4858-4840-5098 v1
d. SECTION SEVEN: IMPROVEMENTS is amended by amending Section 7.4 to read in its entirety as follows:
“7.4 Capital Improvement Fund (CIRF):
(a) Effective July 1, 2023, five percent (5%) of all revenue generated and received from annual golf operations (driving range, golf course green fees, and short game practice center) shall be placed in a Capital Impro vement Reserve Fund (CIRF) to fund additional capital improvement projects through the Amended Lease t erm and any extension or renewal thereof.
(b) Expenditures for capital improvements funded out of this CIRF shall be approved in writing by the City prior to construction, which approval shall not be unreasonably withheld, and any funds remaining in the CIRF at the expiration of the Amended Lease t erm or any extension or renewal thereof shall inure to the benefit of the City.”
3. Consent for Improvement.
Pursuant to Section 7.1 of the Lease, Lessor hereby authorizes Lessee to install the trailer on the Premises in the location and manner described in Exhibit B, conditioned upon Lessee obtaining the Use Permit Modification and any other necessary government permits or authorizations to install and operate the Trailer.
4. Sublease.
The Parties agree that the Lease is hereby amended to provide that in addition to the amounts due pursuant to the Lease Section 5: Lease Rental Payments, Lessee shall during the initial term of the draft Sublease (Exhibit A) Section 1.2, Term, pay to the Lessor, additional monthly rental payments equal to five percent (5%) of the rent paid by Sublessee to Lessee. (a) The point of sale for all merchandise sold by Sublessee during the Sublease shall be Foster City, California.
(b) If Sublessee proposes to extend the sublease per Exhibit A, Section 7.3, Right of First Negotiation, beyond the initial term, Lessor shall have the right to approve or reject the proposed Sublease extension prior to the proposed effective date of the extension and to renegotiate the percentage of rent due to Lessor during the Sublease extension. In no instance shall the additional monthly rental payment due to Lessor per the Sublease extension be less than five percent (5%) of the Rent paid by Sublessee, per Exhibit A, Sublease Section 2.1, Monthly Rent.
5 . Other Provisions Remaining in Full Force and Effect. Except as amended above, all of the terms and conditions of the Lease, dated June 10, 1996, as a mended, shall remain in full force and effect. Any subsections not specifically identified above shall remain unchanged. [S
ignatures on Next Page]
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4858-4840-5098 v1
IN WITNESS WHEREOF, the parties have executed this Ninth Amendment to the Lease effective as of the 20th day of June, 2023.
LESSOR: LESSEE:
________
____________________
JON FROOMIN, Mayor
___________________________
VB Golf, LLC
LES
SOR:
________
____________________
JON FROOMIN, Board President
A
TTEST
________
____________________
Priscilla Schaus, City Clerk
AP
PROVED AS TO FORM:
________
____________________
Benjamin L. Stock, City Attorney
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EXHIBIT A-SUBLEASE AGREEMENT
6.12 Attachment 3 - Proposed Ninth Amendment
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SUBLEASE AGREEMENT
THIS SUBLEASE is made between the Landlord and the Tenant identified in the Basic Sublease Provisions below, and constitutes a Sublease between the parties of the "Subleased Premises" as identified in the Basic Sublease Provisions below, on the terms and conditions and with and subject to the covenants and agreements of the parties hereinafter set forth.
A. Basic Sublease Provisions.
The following are certain sublease provisions which are part of, and, in certain instances, referred to, in subsequent provisions of this Sublease:
1) Sublessor is under certain terms and obligations as defined in “Master Lease” executed in 1996, and therefore, all terms and conditions of this Sublease agreement shall be subject to the terms of the Master Lease and any revisions to the Master Lease between VB Golf LLC and the City of Foster City and the Estero Municipal Improvement District. 2) Date of Sublease: ____________
3) Sublessor's Name and Address: VB Golf, LLC, a Delaware Limited Liability Company dba Mariners Point Golf Center, whose address is 2401 East Third Avenue, Foster City, CA 94404
4) Sublessee’s Name and Address: ___________________
5) Premises: Food trailer, owned by Landlord for operating food service at Mariners Point Golf Center.
6) Expiration Date: _____________
7) Permitted Use: Operation of a food trailer selling food, snack foods, and non-alcoholic beverages
RECITALS
City of Foster City and the Estero Municipal Improvement District, as Master Lessor, executed a lease on June 10, 1996 (the “Master Lease”).
Sublessor (“VB Golf LLC”) desires to sublease to Sublessee (“_____________”) a portion of the leased property (the “Property”) currently occupied by the Sublessor under the terms of the Master Lease, and Sublessee desires to lease that property from Sublessor; and The Lessor under the Master Lease has consented to this.
6.12 Attachment 3 - Proposed Ninth Amendment
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2 THEREFORE, Sublessor and Sublessee agree as follows:
SECTION ONE: PREMISES AND TERM OF LEASE
1.1 Sublease of Premises: For and in consideration of the payments of rentals and the performance by Lessee of each term, covenant and condition herein, Sublessor hereby leases to Sublessee and Sublessee hereby subleases from Sublessor, that certain real property in the City of Foster City at 2401 East Third Avenue, Foster City, CA.
1.2 Original Sublease Term: The term of the Sublease shall run from _________________
SECTION TWO: SUBLEASE RENTAL PAYMENTS
2.1 Monthly Rent: In consideration for the rental of the Premises by Sublessor to Sublessee, beginning on _________, and thereafter on the first (1st) day of each calendar month, in advance, Sublessee shall pay as rent to Sublessor $________.
2.2 Place of Payment of Rent: Sublessee shall make all rent payments, and pay all other sums due under this Sublease, in lawful money of the United States, by check payable to “Mariners Point Golf Center” and shall personally deliver or mail all rent payments without any notice or demand to Sublessor at the address set forth in Section 7 below.
2.3 Charge for Late Rent Payment:
2.3.1 Late Payment Constitutes Breach: Sublessee hereby acknowledges that the late payment of rent or any other sums due hereunder constitutes a material breach of this Sublease.
2.3.2 Late Charges: If any payment of rent or any other sum due Sublessor is not received by Sublessor within ten (10) days of the due date, a late fee of 10% of monthly rent, shall become immediately due and payable to Sublessor.
2.3.3 Reasonable Estimate of Sublessor’s Costs: Sublessee and Sublessor hereby acknowledge and agree that such late charges do not represent and shall not be deemed to be an interest payment, but that such late charges represent a fair and reasonable estimate of the costs and expenses that Sublessor will incur by reason of Sublessee’s late payment.
2.3.4 No Waiver by Accepting Late Charges: Acceptance by Sublessor of any delinquent rent payment or late charges shall in no way constitute a waiver of Sublessee’s default with respect to such overdue and delinquent payment, or in any way impair, prevent or preclude Sublessor from exercising any of its rights or remedies set forth in this Sublease or otherwise provided by law.
2.4 Records and Accounts: As a condition of the Master Lease, Sublessee shall, at all times during the term of this Lease, keep or cause to be kept, true and complete books, records and accounts of all financial transactions in the operation of all business activities, of whatever nature, conducted in pursuance of the rights granted herein. The records must be supported by source documents such as sales slips, cash register tapes, purchase invoices, or other pertinent documents. Failure to retain such
6.12 Attachment 3 - Proposed Ninth Amendment
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3 records shall be considered a material breach of this Sublease. Sublessor reserves the right to inspect said books, records and accounts.
SECTION THREE: USE OF PREMISES
3.1 Use of Premises: For and during the term of this Sublease, any extension or renewal thereof, Sublessee shall use the Premises for operating food trailer selling soft drinks, snacks, food and other beverages.
3.2 Conditions of Use: For and during the term of this Sublease, and any extension or renewal thereof, Sublessee’s use of the Premises, as set forth in Section 3.1 above, shall be subject to the following conditions, covenants and restrictions. A breach of these conditions which is not cured after 30 days is grounds for terminating the lease:
(a) Except as provided in this Sublease, the Premises shall be used for the purposes specified in Section 3.1 above and for no other uses or purposes whatsoever, without the prior written consent of Sublessor.
(b) Sublessee shall, at all times during the term of this Sublease and any extension or renewal thereof, maintain proper and adequate monitoring and supervision of the Premises in order to assure orderly use of the Premises and to prevent intrusion from trespassers, uninvited persons or unsupervised children and vandals.
(c) Sublessee shall, to the satisfaction of Sublessor, keep and maintain the Premises and all improvements of any kind in a state of good repair and cleanliness. Any additions or changes to the furnishings, signage or equipment must be approved by the sublessor. Subleased premises must be kept in clean and orderly fashion, and sublessee may not store any materials outside of the leased premises unless authorized by Sublessor. Sublessee is responsible for any and all insect and pest eradication in and around the kitchen, storage area and dining area. (d) Sublessee shall not maintain, commit or permit the maintenance or commission of any waste or any nuisance (as defined in California Civil Code section 3479) on the Premises, and Sublessee shall not use or permit the use of the Premises for any unlawful purpose. Sublessee further shall not commit any other act or thing on the Premises which may unreasonably disturb the quiet enjoyment of adjacent Sublessor.
(e) Sublessor or its authorized representative shall have the right at all reasonable times to enter upon the Premises and inspect the general condition of the Premises to determine if Sublessee is complying with the terms, conditions, requirements and provisions of this Sublease. The right to enter shall be exercised during business hours.
(f) Sublessee shall not discriminate against any employee, person or class of persons by reason of sex, race, color, creed, religion or national ancestry. (g) Sublessee shall operate and manage the services and facilities offered in a high quality manner comparable to other high quality businesses providing similar facilities and services during the entire term of this Sublease, and during any extensions or renewals thereof. Sublessee shall dispense food and beverages of high quality and shall maintain a high standard of service at least equal to that
6.12 Attachment 3 - Proposed Ninth Amendment
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4 of other establishments in the adjacent communities and to those prevailing in such areas for similar products and services, and without discrimination. All prices charged for such services and facilities supplied to the public shall be fair and reasonable.
(h) Sublessee agrees to maintain and adhere to a written schedule delineating the operating hours for the business. If, for any reason, Sublessee cannot open and operate their business as scheduled, Sublessee must immediately inform Sublessor in writing or by telephone. Failure to do so will result in a fine of $300 fee per incident, payable to the Sublessor. If Sublessee cannot provide their facilities and services to the public for any period exceeding five days, such action will constitute a material event of default under this Sublease. (i) Sublessor reserves the right to prohibit the sale of any item which it reasonably deems to be beyond the scope of merchandise deemed necessary for proper service to the public for the type of business operations being conducted in the Facilities.
(j) Sublessee shall at all times retain active, qualified, competent and experienced personnel to supervise Sublessee’s operation and to represent and act for Sublessee.
3.3 Utilities and Services: Sublessor shall be solely responsible for obtaining utility services. Sublessor will pay for all other services, including, but not limited to water, power, garbage collection, and sewer supplied to the Premises.
3.4 Licenses or Permits: Sublessee shall obtain any and all governmental approvals, permits and/or licenses which may be required in connection with the use of the Premises as set forth in this Sublease. No permit, approval or consent given under this Sublease by Sublessor shall affect or limit Sublessee’s obligations hereunder, nor shall any approvals or consents given by Sublessor, it its capacity as a party to this Sublease, be deemed to be approval as to compliance or conformance with any applicable governmental codes, laws, orders, rules or regulations.
SECTION FOUR: TERMINATION OF AGREEMENT
4.1 Termination of Agreement:
4.1.1 Except as otherwise provided, if Sublessee defaults in the performance of any promise, term, condition, or covenant required of it herein, and fails to cure such default, or fails to take reasonable action, within thirty (30) calendar days following notice thereof from Sublessor, this Agreement shall terminate.
4.1.2 Sublessor may immediately terminate this Agreement, without serving such notice of default to Sublessee, upon the happening of any of the following events:
(a) The failure of Sublessee to maintain in full force and affect all forms of insurance required hereunder.
(b) The failure of Sublessee to cause to remain in full force and affect any permit or license required hereunder.
6.12 Attachment 3 - Proposed Ninth Amendment
304
5 (c) Any attempt to effect the sale, transfer, or assignment by Sublessee of any right, license, privilege or duty granted to or imposed upon it hereunder, without the prior approval of Sublessor.
(d) Upon closure of the food trailer due to a major breach of service including, but not limited to, health or safety precautions.
(e) Filing of a bankruptcy petition by Sublessee
(f) Any major change in Sublessor strategy (i.e. sale of premises, loss of master lease, bankruptcy).
4.1.3 If Sublessor terminates this Agreement under the Section 4.1, Sublessor may take over Sublessee’s food trailer activities and provide them in any manner deemed appropriate by Sublessor for Sublessor’s best interests without any liability therefore to Sublessee.
SECTION FIVE: MAINTENANCE AND REPAIR OF PREMISES
5.1 Sublessee’s Obligation to Maintain Premises: Sublessee shall at all times during the term of this Sublease, and any extension or renewal thereof, at its sole cost and expense, keep and maintain in good condition and in substantial repair, the Premises and all appurtenances and every part thereof, including improvements of any kind erected, installed or made on or within the Premises not including landscaping.
5.2 Sublessors Default of its Maintenance Duties: In the event that Sublessee fails, neglects or refuses to maintain or make reasonable repairs or replacements as required by this Sublease, Sublessor shall notify Sublessee in writing of such failure or refusal.
Should Sublessee fail or refuse to act to correct such default within twenty (20) days of receipt of such written notice from Sublessor, Sublessor may (but shall not be required to), itself or by contract, undertake the necessary maintenance, repair or replacements; and cost thereof, including but not limited to the cost of labor, materials and equipment, plus an administrative fee in the amount of the greater of $100 or twenty percent (20%) of the sum of such costs, shall be paid by the Sublessee to Sublessor within ten (10) days of Sublessee’s receipt of a statement of such costs from Sublessor. Any such maintenance, repair or replacement by or on behalf of Sublessor shall not be deemed to be a waiver of Sublessee’s default under this Sublease, and shall not in any way impair, prevent or preclude Sublessor from exercising any of its rights or remedies set forth in this Sublease or otherwise provided by law.
SECTION SIX: INSURANCE AND INDEMNIFICATION
6.1 Sublessee’s Coverages: Sublessee shall take out and maintain the following insurance:
(a) Workers’ Compensation Insurance to cover its employees (if any) as required by law. Such policy of Workers Compensation Insurance shall contain the following endorsements:
6.12 Attachment 3 - Proposed Ninth Amendment
305
6 “The insurer issuing the above-described workers compensation policy waives all rights of subrogation against Foster City, and The Estero Municipal Improvement District, its officers, directors, employees and representatives.” (b) Commercial General Liability Insurance, including Products Liability, and owned, non-owned and hired automobiles, providing coverage in the following minimum limits:
Combined single limit of $1,000,000 per occurrence, $2,000,000 aggregate, with $1,000,000 umbrella coverage for Bodily Injury and Property Damage. (c) Fire and Extended Coverage: Sublessee shall obtain and insure subleased premises and improvements to 100% of their replacement cost, using a standard form fire insurance policy containing the “Extended Coverage” endorsement.
6.2 Certificate of Insurance: Sublessee shall present to Sublessor the original policies of insurance required by this section showing the issuance of such insurance and the additional insureds and other provisions and endorsements required herein. At least 30 days prior to the expiration of any such policy, a signed complete certificate of insurance, with all endorsements provided herein, showing that such insurance coverage has been renewed or extended, shall be filed with Sublessor.
6.3 Failure to Furnish Insurance: Notwithstanding any other provision of this Sublease, the failure to furnish to Sublessor the above-referenced original policies of insurance or Certificates of Insurance in such form and at such time as Sublessee is required to provide the same under this Sublease shall constitute a material event of default under this Sublease.
6.4 Indemnification: Sublessee shall indemnify, defend and hold Sublessor, City of Foster City and the Estero Municipal Improvement District harmless against all actions, claims, demands, costs, liabilities, losses, damages, judgments, penalties or expenses (including attorneys’ fees and costs) of any kind, arising, directly or indirectly, (1) out of the improvement, use, or operation of the property by Sublessee or any user during the term, (2) from any condition of the property during the term, (3) from any breach or default on the part of Sublessee in the performance of any covenant or agreement on the part of Sublessee to be performed pursuant to this sublease (4) from any act or negligence of Sublessee, or any of its agents, contractors, employees occurring during the term, or (5) from any accident, injury or damage whatsoever caused to any person, firm or corporation occurring during the term in or about the property. In the event that any action or proceeding is brought against Sublessor by reason of any matter for which Sublessee has hereby agreed to indemnify Sublessor, Sublessee upon notice from Sublessor, covenants to resist or defend such action or proceeding by counsel reasonably satisfactory to Sublessor.
6.5 Attorneys’ Fees: In the event of any dispute between Sublessor and Sublessee in any way related to this Sublease, and whether involving contract or tort claims, the non- prevailing party shall pay to the prevailing part all reasonable attorneys’ fees and expenses of any type incurred by the prevailing party in connection with any action or
6.12 Attachment 3 - Proposed Ninth Amendment
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7 proceeding, whether or not the dispute is litigated or prosecuted to final judgment or an action is filed.
SECTION SEVEN: LEGAL RELATIONS AND RESPONSIBILITIES
7.1 Assignment and Sublease: Sublessee shall not, without prior written consent of Sublessor, either voluntarily or by operation of law, assign, mortgage, or transfer this Sublease, or any interest in this Sublease, or permit the use of the Premises by any person or persons other than the Sublessee, or sublet the Premises or any part thereof.
Any attempted or purported assignment, sublease or other transfer in violation of this Sublease shall be null and void, shall confer no right, title or interest in or to this Sublease, the Premises or any part thereof, and shall constitute a material breach of this Sublease.
7.2 Financing: Sublessee shall not enter into such pledges or assignments of its interest in the Sublease without Sublessors consent. Furthermore, Sublessee may enter into leases that may be customary and necessary to obtain reasonable financing for the development of the Premises and Sublessor shall consent to such financing as may be necessary for Sublessee to obtain such financing, provided that Sublessor shall not incur any liability, cost or expense pertaining to its consent, nor create a cloud or liability of Sublessors leasehold and its leasehold improvements. Said financing is subordinate to and subject to the terms of the Master Lease.
7.3 Right of First Negotiation: In the event Sublessee seeks to enter a new Sublease, Sublessee shall have the first right of negotiation for a period of sixty (60) days following Sublessor receiving notice of Sublessee’s intention to renew the Sublease.
SECTION EIGHT: MISCELLANEOUS
8.1 Notices: Any notice, payment or instrument required or permitted to be given or delivered by this Sublease may be given or delivered by person delivery or by depositing the same in any United States mail depository, first class postage prepaid, and addressed as follows:
If to Sublessor by mail or personal delivery:
VB Golf LLC
2401 East Third Avenue
Foster City, CA, 94404
IN WITNESS WHEREOF, the parties hereto have duly executed this Sublease as of __________ ________________________ VB GOLF, LLC dba Mariners Point Golf ____________________________ _________________________________ _____________ Chris Aliaga
6.12 Attachment 3 - Proposed Ninth Amendment
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4858-4840-5098 v1
EXHIBIT B-MARINER’S POINT GOLF CENTER FOOD TRAILER PLANS
6.12 Attachment 3 - Proposed Ninth Amendment
308
MARINER'S POINT GOLF CENTER
FOOD TRAILER
2401 EAST 3RD AVENUE
FOSTER CITY, CA 94404
BM
1-621
BLDG.DEPT SUBMIT
05.09.23 Printed on: 5/9/2023
Revisions By
Kotas/
Pantaleoni
Architects
A1.0
Anthony A. Pantaleoni
LEED AP
Drawn By:
Job Number:
Sheet Title:
Project Info.:
SITE AND CITY INFO.
Date:
70 Zoe Street Suite 200
San Francisco, California 94107
t. 415 495 4051
[email protected]
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1. ALL DIMENSIONS SHOWN ARE TO FACE OF STUD, FACE OF CONCRETE, OR FACE OF BLOCK, U.O.N. VERTICAL DIMENSIONS ARE SHOWN TO TOP OF SLAB, FLOOR JOISTS OR FLOOR FRAMING.
2. CONTRACTOR AND SUBCONTRACTORS SHALL FAMILIARIZE THEMSELVES WITH EXISTING CONDITIONS PRIOR TO COMMENCING WORK.
3. DO NOT SCALE DRAWINGS. WRITTEN DIMENSIONS TAKE PRECEDENCE.
CONTRACTOR TO NOTIFY ARCHITECT OF ANY DISCREPANCIES BETWEEN FIELD CONDITIONS AND DIMENSIONS/CONDITIONS SHOWN IN THESE DRAWINGS.
4. MECHANICAL, PLUMBING, ELECTRICAL AND SPRINKLER PERMITS SHALL BE THE RESPONSIBILITY OF THOSE SUBCONTRACTORS.
5. CONTRACTOR SHALL REVIEW AND UTILIZE SPECIFICATIONS PROVIDED IN CONJUNCTION WITH THIS SET OF CONSTRUCTION DOCUMENTS. ARCHITECT
SHOULD BE NOTIFIED OF ANY DISCREPANCY BETWEEN DRAWINGS AND SPECIFICATIONS.
6. ALL WORK PERFORMED WILL COMPLY WITH THE AMERICAN DISABLITIES ACT OUTLINED IN SECTIONS 10&11 IN THE CBC. SEE SHEET A1.2 FOR STANDARD ACCESSIBILITY DETAILS APPLICABLE THROUGHOUT PROJECT.
2401 East 3rd Avenue
APN: 094-130-010
Zoning: CMPD
Occupancy: B
Construction: VB
Lot Size:
24 acres (1,045,440 square feet)
Square Footage: (Existing) (Proposed) (Total)
Lower Level: 4,596 SF+/- 1,324 SF+/- 5,920 SF+/-
Upper Level: 1,305 SF +/- 0 (unchanged) 1,305 SF +/-
Building Code:
2019 California Building Code (CBC)
2019 California Electrical Code
2019 California Fire Code
2019 California Green Building Code
CLIENT/ TENANT
Chris Aliaga CEO
Mariner’s Point Golf Center
2401 East Third Avenue
Foster City, CA 94404
650-573-7888
ARCHITECT
Tony Pantaleoni
Kotas/Pantaleoni Architects
70 Zoe Street, Suite 200
San Francisco, CA. 94107
415-495-4051
415-495-6885 FAX
STRUCTURAL ENGINEER
Geoffrey Clifford S.E.
BCA Structural Engineering, Inc.
1300 Industrial Road, Unit 1B
San Carlos, CA 94070
650-508-2500
650-508-2505 FAX
GEOTECHNICAL ENGINEER
Craig Reid
C2Earth, Inc.
750 Camden Avenue, Suite A
Campbell, CA 95008
408-866-5436
TITLE 24
Travis Wade
Wade Energy
1942 Linda Drive
Pleasant Hill, CA 94523
925-383-5490
PLAN
NORTH
1 SCALE: 1:0.451 SITE
PROJECT SITE
(E) ACCESSIBLE
PARKING
(E) TRAINING FACILITY BUILDING
(E) ACCESSIBLE
TOILET FACILITIES
(E) DRIVING RANGE
STRUCTURE
(E) MAIN ENTRANCE
AREA OF WORK
CITY INFORMATION GENERAL NOTES DRAWING SCHEDULE SCOPE OF WORK
VICINITY MAP
SYMBOLS
ABBREVIATIONS
DOOR NO.
WINDOW NO.
DETAIL NO.
SHEET NO.
SECTION NO.
SHEET NO.
ELEVATION NO.
INTERIOR & EXTERIOR
SHEET NO.
SHEET NO.
INTERIOR ELEV. NO.
ROOM NAME
ELEVATIONEL=164'-2"
DINING ROOM
3 1
4 2A-1
A-3
5 3
8 A-1
6 A-4
4 ADDITION OF FOOD TRAILER W/ REQUIRED WATER
& SEWER LINES
PROJECT DIRECTORY
(E) DRIVING RANGE
A1.0 GENERAL NOTES, CITY INFO
A2.0 PROPOSED FOOD TRAILER SITE PLAN
ELECTRICAL & PLUMBING
UNDER SEPARATE PERMIT
6.12 Attachment 3 - Proposed Ninth Amendment
309
MARINER'S POINT GOLF CENTER
FOOD TRAILER
2401 EAST 3RD AVENUE
FOSTER CITY, CA 94404
BM
1-621
BLDG.DEPT SUBMIT
05.09.23 Printed on: 5/9/2023
Revisions By
Kotas/
Pantaleoni
Architects
A2.0
Anthony A. Pantaleoni
LEED AP
Drawn By:
Job Number:
Sheet Title:
Plans:
PROPOSED FOOD
TRAILER PLAN
Date:
70 Zoe Street Suite 200
San Francisco, California 94107
t. 415 495 4051
[email protected]
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9 ±10'-8 1/8"
CLEAR
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(N) IN-GROUND GREASE TRAP
TZ-600 TRAPZILLA
EXISTING SEWER CLEANOUT
EXISTING WATER
FOUNTAIN
NEW 3/4" WATER LINE
NEW 4" SEWER LINE
NEW 4" SEWER
LINE CONNECT
TO EXISTING LINE
(E) FENCE
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NEW ELECTRICAL LINE
(E) SCREEN WALL (E) GATE
OFFICE MECH.
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19TH HOLE
BAR & CAFE
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STORAGE
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PUTTING GREEN
ROUGH GRASS AREA
CART PATH
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LAKESIDE DRIVE
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SURFACE
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4%
MAX
. SLOPE
TYP
.
(E)ASPHALT SURFACE,
4% MAX. SLOPE
TYP.
SCALE: 1/8" = 1'-0"1 FOOD TRUCK SITE PLAN
6.12 Attachment 3 - Proposed Ninth Amendment
310
RECOMMENDATION
It is recommended that the City Council/EMID Board of Directors (hereinafter referred to as City Council) adopt the attached resolutions:
1. approving the updated salary changes to the current Compensation and Benefit Plan, effective June 1, 2023, and
2. approving a new Compensation and Benefit Plan, effective July 1, 2023, for the unrepresented Management Employees.
EXECUTIVE SUMMARY
The City Council requested staff to revise the current Compensation and Benefit Plan for the unrepresented Management Employees. Based on the City Council's direction, staff is bringing forward an updated Compensation and Benefit Plan, effective June 1, 2023 which includes updated salary changes.
Additionally, staff is bringing forward adjustments to the Compensation and Benefit Plan, effective July 1, 2023, July 1, 2024 and July 1, 2025 for City Council review that includes increases to compensation (wages and health benefit contributions, Police Management Educational Incentives, Vehicle Allowances for Executive Management), adjustments to the Administrative Leave Policy and updated language changes.
DATE: June 20, 2023
TO:
Mayor and Members of the City Council
President and Members of the Estero Municipal Improvement District (EMID) Board of Directors
VIA: Stefan Chatwin City/District Manager
FROM: City’s Labor Negotiation Team
SUBJECT: CONSIDERATION OF COMPENSATION STUDY CHANGES TO THE
MANAGEMENT GROUP COMPENSATION AND BENEFIT PLAN
EFFECTIVE JUNE 1, 2023, AND A NEW MANAGEMENT GROUP
COMPENSATION AND BENEFIT PLAN JULY 1, 2023
6.13 6.13 Staff Report
311
BACKGROUND/ANALYSIS
The Management Employees group is made up of unrepresented employees of various positions including department heads, mid-management, and other professional classifications. The current Compensation and Benefit Plan for the Management Employees was approved on July 1, 2021. The new Compensation and Benefit Plan is recommended for City Council approval with an effective date of June 1, 2023. The previous Compensation and Benefit Plan provided for the City to perform a market compensation survey. That survey was done and is being implemented effective June 1, 2023 as noted below. That action is consistent with the implementation of the compensation survey for the Police Association.
Effective June 1, 2023, Revision to the current Compensation and Benefit plan with increases to the current salary ranges are as follows:
ACCOUNTANT I 5.97%
ACCOUNTANT II 6.80%
ADMINISTRATIVE SERVICES DIRECTOR 14.90%
ASSISTANT CITY MANAGER 10.08%
ASSISTANT ENGINEER 5.55%
ASSISTANT FINANCE DIRECTOR 10.18%
ASSOCIATE CIVIL ENGINEER 6.37%
ASSOCIATE PLANNER 0.64%
BUILDING/FLEET MAINTENANCE MANAGER 14.81%
CHIEF BUILDING OFFICIAL 13.73%
CITY MANAGER 10.70%
COMMUNICATION DIRECTOR/CITY CLERK 9.65%
COMMUNICATIONS MANAGER 23.32%
COMMUNITY DEVELOPMENT DIRECTOR 11.69%
DEPUTY CITY MANAGER 17.71%
DIRECTOR OF PUBLIC WORKS 14.41%
ECONOMIC DEVELOPMENT MANAGER 10.74%
ENGINEERING MANAGER 24.07%
FINANCE DIRECTOR 14.90%
FINANCIAL SERVICES MANAGER 7.12%
HUMAN RESOURCES ANALYST 15.21%
HUMAN RESOURCES MANAGER 10.74%
HUMAN RESOURCES TECHNICIAN 9.76%
HOUSING COORDINATOR 5.28%
INFORMATION TECHNOLOGY MANAGER 10.74%
MANAGEMENT ANALYST 5.28%
PARKS & RECREATION DIRECTOR 14.90%
PARKS MAINTENANCE MANAGER 12.39%
PLANNING MANAGER 9.79%
POLICE CAPTAIN 9.77%
POLICE CHIEF 12.50%
POLICE LIEUTENANT 10.49%
POLICE RECORDS SUPERVISOR 13.14%
PRINCIPAL MANAGEMENT ANALYST 10.03%
6.13 6.13 Staff Report
312
PW MAINTENANCE MANAGER 4.14%
PW MAINTENANCE SUPERINTENDENT 2.71%
RECREATION MANAGER 10.62%
SENIOR CIVIL ENGINEER 5.69%
SENIOR ACCOUNTANT 1.04%
SENIOR HUMAN RESOURCES ANALYST 9.76%
SENIOR MANAGEMENT ANALYST 8.89%
SENIOR PLANNER 10.22%
TECHNOLOGY ANALYST I 14.60%
TECHNOLOGY ANALYST II 12.40%
There are no changes to the current salary ranges for Assistant Planner, Deputy City Clerk, Sr. Systems Analyst, and Management Assistant.
Attached is an updated Compensation and Benefit Plan for the Management Employees. Revisions to the plan is based on direction from City Council and is mutually beneficial for the City/EMID and the covered employees. These updates to the plan will help with recruitment and retention in a tight labor market. A summary of the new provisions in the plan is noted below:
Effective Date: July 1, 2023
Wages:
•Effective July 1, 2023, a wage increase equal to a percentage movement of the San Francisco-Hayward-Oakland CPI-U April 2022 to April 2023, with a minimum of 3% and a maximum of 5%.
•Effective July 1, 2024, a wage increase equal to a percentage movement of the San Francisco-Hayward-Oakland CPI-U April 2023 to April 2024, with a minimum of 3% and a maximum of 5%.
•Effective July 1, 2025, a wage increase equal to a percentage movement of the San Francisco-Hayward-Oakland CPI-U April 2024 to April 2025, with a minimum of 3% and a maximum of 5%.
Flexible Benefit Plan (Medical, Dental, Vision): Effective January 1, of each year the Employer's contribution towards the Flexible Benefit Plan will be increased by the percentage increase in the CalPERS Kaiser HMO Basic Premium Region 1 rate for Public Agencies.
Education Incentive Pay: Effective July 1, 2024, completion of the P.O.S.T. Managerial Training curriculum or possession of a Master’s Degree shall qualify a Police Manager for a differential equivalent to seven percent (7%) of Police Sergeant base salary at top step. Pay shall commence upon approval of a request for incentive pay. Pay will not be retroactive to date of eligibility.
6.13 6.13 Staff Report
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Vehicle Allowances: Employees in Executive Management classifications shall be provided either a City vehicle or a vehicle allowance of $400 per month, as determined to be appropriate by the City/District Manager. Certain Employees in other Management classifications whose duties include response to emergencies outside the regular work day may also be assigned City vehicles or granted vehicle allowances at the discretion of the City/District Manager.
FISCAL IMPACT
The provision represents an increase of $92,900 in Management employee costs for FY2022-2023; however, no supplemental budget appropriations is required due to salary savings.
The preliminary FY 2023-2024 budget included a 2% placeholder increase in wages for the unrepresented Management Employees. The provisions recommended for approval result in an increase of $1,620,076 for FY 2023-2024 and will be included in the budget to be adopted by City Council on June 20, 2023 as summarized in the table below.
General Fund 001 1,321,330
CalOPPS Fund 114 10,973
Workforce Housing 139 1,435
Water Enterprise Fund 401 78,201
Wastewater Enterprise fund 451 89,496
Vehicles Internal Service Fund 501 23,286
IT Internal Service Fund 504 66,138
Building Maintenance Internal Service Fund
505 29,216
1,620,076
CITY COUNCIL VISION, MISSION AND VALUE/PRIORITY AREA
Staff Empowerment and Operational Excellence
Attachments:
Attachment 1 - City Resolution
Attachment 2 - EMID Resolution
Attachment 3 - Management Compensation and Benefit Plan
6.13 6.13 Staff Report
314
9 3
4 RESOLUTION NO.____________
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FOSTER CITY
APPROVING COMPENSATION STUDY CHANGES TO THE MANAGEMENT
COMPENSATION AND BENEFIT PLAN, EFFECTIVE JUNE 1, 2023 AND THE NEW MANAGEMENT COMPENSATION AND BENEFIT PLAN, EFFECTIVE JULY 1, 2023
CITY OF FOSTER CITY
WHEREAS, the City and the Management Group have met and conferred in good faith and agreed upon a three-year compensation and benefit plan.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Foster City does hereby
1) Approve the compensation study changes to the current Management Compensation and Benefit Plan effective June 1, 2023, and 2) Approve the new Management and Compensation and Benefit Plan effective July 1, 2023.
PASSED AND ADOPTED as a resolution of the City Council of the City of Foster City at the special meeting held on the 20th day of June 2023, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
JON FROOMIN, MAYOR
ATTEST:
PRISCILLA SCHAUS, CITY CLERK
6.13 Attachment 1 - City Resolution
315
9 3
3 RESOLUTION NO.____________
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ESTERO MUNICIPAL
IMPROVEMENT DISTRICT APPROVING COMPENSATION STUDY CHANGES TO THE MANAGEMENT COMPENSATION AND BENEFIT PLAN, EFFECTIVE JUNE 1, 2023 AND THE NEW MANAGEMENT COMPENSATION AND BENEFIT PLAN, EFFECTIVE JULY 1, 2023
ESTERO MUNICIPAL IMPROVEMENT DISTRICT
WHEREAS, the District and the Management Group have met and conferred in good faith and agreed upon a three-year compensation and benefit plan.
NOW, THEREFORE, BE IT RESOLVED that the Board of Directors of the Estero Municipal District does hereby
1) Approve the compensation study changes to the current Management Compensation and Benefit Plan effective June 1, 2023, and 2) Approve the new Management and Compensation and Benefit Plan effective July 1, 2023.
PASSED AND ADOPTED as a resolution of the Board of Directors of the Estero Municipal District at the special meeting held on the 20th day of June 2023, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
JON FROOMIN, PRESIDENT
ATTEST:
PRISCILLA SCHAUS, DISTRICT SECRETARY
6.13 Attachment 2 - EMID Resolution
316
COMPENSATION AND BENEFITS PLAN
FOR
CITY OF FOSTER CITY/
ESTERO MUNICIPAL IMPROVEMENT DISTRICT
MANAGEMENT EMPLOYEES
Effective July 1, 2023
6.13 Attachment 3 - Management Compensation and Benefits Plan 2023
317
1 TABLE OF CONTENTS
ARTICLE I WAGES AND BENEFITS..............................................................................2 Section 1 - Wages.........................................................................................................2 Section 2 - Retirement ..................................................................................................2 Section 3 - Probationary Period and Merit Increases ...................................................4 Section 4 - Public Safety Management Special Pay and Allowance ............................4 Section 5 - City Provided Vehicles and Vehicle Allowances.........................................5 Section 6 - Sick Leave Payment ...................................................................................5 Section 7 - Flexible Benefits Plan .................................................................................6 Section 8 - Long Term Disability ...................................................................................7 Section 9 - Life Insurance .............................................................................................7 Section 10 – VEBA (Voluntary Employee Beneficiary Association) Program...............7 Section 11 - Deferred Compensation Plan ...................................................................9 Section 12 – 401(a)(h) Plan ..........................................................................................9 Section 13 - Pay for Temporary Assignment ..............................................................10 Section 14 - Vision Care/Professional Development/Fitness Club (Gym) Memberships..... 10 Section 15 – Longevity Recognition Plan ...................................................................10 ARTICLE II HOLIDAYS..................................................................................................13 Section 1 - Official City/District Holidays.....................................................................13 Section 2 – Holiday In-Lieu Pay..................................................................................14 ARTICLE III VACATION AND OTHER LEAVES...........................................................14 Section 1 - Vacation Accrual & Use ............................................................................14 Section 2 - Administrative Leave.................................................................................16 Section 3 – Recognition Leaves .................................................................................16 Section 5 - Sick Leave Accrual & Use.........................................................................17 Section 6 - Industrial Disability Leave .........................................................................18 Section 7 - Educational Release Time........................................................................18 EFFECTIVE DATE.........................................................................................................18 ATTACHMENT A – FY 2023 – 2024 Pay Plan for Management Classifications………....19
6.13 Attachment 3 - Management Compensation and Benefits Plan 2023
318
2 COMPENSATION AND BENEFITS PLAN
FOR
CITY OF FOSTER CITY/
ESTERO MUNICIPAL IMPROVEMENT DISTRICT
MANAGEMENT EMPLOYEES
(Unrepresented)
The City of Foster City/Estero Municipal Improvement District (hereinafter called "City/District") provides the following wages, hours, and other terms and conditions of employment to its Management Group (hereinafter called “Management Group,” “Management Employees”, or “Employees”) as described in this Compensation and Benefits Plan (hereinafter called the “Plan”).
ARTICLE I
WAGES AND BENEFITS
Section 1 - Wages
1.1 Effective July 1, 2023, wages for the Management group classifications and the monthly pay ranges and steps shall be as established in Attachment A. The wages listed in Attachment A reflect adjustments made due to the findings of the Compensation Study and include an across-the-board increase to base salary for all management classifications of a percentage movement of the SF-Bay Area CPI-U April 2022 to April 2023 (Urban) with a minimum of three percent (3.0%) and a maximum of five percent (5.0%)
1.2 Effective July 1, 2024, an across-the-board increase to base salary for all management classifications of a percentage movement of the SF-Bay Area CPI- U April 2023 to April 2024 (Urban) with a minimum of three percent (3.0%) and a maximum of five percent (5.0%)
1.3 Effective July 1, 2025, an across-the-board increase to base salary for all management classifications of a percentage movement of the SF-Bay Area CPI-U April 2024 to April 2025 (Urban) with a minimum of three percent (3.0%) and a maximum of five percent (5.0%)
Section 2 - Retirement
2.1 The City/District contracted with the Public Employees Retirement System (P.E.R.S.) to provide the 2.7% @ 55 retirement plan for miscellaneous Employees effective October 1, 2007. Effective January 1, 2013, the City/District no longer offered the 2.7% @ 55 retirement benefit formula to new Employees. All miscellaneous Employees hired on or before December 31, 2012, will continue to be afforded the 2.7% @ 55 retirement benefit formula. Effective January 1, 2013, the Public Employees Pension Reform Act (PEPRA) requires new miscellaneous Employees to enroll in the 2% @ 62 retirement tier with pension calculated based on the average highest annual compensation over a consecutive 36-month period.
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319
3 This new retirement tier applies only to a new member. A new member is (a) someone who has never been in P.E.R.S. or a reciprocal retirement system or (b) someone previously in P.E.R.S. or a reciprocal retirement system, but who has a gap of at least six (6) months since being covered by any of those pension systems. P.E.R.S. refers to employees hired before January 1, 2013 as classic members.
Miscellaneous Employees Hire Date
Retirement
Benefit Formula
On or before 12/31/2012 2.7% @ 55
"Classic Member" on or after 1/1/2013 2.7% @ 55
"New Member" on or after 1/1/2013 2.0% @ 62
2.2 Miscellaneous and public safety Management Employees P.E.R.S. contributions shall be administered in accordance with Internal Revenue Code Section 414(h)(2).
2.3 The City/District shall contract with P.E.R.S. to provide the 4th Level of 1959 Survivor Benefits.
2.4 The City/District contracted with P.E.R.S. to provide the enhanced Public Safety retirement benefit formula 3% @ 50 (Section 21362.2) effective June 30, 2001 for Fire Safety Managers. All Fire Safety Managers hired on or before December 31, 2011 will continue to be afforded the 3% @ 50 retirement benefit formula.
Effective January 1, 2012, the City/District no longer offered the 3% @ 50 benefit formula to new Fire Safety Managers. All Fire Safety Managers hired on or after January 1, 2012 were afforded a 2% @ 50 retirement benefit formula. Effective January 1, 2013, PEPRA requires new Fire Safety Managers to enroll in a 2.7% @ 57 retirement tier with pension calculated based on the average highest annual compensation over a consecutive 36-month period. This new retirement tier applies only to a new member as defined in Section 2.1 above.
2.5 The City/District contracted with P.E.R.S. to provide the enhanced Public Safety retirement benefit formula 3% @ 50 (Section 21362.2) effective July 1, 2002 for Police Safety Managers. All Police Safety Managers hired on or before December 31, 2011 will continue to be afforded the 3% @ 50 retirement benefit formula.
Effective January 1, 2012, the City/District no longer offered the 3% @ 50 benefit formula to new Police Safety Managers. All Police Safety Managers hired on or after January 1, 2012 were afforded a 2% @ 50 retirement benefit formula.
Effective January 1, 2013, PEPRA requires new Police Safety Managers to enroll in a 2.7% @ 57 retirement tier with pension calculated based on the average highest annual compensation over a consecutive 36-month period. This new retirement tier applies only to a new member as defined in Section 2.1 above.
Public Safety Managers Hire Date
Retirement Benefit
Formula
On or before 12/31/2011 3.0% @ 50
On or after 1/1/2012 and before 1/1/2013 2.0% @ 50
"Classic Member" on or after 1/1/2013 2.0% @ 50
6.13 Attachment 3 - Management Compensation and Benefits Plan 2023
320
4 "New Member" on or after 1/1/2013 2.7% @ 57
2.6 The City/District shall continue to contract with P.E.R.S. to provide the Military Service Credit.
2.7 Effective April 1, 2022, the parties agree that Classic employees designated by CalPERS as Misc Employees and Public Safety Members will pay/contribute 0.5% toward the Employer’s PERS contribution rate.
Section 3 - Probationary Period and Merit Increases
3.1 Probationary Period - The initial probationary period for new Employees shall be for a period of not less than twelve (12) months of actual service, unless an Employee has already served a twelve (12) month probationary period in another class in this Employee unit. In such case, the probationary period shall be for a period of not less than six (6) months of actual service. Further provisions regarding probationary periods are found in the City/District Personnel Rules and Regulations (hereinafter called “City/District Personnel Rules”).
3.2 Merit Increases - Upon the satisfactory completion of six (6) months of the required probationary period, a merit increase to the next higher step in the salary range shall be granted to eligible Employees. Each twelve (12) months thereafter upon the anniversary of such first merit increase, and until the maximum pay range established for their job class has been reached, each Employee receiving a satisfactory performance evaluation shall receive a merit increase to the next higher step. Provided, however, that the Employee shall not receive annual merit increases beyond the maximum step of the salary range for the established job class.
Section 4 - Public Safety Management Special Pay and Allowance
4.1 Uniform Allowance - The City/District shall provide an annual uniform purchase and maintenance allowance of $722 for each Public Safety Management Employee required to purchase and maintain a uniform. The City/District shall pay the uniform allowance in twenty four (24) equal installments of thirty dollars and eight cents ($30.08) to eligible employees each payroll period.
4.2 Continuing Uniform Allowance - The City/District shall provide a continuing uniform allowance to each Public Safety Management Employee who is required to wear a uniform in the sum of $722. Employees who terminate City/District employment for any reason shall be entitled only to compensation at the rate of $60.16 for each month of service in the fiscal year and shall reimburse the City/District a prorated amount of $60.16 for each month of service not completed by deduction from the final paycheck of the Employee. The City/District shall pay the continuing uniform allowance in twenty four (24) equal installments of thirty dollars and eight cents ($30.08) to eligible employees each payroll period.
4.3 Legal Defense Insurance - The City/District will provide annual legal defense coverage through the California Police Officers Association (CPOA) on a
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321
5 reimbursable basis. The cost of reimbursement for such coverage shall not exceed $250 per year.
4.4 Education Incentive Pay - Effective July 1, 2024, completion of the P.O.S.T.
Managerial Training curriculum or possession of a Master’s Degree shall qualify a Police Manager for a differential equivalent to seven percent (7%) of Police Sergeant base salary at top step. Pay shall commence upon approval of a request for incentive pay. Pay will not be retroactive to date of eligibility.
Section 5 - City Provided Vehicles and Vehicle Allowances
5.1 Employees in Executive Management classifications shall be provided either a City vehicle or a vehicle allowance of $400 per month, as determined to be appropriate by the City/District Manager. Certain Employees in other Management classifications whose duties include response to emergencies outside the regular work day may also be assigned City vehicles or granted vehicle allowances at the discretion of the City/District Manager.
5.2 Employees using a City vehicle must sign a "Vehicle Use Declaration & Acknowledgement Form."
Section 6 - Sick Leave Payment
6.1 Non 401(a)(h) Participants - Employees hired prior to 1/1/97 who did not elect to participate in the 401(a)(h) Plan who terminate their employment in good standing shall receive compensation for the prescribed value of unused sick leave in accordance with the following schedule:
Sick Leave
Balance at Termination
% of Prescribed Value
of
Sick Leave Paid at
Termination
0 to 399 hours 25%
400 to 799 hours 30%
800 to 1,199 hours 40%
1,200 or more hours 50%
All Other Employees
6.2 All Employees other than those specified in Section 6.1 who terminate their employment in good standing shall receive compensation for the prescribed value of unused sick leave at a rate of 25% of the prescribed value of unused sick leave upon termination.
6.3 Calculation of Unused Sick Leave Balance Values - The prescribed value of unused sick leave shall be calculated as follows:
a) Determine number of sick leave hours accrued upon separation.
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322
6 b) Calculate value of sick leave by multiplying the hours accrued at the Employee’s pay rate at separation.
c) Select the appropriate percentage as described in section 6.1 or 6.2 as applicable and apply to the total dollar value as calculated above to determine the sick leave payment.
6.4 The rate of pay to be used for calculating the payment for sick leave shall be the rate of pay established in the City/District Personnel Rules.
6.5 When termination is caused by the death of the Employee, said pay for unused sick leave will be paid to the beneficiary the Employee has designated. In the event an Employee has not designated a beneficiary, the payment shall be made to the estate of the Employee.
Section 7 - Flexible Benefits Plan
7.1 The City/District shall offer a Flexible Benefits Plan and make monthly contributions as an Employee benefits allowance for allocation to a health plan, dental plan, optional vision plan, health and/or dependent care flexible spending account, as follows:
Employee and Family
Members enrolled in Medical
Plan Choice:
Monthly
Amount
Effective
1/1/2023
No Plan $1245
Employee Only $1515
Employee + One $1963
Employee + Two or more $2448
Effective January 1, of each year of the Compensation Benefits Plan, the Employer’s contribution toward the Flexible Benefit Plan will be increased by the percentage increase in the CalPERS Kaiser Basic Premium Region 1 Rate.
7.2 Employees who have any leftover flexible benefit allowance available after deducting all selected plan premium amounts will receive the funds as wages subject to applicable tax withholdings.
7.3 Flexible Benefit Plan participants shall assume the third-party administration costs of the plan. A plan participant is defined as any person for whom the third-party administrator charges a fee.
7.4 The City/District shall contribute the minimum amount required under the P.E.R.S.
Health Care Plan (PEMCHA) for active and retired Employees' medical insurance premiums.
7.5 Employees who opt out of health plan coverage through the City/District must annually provide proof of insurance through a spouse, parent or state-registered
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323
7 domestic partner in order to be eligible for the “no plan” contribution amount in Section 7.1
Section 8 - Long Term Disability
8.1 The City/District shall pay the full amount to provide Long Term Disability (LTD) insurance for Management Employees.
Section 9 - Life Insurance
9.1 The City/District shall contribute the full amount to provide a term life insurance policy equal to the Employee's annual salary with a minimum coverage of $50,000 and a maximum coverage of $150,000, plus the same amount of Accidental Death and Dismemberment insurance for each Employee.
Section 10 – VEBA (Voluntary Employee Beneficiary Association) Program
10.1 The purpose of the VEBA (Voluntary Employee Beneficiary Account) Trust is to provide Employees with the ability to plan for future as well as current health care expenses. Expenses such as long term care, unreimbursed medical premiums, copayments and pharmacy charges are all eligible expenses under a VEBA Trust arrangement. Employees will realize a significant benefit since eligible contributions to a VEBA Trust are tax exempt and the reimbursed expenses from the VEBA Trust are also tax exempt.
10.2 Eligibility Defined. Effective July 1, 2012, all eligible employees, who are members of the Management Group, may participate in the VEBA Trust. An eligible employee is an employee who is a member of the Management Group. Beginning July 1, 2012, all eligible employees had fifteen (15) days to “opt-in” or “opt-out” of the VEBA Trust. Elections to “opt-in” or “opt-out were irrevocable for the duration of the employee’s tenure within the Management Group. Participation is subject to and governed by all IRS requirements applicable to the VEBA Trust.
Management Group Employees who elected to “opt-in” will make uniform monthly contributions and contributions upon separation as outlined below.
Employee Contributions. Participation in the VEBA Trust by an Employee who elects to “opt-in” requires a payroll deduction each pay period to fund the Employee’s account. The Management Group determined that contributions to the VEBA Trust are based on years of service in PERS or a reciprocal retirement plan and the contributions effective as of July 1, 2012 shall remain in effect for the duration of this Plan as follows:
Years of Service Contribution Amount Per Pay Period
0 to 5 $50.00
6 to 10 $100.00
11 to 15 $100.00
16 to 20 $150.00
21 to 25 $175.00
Over 25 years $225.00
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8 Contributions made by an eligible Employee must be made through payroll deductions. Eligible Employees cannot make direct contributions to the VEBA Trust. Once separated from the City/District, the Employee can no longer make contributions to the VEBA Trust.
Leave Payout
Sick Leave – as of July 1, 2012, upon retirement/separation of employment, 100% of the Employee’s sick leave balance payout (25% of the total dollar value per Section 6 of the Plan) shall be contributed into the Employee’s VEBA account.
Safety Management Employees are entitled to convert their unused sick leave balance to service credit with P.E.R.S. at the time of retirement. After this election, 100% of the Employee’s available sick leave balance payout (25% of the remaining balance) will be contributed to their VEBA account.
Vacation Leave – as of July 1, 2012, upon retirement/separation of employment, the Management Group determined the following vacation leave payouts will be contributed to the Employee’s VEBA account:
Years of Service Contribution Amount
0 to 5 50%
6 to 10 75%
11 to 15 75%
16 to 20 75%
21 to 25 100%
Over 25 years 100%
If an Employee elects to sell back any accrued vacation leave and/or contribute any accrued vacation leave to his/her 457 Plan account pursuant to Article III, Section 1.7, the VEBA vacation leave payout will be calculated by applying the contribution amount percentage shown in the table immediately above to the remaining balance of the Employee’s accrued vacation leave after the sell back and/or 457 Plan account contribution
Longevity Pay
100% of the longevity pay for those Public Safety Management Employees who participate in the VEBA Trust shall be contributed to their VEBA account.
Administrative Leave
100% of the balance shall be contributed into the Employee’s VEBA account.
New Employees or Newly Eligible Employees
Employees, whether new to the City/District or to the Management Group, who become eligible to participate in the VEBA Trust after July 1, 2012 will have fifteen (15) calendar days from the date of eligibility to elect whether they would like to “opt-in” or “opt-out” of the VEBA Trust. If a newly eligible Employee elects to “opt- in,” payroll deductions will begin in accordance with the Employee contribution amounts in this Plan. If a newly eligible Employee fails to make an election within
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325
9 fifteen (15) days from the date of plan eligibility, it will be deemed that the newly eligible Employee has elected to “opt-out.”
Participant Account
A separate account is maintained for each contributing eligible Employee which documents the Employee’s contributions and disbursements. Contributions to a VEBA Trust, as well as any disbursements to cover non-reimbursed post-tax medical care expenses, are both tax-free. Eligible benefits subject to reimbursement by the VEBA Trust shall be limited to long-term care expenses and non-reimbursed medical premiums, co-payments, prescribed drug expenses and other medical care costs as defined by internal Revenue Code Section 213.
