 71,000 Non-Itemized Account GASB75 OPEB EXP-PEMHCA505-0550-419-41-42 5,000 4,000 Non-Itemized Account PEMHCA 505-0550-419-41-54 3,785 4,058 Non-Itemized Account EMPLOYEE BENEFIT-PERS UAL505-0550-419-41-61 154,755 135,629 Non-Itemized Account GENERAL OFFICE SUPPLIES505-0550-419-42-43 5,900 5,900 Non-Itemized Account VEHICLE RENTAL CHARGES505-0550-419-42-44 67,797 103,394 Non-Itemized Account MAINT-FACILITY & EQUIP 505-0550-419-42-46 319,300 384,300 Itemized Account MAINT-FACILITY & EQUIP 505-0550-419-42-46 30,000 35,000BLDG. MATERIAL - LUMBER, HARDWARE, PAINT, ETC. Itemization MAINT-FACILITY & EQUIP 505-0550-419-42-46 1,000 1,000VANDALISM REPAIRS Itemization MAINT-FACILITY & EQUIP 505-0550-419-42-46 10,000 10,000SUSTAINABILITY PROJECTS Itemization MAINT-FACILITY & EQUIP 505-0550-419-42-46 20,200 20,200STANDBY GENERATORS REPAIR Itemization MAINT-FACILITY & EQUIP 505-0550-419-42-46 3,000 3,000SECURITY CAMERA MAINTENANCE Itemization MAINT-FACILITY & EQUIP 505-0550-419-42-46 2,000 2,000PLUMBING SUPPLIES Itemization MAINT-FACILITY & EQUIP 505-0550-419-42-46 9,600 9,600PEST CONTROL FOR CITY BUILDINGS Itemization MAINT-FACILITY & EQUIP 505-0550-419-42-46 3,000 3,000LOCKS AND KEYS Itemization MAINT-FACILITY & EQUIP 505-0550-419-42-46 50,000 50,000JANITORIAL SUPPLIES Itemization MAINT-FACILITY & EQUIP 505-0550-419-42-46 100,000 100,000HVAC REPAIR AND MAINTENANCE Itemization MAINT-FACILITY & EQUIP 505-0550-419-42-46 58,000 58,000GOVERNMENT CENTER MAINTENANCE Itemization MAINT-FACILITY & EQUIP 505-0550-419-42-46 1,000 1,000FIRST AID KIT SUPPLIES Itemization MAINT-FACILITY & EQUIP 505-0550-419-42-46 12,500 12,500CORPORATION YARD AUTOMATIC DOOR MAINTENANCEItemization MAINT-FACILITY & EQUIP 505-0550-419-42-46 5,000 5,000ELECTRICAL SUPPLIES AND REPAIRS Itemization MAINT-FACILITY & EQUIP 505-0550-419-42-46 14,000 14,000CARPET/WINDOW MAINTENANCE Itemization MAINT-FACILITY & EQUIP 505-0550-419-42-46 0 50,000EXCEPTION REQUEST - HVAC REPAIR & MAINT INCREASE COSTItemization MAINT-FACILITY & EQUIP 505-0550-419-42-46 0 10,000EXCEPTION REQUEST - JANITORIAL SUPPLIES INCREASE COSTItemization UTILITIES & COMMUNICATION505-0550-419-42-48 602,000 602,000 Itemized Account UTILITIES & COMMUNICATION505-0550-419-42-48 562,000 562,000UTILITIES FOR ALL CITY FACILITIES Itemization UTILITIES & COMMUNICATION505-0550-419-42-48 40,000 40,000UTILITIES FOR JOINT USE FACILITIES Itemization Attachment 2
Proposal: 505 - Building Maintenance Fund
Budget: FY 2023-24 5 YR EXPENDITURES BUDGET

6.11 Attachment 2 - 505 Building Maintenance Fund Expenses

262

Account Name Account String FY 22-23 Budget
by Account
FY 22-23
Line Items
FY 23-24 Budget
by Account
FY 23-24
Line Items Line Item Description Itemization status
CONTRACT, PROF, SPEC SVCS505-0550-419-42-51 477,000 493,500 Itemized Account CONTRACT, PROF, SPEC SVCS505-0550-419-42-51 20,000 20,000FIRE PROTECTION SYSTEM Itemization CONTRACT, PROF, SPEC SVCS505-0550-419-42-51 4,600 4,600DISPOSAL OF HAZARDOUS MATERIALS Itemization CONTRACT, PROF, SPEC SVCS505-0550-419-42-51 40,000 40,000JANITORIAL SERVICES - JUA BREWER ISLAND GYM Itemization CONTRACT, PROF, SPEC SVCS505-0550-419-42-51 20,000 20,000SOLAR MAINTENANCE Itemization CONTRACT, PROF, SPEC SVCS505-0550-419-42-51 15,000 15,000ELEVATOR MAINTENANCE CONTRACT Itemization CONTRACT, PROF, SPEC SVCS505-0550-419-42-51 8,600 8,600ELEVATOR SMOKE GUARD MAINTENANCE Itemization CONTRACT, PROF, SPEC SVCS505-0550-419-42-51 4,200 4,200FIRE EXTINGUISHER MAINTENANCE Itemization CONTRACT, PROF, SPEC SVCS505-0550-419-42-51 15,000 15,000TEST/REPAIR/REPLACE BUILDING BACKFLOW SYSTEMS Itemization CONTRACT, PROF, SPEC SVCS505-0550-419-42-51 315,000 315,000JANITORIAL SERVICES - CITYWIDE Itemization CONTRACT, PROF, SPEC SVCS505-0550-419-42-51 34,600 34,600GOVERNMENT CENTER MAINTENANCE AND BUILDING REPAIRSItemization CONTRACT, PROF, SPEC SVCS505-0550-419-42-51 0 6,500EXCEPTION REQUEST - UNIFORM SVCS Itemization CONTRACT, PROF, SPEC SVCS505-0550-419-42-51 0 10,000EXCEPTION REQUEST - WEEKEND LIBRARY ON-CALL JANITORIAL SVCSItemization TRAVEL,CONFERENCE,MEETING505-0550-419-42-54 2,000 2,000 Non-Itemized Account TRAINING 505-0550-419-42-55 750 4,750 Itemized Account
TRAINING 505-0550-419-42-55 750 750TRAINING Itemization TRAINING 505-0550-419-42-55 0 4,000EXCEPTION REQUEST - ANNUAL BLDG OPERATOR CERT TRAININGItemization EQUIP REPLACEMENT CHARGES505-0550-419-42-56 31,192 31,192 Non-Itemized Account COMM & INFO SERVICES CHGS505-0550-419-42-57 42,205 42,483 Non-Itemized Account ALLOCATION OF OVERHEAD505-0550-419-42-63 205,156 0 Non-Itemized Account MACHINERY & EQUIP >5000505-0550-419-43-85 957,500 237,500 Itemized Account MACHINERY & EQUIP >5000505-0550-419-43-85 7,500 7,500CITYWIDE FURNITURE Itemization MACHINERY & EQUIP >5000505-0550-419-43-85 100,000 100,000CONTINGENCY-INFRASTRUCTURE Itemization MACHINERY & EQUIP >5000505-0550-419-43-85 800,000 80,000ITEMS TO BE REPLACED Itemization MACHINERY & EQUIP >5000505-0550-419-43-85 50,000 50,000CONTINGENCY-REPLACEMENT Itemization 3,730,870 2,940,520