An eligible Employee’s VEBA account is subject to a monthly administrative fee for expenses related to recordkeeping, claims processing and claims reimbursement. The fee will be deducted from the eligible Employee’s individual account.
If the Internal Revenue Service (IRS) concludes that the VEBA Trust does not qualify under the requirements of the Tax Code or no longer qualifies after initial qualification, the City/District shall meet with the Management Employees and discuss options to bring the VEBA Trust into compliance or to discontinue the VEBA Trust.
The Management Group may discuss with the City Manager and, if approved by a majority of the Management Group, implement a retirement health savings program. Participation in a retirement health savings program would be mandatory for all Management Group members with contributions determined by the Management Group per side letter in accordance with current law.
Section 11 - Deferred Compensation Plan
11.1 The City/District shall offer a voluntary deferred compensation plan available to all Management Employees in accordance with Internal Revenue Code section 457.
Information about the 457 Plan options is available on the City/District’s intranet.
The plan year for Employee contributions to the 457 Plan is the calendar year, January 1 to December 31. The maximum voluntary contribution to any Employee’s account shall be that amount established by law.
Section 12 – 401(a)(h) Plan
12.1 Effective July 1, 2002, the 401(a)(h) plan was discontinued and when it was discontinued, “side car” contributions could no longer be made to the 401(a)(h).
The “side car” program continued and “side car” sick leave reserve balances could only be used as sick leave. Effective July 1, 2013, any remaining “side car” sick leave reserve balances were paid out as specified in Section 6 to Employees with remaining balances. The City/District contributed the “side car” funds directly into the Employees’ VEBA account, and the “side car” program no longer exists.
12.2 All Management Employees may participate in a voluntary 401(a) plan. Only
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10 Miscellaneous (non-Public Safety) Management Employees who elect to participate and who contribute a minimum of 1% of salary shall receive a City/District contribution to their account of 4% of salary.
The maximum voluntary contribution to any Employee’s account shall be that amount established by law.
Section 13 - Pay for Temporary Assignment
13.1 An Employee appointed to a higher paid classification on an acting basis shall be paid at the first step of the higher pay range or at the step which is not less than 5% more than his/her current pay, provided the duration of the assignment is for five (5) days or more for purposes other than vacation relief and the duties of the higher paid class are performed.
Section 14 - Vision Care/Professional Development/Fitness Club (Gym) Memberships The City/District will reimburse, upon presentation of the proper documentation as outlined below, up to $200 per fiscal year (July 1 through June 30 of the following year) for the following items:
14.1 Vision Care: appropriate receipts from a qualified optometrist and/or optician towards the cost of an Employee's eye examination, prescription eyeglasses and/or contact lenses.
14.2 Professional Development: appropriate receipts for professional development expenses which may include the following: the cost of certificate programs, seminars, workshops, conferences; professional, civic, or community organizations; management-related books, tapes, or training programs.
Reimbursement for such expenses must be approved in advance by the City/District Manager. These expenses must be career/job related, and not provided through any other budgetary means such as the City-wide training fund or departmental travel/meeting funds.
14.3 Fitness Club (Gym) Membership: appropriate receipts for fitness club (gym) membership expenses including membership fees and monthly dues, class fees or any other fees paid to the fitness club (gym) or any other provider.
Reimbursement of any fitness club (gym) expense under this Section 15.3 is subject to Federal, State and Medicare taxes in accordance with IRS regulations.
Section 15 – Longevity Recognition Plan
15.1 The City/District provided a Longevity Recognition Plan in recognition of an Employee’s length of service with the City/District and that the City/District does not otherwise provide retiree medical benefits prior to October 1, 2007.
15.2 Employees who retired from the City/District as defined by P.E.R.S., whether for a normal retirement or an industrial disability retirement prior to October 1, 2007, receive a monthly benefits payment as outlined in the table below starting at the beginning of the first calendar month following retirement:
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11 Years of Service Upon Retirement Monthly Benefit
Day 1, Year 10 through Year 14 $125
Day 1, Year 15 through Year 19 $200
Day 1, Year 20 through Year 24 $275
Day 1, Year 25 and thereafter $350
15.3 The monthly benefit as described in Section 16.2 is payable to the Employee up until the Employee’s death. Benefits shall cease on the first day of the calendar month following the Employee’s death.
15.4 Prior to implementation of the Longevity Recognition Plan, the City/District determined a third party administrator was not necessary to establish and administer the plan. If the City/District makes a determination to the contrary in the future, such decision will be discussed with Employees prior to implementation. If a third-party administrator is used, any recurring administrative fees associated with administering the plan shall be paid by the participating employees. The City/District shall also strive to implement the Longevity Recognition Plan in accordance with Internal Revenue Code statutes and in a manner that minimizes the tax liability of the Employee to the extent possible.
15.5 Effective October 1, 2007, upon implementation of the enhanced 2.7% @ 55 retirement formula for Miscellaneous Management Employees per Section 2.1, the Longevity Recognition Plan no longer applied to the Miscellaneous Management Employees except for Employees who retired prior to October 1, 2007. Future retirees forfeited any previously agreed to benefit under this provision which terminated one day prior to the implementation of the enhanced retirement formula.
15.6 On July 1, 2006, the City/District implemented a Longevity Recognition Plan for Fire Safety Managers.
a. Fire Safety Managers hired on or before December 31, 2011 and who retire from the City/District as defined by P.E.R.S. whether for a normal retirement or an industrial disability retirement, shall receive a monthly benefit payment starting at the beginning of the first calendar month following retirement based upon the Employee’s length of service as follows:
Years of Service Upon Retirement Monthly Benefit Amount Day 1, Year 10 through Year 14 $125
Day 1, Year 15 through Year 19 $200
Day 1, Year 20 through Year 24 $275
Day 1, Year 25 and thereafter $350
b. Fire Safety Managers with 25 years and one day of service or more may receive the longevity recognition pay, so long as the following conditions are met:
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12 i. They separate with the City/District in good standing; and ii. They retire with P.E.R.S. within five (5) years of separation.
Fire Safety Managers separating under this subsection (b) are not eligible to receive the longevity recognition pay until after the Employee retires with P.E.R.S. To receive payment, the Employee must apply to the City/District for the benefit and show proof of retirement with P.E.R.S. Payments will commence on the same schedule and will not include any retroactive payments, either for time since separation or for time since the Employee retired with P.E.R.S.
c. Before separation of employment, the Employee must make an irrevocable election for one of the following options for the proportion of his/her longevity pay to be contributed to the VEBA account:
0% 25% 50% 75% 100%
If the Employee fails to make an election before the Employee’s last day of employment, the entire amount of the longevity pay will be contributed into the VEBA.
d. The monthly benefit as described in Section 16.6(a) is payable to the Employee up until the Employee’s death. Benefits shall cease on the first day of the calendar month following the Employee’s death.
e. Fire Safety Managers hired on or after January 1, 2012 will not be eligible for the Longevity Recognition Plan.
15.7 On January 1, 2002, the City/District implemented a Longevity Recognition Plan for the Police Safety Managers. This plan was implemented in recognition of an employee’s length of service with the City/District and that the City/District does not otherwise provide retiree medical benefits. Effective January 1, 2012, this plan was eliminated for all newly hired Police Safety Managers. a. Police Safety Managers hired on or before December 31, 2011, who file for a P.E.R.S. retirement while employed with the City/District, whether for a normal retirement or an industrial disability retirement, shall receive a monthly benefit payment starting at the beginning of the first calendar month following retirement to be contributed, in whole or in part, at the discretion of the Employee, into the Employee’s VEBA account. The amount of entire benefit is dependent upon the Employee’s length of service, as follows:
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13 Years of Service Upon Retirement % of
Maximum
Benefit
Monthly
Benefit
Amount
Day 1, Year 10 through Year 14 40% $140
Day 1, Year 15 through Year 19 60% $210
Day 1, Year 20 through Year 24 80% $275
Day 1, Year 25 and thereafter 100% $345
b. Police Safety Managers hired on or before December 31, 2011, before separation of employment, must opt for one of the following options for the proportion of his/her longevity pay to be contributed to the VEBA account:
0% 25% 50% 75% 100%
If the Employee fails to make an election before the Employee’s last day of employment, the entire amount of the longevity pay will be contributed into the VEBA.
c. The monthly benefit as described in Section 15.7(a) is payable to the Police Safety Manager up until the Employee’s death. Benefits shall cease on the first day of the calendar month following the Employee’s death. d. Police Safety Managers hired on or after January 1, 2012 will not be eligible for the Longevity Recognition Plan.
ARTICLE II
HOLIDAYS
Section 1 - Official City/District Holidays
1.1 The following holidays are observed by the City/District:
New Year's Day, January 1
Martin Luther King, Jr. Day, January 15 or its legal substitute (third Monday in January)
President’s Day, February 22 or its legal substitute (third Monday in February) Memorial Day, May 31 or its legal substitute (last Monday in May) Independence Day, July 4
Labor Day, first Monday in September
Veteran's Day, November 11
Thanksgiving Day, fourth Thursday in November
Day after Thanksgiving, fourth Friday in November
Christmas Eve, December 24
Christmas Day, December 25
New Years’ Eve, December 31
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14 When any day recognized as a holiday falls on a Sunday, the holiday shall be observed on the following Monday. When any day recognized as a holiday falls on a Saturday, the holiday shall be observed on the preceding Friday.
With regard to the holidays on Christmas Eve (December 24) and New Years’ Eve (December 31) should either date fall on a Saturday or Sunday, the preceding Friday shall be observed. In the case where Christmas Day and/or New Years’ Day are observed on Friday, the corresponding Eve holiday shall be observed on Thursday.
Section 2 – Holiday In-Lieu Pay
2.1 Police Lieutenants shall receive holiday in-lieu pay in the amount of 5.4% of their base pay in-lieu of twelve (12) City/District recognized holidays. Police Lieutenants wishing to take a holiday off will need to use other available leaves.
ARTICLE III
VACATION AND OTHER LEAVES
Section 1 - Vacation Accrual & Use
1.1 Employees eligible for vacation shall accrue vacation leave in accordance with the schedules in Sections 1.2, 1.3 and 1.4.
1.2 Vacation Accrual for Executive Management shall be as follows:
Years of Service Hours per Pay
Period
Maximum Hours Days per Year
1 through 5 5.00 360 15 working days
Day 1, Year 6 5.33 384 16 working days
Day 1, Year 7 5.67 408 17 working days
Day 1, Year 8 6.00 432 18 working days
Day 1, Year 9 6.33 456 19 working days
Day 1, Year 10 6.67 480 20 working days
Day 1, Year 11 to 15 7.00 504 21 working days
Day 1, Year 16 and
thereafter
7.67 552 23 working days
1.3 Vacation Accrual for Other Management Employees
Years of Service Hours per Pay
Period
Maximum Hours Days per Year
1 through 3 3.67 264 11 working days
Day 1, Year 4 4.00 288 12 working days
Day 1, Year 5 5.00 360 15 working days
Day 1, Year 6 5.33 384 16 working days
Day 1, Year 7 5.67 408 17 working days
Day 1, Year 8 6.00 432 18 working days
Day 1, Year 9 6.33 456 19 working days
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15 Day 1, Year 10 6.67 480 20 working days
Day 1, Year 11 to
15 7.00 504 21 working days
Day 1, Year 16
and thereafter
7.67 552 23 working days
1.4 Employees shall accrue vacation leave only as it is earned. New Employees shall not be eligible to use any vacation leave, however, until after completion of their initial six months of employment.
1.5 The City/District Manager may grant a new Management Employee a starting accrual rate that recognizes that individual’s professional service prior to becoming a Foster City Manager. This does not apply to promotional Employees.
1.6 Employees shall not accumulate more than the equivalent of three annual vacation accruals. An Employee who accumulates vacation in excess of three annual vacation accruals shall not accrue additional hours until the balance is below the maximum amount pursuant to this section. Employees may cash out up to a maximum of one hundred sixty (160) hours of accrued vacation leave once per calendar year in December. An Employee is eligible for this cash out option only if he/she has used at least forty eight (48) hours of vacation leave in the previous twelve (12) month period, retains a minimum accrued vacation leave balance of eighty (80) hours after the requested cash out, and filed a vacation cash out request form with Human Resources no later than December 20th of the prior year.
Payroll records will be used to determine whether or not an Employee has taken the required forty eight (48) hours of vacation leave. If an Employee has used twenty four (24) hours of vacation leave in the previous six (6) month period, the Employee is eligible to cash out up to eighty (80) hours of accrued vacation leave once per calendar year in December. An employee is eligible for this cash out option only if he/she retains a minimum accrued vacation leave balance of eighty (80) hours after the requested cash out and filed a vacation cash out request form with Human Resources no later than December 20 th of the prior year. Payroll records will be used to determine whether or not an Employee has taken the required twenty four (24) hours of vacation leave.
1.7 Vacation use may be deferred by the written approval of the City/District Manager when in the best interests of City/District government and the Employee.
1.8 It is the responsibility of the Employee to review the vacation accrual balance printed on his/her paycheck stub to ensure that he/she uses his/her vacation within three accrual years unless deferment is requested and obtained from the City/District Manager as provided.
1.9 Employees may use accrued vacation in one (1) hour increments, subject to Department Head (or City/District Manager in the case of Department Heads) approval.
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16 1.10 Additional guidelines that clarify the use and administration of this provision may be found in the City/District Personnel Rules.
1.11 At least thirty (30) days prior to separation, Management Employees may elect to (a) sell back up to a maximum of 200 hours of accrued vacation leave or (b) contribute up to a maximum of 200 hours of accrued vacation leave to their 457 Plan account within applicable IRS limits. A total of 200 hours of accrued vacation leave is available for sell back, 457 Plan contribution or a combination thereof. The number of hours to be sold or contributed must be accrued at the time of sell back or contribution, and if the Employee elects to sell back any accrued vacation leave hours, the Employee shall receive a check for the hours sold prior to separation of employment. If an Employee elects vacation sell back and/or 457 Plan contribution and participates in VEBA, the VEBA contribution vacation leave payout in Article I, Section 10.2 will be calculated by applying the contribution amount percentage in the vacation leave table in Article I, Section 10.2 to the remaining balance of the Employee’s accrued vacation leave after the sell back or 457 Plan contribution.
Section 2 - Administrative Leave
2.1 FLSA exempt employees shall be credited with eighty (80) hours of administrative leave annually. FLSA non-exempt employees shall be credited with thirty-six (36) hours of administrative leave annually. Administrative leave will be credited on December 1 and shall not be carried over past November 30 of the following year.
FLSA exempt employees may receive pay in lieu of time off for up to eighty (80) hours of unused administrative leave as of November 30, to be paid in December.
FLSA non-exempt employees may receive pay in lieu of time off for up to thirty-six (36) hours of unused administrative leave as of November 30, to be paid in December.
2.2 Administrative leave shall be prorated at the rate of 6.66 hours per month for exempt employees and 3 hours per month for non-exempt employees and may be used in advance subject to deduction from final paycheck should the Employee not complete the full year (12/1 - 11/30). Upon appointment, new Employees shall receive this leave on the same prorated basis.
2.3 Administrative leave shall be taken at the discretion of the Employee contingent upon approval by the City/District Manager for Executive Management and by the Department Head for all other Management Employees.
Section 3 – Recognition Leaves
Performance Component
3.1 Employees are eligible to receive a maximum of five (5) days of paid leave per fiscal year in recognition of exemplary performance.
3.2 Leave may be granted in any increment between one (1) day and five (5) days to individuals or to work teams for such reasons as a single outstanding achievement, consistently above standard job performance, or other extraordinary efforts on
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17 behalf of the City/District, as recommended by the Department Head and approved by the City/District Manager.
3.3 This leave must be taken as paid time off in the fiscal year in which it is granted.
This leave has no cash value and is not compensable upon termination of employment with the City/District.
Service Component
3.4 Employees who subsequently complete 10, 20 and 30 years of service with the City/District shall receive 40 hours of paid leave on their 10th, 20th and 30th anniversary of employment with the City/District on their anniversary date.
3.5 This leave must be taken as paid time off within one year of the date it is granted.
This leave has no cash value and is not compensable upon termination of employment with the City/District.
Section 4 - Funeral/Bereavement Leave
4.1 Regular and probationary Employees shall be entitled to up to three (3) working days of funeral/bereavement leave for each occurrence of death of an immediate family member. Requests for funeral/bereavement leave of up to three (3) working days and for any additional time beyond the standard leave of three (3) working days must be approved by the Department Head and the City/District Manager.
Immediate family shall mean spouse (including state-registered domestic partners), children of either spouse, either parent, brother or sister, Employee's grandparents, grandchildren, father-in-law, mother-in-law, brother-in-law or sister- in-law. Other relatives and significant persons may be included with the approval of the City/District Manager. This leave shall not be accumulated and is in addition to sick leave and vacation benefits.
4.2 Employees may be entitled to additional leave upon request, pursuant to Federal and State Family Leave laws.
Section 5 - Sick Leave Accrual & Use
5.1 Management Group Employees shall accrue sick leave at a rate of five and two thirds (5.666) hours per calendar month for each month that the Employee has worked regularly scheduled hours. There shall be no maximum accumulation of sick leave.
5.2 Employees may utilize unused sick leave to care for members of the immediate family and/or household members who have suffered an illness or injury in accordance with State law.
Family sick leave may be taken and if taken, shall be charged to sick leave or, with the concurrence of the Department Head, to vacation or administrative leave where the presence of the employee elsewhere is essential because of illness, or disability of immediate members of his/her family. Immediate family member means parent, child, spouse, registered domestic partner, parent-in-law, sibling,
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18 grandparent or grandchild. No more than half of the Employee’s annual accrual may be granted for family sick leave in any one calendar year. Any additional absences due to family illness or for other family members shall be charged to discretionary leave balances (e.g., vacation, compensatory time off, etc.).
5.3 Employees may be entitled to request additional leave pursuant to Federal and State Family Leave laws.
5.4 The patterns of use, frequency of occurrence, total hours used, and hours available compared to hours accrued for each Employee will be periodically reviewed by the Department Head. Department standards will be communicated and applied to evaluate the individual use of this benefit. An improvement plan may be developed and implemented by the Department Head, considering factors such as Employee circumstances, the operational impact of unscheduled absences, the obligation to provide consistency within the department, and the responsibility of managers to set a good example for other employees of the City/District.
5.5 Employees covered by this Plan are eligible to participate in a catastrophic leave donation program in accordance with the City/District’s Catastrophic Leave Donation Policy.
Section 6 - Industrial Disability Leave
6.1 The City/District will provide full pay for the initial three (3) months to non-Public Safety Employees who suffer industrial disabilities and are on authorized disability leave. During this period, the Employee will accrue benefits and the City/District will continue to contribute to benefits as usual. The Employee shall pay their usual portion of the benefits. Worker's Compensation benefits will be integrated and checks endorsed to the City/District by the Employee. No use of sick leave will be required during the first three (3) months.
6.2 After the first three (3) months of Industrial Disability Leave, until the Employee is determined to be able to return to work or permanent and stationary and unable to return to work, the Employee may integrate Worker's Compensation benefits with unused sick leave to assure no loss of compensation. The continuing eligibility for employee benefits will be determined in accordance with insurance contracts, State and Federal law, and City/District policy after the first three (3) months.
Section 7 - Educational Release Time
7.1 Employees shall be permitted to take job-related educational classes during on- duty hours within reasonable limits with approval of the Department Head and the City/District Manager.
EFFECTIVE DATE
This Plan shall take effect on July 1, 2023, and will remain in effect until further revised or replaced by action of the City Council.,
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19 Attachment A
Pay Plan for FY 2023-2024
Effective July 1, 2023, monthly wages for exempt classes represented by the Management Group shall be listed below:
Executive Management - Exempt
Step 1 Step 2 Step 3 Step 4 Step 5
Assistant City Manager 19,659.45 20,642.42 21,674.54 22,758.27 23,896.18 Chief of Police 19,659.45 20,642.42 21,674.54 22,758.27 23,896.18 Deputy City Manager 18,040.10 18,942.11 19,889.22 20,883.69 21,927.86 Director of Public Works 18,040.10 18,942.11 19,889.22 20,883.69 21,927.86 Parks & Recreation Director 17,609.77 18,490.25 19,414.75 20,385.49 21,404.76 Finance Director 17,609.77 18,490.25 19,414.75 20,385.49 21,404.76 Community Development Director 17,609.77 18,490.25 19,414.75 20,385.49 21,404.76 Administrative Services Director 17,609.77 18,490.25 19,414.75 20,385.49 21,404.76 Communications Director/City Clerk 16,804.81 17,645.04 18,527.29 19,453.65 20,426.33 Other Management - Exempt
Step 1 Step 2 Step 3 Step 4 Step 5
Police Captain 16,547.61 17,375.00 18,243.75 19,155.93 20,113.74 Engineering Manager 14,566.48 15,294.81 16,059.56 16,862.54 17,705.67 Police Lieutenant 14,389.06 15,108.51 15,863.93 16,657.13 17,489.97 Assistant Finance Director 13,931.29 14,627.84 15,359.24 16,127.19 16,933.56 Chief Building Official 13,351.78 14,019.37 14,720.33 15,456.34 16,229.17 Information Technology Manager 13,191.46 13,851.03 14,543.59 15,270.77 16,034.30 Economic Development Manager 13,191.46 13,851.03 14,543.59 15,270.77 16,034.30 Human Resources Manager 13,191.46 13,851.03 14,543.59 15,270.77 16,034.30 Planning Manager 12,889.71 13,534.20 14,210.91 14,921.45 15,667.53 Principal Management Analyst 12,485.95 13,110.24 13,765.75 14,454.04 15,176.74 Financial Services Manager 12,155.92 12,763.71 13,401.89 14,071.98 14,775.57
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20 Senior Civil Engineer 12,094.18 12,698.89 13,333.82 14,000.51 14,700.54 Public Works Maintenance Manager 11,917.57 12,513.45 13,139.13 13,796.09 14,485.88 Building/Fleet Maintenance Manager 11,321.77 11,887.86 12,482.25 13,106.37 13,761.70 Parks Maintenance Manager 11,083.45 11,637.63 12,219.51 12,830.50 13,472.02 Recreation Manager 10,908.61 11,454.04 12,026.73 12,628.06 13,259.46 Senior Management Analyst 10,857.15 11,400.01 11,970.02 12,568.52 13,196.94 Senior Planner 10,574.25 11,102.97 11,658.12 12,241.03 12,853.08 Associate Civil Engineer 10,516.81 11,042.65 11,594.79 12,174.53 12,783.26 Senior Human Resources Analyst 10,389.10 10,908.56 11,453.99 12,026.68 12,628.01 Public Works Maintenance Superintendent 10,129.36 10,635.82 11,167.61 11,725.98 12,312.28 Sr. Systems Analyst 9,970.64 10,469.16 10,992.61 11,542.23 12,119.35 Senior Accountant 9,803.58 10,293.76 10,808.46 11,348.88 11,916.32 Communications Manager 9,506.97 9,982.32 10,481.43 11,005.51 11,555.79 Assistant Engineer 9,464.99 9,938.24 10,435.15 10,956.90 11,504.74 Management Analyst 9,440.96 9,913.02 10,408.67 10,929.10 11,475.55 Associate Planner 9,194.92 9,654.67 10,137.40 10,644.28 11,176.50 Human Resources Analyst 9,033.77 9,485.46 9,959.73 10,457.72 10,980.61 Technology Analyst II 8,813.46 9,254.13 9,716.84 10,202.68 10,712.81 Accountant II 8,524.55 8,950.78 9,398.32 9,868.25 10,361.66 Assistant Planner 8,275.11 8,688.85 9,123.30 9,579.46 10,058.43 Technology Analyst I 7,762.46 8,150.58 8,558.11 8,986.02 9,435.31 Accountant I 7,672.43 8,056.05 8,458.86 8,881.81 9,325.91 Management Assistant 6,455.99 6,778.79 7,117.73 7,473.61 7,847.29 Effective July 1, 2023, hourly wages for non-exempt classes represented by the Management Group shall be listed below:
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21 Other Management - Non-Exempt
Step 1 Step 2 Step 3 Step 4 Step 5
Housing Coordinator 54.4671 57.1905 60.0500 63.0525 66.2051 Police Records Supervisor 49.8726 52.3662 54.9845 57.7337 60.6204 Deputy City Clerk 43.8784 46.0723 48.3759 50.7947 53.3344 Human Resources Technician 40.8812 42.9253 45.0716 47.3252 49.6915
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DATE: June 20, 2023
TO: Mayor and Members of the City Council President and Members of the Estero Municipal Improvement District (EMID) Board of Directors
VIA: Stefan Chatwin, City/District Manager
FROM: City’s Labor Negotiations Team
DEPARTMENT: Administrative Services
SUBJECT: APPROVING THE UPDATED JOB DESCRIPTIONS OF
ACCOUNTANT I, ACCOUNTANT II, ASSISTANT ENGINEER,
ASSISTANT FINANCE DIRECTOR, ASSISTANT PLANNER,
ASSOCIATE CIVIL ENGINEER, ASSOCIATE PLANNER, CHIEF
BUILDING OFFICIAL, CITY MANAGER, COMMUNICATIONS
DIRECTOR/CITY CLERK, COMMUNICATIONS MANAGER,
COMMUNITY DEVELOPMENT DIRECTOR, DEPUTY CITY
CLERK, DIRECTOR OF PUBLIC WORKS, ENGINEERING
MANAGER, FINANCE DIRECTOR, FINANCIAL SERVICES
MANAGER, HUMAN RESOURCES ANALYST, HUMAN
RESOURCES TECHNICIAN, HOUSING COORDINATOR,
INFORMATION TECHNOLOGY MANAGER, MANAGEMENT
ANALYST, PARKS AND RECREATION DIRECTOR, PARKS
MAINTENANCE MANAGER, PLANNING MANAGER, POLICE
CAPTIAN, POLICE CHIEF, POLICE LIEUTENANT, POLICE
RECORDS SUPERVISOR, PRINCIPAL MANAGEMENT
ANALYST, PUBLIC WORKS MAINTENANCE MANAGER, PUBLIC
WORKS MAINTENANCE SUPERINTENDENT, RECREATION
MANAGER, SENIOR CIVIL ENGINEER, SENIOR ACCOUNTANT,
SENIOR HUMAN RESOURCES ANALYST, SENIOR
MANAGEMENT ANALYST, SENIOR PLANNER, SR. SYSTEMS
ANALYST, TECHNOLOGY ANALYST I AND II
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RECOMMENDATION
It is recommended that the City Council/EMID Board of Directors (City Council) approve the attached resolutions approving the updated job classifications under the Management Compensation and Benefit Plan.
EXECUTIVE SUMMARY
Following the completion of a Classification Study, staff is requesting approval of the updated Management job classifications which were included in the study.
BACKGROUND/ANALYSIS
At the June 21, 2021 Regular Meeting, the City Council adopted Resolutions No. 2021- 90 and 3588 approving an agreement with Koff & Associates, a division of Gallagher Benefit Services, Inc. (Koff & Associates) for classification study services. Koff & Associates completed the study, including the preparation of new job classifications, and a final report was delivered to City Council on Monday, May 15, 2023.
Staff recommends replacing the existing job classifications with the following updated job classification (Use Ctrl + Click to follow the links to the updated job classifications):
Accountant I
Accountant II
Assistant Engineer
Assistant Finance Director
Assistant Planner
Associate Civil Engineer
Associate Planner
Building/Fleet Maintenance Manager
Chief Building Official
Chief of Police
Communications Director/City Clerk
Communications Manager
Community Development Director
Deputy City Clerk
Director of Public Works
Engineering Manager
Finance Director
Financial Services Manager
Housing Coordinator
Human Resources Analyst
Human Resources Technician
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Information Technology Manager
Management Analyst
Parks & Recreation Director
Parks Maintenance Manager
Planning Manager
Police Captain
Police Lieutenant
Police Records Supervisor
Principal Management Analyst
Public Works Maintenance Manager
Public Works Maintenance Superintendent
Recreation Manager
Senior Accountant
Senior Civil Engineer
Senior Human Resources Analyst
Senior Management Analyst
Senior Planner
Senior Systems Analyst
Technology Analyst I/II
California Environmental Quality Act
Not Applicable
FISCAL IMPACT
There is no financial impact associated with approving the updated job classifications.
CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Staff Empowerment and Operational Excellence
ATTACHMENTS:
Attachment 1 – City Resolution
Attachment 2 – EMID Resolution
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RESOLUTION NO.____________
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FOSTER CITY
APPROVING UPDATED JOB CLASSIFICATIONS FOR POSITIONS UNDER THE MANAGEMENT COMPENSATION AND BENEFIT PLAN: ACCOUNTANT I,
ACCOUNTANT II, ASSISTANT ENGINEER, ASSISTANT FINANCE DIRECTOR,
ASSISTANT PLANNER, ASSOCIATE CIVIL ENGINEER, ASSOCIATE PLANNER,
CHIEF BUILDING OFFICIAL, CITY MANAGER, COMMUNICATIONS DIRECTOR/CITY
CLERK, COMMUNICATIONS MANAGER, COMMUNITY DEVELOPMENT DIRECTOR,
DEPUTY CITY CLERK, DIRECTOR OF PUBLIC WORKS, ENGINEERING MANAGER,
FINANCE DIRECTOR, FINANCIAL SERVICES MANAGER, HUMAN RESOURCES
ANALYST, HUMAN RESOURCES TECHNICIAN, HOUSING COORDINATOR,
INFORMATION TECHNOLOGY MANAGER, MANAGEMENT ANALYST, PARKS AND
RECREATION DIRECTOR, PARKS MAINTENANCE MANAGER, PLANNING
MANAGER, POLICE CAPTAIN, POLICE CHIEF, POLICE LIEUTENANT, POLICE
RECORDS SUPERVISOR, PRINCIPAL MANAGEMENT ANALYST, PUBLIC WORKS
MAINTENANCE MANAGER, PUBLIC WORKS MAINTENANCE SUPERINTENDENT,
RECREATION MANAGER, SENIOR CIVIL ENGINEER, SENIOR ACCOUNTANT,
SENIOR HUMAN RESOURCES ANALYST, SENIOR MANAGEMENT ANALYST, SENIOR PLANNER, SR. SYSTEMS ANALYST, TECHNOLOGY ANALYST I AND II
CITY OF FOSTER CITY
WHEREAS, the City has adopted a classification plan of job class titles with associated distinguishing characteristics, examples of duties, statements of desired knowledge, skills, and abilities, and minimum qualifications for each class; and WHEREAS, there is a need to periodically evaluate and revise the requirements of those classes; and WHEREAS, a Classification Study was recently completed including the review of all job classifications; and
WHEREAS, the updated job classifications resulting from the study which fall under the Management Compensation and Benefit Plan were reviewed by the Management team and no changes were requested; and
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Foster City does hereby approve updated job classifications for positions under the Management Compensation and Benefit Plan: Accountant I, Accountant II, Assistant Engineer, Assistant Finance Director, Assistant Planner, Associate Civil Engineer, Associate Planner, Chief Building Official, City Manager, Communications Director/City Clerk, Communications Manager, Community Development Director, Deputy City Clerk, Director Of Public Works, Engineering Manager, Finance Director, Financial Services Manager, Human Resources Analyst, Human Resources Technician, Housing Coordinator, Information Technology Manager, Management Analyst, Parks And
6.14 Attachment 1 - City Resolution
342
Recreation Director, Parks Maintenance Manager, Planning Manager, Police Captain, Police Chief, Police Lieutenant, Police Records Supervisor, Principal Management Analyst, Public Works Maintenance Manager, Public Works Maintenance Superintendent, Recreation Manager, Senior Civil Engineer, Senior Accountant, Senior Human Resources Analyst, Senior Management Analyst, Senior Planner, Sr. Systems Analyst, and Technology Analyst I and II.
PASSED AND ADOPTED as a resolution of the City Council of the City of Foster City at the special meeting held on the 20th day of June, 2023, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
JON FROOMIN, MAYOR
ATTEST:
PRISCILLA SCHAUS, CITY CLERK
6.14 Attachment 1 - City Resolution
343
RESOLUTION NO.____________
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ESTERO MUNICIPAL
IMPROVEMENT DISTRICT APPROVING UPDATED JOB CLASSIFICATIONS FOR POSITIONS UNDER THE MANAGEMENT COMPENSATION AND BENEFIT PLAN:
ACCOUNTANT I, ACCOUNTANT II, ASSISTANT ENGINEER, ASSISTANT FINANCE
DIRECTOR, ASSISTANT PLANNER, ASSOCIATE CIVIL ENGINEER, ASSOCIATE
PLANNER, CHIEF BUILDING OFFICIAL, CITY MANAGER, COMMUNICATIONS
DIRECTOR/CITY CLERK, COMMUNICATIONS MANAGER, COMMUNITY
DEVELOPMENT DIRECTOR, DEPUTY CITY CLERK, DIRECTOR OF PUBLIC
WORKS, ENGINEERING MANAGER, FINANCE DIRECTOR, FINANCIAL SERVICES
MANAGER, HUMAN RESOURCES ANALYST, HUMAN RESOURCES TECHNICIAN,
HOUSING COORDINATOR, INFORMATION TECHNOLOGY MANAGER,
MANAGEMENT ANALYST, PARKS AND RECREATION DIRECTOR, PARKS
MAINTENANCE MANAGER, PLANNING MANAGER, POLICE CAPTAIN, POLICE
CHIEF, POLICE LIEUTENANT, POLICE RECORDS SUPERVISOR, PRINCIPAL
MANAGEMENT ANALYST, PUBLIC WORKS MAINTENANCE MANAGER, PUBLIC
WORKS MAINTENANCE SUPERINTENDENT, RECREATION MANAGER, SENIOR
CIVIL ENGINEER, SENIOR ACCOUNTANT, SENIOR HUMAN RESOURCES ANALYST, SENIOR MANAGEMENT ANALYST, SENIOR PLANNER, SR. SYSTEMS
ANALYST, TECHNOLOGY ANALYST I AND II
ESTERO MUNICIPAL IMPROVEMENT DISTRICT
WHEREAS, the District has adopted a classification plan of job class titles with associated distinguishing characteristics, examples of duties, statements of desired knowledge, skills, and abilities, and minimum qualifications for each class; and WHEREAS, there is a need to periodically evaluate and revise the requirements of those classes; and
WHEREAS, a Classification Study was recently completed including the review of all job classifications; and
WHEREAS, the updated job classifications resulting from the study which fall under the Management Compensation and Benefit Plan were reviewed by the Management team and no changes were requested; and
NOW, THEREFORE, BE IT RESOLVED that the Board of Directors of the Estero Municipal Improvement District does hereby approve updated job classifications for positions under the Management Compensation and Benefit Plan: Accountant I, Accountant II, Assistant Engineer, Assistant Finance Director, Assistant Planner, Associate Civil Engineer, Associate Planner, Chief Building Official, City Manager, Communications Director/City Clerk, Communications Manager, Community Development Director, Deputy City Clerk, Director Of Public Works, Engineering
6.14 Attachment 2 - EMID Resolution
344
Manager, Finance Director, Financial Services Manager, Human Resources Analyst, Human Resources Technician, Housing Coordinator, Information Technology Manager, Management Analyst, Parks And Recreation Director, Parks Maintenance Manager, Planning Manager, Police Captain, Police Chief, Police Lieutenant, Police Records Supervisor, Principal Management Analyst, Public Works Maintenance Manager, Public Works Maintenance Superintendent, Recreation Manager, Senior Civil Engineer, Senior Accountant, Senior Human Resources Analyst, Senior Management Analyst, Senior Planner, Sr. Systems Analyst, and Technology Analyst I and II.
PASSED AND ADOPTED as a resolution of the Board of Directors of the Estero Municipal Improvement District at the special meeting held on the 20 th day of June, 2023, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
JON FROOMIN, PRESIDENT
ATTEST:
PRISCILLA SCHAUS, DISTRICT SECRETARY
6.14 Attachment 2 - EMID Resolution
345
DATE: June 20, 2023
TO: Mayor and Members of the City Council President and Members of the Estero Municipal Improvement District (EMID) Board of Directors
VIA: Stefan Chatwin, City/District Manager
FROM: City’s Labor Negotiations Team
DEPARTMENT: Administrative Services
SUBJECT: CITY/DISTRICT PAY PLAN FOR FISCAL YEAR 2022-2023 AND 2023-2024
RECOMMENDATION
It is recommended that the City Council/EMID Board of Directors (City Council) adopt resolutions approving the updated Pay Plan for Fiscal Year 2022-2023, effective June 1, 2023, and the Pay Plan for Fiscal Year 2023-2024, effective July 1, 2023.
BACKGROUND/ANALYSIS
Staff has recommended the approval of the updated Management Compensation and Benefit Plan effective June 1, 2023 and the new Management Compensation and Benefit Plan effective July 1, 2023. With City Council’s approval, staff is bringing forward an updated Pay Plan for FY 2022-2023 to include the updated salary ranges effective June 1, 2023, and the new Pay Plan for FY 2023-2024 to include the updated salary range for the Management effective July 1, 2023.
To meet CalPERS requirements under Government Code 20636 and CCR section 570.5, which requires public agencies to provide a publicly available pay schedule, staff is bringing these items forward to ensure the City’s pay schedule is updated with the newly approved pay rates. Staff requests approval of the resolutions to approve the updated Pay Plan for Fiscal Year 2022-2023, effective June 1, 2023, and the Pay Plan
6.15 6.15 Staff Report
346
for Fiscal Year 2023-2024, effective July 1, 2023. Upon approval, staff will publish the updated pay plan on the City’s website for public access.
California Environmental Quality Act
Not Applicable
FISCAL IMPACT
The updated FY 2022-2023 Pay Plan reflects the approved salary ranges provided for Management effective June 1, 2023. No additional budget allocation is required for FY 2022-2023 due to salary savings. The FY 2023-2024 Pay Plan reflects the approved salary ranges provided for Management effective July 1, 2023. The increased employee costs associated with the Management Compensation and Benefit Plan will be included in the FY 2023-2024 budget to be considered for adoption by City Council at the June 20, 2023 Special Meeting.
CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Staff Empowerment and Operational Excellence
ATTACHMENTS:
Attachment 1 - City Resolution
Attachment 2 - EMID Resolution
Attachment 3 - City/District Pay Plan for FY 2022-2023, effective June 1, 2023 Attachment 4 – City/District Pay Plan for FY 2023-2024, effective July 1, 2023
6.15 6.15 Staff Report
347
RESOLUTION NO.____________
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FOSTER CITY APPROVING AND ADOPTING THE UPDATED PAY PLAN FOR FISCAL YEAR 2022- 2023, EFFECTIVE JUNE 1, 2023, AND THE PAY PLAN FOR FISCAL YEAR 2023- 2024, EFFECTIVE JULY 1, 2023
CITY OF FOSTER CITY
WHEREAS, the City Manager has prepared and submitted to the City Council an updated pay plan for Fiscal Year 2022-2023 effective June 1, 2023; and WHEREAS, the City Manager has prepared and submitted to the City Council a pay plan for Fiscal Year 2023-2024 effective July 1, 2023; and WHEREAS, the pay plans incorporate the salary increases for the Foster City Management Group; and
WHEREAS, the pay plans also reflect the salary of the City Manager per the Amended Employment Agreement; and
WHEREAS, the City Council must approve the pay plans in order for the pay ranges to become effective.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Foster City does hereby approve and adopt the updated Pay Plan for Fiscal Year 2022- 2023, effective June 1, 2023, and the Pay Plan for Fiscal Year 2023-2024, effective July 1, 2023.
PASSED AND ADOPTED as a resolution of the City Council of the City of Foster City at the special meeting held on the 20th day of June 2023, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
JON FROOMIN, MAYOR
ATTEST:
PRISCILLA SCHAUS, CITY CLERK
6.15 Attachment 1 - City Resolution
348
RESOLUTION NO.____________
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ESTERO MUNICIPAL
IMPROVEMENT DISTRICT APPROVING AND ADOPTING THE UPDATED PAY PLAN FOR FISCAL YEAR 2022-2023, EFFECTIVE JUNE 1, 2023, AND THE PAY PLAN FOR FISCAL YEAR 2023-2024, EFFECTIVE JULY 1, 2023
ESTERO MUNICIPAL IMPROVEMENT DISTRICT
WHEREAS, the District Manager has prepared and submitted to the Board of Directors an updated pay plan for Fiscal Year 2022-2023 effective June 1, 2023; and WHEREAS, the District Manager has prepared and submitted to the Board of Directors a pay plan for Fiscal Year 2023-2024 effective July 1, 2023; and WHEREAS, the pay plans incorporate the salary increases for the Foster City Management Group; and
WHEREAS, the pay plans also reflect the salary of the District Manager per the Amended Employment Agreement; and
WHEREAS, the Board of Directors must approve the pay plans in order for the pay ranges to become effective.
NOW, THEREFORE, BE IT RESOLVED that the Board of Directors of the Estero Municipal Improvement District does hereby approve and adopt the updated Pay Plan for Fiscal Year 2022-2023, effective June 1, 2023, and the Pay Plan for Fiscal Year 2023-2024, effective July 1, 2023.
PASSED AND ADOPTED as a Resolution of the Board of Directors of the Estero Municipal Improvement District at the special meeting held on the 20 th day of June 2023, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
JON FROOMIN, PRESIDENT
ATTEST:
PRISCILLA SCHAUS, DISTRICT SECRETARY
6.15 Attachment 2 - EMID Resolution
349
Exhibit ACity of Foster City / Estero Municipal Improvement District FY 2022-2023 Pay Plan
Effective June 1, 2023
Hourly
Position Step 1 Step 2 Step 3 Step 4 Step 5
Monthly
Executive Management
City Manager 25,276.49$
Chief of Police 18,867.04$ 19,810.39$ 20,800.90$ 21,840.95$ 22,933.00$ Assistant City Manager 18,867.04$ 19,810.39$ 20,800.90$ 21,840.95$ 22,933.00$ Director of Public Works 17,312.97$ 18,178.61$ 19,087.54$ 20,041.91$ 21,044.00$ Deputy City Manager 17,312.97$ 18,178.61$ 19,087.54$ 20,041.91$ 21,044.00$ Community Development Director 16,899.95$ 17,744.95$ 18,632.19$ 19,563.80$ 20,542.00$ Finance Director 16,899.95$ 17,744.95$ 18,632.19$ 19,563.80$ 20,542.00$ Administrative Services Director 16,899.95$ 17,744.95$ 18,632.19$ 19,563.80$ 20,542.00$ Parks & Recreation Director 16,899.95$ 17,744.95$ 18,632.19$ 19,563.80$ 20,542.00$ Communications Director / City Clerk 16,127.44$ 16,933.80$ 17,780.50$ 18,669.53$ 19,603.00$ Other Management - Exempt
Police Captain 15,880.63$ 16,674.67$ 17,508.40$ 18,383.82$ 19,303.00$ Engineering Manager 13,979.39$ 14,678.35$ 15,412.26$ 16,182.87$ 16,992.00$ Police Lieutenant 13,809.05$ 14,499.51$ 15,224.47$ 15,985.70$ 16,785.00$ Assistant Finance Director 13,369.72$ 14,038.21$ 14,740.13$ 15,477.14$ 16,251.00$ Chief Building Official 12,813.60$ 13,454.27$ 14,126.98$ 14,833.33$ 15,575.00$ Economic Development Manager 12,659.75$ 13,292.73$ 13,957.35$ 14,655.23$ 15,388.00$ Information Technology Manager 12,659.75$ 13,292.73$ 13,957.35$ 14,655.23$ 15,388.00$ Human Resources Manager 12,659.75$ 13,292.73$ 13,957.35$ 14,655.23$ 15,388.00$ Planning Manager 12,370.16$ 12,988.66$ 13,638.09$ 14,320.00$ 15,036.01$ Principal Management Analyst 11,982.65$ 12,581.78$ 13,210.88$ 13,871.42$ 14,564.99$ Financial Services Manager 11,665.92$ 12,249.22$ 12,861.68$ 13,504.76$ 14,180.00$ Senior Civil Engineer 11,606.68$ 12,187.01$ 12,796.37$ 13,436.19$ 14,108.00$ Public Works Maintenance Manager 11,437.19$ 12,009.05$ 12,609.51$ 13,240.00$ 13,901.99$ Building/Fleet Maintance Manager 10,865.42$ 11,408.70$ 11,979.14$ 12,578.09$ 13,207.00$ Parks Maintenance Manager 10,636.72$ 11,168.56$ 11,726.99$ 12,313.34$ 12,929.00$ Recreation Manager 10,468.88$ 10,992.33$ 11,541.95$ 12,119.05$ 12,725.00$ Senior Management Analyst 10,419.53$ 10,940.51$ 11,487.53$ 12,061.90$ 12,665.00$ Senior Planner 10,148.04$ 10,655.44$ 11,188.22$ 11,747.63$ 12,335.00$ Associate Civil Engineer 10,092.92$ 10,597.57$ 11,127.45$ 11,683.81$ 12,268.00$ Senior Human Resources Analyst 9,970.31$ 10,468.83$ 10,992.28$ 11,541.90$ 12,119.00$ Public Works Maintenance Superintendent 9,721.05$ 10,207.10$ 10,717.46$ 11,253.34$ 11,816.00$ Sr. Systems Analyst 9,568.73$ 10,047.16$ 10,549.52$ 11,076.99$ 11,630.84$ Senior Accountant 9,408.41$ 9,878.84$ 10,372.79$ 10,891.42$ 11,436.00$ Communications Manager 9,123.76$ 9,579.96$ 10,058.97$ 10,561.91$ 11,090.00$ Assistant Engineer 9,083.48$ 9,537.65$ 10,014.52$ 10,515.25$ 11,041.00$ Management Analyst 9,060.41$ 9,513.43$ 9,989.11$ 10,488.57$ 11,013.00$ Associate Planner 8,824.31$ 9,265.53$ 9,728.80$ 10,215.24$ 10,726.01$ Human Resources Analyst 8,669.63$ 9,103.12$ 9,558.28$ 10,036.19$ 10,538.01$ Technology Analyst II 8,458.18$ 8,881.10$ 9,325.16$ 9,791.43$ 10,281.00$ Accountant II 8,180.93$ 8,589.98$ 9,019.49$ 9,470.47$ 9,944.00$ Assistant Planner 7,953.09$ 8,350.75$ 8,768.29$ 9,206.70$ 9,667.04$ Technology Analyst I 7,449.57$ 7,822.05$ 8,213.16$ 8,623.82$ 9,055.00$ Accountant I 7,363.18$ 7,731.34$ 8,117.91$ 8,523.81$ 8,950.00$ Management Assistant 6,195.75$ 6,505.53$ 6,830.81$ 7,172.34$ 7,530.96$
6.15 Attachment 3 - City District Pay Plan for FY 2022-2023, effective June 1, 2023
350
Exhibit ACity of Foster City / Estero Municipal Improvement District FY 2022-2023 Pay Plan
Effective June 1, 2023
Hourly
Position Step 1 Step 2 Step 3 Step 4 Step 5
Other Management - Non-Exempt
Deputy City Clerk 42.6844$ 44.8186$ 47.0595$ 49.4125$ 51.8831$ Police Records Supervisor 47.8623$ 50.2554$ 52.7682$ 55.4066$ 58.1769$ Housing Coordinator 52.2716$ 54.8852$ 57.6295$ 60.5110$ 63.5365$ Human Resources Technician 39.2334$ 41.1951$ 43.2549$ 45.4176$ 47.6885$ AFSCME - Maintenance Unit
Public Works Lead Maintenance Worker 40.1053$ 42.1106$ 44.2161$ 46.4269$ 48.7482$ Building Lead Maintenance Worker 39.3736$ 41.3423$ 43.4094$ 45.5799$ 47.8589$ Parks Lead Maintenance Worker 39.3736$ 41.3423$ 43.4094$ 45.5799$ 47.8589$ Irrigation Technician 39.3736$ 41.3423$ 43.4094$ 45.5799$ 47.8589$ Mechanic I 38.9202$ 40.8662$ 42.9095$ 45.0550$ 47.3077$ Building Maintenance Worker II 37.0696$ 38.9231$ 40.8693$ 42.9128$ 45.0584$ Public Works Maintenance Worker II 36.3767$ 38.1955$ 40.1053$ 42.1106$ 44.2161$ Parks Maintenance Worker II 35.7130$ 37.4987$ 39.3736$ 41.3423$ 43.4094$ Equipment Maintenance Worker 35.3018$ 37.0669$ 38.9202$ 40.8662$ 42.9095$ Building Maintenance Worker I 33.6232$ 35.3044$ 37.0696$ 38.9231$ 40.8693$ Public Works Maintenance Worker I 32.9948$ 34.6445$ 36.3767$ 38.1955$ 40.1053$ Parks Maintenance Worker I 32.3928$ 34.0124$ 35.7130$ 37.4987$ 39.3736$ Public Works Maintenance Worker 29.9272$ 31.4236$
Parks Maintenance Worker 29.3812$ 30.8503$
AFSCME - General Unit
Plans Examiner 57.4858$ 60.3601$ 63.3781$ 66.5470$ 69.8744$ Sr. Bldg Inspector 52.1413$ 54.7484$ 57.4858$ 60.3601$ 63.3781$ Building Inspector 47.2937$ 49.6584$ 52.1413$ 54.7484$ 57.4858$ Sr. Engineering Technician 41.9548$ 44.0525$ 46.2551$ 48.5679$ 50.9963$ Recreation Coordinator II 41.4501$ 43.5226$ 45.6987$ 47.9836$ 50.3828$ Social Media / Communication Assistant 39.4086$ 41.3790$ 43.4479$ 45.6203$ 47.9013$ Administrative Assistant II 38.4133$ 40.3340$ 42.3507$ 44.4682$ 46.6916$ Recreation Coordinator I 37.5965$ 39.4763$ 41.4501$ 43.5226$ 45.6987$ Code Enforcement Officer II 37.5319$ 39.4085$ 41.3789$ 43.4478$ 45.6202$ Building Permit Technician II 36.5940$ 38.4237$ 40.3449$ 42.3621$ 44.4802$ Senior Accounting Specialist 35.3789$ 37.1478$ 39.0052$ 40.9555$ 43.0033$ Administrative Assistant I 34.8420$ 36.5841$ 38.4133$ 40.3340$ 42.3507$ Sr. Comm. Services Officer 34.0427$ 35.7448$ 37.5320$ 39.4086$ 41.3790$ Code Enforcement Officer I 34.0427$ 35.7448$ 37.5320$ 39.4086$ 41.3790$ Accounting Specialist 33.6942$ 35.3789$ 37.1478$ 39.0052$ 40.9555$ Building Services Coordinator 33.6232$ 35.3044$ 37.0696$ 38.9231$ 40.8693$ Police Records Specialist 33.1918$ 34.8514$ 36.5940$ 38.4237$ 40.3449$ Building Permit Technician I 33.1918$ 34.8514$ 36.5940$ 38.4237$ 40.3449$ Office Assistant II 30.7981$ 32.3380$ 33.9549$ 35.6526$ 37.4352$ Office Assistant I 27.9348$ 29.3315$
FCPOA
Police Sergeant 65.4277$ 68.6991$ 72.1341$ 75.7408$ 79.5278$ Police Corporal 59.7810$ 62.7701$ 65.9086$ 69.2040$ 72.6642$ Police Dispatch Supervisor 54.9079$ 57.6533$ 60.5360$ 63.5628$ 66.7409$ Police Officer 54.0295$ 56.7310$ 59.5675$ 62.5459$ 65.6732$ Lead Police Dispatcher 50.2962$ 52.8110$ 55.4516$ 58.2242$ 61.1354$ Police Officer Recruit 49.0063$ 51.4566$
Police/Fire Dispatcher 45.6201$ 47.9011$ 50.2962$ 52.8110$ 55.4516$ Hourly / Part-Time / Seasonal
Building Services Coordinator Assistant 18.94$ 19.60$ 20.29$ 21.00$ 21.74$ Recreation Leader III 18.94$ 19.60$ 20.29$ 21.00$ 21.74$ Recreation Leader II 17.68$ 18.30$ 18.93$ 19.60$ 20.29$ Building Serv. Assistant 16.50$ 17.08$ 17.68$ 18.29$ 18.93$ Clerical Assistant 16.50$ 17.08$ 17.68$ 18.29$ 18.93$ Recreation Leader I 16.50$ 17.08$ 17.68$ 18.29$ 18.93$ Department Intern 16.50$ 30.00$
Videographer 20.00$ 30.00$
Hourly
6.15 Attachment 3 - City District Pay Plan for FY 2022-2023, effective June 1, 2023
351
Exhibit ACity of Foster City / Estero Municipal Improvement District FY 2023-2022 Pay Plan
Effective July 1, 2023
Hourly
Position Step 1 Step 2 Step 3 Step 4 Step 5
Monthly
Executive Management
City Manager 26,338.10$
Chief of Police 19,659.45 20,642.42 21,674.54 22,758.27 23,896.18 Assistant City Manager 19,659.45 20,642.42 21,674.54 22,758.27 23,896.18 Director of Public Works 18,040.10 18,942.11 19,889.22 20,883.69 21,927.86 Deputy City Manager 18,040.10 18,942.11 19,889.22 20,883.69 21,927.86 Community Development Director 17,609.77 18,490.25 19,414.75 20,385.49 21,404.76 Finance Director 17,609.77 18,490.25 19,414.75 20,385.49 21,404.76 Administrative Services Director 17,609.77 18,490.25 19,414.75 20,385.49 21,404.76 Parks & Recreation Director 17,609.77 18,490.25 19,414.75 20,385.49 21,404.76 Communications Director / City Clerk 16,804.81 17,645.04 18,527.29 19,453.65 20,426.33 Other Management - Exempt
Police Captain 16,547.61 17,375.00 18,243.75 19,155.93 20,113.74 Engineering Manager 14,566.48 15,294.81 16,059.56 16,862.54 17,705.67 Police Lieutenant 14,389.06 15,108.51 15,863.93 16,657.13 17,489.97 Assistant Finance Director 13,931.29 14,627.84 15,359.24 16,127.19 16,933.56 Chief Building Official 13,351.78 14,019.37 14,720.33 15,456.34 16,229.17 Economic Development Manager 13,191.46 13,851.03 14,543.59 15,270.77 16,034.30 Information Technology Manager 13,191.46 13,851.03 14,543.59 15,270.77 16,034.30 Human Resources Manager 13,191.46 13,851.03 14,543.59 15,270.77 16,034.30 Planning Manager 12,889.71 13,534.20 14,210.91 14,921.45 15,667.53 Principal Management Analyst 12,485.95 13,110.24 13,765.75 14,454.04 15,176.74 Financial Services Manager 12,155.92 12,763.71 13,401.89 14,071.98 14,775.57 Senior Civil Engineer 12,094.18 12,698.89 13,333.82 14,000.51 14,700.54 Public Works Maintenance Manager 11,917.57 12,513.45 13,139.13 13,796.09 14,485.88 Building/Fleet Maintance Manager 11,321.77 11,887.86 12,482.25 13,106.37 13,761.70 Parks Maintenance Manager 11,083.45 11,637.63 12,219.51 12,830.50 13,472.02 Recreation Manager 10,908.61 11,454.04 12,026.73 12,628.06 13,259.46 Senior Management Analyst 10,857.15 11,400.01 11,970.02 12,568.52 13,196.94 Senior Planner 10,574.25 11,102.97 11,658.12 12,241.03 12,853.08 Associate Civil Engineer 10,516.81 11,042.65 11,594.79 12,174.53 12,783.26 Senior Human Resources Analyst 10,389.10 10,908.56 11,453.99 12,026.68 12,628.01 Public Works Maintenance Superintendent 10,129.36 10,635.82 11,167.61 11,725.98 12,312.28 Sr. Systems Analyst 9,970.64 10,469.16 10,992.61 11,542.23 12,119.35 Senior Accountant 9,803.58 10,293.76 10,808.46 11,348.88 11,916.32 Communications Manager 9,506.97 9,982.32 10,481.43 11,005.51 11,555.79 Assistant Engineer 9,464.99 9,938.24 10,435.15 10,956.90 11,504.74 Management Analyst 9,440.96 9,913.02 10,408.67 10,929.10 11,475.55 Associate Planner 9,194.92 9,654.67 10,137.40 10,644.28 11,176.50 Human Resources Analyst 9,033.77 9,485.46 9,959.73 10,457.72 10,980.61 Technology Analyst II 8,813.46 9,254.13 9,716.84 10,202.68 10,712.81 Accountant II 8,524.55 8,950.78 9,398.32 9,868.25 10,361.66 Assistant Planner 8,275.11 8,688.85 9,123.30 9,579.46 10,058.43 Technology Analyst I 7,762.46 8,150.58 8,558.11 8,986.02 9,435.31 Accountant I 7,672.43 8,056.05 8,458.86 8,881.81 9,325.91 Management Assistant 6,455.99 6,778.79 7,117.73 7,473.61 7,847.29
6.15 Attachment 4 - City District Pay Plan for FY 2023-2024, effective July 1, 2023
352
Exhibit ACity of Foster City / Estero Municipal Improvement District FY 2023-2022 Pay Plan
Effective July 1, 2023
Hourly
Position Step 1 Step 2 Step 3 Step 4 Step 5
Other Management - Non-Exempt
Deputy City Clerk 43.8784 46.0723 48.3759 50.7947 53.3344 Police Records Supervisor 49.8726 52.3662 54.9845 57.7337 60.6204 Housing Coordinator 54.4671 57.1905 60.0500 63.0525 66.2051 Human Resources Technician 40.8812 42.9253 45.0716 47.3252 49.6915 AFSCME - Maintenance Unit
Public Works Lead Maintenance Worker 40.1052$ 42.1105$ 44.2160$ 46.4268$ 48.7481$ Building Lead Maintenance Worker 39.3736$ 41.3423$ 43.4094$ 45.5799$ 47.8589$ Parks Lead Maintenance Worker 39.3736$ 41.3423$ 43.4094$ 45.5799$ 47.8589$ Irrigation Technician 39.3736$ 41.3423$ 43.4094$ 45.5799$ 47.8589$ Mechanic I 38.9202$ 40.8662$ 42.9095$ 45.0550$ 47.3077$ Building Maintenance Worker II 37.0695$ 38.9230$ 40.8692$ 42.9127$ 45.0583$ Public Works Maintenance Worker II 36.3766$ 38.1954$ 40.1052$ 42.1105$ 44.2160$ Parks Maintenance Worker II 35.7130$ 37.4986$ 39.3735$ 41.3422$ 43.4093$ Equipment Maintenance Worker 35.3018$ 37.0669$ 38.9202$ 40.8662$ 42.9095$ Building Maintenance Worker I 33.6232$ 35.3044$ 37.0696$ 38.9231$ 40.8693$ Public Works Maintenance Worker I 32.9948$ 34.6445$ 36.3767$ 38.1955$ 40.1053$ Parks Maintenance Worker I 32.3928$ 34.0124$ 35.7130$ 37.4986$ 39.3735$ Public Works Maintenance Worker 29.9272$ 31.4236$
Parks Maintenance Worker 29.3812$ 30.8503$
AFSCME - General Unit
Plans Examiner 57.4858$ 60.3601$ 63.3781$ 66.5470$ 69.8744$ Sr. Bldg Inspector 52.1412$ 54.7483$ 57.4857$ 60.3600$ 63.3780$ Building Inspector 47.2936$ 49.6583$ 52.1412$ 54.7483$ 57.4857$ Sr. Engineering Technician 41.9548$ 44.0525$ 46.2551$ 48.5679$ 50.9963$ Recreation Coordinator II 41.4501$ 43.5226$ 45.6987$ 47.9836$ 50.3828$ Social Media / Communication Assistant 39.4086$ 41.3790$ 43.4479$ 45.6203$ 47.9013$ Administrative Assistant II 38.4132$ 40.3339$ 42.3506$ 44.4681$ 46.6915$ Recreation Coordinator I 37.5964$ 39.4762$ 41.4500$ 43.5225$ 45.6986$ Code Enforcement Officer II 37.5319$ 39.4085$ 41.3789$ 43.4478$ 45.6202$ Building Permit Technician II 36.5939$ 38.4236$ 40.3448$ 42.3620$ 44.4801$ Senior Accounting Specialist 35.3789$ 37.1478$ 39.0052$ 40.9555$ 43.0033$ Administrative Assistant I 34.8420$ 36.5841$ 38.4133$ 40.3340$ 42.3507$ Sr. Comm. Services Officer 34.0427$ 35.7448$ 37.5320$ 39.4086$ 41.3790$ Code Enforcement Officer I 34.0427$ 35.7448$ 37.5320$ 39.4086$ 41.3790$ Accounting Specialist 33.6942$ 35.3789$ 37.1478$ 39.0052$ 40.9555$ Building Services Coordinator 33.6232$ 35.3044$ 37.0696$ 38.9231$ 40.8693$ Police Records Specialist 33.1918$ 34.8514$ 36.5940$ 38.4237$ 40.3449$ Building Permit Technician I 33.1918$ 34.8514$ 36.5940$ 38.4237$ 40.3449$ Office Assistant II 30.7981$ 32.3380$ 33.9549$ 35.6526$ 37.4352$ Office Assistant I 27.9348$ 29.3315$
FCPOA
Police Sergeant 68.1757$ 71.5845$ 75.1637$ 78.9219$ 82.8680$ Police Corporal 62.2919$ 65.4065$ 68.6768$ 72.1106$ 75.7161$ Police Dispatch Supervisor 57.2142$ 60.0749$ 63.0786$ 66.2325$ 69.5441$ Police Officer 56.2988$ 59.1137$ 62.0694$ 65.1729$ 68.4315$ Lead Police Dispatcher 52.4087$ 55.0291$ 57.7806$ 60.6696$ 63.7031$ Police Officer Recruit 51.0645$ 53.6177$
Police/Fire Dispatcher 47.5362$ 49.9130$ 52.4087$ 55.0291$ 57.7806$ Hourly / Part-Time / Seasonal
Building Services Coordinator Assistant 18.94$ 19.60$ 20.29$ 21.00$ 21.74$ Recreation Leader III 18.94$ 19.60$ 20.29$ 21.00$ 21.74$ Recreation Leader II 17.68$ 18.30$ 18.93$ 19.60$ 20.29$ Building Serv. Assistant 16.50$ 17.08$ 17.68$ 18.29$ 18.93$ Clerical Assistant 16.50$ 17.08$ 17.68$ 18.29$ 18.93$ Recreation Leader I 16.50$ 17.08$ 17.68$ 18.29$ 18.93$ Department Intern 16.50$ 30.00$
Videographer 20.00$ 30.00$
Hourly
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1 DATE: June 20, 2023
TO: Mayor and Members of the City Council President and Members of the Estero Municipal Improvement District (EMID) Board of Directors
FROM: Benjamin Stock, City Attorney/District Legal Counsel SUBJECT: APPROVING THE FIRST AMENDMENT TO CITY/DISTRICT MANGER STEFAN CHATWIN’S EMPLOYMENT CONTRACT
RECOMMENDATION
It is recommended that the City Council/EMID Board of Directors (City Council) adopt resolutions approving the first amendment to the City/District Manager’s Employment Agreement which adjusts the annual compensation from $274,000 to $316,057 and increases the City/EMID’s contribution to Mr. Chatwin’s retirement fund from 4% to 10%.
BACKGROUND/ANALYSIS
Stefan Chatwin was appointed as City/District Manager effective June 21, 2022, and continues to serve in that position. Pursuant to the Employment Agreement between the City/District and Mr. Chatwin, his performance is to be evaluated on an annual basis during the term of his employment.
On June 5, 2023, the City Council /EMID Board conducted its annual review of Mr.
Chatwin’s performance. Based on that review, the City Council /EMID Board instructed that a contract amendment adjusting the City Manager’s base compensation be prepared for consideration, per Section 7 of the Employment Agreement that allows for the consideration of salary increases as part of the annual performance evaluation.
Section 7 also sets his base compensation at $274,000 per year. Attached for the City Council/EMID Board’s consideration is a resolution amending Paragraph 7 of the City/District Manager’s Employment Agreement, adjusting the base annual compensation rate to 10.7% to $303,318 effective June 1, 2023, per the City’s Compensation Study result and effective on the same date as the Management
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1 Employees. Additionally, the City Council/EMID Board instructed that Mr. Chatwin’s base annual compensation rate be adjusted for the same COLA as the Management Group of 4.2% to $316,057 with the same effective July 1, 2023 as will occur with the Management Group. Finally, the City Council/EMID Board instructed that the City/EMID increase the current 4% contribution to Mr. Chatwin’s retirement fund under Section 8(d) to the Employment Agreement to 10%.
In order to implement this contract amendment, the City Council /EMID Board must adopt the attached resolution. If adopted, then both the Mayor /President and City/District Manager would execute the contract amendment, as shown in the First Amendment, thereby adjusting the City/District Manager's Employment Agreement.
FISCAL IMPACT
Approving the First Amendment to the City/District Manager’s Employment Agreement will adjust the annual compensation for the City/District Manager from $274,000 to $303,318 effective June 1, 2023, and from $303,318 to $316,057 effective July 1, 2023.
No supplemental budget appropriation is required due to salary savings for FY2022- 2023.
CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Staff Empowerment and Operational Excellence
ATTACHMENTS:
Attachment 1 - City Resolution
Attachment 2 - EMID Resolution
Attachment 3 – First Amendment to the Employment Agreement
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4875-5909-3353 v1
RESOLUTION NO. _____________
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FOSTER CITY APPROVING THE FIRST AMENDMENT TO THE CITY MANAGER’S EMPLOYMENT
AGREEMENT
CITY OF FOSTER CITY
WHEREAS, the City of Foster City and Stefan Chatwin entered into an Employment Agreement on June 21, 2022, which appointed Stefan Chatwin as the City Manager for the City of Foster City; and
WHEREAS, pursuant to the Employment Agreement, the City Council is required to evaluate the City Manager’s performance annually; and WHEREAS, based on its review, the City Council has determined that the City Manager’s base compensation should be adjusted; and
WHEREAS, the City Manager’s Employment Agreement requires that adjustments to compensation and benefit be approved by resolution.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Foster City, that the City Manager’s Employment Agreement is hereby amended, as outlined in the First Amendment.
PASSED AND ADOPTED as a resolution of the City Council of the City of Foster City at the special meeting held on the 20th day of June 2023, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
JON FROOMIN, MAYOR
ATTEST:
PRISCILLA SCHAUS, CITY CLERK
6.16 Attachment 1 - City Resolution
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4876-2679-2041 v1
9 7
1 RESOLUTION NO. _____________
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ESTERO MUNICIPAL
IMPROVEMENT DISTRICT APPROVING THE FIRST AMENDMENT TO THE DISTRICT MANAGER’S EMPLOYMENT AGREEMENT
ESTERO MUNICIPAL IMPROVEMENT DISTRICT
WHEREAS, the ESTERO MUNICIPAL IMPROVEMENT DISTRICT and Stefan Chatwin entered into an Employment Agreement on June 21, 2022, which appointed Stefan Chatwin as the District Manager for the Estero Municipal Improvement District; and
WHEREAS, pursuant to the Employment Agreement, the Board of Directors is required to evaluate the District Manager’s performance annually; and WHEREAS, based on its review, the Board of Directors has determined that the District Manager’s base compensation should be adjusted; and WHEREAS, the District Manager’s Employment Agreement requires that adjustments to compensation and benefit be approved by resolution.
NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Estero Municipal Improvement District, that the District Manager’s Employment Agreement is hereby amended, as outlined in the First Amendment.
PASSED AND ADOPTED as a resolution of the Board of Directors of the Estero Municipal Improvement District at the special meeting held on the 20th day of June 2023, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
JON FROOMIN, PRESIDENT
ATTEST:
PRISCILLA SCHAUS, DISTRICT SECRETARY
6.16 Attachment 2 - EMID Resolution
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4891-7435-9145 v1
FIRST AMENDMENT TO THE EMPLOYMENT AGREEMENT BETWEEN THE CITY
OF FOSTER CITY AND STEFAN CHATWIN
This document constitutes the First Amendment to the Employment Agreement entered into as of the 21st day of June, 2022 by and between the City of Foster City/Estero Municipal Improvement District hereinafter called “City/District” and Stefan Chatwin, hereinafter called “Employee”.
The First Amendment is entered into with reference to the following facts and circumstances:
A. Paragraph 7 of the Employment Agreement shall be amended to read as follows:
7. Effective June 1, 2023, City/District agrees to pay Employee $303,318 in base salary per year, and effective July 1, 2023, City/District agrees to pay Employee $316,057 during the remaining term of this Agreement for his services. All salary payments to Employee shall be payable in installments at the same time as the other employees of the City/District are paid and subject to the customary withholding. Increases in salary will be determined by the City Council/District Board as part of Employee’s performance evaluations, and in no case shall Employee’s annual salary increase exceed that of other across the board increases for Management Employees.
B. Paragraph 8(d) of the Employment Agreement shall be amended to read as follows:
d. Employee may participate in a voluntary 401(a) and/or 457 plan. Should Employee elect to contribute a minimum 1% of base salary to his 401(a) and/or 457 plan, the City/District agrees to make a contribution equaling 10% of Employee’s annual base salary into Employee’s account effective July 1, 2023.
The maximum voluntary contribution to Employee’s account shall be that amount established by law. Such contributions will not be deemed to increase Employee’s base salary for any purpose.
C. All other terms and conditions of the Employment Agreement shall remain in force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be executed on the date first above written by their respective officers duly authorized in that behalf.
6.16 Attachment 3 - First Amendment to Chatwin Employment Agreement
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4891-7435-9145 v1
DATED: DATED:
CITY OF FOSTER CITY/
ESTERO CITY MUNICIPAL
IMPROVEMENT DISTRICT
By: JON FROOMIN, MAYOR/PRESIDENT STEFAN CHATWIN
ATTEST
Priscilla Schaus, City Clerk/District Secretary
Approved as to Form
Benjamin Stock, City Attorney/District Legal Counsel
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1 AT-WILL EMPLOYMENT AGREEMENT
OF
Stefan Chatwin
This agreement (“Agreement”) is between the CITY OF FOSTER CITY, a municipal corporation, and the ESTERO MUNICIPAL IMPROVEMENT DISTRICT, a district, organized under the laws of the State of California (collectively “City/District”) , and STEFAN CHATWIN ("Employee"). City/District and Employee shall be collectively referred to as “Parties” or individually referred to as “Party”, “Employee” or “City/District”.
RECITALS
WHEREAS, the City/Dist rict has completed a recruitment process and has determined that the City/District desires to offer the position of City/District Manager to Employee; and
WHEREAS, Employee has indicated he desires to serve in the capacity of City/District Manager; and
WHEREAS, In accordance with the terms of the Agreement, City/District and Employee have agreed to memorialize their intent and the terms of employment by this Agreement.
NOW THEREFORE, it is hereby agreed by City/District and Employee as follows:
1. Effective Date
The effective date of this Agreement is June 21, 2022.
2. Appointment as City/District Manager and Start Date
The City/District agrees to employ Employee as City/District Manager for the City/District, subject to the terms, conditions and provisions of this Agreement. Employee accepts such employment. Employee shall be “at will” and serve at the pleasure of the City Council/District Board. Employee shall start performance of his duties as City/District Manager on June 21, 2022.
3. Term of Agreement
The term of this Agreement shall (“Term”) be for a period of five (5) years, commencing on June 21, 2022 to June 21, 2027, unless terminated earlier by either Party pursuant to Section 6 below. Employee is an at will employee who may be terminated at any time, with or without cause, and shall serve at the pleasure of the City/District Council. Employee may resign at any time for any reason by providing notice in accordance with Section 6 to City/District Council. If either Party intends not to renew or extend the Term at its expiration, the Party shall give notice to the other Party at least 180 days prior to the expiration of the Term.
4. Duties and Responsibilities
a. Employee will perform the functions and duties specified in the laws of the United States and the State of California and in Foster City Municipal Code, Title 2, Chapter 2.04, and Estero Municipal District Code, Title 2, Chapter 2.12, ordinances and resolutions of City/District, DocuSign Envelope ID: 541EDC93-EC7B-47FB-8E57-7BE5C0A167C7
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2 and to perform other legally permissible and proper duties and functions of the City/District Council may, from time to time, assign.
b. Employee shall perform his duties to the best of his ability in accordance with the highest professional and ethical standards of the profession, comply with all general rules and regulations established by the City/District, and obey all State and Federal laws.
c. Employee agrees to devote his productive time, ability and attention to the City/District's business during the term of this Agreement. Employee shall not hold secondary employment, and shall be employed exclusively by the City/District . The Cit y/District and Employee recognize that Employee is expected to devote necessary time outside normal office hours to perform business of the City/District. Since Employee's position is "exempt" under the Fair Labor Standards Act, Employee shall not receive overtime or extra compensation for work performed outside normal business hours.
d. Employee shall not engage in any activity, which is or may become a conflict of interest, prohibited by contract, or which may create an incompatibility of office as defined under California law. Prior to performing any services under this Agreement and annually thereafter, the Employee must complete disclosure forms as required by law.
5. Work Hours
The Employee is an exempt employee expected to work the hours necessary to fulfill the obligations of the Employee position. The City Council/ District Board and Employee share the belief that his presence at City Hall during normal business hours is important to demonstrate leadership and to promote employee morale and growth. With these goals in mind, as the head of the City/District organization, the Employee is expected to be available at all times and is generally expected to be present in the workplace during normal business hours on most days.
In recognition of the position’s demands, the City Council/District Board wishes to provide the Employee flexibility to determine his work schedule in fulfilling his work obligations. The Employee may therefore set his own regular work schedule provided that it averages at least 8 hours per regular work day (including leave taken) over a two week period.
6. Resignation, Termination and Severance Pay
a. Resignation: Employee may resign or retire at any time from his employment with the City/District, and agrees to provide the City/District at least sixty (60) calendar days advance written notice of the effective date of his resignation or retirement. Failure of Employee to give the required written notice of resignation will result in a pro-rata reduction in benefits normally payable to resigning City/District employees, such as, but not limited to, accrued vacation payment, and the like. Voluntary resignation by Employee will result in a loss of all Severance Pay from City/District.
b. Termination by City/District: City/District may terminate Employee, with or without cause, at any time.
i. Termination without Cause: City/District may terminate Employee without cause by providing him with a written notice of termination. If City/District terminates employee without cause, City/District shall provide Employee sixty (60) calendar days written notice of such termination, unless the parties mutually agree DocuSign Envelope ID: 541EDC93-EC7B-47FB-8E57-7BE5C0A167C7
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3 otherwise. If the City/District, at the request of a majority of the City Council/District Board, requests Employee’s resignation without cause, then Employee shall be dee med terminated without cause. If the Employee is terminated without cause, then the Employee is entitled to receive severance as detailed in Section Eleven ( 11) below . However, consideration of termination without cause of Employee by the City Council/District Board shall not occur within ninety (90) calendar days before or following a general or special election at which a Councilmember is elected.
ii. Termination for Cause: City/District may terminate Employee for cause by providing him with a written notice of termination. Such termination may be effective immediately. The following are sufficient basis for termination for cause:
A. Employee engages in illegal activities;
B. Gross malfeasance;
C. Dereliction of duties;
D. Absence from employment without a good cause;
E. Failure to perform duties and responsibilities under this Agreement, as defined in the City/District’s Code, or as specified in the City/District Manager’s job description.
F. Resume fraud or other acts of material dishonesty;
G. Violation of the City/District ’s Rules, including but not limited to, the City/District’s rule against harassment, discrimination, and retaliation; H. Use or possession of illegal drugs;
I. Engaging conduct tending to bring embarrassment or disrepute to the City/District;
J. Conviction of any felony or any criminal offense involving moral turpitude; or
K. An abuse of his office or position as that term is defined in Government Code Section 53243.4.
c. Termination by Reduction of Salary or Benefits: If City/District at any time during this Agreement reduces the salary of City/District Manager in a greater percentage than an applicable across -the-board reduction for other “at will” employees , as defined in the City/District’s Compensation and Benefits Plan for Management E mployees (“Plan”), the Employee may, at his option, be deemed to be “termi nated” without cause at the date of such reduction.
d. Affirmation of “At-Will” status: The parties recognize and affirm that: 1) Employee is an "at-will" employee whose employment may be terminated by the City Council/District Board at any time; and 2) t here is no express or implied promise made to Employee for any form of continued employment as City/District Manager or any ot her position of employment with City/District. This Agreement is the sole and exclusive basis for an employment relationship between Employee and the City/District. Nothing in this Agreement shall be construed to create a property interest for Employee in the position of City/District Manager.
7. Salary
Effective June 21, 2022, City/District agrees to pay Employee $2 74,000 in base salary per year ($22,833.33 per month) during the term of this Agreement for his services. All salary payments to Employee shall be payable in installments at the same time as other employees of DocuSign Envelope ID: 541EDC93-EC7B-47FB-8E57-7BE5C0A167C7
6.16 Attachment 4 - Employment Agreement
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4 the City/District are paid and subject to the customary withholding. Increases in salary will be determined by the City Council/District Board as part of Employee’s performance evaluations , and in no case shall Employee’s annual salary increase exceed that of other across the board increases for Management Employees.
8. Vacation, Sick Leave, and Other Employment Benefits
Unless provided otherwise in this Agreement, Employee shall receive all benefits provided to Department Heads pursuant to the approved Compensation and Benefits Plan for the City of Foster City and Estero Municipal Improvement District Management employees . In addition, on the Effective Date of this Agreement:
a. Employee will be credited with 80 hours of vacation leave. Employee shall be eligible to use these 80 hours of leave effective June 21, 2022. b. Employee will be credited with 40 hours of sick leave. c. Employee will be credited with 16 years of service for the purposes of accrual of vacation leave. Vacation leave earned under this provision will not be eligible for use until completion of employee’s initial six months of employment. d. Employee may particip ate in a voluntary 401(a) plan. Should Employee elect to contribute a minimum 1% of base salary to his 401(a) plan, the City/District agrees to make a contribution equaling 4% of Employee’s annual base salary into Employee’s account. The maximum voluntary contribution to Employee’s account shall be that amount established by law. Such contributions will not be deemed to increase Employee’s base salary for any purpose.
e. City/District shall provide an auto allowance of $500/month to compensate Employee for the use of his personal vehicle on official City/District business , including all business travel within 100 miles of City Hall . The car allowance shall be subject to withholdings, to the extent required by law. Employee shall maintain a current and valid California Driver’s License, insurance coverage, registration and any other legal requirements to operate a personal motor vehicle in the State of California. f. City/District will provide Employee with a computer and smartphone to be used in the manner and subject to the procedures generally applicable to other executive employees, including applicable computer use policies.
9. Dues, Subscriptions, and Professional Development
a. The City/District agrees that on a yearly basis during its budget process to consider whether to pay for professional dues and subscriptions of Employee for national, regional, state, and local associations and organizations.
b. The City/District agrees that on a yearly basis during its budget process to consider whether to pay for travel and subsistence expenses of Employee for professional and official travel, meeting, and other occasions to continue the professional development of Employee, and to pursue necessary official functions for the City/District, including, but not limited to the ICMA Annual Conference and such other national, regional, state and local governmental groups and committees (including community and civic organizations) thereof which E mployee serves as a member, and for travel and subsistence expenses of Employee for short courses, institutes, and seminars that are necessary for his professional development and for the good of the City/District.
Employee understands and agrees these pro fessional development expenses are subject to budget constraints and that the City Council/District Board retains discretion DocuSign Envelope ID: 541EDC93-EC7B-47FB-8E57-7BE5C0A167C7
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5 in determining whether to fund any of the above-referenced expenses.
10. Housing Benefits
a. Housing Allowance: Upon providing proof of residency, City/District will pay to Employee $2,500 per month for housing assistance for a residential unit located within the City (“Housing Allowance”). This Housing Allowance is applicable to either a purchased or rental primar y residence within the City. If Employee elects to obtain the Housing Allowance, the Employee shall not be entitled to obtain a City Loan, as outlined below.
b. Housing Loan: Should Employee purchase his primary residence within the City of Foster City du ring the term of this Agreement, the City/District agrees to make available to Employee a housing loan of up to Two Million Five Hundred Thousand Dollars ($2,500,000) (“City Loan”) providing that the City Loan shall not exceed ninety percent (90%) of the property purchase price. If Employee elects to obtain the City Loan, the Employee shall not be entitled to any Housing Allowance outlined above.
The City Loan shall be limited to purchase of the property within the City limits and shall be Employee’s pr imary residence. The City Loan shall be evidenced by a Promissory Note made by Employee payable to the City/District and secured by a First Deed of Trust on the property. Any such loan will be in a form as approved by the City Council/District Board, and will include the following terms:
(i) Thirty (30) year term, with an interest rate not to exceed the five (5) year average rate of return on the state’s Local Agency Investment Fund (“LAIF”), locked at the time of any such loan.
(ii) The Employee shall be required to pay all principal and interest for the loan amount which shall be amortized and payable in equal biweekly installments through an automatic payroll deduction.
(iii) The Employee shall be responsible to pay all costs associated with any such residence, including, but not limited to all applicable taxes, insurance and homeowners fees and be responsible at his expense to maintain the property in good and habitable conditions at all times.
(iv) The loan may be prepaid earlier without penalty.
(v) The Promissory Note shall be due and payable in full within eighteen (18) months of Employee’s termination if Employee’s termination is pursuant to section 6(b)(i) above. If separation is for any other r eason than section 6(b)(i), the Employee shall have nine (9) months to repay the Promissory Note. If the City/District determines in its reasonable discretion that the property is no longer Employee’s primary residence, Employee shall have sixty (60) days to repay the Promissory Note.
11. Severance
a. Employee shall serve at the will and pleasure of the City Council/District Board, and DocuSign Envelope ID: 541EDC93-EC7B-47FB-8E57-7BE5C0A167C7
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6 his employment may be terminated by the City Council/District Board at any time in accordance with Section 6. Termination of Employee’s employment shall not require any showing of cause or justification, nor shall Employee be entitled to any internal administrative appeal of the decision of the City Council/District Board, beyond any process required by law.
b. In the event of Employee's involuntary termination for reasons other than his resignation, death, disability, or termination with cause as provided in section 6(b)(ii) above, Employee shall be paid severance pay as provided in section 11(e) below.
Employee shall not receive severance if, at the end of the five year Term, the Council determines not to renew this Agreement.
c. In accordance with state law, Employee shall be entitled to receive all compensation earned, but unpaid, for actual work performed and accrued unused vacation time as of the date of termination.
d. If Employee is paid severance pay as provided in section 11(e), below, payment of such severance shall be c onditioned upon Employee's signature on written waiver, attached hereto as Exhibit A , of any claims, grievances or causes of action against City/District, its employees, agents, officers, and City/District Council arising out of or concerning this Agreement, Employee’s employment with City/District, or the termination of his employment with the City/District. If Employee does not agree to waive such claims, grievances or causes of action, the City/District shall not pay Employee severance pay.
e. If Employee’s employment is terminated, and severance pay is applicable pursuant to the terms stated above, City/District agrees to pay Employee a cash payment equal to six (6) months of base salary and health benefits, minus any required withholding.
Such payment shall release City/District from any furt her obligations under this Agreement.
12. Annual Performance Evaluation
a. City/District and Employee acknowledge that periodic performance evaluations are an important means by which City/Dist rict and Employee may ensure effective communications regarding expectations and performance. Toward this end, the City Council/District Board will review and discuss Employee’s performance 6 months after the Effective Date of this Agreement, 12 months after the Effective Date of this Agreement, and annually thereafter. Employee acknowledges and accepts the fact that the City Council/District Board has the right to schedule an evaluation session more frequently than once a year.
b. Employee will req uest and schedule the annual performance evaluation as appropriate under City Council/ District Board agenda procedures or as otherwise directed by the City Council/District Board.
13. Indemnification
The City/District shall defend, hold harmless and indemnify Employee against any tort, civil rights, personnel, discrimination, professional liability claim or demand or other legal action, whether groundless or otherwise, arising out of an alleged act or omission occurring in the DocuSign Envelope ID: 541EDC93-EC7B-47FB-8E57-7BE5C0A167C7
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7 performance of Employee's duties in accordance with the provisions of California Government Code section 825. The City/District shall provide a defense in accordance with California Government Code section 995. The City/District may decline to defend and/or indemnify Employee only as permitted by the California Government Code. The City/District may compromise and settle any such claim or suit and pay the amount of any settlement or judgment therefrom.
14. Bonding
City/District shall bear the full cost of any fidelity or other bonds the City/District Council requires of Employee under any law or ordinance or otherwise .
15. Notices
Notices to Employee must be served (1) to Employee personally, (2) by delivery to the Office of the City/District Manager during regular business hours, or (3) by deposit in the custody of the United States Postal Service, postage prepaid, to Employee’s home address on file with the City/District. Notice is deemed given as of the date of personal service, delivery or deposit, respectively.
Notices to the City/District must be delivered to the City Attorney/District Legal Counsel personally or to the City Attorney/District Legal Counsel’s Office during normal business hours.
16. Abuse of Office
California Government Code Sections 53243, 52431.1, 53243.2 and 52431.3 are incorporated by reference as if fully set forth herein.
If this Agreement is terminated, any cash settlement related to the termination that Employee may receive from City/District shall be fully reimbursed to the City/District if Employee is convicted of a crime involving an abuse of his or his office or position.
17. Entire Agreement
This Agreement contains all of the terms agreed upon by the City/District and Employee with respect to the subject matter of this Agreement and supersedes all prior agreements, arrangements and communications between the Parties concerning such subject matter, whether oral or written, including but not limited to information published in the job announcement and other recruiting documents pertaining to compensation and benefits of the City/District manager position.
18. Confidentiality
During the course of employment or at any other time, Employee agrees not to disclose, communicate, use to the detriment of the City/District or for the benefit of any other person (including Employee) or misuse in any way any confidential information or data concerning City/District. Employee acknowledges and agrees that all such confidential information received by Employee will be received in confidence and as a fiduciary of the City/District.
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8 19. Informed Agreement
This Agreement has been negotiated between the City/District Council, on behalf of City/District, and Stefan Chatwin as Employee. City/District and Employee acknowledge that they have each contributed to the making of this Agreement and that in the event of a dispute over the interpretation of this Agreement, the language of the Agreement will not be construed against one party in favor of the other. City/District and Employee acknowledge that they have each had an adequate opportunity to consult with their own legal counsel in the negotiation and preparation of this Agreement.
20. AB 1344
Assembly Bill 1344, which was subsequently enacted as Government Code Sections 53243 - 53244, sought to provide greater transparency in local government and institute certain limitations on compensation paid to local government executives.
These statutes, generally require that certain contracts between local agencies and its employees include provisions requiring an employee who is convicted of a crime involving an abuse of his office or position to provide reimbursement to the local agency for the certain forms of payment, including but not limited to the following: (i) criminal defense costs; (ii) cash settlement payments; and (iii) any non-contractual settlement payments. Accordingly, the Parties agree that it is their mutual intent to fully comply with these Government Code sections and all other applicable law as it exists as of the date of execution of this Agreement and as such laws may be amended from time to time thereafter. Specifically, the following Government Code sections are called out and hereby incorporated by this Agreement:
§ 53243.1. Reimbursement of legal criminal defense upon conviction of crime involving office or position.
§ 53243.2. Reimbursement of cash settlement upon conviction of crime involving office or position.
§ 53243.3. Reimbursement of non-contractual payments upon conviction or crime involving office or position.
§ 53243.4. “Abuse of office or position” defined.
21. Effect of Conviction on Termination.
If Employee is convicted of a crime involving an abuse of his office or position, as defined in Government Code section 53243.4, the following restrictions will apply: (i) any paid leave given to Employee pending an investigation shall be fully reimbursed to City/District, (ii) any funds expended by City/District for the legal criminal defense of Employee shall be fully reimbursed to City/District, (iii) any cash settlement paid to Employee shall be fully reimbursed. Upon conviction of a covered felony under Government Code sections 7522.72 or 7522.74, Employee may forfeit the benefits in DocuSign Envelope ID: 541EDC93-EC7B-47FB-8E57-7BE5C0A167C7
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9 accordance with those sections.
22. General Provisions
A. Construction. “Herein” and other similar compounds of the word “here” mean this entire instrument and not any particular provision. Section headings and numbers have been inserted for convenience of reference only and shall be given no legal effect. In the event of any conflict between any headings or numbers and the text of this Agreement, the text shall control.
B. Counterparts. This Agreement may be executed in one or more counterparts, each of which is considered an original, and all of which taken together are considered one and the same instrument. This Agreement may be signed electronically in accordance with the City’s/District’s policy regarding electronic signatures.
C. Waiver. Waiver by either party of any term or condition of this Agreement or any breach is not a waiver of any other term or condition or breach of the Agreement.
D. Execution and Applicable Law. This Agreement has been executed in California, and is to be governed in accordance with the laws of the State of California in every respect. The Parties agree that venue for any action arising out of this Agreement shall be in San Mateo County.
E. Amendment. This Agreement may not be amended or modified except by a written instrument executed by the parties.
F. Entire Agreement. This Agreement contains all of the terms agreed upon by the City/District and Employee with respect to the subject matter of this Agreement and supersedes all prior agreements, arrangements and communications between the parties concerning such subject matter, whether oral or written, including but not limited to information published in the job announcement and other recruiting documents pertaining to compensation and benefits of the city manager position.
G. Mediation. Neither Employee nor City/District shall be permitted to file legal action without first meeting in mediation and making a good faith attempt to reach a mediated resolution which mediation shall be conducted within 30 days of the request to initiate mediation by either party to this Agreement. The Parties may, by mutual consent, agree to a longer period of time for mediation. The costs of the mediator, if any, shall be paid equally by the Parties. If a mediated settlement is reached neither party shall be deemed the prevailing party for purposes o f the settlement and each party shall bear its own legal costs.
H. Successors. This agreement is binding upon and inure to the benefit of the heirs at law and executors of Employee.
I. Severance of Provisions. If any provision, or any portion thereof, contained in this Agreement is held unconstitutional, invalid or unenforceable, the remainder of this Agreement , or portion thereof, is considered severable, not affected, and remains in full force and effect.
IN WITNESS WHEREOF, the City/District has caused this Agreement to be signed and executed in its behalf by its Ma yor/President and duly attested by the City/District Clerk. It has also been executed by the Employee.
EMPLOYEE CITY/DISTRICT
____________________________ _________________________________ Stefen Chatwin Richa Awasthi, Mayor/President
Stefan Chatwin (Jun 14, 2022 18:15 PDT)
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10 ATTEST:
____________________________
Priscilla Schaus, City Clerk/District Clerk
APPROVED AS TO FORM:
____________________________
Benjamin L. Stock, City Attorney/District Legal Counsel
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DATE: June 20, 2023
TO: President and Members of the Estero Municipal Improvement District (EMID) Board of Directors
VIA: Stefan Chatwin, District Manager
Marlene Subhashini, Assistant District Manager
FROM: Ramon Towne, Interim Director of Public Works/District Engineer Laura Galli, Engineering Manager
Ryan Marquez, Senior Civil Engineer
DEPARTMENT: Public Works Department
SUBJECT: REJECT THE LONE BID & APPROVE CONTINGENCY
INCREASE OF $25,000 FOR LIFT STATION 59 EFFLUENT LINE
IMPROVEMENT PROJECT (CIP 455-695)
RECOMMENDATION
It is recommended that the Board of Directors of the Estero Municipal Improvement District (EMID Board) adopt the attached resolution authorizing the President to:
1. Reject the lone bid received on May 11, 2023 at 2:00 PM for the Lift Station 59 Effluent Line Improvements (CIP 455-661); and
2. Approve an increase in contingency funding of $25,000 for supplemental design work.
EXECUTIVE SUMMARY
CIP 455-695 involves various improvements to the wastewater effluent line from EMID’s main Pump Station 59 located in EMID’s Corporation Yard to provide this critical facility with enhanced operational flexibility, flow measurement accuracy and reliability and redundancy during repairs.
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One bid was received and opened on Thursday, May 11, 2023, at 2:00 PM. The bid was submitted by Anvil Builders, Inc. in the amount of $2,244,120 which is approximately $950,000 above the Engineer’s Estimate. The project has an unencumbered budget balance of approximately $1.6 million, which is not sufficient to fully fund construction. After reviewing the bid and speaking with the design consultant and prospective contractors it was determined that re-bidding the project at a more optimal time after refining the project plans, specifications, and estimates may result in receiving more favorable bids.
Increasing the contingency budget by $25,000 will allow for additional design work, including geotechnical analyses, that will look for areas to decrease project costs and avoid possible later change orders.
BACKGROUND
CIP 455-695 includes improvements intended to provide pump station 59 with enhanced operational flexibility, flow measurement accuracy and reliability, and redundancy during repairs. The specific improvements include the following:
1. Replacement of the existing ultrasonic effluent flow meter that measures the amount of sewage that flows to the Wastewater Treatment Plant.
2. Installation of a permanent bypass will be installed at the Pump Station within the Corporation Yard to allow staff to perform repairs on the system without shutting down the EMID’s sewage system and interrupting sewage flow to the Wastewater Treatment Plant.
3. Installation of a knife gate valve on the exterior manifold to allow for isolating of half of the discharge line to allow for continued system operation during repairs.
At its February 1, 2021 meeting, the EMID Board adopted Resolution No. 3557 authorizing a consultant agreement with BKF Engineers for professional engineering services for the subject project.
At its April 3, 2023 meeting, the EMID Board adopted Resolution No. 3715 authorizing the Call for Bids for the subject project.
Bids for this project were opened on Thursday, May 11, 2023, at 2:00 PM, with the following results:
Name of Company Total Bid Over/(Under)
Engineer’s
Estimate
Over/(Under)
Engineer’s
Estimate
Engineer’s Estimate $1,303,995 -- --
Anvil Builders, Inc. $2,244,120 $940,125 72%
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ANALYSIS
The bid price, in the amount of $2,244,120, submitted by Anvil Builders, Inc. is $940,125 more than the engineer’s estimate. Bidding during late spring/early summer can sometimes lead to less bidders as contractors often have their work for the year filled up in the first few months of the year. Furthermore, when one bid is received it is difficult for staff to discern how competitive the pricing is.
Provisions of Section 00 1113, “Notice Inviting Bids”, Paragraph 1.07, “Reservation of Rights” of the standard specifications states that “The owner reserves the right to reject any or all Bids”. Staff is recommending the Board exercise this right and reject all bids at this time.
In reviewing the bids, talking with prospective contractors, and the design consultant, staff is proposing to work with the project design team to make the following modifications to the plans and specifications and re-bid the project to reduce overall bid prices:
1. Re-bid in the fall/winter of 2023 with construction to occur in a wider construction window, perhaps through summer 2024. Multiple contractors stated they were too busy at the time to bid and construct the work. Thus, bidding later this fall or winter for construction in summer 2024 will allow contractors to have a more open schedule and should result in more bidders which creates a more competitive bid environment.
2. Open up material specifications, where possible. The current bid calls for certain specific materials with an option for approved equal. This requires the contractor to take on some amount of risk. If they bid the project using what they assume to be an approved equal and later find out it is not, they can lose money. By listing more approved materials, it allows for some reassurance in using alternate materials and could allow for a lower overall bid.
3. On-board a geotechnical engineer to provide design and construction recommendations for shoring, excavation, dewatering, earth pressures, subgrade preparation and backfill recommendations. While it is common to not provide a soils report for design and construction, having geotechnical recommendations may provide some level of assurance to bidders. Multiple contractors raised the issue of lack of information regarding soil conditions and uncertainty with the ground water table. Providing more information will help ease any uncertainty contractors may have which should lead to a less conservative bid approach and possibly more interested contractors.
4. Conduct value engineering analysis to find areas of the design where a cost effective alternative may be available. There may be different types of valves or a longer shutdown window that may be acceptable by EMID staff that can lower the price of the overall project by giving more leeway to the contractor to construct the project and to use cost effective materials that will still work for EMID staff.
On February 1, 2021 the EMID Board approved approximately $17,000 of design contingency funding with approximately $13,000 being used on Contract Amendment #1
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in February of 2023 for additional scope of work. Staff is recommending increasing the contingency in the amount of $25,000.00. An increase of $25,000 in addition to the existing $4,000 will cover the remaining work proposed above for Contract Amendment #2.
CEQA
Categorically Exempt pursuant to CEQA Guidelines Section 15301(b) – Existing Facilities.
FISCAL IMPACT
The fiscal impact of this item is $25,000. However, staff believes clarification of the design could lead to lower project costs.
A fund balance of approximately $1.6M is available in the project budget. However, even with the above described adjustments, additional funding may be required. If needed, a request for additional funding will be brought to the EMID Board for approval at the time of award of contract. It is anticipated the Call for Bids will be re-issued in Fall/Winter 2023.
CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Facilities and Infrastructure
ATTACHMENTS:
Attachment 1 – EMID Resolution
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RESOLUTION NO.____________
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ESTERO MUNICIPAL
IMPROVEMENT DISTRICT REJECTING THE LONE BID, AND AUTHORIZING AN
INCREASE TO THE PROJECT DESIGN CONTINGENCY BY THE AMOUNT OF $25,000 FOR THE LIFT STATION 59 EFFLUENT LINE IMPROVEMENTS PROJECT (CIP 455-695) AND FINDING THE PROJECT EXEMPT PURSUANT TO CEQA GUIDELINES SECTION 15301(B) – EXISTING FACILITIES
ESTERO MUNICIPAL IMPROVEMENT DISTRICT
WHEREAS, Pump Station 59 is a critical EMID facility in need of enhanced operational flexibility, flow measurement accuracy and reliability and redundancy during repairs; and
WHEREAS, at the April 3, 2023 Board Meeting, the Board of Directors adopted Resolution 3715 approving the plans and specifications and authorizing the Call for Bids for the Lift Station 59 Effluent Line Improvements Project (Project) (CIP 455-695); and
WHEREAS, one bid was received from Anvil Builders Inc. in the amount of $2,244,120 on May 11, 2023 at 2:00 p.m.; and
WHEREAS, the provisions of Section 00 1113, “Notice Inviting Bids”, Paragraph
1.07, “Reservation of Rights” of the standard specifications states that “The owner reserves the right to reject any or all Bids”; and
WHEREAS, upon review of the bid and related documents, staff recommends rejecting the one bid and bid bond be returned; and
WHEREAS, this Project is categorically exempt pursuant to CEQA Guidelines Section 15301(b) – Existing Facilities.
NOW, THEREFORE, BE IT RESOLVED that the Board of Directors of the Estero Municipal Improvement District does hereby authorize:
1. Rejection of the lone bid opened on May 11, 2023 at 2:00pm for the Lift Station 59 Effluent Line Improvements (CIP 455-661); and
2. An increase to the existing project design contingency by the amount of $25,000 in addition to the remaining $4,000 currently left in contingency for supplemental design work, with authorization given to the District Manager or his designee, to execute contract amendments up to the contingency amount.
BE IT FURTHER RESOLVED minor, non-substantive revisions may be approved by the District Manager and the District Attorney, and any other documents may be executed as necessary to effectuate the terms of the Agreement as authorized above.
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PASSED AND ADOPTED as a resolution of the City Council of the City of Foster City at the special meeting held on the 20th day of June 2023, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
JON FROOMIN, PRESIDENT
ATTEST:
PRISCILLA SCHAUS, DISTRICT SECRETARY
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DATE: June 20, 2023
TO: Mayor and Members of the City Council
VIA: Stefan Chatwin, City Manager
FROM: Kevin Ortiz, Management Analyst
DEPARTMENT: City Manager
SUBJECT: CONSIDERATION OF LETTER IN SUPPORT OF AB 1657 AND LETTERS IN OPPOSITION OF SB 389, AB 460, AND AB 1337
RECOMMENDATION
It is recommended that the City Council, via Minute Order, authorize the Mayor, on behalf of the City, to sign a letter in support of AB 1657 and letters in opposition of SB 389, AB 460, and AB 1337.
EXECUTIVE SUMMARY
In an effort to advance the City’s public policy advocacy efforts, the City’s lobbyist consultant, Renne Public Policy Group (RPPG) has been tracking priority legislation on behalf of the City. Some of these bills will have an impact in our community as well as impact the City’s ability to retain local control, make decisions, conduct operations, and/or create new financial and legal liability.
In order to ensure that the City’s voice is heard in Sacramento, it is critical that the City, with the help of RPPG, relay their concerns directly to state lawmakers in a timely manner. One of the means for the City to remain actively engaged in the state law- making process is by taking advocacy positions on certain high priority bills.
Provided in this report is a summary on the four (4) bills that were being monitored and are provided to the City Council for consideration. City staff recommends the following advocacy positions on the above-mentioned bills:
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BILL NO. TITLE RECOMMENDED
POSITION
AB 1657 The Affordable Housing Bond Act of 2024 Support SB 389 State Water Resources Control Board: Determination of Water Right
Oppose
AB 460 State Water Resources Control Board: Water
Rights and Usage: Interim Relief: Procedures
Oppose
AB 1337 State Water Resources Control Board: Water
Diversion Curtailment
Oppose
BACKGROUND/ANALYSIS
AB 1657 (As of April 17, 2023) – The Affordable Housing Bond Act of 2024 Housing affordability and homelessness are among the most critical issues facing Californians today. City officials intimately understand these crises firsthand and are working to find creative solutions so homes of all income levels can be built. As a result, cities are calling on the Legislature and the Governor to provide ongoing funding to help cities prevent and reduce homelessness and spur housing development.
AB 1657 proposes to place a $10 billion bond measure on the March 2024 California statewide ballot to spur the production of affordable and supportive housing.
Furthermore, AB 1657 would provide targeted and significant funding to support community-based solutions. A recent statewide survey by Cal Cities underscores the need for funding. The results show that cities believe limited supportive housing options and lack of ongoing funding are the top two barriers to preventing and reducing homelessness.
The investments proposed in AB 1657 would come at a critical time as the last round of funding for the state’s flagship multi-family affordable housing program, the Multifamily Housing Program, was oversubscribed ten to one. Affordable housing projects would be adequately prepared if funding is available.
As a result, City staff recommends that the City Council, via Minute Order, authorize the Mayor to sign a letter in support of AB 1657.
SB 389 (As Amended on April 27, 2023) – State Water Resources Control Board:
Determination of Water Right
Water agencies rely on their water rights to conduct water supply and demand assessments and to ensure that there will be sufficient water to meet the needs of their customers. Materially altering the water rights system in California could result in the
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inability of water agencies to adequately plan for the future because there is no certainty of receiving the full extent of their water rights. Housing projects, for example, are extremely reliant on a reliable water supply. In fact, a housing project cannot be built without the assurance that there will be sufficient water to meet the increased need. Additionally, water agencies have spent millions or billions of dollars to improve and adapt infrastructure to adjust to changes in climate. Millions more will need to be spent to make up water supply differences if a water right is infringed. Those costs will ultimately be borne by customers. Should this bill proceed, SB 389 may effectuate a regulatory taking of a right crucial to water agencies, impair many aspects of California’s economy, and lead to an increased risk of communities not having enough water.
SB 389 has two concerning pieces. First, the bill shifts the burden of proof for showing that water rights are valid, and that uses are still being used, onto the water rights holder by a preponderance of the evidence. Shifting the burden of proof may place undue hardship on water rights holders that are brought before the State Water Resources Control Board (SWRCB) to show historical use in a process that is similar to statutory adjudications but without any of the due process protections present in statutory adjudications. Assessing the validity of a water right requires notice to all interested parties that are investigating and holding hearings. These protections are not guaranteed in SB 389.
Second, the forfeiture element of this bill differs from common law forfeiture. Under common law forfeiture, a water right may be in jeopardy if there is a competing use for the water. As envisioned in SB 389, there does not need to be that competing use for the SWRCB to write off a water right for lack of use. This may lead to a perverse incentive to use and to waste more water. This bill seeks to rewrite recent appellate law (Millview County Water Dist. v. State Water Resources Control Bd. (2014) 229Cal.App.4th 879 (Millview I) around forfeiture to make it easier for the SWRCB to make forfeiture decisions.
The intent of SB 389 is to provide the SWRCB with tools to investigate and determine senior water rights claims and to obtain data on water usage during dry periods.
However, the SWRCB has existing authority under section 1051 and sections 2500- 2900 of the Water Code to review water use in two ways: 1) water rights holders that previously diverted or intend to divert more than 10 acre-feet per year or are authorized to divert more than 10 acre-feet per year are required to measure and report on the water they divert to the SWRCB, and 2) the SWRCB can investigate stream systems and determine all rights of that stream system. The authority envisioned in this bill could result in a severe diminishment of water rights and could impact a water agency’s ability to plan for the future.
AB 460 (As Amended on May 18, 2023) – State Water Resources Control Board: Water Rights and Usage: Interim Relief: Procedures
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The intent of AB 460 is to respond to a curtailment violation incident from August 2022 whereby the SWRCB could not act quickly enough to stop the harmful activities; however, the bill would authorize the SWRCB to issue interim relief to address much more than violations to curtailment orders. The bill would apply to the:
•Section 2 of Article X of the California Constitution (the reasonableness doctrine);
•Enforcement of water quality objectives, principles, or guidelines.