6.11 Attachment 2 - 505 Building Maintenance Fund Expenses

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Attachment 3

INTERNAL SERVICE FUND CHARGES
BUILDING MAINTENANCE FUND 505
Approved
FY 2022-2023
Requested
FY 2023-2024 Variance Notes
0110 City Manager/City Attorney 102,697 111,989 9,292 1 0210 City Clerk Admin 69,438 75,721 6,283 2 0230 City Clerk Communications 16,842 18,366 1,524 3 0510 Park & Rec Admin 1,136,837 1,148,376 11,539 4 0520 Parks Maint 247,351 232,102 (15,249) 5 0630 PD Admin 317,448 334,840 17,392 6 0750 Fire JPA 33,635 68,954 35,319 7 0810 Planning Admin 57,711 62,933 5,222 8 0820 Building 57,711 62,933 5,222 9 0910 PW Admin & Engineering 78,844 85,978 7,134 10 0920 PW Lagoons & Levees 74,411 69,823 (4,588) 11 0930 PW Streets 74,411 69,823 (4,588) 12 1010 City Council 166,246 181,289 15,043 13 1110 Finance Admin 18,289 19,944 1,655 14 1120 Finance General Acctg 36,578 39,887 3,309 15 1130 Finance Utility 27,433 29,915 2,482 16 1140 Finance Tax Admin 9,144 9,972 828 17 1210 Human Resources 79,493 86,686 7,193 18 1310 Library 503,744 538,360 34,616 19 401 Water Enterprise 148,801 139,627 (9,174) 20 451 Wastewater Enterprise 148,801 139,627 (9,174) 21 Total All Funds 3,405,865 3,527,145 121,280 Detailed Analysis
Note 1
Note 2
Note 3
Note 4
Note 5
Note 6 Significant increase in replacement cost of flooring Note 7
Note 8
Note 9
Note 10
Note 11
Note 12
No change in asset replacement costs at the Corporation Yard and overal decrease in cost of Building Maintenance Operation
No change in asset replacement costs at the Corporation Yard and overal decrease in cost of Building Maintenance Operation
City Hall Departments reflect increase in replacement cost for Government Center Exterior Paint/Sealing and flooring
Department Charged (Receiving
Goods/Services)
City Hall Departments reflect increase in replacement cost for Government Center Exterior Paint/Sealing and flooring
Minor increases to replacement costs at Teen Center and Library/Community Center, offset by extension of Recreation Center projects to align with Replacement Project and overall decrease in cost of Building Maintenance Operation No change in asset replacement costs at the Corporation Yard and overal decrease in cost of Building Maintenance Operation
Significant increase in replacement cost for Fire Station Exterior Paint/Sealing and proportionate share for Government Center Paint/Sealing City Hall Departments reflect increase in replacement cost for Government Center Exterior Paint/Sealing and flooring
City Hall Departments reflect increase in replacement cost for Government Center Exterior Paint/Sealing and flooring
City Hall Departments reflect increase in replacement cost for Government Center Exterior Paint/Sealing and flooring
City Hall Departments reflect increase in replacement cost for Government Center Exterior Paint/Sealing and flooring
\\MILHOUSE\Tier1-Shared\groups\Budget\Budget 2023-2024\ISF\BMF 2023-24\Attachment 1.3 BMF List FY 2023-24\Attachment 1.3 BMF List FY 2023-24

6.11 Attachment 3 - Internal Service Fund Charges

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Note 13
Note 14
Note 15
Note 16
Note 17
Note 18
Note 19 Increase in the replacement cost for Library flooring Note 20
Note 21
City Hall Departments reflect increase in replacement cost for Government Center Exterior Paint/Sealing and flooring
No change in asset replacement costs at the Corporation Yard and overal decrease in cost of Building Maintenance Operation
No change in asset replacement costs at the Corporation Yard and overal decrease in cost of Building Maintenance Operation
Increase in replacement cost for Council Chambers roof and proportionate share of cost of Government Center Exterior Paint/Sealing and flooring City Hall Departments reflect increase in replacement cost for Government Center Exterior Paint/Sealing and flooring
City Hall Departments reflect increase in replacement cost for Government Center Exterior Paint/Sealing and flooring
City Hall Departments reflect increase in replacement cost for Government Center Exterior Paint/Sealing and flooring
City Hall Departments reflect increase in replacement cost for Government Center Exterior Paint/Sealing and flooring
\\MILHOUSE\Tier1-Shared\groups\Budget\Budget 2023-2024\ISF\BMF 2023-24\Attachment 1.3 BMF List FY 2023-24\Attachment 1.3 BMF List FY 2023-24

6.11 Attachment 3 - Internal Service Fund Charges

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Attachment 4
City of Foster City
Building Maintenance Replacement Fund
Changes to Estimated Useful Lives
For FY 2023-2024
Description Department
Purchased
Fiscal Year
Beginning
Previous
Useful
Life
(Years)
Revised
Useful
Life
(Years)
Increase
(Decrease)
Equipment - COUNCIL CHAMBERS GENIE 05-50 2006 17 18 1 Equipment - GAS FORCE AIR HEATER (CY) 05-50 2008 15 16 1 Roofing - Recreation Center / Senior Wing 05-50 1997 26 27 1 Roofing - Council Chambers Zinc 05-50 2002 17 35 18 Roofing - Council Chambers Top 05-50 2017 17 15 (2) Paint - Recreation Center/Sr Wing - Exterior 05-50 2015 8 9 1 Paint - Government Center/CH - Interior 05-50 2002 21 22 1 Flooring - Recreation Center / Senior Wing 05-50 2012 11 12 1 Flooring - Library / Community Cente
r 05-50 2009 15 16 1
HVAC - Teen Center 05-50 2009 18 20 2

6.11 Attachment 4 - Changes to Estimated Useful LIves BVM 2023-24

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Attachment 5
City of Foster City
Building Maintenance Replacement Fund
Changes to Replacement Values
For FY 2023-2024
Description Department
Purchased
Fiscal Year
Beginning
Previous
Replacement
Value
Revised
Replacement
Value
Increase
(Decrease)
Roofing - Council Chambers Zinc 05-50 2002 80,000 200,000 120,000 Roofing - Council Chambers Top 05-50 2017 35,000 50,000 15,000 Paint - Teen Center - Exterior 05-50 2009 50,000 70,000 20,000 Paint - Library / Community Center 05-50 2017 85,000 125,000 40,000 Paint - Government Center - Exterior Sealing 05-50 2014 71,000 150,000 79,000 Paint - Fire Station - Exterior Sealing 05-50 2014 50,000 100,000 50,000 Flooring - Library / Community Center 05-50 2009 200,000 250,000 50,000 Flooring - Police Station 05-50 2014 53,000 150,000 97,000 Flooring - Government Center/City Hall 05-50 2014 145,000 300,000 155,000 HVAC - Teen Center 05-50 2009 75,000 250,000 175,000
TOTAL
$ 844,000 $ 1,645,000 $ 801,000

6.11 Attachment 5 - Changes to Replacement Values BMF 2023-24

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Attachment 6
Building Maintenance Fund Budget Comparisons (505-0550) Account Description
Approved
FY 2021-2022
Requested
FY 2022-2023
Increase
(Decrease) Notes
4110 Permanent Salaries 514,161 557,962 43,801 1 4111 Hourly & Part Time Salary 19,467 - (19,467) 2 4112 Overtime 5,300 5,300 - 3 4121 PERS Retirement 52,100 60,909 8,809 4 4135 Flex Allowance 85,445 96,571 11,126 5 4136 Workers Compensation 58,419 60,873 2,454 6 4139 Other Fringe Benefits 21,216 22,141 925 7 4140 Compensated Absences 16,422 15,058 (1,364) 8 4141 GASB68 PENSION EXP-PE 84,000 71,000 (13,000) 9 4142 GASB75 OPEB EXP-PEMHCA 5,000 4,000 (1,000) 10 4154 PEMHCA 3,785 4,058 273 11 4161 Employee Benefit-PERS UAL 154,755 135,629 (19,126) 12 4243 General Office Supplies 5,900 5,900 - 13 4244 Vehicle Rental Charges 67,797 103,394 35,597 14 4246 Maint-Facility&Equip 319,300 384,300 65,000 15 4248 Utilities & Communication 602,000 602,000 - 16 4251 Contract, Prof, Spec Svcs 477,000 493,500 16,500 17 4254 Travel,Conference,Meeting 2,000 2,000 - 18 4255 Training 750 4,750 4,000 19 4256 Equip Maintenance Charges 31,192 31,192 - 20 4257 Comm & Info Services Charges 42,205 42,483 278 21 4263 Allocation of Overhead 205,156 - (205,156) 22 4385 Machinery & Equip >5000 957,500 237,500 (720,000) 23 3,730,870 2,940,520 (790,350)
Detailed Analysis:

Note 1 Personnel charges calculated by Finance Department Note 2 Restructure of part time personnel to full time (shared with PW Maintenance) Note 3 No Change
Note 4 Personnel charges calculated by Finance Department Note 5 Personnel charges calculated by Finance Department Note 6 Personnel charges calculated by Finance Department Note 7 Personnel charges calculated by Finance Department Note 8 Personnel charges calculated by Finance Department Note 9 Personnel charges calculated by Finance Department Note 10 Personnel charges calculated by Finance Department Note 11 Personnel charges calculated by Finance Department Note 12 Personnel charges calculated by Finance Department Note 13 No Change
Note 14 Details provided in Vehicle Replacement Fund
Note 15 Increase in cost of janitorial supplies and HVAC repair/maintenance Note 16 No Change
Note 17 Increase in janitorial cost for weekend work and cost of uniform services Note 18 No Change
Note 19 Addition of line item for staff Building Operator Certification Training Note 20 Details provided in Building Replacement Fund Attachments Note 21 Details provided in IT Fund
Note 22 New methodology of calculating overhead costs does not allocate to Bldg Maint Fund Note 23 List of replacements is included in budget submittal \\MILHOUSE\Tier1-Shared\groups\Budget\Budget 2023-2024\ISF\BMF 2023-24\Attachment 6 - BMF Variance Analysis FY 2023- 24\Attachment D Variance Analysis 3/7/2023

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Attachment 7
City of Foster City
Building Maintenance Fund
Items Added To or Deleted From the Building Maintenance List For FY 2023-2024
Description Department
Purchased
Fiscal Year
Beginning
Replacement
Value Comments (if any)
Items Added
None
Total Added -$
Items Deleted
None
Total Deleted -$
TOTAL (impact to list) -$

6.11 Attachment 7 - Items Added or Deleted BMF 2023-24

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Attachment 8
Building Maintenance Fund

The Building Maintenance Fund captures and distributes the costs of City-wide Building Maintenance. Building Maintenance Division staff ensures that all City facilities are safe and clean by providing management, maintenance and inspection of City/District buildings and equipment, develop ongoing maintenance systems and procedures, provide efficient, timely and quality service to maintain the 150,748 square feet of diverse facilities for the hours of operation that meet community needs and industry standards.

Although the Building Maintenance Division has experienced a number of significant changes in the division’s reporting relationships and organizational structure since FY 2019-2020, the day-to-day operations and goals have not changed for the Division’s staff, which consists of consists of a 50% Manager (shared with the Vehicle Maintenance Division), one (1) Lead Building Maintenance Worker and three (3) Building Maintenance Worker I/II positions with supervisory, engineering and administrative support.

In FY 2022-2023, Building Maintenance completed the following projects in addition to routine and emergency repair and preventative maintenance:
•Remodeled the City Manager and City Council offices
•Installed shut-off valves at the Corporation Yard employees’ bathrooms •Upgraded the holiday floating tree platform
•Renovated the Recreation Center kitchen to receive a permit to operate •Replaced the metal tracks at the employees’ gate at the Corporation Yard •Retrofit exterior lights at the teen Center to energy-efficient LED •Deployed compost recycling receptacles and signage in all City buildings in compliance with SB 1383
•Installed cleanups at Edgewater Park bathrooms

6.11 Attachment 8 - BMF Narrative FY 2023-24

270

DATE: March 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 Manager

FROM: Julie Paping, Administrative Services Director
DEPARTMENT: Administrative Services
SUBJECT: FY 2023-2024 SELF-INSURANCE FUND BUDGET

RECOMMENDATION
City/EMID ("City") staff seeks reaffirmation of the City Council/EMID Board of Directors' ("City Council") policy to maintain a minimum Self-Insurance Fund Reserve Balance of $1 million. In addition, staff seeks City Council direction for staff to prepare the FY 2023-2024 budget with department assessments in the table below.

BACKGROUND/ANALYSIS
Attachment 1 is the analysis of internal service charges and the preliminary proposed budget for FY 2023-2024 for the Self-Insurance Fund. The analysis shows the audited ending fund balance from FY 2021-2022 (June 30, 2022) as $984,847. With revenues and expenditures projected through June 30, 2023, the estimated fund balance beginning FY 2023-2024 will be $989,547 which is slightly below the $1 million reserve target. While the general liability premium is projected higher than prior years, the City Council’s conservative approach to handling claims’ helps to keep the expenditures within budget.

Expenditures
Expenditures in this fund represent the Pooled Liability Assurance Network Joint Power’s Authority (PLAN JPA) premium and an allowance for expenses that may be incurred below the $100,000 liability Self-Insured Retention (SIR) and property and

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vehicle damage deductibles.

For FY 2023-2024, the amount budgeted for premiums includes an increase of approximately 17.5% above the previous year which reflects ongoing volatility in the insurance market that continues to experience considerable losses in natural disasters, cyber-attacks, and fires throughout the United States and in California. This volatility has also resulted in several insurance providers exiting the California market, resulting in fewer providers to provide competitive insurance quotes for the group. PLAN JPA currently uses a third-party claims administrator, Sedgwick, to assist with claims administration. PLAN JPA’s goal of maintaining the pool’s funding at the 65% confidence level for liability and 70% for property, and the ongoing impact of natural disasters on property insurance premiums are actively being addressed by the PLAN JPA Board.

The actual PLAN JPA liability, property, and cyber premiums will not be finalized until around June 2023, so the figures may be adjusted, if needed, in the final FY 2023-2024 budget prior to adoption. Expenditures within the City’s SIR are estimated to be at or under $260,000, based on current experience.

Revenues/Internal Service Charges
Revenues are derived from internal service charges to the City General Fund, Vehicle Replacement Fund, Water Fund, and Wastewater Fund; interest earnings; and any rebates of the PLAN JPA premiums based on positive experience and PLAN JPA policy. There are no anticipated rebates from PLAN JPA and there are expected additional expenses associated with premium increases, as well as costs associated with PLAN JPA’s administrative overhead and the goal to fund at a higher confidence level.

Based upon projected reserves at the end of FY 2022-2023 which are projected slightly below the $1 million reserve and the projected expenditures for FY 2023-2024, Self- Insurance internal services charges in the following budgets will reflect the assessments as shown below.

Budget Budgeted
FY2022-2023
Proposed
FY2023-2024
Increase
(Decrease)
Revenue
General Fund - City
Manager's Department $536,953 $683,217 $146,264
Vehicle Replacement
Fund $155,120 $197,374 $42,254
Water Fund $250,578 $318,835 $68,257
Wastewater Fund $250,578 $318,835 $68,257
Interest $4,400 $25,000 $20,600
Total $1,197,629 $1,543,261 $345,632

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California Environmental Quality Act
Not Applicable

FISCAL IMPACT
As noted above, the increase to the Self Insurance Fund Budget is currently projected to be $345,632. Staff will continue to monitor progress as PLAN JPA works to finalize the cost for FY 2023-2024 and will report back on any adjustments to the above projections.

CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
This item supports the City Council’s Vision and Mission by promoting a sustainable economic environment in a very challenging insurance market. Our participation in PLAN JPA allows the City to limit excessive liability exposures by sharing the risk among other government agencies, allowing the organization to focus on delivering programs and services while protecting the community’s assets and properties.

ATTACHMENTS:

Attachment 1 - FY 2023-2024 Self Insurance Fund Internal Service Charges Analysis and Proposed Budget
Attachment 2 - FY 2023-2024 Self Insurance Fund Budget Narrative

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ATTACHMENT 1
FY 2023/2024 SELF INSURANCE FUND INTERNAL SERVICE CHARGES Fund Balance 6/30/2022 (Actual) 984,847$
From FY 2022/2023 CAFR
Original Projected
Budget 6/30/2023
Revenues FY 2022/2023 1,197,629$ 1,208,229$ 1,208,229$ Department Assessments 1,193,229 1,193,229
City GF 536,953$
Vehicle 155,120$
Water 250,578$
Wastewater 250,578$
Interest Earnings 4,400$ 15,000$
Expenditures FY 2022/2023 1,343,529$ 1,203,529$ (1,203,529)$ SIR - New Claims 130,000$ 60,000$
SIR - Existing Claims 130,000$ 60,000$
Liability/Property/Vehicle Premium 1,042,433$ 1,042,433$ All Risk & Bond (includes Cyber and Storage Tank) 40,096$ 40,096$ Supplies and Services 1,000$ 1,000$
Fund Balance 6/30/2023 (Projected) 989,547$
Proposed
Budget
Revenues FY 2023/2024 1,543,261$
Department Assessments 1,518,261$
City GF 45.0% 683,217$
Vehicle 13.0% 197,374$
Water 21.0% 318,835$
Wastewater 21.0% 318,835$
Interest Earnings 25,000$
Expenditures FY 2023/2024 1,532,807$
SIR - New Claims 130,000$
SIR - Existing Claims 130,000$
Liability/Property/Vehicle Premium 1,222,251$
All Risk & Bond (includes Cyber and Storage Tank) 49,556$ Supplies and Services 1,000$
Fund Balance 6/30/2024 (Projected) 1,000,001$
Target Fund Balance (1,000,000)$
Difference 1$

6.12 Attachment 1 - FY 2023-2024 Self Insurance Fund Internal Service Charges Analysis and Proposed Budget

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Self Insurance Fund

The Self Insurance Fund was established as a cost savings tool to address the high cost of purchasing commercial liability insurance. The City/District currently has a liability self -insured retention of $100,000, meaning that the City/District pays all expenses associated with a claim up to the first $100,000.

The City of Foster City is a member of a self -insured insurance pool known as Pooled Liability Assurance Network (PLAN) JPA that provides general liability coverage from $100,000 to $25,000,000 per claim. Any claim over $25,000,000 is the City’s responsibility. The pool also jointly purchases all -risk (property) and public officials’ bond insurance coverage for member agencies. PLAN JPA offers additional insurance, and the City participates in an enhanced cyber insurance program.

Expenditures in this fund represent the PLAN JPA premium and an allowance for expenses that may be incurred below the $100,000 liability self -insured retention, as well as property and vehic le damage deductibles. PLAN JPA premiums are largely based on the member’s payroll, services provided, and the value of property insured.

Revenues are derived from assessments to the City General Fund, vehicle replacement fund, water fund and wastewater/s ewer fund; interest earnings; and any rebates of the PLAN JPA premiums based on positive experience and PLAN policy. PLAN JPA also offers a grant fund program to support member agencies with their safety and risk management programs.

The Self-Insurance Fund is funded to a target reserve level of $1 million.

6.12 Attachment 2 - FY2023-2024 Self Insurance Fund Budget Narrative

275

DATE: March 27, 2023

TO: Mayor and Members of the City Council
VIA: Stefan Chatwin, City Manager

FROM: Rob Lasky, IT Manager
Julie Paping, Administrative Services Director
DEPARTMENT: Administrative Services
SUBJECT: Information Technology Fund Budget and Internal Service Charges for FY 2023-2024

RECOMMENDATION
It is recommended that the City Council review this report and its attachments and provide policy direction on the proposed Information Technology (IT) internal service expenditures budget, including the scheduled replacement purchases and Information Technology Fund charges in the Fiscal Year 2023-2024 Preliminary Budget.

BACKGROUND/ANALYSIS
Attached are the spreadsheets for the Information Technology Equipment Replacement Fund. The City/EMID (“City”) continues to use the Internal Service Fund Methodology developed in FY 2005-2006 in determining the Information Technology Replacement Fund listing for FY 2023-2024.

On an annual basis, the IT Division reviews with each department their list of assets to determine which items are no longer needed, which equipment should be replaced, or which new assets will be requested. The replacement lives and values of each asset are also reviewed by the IT Division and adjusted where necessary. Assets that are fully funded are not automatically

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replaced. If it is determined that it is in good working condition, the asset accrual is frozen and no replacement charges are accrued.

Total IT internal service expenditures for FY 2023-2024 will be $ 2,940,381 which is $537,190 (or ~ 22.35%) higher than internal service expenditures for FY 2022-2023 of $2,403,191. The main reason for the increase is that FY 2023- 24 has higher cost capital projects planned than in FY 2022-23. Some of those new high-cost capital projects are: Phone System Replacement for $275,000, Virtualization Servers Replacement for $75,000, and Scheduling Software for $75,000.

The following list summarizes the items that had the highest impact in the changes to the IT fund:
Phone System Replacement: The City’s current Mitel/Shoretel phone system is coming up on end-of-support and must be replaced. The current system was purchased in 2012. Estimated cost of replacement is $275,000.
Server Replacements: The servers that are up for replacement include our Virtualization Servers ($75,000), the IBMi (formerly AS/400) Server ($60,000) and the Backup System ($60,000). Combined cost of replacements is $195,000.
Scheduling Software: Various departments have been using software developed in-house for timekeeping/shift scheduling for many years.

Since IT no longer has a developer on staff, we are looking to off-the- shelf software to bring us longer term supportability and enhanced features that departments need. Estimated cost is $75,000. Security Enhancements: Door/Gate Security System Updates ($50,000) will upgrade the controller hardware of our door keycard system to allow us to update the management software to a modern and supported version. Multi-factor Authentication Keyfobs ($7,500) are physical authentication keys for users without City-issued cell phones which will increase security when logging on remotely. Estimated cost is $57,500 Miscellaneous assets were deferred by departments, but not enough to offset the increases listed above. See Attachment 6 for added or deleted items

CALIFORNIA ENVIRONMENTAL QUALITY ACT
Not Applicable

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FISCAL IMPACT
Total IT internal service expenditures for FY 2023-2024 will be $2,940,381 which is $ 537,190 (or ~ 22.351%) higher than internal service charges for FY 2022-2023 of $2,403,191. The main reason for the increase is that FY 2023- 24 has higher cost capital projects planned than in FY 2022-23.

CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Innovation and Sustainability
ATTACHMENTS:
Attachment 1 – Draft FY 2023-2024 Operating Budget – Information Technology Fund
Attachment 2 – Department Internal Services Charges Allocation Summary for FY 2023-2024
Attachment 3 – Information Technology Fund Comparison for FY 2023- 2024
Attachment 4 – Internal Service Fund Variance Analysis Attachment 5 – Schedule of Items to be Replaced for FY 2023-2024 Attachment 6 – Items Added to or Deleted From the Equipment Replacement FY 2023-2024
Attachment 7 – Changes to Estimated Useful Lives for FY 2023-2024 Attachment 8 – Changes to Replacement Values for FY 2023-2024 Attachment 9 – Budget Narrative for FY 2023-2024 - Information Technology Fund

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Attachment 1
Proposed: Fund 504 - Information Technology Fund
FY 2023-2024 EXPENDITURE BUDGET REQUEST
Account Name Account String Current Description FY 22-23 Budget 2023-2024
Proposed Budget
TOTALS $2,403,191 $2,940,381
PERMANENT SALARIES 504-0160-419-41-10 $643,003 $662,130 PERS RETIREMENT 504-0160-419-41-21 $65,349 $74,666
FLEX ALLOWANCE 504-0160-419-41-35 $135,996 $125,411
WORKERS COMPENSATION 504-0160-419-41-36 $3,997 $3,859
OTHER FRINGE BENEFITS 504-0160-419-41-39 $40,440 $41,110 COMPENSATED ABSENCES 504-0160-419-41-40 $20,145 $17,334 GASB68 PENSION EXP-PERS 504-0160-419-41-41 $51,000 $51,000 GASB75 OPEB EXP-PEMHCA 504-0160-419-41-42 $6,000 $6,000 PEMHCA 504-0160-419-41-54 $3,648 $5,472
EMPLOYEE BENEFIT-PERS UAL504-0160-419-41-61 $165,898 $140,049 SPECIAL DEPARTMENTAL SUP504-0160-419-42-40 CONTINGENCY / EMERGENCY EQUIPMENT REPLACEMENT $50,000 $50,000 COPY EXPENSE 504-0160-419-42-41 $750 $750
POSTAGE EXPENSE 504-0160-419-42-42 POSTAGE EXPENSE - CORRESPONDENCE, PACKAGES, ETC. $300 $300 GENERAL OFFICE SUPPLIES 504-0160-419-42-43 $400 $400
TOOLS & EQUIP(<5000@ITEM)504-0160-419-42-45 REPLACEMENT MONITORS & PROJECTORS & CAMERAS (AS NEEDED) $9,000 $9,000 MAINT-FACILITY & EQUIP 504-0160-419-42-46 $736,500 $768,500 MAINT-FACILITY & EQUIP 504-0160-419-42-46 CLOSED CAPTIONING SERVICES FOR MEETING VIDEOS $15,000 $15,000 MAINT-FACILITY & EQUIP 504-0160-419-42-46 PENSION SOFTWARE MAINTENANCE $13,000 $0 MAINT-FACILITY & EQUIP 504-0160-419-42-46 TELEPHONE SYSTEM MAINTENANCE $14,000 $14,000 MAINT-FACILITY & EQUIP 504-0160-419-42-46 AGENDA/MINUTES/VIDEO STREAMING ANNUAL FEE $25,000 $25,000 MAINT-FACILITY & EQUIP 504-0160-419-42-46 GIS AERIAL PHOTOGRAPHY SUBSCRIPTION $10,000 $10,000 MAINT-FACILITY & EQUIP 504-0160-419-42-46 WEBSITE CONTENT MANAGEMENT SOFTWARE MAINT $7,500 $7,500 MAINT-FACILITY & EQUIP 504-0160-419-42-46 MICROSOFT SERVER, OFFICE AND CAL LICENSES - EA $90,000 $90,000 MAINT-FACILITY & EQUIP 504-0160-419-42-46 POLICE SOFTWARE MAINTENANCE (CAD/RMS, OTHERS) $70,000 $80,000 MAINT-FACILITY & EQUIP 504-0160-419-42-46 OPENGOV BUDGETING SOFTWARE MAINTENANCE $51,000 $51,000 MAINT-FACILITY & EQUIP 504-0160-419-42-46 GIS SOFTWARE MAINTENANCE $40,000 $43,000 MAINT-FACILITY & EQUIP 504-0160-419-42-46 BACKUP HARDWARE MAINT AND CLOUD REPLICATION $26,000 $28,000 MAINT-FACILITY & EQUIP 504-0160-419-42-46 BUSINESS CONTINUITY SERVICES $20,000 $20,000 MAINT-FACILITY & EQUIP 504-0160-419-42-46 ANTIVIRUS SOFTWARE MAINTENANCE $15,000 $15,000 MAINT-FACILITY & EQUIP 504-0160-419-42-46 FIREWALL MAINTENANCE $15,000 $15,000 MAINT-FACILITY & EQUIP 504-0160-419-42-46 CLOUD BASED EMAIL ARCHIVE/SPAM FILTER/BACKUP $20,000 $21,000 MAINT-FACILITY & EQUIP 504-0160-419-42-46 PRINTER&SCANNER MAINT/TONER/REPAIR $7,000 $7,000 MAINT-FACILITY & EQUIP 504-0160-419-42-46 CITIZEN REQUEST MAINTENANCE APP (SeeClickFix) $7,000 $7,000 MAINT-FACILITY & EQUIP 504-0160-419-42-46 COST ALLOCATION SOFTWARE MAINTENANCE $5,000 $0 MAINT-FACILITY & EQUIP 504-0160-419-42-46 RECREATION CLASS REGISTRATION SOFTWARE MAINT $8,000 $8,000 MAINT-FACILITY & EQUIP 504-0160-419-42-46 OTHER SOFTWARE MAINTENANCE (<$3000) $28,000 $25,000 MAINT-FACILITY & EQUIP 504-0160-419-42-46 DOCUMENT MANAGEMENT SOFTWARE MAINTENANCE $20,000 $27,000 MAINT-FACILITY & EQUIP 504-0160-419-42-46 HTE SOFTWARE ANNUAL MAINTENANCE $69,000 $72,000 MAINT-FACILITY & EQUIP 504-0160-419-42-46 POLICE DISPATCH BATTERY BACKUP MAINTENANCE $3,500 $3,500 MAINT-FACILITY & EQUIP 504-0160-419-42-46 ISeries SOFTWARE & HARDWARE MAINTENANCE $9,000 $10,000 MAINT-FACILITY & EQUIP 504-0160-419-42-46 E-SIGNATURE SOFTWARE SUBSCRIPTIONS $13,000 $13,000 MAINT-FACILITY & EQUIP 504-0160-419-42-46 VMWARE SOFTWARE MAINTENANCE $12,000 $12,000 MAINT-FACILITY & EQUIP 504-0160-419-42-46 ADOBE SOFTWARE SUBSCRIPTIONS $8,000 $9,000 MAINT-FACILITY & EQUIP 504-0160-419-42-46 REMOTE MONITORING/MANAGEMENT (RMM) SOFTWARE SUBSCRIPTION$7,500 $7,500 MAINT-FACILITY & EQUIP 504-0160-419-42-46 SOCIAL MEDIA SENTIMENT ANALYSIS SOFTWARE SUBSCRIPTION 3-YEAR (ZENCITY) $25,000 $0 MAINT-FACILITY & EQUIP 504-0160-419-42-46 PUBLIC ENGAGEMENT SOFTWARE $20,000 $20,000 MAINT-FACILITY & EQUIP 504-0160-419-42-46 ZOOM SOFTWARE SUBSCRIPTIONS $10,000 $10,000 MAINT-FACILITY & EQUIP 504-0160-419-42-46 MANAGED SECURITY SERVICES $50,000 $50,000 MAINT-FACILITY & EQUIP 504-0160-419-42-46 COMCAST DIGITAL BOXES $3,000 $3,000