This bill raises several due process concerns. AB 460 would allow the SWRCB to issue interim relief without notice or opportunity for a hearing. It is unclear whether this bill incorporates all the same showing that is required for a superior court to grant a preliminary injunction (burden of proof, standard of review, and/or due process).
Allowing the SWRCB to act on its own motion to issue an order violates certain ensured protections. There already exists a process where the SWRCB can seek short-term injunctive relief by referring matters to the Attorney General. The scope of actions this bill targets requires fact-finding and balancing, which is only something an adjudicator should be able to do.
Additionally, AB 460 would place onerous and costly requirements on water users involved in interim relief. The technical and monitoring work that water users may be ordered to complete at their own expense is overly expansive, as is the funding for studies that the SWRCB, at its own discretion, could determine are necessary to evaluate the impact of the diversion or use. The City agrees that sufficient fines may be necessary to discourage and prevent illegal diversions; however, the potential for fees for technical, monitoring, and additional studies is excessive.
AB 1337 (As Amended on May 18, 2023) – State Water Resources Control Board:
Water Diversion Curtailment
The SWRCB has existing authority under Section 1058.5 of the Water Code to adopt emergency regulations in drought years, which is consistent with California water law and the law of priority. There is insufficient justification for the scope of this bill since the impact of this bill goes far beyond drought and protecting public trust resources. The fact sheet depicts the issue as the SWRCB needing to curtail water rights during times of shortage, which the SWRCB already has the authority to do. In times of shortage, an emergency regulation may be adopted and readopted each year if the shortage emergency continues. When there is no water shortage, there should not be a need to curtail diversions.
This bill additionally infringes on due process protections. The bill authorizes the SWRCB to issue a curtailment order before the opportunity to be heard in the event the Board feels it would be impractical given the likelihood of harm or other relevant circumstances. Giving any entity unilateral discretion to impact the rights of others without the opportunity for notice and hearing is unreasonable and would have serious implications for water diverters. AB 1337 would give the SWRCB unrestricted authority
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to adopt regulations. There needs to remain a process for people that will be impacted by any decision to be involved by providing evidence and being heard by a neutral arbiter.
Additionally concerning is that this bill provides that any regulation adopted under this authority would be exempt from the requirements of the California Environmental Quality Act (CEQA) without first ensuring that the SWRCB make any findings that the regulation or order will not have a significant adverse effect on the environment.
Minimum environmental protections are essential for every agency action. This bill should, at least, require the SWRCB to make the finding that implementing the regulation or order will not have a significant adverse effect on the environment, will result in environmental benefits or prevent harm to environmental resources, and that the benefits provided, or harm prevented, outweighs any adverse effects that may result from adopting the regulation or order.
Therefore, City staff recommends that the City Council, via Minute Order, authorize the Mayor to sign letters in opposition of SB 389, AB 460, and AB 1337.
California Environmental Quality Act
Not Applicable
FISCAL IMPACT
There is no fiscal impact associated with the recommended action.
CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Facilities and Infrastructure
Smart Planning, Development, and the Local Economy
ATTACHMENTS:
Attachment 1 - Draft Letters in Support of AB 1657 and Opposition of SB 389, AB 460, and AB 1337
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City of Foster City • 610 Foster City Boulevard, Foster City, CA 94404 P: (650) 286-3200 • F: (650) 577-0983 • E: [email protected]
OFFICE OF THE CITY COUNCIL
City of Foster City
June 20, 2023
The Honorable Buffy Wicks
Chair, Assembly Committee on Housing and Community Development 1021 O Street, Room 4240
Sacramento, CA 95814
RE: Support AB 1657 (As of April 17, 2023) – The Affordable Housing Bond Act of 2024 Dear Assemblymember Wicks,
The City of Foster City is pleased to support your AB 1657, which would place a $10 billion bond measure on the March 2024 ballot to spur the production of affordable and supportive housing.
Housing affordability and homelessness are among the most critical issues facing Californians today. City officials intimately understand these crises firsthand. Local leaders are working to find creative solutions so homes of a ll income levels can be built. That is why cities are calling on the Legislature and the Governor to provide ongoing funding to help cities prevent and reduce homelessness and spur housing development.
AB 1657 would provide targeted and significant fundin g to support community -based solutions that get our residents off the streets and keep them in their homes. A recent statewide survey by Cal Cities underscores the need for funding. The results show that cities believe limited supportive housing options and lack of ongoing funding are the top two barriers to preventing and reducing homelessness.
The investments proposed in AB 1657 would come at a critical time as the last round of funding for the state’s flagship multi-family affordable housing program, the Multifamily Housing Program, was oversubscribed ten to one. Affordable housing projects are ready to go if funding is available.
The City of Foster City believes that now is the time to invest in affordable housing. With the slowing economy, stubbornly high inflation, and the heightened threat of an economic recession, we know that our residents, now more than ever, are at risk of housing instability, losing their homes altogether, and falling into homelessness.
For these reasons, the City of Foster City supports AB 1657.
Sincerely,
Jon Froomin, Mayor
City of Foster City
6.18 Attachment 1 - Draft Letters in Support of AB 1657 and Opposition of SB 389, AB 460, and AB 1337
381
City of Foster City • 610 Foster City Boulevard, Foster City, CA 94404 P: (650) 286-3200 • F: (650) 577-0983 • E: [email protected] CC: The Honorable Josh Becker, Senator, Senate District 13 The Honorable Diane Papan, Assemblymember, Assembly District 21 League of California Cities
6.18 Attachment 1 - Draft Letters in Support of AB 1657 and Opposition of SB 389, AB 460, and AB 1337
382
City of Foster City • 610 Foster City Boulevard, Foster City, CA 94404 P: (650) 286-3200 • F: (650) 577-0983 • E: [email protected]
OFFICE OF THE CITY COUNCIL
City of Foster City
June 20, 2023
The Honorable Ben Allen
Senator, Senate District 24
California State Senate
1021 O Street, Suite 6610
Sacramento, CA 95814-0007
RE: Oppose SB 389 (As Amended on April 27, 2023) – State Water Resources Control Board:
Determination of Water Right
Dear Senator Allen,
On behalf of the City of Foster City, I write to respectfully oppose your Senate Bill (SB) 389, which would grant the State Water Resources Control Board (SWRCB) the authority to review, verify, and issue decisions on senior water rights claims not granted via the Water Commission Act of 1913.
Water agencies rely on their water rights to conduct water supply and demand assessments and to ensure that there will be sufficient water to meet the needs of their customers. Materially altering the water rights system in California could result in the inability of water agencies to adequately plan for the future because there is no certainty of receiving the full extent of their water rights. Housing projects, for example, are extremely reliant on a reliable water supply. In fact, a housing project cannot be built without the assurance that there will be sufficient water to meet the increased ne ed. Additionally, water agencies have spent millions or billions of dollars to improve and adapt infrastructure to adjust to changes in climate. Millions more will need to be spent to make up water supply differences if a water right is infringed. Those co sts will ultimately be borne by customers. Should this bill proceed, SB 389 may effectuate a regulatory taking of a right crucial to water agencies, impair many aspects of California’s economy, and lead to an increased risk of communities not having enough water.
SB 389 has two concerning pieces. First, the bill shifts the burden of proof for showing that water rights are valid, and that uses are still being used, onto the water rights holder by a preponderance of the evidence. Shifting the burden of proof may place undue hardship on water rights holders that are brought before the SWRCB to show historical use in a process that is similar to statutory adjudications but without any of the due process protections present in statutory adjudications. Assessing the validity of a water right requires notice to all interested parties that are investigating and holding hearings. These protections are not guaranteed in SB 389.
Second, the forfeiture element of this bill differs from common law forfeiture. Under com mon law forfeiture, a water right may be in jeopardy if there is a competing use for the water. As envisioned in SB 389, there does not need to be that competing use for the SWRCB to write off a water right for lack of use. This may lead to a
6.18 Attachment 1 - Draft Letters in Support of AB 1657 and Opposition of SB 389, AB 460, and AB 1337
383
City of Foster City • 610 Foster City Boulevard, Foster City, CA 94404 P: (650) 286-3200 • F: (650) 577-0983 • E: [email protected] perverse incentive to use and to waste more water. This bill seeks to rewrite recent appellate law (Millview County Water Dist. v. State Water Resources Control Bd. (2014) 229Cal.App.4th 879 (Millview I) around forfeiture to make it easier for the SWRCB to make forfeiture decisions.
The intent of SB 389 is to provide the SWRCB with tools to investigate and determine senior water rights claims and to obtain data on water usage during dry periods. However, the SWRCB has existing authority under section 1051 and sections 2500-2900 of the Water Code to review water use in two ways: 1) water rights holders that previously diverted or intend to divert more than 10 acre -feet per year or are authorized to divert more than 10 acre-feet per year are required to measure and report on the water they divert to the SWRCB, and 2) the SWRCB can investigate stream systems and determine all rights of that stream system. The authority envisioned in this bill could result in a severe diminishment of water rights and could impact a water agency’s ability to plan for the future.
For these reasons, we respectfully oppose SB 389. Should you have any questions, please contact our legislative advocate Dane Hutchings with Renne Public Policy Group at (916) 974-9270.
Sincerely,
Jon Froomin
Mayor, City of Foster City
CC: The Honorable Senator Josh Becker, Senate District 13 The Honorable Assemblymember Diane Papan, Assembly District 21
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384
City of Foster City • 610 Foster City Boulevard, Foster City, CA 94404 P: (650) 286-3200 • F: (650) 577-0983 • E: [email protected]
OFFICE OF THE CITY COUNCIL
City of Foster City
June 20, 2023
The Honorable Rebecca Bauer-Kahan
Assemblymember, Assembly District 16
California State Assembly
1021 O Street, Suite 6320
Sacramento, CA 95814-0007
RE: Oppose AB 460 (As Amended on May 18, 2023) – State Water Resources Control Board: Water Rights and Usage: Interim Relief: Procedures
Dear Assemblymember Bauer-Kahan,
On behalf of the City of Foster City, I write to respectfully oppose your Assembly Bill (AB) 460, wh ich would materially and broadly alter the State Water Resources Control Board’s (SWRCB) existing enforcement authority in a manner that is concerning because it would inhibit our public water agencies from adequately planning for water availability.
Water agencies rely on their water rights to conduct water supply and demand assessments and ensure there will be sufficient water to meet the needs of their customers. Materially altering the water rights system in California could result in the inability of water agencies to adequately plan for the future because there is no certainty of receiving the full extent of their water rights. Housing projects, for example, are extremely reliant on a reliable water supply. In fact, a housing project cannot be built without the assurance that there will be sufficient water to meet the increased need. Additionally, water agencies have spent millions or billions of dollars to improve and adapt infrastructure to adjust to changes in climate. Millions more will need to be spent to make up water supply differences if a water right is infringed. Those costs ultimately are borne by customers. Should this bill proceed, AB 460 may effectuate a regulatory taking of a right crucial to water agencies, impair many aspects of California’s economy, and lead to an increased risk of communities not having enough water.
The intent of AB 460 is to respond to a curtailment violation incident from August 2022 whereby the SWRCB could not act quickly enough to stop the harmful activities; however, the bill would authorize the SWRCB to issue interim relief to address much more than violations to curtailment orders. The bill would apply to the:
• Section 2 of Article X of the California Constitution (the reasonableness doctrine); • Enforcement of water quality objectives, principles, or guidelines.
This bill raises several due process concerns. AB 460 would allow the SWRCB to issue interim relief without notice or opportunity for a hearing. It is unclear whether this bill incorporates all the same showing that is required
6.18 Attachment 1 - Draft Letters in Support of AB 1657 and Opposition of SB 389, AB 460, and AB 1337
385
City of Foster City • 610 Foster City Boulevard, Foster City, CA 94404 P: (650) 286-3200 • F: (650) 577-0983 • E: [email protected] for a superior court to grant a preliminary injunction (burden of proof, standard of review, and/or due process).
Allowing the SWRCB to act on its own motion to issue an order violates certain ensured prot ections. There already exists a process where the SWRCB can seek short -term injunctive relief by referring matters to the Attorney General. The scope of actions this bill targets requires fact -finding and balancing, which is only something an adjudicator should be able to do.
Additionally, AB 460 would place onerous and costly requirements on water users involved in interim relief. The technical and monitoring work that water users may be ordered to complete at their own expense is overly expansive, as is the funding for studies that the SWRCB, at its own discretion, could determine are necessary to evaluate the impact of the diversion or use. The City agrees that sufficient fines may be necessary to discourage and prevent illegal diversions; however, the potential for fees for technical, monitoring, and additional studies is excessive.
For these reasons, we respectfully oppose AB 460. Should you have any questions, please contact our legislative advocate Dane Hutchings with Renne Public Policy Group at (916) 974-9270.
Sincerely,
Jon Froomin
Mayor, City of Foster City
CC: The Honorable Josh Becker, Senator, Senate District 13 The Honorable Diane Papan, Assemblymember, Assembly District 21
6.18 Attachment 1 - Draft Letters in Support of AB 1657 and Opposition of SB 389, AB 460, and AB 1337
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City of Foster City • 610 Foster City Boulevard, Foster City, CA 94404 P: (650) 286-3200 • F: (650) 577-0983 • E: [email protected]
OFFICE OF THE CITY COUNCIL
City of Foster City
June 20, 2023
The Honorable Buffy Wicks
Assemblymember, Assembly District 14
California State Assembly
1021 O Street, Suite 4240
Sacramento, CA 95814-0007
RE: Oppose AB 1337 (As Amended on May 18, 2023) – State Water Resources Control Board: Water Diversion Curtailment
Dear Assemblymember Wicks,
On behalf of the City of Foster City, I write to respectfully oppose your Assembly Bill (AB) 1337, which would expand the authority of the State Water Board (SWRCB) to restrict diversions through regulations.
Water agencies rely on their water rights to conduct water supply and demand assessments and to ensure that there will be sufficient water to meet the needs of their customers. Materially altering the water rights system in California could result in the inability of water agencies to adequately plan for the future because there is no certainty of receiving the full extent of their water rights. Housing projects, for example, are extremely reliant on a reliable water supply. In fact, a housing project cannot be built without the assurance that there will be sufficient water to meet the increased need. Additionally, water agencies have spent millions or billions of dollars to improve and adapt infrastructure to adjust to changes in climate. Millions more will need to be spent to make up water supply differences if a water right is infringed. Those costs ultimately will be borne by customers. Should this bill proceed, AB 1337 may e ffectuate a regulatory taking of a right crucial to water agencies, impair many aspects of California’s economy, and lead to an increased risk of communities not having enough water.
The impact of this bill goes far beyond drought and protecting public tr ust resources. The SWRCB has existing authority under Section 1058.5 of the Water Code to adopt emergency regulations in drought years , which is consistent with California water law and the law of priority. There is insufficient justification for the scope of this bill. The fact sheet depicts the issue as the SWRCB needing to curtail water rights during times of shortage, which the SWRCB already has the authority to do. In times of shortage, an emergency regulation may be adopted and readopted each year if the shortage emergency continues. When there is no water shortage, there should not be a need to curtail diversions.
This bill additionally infringes on due process protections. The bill authorizes the SWRCB to issue a curtailment order before the opportunity to be heard in the event the Board feels it would be impractical given the likelihood of harm or other relevant circumstances. Gi ving any entity unilateral discretion to impact the rights of others
6.18 Attachment 1 - Draft Letters in Support of AB 1657 and Opposition of SB 389, AB 460, and AB 1337
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City of Foster City • 610 Foster City Boulevard, Foster City, CA 94404 P: (650) 286-3200 • F: (650) 577-0983 • E: [email protected] without the opportunity for notice and hearing is unreasonable and would have serious implications for water diverters. AB 1337 would give the SWRCB unrestricted authority to adopt regulations. There needs to remain a process for people that will be impacted by any decision to be involved by providing evidence and being heard by a neutral arbiter.
Additionally concerning is that this bill provides that any regulation adopted under this authority would be exempt from the requirements of the California Environmental Quality Act (CEQA) without first ensuring that the SWRCB make any findings that the regulation or order will not have a significant adverse effect on the environment.
Minimum environmental protections are essential for every agency action. This bill should, at least, require the SWRCB to make the finding that implementing the regulation or order will not have a significant adverse effect on the environment, will result in environmental benefits or prevent harm to environmental resources, and that the benefits provided, or harm prevented, outweighs any adverse effects that may result from adopting the regulation or order.
For these reasons, we respectfully oppose AB 1337. Should you have any questions, please contact our legislative advocate Dane Hutchings with Renne Public Policy Group at (916) 974-9270.
Sincerely,
Jon Froomin
Mayor, City of Foster City
CC: The Honorable Josh Becker, Senator, Senate District 13 The Honorable Diane Papan, Assemblymember, Assembly District 21
6.18 Attachment 1 - Draft Letters in Support of AB 1657 and Opposition of SB 389, AB 460, and AB 1337
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DATE: June 20, 2023
TO: Mayor and Members of the City Council
VIA: Stefan Chatwin, City Manager
FROM: Marlene Subhashini, Assistant City Manager
Francine Magno, Senior Civil Engineer
Paul Nagengast, Project Advisor, Regional Government Services DEPARTMENT: Public Works
SUBJECT: LEVEE IMPROVEMENTS PROJECT (CIP 327-657) – GENERAL UPDATE
RECOMMENDATION
It is recommended that the City Council, by Minute Order, consider and accept this progress update on the Levee Improvements Project (Project). No further action is required by the City Council.
EXECUTIVE SUMMARY
Staff will provide a verbal update of the latest Project activities at the City Council meeting. This report provides an update of Project progress and budget impacts with current expenditures detailed in an attached work sheet.
Highlights of Project progress and pictures, since the last City Council update on April 17, 2023, are included in the attached Construction Managers Report and listed below:
•The Contractor has met the Phase 1 milestone date of March 27, 2023, by opening the trail to the public in accordance with the approval of Contract Change Order No. Thirty-One (CCO 31) by the City Council on March 6, 2023. The Contractor continues with minor work adjacent to the trail in accordance with the requirements from BCDC to work in the various regulatory agencies permitted bird nesting areas.
7.1 7.1 Staff Report
389
•As of the preparation of this report, the Contractor has not met the Phase 2 (Shorebird Park to San Mateo bridge) milestone date of May 31, 2023 due to ongoing work not completed to ensure sufficient public access locations and the safe use of trail by the public. In accordance with CCO 31, an amount of $1,500/day from May 31 to the date the trail within Phase 2 can be safely opened to the public will be deducted from Contractor payments. In addition, the Contractor will not receive early release of 15% of earned Project contract retention monies. Currently, there is a target milestone date of mid-June 2023 for Phase 2 trail opening. Staff will provide latest information at the meeting. •The Contractor and City are coordinating with PG&E to energize the streetlights along Beach Park Boulevard in anticipation of commencing slurry seal operations on BPB to remove Contractors staging area and open roadway subsequent to completion of Bowditch Middle School classes in June 2023. •The Contractor continues to complete work in Phase 3 (San Mateo bridge to north of Mariners Point) to meet milestone date of July 31, 2023.
Current Schedule Timeline
Award of Contract: July 20, 2020
Notice to Proceed: September 28, 2020
Phase 1 Bay Trail Interim Milestone Date: March 27, 2023 Phase 2 Bay Trail Interim Milestone Date: May 31, 2023 Phase 3 Bay Trail Interim Milestone Date: July 31, 2023 Project Substantial Completion: October 2023
Project Completion: January 2024
PROJECT BUDGET AND COST/EXPENSES
The Project continues to be on time and within budget and expenses continue to trend as anticipated.
Summary of known costs to date:
•Total Budget/ Bond Measure/Funding Sources: Bond Measure = $90M; Bonds Issued = $85M ($5M Remaining to be Issued); Additional City reserves for Project = $10M; $5M appropriated for Project. Total current appropriated Project funding = $95M.
•Bid: Shimmick: $60.2M; and $9.3M ($587K remaining) contingency for change orders.
•Payments as of 05/31/2023: Shimmick: $64.8M; Others:$17.4M; Total:
$82.2M
•Change Orders Approved as of 05/31/2023: CCO Nos. 1-31 = $12M
7.1 7.1 Staff Report
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CALIFORNIA ENVIRONMENTAL QUALITY ACT
An Environmental Impact Report was prepared for the Levee Protection Planning and Improvements Project (State Clearinghouse No. 2016012012).
FISCAL IMPACT
There is no fiscal impact associated with this update. Any fiscal impacts to the Project will be presented to the City Council as a separate agenda item with a recommended action.
CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Facilities and Infrastructure
ATTACHMENTS:
Attachment 1 - Monthly Construction Manager's Report May 2023 Attachment 2 - Expenditure Report as of May 31, 2023
Attachment 3 - Memorandum and Communications Metrics – May 2023 Dashboard Report
7.1 7.1 Staff Report
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MONTHLY CONSTRUCTION MANAGER’S REPORT
Foster City Levee Improvements Project
City Project No. CIP 301-657
Contractor: Shimmick Construction Co Report Period: May 1-31, 2023 CM: Tanner Pacific, Inc.
Designer: Schaaf & Wheeler
7.1 Attachment 1 - Monthly Construction Manager's Report May 2023
392
MONTHLY CONSTRUCTION MANAGER’S REPORT
Work Summary
Recently Completed:
Initial fine grading of the trail from the SM Bridge to Baywinds Park Installation of decorative concrete panels along Beach Park Blvd Trench drain installations along Beach Park Blvd completed from SM Bridge to Shorebird Park Installed ornamental plantings and associated irrigation around Access Points along Beach Park Blvd
Installation of trail signage, striping, and site furnishings along Beach Park Blvd From SM Bridge to Shorebird Park
Installation of Rapid Flashing Beacons at crosswalks along Beach Park Blvd Shade structure fabric erected near Access Point 17 along Beach Park Blvd Site furnishings installed at Access Points 17 & 18
Completion of hydroseeding at Bridge view Park
Installation of new curb and gutter near Access Point 24 and 25 along Beach Park Blvd Final access point flatwork (concrete ramps and stairs) along Beach Park Blvd Restoration and landscaping of slope at Access Point 25 near Shorebird Park Installation of decorative asphalt and striping along Bay trail From SM Bridge to Shorebird Park
Stamped concrete boardwalk installation at Access Point 17 along Beach Park Blvd Upcoming:
Continued submittals for handrail shop drawings
Continued import of materials to staging areas
Reconfiguration of closure fencing near Baywinds Park for AP 3 ramp construction Landscaping and plantings near Mariner’s Point Golf Center Floodwall 5 concrete caps completion north of the SM Bridge Continued construction of bay-side paths north of the SM Bridge Completion of fine grading north of the SM Bridge
Asphalt trail paving north of the SM Bridge
Trench drain installation north of the SM Bridge
Hydroseeding north of the SM Bridge
Continued guardrail, handrail and permanent fencing installation along Beach Park Blvd Removal of K-rail along Beach Park Blvd
Slurry seal and restriping of Beach Park Blvd
Connecting and energizing of streetlights along Beach Park Blvd Final handrail punch list from ~Sta. 205+00 - 343+00 (Foster City Blvd to Southern Project Limit)
Access Point 30 guardrail installation and opening near Wheelhouse Lane Access Point 31 (lagoon intake structure) completion and opening
7.1 Attachment 1 - Monthly Construction Manager's Report May 2023
393
MONTHLY CONSTRUCTION MANAGER’S REPORT
Monthly Progress Photos
Site furnishings installed at Access Point 17 Trench Drain and Railing being worked on at Retaining Wall 30 and Retaining Wall 29
Curb and Gutter Placement at Section 19 Decorative pavement and striping at Access Point 22
7.1 Attachment 1 - Monthly Construction Manager's Report May 2023
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Levee Project Approved Budget: 95,000,000.00$
Vendor Name or Expense Consultant Role or Expense Category Base Contract Amount
Contingency Contract
Amendments
Current Contract
Authority
Amount
Total
Expected/Actual
Cost
Invoices Received
and Paid As Of
5/31/23
Contingency
Spent
Contingency
Remaining
Status
Shimmick Construction Construction Contractor 60,218,000.00$ 9,300,000.00$ 69,518,000.00$ 69,518,000.00$ $64,782,782.36 $8,463,552.50 $836,447.50 Active Tanner Pacific (TPI) Construction Management and Inspection 6,698,877.00$ 300,000.00$ 2,886,210.81$ 9,885,087.81$ 9,000,000.00$ $7,595,125.03 $0.00 $300,000.00 Active Schaaf & Wheeler (S&W) - Phase 3 Engineering Consultant 2,600,000.00$ -$ 1,368,745.00$ 3,968,745.00$ 3,968,745.00$ $3,735,553.45 N/A N/A Active Urban Planning Partners (UPP) Planning Consultant - EIR 340,404.00$ 51,061.00$ 70,099.00$ 461,564.00$ 470,000.00$ $439,006.29 $51,061.00 $0.00 Active Regional Government Services Authority (RGS) Project Advisory Services** 187,200.00$ -$ 147,420.00$ 334,620.00$ 334,620.00$ $281,174.00 N/A N/A Active Tripepi Smith (TS) Communications / Outreach Consultant 49,000.00$ -$ 61,000.00$ 110,000.00$ 110,000.00$ $93,478.75 N/A N/A Active Tripepi Smith (TS) Communications / Outreach Consultant 127,056.00$ -$ -$ 127,056.00$ 127,056.00$ $98,928.44 N/A N/A Active Tripepi Smith (TS) Communications / Outreach Consultant 133,408.80$ 133,408.80$ 133,408.80$ $84,996.41 Huffman-Broadway Group (HBG) Environmental Consultant - Post Construction Environmental Monitoring
275,000.00$ 275,000.00$ $0.00 $0.00 $0.00 Future Contract Wilsey Ham (WH) RUNCO Survey 16,518.00$ -$ -$ 16,518.00$ 17,000.00$ $4,825.00 N/A N/A In Progress Wilsey Ham (WH) On-Call Surveyor 44,946.00$ 4,000.00$ -$ 48,946.00$ 50,000.00$ $50,693.00 $0.00 $4,000.00 In Progress Bender Rosenthal, Inc. (BRI) Property Acquisition Consultant 218,083.00$ 31,000.00$ 249,083.00$ 249,083.00$ $48,513.25 $0.00 $31,000.00 In Progress Miscellaneous Expenses Other Miscelleneous Expenses 90,000.00$ 90,000.00$ $71,785.45 Active Miscellaneous Expenses Communications / Outreach Expenses 40,000.00$ 40,000.00$ $24,401.02 Active Miscellaneous Expenses Fees Paid to Other Agencies 200,000.00$ 200,000.00$ $181,761.55 Active Miscellaneous Expenses Property Acquistion Cost of acquisition 100,000.00$ 100,000.00$ $0.00 In Progress Burke, Williams & Sorenson, LLP* City Attorney $ 500,000.00 $ 500,000.00 $454,747.32 Active TBWB Strategies (TBWB) Public Outreach 29,986.00$ 119,565.00$ 149,551.00$ $141,427.04 $141,427.04 Closed Rutan & Tucker (R&T) Attorney 53,874.86$ 53,874.86$ $53,874.86 $53,874.86 Closed EMC Research, Inc. (EMC) Public Opinion Research 44,000.00$ 2,500.00$ 46,500.00$ $46,500.00 $46,500.00 Closed SCI Consulting (SCI) Public Finance Consultant 110,000.00$ 110,000.00$ $37,168.72 $37,168.72 Closed Kitahata Company + William Euphrat Municipal
Finance, Inc. (KC&WE)
Public Finance Advisory Consultant 80,000.00$ 80,000.00$ $24,610.50 $24,610.50 Closed Stradling, Yocca, Carlson & Rauth (SYCR) Attorney - Bond Counsel 15,000.00$ 15,000.00$ $15,000.00 $15,000.00 Closed Huffman-Broadway Group (HBG) Environmental Consultant 20,000.00$ 20,000.00$ $19,980.65 $19,980.65 Closed Schaaf & Wheeler (S&W) - Phase 1 Engineering Consultant 887,644.00$ 887,644.00$ $887,430.58 $887,430.58 Closed Schaaf & Wheeler (S&W) - Phase 2 Engineering Consultant 2,324,286.00$ 529,150.00$ 2,853,436.00$ $2,853,649.42 $2,853,649.42 Closed Miscellaneous (MISC)- Keech Properties LLC Levee Mitigation Credits/Expenses 170,000.00$ 170,000.00$ $170,000.00 $170,000.00 Closed Chrisp Striping for Edgewater 16,764.55$ 3,000.00$ 19,764.55$ $15,818.40 $15,818.40 $3,000.00 Closed *Includes former City Attorney fees 74,385,048.21$ 9,689,061.00$ 89,448,372.97$ $82,213,231.49
ONGOING AND FUTURE
CONTRACTS AND EXPENSESMISCCLOSED CONTRACTS
CITY OF FOSTER CITY
CIP 327-657 Levee Improvements Project
Budget and Cost Information
7.1 Attachment 2 - Expenditure Report as of May 31, 2023
395
City of Foster City
MEMORANDUM
DATE: June 8, 2023
TO: Mayor and Members of the City Council
VIA: Stefan Chatwin, City Manager
FROM: Jennifer Nentwig, Principal, Tripepi Smith
SUBJECT: LEVEE IMPROVEMENTS PROJECT – COMMUNICATIONS METRICS
Tripepi Smith would like to share the attached updated Levee Improvements Project Communications Dashboard Report with the Mayor and Members of the City Council. In the report, you will see that the metrics now reflect our communication efforts through the month of May 2023.
As a reminder, this report is a summary that our team typically develops at the end of each month. It includes data on website traffic, social media engagement, community forum participation, and the number and rate of project email and hotline contacts. While Tripepi Smith has been involved in project communications since January 2021, we have pulled numbers (where available) going back to October 2020 to provide a baseline for comparison.
I would like to highlight a few items of note:
● In May 2023, there were a total of 15 inquiries regarding the Levee Project, which was a decrease compared to the previous month's 21 inquiries. The City received inquiries through various channels, including the city's See Click Fix platform, social media platforms, and the Levee Improvement s Project communications email. The majority of the inquiries in May were related to inquiries about open trail access and clarifications regarding the project timeline.
● The City's levee -related social media content experienced an 89.9% increase in engagements and a 27.9% increase in impressions compared to the previous month. Engagements in May increased due to an influx of comments and on social media posts.
● The Levee Improvements Project construction newsletter gained three new followers in May.
7.1 Attachment 3 - Memorandum and Communications Metrics - May 2023 Dashboard Report
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Our team is actively monitoring the metrics to analyze the effectiveness of various types of communication and to align the cadence of our efforts to the community’s interest levels. We believe that the City’s proactive social media communications are leading to fewer people having questions or concerns about the project in general – reflecting positively on overall outreach and engagement efforts.
During May 2023, the number of project inquiries was significantly less than the prior month. As the project progresses, we anticipate inquiries to shift more towards opening timelines for other sections of the trail and feedback and comments regarding the opened portions. As construction continues, the project team remains committed to emphasizing safety messaging, discouraging trespassing, and highlighting trespassing implications such as additional cost to the project and potentially deterring the timeline.
Additionally, the project team will continue to keep the community informed throug h the regular project channels, including the project website, with any project updates and milestones.
As you review the full report, please feel free to let me know if you have any questions. I would be happy to walk you through the report one -on-one if it would be helpful, and we will continue to refine the metrics over time to best meet the project’s needs.
7.1 Attachment 3 - Memorandum and Communications Metrics - May 2023 Dashboard Report
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May 2023 - Foster City Dashboard Report
May 2023
7.1 Attachment 3 - Memorandum and Communications Metrics - May 2023 Dashboard Report
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May 2023 - Foster City Dashboard Report | 1 of 14
Included in this Report
@CityofFC City of Foster City, CA - Government
cityoffc
7.1 Attachment 3 - Memorandum and Communications Metrics - May 2023 Dashboard Report
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May 2023 - Foster City Dashboard Report | 2 of 14
Cross-Network Profiles
Review your aggregate profile and page metrics from the reporting period.
Profile Reporting Period All Profiles All Twitter Post Types Comprehensive Overview
Reporting Period
May 1, 2023 – May 31, 2023
6,278
1.3%
68 6.3%
167
27.7%
51,622
50.3%
2,444
25.3%
4.7%
50.2%
2,373
74.4%
Compare to
Apr 1, 2023 – Apr 30, 2023
6,199 64 231 103,803 3,273 3.2% 9,272
@CityofFC 1,714 4 81 9,979 133 1.3% 34
City of Foster City,
CA - Government
2,401 17 77 37,132 2,162 5.8% 118
cityoffc 2,163 47 9 4,511 149 3.3% 2,221
Profile Audience
Net
Audience
Growth
Published
Posts Impressions Engagements
Engagement
Rate (per
Impression)
Video
Views
7.1 Attachment 3 - Memorandum and Communications Metrics - May 2023 Dashboard Report
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May 2023 - Foster City Dashboard Report | 3 of 14
Tagged Published Post Performance Summary
View your key aggregated tag performance metrics from the publishing period.
Tag Lifetime All Sources All Tags
Impressions
4,328 27.9%
Engagements
187 142.9%
Engagement Rate (per
Impression)
4.3% 89.9%
Post Link Clicks
64 146.2%
Cross-network description: This shows how the City's profiles (Facebook and T witter) performed overall.
Tagged posts: Levee-specific posts earned
4,328 impressions and 187 engagements
across the City's Facebook and T witter accounts. Overall impressions and engagements increased in May compared to April. Impressions and engagements likely increased in May due to an influx of comments on FAQ-related social media posts. The highest performing levee-specific post featured high-resolution pictures of the ongoing construction and actionable links regarding FAQs about the project.
Total number of newsletter subscribers: - 1,133
Analytics by Platform
7.1 Attachment 3 - Memorandum and Communications Metrics - May 2023 Dashboard Report
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Facebook Impressions
Review how your content was seen by the Facebook community during the reporting period.
Profile Reporting Period City of Foster City, CA - Government Facebook Audience
The total number of Facebook followers in May 2023 was 2,839. This was an increase of 15 followers from the previous month.
This report and future reports collect Facebook page followers directly from Facebook.
Organic and Paid Impressions, by Day
Impression Metrics Organic Paid T otals % Change
Impressions 36,720 8.4% 0 100% 37,132 39.5%
1 MAY
2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 3 1 0 500
1,000
1,500
2,000
2,500
3,000
3,500
Impressions
7.1 Attachment 3 - Memorandum and Communications Metrics - May 2023 Dashboard Report
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Facebook Engagement
See how people are engaging with your posts during the reporting period.
Profile Reporting Period City of Foster City, CA - Government Organic and Paid Reactions, Comments, Shares, Post Link Clicks, Other Post Clicks, by Day Engagement Metrics T otals % Change
Total Engagements 2,162 16.4%
Reactions 275 29.7%
Comments 80 19.4%
Shares 39 38.1%
Post Link Clicks 427 10.7%
Other Post Clicks 1,341 15.6%
1 MAY
2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 3 1 0 100
200
300
400
Engagements
Notes on Facebook Performance
7.1 Attachment 3 - Memorandum and Communications Metrics - May 2023 Dashboard Report
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Twitter Audience Growth
See how your audience grew during the reporting period.
Profile Reporting Period @CityofFC All Twitter Post Types The City's Facebook profile earned 37,132 impressions and 2,162 engagements in May 2023, a decrease in both impressions and engagements from April 2023. The decreases are likely due to an overall reduction in posting frequency, with total posts down by nearly a third this month. This represents the total number of impressions and engagements for all City's posts, including levee-related content.
Followers, by Day
Audience Metrics T otals % Change
Followers 1,714
0.2%
7.1 Attachment 3 - Memorandum and Communications Metrics - May 2023 Dashboard Report
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Twitter Impressions
Review how your content was seen by the T witter community during the reporting period.
Profile Reporting Period @CityofFC All Twitter Post Types Impressions, by Day
Impression Metrics T otals % Change
Impressions 9,979
11%
1 MAY
2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 3 1 0 200
400
600
800
Impressions
7.1 Attachment 3 - Memorandum and Communications Metrics - May 2023 Dashboard Report
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Twitter Engagement
See how people are engaging with your posts during the reporting period.
Profile Reporting Period @CityofFC All Twitter Post Types Engagements, by Day
Engagement Metrics T otals % Change
Total Engagements 137 16%
Likes 6 50%
@Replies 3 70%
Retweets 3 0%
Post Link Clicks 84 20%
Other Post Clicks 41 46.1%
Other Engagements 0 0%
1 MAY
2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 3 1 0 2
4 6
8 10
12 14
Engagements
Notes on Twitter Performance
7.1 Attachment 3 - Memorandum and Communications Metrics - May 2023 Dashboard Report
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Tagged Top Posts
View the top tagged published posts from the publishing period.
Tag Lifetime All Sources All Tags
T witter totaled 10,086 impressions in May 2023, a 10.1% decrease from April. T witter also earned 138 engagements. This represents the total number of impressions and engagements for all of the City's posts, including levee-related content.
The top levee-related tweet in May 2023 highlighted staying out of construction zones while near the project.
Descending by Lifetime Impressions
City of Foster …
Fri 5/19/2023 9:04 am PDT
Impressions 708
City of Foster …
Fri 5/26/2023 3:01 pm PDT
Impressions 406
City of Foster …
T ue 5/30/2023 4:30 pm …
Impressions 268
Do you have any questions
about Foster City Levee
Improvements Project? Find…
Learn more about the Foster
City Levee Project! The FAQ
page has information on: -…
Check out this week's
#SafetyTip: The construction
team encourages residents t…
7.1 Attachment 3 - Memorandum and Communications Metrics - May 2023 Dashboard Report
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May 2023 - Foster City Dashboard Report | 10 of 14
Tagged Top Posts
View the top tagged published posts from the publishing period.
Tag Lifetime All Sources All Tags
Descending by Lifetime Impressions
City of Foster …
Fri 5/12/2023 8:03 am PDT
Impressions 248
City of Foster …
Mon 5/8/2023 6:30 pm P…
Impressions 233
City of Foster …
T ue 5/2/2023 4:30 pm PDT
Impressions 210
Do you have questions about
the Foster City Levee
Improvement Project? Visit t…
Follow this
#SafetyTipOfTheWeek:
With construction nearing…
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May 2023 - Foster City Dashboard Report | 11 of 14
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Project Tours/Speaking Events
T otal: N/A
Description: There were no project tours or speaking events in May.
Project Inquiries
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May 2023 - Foster City Dashboard Report | 13 of 14
T otal number of inquiries: 15
Average inquiries/day: 0.48
Website Visitors
T otal number of visitors this month: 1,933
Average visits per day: 62.4
Average visit length (minutes): 1:12s
Media Mentions
The Levee Improvements Project earned no media mentions in May 2023.
Glossary
- Total Impressions: The number of times that any content associated with your page was displayed to a user during the reporting period. This includes both organic and paid activity.
- Facebook Total Engagements: The total number of reactions, comments, shares, post link clicks, other post clicks, and page actions. This includes both organic and paid activity. - Facebook Other Post Clicks: The number of times that users clicked anywhere in your posts without opening a web link, reacting to, commenting on, or sharing your post during the reporting period. This includes clicks to play a video and view a photo. This includes both organic and paid activity.
- Page Actions: The number of times that users clicked on your page’s links or action button during the reporting period.
- Facebook Engagement Rate (per Impression): Reactions, comments, shares, post link clicks, other post clicks, and page actions as a percentage of profile impressions. This indicates how engaged people are with your brand.
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May 2023 - Foster City Dashboard Report | 14 of 14
- Instagram Impressions: The number of times all of your posts and stories were displayed to a user during the reporting period. This does not include profile visitors. This includes both organic and paid activity.
- Instagram Total Engagements: The total number of likes, comments, saves, story replies, and profile actions. This includes organic activity only. In compliance with the European Union’s ePrivacy Directive, Sprout’s Instagram Story Reply metrics will no longer include activity from users in the EEA and it may impact this metric. - Profile Actions: The total number of times users clicked on the links within your profile to contact you, get directions to your location, or visit your website. - Instagram Engagement Rate (per Impression): Likes, comments, saves, story replies, and profile actions as a percentage of profile impressions. This indicates how engaged people are with your brand.
- Twitter Impressions: The number of times that all of your posts were displayed to a user during the reporting period. This includes impressions when your posts are retweeted by other users. This includes organic activity only.
- Twitter Total Engagements: The total number of likes, @replies, retweets, post link clicks, other post clicks, and other engagements. This includes both organic and paid activity.
- Twitter Other Post Clicks: The number of times that users clicked on the content in your posts, excluding the link, during the reporting period. This includes clicks on the media, hashtags, detail expand, and user profile from your posts. This includes organic activity only.
- Twitter Other Engagements: The number of times during the reporting period that users engaged with your posts in other ways. This includes such engagements as poll votes, app install attempts, app opens, and follows from your posts. This includes organic activity only.
- Twitter Engagement Rate (per Impression): Likes, @replies, retweets, post link clicks, other post clicks, and other engagements as a percentage of profile impressions.
This indicates how engaged people are with your brand.
7.1 Attachment 3 - Memorandum and Communications Metrics - May 2023 Dashboard Report
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3 6
8 DATE: June 20, 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
Marlene Subhashini, Assistant City Manager
FROM: Derek Schweigart, Parks and Recreation Director
Tiffany Oren, Recreation Manager
DEPARTMENT: Parks and Recreation
SUBJECT: UPDATE ON PROPOSED CHANGES TO THE FOSTER CITY
YOUTH SPORTS FIELD USER GROUP FEES FOR FISCAL
YEAR 2023-2024
RECOMMENDATION
It is recommended that the City Council provide policy direction regarding the proposed changes to the Foster City Youth Sports Field User Group (Field User Groups) fees and charges in the Master Fee and Service Charges Schedule Fiscal Year (FY) 2023-2024 budget.
EXECUTIVE SUMMARY
Parks and Recreation fees and charges are a critical component in cost recovery for services in the Special Recreation Fund. The Department seeks to maintain competitive charges for programs and facilities while achieving maximum cost recovery. The Department’s proposed fee changes for FY 2023-2024 were presented to the City Council during their study session that was held on April 10, 2023, which included proposed fee changes for the City’s field user groups. The Council recommended postponing a decision on the sports field user fees until staff met with the impacted groups to further discuss proposals to explore options and the timing of implementation. A meeting was held with the Field User Groups on Monday, May 15, 2023. Staff
7.2 7.2 Staff Report
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8 recommends Council receive this update from the meeting and provide policy direction on the field user group fees proposed for FY 2023-2024.
BACKGROUND
The Parks and Recreation Department’s fees and charges are a critical component in cost recovery for services in both the General Fund (Parks) and the Special Recreation Fund (Recreation). The Parks and Recreation Department actively identifies programs that can be partially or completely self-supporting and regularly reviews and adjusts program fees as costs of delivering services increase, while ensuring fees and charges remain competitive with fees charged by neighboring cities. Recently, the City completed a cost-allocation study which helps to determine the costs for delivering its various services and the maximum amount the City may charge for the service. The annual maintenance and administrative costs for Foster City’s sports fields are approximately $780,884. A thorough review of the sports field revenue received by field user groups and renters indicated that the City is receiving less than 10% of the costs for providing the service, and compared to other neighboring cities, Foster City’s fees are below market rate for comparable sports fields. In response, staff began looking for opportunities to increase sports field revenue to help offset maintenance and administrative costs, and to better manage use of the fields by implementing a nominal hourly reservation fee for field use.
At a City Council Special meeting on April 10, 2023, the Council held a study session to review the recently completed Cost Allocation Plan and User Fee Study and proposed changes to the City’s Master Fee and Service Charges Schedule for FY 2023-2024. The Council received and considered the proposed fee changes for the Parks and Recreation Department including the fees charged to Field User Groups for use of the City’s sports fields. Staff proposed adding a weekday and weekend hourly rate for use of the sports fields, in addition to the player fee of $10 for residents and $45 for non-residents that is currently charged. Based on comparable rates charged by neighboring cities, staff recommended a $4 per hour weekday use rate and $6 per hour weekend use rate to be charged to Tier 2 groups that include the current Field User Groups. The rate would potentially increase each year for the next five years while continuing to remain competitive.
During their discussion, Council members were generally supportive of increasing the rates charged to the Field User Groups for use of the City’s sports fields and helping to recover more of the costs for maintaining the fields. Representatives from the various Field User Groups attended the meeting with one representative speaking during public comment with a request for further discussion with City staff due to the financial impacts to some groups. The Council requested that staff meet with the Field User Groups and place the item on a future Council meeting agenda pending the outcome of this meeting.
ANALYSIS
The City offers premier sports fields to its residents and visitors and are some of the most well-maintained fields in San Mateo County and on the peninsula. This comes at a
7.2 7.2 Staff Report
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8 significant cost with the City investing several million dollars in synthetic turf field conversions in recent years and with annual maintenance and administrative costs of approximately $780,884. As field maintenance costs continue to increase, staff began looking at ways to offset these costs and to improve the overall cost recovery for providing this service. An analysis by staff showed that in addition to the nominal player fee currently charged to leagues for use of the fields, implementing a nominal hourly use fee would further assist in offsetting maintenance and administrative costs while improving how field reservations are currently managed.
Cities typically charge either an hourly field use rate to regular sports user organizations, or a per participant charge while several cities surveyed charge both. Foster City currently charges leagues only a per player fee for each season. In most cases, the rates charged to youth sports user groups are reduced compared to those rates charged to resident adult sports groups, and non-resident sports groups. Staff compared the City’s rental rates with several neighboring cities on the Peninsula including San Mateo, Burlingame, San Carlos and Palo Alto (See Attachment B). Cities varied in their methods for collecting fees for use of their sports fields, but in comparing the actual fees charged, Foster City’s fees are lower in comparison. It should be noted that in addition to the player fees that are paid by the City’s youth sports leagues, several leagues including AYSO, PYSC, FCYSA, and FCTB signed agreements in 2020 and 2022 to reimburse the cost for synthetic turf field conversion at Sea Cloud Park (CIP 301-659). The amount the groups contributed for the field conversions totaled $481,000 or approximately 15% of the total design and construction of those projects which were $3,311,960. These are important contributions by the leagues which enabled the City to do the field conversion.
These contributions supported the capital expense but didn’t include annual upkeep and maintenance of the fields.
In addition to helping generate more revenue to improve cost recovery, charging an hourly rate for field usage will also help the City better manage the fields by ensuring greater field utilization. Currently, Field User Groups reserve large blocks of time from 6-8 hours or more, and do not always utilize time reserved. Adding the hourly rate fee would limit this practice and open spots for other users at regular or premium rates. This would also prevent groups from subletting or sub-renting their time to outside users.
Current policy prohibits subletting; however, this is not detailed in the field rental packet but will be updated for next year.
Following the City Council study session on April 10, 2023, staff scheduled a meeting with the Field User Group representatives for April 20, 2023, and requested that they provide any proposals or suggestions in advance of the meeting for the City to consider.
The City also requested information on the potential impacts to players/family based on each league’s actual field usage, and any recommendations on timing and implementation of potential fee changes so they would better coincide with league registration. The City received a response letter from the Field User Groups on April 19,
7.2 7.2 Staff Report
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3 6
8 2023 (see Attachment C) that included proposals for the City to consider. Below is a brief outline of Field User Groups’ proposals:
1. Option 1: Increase current per player participation fee by $5 to $15/resident; $50/non-resident (currently $10/resident; $45/non-resident), with a 4-year lock on the increase. This option would increase current revenue by $15,325 annually.
2. Option 2: Remove per player fees completely, only charge per-hour use fees ($2/weekdays per hour and $4/weekends per hour). This option would decrease current revenue by $46,545 annually.
3. Option 3: Keep current per player fees with 4-year lock and add $1/weekday per hour and $2/weekends per hour. This option would increase revenue by $10,775- $21,551 annually.
Given the limited time to review the proposals and the need for additional information to adequately evaluate them, the meeting with the Field User Groups was postponed until May 16. Each Field User Group was asked to provide a sample season including dates and times of actual field use, the number of resident and non-resident participants, and fees charged. After a thorough analysis of the proposals and the information provided, staff did not feel that the proposed options by the youth organizations were adequate in achieving the desired cost recovery or management of the field reservations. The responses revealed that the sports groups were only using 41% of their permitted time.
Also, although the Field User Groups were working with the City as a collective youth organization body, there were clear distinctions between the various groups which the City wished to explore in greater depth.
On May 16, staff hosted a meeting with the Field User Groups to review the data and to discuss how to best move forward. Representatives from AYSO, PYSC, FCTB., FCLL and FCYSA attended, PenCities was not present. Upon discussion with staff, there was much progress and general support around several key topics. These include:
1. Improving field allocation and field reservation management to improve overall field utilization was in everyone’s best interest.
2. Understanding there are differences between the various sports leagues in terms of percentage of residents served, recreational based (everyone participates) vs. select or competitive play, developmental vs. pay to play, and the ability and expectation to pay higher fees.
3. An agreement around a tiered fee structure where there is a greater discount or subsidy for field usage based on the various criterion.
4. Any changes to the fee structure would not occur any sooner than the spring 2024 season to allow leagues to prepare for registration.
During the meeting, staff presented possible tiers and distinguishing criteria where the various sports organizations might fit. Below are the proposed tiers and criteria:
•Tier 1: Parks and Recreation Department based programs and school district (under JUA) usage for Foster City students ($0 per field use hour)
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8 •Tier 2: Foster City youth sports organizations that are recreational based (everyone plays regardless of ability, no cuts, or tryouts). Minimum 80% Foster City residents ($3 per field use hour)
•Tier 3a: Foster City youth sports organizations that allow players to play competitively and have minimum 75% Foster City residents ($5 per field use hour) •Tier 3b: Foster City youth sports organizations that allow players to play competitively and have minimum 51% Foster City residents ($7 per field use hour) The proposed tiers and criteria are for Foster City’s youth sports organizations only. Other sports field users would not fall under these proposed tiers and criteria and are currently charged higher participant fees as well as higher hourly use rates per the current master fees and charges schedule.
Staff recommends the City Council consider and provide policy direction on the following proposed options concerning the Field User Group fees and charges for FY 2023-2024.
1. Implement a tiered fee structure for hourly use fees as recommended by staff and agreed upon by field user groups effective January 1, 2024.
2. Direct staff to return to the City Council with a recommendation to keep original proposed rates of $4 per field use hour (weekdays) and $6 per field use hour (weekends) effective January 1, 2024.
3. Direct staff to return to the City Council with one of the proposals provided by the Field User Groups.
For all the options presented, staff does not recommend a freeze on the proposed fees beyond FY 2024-2025 as was proposed by the Field User Groups, given the costs for maintaining fields will continue to increase and the current market conditions are uncertain.
Upon Council’s direction, staff will notice a public hearing for the City Council meeting scheduled for July 17, 2023, to receive comments on the proposed changes to the Field User Group fees, and after considering the staff report and public testimony consider adopting a resolution amending the Master Fees and Services Charges Schedule with changes effective January 1, 2024.
California Environmental Quality Act
Not Applicable
FISCAL IMPACT
The tiered fee structure for hourly use fees as recommended by City staff would generate approximately $51,045 annually in additional revenue to support the ongoing sports field
7.2 7.2 Staff Report
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3 6
8 maintenance. This amount is in addition to the current player fees that are collected by the City which is approximately $69,048.
The original proposal that staff presented to City Council on April 10, 2023, would generate approximately $40,343 to $60,514 per year in addition to the current player fees that are collected by the City.
The revenue generated is similar in both options, however, the tiered approach impacts Field User Groups differently depending on how the groups are classified in their respective tiers.
CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Safety and Social Equity
Staff Empowerment and Operational Excellence
ATTACHMENTS:
Attachment 1 - Fee Comparison
Attachment 2 - Letter from Field User Groups
7.2 7.2 Staff Report
418
Do you charge a Resident/Non-Resident Registration Fee to leagues:
Youth Org Adult Org
Do you charge hourly rate to
youth sports :Field Reservations Hourly Rate Light Fee Light Fee Tournament Fee CommentResident Non-Resident per player Resident and Non‐Resident
Particpant Fee is paid.Foster City (Tier A & B) NA NA NO $10.40 $46.80 Bi-Annual $31.20 $36.50 None FC (Tier C&D) BB & SB
FC (Tier C&D) Soccer
$15.6 R $46.8 NR
$36.4 NR
$10.40
$10.40
$46.80
$46.80
Bi-Annual
Bi-Annual
$31.20
$31.20
$36.50
$36.50$20.8 Res
Brisbane has no youth sports
organizations.
All youth sports prgrams are done in
house.
Brisbane $28.00
$28.00
None
None
None
Brisbane Non Profit $17.00
Non Brisbane Non Profit
Resident
$29.00
$44.00
$79.00
$28.00
$28.00
$28.00Non Resident
Redwood City only charges the
res/nonres fee.
RC breaks up the fields into small
sections and schedules all the
sections
Redwood City Tier 2 & 3
Redwood City Tier 4
NA No $10.00
NA
$20.00
NA
Bi-Annual $20.00
$20.00
$20.00
$20.00Youth $30 hr Adult $50 hr
Redwood City Tier 5
Redwood City Tier 6
Youth $30 hr
Youth $30 hr
Adult $50 hr
Adult $50 hr
NA
NA
NA
NA
$20.00
$20.00
$20.00
$20.00
South San Francisco charges an
annual fee to the sports
organizations. Not allowed to charge
them hourly.
South San Francisco (cat 1 - Up to 99 mem) NA No $117.60 NA Annual Fee $35.70 $38.85
$35.70
$38.85
Resident Rate
South San Francisco (cat 2 - Up to 199 mem)
South San Francisco (cat 3 - Up to 299 mem)
South San Francisco (cat 4 - 300 Up)
NA
NA
NA
No
No
No
$176.40
$288.75
$406.35
NA
NA
NA
Annual Fee
Annual Fee
Annual Fee
Non-resident Rate
$8 weekday per $15 weekend/holiday
use per use
$20 weekday per $40 weekend/holiday
San Mateo Charges both Registration
and hourly.San Mateo (Tier 2) Yes
Yes
$8.00 $8.00 Bi-Annual
Bi-Annual
$25.00
$25.00
$25.00
$25.00
$100.00
$210.00San Mateo (Tier 3 & 4) $20.00 $20.00use per use
Burlingame Tier A-1 (Youth Sports)
Burlingame Tier B (Residents)
$3 (50%+ R)
$25.00
$9 (50%+ NR) Yes $16.00 $86.00 Bi-Annual $38.50
$38.50
$38.50
$38.50
$38.50
$38.50
Registration only.
Burlingame Tier C (Non Residents) $36.00
Belmont $28.00
$66.00
$51.00
$66.00
Bi-Annual
Flat Fee
$20.00
$32.00
$20.00
$32.00
Registration only.
San Carlos (Youth groups)
San Carlos (Other Groups)
NA NA No
No
350 new request - 300 repeat request
$26.00 $32.00
Ranges from $6
to $20 depending
on the Field
San Bruno NA $10.00 $15.00 Registration Only
San Bruno (Non-Profit)
San Bruno (Resident)
$20.00
$40.00
$50.00San Bruno (Non-Resident)
Menlo Park - Baseball (Natural Turf)
Menlo Park - Baseball (Natural Turf)
Menlo Park - Soccer (Natural Turf)
$11.00
$19.00
$17.00
$28.00
$27.00
$36.00
$63.00
$106.00
Res - Non-Profit
NR - Non-Profit
Res - Non-Profit
NR - Non-Profit
Res - Non-Profit
NR - Non-Profit
Res - For Profit
NR - For Profit
Yes
Yes
Yes
Yes
Yes
Yes
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
$10.00
$10.00
$10.00
$21.00
$21.00
$21.00
Hourly Rate charged
Menlo Park - Soccer (Natural Turf)
Menlo Park - Soccer (Synthetic Turf)
Menlo Park - Soccer (Synthetic Turf)
Menlo Park - Soccer (Synthetic Turf) - Adult
Menlo Park - Soccer (Synthetic Turf) - Adult
Millbrae $23.00 $23.00 Bi-Annual Registration Only
Per hour feePalo Alto $30
$30
$30
$30
$30
$30
Grass Field $54 R
$30
$98 NR NA
NA
NA
NAGrass Field - Palo Alto based Non-Profits
Grass Field - Palo Alto based Youth Sports Org
(When 51% or more of participantion are Palo Alto
residents)
$9 NA
NA
NA
NA
$30
$30
$30
$30Synthetic Turf Field - Palo Alto Based Non-Profits $52 Synthetic Turf Field - Palo Alto based Youth
Sports Org (When 51% or more of participantion
are Palo Alto residents)
$39
$73
NA
NA
NA
NA
$30
$30
$30
$30Synthetic Turf Field $163
7.2 Attachment 1 - Fee Comparison
419
ATTN: Derek Schweigart
Parks & Recreation Director
City of Foster City
610 Foster City Blvd.
Foster City, CA 94404
April 19, 2023
RE: Proposed Additional Field Fees and Use Scenarios
Dear Mr. Schweigart,
We write to you collectively as representatives for Foster City Youth Sports Organizations (“Youth Organizations”) to urge you to consider the negative impacts of charging Youth Organizations additional per hour field usage fees and increasing revenue through field rentals to non-Foster City organizations (collectively “Proposal”) and collaborate on a mutually acceptable solution for field fees.
I. Background
Youth Organizations are local, community-based groups that, for decades, have partnered with the City of Foster City and Parks and Recreation to provide Foster City families and residents with affordable and high quality youth sports programs. Many of our organizations also offer family discounts and scholarships to families in need.
We are proud of the benefits and impact we have had on our local community. That pride shows itself in the way we take care of the fields and pay for and provide equipment for the fields (that are also used by other outside organizations that the City charges for field use). A few examples are soccer goals ($136,000), pitching mounds ($35,000), nets (both baseball and soccer), field prep equipment, bins for the fields to hold bases and first aid equipment.
We are the volunteers that regularly prepare the fields, chalk the lines and take care of the fields at Sea Cloud Park for our weekly games year round. We do this at our own expense and at no cost to the city of Foster City.
Field improvements were funded by the taxpayers for the primary use by residents and Foster City Sports Organizations and for the benefit of local residents in Foster City. The fields were not meant to be a revenue generating source for the city (i.e., field rentals to non-Foster City groups, increasing fees to Foster City non-profit organizations), but rather a resource to local residents, particularly the youth of Foster City.
By increasing costs to local leagues who are largely nonprofit, the result is essentially increasing each player’s registration cost, thereby asking the residents of Foster City to pay multiple times
7.2 Attachment 2 - Letter from Field User Groups
420
for thesameresource. Thisisn’t somethingtheYouthOrganizationscantakelightlyaswehavearesponsibilitytoour playersandthefutureof youthsportsinFoster City.
II. NegativeImpact
A. Consistent withOther BayAreaCities, YouthOrganizationsAlreadyPayPerParticipant FeestotheCityfor FieldUsageandShouldNot BeChargedTwicefortheSamePurpose.
Per theCityof Foster City/EsteroMunicipal Improvement District Master Fees&ServiceChargesSchedule, YouthOrganizationsalreadypayper participant fees, whichwerepreviouslyagreedbetweentheCityandYouthOrganizationstohelpwithfieldmaintenancecosts. InFY2019-2020, feeswere$0/resident and$25/non-resident.StartinginFY2020-2021, feeswereincreasedto$10/resident and$35/non-resident(increaseof 40%). InFY2021-2022, resident feesremainedflat whilenon-resident feescontinuedtoincreaseanother 28.57%. InFY2022-FY2023, bothresident andnon-resident feesincreased4%.
It isnot clear touswhythereisyet another feetobeimposedfor fielduse, whentherehasbeenanagreement inplacefor thepast four (4) yearswithincremental feesonanannual basis.
Furthermore, inlookingat our neighboringcities, manydonot applyadditional hourlyfeesontopof existingper participant fees. For example, RedwoodCity, SouthSanFrancisco, Belmont, SanCarlos, SanBrunoandMillbraeall donot chargehourlyfeestoyouthsports. MenloParkchargesaper hour feebut doesnot chargeaper participantfee. Our neighbor SanMateo, chargeslower per participant fee(annuallyv. per season)andamuchlower dayrateusefee.
B. TheNewProposedHourlyUsageFeesisExcessiveandCouldSignificantlyReduceYouthSportsLeagues’ ServicesinFoster City.
Inadditiontotheper participant feesthat YouthOrganizationsalreadypaytotheCity,YouthOrganizationsalsocontributetensof thousandsof dollarseveryyear insupport ofthecity’sturfingof thefieldsat SeaCloudPark. Addinganother layer of feestothesefeescausessignificant financial hardshipandimpact andisincongruent toreasonablefeeadjustments.
Usingthecurrent spring2023seasonregistrationfor asmaller sportsorganization, theoriginal proposal that ParksandRecreationsharedat $6/hour for weekdaysand$10/hour for weekendswouldyieldatotal cost increaseof over 350%infieldfeesandupwardsof 59%increaseinregistrationfeesfor certainagegroups. Therevisedproposal at $4/hour for weekdaysand$6/hour for weekendswouldyieldatotal costincreaseof 240%infieldfeesandupwardsof 41%inregistrationfeesfor certainage
7.2 Attachment 2 - Letter from Field User Groups
421
groups. Theseincreasesaresignificant andexcessivefor thesmaller nonprofitorganizationsthat aimtokeepfeeslowtoprovidevaluableresourcestoresidentsandcontinuepromotingthefutureof youthsportsinFoster City.
C. OpeningFoster CityFieldstoOutsideOrganizationsCreatesAdditional RiskandDoesNot ServetheBest Interestsof Foster CityResidents.
Inthepast, manyexternal organizationshaveusedthefieldswithout permit. WithmoreoutsidegroupsusingFoster Cityparksasahome, moregroupswill betemptedto"squat". Inthepast, theFoster CityPoliceDepartment hasbeenhesitant toinvolvethemselvesinsuchdisputes. Whenaskedtoleavethefields, "squatters" havesometimesbecomeviolent. Wedon't want youthorganizersor Foster CityParkandRecreationemployeestoriskthemselvesinsuchascenario. Therearemanymorequestionsthat wewouldliketodiscussfurther:● Howwill theCityandParksandRecreationensurethat outsideorganizations(oroutsidegroupsnot fromarecognizedorganization) arecomplyingwithourprocesses?● Whowill ensureoutsideorganizationsarerespectingour facilities?● Howwill Foster CityParkandRecreationensurethat theequipment andinfrastructurepurchasedbyYouthOrganizationsisnot damaged?● Howwill Foster CitycompensateYouthOrganizationsfor damagecausedbyoutsidegroups?● If thefieldsdeteriorateat anacceleratedrate, howwill Foster CityParksandRecreationrecover someof thesecostsfromexternal groups? Or will that full billbechargedtoFoster CitytaxpayersandFoster CityYouthgroups? III. Counter Proposal fromYouthOrganizations
Wearefullysupportiveof theCity’seffortstoconservecosts, but wealsourgetheCitytodotheright thingfor our communityandcontinuetosupport youthsports. Assuch, wewouldliketoproposethefollowingoptionsfor your consideration:
A. Option1: Increasethecurrent per player feesto$15/resident (44%increase) and$50/non-resident (6.8%increase) witha4year lock. Noadditional per hour usefeespursuant toreasonsdiscussedinSectionII above.B. Option2: Removeper player feescompletely. Chargeonlyper hour usefees: $2/$4per hour, withuniformityof chargesonthesamefield for different sports(e.g., B3andB4for baseball/softball tobechargedasonefield- thesameasS4for soccer).C. Option3: Keepthecurrent per player feesthesamewitha4year lock. Additionally,charge$1/$2per hour, withuniformityof chargesonthesamefieldfor different sports(e.g.,B3andB4for baseball/softball tobechargedasonefield- thesameasS4forsoccer.) anda4year lock.
7.2 Attachment 2 - Letter from Field User Groups
422
Additionally, toresolvetheallegedissueof unusedfieldtime, YouthOrganizationswill provideareducedscheduleof actual hoursneededeachseason.
Wehavealwaysvaluedour partnershipwiththeCityandParksandRecreationandhopethatwecancollaboratetowardsasolutionthat ismutuallyacceptable.
Thankyoufor your consideration.
Sincerelyyours,
Emi Pic Emil PicchiFieldsCoordinator, Foster CityAYSO ArchanaBhutaPresident, Foster CityLittleLeague
RickKellyPresident, Foster CityTournament Baseball
Grac
Tsa GraceTsaiPresident, Foster CityYouthSoftball Association Andre
Stanle AndrewStanleyPresident, PeninsulaYouthSoccer Club Denni Millstei DennisMillsteinPresident, PenCitiesBaseball
7.2 Attachment 2 - Letter from Field User Groups
423
DATE: June 20, 2023
TO: Mayor and Members of the City Council
VIA: Stefan Chatwin, City Manager
FROM: Edmund Suen, Finance Director
Waqas Hassan, Assistant Finance Director
Francine Magno, Senior Civil Engineer
Benjamin Stock, City Attorney
DEPARTMENT: Finance, Public Works, City Attorney
SUBJECT: APPROVAL OF RESOLUTIONS IN CONNECTION WITH
GENERAL OBLIGATION BOND SALE
RECOMMENDATION
It is recommended that the City Council adopt the attached resolutions:
1. Providing for the issuance of its General Obligation Bonds, Series 2023 (Levee Protection Planning and Improvements Project) (Green Bonds) in the principal amount not to exceed $5,000,000; and
2. Establishing the property tax rate and fixed charge assessments for bonded indebtedness for Fiscal Year 2023-2024.
The City awarded a construction bid for the Levee Protection Planning and Improvements Project (the “Project”) to Shimmick Construction Company, Inc. in the amount of $ 60.218 million. Project contingencies, design, engineering and other soft costs raised the initial total project cost to $85 million. In August 2020 the City sold $85 million of its $90 million general obligation (GO) bond authorization to finance the Project (2020 Bonds). Subsequent change orders and contract amendments have increased the total cost of the Project to $ 95 million. The City will expend $ 5 million of its accumulated reserves and sell the balance of the unissued GO bond authorization to fund the increase in the cost of the Project.
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The resolutions before the City Council tonight authorize the sale of the bonds (2023 Bonds) and the placement of a tax levy on the secured tax roll for the Fiscal Year 2023- 2024, the distribution of a Preliminary Official Statement (disclosing facts and certain risks associated with investing in the 2023 Bonds), and execution of a Supplement to the Resolution reflecting the sale of the 2023 Bonds, a continuing disclosure certificate, an Official Notice of Sale and opinions and certificates necessary to close the bond transaction. The Supplement to the Resolution documenting the sale of 2023 Bonds specifies the terms of the 2023 Bonds, the rights of the owners of the 2023 Bonds and the obligations of the City in connection with the 2023 Bonds.
BACKGROUND
In 2003, FEMA undertook a plan to modernize its flood maps and determined that some previously accredited levees did not meet its accreditation standard which requires that the levee be able to protect against a “one percent annual chance” flood. A one percent annual chance flood describes a water elevation level that has a 1-in-100 chance of being exceeded in any year. A property located in a one percent annual chance floodplain has a 26 percent chance of being flooded at least once during the lifetime of a 30-year mortgage payoff period.
Levees that do not provide a one percent annual chance flood protection are not accredited. A non-accredited levee is considered by FEMA in its analyses to be the same as no levee at all; this means that communities protected by levees that do not meet the one percent annual chance standard are considered “without levees” and are mapped into a Special Flood Hazard Area. In 2014, approximately 85% of the 6 miles of levees protecting Foster City were determined by FEMA to not meet this standard.
Properties in a Special Flood Hazard Area with mortgages that are issued by federally chartered banks, banks whose deposits are insured by the FDIC, or properties that are in any way otherwise eligible for a direct or indirect federal loan or payment (such as in the event of flooding), are required to obtain flood insurance. No property in a Special Flood Hazard Area without flood insurance is eligible for any type of federal disaster relief assistance due to flood damage.
On June 5, 2018, 80.6% of City voters approved the sale of up to $90 million of GO bonds to fund the Project.
ANALYSIS
General obligation bonds are used by communities to finance facilities of widespread general benefit to the community for which accumulated reserves and current revenues are insufficient. The bonds must be approved by 2/3rds of those voting on the bond measure and are repaid with a tax imposed on all taxable property within the community that is levied in an amount sufficient to pay annual debt service on the bonds.
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The City has assembled a team of finance professionals to help it structure and sell the 2023 Bonds. Jones Hall serves as disclosure counsel and bond counsel and William Euphrat Municipal Finance, Inc. serves as municipal advisor. U.S. Bank will serve as Paying Agent, Registrar and Costs of Issuance Agent. The 2023 Bonds will be sold in a sealed bid public auction to the lowest bidder.
As were the 2020 Bonds, the 2023 Bonds will be structured with level debt service. The 2023 Bonds are expected to be priced by the lowest bidder with interest rates on all maturities at 5% and be reoffered to the public with lower yields. This will generate a premium that will be paid by the low bidder to the City, which State law requires be applied to pay debt service. The premium will be applied to debt service on the 2023 Bonds. Depending on the amount of the premium, this will result in no tax levy in FYE 2024 and levy for only part of the debt service in FYE 2025. Thereafter the levy will cover all debt service.
The FY 2023-24 tax levy per $100 of assessed value necessary to pay debt service on the 2020 Bond payments coming due on February 1, 2024 and August 1, 2024 is $.02791. This is equivalent to $27.91 per $100,000 of assessed value.
Staff estimates that the annual tax rate per $100,000 of assessed value to pay debt service the 2023 Bonds would be approximately $0.76 in FYE 2025, increasing to $2.32 in FYE 2026 and would decline thereafter as assessed value increased. The following chart shows the estimated debt service and tax rates per $100,000 of assessed value for both the $85 million 2020 Bonds and the proposed $5 million 2023 Bonds. **Assumes AV growth of two percent annually through 2050. $-$5.0$10.0$15.0$20.0$25.0$30.0
$-$0.5$1.0$1.5$2.0$2.5$3.0$3.5$4.0$4.5202420252026202720282029203020312032203320342035203620372038203920402041204220432044204520462047204820492050Levy/$100,000 Millions EstimatedAnnualDebtServiceandTaxRates**
2020BondsDSLevy2023BondsDSLevy2020Bonds$/100kLevy2023Bonds$/100kLevyAggregate$/100kLevy
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The current estimate of the true interest cost of the 2023 Bonds is 4.00%. True interest cost is a measure of total interest paid, plus the underwriter’s discount, that takes into account the value of money over time. Total net debt service (principal and interest) paid over the life of the 2023 Bonds would be approximately $9.252 million. The highest annual levy of $2.32/$100,000 is estimated to occur in the fiscal year ending 2026.
One of the two GO bond resolutions presented for approval tonight will approve the tax levy for the fiscal year ended June 30, 2024. The other resolution will approve the sale of the 2023 Bonds and certain key documents necessary for their issuance. The average tax rate would be approximately $1.81/$100,000. These amounts are estimates only. The interest rates and reoffering yields will be set when the bonds are priced in July. Actual assessed valuation levels will most likely differ somewhat from those used in this analysis, and those actual levels will determine the required tax levy each year.
The amount a taxpayer contributes towards bond debt service is based on the assessed value of that taxpayer’s property. If assessed valuation grows at a rate faster than two percent, then the tax levy will decrease over time at a faster rate than shown in the above table.
The 2023 Bonds will be payable only from the City’s unlimited ad valorem taxing power to raise sufficient tax revenues to make annual debt service payments on the bonds.
The tax levy associated with general obligation bonds may only be used to pay debt service on such bonds. The General Fund of the City does not secure the repayment of the 2020 Bonds or the 2023 Bonds.
California Environmental Quality Act
Not Applicable
FISCAL IMPACT
With the exception of rating fees, all issuance costs associated with the 2023 Bonds are contingent on the sale of the 2023 Bonds. Rating fees are expected to total $25,000 for a rating from Moody’s Investors Service (Moody’s). Moody’s has rated the 2020 Bonds in its highest rating category, Aaa, and the 2023 Bonds are expected to also be rated Aaa.
The interest portion of annual debt service on the 2023 Bonds will be paid from the original issue premium collected at closing until such premium is exhausted and from tax levies collected by the County of San Mateo. After the original issue premium is fully expended, all of the annual debt service on the 2023 Bonds will be paid from tax levies collected by the County of San Mateo.
The following table shows the sources and uses of funds for the Project based on the sale of the remaining authorization. The Original issue premium generated at bond
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pricing will not pay either underwriter’s discount or other costs of issuance (such as legal, advisory, and rating fees).
REQUIRED DOCUMENT APPROVALS
The resolution approving the issuance of the 2023 Bonds approves by name certain documents associated with the issuance of the bonds. These documents include the Supplement to the Resolution, the Preliminary Official Statement, a Continuing Disclosure Certificate and an Official Notice of Sale, and each is briefly described in Attachment 3 to this staff report.
RESPONSIBILITIES OF ELECTED OFFICIALS UNDER FEDERAL SECURITIES LAWS
The attached Preliminary Official Statement has been reviewed and approved for transmittal to the City Council by the City’s Disclosure/Federal Tax Working Group. The distribution of the Preliminary Official Statement by the City is subject to federal securities laws, including the Securities Act of 1933 and the Securities Exchange Act of 1934. These laws require the Preliminary Official Statement to include all facts that would be material to an investor in the 2023 Bonds. Material information is information that there is a substantial likelihood would have actual significance in the deliberations of the reasonable investor when deciding whether to buy or sell the 2023 Bonds.
The SEC has stated in a release (the “Release”), if a member of the City Council has knowledge of any facts or circumstances that an investor would want to know about prior to investing in the 2023 Bonds, whether relating to their repayment, tax-exempt status, undisclosed conflicts of interest with interested parties, or otherwise, he or she should endeavor to discover whether such facts are adequately disclosed in the Preliminary Official Statement. In the Release, the SEC stated that the steps that a member of the City Council could take include becoming familiar with the Preliminary Official Statement and questioning staff and consultants about the disclosure of such SourcesBonds 5,000,000$OrginalIssuePremium601,846Total 5,601,846UsesProjectFund 4,850,400CostsofIssuance124,600Underwriter'sDiscount 25,000CapitalizedDebtService601,846Total 5,601,846$
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facts. If the City Council concludes that the Preliminary Official Statement includes all facts that would be material to an investor in the 2023 Bonds, it must adopt a resolution that authorizes staff to execute a certificate to the effect that the Preliminary Official Statement has been “deemed final.”
The key sections of the Preliminary Official Statement are identified below:
“PLAN OF FINANCE – Purpose of Issue”: This section of the Preliminary Official Statement describes the improvements to be financed by the 2023 Bonds and some of the risks that will be mitigated by construction of the levee improvements, including short-term flooding from storms and high tides and long-term risks from climate change.
This section also describes some of the ongoing risks to the levee system, including earthquakes.
“SECURITY FOR THE BONDS”: This section of the Preliminary Official Statement describes the security for the City’s obligation to repay the 2023 Bonds, specifically the obligation to levy ad valorem taxes on taxable property in the City. “PROPERTY TAXATION”: This section describes California’s property tax system, the primary credit characteristics of taxable property in the City, including Citywide assessed value and major property owners (including the risks of concentrated ownership), and the County’s current approach to the Teeter Plan. “APPENDIX A - FINANCIAL, ECONOMIC AND DEMOGRAPHIC INFORMATION FOR THE CITY OF FOSTER CITY AND SAN MATEO COUNTY”: This section describes the City’s finances, including (i) its historical revenue and expenditures, (ii) its current and historical budgets, (iii) its reserve policy, (iv) its major revenues, (v) the City’s five- year financial plan, and (vi) the City’s long-term payment obligations, including pension and OPEB costs.
COVID-19 and its impacts on the City are discussed in great detail throughout the Preliminary Official Statement and additionally in Appendix A.
NEXT STEPS
Once the attached resolutions are approved, no further action by the City Council is necessary to authorize issuance of the 2023 Bonds. The 2023 Bonds are expected to sell on July 12 and close on July 27.
ALTERNATIVES
The City is obligated to make the additional payments it authorized pursuant to change orders. If the Council declines to approve the sale of 2023 Bonds, the City would be obligated to use accumulated reserves to pay for the entire amount so additionally approved.
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CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Facilities and Infrastructure
ATTACHMENTS:
•Attachment 1 - Resolution (Providing for Issuance of General Obligation Bonds, Series 2023), including Supplement to the Resolution
•Attachment 2 - Resolution (Establishing Property Tax Rate and Fixed Charge Assessments for Bonded Indebtedness for Fiscal Year 2023-2024) •Attachment 3 - Summary of Principal Legal Documents
•Attachment 4 - Preliminary Official Statement, including Appendix D – Form of Continuing Disclosure Certificate
•Attachment 5 – Official Notice of Sale
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3 RESOLUTION NO. 2023-__
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FOSTER CITY PROVIDING FOR THE ISSUANCE OF ITS GENERAL OBLIGATION BONDS, SERIES 2023 (LEVEE
PROTECTION PLANNING AND IMPROVEMENTS PROJECT) IN THE PRINCIPAL AMOUNT NOT TO EXCEED $5,000,000
CITY OF FOSTER CITY
WHEREAS, pursuant to the provisions of Article 1, Chapter 4 of Division 4 of Title 4 of the Government Code of the State of California, as amended (the "Law"), and pursuant to Ordinance No. 613 adopted by the City Council (the "City Council") of the City of Foster City (the "City") on March 5, 2018 (the "Ordinance"), a special election was duly and regularly held on June 5, 2018, in the territory included within the boundaries of the City (the "Election") at which Election there was submitted to the qualified voters of said City the following proposition (the "Bond Measure"):
"To improve the levee protecting essential city services, including fire, police, water, sewer, transportation infrastructure; protect Foster City homes, schools, businesses from flooding; avoid both Foster City being designated a FEMA special flood hazard area and flood insurance requirements for residents/businesses; shall Foster City issue $90,000,000 in bonds at legal rates, levy approximately $40 per $100,000 assessed valuation, averaging $5,171,000 collected annually while bonds are outstanding, with citizens' oversight, no funds for administrators, all funds staying local?" WHEREAS, at the Election, the Bond Measure received the affirmative vote of the requisite two-thirds or more of the voters of the City voting on the proposition, as certified by the Registrar of Voters of the County in the official canvassing of votes (the "Authorization"), and all the requirements of the Constitution and laws of the State of California have been complied with in the holding of the Election; and
WHEREAS, in its Resolution No. 2020-67, which was adopted by the City Council on July 6, 2020, the City declared its intention to finance a portion of the projects described in the Authorization with the proceeds of Tax-Exempt Bonds (as defined in Resolution No. 2020-067) and to reimburse with proceeds of the Tax-Exempt Bonds certain capital expenditures that were paid from available moneys of the City prior to the date of issuance of the Tax-Exempt Bonds; and WHEREAS, pursuant to the Authorization, Article 4.5 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code (the "Bond Law") and Resolution No. 2020-067, the City previously issued its $85,000,000 City of Foster City General Obligation Bonds, Series 2020 (Levee Protection Planning and Improvements Project (the “2020 Bonds”), leaving $5,000,000 of bonding authority available under the Authorization; and WHEREAS, at this time this City Council has determined that it is necessary and desirable and in the best interests of the City to issue the second series of bonds under the Authorization in an aggregate principal amount not-to-exceed $5,000,000, and to be styled as "City of Foster City General Obligation Bonds, Series 2023 (Levee Protection Planning And Improvements Project)” (the "Bonds") for the purposes set forth in the Authorization;
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3 WHEREAS, t h e C i t y C o u n c i l i n t e n d s t o i s s u e t h e B o n d s in accordance with the Election, the Ordinance, the Law and the Bond Law, and wishes to adopt this Resolution to authorize the issuance of the Bonds and approve the forms of certain documents; WHEREAS, the City Council has determined that U.S. Bank Trust Company, National Association (the "Paying Agent") shall act as the initial paying agent and registrar for the Bonds subsequent to the adoption of this Resolution; and
WHEREAS, in order to effect the issuance of the Bonds, the City Council desires to approve the form of a preliminary official statement, the form of a continuing disclosure certificate, and the form of an Official Notice of Sale, the forms of which are on file with the City Clerk and presented at this meeting; and
WHEREAS, this City Council desires to appoint certain professionals to provide services related to the issuance of the Bonds; and
WHEREAS, in order to comply with Government Code Section 5852.1, the City Council has obtained certain information relating to the Bonds and included it in Exhibit B attached to this Resolution, and such information is hereby disclosed and made public; and WHEREAS, all acts, conditions and things required by law to be done or performed have been done and performed in strict conformity with the laws authorizing the issuance of general obligation bonds of the City, and the indebtedness of the City, including this proposed issue of Bonds, is within all limits prescribed by law;
NOW, THEREFORE, the City Council of the City of Foster City, California, DOES HEREBY RESOLVE, DETERMINE AND ORDER as follows:
SECTION 1. Each of the above recitals is true and correct.
SECTION 2. The issuance of the Bonds in a principal amount not to exceed $5,000,000 pursuant to the Bond Law is hereby approved and such Bonds shall mature on the dates and pay interest at the rates set forth in and all other provisions of the Bonds shall be governed by the terms and conditions of a Supplement to this Resolution to be executed by the Mayor of the City or the City Manager (including any acting or interim City Manager), or their written designee (each an "Authorized Officer" and collectively, the "Authorized Officers"), each acting alone, which Supplement to Resolution is hereby approved in substantially the form attached hereto as Exhibit A (the "Supplement to Resolution"), together with such additions thereto and changes therein as Bond Counsel (as defined below) and the Authorized Officers deem necessary. Approval of such changes shall be conclusively evidenced by the execution and delivery of the Supplement to Resolution by an Authorized Officer. The covenants set forth in the Supplement to Resolution are hereby approved, shall be deemed covenants of the City Council and shall be complied with by the City and its officers. The Supplement to Resolution shall constitute a contract between the City and the Owners of the Bonds.
SECTION 3. The Bonds shall be sold upon the direction of an Authorized Officer or the Finance Director.
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3 The City Council hereby authorizes the sale of the Bonds by competitive public bidding in accordance with the provisions of the Official Notice of Sale. The form of the Official Notice of Sale presented to this City Council is approved in substantially the form presented. The terms and conditions of the offering and the competitive public sale of the Bonds shall be as specified in the Official Notice of Sale. An Authorized Officer or the Finance Director, on behalf of the City, is hereby authorized and directed to accept the best responsible bid for the purchase of the Bonds, determined in accordance with the Official Notice of Sale. Sale of the Bonds shall be awarded, or all bids shall be rejected, at the time specified in the Official Notice of Sale.
The City Council hereby authorizes and directs Bond Counsel to publish a notice of the City’s intention to sell the Bonds, in form and substance acceptable to Bond Counsel, in The Bond Buyer once at least 15 days prior to the date fixed for receipt of bids, in accordance with Section 53692 of the California Government Code.
SECTION 4. The preliminary official statement (the "Preliminary Official Statement") presented to this City Council is approved in substantially the form presented. The City Manager or the Finance Director, or their written designees, is authorized to make such changes in and additions to the Preliminary Official Statement prior to mailing as may be approved by the City Manager or the Finance Director, or their written designees; and each of the City Manager, the Finance Director and their written designees is hereby authorized and directed to deem such form, as modified, "final," except for information relating to the offering prices, interest rates, selling compensation, rating and other terms of the Bonds depending on such matters. The execution of the official statement by an Authorized Officer and the printing and distribution thereof (in both preliminary and final forms) in connection with the sale of the Bonds, with such changes as are approved or required as set forth above, are hereby authorized and approved.
SECTION 5. The form of the Continuing Disclosure Certificate to be executed by the City (the "Continuing Disclosure Certificate"), presented to this City Council is approved in substantially the form presented. An Authorized Officer is hereby authorized and directed, for and in the name and on behalf of the City, to execute the Continuing Disclosure Certificate in substantially said form, with such changes therein as an Authorized Officer or the Finance Director may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof by an Authorized Officer.
SECTION 6. In connection with the sale and issuance of the Bonds, the City Council hereby appoints (a) Jones Hall, A Professional Law Corporation, as bond counsel and disclosure counsel ("Bond Counsel") and (b) William Euphrat Municipal Finance, Inc. ("Municipal Advisor"), as municipal advisor with respect to the Bonds.
SECTION 7. The Authorized Officers, the Finance Director and the City Clerk, and their written designees, are each hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents which each may deem necessary or advisable in order to consummate the sale, execution and delivery of the Bonds and the financing of the Project and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution and the Supplement to Resolution thereto, the Bonds, the Continuing Disclosure Certificate, the Official Notice of Sale, the Preliminary Official Statement, and the Official Statement. Such actions heretofore taken by such officers or designees are hereby ratified,
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3 confirmed and approved.
SECTION 8. The Finance Director is hereby authorized and directed to record the sources and uses of funds for the Bonds as well as the associated interest income, property tax levy revenues, debt service payments, and administrative expenditures in its Project Fund, Debt Service Fund and Rebate Fund and make any corresponding appropriations and/or adjustments to its fiscal year 2023-24 budget.
SECTION 9. The City Clerk shall certify to the adoption of this Resolution.
PASSED AND ADOPTED as a resolution of the City Council of the City of Foster City at the special meeting held on the 20th day of June, 2023, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
JON FROOMIN, MAYOR
ATTEST:
PRISCULLA SCHAUS, CITY CLERK
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EXHIBIT A
SUPPLEMENT TO RESOLUTION NO. ___________
GOVERNING TERMS OF THE $5,000,000 CITY OF FOSTER CITY
GENERAL OBLIGATION BONDS, SERIES 2023
(LEVEE PROTECTION PLANNING AND IMPROVEMENTS PROJECT)
DATED AS OF _________ 1, 2023
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SUPPLEMENT TO RESOLUTION NO. ________
THIS SUPPLEMENT TO RESOLUTION NO. ________ executed as of _____, 2023, governs the terms of the City of Foster City General Obligation Bonds, Series 2023 (Levee Protection Planning and Improvements Project).
RECITALS:
WHEREAS, pursuant to the provisions of Article 1, Chapter 4 of Division 4 of Title 4 of the Government Code of the State of California, as amended (the "Law"), and pursuant to Ordinance No. 613 adopted by the City Council (the "City Council") of the City of Foster City (the "City") on March 5, 2018 (the "Ordinance"), a special election was duly and regularly held on June 5, 2018, in the territory included within the boundaries of the City (the "Election") at which Election there was submitted to the qualified voters of said City the following proposition (the "Bond Measure"):
"To improve the levee protecting essential city services, including fire, police, water, sewer, transportation infrastructure; protect Foster City homes, schools, businesses from flooding; avoid both Foster City being designated a FEMA special flood hazard area and flood insurance requirements for residents/businesses; shall Foster City issue $90,000,000 in bonds at legal rates, levy approximately $40 per $100,000 assessed valuation, averaging $5,171,000 collected annually while bonds are outstanding, with citizens' oversight, no funds for administrators, all funds staying local?" WHEREAS, at the Election, the Bond Measure received the affirmative vote of the requisite two- thirds or more of the voters of the City voting on the proposition, as certified by the Registrar of Voters of the County in the official canvassing of votes (the "Authorization"), and all the requirements of the Constitution and laws of the State of California have been complied with in the holding of the Election; and
WHEREAS, in its Resolution No. 2020-67, which was adopted by the City Council on July 6, 2020, the City declared its intention to finance a portion of the projects described in the Authorization with the proceeds of Tax-Exempt Bonds (as defined in Resolution No. 2020-067) and to reimburse with proceeds of the Tax-Exempt Bonds certain capital expenditures that were paid from available moneys of the City prior to the date of issuance of the Tax-Exempt Bonds; and WHEREAS, pursuant to the Authorization, Article 4.5 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code (the "Bond Law") and Resolution No. 2020-067, the City previously issued its $85,000,000 City of Foster City General Obligation Bonds, Series 2020 (Levee Protection Planning and Improvements Project (the “2020 Bonds”), leaving $5,000,000 of bonding authority available under the Authorization; and WHEREAS, at this time this City Council has determined that it is necessary and desirable and in the best interests of the City to issue the second series of bonds under the Authorization in an aggregate principal amount not-to-exceed $5,000,000, and to be styled as "City of Foster City General Obligation Bonds, Series 2023 (Levee Protection Planning And Improvements Project) (the "Bonds") for the purposes set forth in the Authorization;
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WHEREAS, the City Council intends to issue the Bonds in accordance with the Election, the Ordinance, the Law and the Bond Law, and wishes to adopt this Resolution to authorize the issuance of the Bonds and approve the forms of certain documents; WHEREAS, the City Council has determined that U.S. Bank Trust Company, National Association (the "Paying Agent") shall act as the initial paying agent and registrar for the Bonds subsequent to the adoption of this Resolution; and
NOW, THEREFORE, in order to establish the terms and conditions upon and subject to which the Bonds are to be issued, the City Council does hereby covenant and agree, for the benefit of the Owners of the Bonds, as follows:
SECTION 1. Definitions. Unless the context clearly otherwise requires the following terms or as defined in the recitals hereof shall have the respective meanings ascribed to them in this Section 1:
Auditor. The term “Auditor” means the County Auditor-Controller of the County of San Mateo, California, being the Auditor-Controller of such County.
Authorized Investments. The term “Authorized Investments” means any investment permitted by law to be made with any moneys belonging to or in the custody of the City and by any policy guidelines promulgated by the City, but only to the extent that the same are acquired at Fair Market Value; including:
(1) Generally approved qualifying investment instruments:
a. Obligations of the U.S. Government, its agencies, and instrumentalities. b. Certificates of deposit with banks and savings and loans doing business in the State of California.
c. Prime Banker’s Acceptances.
d. Prime Commercial Paper.
e. Repurchase Agreements and Money Market Funds whose underlying collateral consists of the foregoing.
f. San Mateo County’s Investment Pool for local agencies, which includes the purchase of Reverse Repurchase Agreements.
g. Pools and other investment structures incorporating investments listed in a through e.
(2) Generally approved qualifying investment instruments for City funds, as further limited by the investment policy:
a. United States Treasury Bills, Bonds, and Notes, or those for which the full faith and credit of the United States are pledged for payment of principal and interest.
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b. Obligations issued by the United States Government Agencies such as the Government National Mortgage Association (GNMA), Federal Farm Credit Bank System (FFCB), the Federal Home Loan Bank Board (FHLB), the Federal Home Loan Mortgage Corporation (FHLMC), the Federal National Mortgage Association (FNMA), and the Student Loan Marketing Association (SLMA).
c. Bills of exchange or time drafts drawn on and accepted by a commercial bank otherwise known as banker’s acceptances. Purchases of banker’s acceptances may not exceed 180 days to maturity.
d. Commercial paper ranked P1 by Moody’s Investor Services and A1 by Standard and Poor’s, and issued by a domestic corporation having assets in excess of $500 million and having an A or better rating on its long-term debentures as provided by Moody’s or Standard and Poor’s. e. Local Agency Investment Fund. The City may invest in the Local Agency Investment Fund (LAIF) established by the State Treasurer for the benefit of local agencies up to the maximum amount permitted by State law. f. Money market funds rated in the highest category of Moody’s or Standard and Poor’s, or administered by a domestic bank with long- term debt rated in one of the top two categories of Moody’s or Standard and Poor’s.
Authorized Representative of the City. The term “Authorized Representative of the City” means the Mayor, the City Manager, the Finance Director or any other person or persons designated by any of them in a written certificate or by the City Council of the City and authorized to act on behalf of the City by a written certificate signed on behalf of the City by the Mayor of the City and containing the specimen signature of each such person.
Bond Counsel. The term “Bond Counsel” means an attorney or firm of attorney of whose opinions are nationally accepted in matters pertaining to the tax-exempt status of interest on bonds issued by states and their political subdivisions.
Bond Law. The term “Bond Law” means Article 4.5 of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code.
Bonds. The term “Bonds” means the $5,000,000 City of Foster City General Obligation Bonds, Series 2023 (Levee Protection Planning and Improvements Project).
Closing Date. The term “Closing Date” is the date the bonds are delivered to the initial purchaser thereof.
Code. The term “Code” means the Internal Revenue Code of 1986 as in effect on the date of issuance of the Bonds or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the date of issuance of the Bonds, together with applicable proposed, temporary and final regulations promulgated, and applicable official public guidance published, under the Code.
Computation Year. The term “Computation Year” means, with respect to the Bonds, the period beginning on the Delivery Date and ending on August 1, 2024, and each 12-month period
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ending on August 1 thereafter until there are no longer any Bonds outstanding, or such other computation year as may be established pursuant to the Tax Certificate.
Costs of Issuance. The term “Costs of Issuance” means all of the costs of issuing the Bonds, including, but not limited to, all printing and document preparation expenses in connection with this Resolution, the Bonds, the Official Statement pertaining to the Bonds, the Bond Purchase Agreement, and any and all other agreements, instruments, certificates or other documents prepared in connection therewith; financial advisory fees; bond counsel fees; underwriter’s fees; rating agency fees; auditor’s fees; CUSIP service bureau charges; legal fees and expenses of counsel with respect to the financing; the initial fees and expenses of the Paying Agent; other fees for professional consulting services fees for credit enhancement relating to the Bonds; and other fees and expenses incurred in connection with the issuance of the Bonds, to the extent such fees and expenses are approved by the City.
Costs of Issuance Account. The term “Costs of Issuance Account” means the account by that name established pursuant to the Costs of Issuance Custody Agreement, providing for payment of Costs of Issuance from amounts deposited in the Costs of Issuance Account pursuant to Section 2 hereof.
Costs of Issuance Custodian. The term “Costs of Issuance Custodian” means U.S. Bank Trust Company, National Association, in its capacity under the Costs of Issuance Custody Agreement.
Costs of Issuance Custody Agreement. The term “Costs of Issuance Custody Agreement” means the Costs of Issuance Custody Agreement between the City and the Costs of Issuance Custodian, dated the Closing Date, and providing for payment of the Costs of Issuance.
Debt Service Fund. The term “Debt Service Fund” means the fund of that name established under Section 13 hereof and the Law.
Depository. The term “Depository” means (a) initially, DTC, and (b) any other Securities Depository acting as Depository under this Indenture.
Depository System Participant. The term “Depository System Participant” means any participant in the Depository’s book-entry system.
DTC. The term “DTC” means The Depository Trust Company, New York, New York, and its successors and assigns.
Fair Market Value. The term Fair Market Value means the price at which a willing buyer would purchase the investment from a willing seller in a bona fide, arm's length transaction (determined as of the date the contract to purchase or sell the investment becomes binding) if the investment is traded on an established securities market (within the meaning of section 1273 of the Code) and, otherwise, the term "Fair Market Value" means the acquisition price in a bona fide arm's length transaction (as referenced above) if (i) the investment is a certificate of deposit that is acquired in accordance with applicable regulations under the Code, (ii) the investment is an agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for example, a guaranteed investment contract, a forward supply contract or other investment agreement) that is acquired in accordance with applicable regulations under the Code, (iii) the investment is a United States Treasury Security-- State and Local Government Series that is acquired in accordance with applicable regulations of
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the United States Bureau of Public Debt, or (iv) any commingled investment fund in which The City and related parties do not own more than a 10% beneficial interest therein if the return paid by the fund is without regard to the source of the investment. To the extent required by the applicable regulations under the Code, the term “investment” will include a hedge.
Finance Director. The term “Finance Director” means the Finance Director or, if there is no Finance Director, Treasurer of the City.
Government Obligations. The term “Government Obligations shall mean:
Direct and general obligations of the United States of America, or obligations that are unconditionally guaranteed as to principal and interest by the United States of America (which may consist of obligations of the Resolution Funding Corporation that constitute interest strips), and obligations secured or otherwise guaranteed, directly or indirectly, as to principal and interest by a pledge of the full faith and credit of the United States of America. In the case of direct and general obligations of the United States of America, Government Obligations shall include evidences of direct ownership of proportionate interests in future interest or principal payments of such obligations. Investments in such proportionate interests must be limited to circumstances where (i) a bank or trust company acts as custodian and holds the underlying United States obligations; (ii) the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor of the underlying United States obligations; and (iii) the underlying United States obligations are held in a special account, segregated from the custodian’s general assets, and are not available to satisfy any claim of the custodian, any person claiming through the custodian, or any person to whom the custodian may be obligated; provided that such obligations are rated or assessed at least as high as direct and general obligations of the United States of America by either Moody’s or S&P.
Interest Payment Date. The term “Interest Payment Date” means each February 1 and August 1, commencing February 1, 2024.
Moody’s. The term “Moody’s” means Moody’s Investors Service, Inc., a corporation organized and existing under the laws of the State of Delaware, its successor and assigns or, if such corporation shall be dissolved or liquidated or no longer shall perform the functions of a securities rating agency, such other nationally recognized securities rating agency as may be designated by the City.
Outstanding. The term “Outstanding” means, when used with reference to the Bonds, as of any date, Bonds theretofore issued or thereupon being issued under this Resolution except:
(1) Bonds canceled at or prior to such date;
(2) Bonds in lieu of or in substitution for which other Bonds shall have been delivered pursuant to Section 7 hereof; or
(3) Bonds for the payment or redemption of which funds or Government Obligations in the necessary amount shall have been set aside (whether on or prior to the maturity or redemption date of such Bonds), in accordance with Section 16 of this Resolution.
Owner. The term “Owners” or “Bond Owner” or any similar term, when used with respect to the Bonds, means any person in whose name a Bond is registered in the books of registration maintained by the Paying Agent.
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Participants. The term “Participants” means those broker-dealers, banks and other financial institutions from time to time for which DTC holds Bonds as securities depository.
Paying Agent. The term “Paying Agent” means that entity so designated from time to time by the City Council of the City to serve as, paying agent, transfer agent and registrar for the Bonds.
The initial Paying Agent shall be U.S. Bank Trust Company, National Association.
Project Costs. The term “Project Costs” means all of the expenses of and incidental to the construction and/or acquisition of the works and the payment of the costs described in the recitals hereof, in the Bond Measure and in the Ordinance, which are permitted under the Law to be financed with the proceeds of the Bonds, including Costs of Issuance.
Project Fund. The term “Project Fund” means the fund of that name established under Section 11 hereof and the Law.
Securities Depository. “Securities Depository” means The Depository Trust Company, 55 Water Street, New York, New York 10041, Tel: (212) 855-1000 or Fax: (212) 855-7320.
S&P. The term “S&P” means S&P Global Ratings, its successor and assigns, or if such entity shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, such other nationally recognized securities rating agency as may be designated by the City.
Rebate Regulations. The term “Rebate Regulations” means the Treasury Regulations issued under Section 148(f) of the Code.
Record Date. The term “Record Date” shall mean the fifteenth day of the month preceding an Interest Payment Date.
Resolution. The term “Resolution” shall mean, collectively, Resolution No. ________ of the City Council, together with this Supplement to Resolution.
Term Bonds. The term “Term Bonds” means those Bonds for which mandatory redemption dates have been established in Section 10 hereof.
SECTION 2. Authorization to Issue. Bonds of the City in the sum of $5,000,000 shall be issued for the purpose stated in the Proposition set out in the recitals hereof. Said Bonds are further issued pursuant to the provisions of the Law and the Bond Law. Said Bonds shall be designated the “City of Foster City General Obligation Bonds, Series 2023 (Levee Protection Planning and Improvements Project).” The Bonds shall be issued in the form of fully registered bonds in the denomination of $5,000 each or any whole multiple thereof and shall mature on the dates and in the amounts, and shall bear interest at the rates, per annum, for each of the years as follows:
Year
(August 1) Principal Amount Interest Rate
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Year
(August 1) Principal Amount Interest Rate
*Term Bond
The Bonds shall bear interest at the rates set forth above, from the Closing Date, payable on February 1, 2024 and thereafter semiannually on each February 1 and August 1. Each Bond shall bear interest until its principal sum has been paid; provided, however, that if funds are available for the payment thereof on such Bonds applicable maturity date in full accordance with the terms of this Resolution, such Bond shall then cease to bear interest. Interest on the Bonds shall be calculated on the basis of a 360-day year comprising twelve 30-day months.
The Bonds shall be numbered No. 1 and sequentially upwards and shall be dated the Closing Date, except that Bonds issued upon exchanges and transfers of other Bonds shall be dated so that no gain or loss of interest shall result from the exchange or transfer. Interest on each Bond shall be paid by the Paying Agent by check mailed by first class mail, postage prepaid, on the Interest Payment Date to the Owner as his/her name and address appear on the register kept by the Paying Agent at the close of business on the applicable Record Date. At the request of any owner of at least $1,000,000 in aggregate principal amount of Bonds, interest on the Bonds will be paid by wire transfer in immediately available funds if such request is made at least fifteen days before the Record Date for such payment, any such designation to remain in effect until withdrawn. Each Bond shall bear interest from the Interest Payment Date next preceding the date of authentication with respect to which interest has been paid or provided for (unless (i) the date of authentication is prior to the first Record Date, in which event from the Closing Date, (ii) the date of authentication is after a Record Date and before the following Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (iii) it is authenticated as of an Interest Payment Date, in which event it shall bear interest from such date) until the principal hereof shall have been paid.
$___________ of proceeds of the Bonds (comprising $5,000,000 aggregate principal amount, plus $________ in net original issue premium, less $________ of underwriter’s discount) shall be disbursed, as follows:
$ to the Project Fund to be applied to pay
Project Costs in accordance with
Section 11
to the Costs of Issuance Account to be
applied to pay certain Costs of Issuance
to the Debt Service Fund to be applied to
pay interest on the Bonds
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$ TOTAL
SECTION 3. Place of Payment. The Bonds shall be payable in lawful money of the United States of America and principal of the Bonds shall be payable upon surrender thereof at the principal corporate trust office of the Paying Agent in San Francisco, California.
SECTION 4. Paying Agent. The initial Paying Agent for the Bonds shall be U.S. Bank Trust Company, National Association The Paying Agent may at any time resign and be discharged of the duties and obligations created by this Resolution by giving at least 60 days’ written notice to the City. The Paying Agent may be removed at any time by an instrument filed with such Paying Agent and signed by the City. A successor Paying Agent shall be appointed by the City and shall be a bank or trust company organized under the laws of any state of the United States, a national banking association or any other financial institution, having capital stock and surplus aggregating at least $75,000,000 and doing business in the State and willing and able to accept the office on reasonable and customary terms and authorized by law to perform all the duties imposed upon it by this Resolution. Such Paying Agent shall signify the acceptance of its duties and obligations hereunder by executing and delivering to the City a written acceptance thereof.
Resignation or removal of the Paying Agent shall be effective upon appointment and acceptance of a successor Paying Agent.
In the event of the resignation or removal of the Paying Agent, such Paying Agent shall pay over, assign and deliver any moneys held by it as Paying Agent to its successor, or, if there is no successor, to the Finance Director. In the event that for any reason there shall be a vacancy in the office of the Paying Agent, the Finance Director shall act as such Paying Agent. The City shall cause the new Paying Agent appointed to replace any resigned or removed Paying Agent to mail notice of its appointment and the address of its principal office to all registered Owners.
SECTION 5. Form of Bonds. The Bonds shall be substantially in the form attached hereto as Attachment ”1.” Such form is hereby approved and adopted as the form of the Bonds and of the redemption, exchange, registration and assignment provisions pertaining to them, with necessary or appropriate variations, omissions, and insertions, as permitted or required by this Resolution.
Any Bonds issued pursuant to this Resolution may be initially issued in temporary form exchangeable for definitive Bonds when the same are ready for delivery. The temporary Bonds may be printed, lithographed or typewritten, shall be of such denominations as may be determined by the City, shall be in fully registered form and may contain references to any of the provisions of this Resolution as may be appropriate. Every temporary Bond shall be executed by the City and be authenticated by the Paying Agent upon the same conditions and in substantially the same form and manner as the definitive fully registered bonds. If the City issues temporary Bonds, it will execute and furnish definitive Bonds without delay, and, thereupon, the temporary Bonds shall be surrendered for cancellation at the principal office of the Paying Agent in San Francisco, California, or at such other place in California as the City may approve. The Paying Agent shall deliver in exchange for the surrendered temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized denominations of this same issue. Until exchanged, the temporary Bonds shall be entitled to the same benefits under this Resolution as definitive Bonds of this same issue.
SECTION 6. Execution and Authentication of the Bonds. The Bonds shall be signed on behalf of the City by its Mayor and by its City Manager by facsimile signatures and by its City Clerk, or authorized Deputy City Clerk, by facsimile signature. The foregoing officers are hereby
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authorized and directed to sign the Bonds in accordance with this Section 6. If any City officer whose facsimile signature appears on the Bonds ceases to be an officer before delivery of the Bonds, his or her signature is as effective as if he or she had remained in office.
The Paying Agent shall authenticate the Bonds on registration and/or exchange to effectuate the registration and exchange provisions set forth in Section 7 below; and only those Bonds that have endorsed on them a certificate of authentication, substantially in the form set forth in the form of Bond, duly executed by the Paying Agent, shall be entitled to any rights, benefits or security under this Resolution. No Bond shall be valid or obligatory for any purpose unless and until the certificate of authentication thereon has been duly executed by the Paying Agent. The certificate of the Paying Agent upon any Bond shall be conclusive and the only evidence required that the Bond has been duly authenticated and delivered under this Resolution. The Paying Agent’s certificate of authentication on any Bond shall be deemed to have been duly executed if signed by an authorized officer of the Paying Agent, but it shall not be necessary that the same officer sign the certificate of authentication on all of the Bonds that may be issued hereunder.