6.13 Attachment #1 - FY 2023-2024 Proposed Expenditures 2022-03-07

279

Attachment 1
Proposed: Fund 504 - Information Technology Fund
FY 2023-2024 EXPENDITURE BUDGET REQUEST
Account Name Account String Current Description FY 22-23 Budget 2023-2024
Proposed Budget
MAINT-FACILITY & EQUIP 504-0160-419-42-46 CMMS SOFTWARE MAINTENANCE $0 $34,000 MAINT-FACILITY & EQUIP 504-0160-419-42-46 APPLICANT TRACKING/ONBOARDING SOFTWARE SUBSCRIPTION $0 $10,000 MAINT-FACILITY & EQUIP 504-0160-419-42-46 EMPLOYEE PERFORMANCE REVIEW SOFTWARE SUBSCRIPTION $0 $6,000 UTILITIES & COMMUNICATION504-0160-419-42-48 $115,000 $131,000 UTILITIES & COMMUNICATION504-0160-419-42-48 AT&T TELEPHONE SERVICES $20,000 $20,000 UTILITIES & COMMUNICATION504-0160-419-42-48 CELL PHONE (T-MOBILE) $37,000 $42,000 UTILITIES & COMMUNICATION504-0160-419-42-48 INTERNET SERVICE PROVIDER $51,000 $62,000 UTILITIES & COMMUNICATION504-0160-419-42-48 DATA ACCESS IN VEHICLES (PD) $7,000 $7,000 CONTRACT, PROF, SPEC SVCS504-0160-419-42-51 $63,000 $63,000 CONTRACT, PROF, SPEC SVCS 504-0160-419-42-51 AS400 CONSULTING SERVICES $3,000 $3,000 CONTRACT, PROF, SPEC SVCS 504-0160-419-42-51 CARRYOVER - IT STRATEGIC PLAN CONSULTANT $60,000 $60,000 MEMBERSHIP,DUES,SUBSCRIPT504-0160-419-42-53 $900 $900
TRAVEL,CONFERENCE,MEETING504-0160-419-42-54 $4,500 $4,500 TRAVEL,CONFERENCE,MEETING504-0160-419-42-54 SUNGARD USER CONFERENCE (4) $9,000 $9,000 TRAVEL,CONFERENCE,MEETING504-0160-419-42-54 STAFF CONFERENCES $4,500 $4,500 TRAVEL,CONFERENCE,MEETING504-0160-419-42-54 COVID-19 ADJUSTMENT - SUNGARD USER CONFERENCE (4) ($9,000) ($9,000) TRAINING 504-0160-419-42-55 $10,000 $10,000
TRAINING 504-0160-419-42-55 IT TECHNICAL TRAINING $7,500 $7,500 TRAINING 504-0160-419-42-55 SUNGARD END USER WEBINAR TRAININGS $5,000 $5,000 TRAINING 504-0160-419-42-55 SECURITY AWARENESS TRAINING SUBSCRIPTION $2,500 $2,500 TRAINING 504-0160-419-42-55 COVID-19 ADJUSTMENT - SUNGARD END USER WEBINAR TRAININGS ($5,000) ($5,000) PC, SOFTWARE & HARDWARE504-0160-419-42-59 $22,000 $22,000 PC, SOFTWARE & HARDWARE504-0160-419-42-59 SOFTWARE & HARDWARE TOOLS - IT (<$1000) $5,000 $5,000 PC, SOFTWARE & HARDWARE504-0160-419-42-59 PRINTER/SCANNER REPLACEMENTS (AS NEEDED) $3,000 $3,000 PC, SOFTWARE & HARDWARE504-0160-419-42-59 SOFTWARE & HARDWARE TOOLS - CITYWIDE (<$1000) $14,000 $14,000 ALLOCATION OF OVERHEAD 504-0160-419-42-63 $118,165 $0
COMPUTER EQUIPMENT 504-0160-419-43-88 $137,200 $753,000 COMPUTER EQUIPMENT 504-0160-419-43-88 LAPTOP REPLACEMENTS $4,000 $7,400 COMPUTER EQUIPMENT 504-0160-419-43-88 DESKTOP PC REPLACEMENTS $0 $35,100 COMPUTER EQUIPMENT 504-0160-419-43-88 EDGE NETWORK SWITCHES $59,000 $0 COMPUTER EQUIPMENT 504-0160-419-43-88 WIFI ACCESS POINTS $20,000 $0 COMPUTER EQUIPMENT 504-0160-419-43-88 COUNCIL IPAD REPLACEMENTS $7,000 $0 COMPUTER EQUIPMENT 504-0160-419-43-88 PATROL CAR MODEMS $0 $40,000 COMPUTER EQUIPMENT 504-0160-419-43-88 AS/400 SERVER REPLACEMENT $0 $60,000 COMPUTER EQUIPMENT 504-0160-419-43-88 TRAINING LAPTOP REPLACEMENTS $0 $15,000 COMPUTER EQUIPMENT 504-0160-419-43-88 VMWARE SERVER REPLACEMENT $0 $75,000 COMPUTER EQUIPMENT 504-0160-419-43-88 BACKUP SYSTEM REPLACEMENT $0 $60,000 COMPUTER EQUIPMENT 504-0160-419-43-88 UPS BATTERY REPLACEMENTS $0 $8,000 COMPUTER EQUIPMENT 504-0160-419-43-88 PHONE SYSTEM REPLACEMENT $0 $275,000 COMPUTER EQUIPMENT 504-0160-419-43-88 COPIER REPLACEMENT $0 $15,000 COMPUTER EQUIPMENT 504-0160-419-43-88 SCHEDULING SOFTWARE FOR POLICE $0 $75,000 COMPUTER EQUIPMENT 504-0160-419-43-88 DOOR/GATE SECURITY SYSTEM UPDATES $0 $50,000 COMPUTER EQUIPMENT 504-0160-419-43-88 MULTI-FACTOR AUTHENTICATION KEYFOBS $0 $7,500 COMPUTER EQUIPMENT 504-0160-419-43-88 911 DIGITAL RECORDING LOGGING SYSTEM $0 $30,000

6.13 Attachment #1 - FY 2023-2024 Proposed Expenditures 2022-03-07

280

Attachment # 2
Information Technology Internal Services Fund
Department Internal Services Charges Allocation Summary For fiscal year beginning July 1, 2023
Department / Division
Personnel
Allocation
Supplies & Services
Allocation Subtotal
Department Asset
Replacement
Charges Subtotal
Reallocations
to Funds
New
Capital
Outlay
Total Internal
Service Charge
Allocations
CC = City Clerk 54,081 43,975 98,056 3,438 3.00% 13,184 114,678.82 (37,271) - 77,408 HR = Human Resource - - - 0.00% - 0.00 - - - FS = Financial Services 148,723 109,993 258,717 2,588 8.25% 36,257 297,561.35 (96,707) - 200,854 CD = Community Development 112,669 87,560 200,229 3,046 6.25% 27,467 230,742.41 (74,991) - 155,751 CM = City Manager 54,081 43,175 97,256 3,135 3.00% 13,184 113,575.49 (36,912) - 76,663 PD = Police Dept 414,623 428,237 842,860 42,947 23.00% 101,080 986,886.73 (320,738) - 666,149 FD = Fire Dept - - - - 0.00% - 0.00 - - - PW = Public Works 108,162 86,950 195,112 8,323 6.00% 26,369 229,803.96 (74,686) - 155,118 RE = Recreation & Parks 54,081 49,925 104,006 11,307 3.00% 13,184 128,497.16 (41,762) - 86,736 AS = Admin Services 54,081 41,875 95,956 1,312 3.00% 13,184 110,452.16 (35,897) 74,555 PM = Parks Maint 49,574 45,064 94,639 3,724 2.75% 12,086 110,448.78 (35,896) - 74,553 CY = Corp Yard (PW Maintenance) 54,081 45,375 99,456 6,243 3.00% 13,184 118,883.82 (38,637) - 80,247 Total General Fund 1,104,158 982,130 2,086,288 86,062 61.25% 269,181 2,441,530.70 (793,497) - 1,648,034 CalOpps 22,873 - 22,873 - 0.00% - 22,873 - 22,873 Permit Technology Fee Fund - 11,700 11,700 29,917 0.00% 41,617 - 41,617 Fire JPA 38,244 3,600 41,844 0.00% 41,844 41,844 CDA - - - - 0.00% - - - - - Water Enterprise Fund - 12,000 12,000 15.00% - 12,000 366,230 - 378,230 Sewer Enterprise Fund - 12,000 12,000 15.00% - 12,000 366,230 - 378,230 Vehicle Maintenance Fund - - - - 0.75% - - 18,311 - 18,311 Bldg Maintenance Fund - - - - 1.75% - - 42,727 - 42,727 1,165,275 1,021,430 2,186,704 115,979 93.75% 269,181 2,571,864 (0) 2,571,866 1,127,031 -
105,601 10,377
Personnel Allocation 1,127,031 1,127,031$ - 11,080 FY 22-23 Charges 2,529,669 Supplies & Services Budget 1,021,430 Increase(Decrease) 353 Total Allocated Costs 2,148,461
Contingency Funding 50,000 dif from last year 0.01% Carryover -
Capital Outlay 753,000
Total Operating Budget 2,951,461
Less Contingency used (11,080)
FY 23-24 Operating Budget 2,940,381 <-- This amount agrees to the line item detail in the budget (attached).