SECTION 7. Registration, Transfers and Exchanges. Any Bond may, in accordance with its terms, be transferred, upon the registration books required to be kept by the Paying Agent, by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such fully registered Bond for cancellation, accompanied by delivery of a written instrument of transfer in a form approved by the Paying Agent, duly executed.
Whenever any Bond or Bonds shall be surrendered for transfer, the Paying Agent shall authenticate and deliver a new Bond or Bonds of the same series and maturity, for the like aggregate principal amount of Bond or Bonds surrendered.
Bonds may be exchanged at the principal corporate trust office of the Paying Agent in San Francisco, California, for a like aggregate principal amount of Bonds of other authorized denominations of the same series and maturity.
The person, firm or corporation requesting the transfer or exchange shall pay any costs or charges in connection with the transfer or exchange as are established by the Paying Agent, in addition to paying any tax or governmental charge that may be imposed in connection with the transfer or exchange. The Paying Agent shall not be required, however, to register a transfer or make an exchange of any Bond (i) during the 15 days before the selection of Bonds for redemption, or (ii) if such Bond has been called for redemption in whole or in part.
SECTION 8. Registration Books. The Paying Agent will keep at its principal corporate trust office in San Francisco, California, or at such other place as the City may approve, sufficient books for the registration and transfer of the Bonds. The books shall at all times be open to inspection by the City; and, upon presentation for such purpose, the Paying Agent shall under such reasonable regulations as it may prescribe, register or transfer, or cause to be registered or transferred, on the register, the Bonds as hereinbefore provided.
SECTION 9. Book-Entry Only System. DTC shall act as the initial Depository for the Bonds.
One Bond for each maturity of the Bonds shall be initially executed, authenticated, and delivered as set forth herein with a separate fully registered certificate (in print or typewritten form). Upon initial execution, authentication, and delivery, the ownership of the Bonds shall be registered in the Bond Register kept by the Paying Agent for the Bonds in the name of Cede & Co., as nominee of DTC or such nominee as DTC shall appoint in writing.
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The representatives of the City and the Paying Agent are hereby authorized to take any and all actions as may be necessary and not inconsistent with this Resolution to qualify the Bonds for the Depository’s book-entry system, including the execution of the Depository’s required representation letter.
With respect to Bonds registered in the Bond Register in the name of Cede & Co., as nominee of DTC, neither the City nor the Paying Agent shall have any responsibility or obligation to any broker-dealer, bank, or other financial institution for which DTC holds Bonds as Depository from time to time (the “DTC Participants”) or to any person for which a DTC Participant acquires an interest in the Bonds (the “Beneficial Owners”). Without limiting the immediately preceding sentence, neither the City nor the Paying Agent shall have any responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co., or any DTC Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any DTC Participant, any Beneficial Owner, or any other person, other than DTC, of any notice with respect to the Bonds, including any notice of redemption, (iii) the selection by the Depository of the beneficial interests in the Bonds to be redeemed in the event the City elects to redeem the Bonds in part, (iv) the payment to any DTC Participant, any Beneficial Owner, or any other person, other than DTC, of any amount with respect to the principal of or interest on the Bonds, or (v) any consent given or other action taken by the Depository as Owner of the Bonds; except that so long as any Bond is registered in the name of Cede & Co., as nominee of DTC, anyone representing themselves to be the Beneficial Owner of $1,000,000 or more in aggregate principal amount of Bonds who has filed a written request with the Paying Agent to receive notices, containing such Beneficial Owner’s name and address, shall be provided with all notices relating to such Bonds by the Paying Agent.
Except as set forth above, the Paying Agent may treat as and deem DTC to be the absolute Owner of each Bond for which DTC is acting as Depository for the purpose of payment of the principal of and interest on such Bonds, for the purpose of giving notices of prepayment and other matters with respect to such Bonds, for the purpose of registering transfers with respect to such Bonds, and for all purposes whatsoever. The Paying Agent shall pay all principal of and interest on the Bonds only to or upon the order of the Owners as shown on the Bond Register, and all such payments shall be valid and effective to fully satisfy and discharge all obligations with respect to the principal of and interest on the Bonds to the extent of the sums or sums so paid.
Upon delivery by DTC to the Paying Agent of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the transfer provisions hereof, references to “Cede & Co.” in this Section 9 shall refer to such new nominee of DTC.
DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving written notice to the Paying Agent during any time that the Bonds are Outstanding, and discharging its responsibilities with respect thereto under applicable law. The City may terminate the services of DTC with respect to the Bonds if it determines that DTC is unable to discharge its responsibilities with respect to the Bonds or that continuation of the system of book- entry transfers through DTC is not in the best interest of the Beneficial Owners, and the City shall mail notice of such termination to the Paying Agent.
Upon the termination of the services of DTC, as provided in the previous paragraph, and if no substitute Depository willing to undertake the functions hereunder can be found which is willing
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and able to undertake such functions upon reasonable or customary terms, or if the City determines that it is in the best interest of the Beneficial Owners of the Bonds that they be able to obtain certificated Bonds, the Bonds shall no longer be restricted to being registered in the Bond Register of the Paying Agent in the name of Cede & Co., as nominee of DTC, but may be registered in whatever name or names the Owners shall designate at that time, in accordance with Section 7.
SECTION 10. Redemption.
(a)Optional Redemption. The Bonds maturing on or after August 1, ____ are subject, at the option of the City, to redemption prior to their stated maturities in whole or in part on any date commencing August 1, ____, at a redemption price equal to the principal amount thereof, together with accrued interest to the date fixed for redemption, without premium. (b)Mandatory Sinking Fund Redemption. The Bonds maturing on August 1, ____, are subject to mandatory sinking fund redemption, in part by lot, prior to their stated maturity, on each August 1 on and after August 1, _____, at a redemption price equal to 100% of the principal amount thereof called for redemption, without premium, plus accrued interest thereon to the date of redemption in the aggregate respective principal amounts set forth in the following table:
Redemption Date
(August 1)
Principal Amount of 20______
Bonds to be Redeemed
The Bonds maturing on August 1, ____, are subject to mandatory sinking fund redemption, in part by lot, prior to their stated maturity, on each August 1 on and after August 1, ____, at a redemption price equal to 100% of the principal amount thereof called for redemption, without premium, plus accrued interest thereon to the date of redemption in the aggregate respective principal amounts set forth in the following table:
Redemption Date
(August 1)
Principal Amount of 20__
Bonds to be Redeemed
(c)Selection of Bonds For Redemption. If less than all of the Bonds outstanding are to be redeemed, the portion of any Bond of a denomination of more than $5,000 to be redeemed shall be in the principal amount of $5,000 or an integral multiple thereof, and, in selecting portions of such Bond for redemption, the Paying Agent shall treat each such Bond as representing that number of Bonds of $5,000 denominations which is obtained by dividing the principal amount of such Bond to be redeemed in part by $5,000. The Paying Agent shall promptly notify the City in writing of the Bonds, or portions thereof, selected for redemption.
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Whenever provision is made in this Resolution for the optional redemption of Bonds and less than all Outstanding Bonds are to be redeemed, the Paying Agent, upon written instruction from the City, shall select Bonds for redemption as so directed and if not directed, in inverse order of maturity. Within a maturity, the Paying Agent shall select Bonds for redemption as directed by the City and, if not so directed, by lot. Redemption by lot shall be in such manner as the Paying Agent shall determine; provided, however, that the portion of any Bond to be redeemed in part shall be in the principal amount of $5,000 or any integral multiple thereof.
In the event that a portion of any Term Bond is optionally redeemed prior to maturity pursuant to Section 10(a) hereof, the remaining mandatory sinking fund payments with respect to such Term Bonds shall be reduced proportionately, or as otherwise directed by the City, in integral multiples of $5,000 principal amount, in respect of the portion of such Bonds optionally redeemed.
(d)Notice of Redemption. The Paying Agent shall further provide written notice to Bond Owners of all Bonds to be redeemed pursuant to this section by first class mail within 45 days, but in no event later than 20 days prior to the date of such redemption. The date on which the Bonds which are called for redemption are to be presented for redemption is herein sometimes called the “redemption date.” The notice of redemption shall (a) state the redemption date; (b) state the redemption price; (c) state the dates of maturity of the Bonds and, if less than all of any such maturity is called for redemption the distinctive numbers of the Bonds of such maturity to be redeemed, and in the case of Bonds redeemed in part only, the respective portions of the principal amount thereof, to be redeemed; (d) state the CUSIP number, if any, of each Bond to be redeemed; (e) give notice that further interest on such Bonds will not accrue after the designated redemption date; and (f) any other descriptive information regarding the Bonds needed to identify accurately the Bonds being redeemed. The actual receipt by the Owner of notice of such redemption shall not be a condition precedent to redemption, and failure to receive such notice shall not affect the validity of the proceedings for the redemption of such Bonds or the cessation of interest on the date fixed for redemption.
At least 20 days before the redemption date, notice shall also be given (i) registered or certified mail, postage prepaid, (ii) confirmed facsimile transmission or overnight delivery service, to the Securities Depository and in accordance with then current guidelines of the Securities and Exchange Commission, to any other firm or service regularly providing information with respect to the redemption of Bonds designated to the Paying Agent by the City. (e)Conditional Notice of Optional Redemption of Bonds. With respect to the optional redemption of Bonds pursuant to the foregoing subsection (a), at the direction of the City filed with the Paying Agent, the notice of such redemption shall state that such redemption is conditioned upon the receipt by the Paying Agent on or before the date fixed for such redemption of sufficient funds for such purpose. In the event that sufficient funds shall not have been deposited with the Paying Agent on or before the date fixed for redemption, the Paying Agent shall promptly notify the Owners of the Bonds by telephone, facsimile transmission or other form of telecommunication, promptly confirmed in writing; and thereupon such redemption and the notice thereof shall be deemed to be canceled and rescinded. (f)Effect of Redemption. When notice of redemption has been given, substantially as provided for herein, and when the amount necessary for the redemption of the Bonds called for redemption (principal and premium, if any) is set aside for that purpose in the Debt Service Fund, as provided for herein, the Bonds designated for redemption shall become due and
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payable on the date fixed for redemption thereof, and upon presentation and surrender of said Bonds at the place specified in the notice of redemption, such Bonds shall be redeemed and paid at said redemption price out of said Debt Service Fund, and no interest will accrue on such Bonds called for redemption after the redemption date specified in such notice and the owners of the Bonds so called for redemption after such redemption date shall look only to the funds held for such purpose in the Debt Service Fund (or held for such specific purpose in the Bond Fund held by the Paying Agent). All Bonds redeemed shall be cancelled forthwith by the Paying Agent and shall not be reissued. The City shall establish a separate account in the Debt Service Fund to hold funds available for payment of called bonds after the redemption date. (g)Bonds No Longer Outstanding. When any Bonds (or portions thereof), which have been duly called for redemption prior to maturity under the provisions of this Resolution, or with respect to which irrevocable instructions to call for redemption prior to maturity at the earliest redemption date have been given to the Paying Agent, in form satisfactory to it, and sufficient moneys shall be held irrevocably in trust as provided in Section 16 for the payment of the redemption price of such Bonds or portions thereof, and accrued interest (if applicable) with respect thereto to the date fixed for redemption, all as provided in this Resolution, then such Bonds shall no longer be deemed Outstanding and shall be surrendered to the Paying Agent for cancellation.
All Bonds paid at maturity or redeemed prior to maturity pursuant to the provisions of this Section 10 shall be cancelled upon surrender thereof and be delivered to or upon the order of the City. All or any portion of a Bond purchased by the City shall be cancelled by the Paying Agent.
SECTION 11. Project Fund.
(a) The proceeds of the sale of the Bonds identified in Section 2 for deposit into the Project Fund shall be deposited with the City to the credit of the “City of Foster City General Obligation Bonds, Series 2023 Project Fund,” (the “Project Fund”), established as an improvement fund within the meaning of the Law. Such proceeds shall be kept separate and distinct from all other funds of the City, and the moneys in said Project Fund shall be applied exclusively to pay Project Costs in accordance with the Law and the Bond Law. (b) The City shall disburse moneys in the Project Fund to the City from time to time to pay the Project Costs. If, upon completion of the project to be funded from the Project Fund, amounts remain therein, the City shall transfer such amounts to the Debt Service Fund. At such time that no amounts remain on deposit in the Project Fund, the City shall close the Project Fund.
(c) Nothing in this Resolution shall limit the authority of the City to cause the appointment of a fiscal agent to hold and disburse the Project Fund, to the extent permitted by the Law.
SECTION 12. Rebate Fund. The City shall establish the General Obligation Bonds, Series 2023 (Levee Protection Planning and Improvements Project) Rebate Fund (the “Rebate Fund”). All money at any time deposited in the Rebate Fund shall be held by the City in trust for payment to the United States Treasury. All amounts on deposit in the Rebate Fund shall be governed by this Section and the Tax Certificate, unless the City obtains an opinion of Bond Counsel that the exclusion from gross income of interest on the Bonds shall not be adversely
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affected for federal income tax purposes if such requirements are not satisfied. (a)Annual Computation. Within 55 days of the end of each Computation Year with respect to the Bonds, the City shall calculate or cause to be calculated the amount of rebatable arbitrage, in accordance with Section 148(f)(2) of the Code and Section 1.148-3 of the Rebate Regulations (taking into account any applicable exceptions with respect to the computation of the rebatable arbitrage, described, if applicable, in the Tax Certificate (e.g., the temporary investments exceptions of Section 148(f)(4)(B) and (C) of the Code), and taking into account whether the 1-1/2% Penalty has been elected), for this purpose treating the last day of the applicable Computation Year as a computation date, within the meaning of Section 1.148-1(b) of the Rebate Regulations (the “Rebatable Arbitrage”). The City shall obtain expert advice as to the amount of the Rebatable Arbitrage to comply with this Section. (b)Annual Transfer. Within 55 days of the end of each applicable Computation Year with respect to the Bonds, an amount shall be transferred by the City to be deposited to the Rebate Fund from any legally available funds, including the other funds and accounts established herein, so that the balance in the Rebate Fund shall equal the amount of Rebatable Arbitrage so calculated in accordance with clause (i) of this Subsection (a). In the event that immediately following the transfer required by the previous sentence, the amount then on deposit to the credit of the Rebate Fund exceeds the amount required to be on deposit therein, the Finance Director shall withdraw the excess from the Rebate Fund and then credit the excess to the Debt Service Fund.
(c)Payment to the Treasury. The City shall pay to the United States Treasury, out of amounts in the Rebate Fund:
(1) Not later than 60 days after the end of (A) the fifth Computation Year with respect to the Bonds, and (B) each applicable fifth Computation Year thereafter, an amount equal to at least 90% of the Rebatable Arbitrage calculated as of the end of such Computation Year; and
(2) Not later than 60 days after the payment of all the Bonds, an amount equal to 100% of the Rebatable Arbitrage calculated as of the end of such applicable Computation Year, and any income attributable to the Rebatable Arbitrage, computed in accordance with Section 148(f) of the Code.
In the event that, prior to the time of any payment required to be made from the Rebate Fund, the amount in the Rebate Fund is not sufficient to make such payment when such payment is due, the City shall calculate or cause to be calculated the amount of such deficiency and deposit an amount received from any legally available source, including the other funds and accounts established herein, equal to such deficiency in the Rebate Fund prior to the time such payment is due. Each payment required to be made pursuant to this Subsection (1) shall be made to the Internal Revenue Service Center, Ogden, Utah 84201 on or before the date on which such payment is due, and shall be accompanied by Internal Revenue Service Form 8038-T prepared by the City, or shall be made in such other manner as provided under the Code. (d)Disposition of Unexpended Funds. Any funds remaining in the Rebate Fund after redemption and payment of the Bonds and the payments described in Subsection (1), may be utilized in any lawful manner by the City.
(e)Survival of Defeasance. Notwithstanding anything in this Section or the
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Resolution to the contrary, the obligation to comply with the requirements of this Section shall survive the defeasance of the Bonds.
SECTION 13. Security/Debt Service Fund. The City Council, so far as is practicable, shall fix such rate or rates for a tax to be levied in the City as will result in revenues which will pay the interest on the Bonds, and provide a sinking or other fund for the payment of the principal of the Bonds as such principal may become due. The City Council shall determine the fiscal year for all of the amounts above set forth, and shall fix the rate or rate of tax to be levied which will raise the amounts of money required by the City for such purposes, and as required by the provisions of the Law, the City Council shall certify to the County Auditor-Controller of the County of San Mateo (the “Auditor”) the rate or rates so fixed and shall furnish to the Auditor a statement in writing containing the following: (a) an estimate of the minimum amount of money required to be raised by taxation during the fiscal year for the payment of the principal of and interest on the Bonds, as will become due before the proceeds of a tax levied at the next general tax levy will be available; (b) an estimate of the minimum amount of money required to be raised by taxation during the fiscal year for all other purposes of the City; and (c) any other items required by the provisions of the Law. The Auditor shall compute and enter in the county assessment roll the respective sums to be paid as a City tax on the property within the City using the rate or rates of levy as fixed by the City Council and the assessed value as found on the assessment roll for the property subject to the tax.
It shall be the duty of all county officers charged with the duty of collecting taxes to collect such tax in time, form and manner as county taxes are collected and when collected to pay the same to the City.
All such taxes for the payment of principal and interest on the Bonds shall be established, levied and collected as provided in the provisions of the Law.
All moneys derived from such taxes and all other moneys allocated and designated for payment of said Bonds and the interest thereon shall be placed in a fund of the City and designated “City of Foster City General Obligation Bonds, Series 2023 (Levee Protection Planning And Improvements Project) Debt Service Fund” (the “Debt Service Fund”), (and accounts therein to the extent created pursuant to Section 10 or 16 hereof) shall be kept separate and apart from all other funds of the City (and are hereby irrevocably pledged for the payment of the Bonds in accordance with the purpose and intent of this Resolution), and until all of said Bonds and all interest thereon have been fully paid (or defeased) the moneys in said fund shall be used for no other purpose than the payment of said Bonds and the interest thereon; provided, however, that when all of the principal and interest on all of the Bonds have been paid, any balance of money then remaining in said funds shall be transferred to the general fund of the City. Interest earned on the investment of monies in the Debt Service Fund shall be retained in the Debt Service Fund and used by the City to pay principal and interest on the Bonds when due.
The Finance Director shall transfer available monies from the Debt Service Fund to the Paying Agent in amounts sufficient and at such time as are necessary to promptly pay principal (including mandatory sinking fund payments), interest and redemption premium, if any, on the Bonds as such shall become due; and the Paying Agent shall establish a fund designated the “City of Foster City General Obligation Bonds, Series 2023 (Levee Protection Planning and Improvements Project) Bond Fund” (the “Bond Fund”) for such purpose and shall make payments to the Bond Owners of principal (including mandatory sinking fund payments), interest and redemption premium, if any, on the Bonds as such shall become due; provided that, in the event of any deficiencies, moneys on deposit in the Bond Fund shall be applied first to the
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payment of interest and then to the payment of principal and, in all such cases, ratably and without preference among all maturities.
SECTION 14. Investments.
(a) Moneys in the Project Fund shall be invested in Authorized Investments which will by their terms mature, or in the case of an investment agreement are available without penalty, as close as practicable to the date the City estimates the moneys represented by the particular investment will be needed for withdrawal from the Project Fund. Earnings on investments of monies in the Project Fund shall be retained therein and applied in accordance with authorized uses thereof and applicable law.
(b) Moneys in the Debt Service Fund and the Bond Fund shall be invested only in Authorized Investments which will by their terms mature, or in the case of an investment agreement are available for withdrawal without penalty, on such dates so as to ensure the payment of principal of, premium, if any, and interest on the Bonds as the same become due.
The Paying Agent shall be under no obligation to invest moneys in the Bond Fund except on the written instruction of the Finance Director. Investment earnings, if any, in the Bond Fund in excess of amounts held for the benefit of Owners shall be returned to the City for deposit in the Debt Service Fund.
In the event that an Authorized Representative of the City does not so direct the Paying Agent, the Paying Agent shall invest moneys in the Bond Fund in the Authorized Investments described in paragraph 2(f) of the definition contained herein and as set forth in the letter of authorization and directions executed by the City and delivered to the Paying Agent. If no investment directions are provided, such amount shall be held in cash, uninvested.
The City and the Paying Agent, at the direction of the City, shall sell at the best price obtainable, or present for redemption, any obligations so purchased whenever it may be necessary to do so in order to provide moneys to meet any payment or transfer to such funds and accounts or from such funds and accounts. For the purpose of determining at any given time the balance in any such funds, any such investments constituting a part of such funds and accounts shall be valued at their market value. Notwithstanding anything herein to the contrary, the Paying Agent shall not be responsible for any loss from investments, sales or transfers undertaken in accordance with the provisions of this Resolution.
Except as otherwise provided in this Resolution, the City covenants that all investments of amounts deposited in any fund or account created by or pursuant to this Resolution, or otherwise containing gross proceeds of the Bonds (within the meaning of section 148 of the Code) will be acquired, disposed of, and valued (as of the date that valuation is required by this Resolution or the Code) at Fair Market Value.
Investments in funds or accounts (or portions thereof) that are subject to a yield restriction under applicable provisions of the Code will be valued at their present value (within the meaning of section 148 of the Code).
SECTION 15. Tax Covenants.
(a) Private Activity Bond Limitation. The City will assure that the proceeds of the Bonds are not so used as to cause the Bonds to satisfy the private business tests of section 141(b) of the Code or the private loan financing test of section 141(c) of the Code.
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(b) Federal Guarantee Prohibition. The City will not take any action or permit or suffer any action to be taken if the result of such action would be to cause any of the Bonds to be "federally guaranteed" within the meaning of section 149(b) of the Code. (c) Rebate Requirement. The City will take any and all actions necessary to assure compliance with section 148(f) of the Code, relating to the rebate of excess investment earnings, if any, to the federal government, to the extent that such section is applicable to the Bonds.
(d) No Arbitrage. The City will not take, or permit or suffer to be taken by the Trustee or otherwise, any action with respect to the proceeds of the Bonds which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the date of issuance of the Bonds would have caused the Bonds to be "arbitrage bonds" within the meaning of section 148 of the Code.
(e) Maintenance of Tax-Exemption. The City will take all actions necessary to assure the exclusion of interest on the Bonds from the gross income of the Owners of the Bonds to the same extent as such interest is permitted to be excluded from gross income under the Code as in effect on the date of issuance of the Bonds.
(f) Record Retention. The City will retain its records of all accounting and monitoring it carries out with respect to the Bonds for at least 3 years after the Bonds mature or are redeemed (whichever is earlier); however, if the Bonds are redeemed and refunded, The City will retain its records of accounting and monitoring at least 3 years after the earlier of the maturity or redemption of the obligations that refunded the Bonds. (g) Compliance with Tax Certificate. The City will comply with the provisions of the Certificate as to Arbitrage and the Certificate Regarding Use of Proceeds (collectively, the “Tax Certificate”) with respect to the Bonds, which are incorporated herein as if fully set forth herein.
The covenants of this Section will survive payment in full or defeasance of the Bonds. (h) Small Issuer Exemption from Bank Nondeductibility Restriction. The City hereby designates the Bonds for purposes of paragraph (3) of section 265(b) of the Code and represents that not more than $10,000,000 aggregate principal amount of obligations the interest on which is excludable (under section 103(a) of the Code) from gross income for federal income tax purposes (excluding (i) private activity bonds, as defined in section 141 of the Code, except qualified 501(c)(3) bonds as defined in section 145 of the Code and (ii) current refunding obligations to the extent the amount of the refunding obligation does not exceed the outstanding amount of the refunded obligation), including the Bonds, has been or will be issued by the Issuer, including all subordinate entities of the Issuer, during the calendar year 2023.
SECTION 16. Defeasance. The Bonds may be defeased in whole or in part prior to maturity by irrevocably depositing with the City in a separate account of the Debt Service Fund to be held separate and apart from all other funds of the City, and which is irrevocably pledged to the Bonds so defeased (or with an entity designated by the Finance Director to act as escrow agent with respect thereto):
(a) An amount of cash which together with amounts then on deposit in the Debt Service Fund, is sufficient, without reinvestment, to pay and discharge all or part of the Bonds outstanding (including all principal, interest and premium, if any) at or before their stated maturity
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date; or
(b) Government Obligations not subject to call, together with cash, if required, in such amount as will, without reinvestment, in the opinion of an independent certified public accountant, together with interest to accrue thereon and moneys transferred from the Debt Service Fund together with the interest to accrue thereon, be fully sufficient to pay and discharge all of the corresponding Bonds (including all principal and interest and premium, if any) to be defeased at or before their stated maturity date.
In such event, notwithstanding that any of the Bonds shall not have been surrendered for payment, all obligations of the City with respect to all said outstanding Bonds shall cease and terminate, except only the obligation of the City to pay or cause to be paid from funds deposited pursuant to paragraphs (a) or (b) of this Section, to the owners of said Bonds not so surrendered and paid all sums due with respect thereto; provided that the City shall have received an opinion of bond counsel for said Bonds, that said Bonds have been defeased.
SECTION 17. Supplemental Resolutions.
(a) This Resolution, and the rights and obligations of the City and of the Owners of the Bonds issued hereunder, may be modified or amended at any time by a supplemental resolution adopted by the City with the written consent of Owners owning at least 60% in aggregate principal amount of the outstanding Bonds, exclusive of Bonds, if any, owned by the City; provided, however, that no such modification or amendment shall, without the express consent of the Owner of each Bond affected, reduce the principal amount of any Bond, reduce the interest rate payable thereon, advance the earliest redemption date thereof, extend its maturity or the times for paying interest thereon or change the monetary medium in which principal and interest is payable, nor shall any modification or amendment reduce the percentage of consents required for amendment or modification. No such supplemental resolution shall change or modify any of the rights or obligations of any Paying Agent without its written assent thereto. Notwithstanding anything herein to the contrary, no such consent shall be required if the Owners are not directly and adversely affected by such amendment or modification. (b) This Resolution, and the rights and obligations of the City and of the Owners of the Bonds issued hereunder, may be modified or amended at any time by a supplemental resolution adopted by the City without the written consent of the Owners; (i) To add to the covenants and agreements of the City in this Resolution, other covenants and agreements to be observed by the City which are not contrary to or inconsistent with this Resolution as theretofore in effect; (ii) To add to the limitations and restrictions in this Resolution, other limitations and restrictions to be observed by the City which are not contrary to or inconsistent with this Resolution as theretofore in effect;
(iii) To confirm as further assurance any pledge under, and the subjection to any lien or pledge created or to be created by, this Resolution, of any moneys, securities or funds, or to establish any additional funds or accounts to be held under this Resolution; (iv) To cure any ambiguity, supply any omission, or cure or correct any defect or inconsistent provision in this Resolution;
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(v) To amend or supplement this Resolution in any other respect, provided such supplemental resolution does not adversely affect the interests of the Owners; (vi) To make such additions, deletions or modifications as may be necessary or desirable to assure exemption from federal income taxation of interest on the Bonds. (c) Any act done pursuant to a modification or amendment so consented to shall be binding upon the Owners of all the Bonds and shall not be deemed an infringement of any of the provisions of this Resolution, whatever the character of such act may be, and may be done and performed as fully and freely as if expressly permitted by the terms of this Resolution, and after consent relating to such specified matters has been given, no Owner shall have any right or interest to object to such action or in any manner to question the propriety thereof or to enjoin or restrain the City or any officer or agent of the City from taking any action pursuant thereto.
SECTION 18. Resolution to Constitute Contract. In consideration of the purchase and acceptance of any and all of the Bonds authorized to be issued hereunder by those who shall own the same from time to time, this Resolution shall be deemed to be and shall constitute a contract by and between the City and the Owners from time to time of the Bonds; and the pledge made in this Resolution shall be for the equal benefit, protection and security of the Owners of any and all of the Bonds, all of which, regardless of the time or times of their issuance or maturity, shall be of equal rank without preference, priority or distinction of any of the Bonds over any other thereof.
SECTION 19. Continuing Disclosure. The City hereby covenants and agrees that it will comply with and carry out all of its obligations under its Continuing Disclosure Certificate to be executed and delivered by the City in connection with the issuance of the Bonds. Notwithstanding any other provision of this Resolution, failure of the City to comply with the Continuing Disclosure Certificate shall not be considered an event of default under this Resolution; however, any Owner or Beneficial Owner may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Section 19. For purposes of this Section, “Beneficial Owner” means any person which has or shares the power, directly or indirectly, to make investment decisions concerning ownership of any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries).
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SIGNED AND APPROVED as of ______ 1, 2023.
CITY OF FOSTER CITY
[SEAL] By:
Its: City Manager
ATTEST:
City Clerk
APPROVED AS TO FORM:
City Attorney
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ATTACHMENT 1
UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AS DEFINED IN THE SUPPLEMENT TO RESOLUTION NO. ) TO THE
PAYING AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY BOND ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
COUNTY OF SAN MATEO
CITY OF FOSTER CITY GENERAL
OBLIGATION BONDS
SERIES 2023 (LEVEE PROTECTION PLANNING AND IMPROVEMENTS PROJECT) INTEREST RATE:
_____%
MATURITY DATE:
August 1, 20__
DATED DATE:
, 2020
CUSIP NO.:
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT: AND NO/100 DOLLARS
THE CITY OF FOSTER CITY, a general law city situated in the County of San Mateo, State of California (the “City”), duly organized and existing under and by virtue of the Constitution and laws of the State of California, hereby acknowledges its indebtedness and promises to pay to the registered owner named above or registered assigns (the “Registered Owner”), the Principal Amount stated above on the Maturity Date stated above, and to pay such registered owner by check mailed by first class mail, postage prepaid, thereto at its address as it appears on the register kept by the Paying Agent at the close of business on the fifteenth day of the month preceding the Interest Payment Date (as hereinafter defined) (the “Record Date”), or, at the request of an owner of in excess of $1,000,000 aggregate principal amount of bonds, by wire transfer, interest on such principal amount on each February 1 and August 1, commencing February 1, 2024 (each, an “Interest Payment Date”) next preceding the date of authentication (unless (i) the date of authentication is prior to the first Record Date in which event from the Dated Date shown above, (ii) the date of authentication is after a Record Date and before the following Interest Payment Date in which event it shall bear interest from such Interest Payment Date, or (iii) it is authenticated as of an Interest Payment Date, in which event it shall bear interest from such date until the Principal Amount hereof shall have been paid or provided for in accordance with Resolution No. 2023-__, adopted by the City Council of the City on _____, 2023, as supplemented by Supplement to Resolution No. _________, dated as of
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______ 1, 2023, executed in connection therewith (as supplemented, the “Resolution”), at the interest rate stated above, payable on each Interest Payment Date. Principal and any premium upon the redemption prior to the maturity of all or part hereof are payable at the principal corporate trust office of U.S. Bank Trust Company, National Association, Paying Agent for the Bonds (the “Paying Agent”), in San Francisco, California. All such amounts are payable in lawful money of the United States of America.
Capitalized terms used herein and not defined shall have the meanings given such terms in the Resolution.
The principal of and interest on the Bonds shall be paid from taxes levied for the payment thereof as set forth in the Resolution, which taxes shall be levied exclusively upon the taxable property in the City.
This Bond is issued in fully registered form. It may be exchanged for a like aggregate principal amount of bonds of other authorized denominations of the same series and maturity, all as more fully set forth in the Resolution. This Bond is transferable by the Registered Owner hereof, in person or by its attorney duly authorized in writing, at the designated corporate trust office of the Paying Agent, but only in the manner, subject to the limitations and upon payment of the charges provided in the Resolution, upon surrender and cancellation of this Bond. Upon such transfer a new registered Bond of authorized denomination or denominations for the same aggregate principal amount of the same series and maturity will be issued to the transferee in exchange therefor.
Bonds shall be subject to optional and mandatory sinking fund redemption as set forth below:
[to come].
The City and the Paying Agent may treat the Registered Owner hereof as the absolute owner hereof for all purposes, and the City and the Paying Agent shall not be affected by any notice to the contrary.
This Bond shall not be entitled to any benefit under the Resolution, or become valid or obligatory for any purpose, until the certificate of authentication hereon endorsed shall have been signed by the Paying Agent.
The rights and obligations of the City and of the registered owners of the Bonds may be amended at any time, and in certain cases without notice to or consent of the registered owners, to the extent and upon the terms provided in the Resolution.
It is hereby recited, certified and declared that the total amount of indebtedness of the City, including the amount of this Bond, is within the limit provided by law and that any and all acts, conditions and things required to exist, to happen and to be performed precedent to and in the issuance of this Bond exist, have happened and have been performed in due time, form and manner as required by the Constitution and laws of the State of California.
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IN WITNESS WHEREOF, THE CITY OF FOSTER CITY has caused this Bond to be signed by the Interim City Manager and the Finance Director of said City, and countersigned by the City Clerk of said City, by their facsimile signatures.
CITY OF FOSTER CITY
By:
Its: City Manager
By:
Its: Mayor
COUNTERSIGNED:
City Clerk of the City of Foster City
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[FORM OF CERTIFICATE OF AUTHENTICATION]
This is one of the fully registered Bonds described in the within-mentioned Resolution.
Date of Authentication: U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Paying
Agent
By:
Its: Authorized Signatory
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[FORM OF ASSIGNMENT]
For value received, the undersigned do(es) hereby sell, assign and transfer unto (Name, Address and Tax Identification or Social Security Number of Assignee) the within Bond and do(es) hereby irrevocably constitute(s) and appoint(s) attorney, to transfer the same on the registration books of the Paying Agent with full power of substitution in the premises.
Dated: Signature Guarantee:
Notice: Signature(s) must be guaranteed by a
qualified guarantor.
Notice: The signature on this assignment must
correspond with the name(s) as written on the
face of the within Bond in every particular
without alteration or enlargement or any
change whatsoever.
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B-1
EXHIBIT B
GOVERNMENT CODE SECTION 5852.1 DISCLOSURE
The following information consists of estimates that have been provided in good faith by the City’s Municipal Advisor:
(A) True interest cost of the Bonds (the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Bonds): 3.85%
(B) Finance charge of the Bonds (sum of all fees/charges paid to third parties): $160,000 (C) Net proceeds of the Bonds received by the City (the amount of proceeds received by the City for the sale of the Bonds less the finance charge of the Bonds described in paragraph (B) and reserves or capitalized interest paid or funded with proceeds of the Bonds, if any):
$4,850,400
(D) Total payment amount (sum total of all payments the borrower will make to pay debt service on the Bonds plus the finance charge of the Bonds described in paragraph (B) not paid with the proceeds of the Bonds): $9,251,972.22
The foregoing estimates constitute good faith estimates only. The principal amount of the Bonds, the true interest cost of the Bonds, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to (a) the actual date of the sale of the Bonds being different than the date assumed for purposes of such estimates, (b) the actual principal amount of Bonds sold being different from the estimated amount used for purposes of such estimates, (c) the actual amortization of the Bonds being different than the amortization assumed for purposes of such estimates, (d) the actual market interest rates and yields at the time of sale of the Bonds being different than those estimated for purposes of such estimates, (e) other market conditions, or (f) alterations in the City’s financing plan, or a combination of such factors. The actual date of sale of the Bonds and the actual principal amount of Bonds sold will be determined by the City based on the timing of the need for proceeds of the Bonds and other factors. The actual interest rates borne by the Bonds will depend on market interest rates at the time of sale thereof. The actual amortization of the Bonds will also depend, in part, on market interest rates at the time of sale thereof. Market interest rates are affected by economic and other factors beyond the control of the City.
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RESOLUTION NO. 2023-__
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FOSTER CITY, CALIFORNIA ESTABLISHING FOR FISCAL YEAR 2023-24 THE PROPERTY TAX
RATE FOR GENERAL OBLIGATION BONDS, INCLUDING CERTAIN UNSOLD GENERAL OBLIGATION BONDS FOR FISCAL YEAR 2023-24
CITY OF FOSTER CITY
WHEREAS, pursuant to the provisions of Article 1, Chapter 4 of Division 4 of Title 4 of the Government Code of the State of California, as amended (the "Law"), and pursuant to Ordinance No. 613 adopted by the City Council (the "City Council") of the City of Foster City (the "City") on March 5, 2018 (the "Ordinance"), a special election was duly and regularly held on June 5, 2018, in the territory included within the boundaries of the City (the "Election") at which Election there was submitted to the qualified voters of said City the following proposition (the "Bond Measure"):
"To improve the levee protecting essential city services, including fire, police, water, sewer, transportation infrastructure; protect Foster City homes, schools, businesses from flooding; avoid both Foster City being designated a FEMA special flood hazard area and flood insurance requirements for residents/businesses; shall Foster City issue $90,000,000 in bonds at legal rates, levy approximately $40 per $100,000 assessed valuation, averaging $5,171,000 collected annually while bonds are outstanding, with citizens' oversight, no funds for administrators, all funds staying local?" WHEREAS, at the Election, the Bond Measure received the affirmative vote of the requisite two-thirds or more of the voters of the City voting on the proposition, as certified by the Registrar of Voters of the County of San Mateo (the “County”) in the official canvassing of votes (the "Authorization"), and all the requirements of the Constitution and laws of the State of California have been complied with in the holding of the Election; and WHEREAS, pursuant to the Authorization, Article 4.5 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code (the "Bond Law") and Resolution No. 2020-067, which was adopted by the City Council on July 6, 2020, the City previously issued its $85,000,000 City of Foster City General Obligation Bonds, Series 2020 (Levee Protection Planning and Improvements Project (the “2020 Bonds”), leaving $5,000,000 of bonding authority available under the Authorization; and
WHEREAS, the City expects that it will issue a second series of the bonds pursuant to the authority of the Authorization and the Bond Law in or around July 2023 (the “2023 Bonds”; together with the 2020 Bonds, the “Bonds”); and
WHEREAS, Section 5403 of the Government Code provides that when bonds to be issued by or on behalf of a public body have been authorized by an election or other method provided by law, and where it is expected that all or any part of such bonds will be sold at such time that principal or interest on such bonds will become due before the proceeds of a tax or assessment levied after such sale would be available to pay such principal or interest, the governing body, at the time of fixing the annual tax or assessment levy, may levy a tax or assessment, as the case
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may be, in an amount clearly sufficient to pay that portion of the principal of and interest on said bonds which it is expected will become due before the proceeds of the next succeeding tax or assessment levy will be available; and
WHEREAS, pursuant to Government Code Section 5403, the City Council desires to establish the rate of property tax required to generate an amount of revenue from the tax base to provide sufficient moneys to pay debt service on the Bonds; and WHEREAS, the City Council wishes at this time to separately authorize the City Manager and the Finance Director to make certain communications with the County respecting the foregoing.
NOW, THEREFORE, the City Council of the City of Foster City, California, DOES HEREBY RESOLVE, DETERMINE AND ORDER as follows:
SECTION 1. The City Council hereby finds and determines that the foregoing recitals are true and correct.
SECTION 2. The City Council hereby finds and determines that the property tax rate within the City for the Bonds (including the 2023 Bonds that are expected to be sold in or around July 2023) for the fiscal year ending June 30, 2024 be and hereby is established at $0.02791 per $100 assessed value, pursuant to Section 5403 of the Government Code.
As provided in Government Code Section 43634, all taxes levied pursuant to this Resolution shall be used only for payment of the Bonds and the interest thereon.
SECTION 3. The City Council hereby directs and authorizes the City Manager and the Finance Director to take any and all actions necessary to ensure that such property tax rate is enrolled with the San Mateo County Auditor-Controller.
SECTION 4. This resolution shall take effect immediately upon its adoption.
SECTION 5. The City Clerk shall certify to the adoption of this Resolution.
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PASSED AND ADOPTED as a resolution of the City Council of the City of Foster City at the special meeting held on the 20th day of June, 2023, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
JON FROOMIN, MAYOR
ATTEST:
PRISCULLA SCHAUS, CITY CLERK
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Summary of Principal Legal Documents
Resolution Authorizing the Sale of Bonds
This resolution establishes the preconditions necessary for the sale of the bonds, citing the law authorizing the sale of general obligation bonds (the “Law”), the ordinance adopted by the City on March 5, 2018 authorizing an election for the sale of general obligation bonds (the “Ordinance”), and the affirmative vote authorizing the sale of the bonds (the “Election”). It establishes the City’s intent to sell the 2023 Bonds in an amount not to exceed $5 million in accordance with Law, the Ordinance, and the Election and authorizes such bond issuance and approves the forms of certain required documents (the Preliminary Official Statement, the Official Statement, the Continuing Disclosure Certificate, and the Official Notice of Sale). It further appoints US Bank and Trust Company as the Paying Agent Bond Registrar, Jones Hall as bond counsel and disclosure counsel, and William Euphrat Municipal Finance, Inc. as municipal advisor, and further authorizes the Mayor, City Manager, Finance Director and City Clerk to execute and deliver such documents as each may deem necessary or advisable to consummate the sale and delivery of the bonds.
Supplement to the Resolution Authorizing the Sale of Bonds This document establishes the terms of the sale of the 2023 Bonds and describes the City’s obligations to collect tax revenues and pay debt service on the bonds.
Under the Supplement, the City pledges all moneys derived from the levy of the ad valorem tax for the payment of interest on and the principal of the 2023 Bonds.
The Supplement serves as a contract with bondowners. It fixes the denominations, payment terms and similar such terms of the 2023 Bonds and establishes covenants of the City, events of default, remedies of bondowners, duties of the paying agent for the 2023 Bonds, bond redemption provisions and miscellaneous other provisions relating to the 2023 Bonds and the security therefor.
Resolution Approving Tax Rate for FY 2023-2024
This resolution establishes the tax rate (expressed in dollars per $100) sufficient to pay debt service on the 2020 Bonds outstanding in FY 2023-2024. The City must collect on the FY 2023-2024 secured tax roll sufficient revenues to pay the February 2024 debt service payments and the August 2024 debt service payments for the 2020 Bonds. Those payments on the 2023 bonds will be paid from the premium collected at closing from the underwriter. The tax rate applies only to the 2020 bonds. The tax rate for FY 2023-2024 is $0.02791 per $100 of taxable assessed value.
Preliminary Official Statement and Final Official Statement The preliminary official statement is the primary disclosure document provided to investors in connection with the City’s issuance of the 2023 Bonds. Disclosure of
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material facts and risks is a prudent and necessary condition to the issuance of bonds. It discloses material information regarding the City, the authority for and purpose of the 2023 Bonds, the Levee Project, the security for the payment of interest on and the repayment of the principal of the 2023 Bonds, the terms of the 2023 Bonds and the redemption provisions therefor, debt service on the 2023 Bonds, material risk factors relating to the City’s collection of taxes to make payments on the 2023 Bonds, material risk factors relating to the security for the 2023 Bonds in general, and other miscellaneous matters. After sale of the 2023 Bonds, missing information such as the bond interest rates and yields, redemption provisions and the underwriting discount for the 2023 Bonds will be filled in and a final official statement will be delivered to bond purchasers.
Official Notice of Sale
The official notice of sale is distributed to prospective initial purchasers of the Bonds (municipal bond underwriting firms that redistribute the 2023 Bonds to the investing public). It briefly outlines the terms of the 2023 Bonds (dated date, form, denominations, maturity dates and amounts, payment dates and the places therefore, transfer and exchange, purpose of and security for, redemption provisions, tax exempt status) and stipulates the terms of the sale and how 2023 Bonds are to be awarded.
The 2023 Bonds will be offered pursuant to an internet-based auction and will be awarded to the bidder that offers the City the lowest true interest cost. The true interest cost is a measure of the City‘s interest cost that reflects the time value of money. It is calculated as the nominal annual discount rate which, when compounded semiannually, and when used to discount the sum of all payments of principal and interest at the rate or rates specified in each bid to the dated date of the 2023 bonds, results in an amount equal to the purchase price of the 2023 Bonds.
Continuing Disclosure Certificate
The SEC does not have the authority to regulate municipal bond issuers. It can, however, regulate bond underwriters. The official statement provides comprehensive disclosure to investors at the time bonds are initially sold. In the interest of requiring more up-to-date information to be provided to investors, the SEC also requires bond underwriters to ensure that issuers of municipal bonds that the underwriters purchase are obligated by a written undertaking to provide continuing disclosure of specific listed events when they occur and key credit information on an annual basis. To allow the underwriter to comply with this requirement, the City will execute a continuing disclosure certificate.
The continuing disclosure certificate requires the City to annually collect and disseminate to the Municipal Securities Rulemaking Board’s (“MSRB”) Electronic Municipal Market Access (“EMMA”) system the following information.
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(a) The City’s audited financial statements prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board.
(b) Unless otherwise provided in the audited financial statements filed on or before the Annual Report Date, financial information and operating data with respect to the City for the preceding fiscal year, substantially similar to that provided in the Official Statement:
(i) Assessed value of taxable property within the jurisdiction of the City; (ii) Summary of property tax rates for all taxing entities within the City expressed as a percentage of assessed valuation in the form of Table 5 of the Official Statement;
(iii) Top twenty property taxpayers for current fiscal year, taxable value and percentage of total assessed value in substantially the form of Table 6 of the Official Statement;
(iv) If and to the extent such information is available from the County, property tax collection delinquencies for the City; and (v) Amount of all general obligation debt of the City outstanding, and total scheduled debt service on such general obligation debt.
In addition, the City must provide information about the occurrence of certain significant events (all of which are listed in the Continuing Disclosure Certificate) relating to the 2023 Bonds.
The City must also provide such further material information, if any, as may be necessary to make the specifically required statements made in the City’s continuing disclosure reports, in the light of the circumstances under which they are made, not misleading.
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PRELIMINARY OFFICIAL STATEMENT DATED _____, 2023
NEW ISSUE - FULL BOOK-ENTRY RATING:
Moody’s: “___”
In the opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, subject, however to certain qualifications described herein, under existing law, the interest on the Bonds is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax. Interest on the Bonds may be subject to the corporate alternative minimum tax. The Bonds are "qualified tax-exempt obligations" within the meaning of section 265(b)(3) of the Internal Revenue Code of 1986, as amended. In the further opinion of Bond Counsel, such interest is exempt from California personal income taxes. See "TAX MATTERS."
$5,000,000*
CITY OF FOSTER CITY
General Obligation Bonds, Series 2023
(Levee Protection Planning and Improvements Project)
Dated: Date of Delivery Due August 1, as shown on inside front cover Issuance. The general obligation bonds captioned above (the “Bonds”) are being issued by the City of Foster City (the “City”) under provisions of the California Government Code and under a Resolution adopted by the City Council of the City (the “City Council”) on May 15, 2023 (the “Bond Resolution”). The Bonds were authorized at an election of the registered voters of the City held on June 5, 2018, at which more than two-thirds of the persons voting on the proposition voted to authorize the issuance and sale of not to exceed $90,000,000 principal amount of general obligation bonds. The Bonds are the second and final series of bonds to be sold and issued under this authorization. See “THE BONDS – Authority for Issuance.”
Purpose. The Bonds are being issued to finance the improvement of the City’s levee system. See “PLAN OF FINANCE – Purpose of Issue.”
Security. The Bonds are general obligations of the City, payable solely from ad valorem property taxes levied by the City and collected by San Mateo County (the “County”). The City Council is empowered and is obligated to annually levy ad valorem taxes for the payment of interest on, and principal of, the Bonds upon all property subject to taxation by the City, without limitation of rate or amount (except certain personal property that is taxable at limited rates). See “SECURITY FOR THE BONDS.”
Book-Entry Only. The Bonds will be issued in book-entry form only, and will be initially issued and registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York (“DTC”). The Bonds are issuable as fully registered securities in denominations of $5,000 or any integral multiple of $5,000. Purchasers of the Bonds will not receive physical certificates representing their interest in the Bonds. See “THE BONDS” and “APPENDIX E – DTC AND THE BOOK-ENTRY ONLY SYSTEM.”
Payments. Interest on the Bonds accrues from the date of delivery and is payable semiannually on February 1 and August 1 of each year, commencing February 1, 2024. Payments of principal and interest on the Bonds will be paid by U.S. Bank Trust Company, National Association, as Paying Agent, to DTC for subsequent disbursement to DTC Participants, which will remit such payments to the owners of the Bonds. See “THE BONDS – Description of the Bonds.” Redemption. The Bonds are subject to optional and mandatory redemption prior to maturity. See “THE BONDS – Redemption.”
Maturity Schedule
(See inside cover)
Cover Page. This cover page contains certain information for general reference only. It is not a summary of all the provisions of the Bonds. Prospective investors must read the entire Official Statement to obtain information essential to making an informed investment decision.
The Bonds will be offered when, as and if issued and accepted by the Purchaser, subject to the approval as to legality by Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel to the City, and subject to certain other conditions. Jones Hall is also serving as Disclosure Counsel to the City. Certain legal matters are being passed upon for the City by the City Attorney. It is anticipated that the Bonds, in book entry form, will be available for delivery by DTC in New York, New York, on or about June 20, 2023*.
The date of this Official Statement is _________, 2023. * Preliminary; subject to change.
This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
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MATURITY SCHEDULE
(Base CUSIP†: ______)
$_________ Serial Bonds
Maturity Date
(August 1)
Principal
Amount
Interest
Rate Yield Price CUSIP†
$________ ____% Term Bond Due August 1, 20__, Yield: ____%, Price: ____; CUSIP†: ___ $________ ____% Term Bond Due August 1, 20__, Yield: ____%, Price: ____; CUSIP†: ___ † CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by FactSet Research Systems Inc on behalf of The American Bankers Association. Neither the City nor the Purchaser takes any responsibility for the accuracy of the CUSIP data.
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GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT
Use of Official Statement. This Official Statement is submitted in connection with the sale of the Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose.
This Official Statement is not a contract between any bond owner and the City or the Purchaser. This Official Statement and the information contained herein are subject to completion or amendment without notice.
No Offering Except by This Official Statement. No dealer, broker, salesperson or other person has been authorized by the City or the Purchaser to give any information or to make any representations relating to the Bonds other than those contained in this Official Statement and, if given or made, such other information or representation must not be relied upon as having been authorized by the City or the Purchaser.
No Unlawful Offers or Solicitations. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor may there be any sale of the Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale.
Estimates and Projections. When used in this Official Statement and in any continuing disclosure by the City, in any press release and in any oral statement made with the approval of an authorized officer of the City, the words or phrases “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “forecast,” “expect,” “intend” and similar expressions identify “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. Any forecast is subject to such uncertainties. Inevitably, some assumptions used to develop the forecasts will not be realized and unanticipated events and circumstances may occur. Therefore, there are likely to be differences between forecasts and actual results, and those differences may be material.
Information in Official Statement. The information set forth in this Official Statement has been furnished by the City and other sources which are believed to be reliable, but it is not guaranteed as to accuracy or completeness by the City.
Involvement of Purchaser. The Purchaser (as defined in “UNDERWRITING”) has reviewed the information in this Official Statement in accordance with, and as a part of, its responsibilities to investors under the Federal Securities Laws as applied to the facts and circumstances of this transaction, but the Purchaser does not guarantee the accuracy or completeness of such information.
Document Summaries. All summaries of the Bond Resolution or other documents referred to in this Official Statement are made subject to the provisions of such documents and qualified in their entirety to reference to such documents, and do not purport to be complete statements of any or all of such provisions.
No Securities Laws Registration. The Bonds have not been registered under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, in reliance upon exceptions therein for the issuance and sale of municipal securities. The Bonds have not been registered or qualified under the securities laws of any state.
Effective Date. This Official Statement speaks only as of its date, and the information and expressions of opinion contained in this Official Statement are subject to change without notice. Neither the delivery of this Official Statement nor any sale of the Bonds will, under any circumstances, give rise to any implication that there has been no change in the affairs of the City, or the other parties described in this Official Statement, or the condition of the property within the City since the date of this Official Statement.
Website. The City maintains a website and social media accounts; however, the information presented therein is not a part of this Official Statement and should not be relied upon in making an investment decision with respect to the Bonds.
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CITY OF FOSTER CITY
ELECTED OFFICIALS
Jon Froomin, Mayor
Patrick Sullivan, Vice Mayor
Sam Hindi, Councilmember
Stacy Jimenez, Councilmember
Art Kiesel, Councilmember
CITY OFFICIALS
Stefan Chatwin, City Manager
Edmund Suen, Finance Director
Waqas Hassan, Assistant Finance Director
Francine Magno, Senior Engineer/Levee Project Manager
Benjamin Stock, City Attorney
PROFESSIONAL SERVICES
BOND COUNSEL AND DISCLOSURE COUNSEL
Jones Hall, A Professional Law Corporation
San Francisco, California
MUNICIPAL ADVISOR
William Euphrat Municipal Finance, Inc.
San Francisco, California
BOND REGISTRAR, TRANSFER AGENT, AND PAYING AGENT
U.S. Bank Trust Company, National Association
San Francisco, California
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i
TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................................1 PLAN OF FINANCE......................................................................................................................................3 Purpose of Issue ....................................................................................................................................3 Sources and Uses of Funds...................................................................................................................7 THE BONDS.................................................................................................................................................8 Authority for Issuance ............................................................................................................................8 Description of the Bonds ........................................................................................................................8 Payment .................................................................................................................................................9 Application of Bond Proceeds ................................................................................................................9 Statutory Lien .......................................................................................................................................10 Redemption..........................................................................................................................................10 Registration, Transfer and Exchange of Bonds ...................................................................................12 Defeasance ..........................................................................................................................................12 DEBT SERVICE SCHEDULES ..................................................................................................................14 SECURITY FOR THE BONDS .....................................................................................................................2 Ad Valorem Taxes..................................................................................................................................2 Public Health Emergencies.................................................................................................................... 2 Limited Obligation ..................................................................................................................................3 PROPERTY TAXATION ...............................................................................................................................3 Property Tax Collection Procedures ......................................................................................................3 Taxation of State-Assessed Utility Property...........................................................................................4 Assessed Valuation................................................................................................................................5 Alternative Method of Tax Apportionment - Teeter Plan ........................................................................7 Appeals of Assessed Value ...................................................................................................................8 Tax Rates...............................................................................................................................................9 Major Taxpayers ..................................................................................................................................10 Direct and Overlapping Debt................................................................................................................10
CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING CITY REVENUES AND APPROPRIATIONS ...........................................................................................................................12 Article XIIIA of the State Constitution ...................................................................................................12 Legislation Implementing Article XIIIA..................................................................................................12 Article XIIIB of the State Constitution ...................................................................................................13 Articles XIIIC and XIIID of the State Constitution .................................................................................13 Proposition 62 ......................................................................................................................................14 Proposition 1A......................................................................................................................................15 Proposition 22 ......................................................................................................................................15 Possible Future Initiatives ....................................................................................................................15 LEGAL MATTERS ......................................................................................................................................16 Tax Exemption .....................................................................................................................................16 Continuing Disclosure ..........................................................................................................................17 Absence of Material Litigation ..............................................................................................................18 RATING ......................................................................................................................................................18 MUNICIPAL ADVISOR ...............................................................................................................................19 UNDERWRITING .......................................................................................................................................19
APPENDIX A - FINANCIAL, ECONOMIC AND DEMOGRAPHIC INFORMATION FOR THE CITY OF
FOSTER CITY AND SAN MATEO COUNTY
APPENDIX B - ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR YEAR ENDED JUNE 30, 2022
APPENDIX C - PROPOSED FORM OF OPINION OF BOND COUNSEL
APPENDIX D - FORM OF CONTINUING DISCLOSURE CERTIFICATE
APPENDIX E - DTC AND THE BOOK-ENTRY ONLY SYSTEM
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1 __________________________________
OFFICIAL STATEMENT
__________________________________
$5,000,000*
CITY OF FOSTER CITY
General Obligation Bonds, Series 2023
(Levee Protection Planning and Improvements Project)
The purpose of this Official Statement, which includes the cover page, inside cover page and attached appendices, is to set forth certain information concerning the sale and delivery of the bonds captioned above (the “Bonds”) by the City of Foster City. All capitalized terms used in this Official Statement, unless noted otherwise, have the meanings set forth in the Bond Resolution (as defined below).
INTRODUCTION
This Introduction is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement and the documents summarized or described in this Official Statement. A full review should be made of the entire Official Statement. The offering of Bonds to potential investors is made only by means of the entire Official Statement.
The City. The City of Foster City (the “City”), a general law city located in San Mateo County (the “County”), was incorporated on April 27, 1971. Located on the San Francisco Peninsula, ten miles south of the San Francisco International Airport, the City encompasses a geographic area of 19.8 square miles, of which 16.1 square miles are part of San Francisco Bay and Belmont Slough, and 3.8 square miles are land. The total area of the City is comprised of approximately 81% water.
See “APPENDIX A – FINANCIAL, ECONOMIC AND DEMOGRAPHIC INFORMATION FOR THE CITY OF FOSTER CITY AND SAN MATEO COUNTY” and “APPENDIX B – ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR YEAR ENDED JUNE 30, 2022,” for demographic and financial information regarding the City.
Authority for Issuance. The Bonds represent a sale of bonds approved by more than two-thirds of the qualified voters in the City voting at a municipal election on June 5, 2018, to approve the issuance of up to $90,000,000 of general obligation bonds. The Bonds are the second and final series of bonds issued under the Authorization (as defined herein). See “THE BONDS – Authority for Issuance.”
The Bonds are being issued under Article 4.5 of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California. The City authorized the issuance of the * Preliminary; subject to change.
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2 Bonds under a Resolution adopted by the City Council of the City (the “City Council”) on June 20, 2023 (the “Bond Resolution”).
Purpose of Issuance. The Bonds are being issued to finance the improvement of the City’s levee system. See “PLAN OF FINANCE – Purpose of Issue.” Security and Sources of Payment for the Bonds. The Bonds are general obligations of the City payable solely from ad valorem property taxes levied by the City and collected by the County. The City Council is empowered and is obligated to annually levy ad valorem taxes for the payment of interest on, and principal of, the Bonds upon all property subject to taxation by the City, without limitation of rate or amount (except with respect to certain personal property that is taxable at limited rates). See “SECURITY FOR THE BONDS.” Tax-Exempt Status of the Bonds. In the opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, subject, however to certain qualifications described herein, under existing law, the interest on the Bonds is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax. Interest on the Bonds may be subject to the corporate alternative minimum tax. The Bonds are "qualified tax-exempt obligations" within the meaning of section 265(b)(3) of the Internal Revenue Code of 1986, as amended. In the further opinion of Bond Counsel, such interest is exempt from California personal income taxes. See “LEGAL MATTERS – Tax Exemption” herein.
Payment and Registration of the Bonds. The Bonds will be dated their date of original issuance and delivery (the “Dated Date”) and will be issued as fully registered bonds, without coupons, in the denominations of $5,000 or any integral multiple of $5,000, registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York (“DTC”), and will be available under the book-entry system maintained by DTC, only through brokers and dealers who are or act through DTC Participants as described below. Owners of the Bonds will not be entitled to receive physical delivery of the Bonds. See “THE BONDS” and “APPENDIX E – DTC AND THE BOOK-ENTRY ONLY SYSTEM.”
Interest on the Bonds accrues from the Dated Date and is payable semiannually on February 1 and August 1 of each year, commencing February 1, 2024. See “THE BONDS – Description of the Bonds.”
Early Redemption. The Bonds are subject to optional and mandatory redemption prior to their maturity as described in “THE BONDS - Redemption.” Continuing Disclosure. The City will covenant for the benefit of bondholders to make available certain financial information and operating data relating to the City and to provide notices of the occurrence of certain enumerated events, in compliance with the Securities Exchange Commission Rule 15c2-12(b)(5) (the “Rule”). See “LEGAL MATTERS – Continuing Disclosure” and APPENDIX D – FORM OF CONTINUING DISCLOSURE CERTIFICATE.” Other Information. This Official Statement speaks only as of its date, and the information contained herein is subject to change. Copies of documents referred to in this Official Statement and information concerning the Bonds are available from the City of Foster City, Attention: City Clerk, 610 Foster City Blvd., Foster City, CA 94404, (650) 286-3200. The City may impose a charge for copying, mailing and handling.
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3 PLAN OF FINANCE
Purpose of Issue
Voter Authorization. The net proceeds of the Bonds will be used to finance the improvement of the City’s levee system, as approved by the Authorization. The abbreviated form of the ballot measure is set forth below:
“To improve the levee protecting essential city services, including fire, police, water, sewer, transportation infrastructure; protect Foster City homes, schools, businesses from flooding; avoid both Foster City being designated a FEMA special flood hazard area and flood insurance requirements for residents/businesses; shall Foster City issue $90,000,000 in bonds at legal rates, levy approximately $40 per $100,000 assessed valuation, averaging $5,171,000 collected annually while bonds are outstanding, with citizens’ oversight, no funds for administrators, all funds staying local?”
The Bonds will be the second and final series of bonds issued pursuant to the Authorization. Following the issuance of the Bonds, there will be no unissued principal remaining under the Authorization.*
Existing Levee. The City maintains an approximately 35,000-linear-foot (6 mile) levee along the San Francisco Bay, which surrounds the majority of the outer perimeter of the City. The original perimeter of the levee was installed in the early 1900s and was formed with dredged Bay mud deposited on the outboard side of the perimeter channel systems. The levee system provides protection from flood hazards and storms and is a valuable safety element.
Approximately 9,000 properties in the City are protected from the 100-year flood by the levee system. In addition, properties in the City are protected from the 100-year flood by the City of San Mateo’s levee and floodwall systems south of San Mateo Creek.
The current levee was permitted by the U.S. Army Corp of Engineers on February 20, 1976, to protect the City from flooding due to level overtopping from high tides/stillwater or storm surge and/or wave runup. It has been improved over time and was last re-accredited by the Federal Emergency Management Agency (“FEMA”) in 2007. FEMA conducted a coastal flood hazard study in 2014, which determined that roughly 85% of the City’s levee system does not meet new FEMA requirements. FEMA granted the City a temporary “seclusion mapping” designation in 2015 to remain classified as having a moderate or minimal flooding risk, so long as progress was made to address the deficiencies of the levee. The City of San Mateo also has a short segment of levee (south of San Mateo Creek) that protects Foster City. This short segment of San Mateo levee is currently accredited by FEMA and is shown on the FEMA Flood Insurance Rate Map.
Levee Protection Improvements Project. An Environmental Impact Report for the levee improvements to be financed by the Bonds (the “Levee Protection Improvements Project”) was certified by the City Council on May 8, 2017, by Resolution No. 2017-27.
The purpose of the Levee Protection Improvements Project is to retain FEMA accreditation for the levee system and provide flood protection in accordance with updated FEMA guidelines. * Preliminary; subject to change.
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4 In addition, the Project would provide some level of sea level rise protection while maintaining public access along the levee system and protection for sensitive species and habitat.
On August 5, 2020, the City issued its $85,000,000 General Obligation Bonds, Series 2020 (the “Series 2020 Bonds”). In October of 2020, construction for the Levee Improvements Project began. Construction is ongoing, and the City expects to complete the Levee Improvements Project by January of 2024.
Risks Addressed by Levee Protection Improvements Project. The Levee Protection Improvements Project is intended to protect the City against certain risks.
Flooding. The levee system provides protection for very short-term duration, extreme high tides coupled with infrequent storm events. This element of the project addresses FEMA’s accreditation issue (FEMA does not currently require any improvements to be made to address sea level rise).
Climate Change. Numerous relevant government studies have been released to document the risk of climate change faced by the City, most notably:
•A 2018 San Mateo County report, entitled “County of San Mateo Sea Level Rise Vulnerability Assessment,” which states that more than 30,000 residential and 3,000 commercial parcels in the County with an assessed aggregate value of $39 billion may be vulnerable to the impacts of sea-level rise in the long-term. The County infrastructure and facilities at risk include airports, electric substations, wastewater treatment plants, healthcare facilities, police stations, fire stations, and miles of levees. •A March 2020 report from the Bay Conservation Development Commission (“BCDC”), entitled “Adapting to Rising Tides Bay Area: Regional Sea Level Rise Vulnerability and Adaptation Study,” which outlines the worst-case scenario for impacts and consequences to four critical regional systems – transportation networks, vulnerable communities, future growth areas, and natural lands – for ten different flooding scenarios in the absence of action. •Two reports issued by the California Ocean Protection Council, including a 2018 report entitled “State of California Sea Level Rise Guidance” (“2018 State Guidance”), and a February 26, 2020, report entitled “Strategic Plan to Protect California’s Coast and Ocean 2020–2025” (“2020 State Guidance”). The 2020 State Guidance established a new goal of ensuring California’s coast is resilient to at least 3.5 feet of sea-level rise by 2050 based on its finding that warming seas and rapidly melting ice sheets are projected to increase sea levels by 3.5 feet or more by the end of the 21 st century.1
1 The California Ocean Protection Council was created pursuant to the California Ocean Protection Act (2004). The Council is a cabinet-level state agency that consists of the Secretary of the Natural Resources Agency, the Secretary for Environmental Protection, the Chair of the State Lands Commission, two members of the public appointed by the Governor and two members of the Legislature.
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5 The City adopted a Climate Action Plan (“CAP”) in January 2016 that contained strategies to achieve 15% greenhouse gas (“GSG”) emissions reduction to levels below the 2005 levels by 2020 and 20% below the 2005 levels by 2025, which the City achieved in 2017. The City is in the process of updating its current CAP to incorporate revised GHG reduction goals that align with new State targets, identify specific measures to achieve GHG reductions and suggest strategies for future adaptations of climate action planning. The City expects to complete this update of its CAP by the end of calendar year 2023..
Climate change concerns are leading to new laws and regulations at the federal, State and local levels. Research suggests that the State will experience hotter and drier conditions, reductions in winter snow and increases in winter rains, sea level rise, significant changes to the water cycle, increased occurrences of extreme and unpredictable weather events, and increased catastrophic wildfires and severity of flood events.
The City is designing the levee improvements to provide protection against 24 inches of sea level rise. The City designed the levee improvements to protect against the combined 100- year flood hazard (tides, wind waves, and wave runup) with the probability of a 0.5% (1 in 200 chance) that Sea Level Rise will exceed 1.9 Feet by 2050, based on the 2018 State Guidance.
The design provides for the maximum protective vertical elevation possible within existing foundational soil limitations at reasonable cost in the current regulatory setting.
As part of its permit application to the BCDC for the Levee Protection Improvements Project, the City prepared a risk assessment and adaptive management plan (“Adaptation Plan”) that outlines a suite of feasible adaptation measures, including landward ecotone levees, traditional shoreline revetments with landward expansion, ecotone levees with Bay fill, adaptive offshore structures, and traditional shoreline revetments, given site conditions, and establishes a pathways approach for future adaptation through 2100. The Project’s permit conditions require that the City perform an update to the Adaptation Plan every five years in order to monitor and anticipate the actual and projected amount of sea level rise that actually occurs in the future.
Risks to the Levee and other Property in the City. Property in the City, including the levee system, is subject to risks from certain seismic conditions.
Earthquake. There are several geological faults in the greater San Francisco Bay Area that have the potential to cause serious earthquakes that could result in damage to property in the city, including taxable property, buildings, roads, bridges and the levee.
There are no known active, potentially active, or inactive faults located within the City.
However, the San Andreas fault, located approximately two miles west of the City, and the Hayward fault, located approximately 14 miles east of the City, are both active. Historic earthquakes have caused strong ground shaking and damage in the San Francisco Bay Area, the most recent being the magnitude 6.9 Loma Prieta earthquake on the San Andreas Fault in October 1989. The epicenter was approximately 50 miles south of the City. The risk posed by an earthquake to the existing levee system is that an earthquake, for example of greater magnitude than the Loma Prieta earthquake, would damage the levee system so that it would be vulnerable to overtopping or breach during a subsequent flood event. The City designed the levee based on expected ground motions for seismic events that have a 100-year return period.
Liquefaction. Liquefaction occurs when ground shaking causes the mechanical properties of some fine grained, saturated soils to liquefy and act as a fluid (liquefaction).
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6 In order for liquefaction to occur, three general geotechnical characteristics are present:
(i) ground water is within the potentially liquefiable zone, (ii) the potentially liquefiable zone is granular and meets a specific range in grain-size distribution, and (iii) the potentially liquefiable zone is of low relative density. If those criteria are present and strong ground motion occurs, then those soils could liquefy, depending upon the intensity and duration of the strong ground motion. The larger the earthquake magnitude, and the longer the duration of strong ground shaking, the greater the potential there is for liquefaction to occur.
Maps prepared by the Association of Bay Area Governments and the United States Geological Survey (the “USGS”) indicate that the City is located in a high- to very-high area for the potential of experiencing earthquake-induced liquefaction. However, site- specific geotechnical investigations conducted for the Levee Protection Improvements Project found that the project site is primarily underlain by soft to stiff clays with some medium dense to dense sandy soils. Based on the cohesion and density of these subsurface deposits, the project-specific geotechnical investigations concluded that the potential for liquefaction and lateral spreading is low at the project site. Based on this conclusion, the risk of liquefaction and localized slope failure at the project site was deemed to be less than significant.
Risks to the City, including climate change, earthquakes and liquefaction, pose a risk to taxable property in the City and, if not addressed, could adversely impact the City’s ability to pay debt service on the Bonds.
Sources and Uses of Funds
The estimated sources and uses of funds with respect to the Bonds will be applied as follows:
Sources of Funds
Principal Amount of Bonds
Plus: Net Original Issue Premium
Less: Purchaser’s Discount
Total Sources
Uses of Funds
Deposit to Project Fund
Deposit to Debt Service Fund
Costs of Issuance(1)
Total Uses
(1) Includes Municipal Advisor fees, Paying Agent fees, Bond Counsel and Disclosure Counsel fees, printing costs, rating agency fee and other related costs.
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7 THE BONDS
Authority for Issuance
The Bonds are being issued under Article 4.5 of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (the “Act”) and other applicable law. The City authorized the issuance of the Bonds with the adoption of the Bond Resolution.
The City received authorization at an election held on June 5, 2018, by an affirmative vote of 86.6% of the eligible voters within the City (the “Authorization”) to issue $90,000,000 of general obligation bonds. On August 5, 2020, the City issued the Series 2020 Bonds. The Bonds are the second and final series of Bonds to be sold and issued under the Authorization. Following the issuance of the Bonds there will no remaining unissued authorization remaining under the Authorization.
Description of the Bonds
Book-Entry Form. The Bonds will be issued in book-entry form only, and will be initially issued and registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York (“DTC”). Purchasers of the Bonds will not receive physical certificates representing their interest in the Bonds. Payments of principal of and interest on the Bonds will be paid by the Paying Agent to DTC for subsequent disbursement to DTC Participants which will remit such payments to the owners of the Bonds.
As long as DTC’s book-entry method is used for the Bonds, the Paying Agent will send any notice of prepayment or other notices to owners only to DTC. Any failure of DTC to advise any DTC Participant, or of any DTC Participant to notify any Beneficial Owner, of any such notice and its content or effect will not affect the validity or sufficiency of the proceedings relating to the prepayment of the Bonds called for prepayment or of any other action premised on such notice.
The Paying Agent, the City, and the Purchaser of the Bonds have no responsibility or liability for any aspects of the records relating to or payments made on account of beneficial ownership, or for maintaining, supervising or reviewing any records relating to beneficial ownership, of interests in the Bonds.
See “APPENDIX E – DTC AND THE BOOK-ENTRY ONLY SYSTEM.”
Interest. Interest on the Bonds is payable semiannually on February 1 and August 1 of each year (the “Interest Payment Dates”), commencing February 1, 2024. Interest on each Bond shall be paid by the Paying Agent on the Interest Payment Date to the owner of the Bonds the fifteenth day of the month preceding an Interest Payment Date (each, a “Record Date”).
Each Bond shall bear interest from the Interest Payment Date next preceding the date of authentication with respect to which interest has been paid or provided for, unless:
i. the date of authentication is prior to the first Record Date, in which event it shall bear interest from the date of delivery of the Bonds,
ii. the date of authentication is after a Record Date and before the following Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or
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8 iii. it is authenticated as of an Interest Payment Date, in which event it shall bear interest from such date) until the principal thereof shall have been paid.
Interest on the Bonds will be calculated on the basis of a 360-day year comprising twelve 30-day months.
Denominations and Maturity. The Bonds shall be issued in the denominations of $5,000 each or any integral multiple of $5,000. The Bonds mature on August 1 in the years and amounts set forth on the inside cover page hereof.
See the maturity schedule on the inside cover page hereof and “DEBT SERVICE SCHEDULE” below.
Payment
Interest on the Bonds (including the final interest payment upon maturity) is payable by check of the Paying Agent mailed to the owner thereof at such owner’s address as it appears on the Registration Books (as defined below) at the close of business on the preceding Record Date, except that at the written request of the Owner of at least $1,000,000 aggregate principal amount of the Bonds, which written request is on file with the Paying Agent as of any Record Date, interest on such Bonds shall be paid by wire transfer on the succeeding Interest Payment Date to an account in the United States of America as shall be specified in such written request.
Principal of and premium (if any) on the Bonds is payable in lawful money of the United States of America upon presentation and surrender at the principal office of the Paying Agent.
Application of Bond Proceeds
The proceeds of the sale from the Bonds, net of costs of issuance and any premium received upon the sale thereof, will be deposited by the City to the credit of the improvement fund created by the Resolution (the “Project Fund”), and will be applied solely for the purposes for which the Bonds are being issued. Interest earnings in the Project Fund will be retained therein.
The City will establish an interest and sinking fund for the Bonds (the “Debt Service Fund”), which will be established as a separate fund to be maintained distinct from all other funds of the City. All taxes levied by the City pursuant to the Bond Resolution for the payment of the principal of and interest and premium (if any) on the Bonds will be deposited in the Debt Service Fund by the City promptly upon receipt from the County. The Debt Service Fund is pledged for the payment of the principal of and interest and premium (if any) on the Bonds when and as the same become due. The City will transfer amounts in the Debt Service Fund, to the extent necessary to pay the principal of and interest on the Bonds as the same become due and payable, to the Paying Agent, as required to pay the principal of and interest and premium (if any) on the Bonds.
If, after payment in full of the Bonds, any amounts remain on deposit in the Debt Service Fund, the City shall transfer such amounts to its general fund, to be applied solely in a manner that is consistent with the requirements of applicable state and federal tax law.
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9 Statutory Lien
Pursuant to California Government Code Section 53515, the Bonds will be secured by a statutory lien on all revenues received pursuant to the levy and collection of ad valorem property taxes for the payment thereof. The lien automatically attaches, without further action or authorization by the City Council, and is valid and binding from the time the Bonds are executed and delivered. The revenues received pursuant to the levy and collection of the ad valorem property tax will be immediately subject to the lien, and such lien will be enforceable against the City, its successor, transferees and creditors, and all other parties asserting rights therein, irrespective of whether such parties have notice of the lien and without the need for physical delivery, recordation, filing or further act.
Redemption
Optional Redemption. The Bonds maturing on or before August 1, 20__ are not subject to redemption prior to maturity. The Bonds maturing on or after August 1, 20__ are subject, at the option of the City, to redemption prior to their stated maturities in whole or in part on any date commencing August 1, 20__, at a redemption price equal to the principal amount thereof, together with accrued interest to the date fixed for redemption, without premium.
Mandatory Sinking Fund Redemption. The Bonds maturing on August 1, 20__, and August 1, 20__ (“Term Bonds”), are subject to mandatory sinking fund redemption, in part by lot, prior to their stated maturity, on each August 1 on and after August 1, 20__, at a redemption price equal to 100% of the principal amount thereof called for redemption, without premium, plus accrued interest thereon to the date of redemption in the aggregate respective principal amounts set forth in the following table:
$_______ Bond Due August 1, 20__
Redemption Date
(August 1)
Principal Amount to be
Redeemed
(Maturity)
$_______ Bond Due August 1, 20__
Redemption Date
(August 1)
Principal Amount to be
Redeemed
(Maturity)
Selection of Bonds for Redemption. If less than all of the Bonds outstanding are to be redeemed, the portion of any Bond of a denomination of more than $5,000 to be redeemed shall be in the principal amount of $5,000 or an integral multiple thereof, and, in selecting portions of such Bond for redemption, the Paying Agent shall treat each such Bond as representing that number of Bonds of $5,000 denominations which is obtained by dividing the principal amount of such Bond to be redeemed in part by $5,000. The Paying Agent shall promptly notify the City in writing of the Bonds, or portions thereof, selected for redemption.
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10 Whenever provision is made for the optional redemption of Bonds and less than all Outstanding Bonds are to be redeemed, the Paying Agent, upon written instruction from the City, will select Bonds for redemption as so directed and if not directed, in inverse order of maturity.
Within a maturity, the Paying Agent will select Bonds for redemption as directed by the City and, if not so directed, by lot. Redemption by lot shall be in such manner as the Paying Agent shall determine; provided, however, that the portion of any Bond to be redeemed in part shall be in the principal amount of $5,000 or any integral multiple thereof.
In the event that a portion of any Term Bond is optionally redeemed prior to maturity, the remaining mandatory sinking fund payments with respect to such Term Bonds will be reduced proportionately, or as otherwise directed by the City, in integral multiples of $5,000 principal amount, in respect of the portion of such Bonds optionally redeemed.
Notice of Redemption. The Paying Agent will cause notice of any redemption to be mailed, first class mail, postage prepaid, at least 20 days but not more than 45 days prior to the date fixed for redemption, (i) to DTC and the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access system, and (ii) to the respective owners of any Bonds designated for redemption, at their addresses appearing on the Registration Books (as defined below) maintained by the Paying Agent. Such mailing will not be a condition precedent to such redemption and failure to mail or to receive any such notice will not affect the validity of the proceedings for the redemption of such Bonds.
The City is entitled to send a redemption notice that declares that the redemption is conditional upon the availability of moneys to accomplish the redemption, and the City may rescind any notice of optional redemption of the Bonds by written notice to the Paying Agent on or prior to the date fixed for redemption, and the Paying Agent shall mail notice of such rescission of redemption in the same manner as the original notice of redemption was sent under this section. Any notice of redemption shall be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for redemption. The City and the Paying Agent have no liability to the owners or any other party related to or arising from such rescission.
A notice of redemption will (a) state the redemption date; (b) state the redemption price; (c) state the dates of maturity of the Bonds and, if less than all of any such maturity is called for redemption the distinctive numbers of the Bonds of such maturity to be redeemed, and in the case of Bonds redeemed in part only, the respective portions of the principal amount thereof, to be redeemed; (d) state the CUSIP number, if any, of each Bond to be redeemed; (e) give notice that further interest on such Bonds will not accrue after the designated redemption date; and (f) include any other descriptive information regarding the Bonds needed to identify accurately the Bonds being redeemed. The actual receipt by the Owner of notice of such redemption shall not be a condition precedent to redemption, and failure to receive such notice shall not affect the validity of the proceedings for the redemption of such Bonds or the cessation of interest on the date fixed for redemption.
Partial Redemption. Upon surrender of Bonds redeemed in part only, the City will execute and the Paying Agent will authenticate and deliver to the owner, at the expense of the City, a new Bond or Bonds, of the same maturity, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond or Bonds.
Effect of Redemption. From and after the date fixed for redemption, if notice of such redemption has been duly given and funds available for the payment of the principal of and
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11 interest (and premium, if any) on the Bonds so called for redemption have been duly provided, such Bonds so called will cease to be entitled to any benefit under the Bond Resolution other than the right to receive payment of the redemption price, and no interest will accrue thereon on or after the redemption date specified in such notice.
Registration, Transfer and Exchange of Bonds
If the book-entry system as described above and in Appendix E is no longer used with respect to the Bonds, the following provisions will govern the registration, transfer, and exchange of the Bonds.
Registration Books. The Paying Agent will keep or cause to be kept sufficient books for the registration and transfer of the Bonds (the “Registration Books”), which will at all times be open to inspection by the City; and, upon presentation for such purpose, the Paying Agent shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said books, the Bonds.
Transfer. Any Bond may, in accordance with its terms, be transferred, upon the Registration Books, by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation at the principal office of the Paying Agent, accompanied by delivery of a written instrument of transfer in a form approved by the Paying Agent, duly executed. The City may charge a reasonable sum for each new Bond issued upon any transfer.
Whenever any Bond or Bonds are surrendered for transfer, the City will execute and the Paying Agent will authenticate and deliver a new Bond or Bonds, for like aggregate principal amount.
Exchange. Bonds may be exchanged at the principal office of the Paying Agent for a like aggregate principal amount of Bonds of authorized denominations and of the same maturity. The City may charge a reasonable sum for each new Bond issued upon any exchange.
Defeasance
All or any portion of the outstanding maturities of the Bonds may be defeased at any time prior to maturity by irrevocably depositing with the City in a separate account of the Debt Service Fund to be held separate and apart from all other funds of the City, and which is irrevocably pledged to the Bonds so defeased (or with an entity designated by the City to act as escrow agent with respect thereto):
(a) Cash: an amount of cash which together with amounts then on deposit in the Debt Service Fund, is sufficient, without reinvestment, to pay and discharge all or part of the Bonds outstanding (including all principal, interest and premium, if any) at or before their stated maturity date; or
(b) Government Obligations: Government Obligations not subject to call, together with cash, if required, in such amount as will, without reinvestment, in the opinion of an independent certified public accountant, together with interest to accrue thereon and moneys transferred from the Debt Service Fund together with the interest to accrue thereon, be fully sufficient to pay and discharge all of the corresponding
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12 Bonds (including all principal and interest and premium, if any) to be defeased at or before their stated maturity date.
In such event, notwithstanding that any such maturities of Bonds shall not have been surrendered for payment, all obligations of the City with respect to all such outstanding Bonds designated for defeasance shall cease and terminate, except only the obligation of the City to pay or cause to be paid from funds deposited pursuant to paragraphs (a) or (b) above, to the owners of such designated Bonds not so surrendered and paid all sums due with respect thereto; provided that the City shall have received an opinion of bond counsel for said Bonds, that said Bonds have been defeased.
“Government Obligations” means direct and general obligations of the United States of America, or obligations that are unconditionally guaranteed as to principal and interest by the United States of America (which may consist of obligations of the Resolution Funding Corporation that constitute interest strips), and obligations secured or otherwise guaranteed, directly or indirectly, as to principal and interest by a pledge of the full faith and credit of the United States of America. In the case of direct and general obligations of the United States of America, Government Obligations shall include evidences of direct ownership of proportionate interests in future interest or principal payments of such obligations. Investments in such proportionate interests must be limited to circumstances where (a) a bank or trust company acts as custodian and holds the underlying United States obligations; (b) the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor of the underlying United States obligations; and (c) the underlying United States obligations are held in a special account, segregated from the custodian’s general assets, and are not available to satisfy any claim of the custodian, any person claiming through the custodian, or any person to whom the custodian may be obligated; provided that such obligations are rated or assessed by S&P Global Ratings (“S&P”) or Moody’s Investors Service (“Moody’s”) at least as high as direct or general obligations of the United States of America by either S&P or Moody’s.
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13 DEBT SERVICE SCHEDULES
The following table shows the debt service schedule with respect to the Bonds (assuming no optional redemptions).
Year Ending
August 1 Principal Interest
Total
Debt Service
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050
Total
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1 Combined Debt Service Schedule. The following table shows the combined debt service schedule for outstanding general obligation bonds of the City following the issuance of the Bonds, assuming no optional redemptions. The following table does not show debt service for bonds that are not general obligation bonds and that are payable from other sources of funds.
Year Ending
August 1
Series 2020
Bonds The Bonds
Total
Debt Service
2023 $5,407,312.50
2024 3,935,312.50
2025 3,937,312.50
2026 3,936,512.50
2027 3,937,912.50
2028 3,936,312.50
2029 3,936,712.50
2030 3,938,912.50
2031 3,937,712.50
2032 3,938,112.50
2033 3,939,912.50
2034 3,937,162.50
2035 3,937,312.50
2036 3,935,212.50
2037 3,939,412.50
2038 3,939,312.50
2039 3,940,012.50
2040 3,937,112.50
2041 3,938,612.50
2042 3,937,412.50
2043 3,938,512.50
2044 3,936,762.50
2045 3,937,162.50
2046 3,939,562.50
2047 3,935,250.00
2048 3,939,250.00
2049 3,936,337.50
2050 3,936,625.00
Total $111,723,062.50
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2 SECURITY FOR THE BONDS
Ad Valorem Taxes
Bonds Payable from Ad Valorem Property Taxes. The Bonds are general obligations of the City, payable solely from ad valorem property taxes levied and collected pursuant to the Authorization. The City has the power, is obligated and has covenanted to direct the County to levy ad valorem taxes upon all property within the City subject to taxation without limitation of rate or amount (except certain personal property which is taxable at limited rates) for the payment of the Bonds and the interest thereon.
Levy and Collection. Each year, the City Council, so far as is practicable, shall fix such rate for a tax to be levied in the City as will result in revenues which will pay the interest on the Bonds, and provide a sinking or other fund for the payment of the principal of the Bonds as such principal may become due. The City Council shall determine the fiscal year for all of the amounts above set forth, and shall fix the rate of tax to be levied which will raise the amounts of money required by the City for such purposes, and as required by the provisions of the law, the City Council shall certify to the County Auditor of the County (the “County Auditor”) the rate so fixed.
The City shall furnish to the County Auditor a statement in writing containing the following: (a) an estimate of the minimum amount of money required to be raised by taxation during the fiscal year for the payment of the principal of and interest on the Bonds, as will become due before the proceeds of a tax levied at the next general tax levy will be available; and (b) such other items required by the provisions of the Law. The County Auditor shall compute and enter in the County assessment roll the respective sums to be paid as a City tax on the property within the City using the rate or rates of levy as fixed by the City Council and the assessed value on the assessment roll for the property subject to the tax.
The City will levy and the County will collect such ad valorem taxes in such amounts and at such times as is necessary to ensure the timely payment of debt service. Such taxes, when collected, will be deposited into the Debt Service Fund.
City property taxes are assessed and collected by the County in the same manner and at the same time, and in the same installments as other ad valorem taxes on real property, and will have the same priority, become delinquent at the same times and in the same proportionate amounts, and bear the same proportionate penalties and interest after delinquency, as do the other ad valorem taxes on real property.
Annual Tax Rates. The amount of the annual ad valorem tax levied by the County to repay the Bonds will be determined by the relationship between the assessed valuation of taxable property in the City and the amount of debt service due on the Bonds. Fluctuations in the annual debt service on the Bonds and the assessed value of taxable property in the City will cause the annual tax rate to fluctuate.
Economic and other factors beyond the City’s control, such as economic recession, deflation of land values, a relocation out of the City or financial difficulty or bankruptcy by one or more major property taxpayers, or the complete or partial destruction of taxable property caused by, among other eventualities, earthquake, flood or other natural disaster, could cause a reduction in the assessed value within the City and necessitate a corresponding increase in the annual tax rate.
Public Health Emergencies. In recent years, public health authorities have warned of threats posed by outbreaks of disease and other public health threats. On February 11, 2020, the
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3 World Health Organization (“WHO”) announced the official name for the outbreak of the disease known as COVID-19 (“COVID-19”), an upper respiratory tract illness. COVID-19 has since spread across the globe. The COVID-19 outbreak is ongoing, and its duration and severity and its economic effects are uncertain in many respects. Uncertain too are the additional actions, if any, that may be taken by federal and State governmental authorities to contain or mitigate the effects of the outbreak. The ultimate impact of COVID-19 on the City’s operations and finances and the economy, real estate market, development within the City and tax collections is not fully known, and it may be some time before the full adverse impact of the COVID-19 outbreak is known.
Further, there could be future COVID-19 outbreaks or other public health emergencies that could have material adverse effects on the City’s operations and finances.
The COVID-19 pandemic is still ongoing; however, indications are strong that the pandemic is transitioning to its endemic stage though its dynamic nature leads to uncertainties.
There are many variables that will continue to contribute to the economic impact of the COVID- 19 pandemic and the recovery, including the length of time social distancing measures are in place, the effectiveness of State and Federal governments’ relief programs and the timing for the containment and treatment of COVID-19. The ultimate impact of COVID-19 on the City’s operations and finances is not fully known, and it may be some time before the full impact of the COVID-19 pandemic is known. See “FINANCIAL, ECONOMIC AND DEMOGRAPHIC INFORMATION FOR THE CITY OF FOSTER CITY AND SAN MATEO COUNTY – CITY FINANCIAL INFORMATION – Impact of COVID-19” for additional information.
ERAF Shift Legislation. Certain property taxes have been shifted from local government agencies to schools by the State Legislature for deposit in the Education Revenue Augmentation Fund (“ERAF”), a shift that has resulted in diversion of City property taxes since fiscal year 1992-
93. The primary change for the City in property tax receipts is a result of a potential change to the distribution formula used for excess ERAF and property tax in lieu of vehicle license fees, both currently pending evaluation with the County and State. See “CITY FINANCIAL INFORMATION – Proposed Fiscal Year 2023-24 State Budget” in Appendix A to this Official Statement for additional information about the State budget. Changes in the distribution formulas may reduce total property tax receipts by approximately $677,000 in fiscal year 2023-24.
Limited Obligation
The Bonds are payable solely from the proceeds of an ad valorem tax levied by the City, and collected by the County, for the payment of principal and interest on the Bonds. Although the County is obligated to levy and collect the ad valorem tax for the payment of the Bonds, the Bonds are not a debt of the County.
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4 PROPERTY TAXATION
Property Tax Collection Procedures
In California, property which is subject to ad valorem taxes is classified as “secured” or “unsecured.” The “secured roll” is that part of the assessment roll containing state assessed public utilities’ property and property, the taxes on which are a lien on real property sufficient, in the opinion of the county assessor, to secure payment of the taxes. A tax levied on unsecured property does not become a lien against such unsecured property, but may become a lien on certain other property owned by the taxpayer. Every tax which becomes a lien on secured property has priority over all other liens arising pursuant to State law on such secured property, regardless of the time of the creation of the other liens. Secured and unsecured property are entered separately on the assessment roll maintained by the county assessor. The method of collecting delinquent taxes is substantially different for the two classifications of property.
Property taxes on the secured roll are due in two installments, on November 1 and April 1 of each fiscal year. If unpaid, such taxes become delinquent after December 10 and April 10, respectively, and a 10% penalty attaches to any delinquent payment. In addition, property on the secured roll with respect to which taxes are delinquent is declared tax defaulted on or about June 30 of the fiscal year. Such property may thereafter be redeemed by payment of the delinquent taxes and a delinquency penalty, plus a redemption penalty of 1-1/2% per month to the time of redemption. If taxes are unpaid for a period of five years or more, the property is subject to sale by the County.
Property taxes are levied for each fiscal year on taxable real and personal property situated in the taxing jurisdiction as of the preceding January 1. A bill enacted in 1983, SB813 (Statutes of 1983, Chapter 498), however, provided for the supplemental assessment and taxation of property as of the occurrence of a change of ownership or completion of new construction. Thus, this legislation eliminated delays in the realization of increased property taxes from new assessments. As amended, SB813 provided increased revenue to taxing jurisdictions to the extent that supplemental assessments of new construction or changes of ownership occur subsequent to the January 1 lien date and result in increased assessed value.
Property taxes on the unsecured roll are due on the January 1 lien date and become delinquent, if unpaid on the following August 31. A 10% penalty is also attached to delinquent taxes in respect of property on the unsecured roll, and further, an additional penalty of 1-1/2% per month accrues with respect to such taxes beginning the first day of the third month following the delinquency date. The taxing authority has four ways of collecting unsecured personal property taxes: (1) a civil action against the taxpayer; (2) filing a certificate in the office of the county clerk specifying certain facts in order to obtain a judgment lien on certain property of the taxpayer; (3) filing a certificate of delinquency for record in the county recorder’s office, in order to obtain a lien on certain property of the taxpayer; and (4) seizure and sale of personal property, improvements or possessory interests belonging or assessed to the assessee. The exclusive means of enforcing the payment of delinquent taxes in respect of property on the secured roll is the sale of the property securing the taxes for the amount of taxes which are delinquent.
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5 Taxation of State-Assessed Utility Property
The State Constitution provides that most classes of property owned or used by regulated utilities are assessed by the State Board of Equalization (“SBE”) and taxed locally. Property valued by the SBE as an operating unit in a primary function of the utility taxpayer is known as “unitary property,” a concept designed to permit assessment of the utility as a going concern rather than assessment of each individual element of real and personal property owned by the utility taxpayer. State-assessed unitary and “operating nonunitary” property (which excludes nonunitary property of regulated railways) is allocated to the counties based on the situs of the various components of the unitary property. Except for unitary property of regulated railways and certain other excepted property, all unitary and operating nonunitary property is taxed at special county-wide rates and tax proceeds are distributed to taxing jurisdictions according to statutory formulae generally based on the distribution of taxes in the prior year.
Assessed Valuation
Assessed Valuation History. The following is a table summarizing the historical assessed valuation of the taxable property in the City.
Table 1
CITY OF FOSTER CITY
Assessed Valuation of All Taxable Property
Fiscal Years 2010-11 to 2022-23
Fiscal Year
Local
Secured(1) Utility Unsecured Total
Percent
Change
2010-11 $6,389,667,764 $0 $234,474,145 $6,624,141,909 --% 2011-12 6,433,410,118 0 226,067,249 6,659,477,367 0.5
2012-13 6,626,005,985 0 250,130,330 6,876,136,315 3.3
2013-14 7,194,315,878 0 321,146,194 7,515,462,072 9.3
2014-15 7,565,650,168 0 248,396,208 7,814,046,376 4.0
2015-16 8,340,748,666 0 237,511,041 8,578,259,707 9.8
2016-17 9,160,702,418 0 206,783,986 9,367,486,404 9.2
2017-18 9,952,381,987 0 200,383,775 10,152,765,762 8.4
2018-19 10,712,449,293 0 225,162,754 10,937,612,047 7.7 2019-20 11,765,308,526 0 280,862,898 12,046,171,424 10.1 2020-21 12,618,630,065 0 265,823,315 12,884,453,380 7.0 2021-22 12,877,196,711 0 297,109,538 13,174,306,249 2.2 2022-23 13,568,789,311 0 292,887,917 13,861,677,228 5.2 (1) Amounts are net of homeowners’ exemption.
Source: California Municipal Statistics, Inc.
Factors Relating to Increases/Decreases in Assessed Value. As indicated in the previous table, assessed valuations are subject to change in each year. Increases or decreases in assessed valuation result from a variety of factors including but not limited to general economic conditions, supply and demand for real property in the area, government regulations such as zoning, and natural disasters such as earthquakes, fires, floods and droughts.
Wildfires. Wildfires have occurred in recent years in different regions of the State, the most destructive of which have burned thousands of acres and destroyed thousands of homes and structures. Many of these fires have originated in wildlands adjacent to urban areas. Although the recent wildfires have not included territory within the City’s boundaries, the City is vulnerable to a wind-driven fire starting along the City’s eastern border.
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6 The City cannot predict or make any representations regarding the effects that natural disasters including but not limited to earthquakes, fires, floods, droughts and related conditions may have on the value of taxable property within the City, or to what extent the effects said disasters might have had on economic activity in the City or throughout the State. See also “SECURITY FOR THE CERTIFICATES – COVID-19 Global Pandemic.” Property Tax Base Transfer Ballot Measure. On November 3, 2020, State voters approved a constitutional amendment entitled Property Tax Transfers, Exemptions and Revenue for Wildfire Agencies and Counties Amendment (“Proposition 19”), which will: (i) expand special rules that give property tax savings to homeowners that are over the age of 55, severely disabled, or whose property has been impacted by a natural disaster or contamination, when they buy a different home; (ii) narrow existing special rules for inherited properties; and (iii) broaden the scope of legal entity ownership changes that trigger reassessment of properties. The City cannot make any assurance as to what effect the implementation of Proposition 19 will have on assessed valuation of real property in the City.
Assessed Valuation by Land Use. The following table shows the land use of parcels in the City, according to assessed valuation. As shown, the majority of land in the City is used for residential purposes.
Table 2
CITY OF FOSTER CITY
Assessed Valuation and Parcels by Land Use
Fiscal Year 2022-23
2022-23 % of No. of % of
Non-Residential: Assessed Valuation (1) Total Parcels Total Commercial/Office $2,197,878,035 16.20% 96 1.03%
Hotel 79,555,730 0.59 3 0.03
Industrial 2,209,509,760 16.28 48 0.52
Government/Social/Institutional 75,737,196 0.56 43 0.46 Miscellaneous 1,269,734 0.01 64 0.69
Subtotal Non-Residential $4,563,950,455 33.64% 254 2.73% Residential:
Single Family Residence $6,052,316,014 44.60% 6,725 72.33% Condominium/Townhouse 1,556,985,771 11.47 2,184 23.49
2-4 Residential Units 17,610,666 0.13 19 0.20
5+ Residential Units/Apartments 1,302,981,354 9.60 36 0.39 Subtotal Residential $8,929,893,805 65.81% 8,964 96.41% Vacant$74,945,051 0.55% 80 0.86%
Total $13,568,789,311 100.00% 9,298 100.00%
(1) Local Secured Assessed Valuation, excluding tax-exempt property.
Source: California Municipal Statistics, Inc.
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7 Assessed Valuation of Single-Family Residential Parcels. The following table shows a breakdown of the assessed valuations of improved single-family residential parcels in the City, according to assessed valuation.
Table 3
CITY OF FOSTER CITY
Per Parcel 2022-23 Assessed Valuation
of Single-Family Homes
No. of 2022-23 Average Median
Parcels Assessed Valuation Assessed Valuation Assessed Valuation Single Family Residential6,725 $6,052,316,014 $899,973 $793,480 2022-23 No. of % of Cumulative Total % of Cumulative
Assessed Valuation Parcels (1) Total % of Total Valuation Total % of Total $0 - $99,999 27 0.401% 0.401% $ 2,242,428 0.037% 0.037% $100,000 - $199,999 697 10.364 10.766 100,405,695 1.659 1.696 $200,000 - $299,999 328 4.877 15.643 82,992,911 1.371 3.067 $300,000 - $399,999 462 6.870 22.513 161,897,385 2.675 5.742 $400,000 - $499,999 508 7.554 30.067 229,039,047 3.784 9.527 $500,000 - $599,999 517 7.688 37.755 283,433,996 4.683 14.210 $600,000 - $699,999 436 6.483 44.238 283,482,141 4.684 18.893 $700,000 - $799,999 418 6.216 50.454 314,212,420 5.192 24.085 $800,000 - $899,999 383 5.695 56.149 325,730,216 5.382 29.467 $900,000 - $999,999 407 6.052 62.201 385,368,321 6.367 35.834 $1,000,000 - $1,099,999 351 5.219 67.420 369,021,157 6.097 41.931 $1,100,000 - $1,199,999 306 4.550 71.970 351,866,040 5.814 47.745 $1,200,000 - $1,299,999 265 3.941 75.911 330,737,042 5.465 53.210 $1,300,000 - $1,399,999 287 4.268 80.178 387,133,952 6.396 59.606 $1,400,000 - $1,499,999 221 3.286 83.465 320,990,037 5.304 64.910 $1,500,000 - $1,599,999 221 3.286 86.751 341,627,505 5.645 70.554 $1,600,000 - $1,699,999 181 2.691 89.442 298,134,566 4.926 75.480 $1,700,000 - $1,799,999 154 2.290 91.732 269,346,807 4.450 79.931 $1,800,000 - $1,899,999 97 1.442 93.175 179,266,642 2.962 82.893 $1,900,000 - $1,999,999 102 1.517 94.691 198,150,889 3.274 86.167 $2,000,000 and greater 357 5.309 100.000 837,236,817 13.833 100.000 6,725 100.000% $6,052,316,014 100.000%
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(1) Improved single family residential parcels. Excludes condominiums and parcels with multiple family units.
Source: California Municipal Statistics, Inc.
Alternative Method of Tax Apportionment - Teeter Plan
General. The Board of Supervisors of the County has adopted the Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds (the “Teeter Plan”), as provided for in Section 4701 et seq. of the California Revenue and Taxation Code. Under the Teeter Plan, each entity levying property taxes in the County may draw on the amount of uncollected secured taxes credited to its fund, in the same manner as if the amount credited had been collected. The City participates in the Teeter Plan, and thus receives 100% of secured property taxes levied in exchange for foregoing any interest and penalties collected on delinquent taxes. However, under the statute creating the Teeter Plan, the Board of Supervisors could under certain circumstances terminate the Teeter Plan in its entirety and, in addition, the Board of Supervisors could terminate the Teeter Plan if the delinquency rate for all ad valorem property taxes levied within the City in any year exceeds 3%. In the event that the Teeter Plan were terminated, the amount of the property taxes received by the City would depend upon the collections of the ad valorem property taxes and delinquency rates experienced with respect to the parcels within the City.
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8 Future Participation in the Teeter Plan. There can be no assurance that the County will always maintain the Teeter Plan or will have sufficient funds available to distribute the full amount of the City’s share of property tax collections to the City. The ability of the County to maintain the Teeter Plan may depend on its financial resources and may be affected by future property tax delinquencies. It may also be affected by State and County action. Property tax delinquencies may be impacted by economic and other factors beyond the City’s or the County’s control, including the ability or willingness of property owners to pay property taxes during an economic recession or depression. An economic recession or depression could be caused by many factors outside the control of the City, including high interest rates, reduced consumer confidence, reduced real wages or reduced economic activity as a result of the spread of COVID-19 or other pandemic or natural or manmade disaster.
However, notwithstanding any possible future change to or discontinuation of the Teeter Plan, State law requires the City to levy ad valorem property taxes sufficient to pay the Bonds when due.
Appeals of Assessed Value
Under California law, property owners may apply for a reduction of their property tax assessment by filing a written application, in form prescribed by the State Board of Equalization (the “SBE”), with the appropriate county board of equalization or assessment appeals board. The County Assessor may independently reduce assessed values as well based upon the above factors or reductions in the fair market value of the taxable property. In most cases, an appeal is filed because the applicant believes that present market conditions (such as residential home prices) cause the property to be worth less than its current assessed value. Any reduction in the assessment ultimately granted as a result of such appeal applies to the year for which application is made and during which the written application was filed. A second type of assessment appeal involves a challenge to the base year value of an assessed property. Appeals for reduction in the base year value of an assessment, if successful, reduce the assessment for the year in which the appeal is taken and prospectively thereafter. The base year is determined by the completion date of new construction or the date of change of ownership. Any base year appeal must be made within four years of the change of ownership or new construction date.
In addition to the above-described taxpayer appeals, county assessors may independently reduce assessed valuations based on changes in the market value of property, or for other factors such as the complete or partial destruction of taxable property caused by natural or man-made disasters such as earthquakes, floods, drought, fire, or toxic contamination pursuant to relevant provisions of the State Constitution.
Whether resulting from taxpayer appeals or county assessor reductions, adjustments to assessed value are subject to yearly reappraisals by the county assessor and may be adjusted back to their original values when real estate market conditions improve. Once property has regained its prior assessed value, adjusted for inflation, it once again is subject to the annual inflationary growth rate factor allowed under Article XIIIA. See “CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING CITY REVENUES AND APPROPRIATIONS” herein.
No assurance can be given that property tax appeals currently pending or in the future, actions by the County assessor, or other factors in the future will not significantly reduce the assessed valuation of property within the City.
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9 Assembly Bill 102. On June 27, 2017, the Governor signed into law Assembly Bill 102 (“AB 102”). AB 102 restructures the functions of the SBE and creates two new separate agencies:
(i) the California Department of Tax and Fee Administration, and (ii) the Office of Tax Appeals.
Under AB 102, the California Department of Tax and Fee Administration will take over programs previously in the SBE Property Tax Department, such as the Tax Area Services Section, which is responsible for maintaining all property tax-rate area maps and for maintaining special revenue district boundaries. Under AB 102, the SBE continues to perform the duties assigned by the State Constitution related to property taxes, however, beginning January 1, 2018, the SBE only hears appeals related to the programs that it constitutionally administers, and the Office of Tax Appeals will hear tax appeals on all other taxes and fee matters, such as sales and use tax and other special taxes and fees. AB 102 obligates the Office of Tax Appeals to adopt regulations as necessary to carry out its duties, powers, and responsibilities.
Tax Rates
The table below shows historical property tax rates within the City:
Table 5
CITY OF FOSTER CITY
TYPICAL TAX RATE PER $100 ASSESSED VALUATION
(TRAs 20-003, 20-006, 20-009 and 20-013)(1)
2018-19 2019-20 2020-21 2021-22 2022-23
General Tax Rate $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 City of Foster City -- -- 0.0360 0.0310 0.0290
San Mateo-Foster City School District 0.0530 0.0437 0.0462 0.0665 0.0613 San Mateo Union High School District 0.0407 0.0385 0.0449 0.0488 0.0504 San Mateo Community College District 0.0175 0.0266 0.0213 0.0227 0.0193 Total Tax Rate $1.1112 $1.1088 $1.1484 $1.1690 $1.1600
(1) 2022-23 assessed valuation in TRAs shown is $12,443,858,652, which represents 89.77% of the City’s total assessed valuation.
Source: California Municipal Statistics, Inc.