Citywide IT Replacement
Charges
% of Total Amount

6.13 Attachment #2 - Department Internal Service Charges FY 2023-2024

281

Information Technology Fund Comparison - Attachment 3
Approved FY
2022-23
Requested FY
2023-2024
Increase
(Decrease) Notes
Account
4388 Capital Outlay $137,200 $753,000 $615,800 1
4110 Salaries $643,003 $662,130 $19,127 2
4121 Benefits-PERS Retirement $65,349 $74,666 $9,317 4
4135 Benefits-Flex Allowance $135,996 $125,411 ($10,585) 4 4136 Benefits-Workers Compensation $3,997 $3,859 ($138) 4 4139 Benefits-Other Fringe Benefits $40,440 $41,110 $670 4 4140 Compensated Absences $20,145 $17,334 ($2,811) 4
4141 GASB68 Pension Exp-PERS $51,000 $51,000 $0 4
4142 GASB75 OPEB Exp-PEMHCA $6,000 $6,000 $0 4
4154 PEMCHA $3,648 $5,472 $1,824 4
4161 Benefits-PERS UAL $165,898 $140,049 ($25,849) 4
4240 Contingency Replacement $50,000 $50,000 $0 5
4241 Copies $750 $750 $0 6
4242 Postage $300 $300 $0 7
4243 Office Supplies $400 $400 $0 8
4245 Tools and Equipment $9,000 $9,000 $0 9
4246 Maintenance $736,500 $768,500 $32,000 10
4248 Utilities and Communications $115,000 $131,000 $16,000 11 4251 Consulting and Contracting $63,000 $63,000 $0 12
4253 Memberships and Dues $900 $900 $0 13
4254 Travel, Conferences, and Meetings$4,500 $4,500 $0 14 4255 Training $10,000 $10,000 $0 15
4259 Misc Software and Hardware $22,000 $22,000 $0 16
4263 Indirect Cost Allocation $118,165 $0 ($118,165) 17 $2,403,191 $2,940,381 $537,190
Detailed Analysis:

Increase
(Decrease)
Rounded to
nearest $1,000
Note 1 Capital Outlay 616,000
Note 2 Salaries 19,000
Note 3 Part-Time Salary -
Note 4 Benefits (29,000)
Note 5 Contingency Replacement -
Note 6 Copies -
Note 7 Postage -
Note 8 Office Supplies -
Note 9 Tools and Equipment -
Note 10 Maintenance 32,000
Note 11 Utilities and Communications 16,000
Note 12 Consulting and Contracting -
Note 13 Memberships and Dues -
Note 14 Travel, Conferences, and Meetings -
Note 15 Training -
Note 16 Misc Software and Hardware -
Note 17 Indirect Cost Allocation (118,000)
Internal Allocations no longer applied to IT as of 2023-24 Net Increase 536,000
Increase due to transitioning from Comcast Inet to paid circuits Increase is due to multiple large capital projects planned for 23-24 No part time hours are requested in 2023-24
Increase is due to maintenace on newly added software systems Decreased due to changes in benefit formulas
Increase due to COLA
Unchanged
Unchanged
Unchanged
Unchanged
Unchanged
Unchanged
Unchanged
Unchanged
Unchanged
Unchanged

6.13 Attachment #3 - ITF Fund Comparison 2023-2024

282

ATTACHMENT #4

INTERNAL SERVICE FUND CHARGES
INFORMATION TECHNOLOGY FUND 504
FY 22/23 FY 23/24 Variance Notes
0110 CMO Admin 87,208 $ 76,663 $ (10,545) $ 1 0210 City Clerk Admin 62,451 $ 77,408 $ 14,957 $ 2 0510 Park & Rec Admin 93,254 $ 86,736 $ (6,518) $ 3 0630 PD Admin 671,149 $ 666,149 $ (5,000) $ 4 0710 Fire Admin - $ - $ - $ 5 0750 Fire JPA 39,867 $ 41,844 $ 1,977 $ 6 0810 Planning Admin 76,259 $ 77,876 $ 1,617 $ 7 0820 Building 76,259 $ 77,875 $ 1,616 $ 8 0910 PW Admin & Engineering 156,684 $ 155,118 $ (1,566) $ 9 0920 PW Lagoons & Levees 35,434 $ 40,124 $ 4,690 $ 10 0930 PW Streets 35,434 $ 40,123 $ 4,689 $ 11 0940 Parks Maintenance 77,263 $ 74,553 $ (2,710) $ 12 1110 Fin Admin 39,705 $ 40,171 $ 466 $ 13 1120 Fin Genl Acctg 79,410 $ 80,342 $ 932 $ 14 1130 Fin Utilities 59,557 $ 60,256 $ 699 $ 15 1140 Tax & Licenses 19,852 $ 20,085 $ 233 $ 16 1210 HR Admin 57,997 $ - $ (57,997)$ 17 9999 Admin Services - $ 74,555$ 74,555 $ 18 114 CALOPPS 12,458 $ 22,873 $ 10,415 $ 19 127 BAERS -$ - $ - $ 20 130 Technology Maintenance/Replacement 41,617 $ 41,617 $ - $ 21 401 Water Enterprise 373,759 $ 378,230 $ 4,471 $ 22 451 Wastewater Enterprise 373,759 $ 378,230 $ 4,471 $ 23 501 Vehicle Replacement 18,088 $ 18,311 $ 223 $ 24 505 Building Maint 42,205 $ 42,727 $ 522 $ 25 Total All Funds 2,529,669 $ 2,571,866 $ 42,197 $ Detailed Analysis rounded to the nearest 1000
Note 1 Decrease due to formation of Admin Services (11,000) Note 2 Increase due to higher maintenance costs 15,000
Note 3 Decrease due to lower replacement costs (7,000)
Note 4 Decrease due to lower replacement costs (5,000)
Note 5 Unchanged -
Note 6 Charges to SMCFire for some IT support hours and server resources (raised by 5% from last FY 2021-22)
2,000
Note 7 Relatively Unchanged 2,000
Note 8 Relatively Unchanged 2,000
Note 9 Relatively Unchanged (2,000)
Note 10 Increase due to higher maintenance costs 5,000
Note 11 Increase due to higher maintenance costs 5,000
Note 12 Decrease due to lower replacement costs (3,000) Note 13 Unchanged -
Note 14 Unchanged -
Note 15 Unchanged -
Note 16 Unchanged -
Note 17 HR has been absorbed by Admin Services (58,000) Note 18 Admin Services is a new department 75,000
Note 19 Increase due to accurately reflect IT time spent on Calopps 10,000 Note 20 BAERS has been dissolved -
Note 21 Unchanged -
Note 22 Increase due to higher maintenance costs 4,000
Note 23 Increase due to higher maintenance costs 4,000
Note 24 Unchanged -
Department Charged (Receiving Goods/Services)
https://fostercity-my.sharepoint.com/personal/rlasky_fostercity_org/Documents/Projects/Budget/2023-2024/staff report for 3-27 meeting/ATT 4 - Internal Service Fund Variance Analysis - IT.xlsx\INFO TECHNOLOGY 3/7/2023

6.13 Attachment #4 - Internal Service Fund Variance Analysis

283

Attachment # 5
City of Foster City
Information Technology Internal Services Fund
Schedule of Items to be Replaced
FY 2023-24
Item Description
Replacement
Cost
Desktop PC Replacements $35,100.00
Laptop Replacements $7,400.00
Patrol Car Modems $40,000.00
Backup System Replacememt $60,000.00
UPS Battery Replacements $8,000.00
Phone System Replacement $275,000.00
Copier Replacements $15,000.00
Scheduling Software for Police $75,000.00
Door/Gate Security System Updates $50,000.00
Multi-factor Authentication Keyfobs $7,500.00
AS/400 Server Replacement $60,000.00
Traing Laptop Replacements $15,000.00
Virualization Server Replacement $75,000.00
911 Digital Recording Logging System $30,000.00
Subtotal - New Replacements FY 23-24 753,000 $
No FY 22-23 Capital Carryovers $0.00
Subtotal - Carryovers from FY 22-23 - $
Total - Replacements 753,000 $

6.13 Attachment #5 - Schedule of Items to be Replaced FY 2023-2024

284

IT ISF Revised Analysis
Attachment # 6
City of Foster City
Information Technology Internal Services Fund
Items Added To or Deleted From the Equipment Replacement List For FY 2023-2024
Description Department
Date
Purchased
(Anticipated
to be
purchased)
Replacement
Value Comments (if any)
Items Added
Patrol Car Modems Police 7/1/2023 40,000 Replacements for the USB cellular modems in the Patrol Cars with Cradlepoint cellular
routers.

Scheduling Software
Citywide 7/1/2023 75,000 Replacement for timekeeping/staff scheduling systems that were developed in-house with
more fully featured off-the-shelf software.

Door/Gate Control Software Upgrade
Citywide 7/1/2023 50,000 Upgrades for the controller hardware and software for the City's Keri System door/gate
keycard access system.

MFA Physical Keys
Citywide 7/1/2023 7,500 To purchase multi-factor authentication (MFA) keys for staff memebrs that need to work
remotely but do not have City-issued cell
phones.

Items Deleted
-NONE-

6.13 Attachment #6 - Items Added or Deleted FY 2023-2024

285

IT Revised Analysis
Attachment # 7
Description Department
Date
Purchased
(Anticipated
to be
purchased)
Original
Useful
Life
(Years)
Revised
Useful
Life
(Years)
Increase
(Decrease) Comments (if any)
-NONE-
For FY 2023-2024
Changes to Estimated Useful Lives
Information Technology Internal Services Fund
City of Foster City

6.13 Attachment #7 - Changes to Useful Life FY 2023-2024

286

IT ISF Revised Analysis
Attachment # 8
Description Department Date
Purchased
(Anticipated
to be
purchased)
Original
Replacement
Value
Revised
Replacement
Value
Increase
(Decrease)
Training Computers Citywide 7/1/2023 8,500 15,000 6,500 IBMi (AS/400) Sever Citywide 7/1/2023 40,000 60,000 20,000 Backup Solution Citywide 7/1/2023 30,000 60,000 30,000
City of Foster City
Information Technology Internal Services Fund
Changes to Replacement Values
For FY 2023-2024

6.13 Attachment #8 - Changes to Replacement Values FY 2023-2024

287

ATTACHMENT #9
4 9
1 Information Technology Fund
The role of Information Technology is to provide responsive, secure and effective support of the City’s network, applications and communication services by coordinating and overseeing the budgeting, planning, implementation, operation and maintenance of City-wide systems and ensure that systems development or implementation proceeds in a logical, integrated and cost-effective manner.

The Information Technology Fund is an Internal Services fund that accounts for the City's investment (both capital and people) in Information Technology. Operating departments are charged back for all of the expenses incurred in this fund based upon their utilization of such technology. Charge backs also include a charge for IT equipment replacement.

PROPOSED SERVICE LEVELS
The objective of the IT Division of the Administrative Services Department is to support and maintain the existing Information Technology infrastructures, enterprise-wide and department applications, systems and hardware. IT will continue to have as its highest priority the maintenance of existing network infrastructure, maintaining existing software solutions (of which public safety and financial applications will receive the highest priority of service), and providing desktop support for operating departments. IT will provide proactive assistance in helping departments review business processes, developing or acquiring new applications or revising existing applications and improving existing network infrastructure to support streamlined business processes. •Support and maintain the existing infrastructures, enterprise-wide and department applications, systems and hardware. •Maintain at all times the Public Safety applications and Financial Systems that have been identified as critical systems. High priority would be given to the services and systems that support the entire organization. •Support and maintain the existing applications developed by the City. In addition, support and maintain new development on an as-needed basis.
•Support and maintain the existing 3 rd party applications. Work with City departments to integrate new applications, systems or devices.
•Support and maintain network security, virus protection and network administration to protect the City’s infrastructure. •Maintain the City’s data / voice communication systems and Internet presence. •Provide staff training and support for maximum utilization of existing software applications and hardware.

6.13 Attachment #9 - IT Fund Narrative 2023-24

288

ATTACHMENT #9
4 9
1 The Information Technology Division’s on-going goals, completed initiatives and anticipated initiatives are included in the Administrative Services Department budget narrative.

Total IT internal service expenditures for FY 2023-2024 will be $ 2,951,461 which is $ 537,190 (or ~ 22.35%) higher than internal service expenditures for FY 2022-2023 of $2,403,191. The main reason for the increase is that higher cost capital projects are planned for FY 2023-24 than those in FY 2022-23. Some of those new high-cost capital projects are: Phone System Replacement for $275,000, Virtualization Servers for $75,000, and Scheduling Software for $75,000.

The following table summarizes the items that had the highest impact in the changes to the IT fund:

Key Projects listed in City Council’s Strategic Priorities initiatives for 2023 - Innovation and Sustainability
Fiscal
Impact
Phone System Replacement: The City’s current Mitel/Shoretel phone system is coming up on end-of-support and must be replaced. The current system was purchased in 2012. $275,000
Server Replacements: The servers that are up for replacement include our Virtualization Servers ($75,000), the IBMi (formerly AS/400) Server ($60,000) and the Backup System ($60,000). $195,000
Scheduling Software: Various departments have been using software developed in-house for timekeeping/shift scheduling for many years. Since IT no longer has a developer on staff, we are looking to off-the-shelf software to bring us longer term supportability and enhanced features that departments need. $75,000
Security Enhancements: Door/Gate Security System Updates ($50,000) will upgrade the controller hardware of our door keycard system to allow us to update the management software to a modern and supported version.

Multi-factor Authentication Keyfobs ($7,500) will provide physical authentication keys for to user to log on remotely, but do not have a City-issued cell phone to function as their authentication device. $57,500

6.13 Attachment #9 - IT Fund Narrative 2023-24

289