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10 Major Taxpayers
The following table shows the twenty largest taxpayers in the City as determined by their secured assessed valuations in 2022-23. A large concentration of ownership in a single individual or entity results in a greater amount of tax collections which are dependent upon that property owner’s ability or willingness to pay property taxes.
Table 6
CITY OF FOSTER CITY
Largest 2022-23 Local Secured Taxpayers
2022-23 % of
Property Owner Primary Land Use Assessed Valuation Total (1)
1. Gilead Sciences Inc. Industrial $2,560,976,485 18.87%
2. BMR Lincoln Center LP Industrial 369,819,236 2.73
3. Hudson Metro Center LLC, Lessee Office Building 359,407,669 2.65
4. Visa USA Inc. Office Building 242,601,156 1.79
5. TR Parkside Towers Corp. Office Building 236,807,528 1.75
6. BEX FMCA LLC Apartments 202,720,103 1.49
7. AREOF VI US Pilgrim Triton LLC Apartments 172,131,498 1.27
8. SF Hillsdale 20102012 LLC Apartments 160,179,128 1.18
9. CV Triton LLC Apartments 119,021,963 0.88
10. Northwestern Mutual Life Insurance Co. Apartments 96,099,965 0.71
11. BRE-BMR 4000 & 4100 East 3rd LLC Office Building 84,670,618 0.62
12. PWM Residential Venture LLC Apartments 75,139,550 0.55
13. Foster City Propco LP Assisted Living 72,448,262 0.53
14. Miramar Apartments Apartments 71,660,843 0.53
15. 1149 Chess Drive LP Industrial 70,691,755 0.52
16. St. Paul Fire & Marine Insurance Co. Office Building 65,573,526 0.48
17. Summerhill Pilgrim Triton LLC Apartments 60,221,752 0.44
18. PREG SCG LP Apartments 54,866,857 0.40
19. BMR Lincoln Centre II LP Industrial 47,184,988 0.35
20. DWF IV Century Plaza LLC Office Building 45,115,994 0.33 $5,167,338,876 38.08%
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(1) 2022-23 Local Secured Assessed Valuation: $13,568,789,311.
Source: California Municipal Statistics, Inc.
Concentration of Ownership. The top twenty taxpayers in the City account for 38.08% of the assessed valuation in the City, with the top secured taxpayer, Gilead Sciences Inc. (“Gilead”), accounting for approximately 18.87% of the City’s assessed valuation, with an assessed valuation of $2,560,976,485 for fiscal year 2022-23. Non-payment of property taxes by a large owner in the City could reduce the City’s local property tax receipts. Gilead is a biopharmaceutical company headquartered in the City, with operations in more than 35 countries. See also “APPENDIX A –
FINANCIAL, ECONOMIC AND DEMOGRAPHIC INFORMATION FOR THE CITY OF FOSTER CITY AND SAN MATEO COUNTY - CITY FINANCIAL INFORMATION - Property Taxes.” Direct and Overlapping Debt
Set forth on the following page is a direct and overlapping debt report (the “Debt Report”) prepared by California Municipal Statistics, Inc. as of May 1, 2023. The Debt Report is included for general information purposes only. The City has not reviewed the Debt Report for completeness or accuracy and makes no representation in connection therewith.
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11 The Debt Report generally includes long-term obligations sold in the public credit markets by public agencies whose boundaries overlap the boundaries of the City in whole or in part. Such long-term obligations generally are not payable from revenues of the City (except as indicated) nor are they necessarily obligations secured by land within the City. In many cases long-term obligations issued by a public agency are payable only from the general fund or other revenues of such public agency.
The table shows the percentage of each overlapping entity’s assessed value located within the boundaries of the City. The table also shows the corresponding portion of the overlapping entity’s existing debt payable from property taxes levied within the City. The total amount of debt for each overlapping entity is not given in the table.
The first column in the table names each public agency which has outstanding debt as of the date of the report and whose territory overlaps the City in whole or in part. The second column shows the percentage of each overlapping agency’s assessed value located within the boundaries of the City. This percentage, multiplied by the total outstanding debt of each overlapping agency (which is not shown in the table) produces the amount shown in the third column, which is the apportionment of each overlapping agency’s outstanding debt to taxable property in the City.
Table 7
CITY OF FOSTER CITY
STATEMENT OF DIRECT AND OVERLAPPING BONDED DEBT
(As of May 1, 2023)
2022-23 Assessed Valuation: $13,861,677,228
DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable Debt 5/1/23 San Mateo Community College District 4.806% $ 34,066,736 San Mateo Union High School District 14.244 90,812,840
Sequoia Union High School District 0.009 40,947
San Mateo-Foster City School District 28.099 146,804,202 Belmont-Redwood Shores School District 0.062 44,183
Midpeninsula Regional Open Space District 0.003 2,480
City of Foster City 100.000 77,165,000 (1)
TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT $348,936,388 OVERLAPPING GENERAL FUND DEBT:
San Mateo County General Fund Obligations 4.806 $28,793,548 San Mateo County Board of Education Certificates of Participation 4.806 311,909 Midpeninsula Regional Park District General Fund Obligations 0.003 2,747 San Mateo County Mosquito and Vector Control District General Fund Obligations 4.806 173,873 TOTAL OVERLAPPING GENERAL FUND DEBT $29,282,077
COMBINED TOTAL DEBT $378,218,465 (2)
Ratios to 2022-23 Assessed Valuation:
Direct Debt ($77,165,000)......................................................0.56% Total Direct and Overlapping Tax and Assessment Debt .......2.52% Combined Total Debt ..............................................................2.73% (1) Excludes the Bonds offered for sale in this Official Statement. (2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations.
Source: California Municipal Statistics, Inc.
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12 CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING CITY REVENUES
AND APPROPRIATIONS
Principal of and interest on the Bonds are payable from the proceeds of an ad valorem tax levied by the City for the payment thereof. See “THE BONDS” and “SECURITY FOR THE BONDS” above. Articles XIIIA, XIIIB, XIIIC and XIIID of the State Constitution, Propositions 62, 111, and 218 and 1A, and certain other provisions of law discussed below are included in this section to describe the potential effect of these Constitutional and statutory measures on the ability of the City to levy taxes and spend tax proceeds for operating and other purposes, and it should not be inferred from the inclusion of such materials that these laws impose any limitation on the ability of the City to levy taxes for payment of the Bonds. The tax levied by the City for payment of the Bonds was approved by the City’s voters in compliance with Article XIIIA and all applicable laws.
Article XIIIA of the State Constitution
On June 6, 1978, California voters approved Proposition 13, which added Article XIIIA to the State Constitution. Article XIIIA, as amended, limits the amount of any ad valorem tax on real property to one percent of the full cash value thereof, except that additional ad valorem taxes may be levied to pay debt service (i) on indebtedness approved by the voters prior to July 1, 1978, (ii) on bonded indebtedness approved by a two-thirds vote on or after July 1, 1978, for the acquisition or improvement of real property or (iii) bonded indebtedness incurred by a school district, community college district or county office of education for the construction, reconstruction, rehabilitation or replacement of school facilities, including the furnishing and equipping of school facilities or the acquisition or lease of real property for school facilities, approved by 55 percent of the voters voting on the proposition. Article XIIIA defines full cash value to mean “the county assessor’s valuation of real property as shown on the 1975-76 tax bill under “full cash value,” or thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment.” This full cash value may be increased at a rate not to exceed two percent per year to account for inflation.
Article XIIIA has subsequently been amended to permit reduction of the “full cash value” base in the event of declining property values caused by damage, destruction or other factors, to provide that there would be no increase in the “full cash value” base in the event of reconstruction of property damaged or destroyed in a disaster, and in other minor or technical ways.
Legislation Implementing Article XIIIA
Legislation has been enacted and amended a number of times since 1978 to implement Article XIIIA. Under current law, local agencies are no longer permitted to levy directly any property tax (except to pay voter-approved indebtedness). The one percent property tax is automatically levied by the County and distributed according to a formula among taxing agencies.
The formula apportions the tax roughly in proportion to the relative shares of taxes levied prior to 1989.
Increases of assessed valuation resulting from reappraisals of property due to new construction, change in ownership or from the two percent annual adjustment are allocated among the various jurisdictions in the “taxing area” based upon their respective “situs.” Any such allocation made to a local agency continues as part of its allocation in future years.
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13 All taxable property is shown at full market value on the tax rolls. Consequently, the tax rate is expressed as $1 per $100 of taxable value. All taxable property value included in this Official Statement is shown at 100 percent of market value (unless noted differently) and all tax rates reflect the $1 per $100 of taxable value.
Article XIIIB of the State Constitution
In addition to the limits Article XIIIA imposes on property taxes that may be collected by local governments, certain other revenues of the State and most local governments are subject to an annual “appropriations limit” imposed by Article XIIIB which effectively limits the amount of such revenues those entities are permitted to spend. Article XIIIB, approved by the voters in June 1979, was modified substantially by Proposition 111 in 1990. The appropriations limit of each government entity applies to “proceeds of taxes,” which consist of tax revenues, State subventions and certain other funds, including proceeds from regulatory licenses, user charges or other fees to the extent that such proceeds exceed “the cost reasonably borne by such entity in providing the regulation, product or service.” “Proceeds of taxes” excludes tax refunds and some benefit payments such as unemployment insurance. No limit is imposed on the appropriation of funds which are not “proceeds of taxes,” such as reasonable user charges or fees, and certain other non-tax funds. Article XIIIB also does not limit appropriation of local revenues to pay debt service on Bonds existing or authorized by January 1, 1979, or subsequently authorized by the voters, appropriations required to comply with mandates of courts or the federal government, appropriations for qualified capital outlay projects, and appropriation by the State of revenues derived from any increase in gasoline taxes and motor vehicle weight fees above January 1, 1990, levels. The appropriations limit may also be exceeded in case of emergency; however, the appropriations limit for the next three years following such emergency appropriation must be reduced to the extent by which it was exceeded, unless the emergency arises from civil disturbance or natural disaster declared by the Governor, and the expenditure is approved by two-thirds of the legislative body of the local government.
The State and each local government entity has its own appropriations limit. Each year, the limit is adjusted to allow for changes, if any, in the cost of living, the population of the jurisdiction, and any transfer to or from another government entity of financial responsibility for providing services. Proposition 111 requires that each agency’s actual appropriations be tested against its limit every two years.
If the aggregate “proceeds of taxes” for the preceding two-year period exceeds the aggregate limit, the excess must be returned to the agency’s taxpayers through tax rate or fee reductions over the following two years.
The City has never exceeded its appropriations limit. Because the issuance of the Bonds has been approved by the voters, the tax levy that is required to pay debt service on the Bonds is not subject to the limitations of Article XIIIB.
Articles XIIIC and XIIID of the State Constitution
On November 5, 1996, the voters of the State approved Proposition 218, known as the “Right to Vote on Taxes Act.” Proposition 218 adds Articles XIIIC and XIIID to the California Constitution and contains a number of interrelated provisions affecting the ability of the City to levy and collect both existing and future taxes, assessments, fees and charges. The interpretation and application of Proposition 218 will ultimately be determined by the courts with respect to a
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14 number of the matters discussed below, and it is not possible at this time to predict with certainty the outcome of such determination.
Article XIIIC requires that all new local taxes be submitted to the electorate before they become effective. Taxes for general governmental purposes of the City require a majority vote and taxes for specific purposes, even if deposited in the City’s General Fund, require a two-thirds vote. The voter approval requirements of Proposition 218 reduce the flexibility of the City to raise revenues for the General Fund, and no assurance can be given that the City will be able to impose, extend or increase such taxes in the future to meet increased expenditure needs.
Article XIIID also adds several provisions making it generally more difficult for local agencies to levy and maintain property-related fees, charges, and assessments for municipal services and programs. These provisions include, among other things, (i) a prohibition against assessments which exceed the reasonable cost of the proportional special benefit conferred on a parcel, (ii) a requirement that assessments must confer a “special benefit,” as defined in Article XIIID, over and above any general benefits conferred, (iii) a majority protest procedure for assessments which involves the mailing of notice and a ballot to the record owner of each affected parcel, a public hearing and the tabulation of ballots weighted according to the proportional financial obligation of the affected party, and (iv) a prohibition against fees and charges which are used for general governmental services, including police, fire or library services, where the service is available to the public at large in substantially the same manner as it is to property owners. If the City is unable to continue to collect these revenues, the services and programs funded with these revenues would have to be curtailed and/or the City’s General Fund might have to be used to support them. The City is unable to predict whether or not in the future it will be able to continue all existing services and programs funded by the fees, charges and assessments in light of Proposition 218 or, if these services and programs are continued, which amounts (if any) would be used from the City’s General Fund to continue to support these activities.
Article XIIIC also removes limitations on the initiative power in matters of reducing or repealing local taxes, assessments, fees or charges. No assurance can be given that the voters of the City will not, in the future, approve an initiative or initiatives which reduce or repeal local taxes, assessments, fees or charges currently comprising a substantial part of the City’s General Fund.
Proposition 62
Proposition 62 was adopted by the voters at the November 4, 1986, general election and (a) requires that any new or higher taxes for general governmental purposes imposed by local governmental entities such as the City be approved by a two-thirds vote of the governmental entity’s legislative body and by a majority vote of the voters of the governmental entity voting in an election on the tax, (b) requires that any special tax (defined as taxes levied for other than general governmental purposes) imposed by a local governmental entity be approved by a two- thirds vote of the voters of the governmental entity voting in an election on the tax, (c) restricts the use of revenues from a special tax to the purposes or for the service for which the special tax was imposed, (d) prohibits the imposition of ad valorem taxes on real property by local governmental entities except as permitted by Article XIIIA, (e) prohibits the imposition of transaction taxes and sales taxes on the sale of real property by local governmental entities, and (f) requires that any tax imposed by a local governmental entity on or after August 1, 1985, be ratified by a majority vote of the voters voting in an election on the tax within two years of the adoption of the initiative or be terminated by November 15, 1988.
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15 California appellate court cases have overturned the provisions of Proposition 62 pertaining to the imposition of taxes for general government purposes. However, the California Supreme Court upheld Proposition 62 in its decision on August 28, 1995, in Fresno County Transportation Authority v. Guardino. This decision reaffirmed the constitutionality of Proposition 62. Certain matters regarding Proposition 62 were not addressed in the Supreme Court’s decision, such as what remedies exist for taxpayers subject to a tax not in compliance with Proposition 62, and whether the decision applies to charter cities. The City has not experienced any substantive adverse financial impact as a result of the passage of this initiative.
Proposition 1A
On November 2, 2004, California voters approved Proposition 1A, which amends the State constitution to significantly reduce the State’s authority over major local government revenue sources. Under Proposition 1A, the State cannot (i) reduce local sales tax rates or alter the method of allocating the revenue generated by such taxes, (ii) shift property taxes from local governments to schools or community colleges, (iii) change how property tax revenues are shared among local governments without two-thirds approval of both houses of the State Legislature or (iv) decrease Vehicle License Fee revenues without providing local governments with equal replacement funding.
Proposition 22
Proposition 22, entitled “The Local Taxpayer, Public Safety and Transportation Protection Act,” was approved by the voters of the State in November 2010. Proposition 22 amended the state Constitution to eliminate or reduce the State’s authority to (i) temporarily shift property taxes from cities, counties and special districts to schools, (ii) use vehicle license fee revenues to reimburse local governments for State-mandated costs (the State will have to use other revenues to reimburse local governments), (iii) redirect property tax increment from redevelopment agencies to any other local government, (iv) use State fuel tax revenues to pay debt service on State transportation bonds, or (v) borrow or change the distribution of State fuel tax revenues.
This Proposition was intended to, among other things, stabilize local government revenue sources by restricting the State’s control over local property taxes.
Possible Future Initiatives
Articles XIIIA, XIIIB, XIIIC and XIIID and Propositions 62, 111, 218, 1A and 22 were each adopted as measures that qualified for the ballot pursuant to the State’s initiative process. From time to time other initiative measures could be adopted, further affecting revenues of the City or the City’s ability to expend revenues. The nature and impact of these measures cannot be anticipated by the City.
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16 LEGAL MATTERS
Tax Exemption
Federal Tax Status. In the opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, subject, however to the qualifications set forth below, under existing law, the interest on the Bonds is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax. Interest on the Bonds may be subject to the corporate alternative minimum tax. The Bonds are "qualified tax-exempt obligations" within the meaning of section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Tax Code"), such that, in the case of certain financial institutions (within the meaning of section 265(b)(5) of the Tax Code), a deduction for federal income tax purposes is allowed for 80% of that portion of such financial institution's interest expense allocable to interest payable on the Bonds.
The opinions set forth in the preceding paragraph are subject to the condition that the City comply with all requirements of the Internal Revenue Code of 1986, as amended (the "Tax Code") that must be satisfied subsequent to the issuance of the Bonds in order that the interest thereon be, and continue to be, excludable from gross income for federal income tax purposes, and in order for the Bonds to be “qualified tax-exempt obligations” within the meaning of Section 265(b)(3) of the Tax Code. The City has made certain representations and covenants in order to comply with each such requirement. Inaccuracy of those representations, or failure to comply with certain of those covenants, may cause the inclusion of such interest in gross income for federal income tax purposes, which may be retroactive to the date of issuance of the Bonds, or may cause the Bonds to not be “qualified tax-exempt obligations” within the meaning of Section 265(b)(3) of the Tax Code.
Tax Treatment of Original Issue Discount and Premium. If the initial offering price to the public at which a Bond is sold is less than the amount payable at maturity thereof, then such difference constitutes "original issue discount" for purposes of federal income taxes and State of California personal income taxes. If the initial offering price to the public at which a Bond is sold is greater than the amount payable at maturity thereof, then such difference constitutes "bond premium" for purposes of federal income taxes and State of California personal income taxes.
Under the Tax Code, original issue discount is treated as interest excluded from federal gross income and exempt from State of California personal income taxes to the extent properly allocable to each owner thereof subject to the limitations described in the first paragraph of this section. The original issue discount accrues over the term to maturity of the Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding dates). The amount of original issue discount accruing during each period is added to the adjusted basis of such Bonds to determine taxable gain upon disposition (including sale, redemption, or payment on maturity) of such Bond. The Tax Code contains certain provisions relating to the accrual of original issue discount in the case of purchasers of the Bonds who purchase the Bonds after the initial offering of a substantial amount of such maturity. Owners of such Bonds should consult their own tax advisors with respect to the tax consequences of ownership of Bonds with original issue discount, including the treatment of purchasers who do not purchase in the original offering to the public at the first price at which a substantial amount of such Bonds is sold to the public.
Under the Tax Code, bond premium is amortized on an annual basis over the term of the Bond (said term being the shorter of the Bond's maturity date or its call date). The amount of bond
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17 premium amortized each year reduces the adjusted basis of the owner of the Bond for purposes of determining taxable gain or loss upon disposition. The amount of bond premium on a Bond is amortized each year over the term to maturity of the Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding dates). Amortized Bond premium is not deductible for federal income tax purposes.
Owners of premium Bonds, including purchasers who do not purchase in the original offering, should consult their own tax advisors with respect to State of California personal income tax and federal income tax consequences of owning such Bonds.
California Tax Status. In the further opinion of Bond Counsel, interest on the Bonds is exempt from California personal income taxes.
Other Tax Considerations. Current and future legislative proposals, if enacted into law, clarification of the Tax Code or court decisions may cause interest on the Bonds to be subject, directly or indirectly, to federal income taxation or to be subject to or exempted from state income taxation, or cause the Bonds to not be “qualified tax-exempt obligations,” or otherwise prevent beneficial owners from realizing the full current benefit of the tax status of such interest. The introduction or enactment of any such legislative proposals, clarification of the Tax Code or court decisions may also affect the market price for, or marketability of, the Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether, if enacted, such legislation would apply to bonds issued prior to enactment.
The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of such opinion, and Bond Counsel has expressed no opinion with respect to any proposed legislation or as to the tax treatment of interest on the Bonds, or as to the consequences of owning or receiving interest on the Bonds, as of any future date. Prospective purchasers of the Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel expresses no opinion.
Owners of the Bonds should also be aware that the ownership or disposition of, or the accrual or receipt of interest on, the Bonds may have federal or state tax consequences other than as described above. Other than as expressly described above, Bond Counsel expresses no opinion regarding other federal or state tax consequences arising with respect to the Bonds, the ownership, sale or disposition of the Bonds, or the amount, accrual or receipt of interest on the Bonds.
A copy of the proposed form of opinion of Bond Counsel for the Bonds is attached hereto as APPENDIX C.
Continuing Disclosure
The City will covenant for the benefit of owners of the Bonds to provide to the Electronic Municipal Market Access System (“EMMA System”) certain financial information and operating data relating to the City by not later than April 1 after the end of each fiscal year of the City (currently June 30th), commencing not later than April 1, 2024 with the report for the 2022-23 fiscal year (the “Annual Report”), and to provide notices of the occurrence of certain listed events.
The specific nature of the information to be contained in the Annual Report or the notices of listed events is summarized in “APPENDIX D – FORM OF CONTINUING DISCLOSURE CERTIFICATE.” These covenants have been made in order to assist the Purchaser in complying with the Rule. The Paying Agent has no obligation to enforce the undertakings of the City in the
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18 Continuing Disclosure Certificate, and a failure by the City to provide any information required thereunder shall not constitute an Event of Default under the Paying Agency Agreement or the Resolution.
During the previous five year period, the City failed to timely financial notice of the incurrence of a financial obligation. The City has retained Urban Futures, Inc., as dissemination agent for its continuing disclosure undertakings and the undertakings of the Estero Municipal Improvement Corporation, including the undertaking to be entered into for the Bonds.
Absence of Material Litigation
No litigation is pending or threatened concerning the validity of the Bonds, and a certificate to that effect will be furnished to the purchasers at the time of the original delivery of the Bonds.
The City is not aware of any litigation pending or threatened questioning the political existence of the City or contesting the City’s ability to receive ad valorem taxes or to collect other revenues or contesting the City’s ability to issue and repay the Bonds.
RATING
Upon issuance of the Bonds, Moody’s will assign the Bonds a rating of “___.” The City has furnished to the rating agency information and material which has not been included in this Official Statement. Generally, rating agency base their ratings on information and material so furnished and on investigations, studies and assumptions made by the rating agency.
The rating reflects only the view of such organization and an explanation of the significance of such rating may be obtained from the rating agency.
There is no assurance that the rating will continue for any given period of time or that they will not be revised downward or withdrawn entirely by such rating agency, if, in the judgment of such rating agency, circumstances so warrant. Any such downward revision or withdrawal of such rating may have an adverse effect on the market price of the Bonds.
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19 MUNICIPAL ADVISOR
The City has retained William Euphrat Municipal Finance, Inc., San Francisco, California, as its municipal advisor (the “Municipal Advisor”) in connection with the preparation of this Official Statement and with respect to the issuance of the Bonds. The Municipal Advisor is not obligated to undertake, and have not undertaken to make, an independent verification or assume responsibility for the accuracy, completeness, or fairness of the information contained in this Official Statement. The Municipal Advisor is an independent registered municipal advisory firm and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities. The Municipal Advisor’s compensation is contingent upon the delivery of the Bonds.
UNDERWRITING
Purchase of the Bonds. Under the terms of a competitive bid, _____________ (the “Purchaser”) has agreed to purchase the Bonds at a price of $__________ (which is equal to the aggregate principal amount of the Bonds ($_________), plus a [net] original issue premium of $________, less a Purchaser’s discount of $________). The Purchaser will purchase all of the Bonds if any are purchased, the obligation to make such purchase being subject to certain terms and conditions set forth in the “Official Notice of Sale,” including the approval of certain legal matters by counsel and certain other conditions.
Offering of the Bonds. The Purchaser intends to offer the Bonds to the public at the offering prices set forth on the inside cover page of this Official Statement. The Purchaser may offer and sell to certain dealers and others at a price lower than the offering prices stated on the inside cover page hereof. The offering prices may be changed from time to time by the Purchaser.
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20 EXECUTION
The execution of this Official Statement and its delivery have been approved by the City Council.
CITY OF FOSTER CITY
By:
City Manager
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APPENDIX A
FINANCIAL, ECONOMIC AND DEMOGRAPHIC INFORMATION
FOR THE CITY OF FOSTER CITY AND SAN MATEO COUNTY
Introduction
The Estero Municipal Improvement District (the “District”) was created by the California State Legislature in 1960 as a general-purpose district with municipal power, including the power to issue municipal bonds. The Board of Directors of the District was created and issued over $80 million in bonds to provide the infrastructure for a new, master-planned community, which was to be built on what then were a dairy farm and salt ponds adjacent to the San Francisco Bay. The bond proceeds were used to fill and reclaim the land and to finance construction of a man-made lagoon for storm drainage and recreation, a water system, a sewer system, a street system that included roads, bridges and streetlights, a parks system, and a fire station. The first residents of this new community, known as “Foster City,” moved into their homes in 1964.
The City of Foster City (the “City”), a general law city located in San Mateo County “(the “County”), was incorporated on April 27, 1971. Located on the San Francisco Peninsula, ten miles south of the San Francisco International Airport, the City encompasses a geographic area of 19.8 square miles, of which 16.1 square miles are part of San Francisco Bay and Belmont Slough, and
3.8 square miles are land. The total area of the City is comprised of approximately 81% water.
Population
Population figures for the City, County and State for the last five years are shown in the following table.
CITY OF FOSTER CITY
Population Estimates
As of January 1
Year
City of
Foster City
County of
San Mateo
State of
California
2018 33,490 772,984 39,586,646
2019 33,693 774,231 39,695,376
2020 33,033 773,244 39,782,870
2021 33,842 751,596 39,303,157
2022 33,056 744,662 39,185,605
Source: State Department of Finance.
City Government
The City is a general law city and has a Council-Manager form of government. Policy- making and legislative authority are vested in a governing council consisting of the City Mayor and four other members. There are five City Council Members elected by seat number for staggered four-year terms, with a two-term limit. The City Manager is responsible for carrying out the policies and ordinances of the Council, for overseeing day-to-day operations of the City, and for appointing the heads of the various departments. The City Council appoints the City Manager, City Attorney, Planning Commissioners, and Citizen Advisory Committee Members. The City Council is
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financially accountable for City operations. The Annual Comprehensive Financial Report includes all funds of the City.
CITY FINANCIAL INFORMATION
Accounting and Budgeting Systems
The City’s financial picture is more readily understood with a general introduction to its accounting and budgeting systems. These systems provide the means for allocating available resources and for the proper control and recording of revenues and expenditures.
As part of an effort to maintain fiscal stewardship and financial accountability, the City uses a fully computerized accounting system. The accounting system is updated regularly to keep abreast of changing accounting techniques and principles. In developing, evaluating and maintaining the City’s accounting system, consideration is given to the adequacy of internal controls. Internal controls are designed to provide reasonable, but not absolute, assurance regarding: 1) the safeguarding of assets against loss from unauthorized use or disposition, and 2) the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that: 1) the cost of a control should not exceed the benefits likely to be derived, and 2) the evaluation of costs and benefits requires estimates and judgments by management. All internal control evaluations occur within the above framework. The City’s internal accounting controls are designed to adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions.
The City’s budget is a detailed operating plan that identifies estimated costs and results in relation to estimated revenues. The budget includes: 1) the programs, projects, services and activities to be carried on during the fiscal year; 2) the estimated revenue available to finance the operating plan; and, 3) the estimated spending requirements of the operating plan. The budget represents a process where policy decisions by the City Council are made and then implemented.
The City is required to adopt an annual budget on or before June 30 for the ensuing fiscal year.
From the effective date of the budget, the amounts stated therein as proposed expenditures become appropriations to the various departments. All appropriations, with the exception of those for the capital improvement projects and debt service funds lapse and must be re-authorized at the end of the fiscal year if they have not been spent or legally committed.
The City maintains budgetary controls. The objective of these budgetary controls is to ensure compliance with legal provisions embedded in the annual appropriated budget approved by the City Council. The City Council may amend the budget by resolution. The budget is adopted at the object level of expenditure within departments. The City Manager may transfer appropriations from one program, activity, or object to another within a department within the same fund but not between departments or funds. Accordingly, the lowest level of budgetary control established by the City Council is at the department level. The City also maintains an encumbrance accounting system as one technique of accomplishing budgetary control. Encumbered amounts lapse at year-end with the exception of the capital improvement projects and debt service funds.
The City, all its funds and the funds of certain other component entities of the City are audited annually by an accountancy corporation. The firm of Maze & Associates, Pleasant Hill, California, was the City’s auditor (the “Auditor”) for fiscal year 2021-22. The annual comprehensive financial report of the City for fiscal year 2021-22 is attached hereto as APPENDIX B. The City’s current auditor is Badawi & Associates, Berkeley, California. The City’s financial
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statements are public documents and are included within this Official Statement without the prior approval of the Auditor.
The Governmental Accounting Standards Board (“GASB”) published its Statement No. 34 “Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments” on June 30, 1999. Statement No. 34 provides guidelines to auditors, state and local governments and special purpose governments such as school districts and public utilities, on new requirements for financial reporting for all governmental agencies in the United States. Generally, the basic financial statements and required supplementary information should include (i) Management’s Discussion and Analysis; (ii) government-wide financial statements prepared using the economic measurement focus and the accrual basis of accounting and fund financial statements prepared using both the current financial resources measurement focus and the modified accrual method of accounting (governmental funds) and funds using the economic measurement focus and the accrual basis of accounting (proprietary funds) and (iii) required supplementary information. The City’s financial statements are prepared in conformance with the requirements of Statement No. 34.
Cybersecurity
The City’s information technology infrastructure continuously faces cyber threats, including, but not limited to, hacking, viruses, malware, ransomware, and data breaches. The City takes cybersecurity very seriously and has operational controls and multiple security measures to safeguard City’s data and infrastructure. There have been no known cybersecurity breaches so far; however, no assurances can be given that the security and operational control measures will be successful in guarding against all cyber threats.
For additional protection, the City carries cyber liability insurance through a joint powers authority, PLAN JPA. The cyber liability program provides coverage for both first- and third-party claims. First-party coverage includes privacy regulatory claims, security breach response, business income loss, dependent business income loss, digital asset restoration costs, and cyber- extortion threats, while third-party coverage includes privacy liability, network security liability, and multimedia liability. Members work directly with the reinsurer to investigate and respond to claims.
Based on its protections and available insurance coverage, the City does not believe that a cyberattack on the City’s information technology infrastructure would have a substantial impact on General Fund revenues.
Impact of COVID-19
As described in this Official Statement, while indications are that the COVID-19 pandemic is transitioning to an endemic stage, many variables will continue to contribute to the economic impact of the COVID-19 pandemic and the recovery. The ultimate impact of COVID-19 on the City’s operations and finances is not fully known, and it may be some time before the full impact of the COVID-19 pandemic is known. The Bonds described in this Official Statement are not secured by the City’s General Fund, but rather are voter-approved general obligations of the City payable solely from the levy and collection of ad valorem property taxes, unlimited as to rate or amount, and are not payable from the General Fund of the City.
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Comparative Financial Statements
The following tables provide a recent history of the City’s Comparative Balance Sheet, and both a recent history of General Fund revenues, expenditures, and changes in fund balances and recently budgeted amounts. See “General Fund Budget” and “Long-Term Financial Plan” below.
CITY OF FOSTER CITY
BALANCE SHEET
GENERAL FUND
(Fiscal Year Ended June 30)
Actual Actual Actual Actual
2018-19 2019-20 2020-21 2021-22
ASSETS:
Cash and investments $54,473,796 $59,048,052 $57,425,187 $47,580,214 Receivables (net of allowance):
Accrued interest 1,082,984 772,445 249,885 573,369
Intergovernmental 25,135 35,501 75,919 54,200
Taxes 2,839,404 2,815,977 3,056,384 3,901,456
Other 182,460 52,943 186,440 44,418
Due from other funds -- -- -- --
Prepaids and deposits 31,331 2,515 1,575 47,254
Inventory 16,900 16,900 16,900 16,900
Restricted cash and investments 295,118 236,274 341,557 470,349 Loans receivables, net of allowance 1,250,485 1,284,468 1,235,250 944,850 Lease receivable -- -- -- 1,194,159
Total assets 60,197,613 64,265,075 62,589,097 54,827,169 LIABILITIES:
Accounts payable 864,586 691,887 875,178 746,908
Accrued payroll 948,172 911,554 928,033 1,034,823
Refundable deposits 1,538,948 2,688,741 1,892,351 2,277,745 Unearned revenue 318,976 92,334 187,889 304,606
Total liabilities 3,670,682 4,384,516 3,883,451 4,364,082 Deferred inflows of resources
Unavailable -loan receivable 1,250,485 1,284,468 1,234,854 944,850 Leases related -- -- -- 1,194,159
Total deferred inflows of resources 1,250,485 1,284,468 1,234,854 2,139,009
FUND BALANCES
Non-spendable 48,231 19,415 18,475 64,154
Restricted 26,384 15,296 24,823 25,857
Committed 3,013,410 7,702,504 4,447,532 4,214,692
Assigned 8,240 -- -- --
Unassigned 52,180,181 50,858,876 52,979,962 44,019,375
Total fund balances 55,276,446 58,596,091 57,470,792 48,324,078 Total liabilities, deferred inflows of
resources and fund balances
$60,197,613 $64,265,075 $62,589,097 $54,827,169
Source: City of Foster City, Annual Comprehensive Financial Reports.
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CITY OF FOSTER CITY
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES
GENERAL FUND
(Fiscal Year Ended June 30)
Actual Actual Actual Actual
2018-19 2019-20 2020-21 2021-22
REVENUES:
Property taxes $33,612,508 $35,186,668 $37,060,897 $38,971,732 Sales and use and sales tax in lieu 3,672,915 3,149,274 3,131,071 3,899,280 Transient occupancy tax 4,389,794 3,506,101 992,616 1,982,779 Franchise tax 1,151,822 1,213,162 1,185,308 1,219,963
Property transfer tax 318,825 279,650 310,457 492,247
License and permits 3,687,802 3,399,595 3,472,940 3,976,116 Intergovernmental [1] 439,720 349,953 707,668 4,203,575 Charges for current services 1,972,511 1,578,848 912,542 1,607,283 Fines and forfeitures 40,694 30,935 14,027 30,318
Investment and rental income [2] 3,203,612 2,272,144 960,201 191,671 Other 552,950 463,996 400,865 813,661
TOTAL REVENUES 53,043,153 51,430,326 49,148,592 57,388,625 EXPENDITURES:
General Government 4,331,645 5,097,645 5,921,517 5,184,094 Public Safety-Police [3] 14,500,953 13,842,519 15,969,516 14,969,118 Public Safety-Fire [3] 11,269,360 9,389,379 11,931,423 10,861,609 Public works 2,368,294 2,551,159 2,321,554 2,407,202
Community development 2,619,519 2,708,698 3,434,512 2,947,704 Parks and recreation 8,773,920 9,353,239 10,524,051 9,653,922 Capital outlay -- - 65,229 -
TOTAL EXPENDITURES 43,863,691 42,942,639 50,167,802 46,023,649 Revenues Over (Under) Expenditures 9,179,462 8,487,687 (1,019,210) 11,364,976
OTHER FINANCING SOURCES (USES)
Transfers in 17,963 18,535 1,259,218 50,000
Transfers out [4] (7,369,312) (5,186,577) (1,365,307) (20,561,690) Total other financing sources (uses) [5] (7,351,349) (5,168,042) (106,089) (20,511,690) Net Change in Fund Balance 1,828,113 3,319,645 (1,125,299) (9,146,714) Fund Balance, July 1 53,448,333 55,276,446 58,596,091 [4] 57,470,792 Fund Balance, June 30 $55,276,446 $58,596,091 $57,470,792 $48,324,078 [1] Fiscal year 2021-22 increase due to the receipt of approximately $4.05 million of American Rescue Plan Act (“ARPA”) funds. [2] Fiscal year 2018-19 investment income includes $1.1 million mark-to-market improvement in unrealized gain/loss. Interest income increased by $0.5 million due to higher yields. Rental income increased by $0.4 million primarily due to one-time payment from Gilead. [3] Fiscal year 2018-19 Public Safety-Police and Fire expenditures each increased by $1.74 million due to $3.48 million additional discretionary City payment to CalPERS to reduce public safety unfunded accrued liability. [4] Total general funds decreased from 2019-20 to 2020-21 due to approximately $19 million of capital improvement expenditures. [5] Fiscal year 2018-19 Net Other Financing Uses include $4.2 million to the City CIP Fund and $3.0 million to the Building Maintenance Internal Service Fund.
Source: City of Foster City, Annual Comprehensive Financial Reports.
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General Fund Budget
Budgetary Process and Administration. The following procedures are performed by the City in establishing the budgetary data reflected in the basic financial statements:
The City Manager submits to the City Council a proposed budget for the coming fiscal year.
The budget includes proposed expenditures and the means of financing them. Public hearings are conducted to obtain taxpayers’ comments. The budget is legally adopted through the passage of a resolution. The transfer of budget amounts between funds or departments are approved by the City Council. Transfer of budget amounts within one fund or one department must be approved by the City Manager. Formal budgetary integration is employed as a management control device during the fiscal year for the General Fund and Special Revenue Funds.
The City uses the cash and encumbrance basis of accounting for budgetary purposes.
Total expenditures of each governmental fund may not exceed fund appropriations at the department level. Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of the budgetary process. Fund appropriations lapse at the end of each year. The City closes out all purchase orders, contracts and other commitments at year-end. Encumbrances are expected to be reappropriated in the following fiscal year.
Fiscal Year 2023-24 General Fund Budget. The City Council held budget study sessions on February 27, March 27, and May 8, 2023 to review and comment on the fiscal year 2023-24 preliminary budget. In recognition of the impending General Fund deficit for the upcoming fiscal year, direction was given by the City Council to place into effect one-time relief to the General Fund in the form of a $439,000 funding "holiday" for the Equipment Replacement Fund and a $375,000 funding reduction (a rollback to the FY 2022-23 funding of $1.23 million) for the Vehicle Replacement Fund. A public hearing was then held on June 5, 2023, and the final fiscal year 2023-24 budget is scheduled for adoption on June 20, 2023. The following table shows the fiscal year 2023-24 preliminary General Fund budget.
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CITY OF FOSTER CITY
GENERAL FUND BUDGET
(Fiscal Years 2022-23 and 2023-24)
Revenues by Source:
Adopted Budget
2022-23
Preliminary
Budget
2023-24 Variance
Property tax $32,840,700 $34,384,300 $1,543,600
Excess ERAF 1,622,650 1,619,850 (2,800)
Transient occupancy tax 2,460,100 3,559,800 1,099,700
Property tax in-lieu of Vehicle License Fee 4,578,800 4,387,980 (190,820) Sales tax 3,172,000 3,927,700 755,700
Business License Tax 1,481,100 1,615,500 134,400
Charges for current services - Recreation 1,236,508 1,526,935 290,427 Charges for current services - CDD 329,853 471,534 141,681 Permits 1,881,524 1,266,675 (614,849)
Franchise tax 1,259,700 1,266,200 6,500
Interest Income 513,100 1,521,700 1,008,800
Rentals - City/EMID 592,751 897,700 304,949
Rentals - Parks and Recreation 302,940 528,128 225,188
Other (Reimbursements, Street Sweeping, Fines, Other) 370,500 521,285 150,785 Other taxes (real property transfer tax) 304,900 311,000 6,100 Intergovernmental (SB90, Grants, ARPA, Other) [1] 4,185,520 140,000 (4,045,520) Total Revenues $57,132,646 $57,946,287 $813,641
Projected Expenditures (see below) 53,521,483 56,377,887 2,856,404 Net revenues over (under) expenditures before transfers 3,611,163 1,568,400 (2,042,763) Net Transfers In (Out) (3,500,000) (6,000,000) (2,500,000) Net Increase (Decrease) in Fund Balance 111,163 (4,431,600) (4,542,763) Use of Reserves to balance budget -- 4,431,600
Net Budget $111,163
[1] Fiscal year 2022-23 Intergovernmental Revenues included the 2nd and final tranche of American Rescue Plan Act (ARPA) COVID- 19 relief funds of $4.05 million, resulting in the FY 2023-24 budget variance.
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Adopted Budget Preliminary
Budget
2022-23 2023-24 Variance
Department Expenses
Employee Services
Salaries and Wages $18,786,080 $19,887,227 $1,101,147
PERS 9,012,453 9,198,715 186,262
Flex Allowance (Health) 3,157,985 3.564.940 406,955
Workers’ Compensation 1,506,158 1,271,880 (234,278)
Other Employee Benefits 935,406 1,026,063 90,657
Total Employee Services 33,398,082 34,948,825 1,550,743 Supplies and Contract Services 15,679,988 16,682,965 1,002,977 Capital Outlay 75,000 40,000 (35,000)
Total Department Expenses 49,153,070 51,671,790 2,518,720 Internal Services Charges 7,851,446 7,704,958 (146,488) Reallocation (3,483,033) (2,998,861) 484,172
Net Expenditures $53,521,483 $56,377,887 $2,856,404
Source: City of Foster City.
In response to a projected General Fund budget deficit of approximately $4.43 million for fiscal year 2023-24, the City plans to use its available reserves (projected to be $49.3 million at June 30, 2023, including a $5.28 million surplus for fiscal year 2022-23) to bridge the shortfall.
The City’s policy on the General Fund Reserve targets a range of 33 1/3% to 50% of the budgeted annual General Fund operating expenditures. The current General Fund Reserve balance ($44.02 million) is 82.2% of the fiscal year 2022-23 budgeted General Fund operating expenditures. The use of General Fund Reserve will allow the City to balance its fiscal year 2023- 24 budget, remain compliant with the City’s General Fund Reserve target, and maintain service levels to the community.
General Fund Reserves (Unassigned Balances)
Reserve Policies. The City fiscal policies establish the framework upon which short and long-term financial decisions are made. In particular, it identifies the long-range goals needed for fiscal sustainability and guides the development of strategies necessary to achieve these goals.
The City has established a reserve policy for its General Fund at a minimum level of 33 1/3 % to
50.0% of annual operating expenditures and for the Water and Wastewater Enterprise Funds a level of 25% of annual operating expenses. The reserve policy serves as a method to deter the City from spending beyond its sustainable means during periods of economic growth, while also providing the City a mechanism to maintain services at desired levels during economic downturns.
In addition, a $2 million emergency reserve is established for each of the three Capital Projects Funds programs; City, Water and Wastewater. The emergency reserve provides a level of financial resources for business continuity in the event of a catastrophic occurrence. Moreover, since fiscal year 2011-12, the City has provided long-term funding of capital improvement projects over a 10- year horizon. In fiscal year 2022-23, the time horizon was extended from 10 years to 15 years.
Projected Use of General Fund Reserves in Fiscal Year 2023-24. As described above, the City expects to rely on an approximately $4.43 million transfer from the General Fund Reserve to balance its fiscal year 2023-24 budget, and the Reserve will remain above the minimum level of
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33 1/3 % to 50.0% of annual operating expenditures following the transfer. See “-Long-Term Financial Plan” below for information about the City’s projected use of the General Fund Reserve in future fiscal years.
Historical General Fund Reserves. The following table details the City’s General Fund Unassigned Balances for fiscal years 2012-13 through 2021-22.
CITY OF FOSTER CITY
General Fund Unassigned Balances
Fiscal Years Ending June 30, 2013 – June 30, 2022
FY Ending
June 30 of
Total General
Fund Unassigned
Balances
% Change From
Prior Year
2013 $19,025,588 --%
2014 23,746,768 24.8
2015 30,303,100 27.6
2016 39,628,699 30.8
2017 43,397,590 9.5
2018 50,980,152 17.5
2019 (1) 52,180,181 2.4
2020 50,858,876 (2.5)
2021 52,979,962 4.2
2022 (2) 44,019,375 (16.9)
Increase over Past 10 Years $24,993,787
% Change over Past 10 Years 131.4%
Aver Annual Change over Past 10 Years 10.8%
Aver. Annual Change over Past 5 Years 0.9%
(1) After the following uses of $7,582,562 of Fiscal Year 2017-18 Operating Surplus:
a) $3,432,974 to pay down unfunded pension liability; b) $2,716,614 to strengthen Building Maintenance Internal Service Fund reserves; c) $716,487 to strengthen City CIP Fund reserves; d) $716,487 to establish new City Facilities Replacement Fund.
(2) Fiscal year 2021-22 includes a transfer out of approximately $19 million to the capital improvement projects.
Source: City of Foster City, Annual Comprehensive Financial Reports.
Long-Term Financial Plan
General. The City has also established internal services funds to accumulate funding for vehicle and equipment replacement, information and technology equipment maintenance and replacement, building repairs and maintenance, self-insurance for legal liability, and post- employment medical benefits. This is another layer of the City long-term plan, not only to budget the true cost of operations from year-to-year, but also to accumulate resources to continue the high level of quality services for the future. As of June 30, 2022, the balance in the internal service funds was $37.49 million, which was a $2.31 million increase from the prior year.
The City has adopted a five-year financial projection model as its basis for developing a long-term financial plan. The plan takes into consideration various financial and economic factors received from multiple sources. Such information includes residential and commercial property
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value trends, assessed valuation data, unemployment rates, consumer spending trends, consumer price indices, interest rates, investment performance of the CalPERS investment portfolio, State budget and financial forecasts, and qualitative data received from discussions and interviews with key business leaders in the City.
The City uses long-term financial planning to ensure stability through the ups-and-downs within economic cycles. It also allows decision makers to better understand the true effects of policy decisions. Through the City’s long-term financial planning, it has built up its current General Fund Reserves to 82.2% of fiscal year 2022-23 operating expenditures.
Current Revenue Forecast. The preliminary five-year financial forecast set forth below was presented to the City Council on May 8, 2023 and reflects the revenue assumptions described in “Property Taxes” and “Other General Fund Revenues and Transfers.” Five-Year Expense Forecast. The City used the following expense assumptions in the five- year financial plan:
Full-time Employees. An increase of 5.0 full-time employees (“FTEs”) for a Citywide total of 177 FTEs is recommended for fiscal year 2023-24.
Pension Costs. In December 2016, CalPERS announced a reduction in its Discount Rate (rate of return on its investment portfolio) from 7.5% to 7.0%. Then in February 2018, CalPERS modified its amortization policy for prospective investment gains and losses from 30 years to 20 years effective fiscal year 2021-22. Each of these changes are expected to add significant costs to government agencies, including the City. Based on CalPERS'
21.3% investment return in fiscal year 2020-21, the discount rate was further lowered to
6.8%, effective fiscal year 2023-24. The forecasted employer pension costs in the General Fund’s 5-year financial plan are $9.20 million for fiscal year 2022-23. However, due largely to CalPERS' 6.1% investment loss in fiscal year 2021-22, employer pension costs will increase significantly starting in fiscal year 2024-25. Projections are $9.95 million for fiscal year 2024-25; $10.12 million for fiscal year 2025-26; $10.68 million for fiscal year 2026-27; and $10.51 million for fiscal year 2027-28.
Over the past several years, the City has taken various actions to address the increase in CalPERS pension costs. The City made a $3.48 discretionary payment in June 2019 and another $7.5 million of discretionary payment in June 2021 to reduce its unfunded accrued liability.
Labor Agreements. The majority of the City's workforce falls under collective bargaining agreements. In fiscal year 2021-22, new two-year labor agreements were reached for full-time city employees, and an update was made to the unrepresented management employees’ compensation and benefit plan. A 4% wage increase was made retroactive July 1, 2021 and a 5% increase was made effective July 1, 2022. A 2% placeholder for annual wage increases and applicable step increases have been included for fiscal year 2023-24 through fiscal year 2027-28, though such increases may be higher.
Although a classification and compensation study was completed and accepted by the City Council in May, the 5-year financial plan does not include fiscal impacts from potential wage and/or benefit adjustments from pending and future labor negotiations with the labor units.
Such adjustments, if any may require supplemental budget augmentations to the fiscal year 2022-23 budget as well as the fiscal year 2023-24 budget. See “- Labor Relations” below.
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Supplies and Services, Capital Outlay, Internal Service Charges, and Reallocations. An overall 4.3% increase in general fund supplies and service costs for fiscal year 2023-24 as a result of one-time expenditures and an inflationary environment. This is followed by an assumption of a return to a moderate 2% annual increase for the subsequent four years of the proposed 5-year financial plan.
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CITY OF FOSTER CITY
GENERAL FUND (FUND 001 to 003)
FIVE YEAR FINANCIAL PLAN FOR FISCAL YEARS ENDED JUNE 30, 2028 Budgeted Projected FIVE YEAR FINANCIAL PLAN
Revenues by Source: 2022-23 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 Property Tax $32,840,700 $33,058,500 34,384,300 $35,301,400 $36,279,440 $37,457,720 $38,672,140 Excess ERAF 1,622,650 3,176,200 1,619,850 1,652,250 1,685,300 1,719,000 1,753,400 Transient occupancy tax* 2,460,100 3,242,700 3,559,800 4,016,700 4,401,400 4,774,200 5,020,200 Property tax in-lieu of VLF 4,578,800 5,654,300 4,387,980 5,217,800 5,348,500 5,482,500 5,619,800 Sales tax 3,172,000 3,840,000 3,927,700 4,093,700 4,264,600 4,422,500 4,567,300 Business License Tax 1,481,100 1,583,800 1,615,500 1,647,800 1,680,800 1,714,400 1,748,700 Charges for current services - Recreation 1,236,508 1,506,677 1,526,935 1,553,835 1,561,250 1,665,933 1,891,515 Charges for current services - Community
Development Dept. 329,853 355,753 471,534 587,312 290,244 322,227 340,031 Permits 1,881,524 1,881,524 1,266,675 2,574,435 1,030,448 1,087,821 1,151,231 Franchise tax 1,259,700 1,241,400 1,266,200 1,291,600 1,317,400 1,343,800 1,370,600 Interest Income 513,100 975,782 1,521,700 1,215,800 1,072,100 908,500 772,300 Rentals - City/EMID 592,751 894,400 897,700 601,100 304,600 308,200 311,800 Rentals - Parks and Recreation 302,940 447,361 528,128 484,176 484,176 693,599 744,690 Other (Reimbursements, Street Sweeping,
Fines, Other) 370,500 546,585 521,285 524,985 528,685 532,485 450,628 Other taxes (real property transfer tax) 304,900 304,900 311,000 317,200 323,500 330,000 336,600 Intergovernmental (SB90, Grants, Other) 4,185,520 4,193,520 140,000 140,800 141,600 142,400 143,300 Total Revenues $57,132,646 $62,903,402 $57,946,287 $61,220,893 $60,713,943 $62,905,285 $64,894,235 Projected Expenditures 53,521,483 54,144,472 56,377,887 59,179,686 59,364,212 60,794,935 61,568,985 Net revenues over (under) expenditures
before transfers 3,611,163 8,758,930 1,568,400 2,041,207 1,349,731 2,110,350 3,325,250 Net Transfers In (Out) (3,500,000) (3,478,713) (6,000,000) (6,000,000) (6,000,000) (6,000,000) (6,000,000) Net Increase (Decrease) in Fund Balance 111,163 5,280,217 (4,431,600) (3,958,793) (4,650,269) (3,889,650) (2,674,750) Opening Fund Balance 44,019,375 44,019,375 49,299,592 44,867,992 40,909,199 36,258,930 32,369,280 Ending Fund Balance (Reserves) $44,130,538 $44,299,592 $44,867,992 $40,909,199 $36,258,930 $32,369,280 $29,694,530 Reserve Balance as % of Next Year's
Operating Expenditures 78.3% 87.4% 75.8% 68.9% 59.6% 52.6% 47.3% * Includes voter approved TOT Revenue Measure in November 2018. 11% effective January 1, 2019, then 12% effective July 1, 2019. (1) Expenditures for fiscal year 2023-24 represent proposed appropriations; expenditures for fiscal year 2023-24 to fiscal year 2027-28 are projections. (2) The City is able to meet the City Council Reserve Policy of 33 1/3% to 50% in each year of the 5-year financial plan. (3) The City received the second and final tranche of America Rescue Plan Act (ARPA) funds in fiscal year 2022-23 for $4,054,920
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CITY OF FOSTER CITY
GENERAL FUND (FUND 001 TO 003) EXPENDITURES DETAIL
FIVE YEAR FINANCIAL PLAN FOR THE YEARS ENDED JUNE 30, 2028 Budgeted Projected FIVE YEAR FINANCIAL PLAN
2022-23 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 Department Expenses
Employee Services $33,398,082 $33,399,261 $34,948,825 $36,291,673 $36,870,865 $37,862,395 $38,180,949 Salaries and Wages 18,786,080 18,752,140 19,887,227 20,321,341 20,704,798 21,115,175 21,623,094 PERS 9,012,453 9,017,223 9,198,715 9,950,641 10,124,660 10,683,688 10,506,404 Flex Allowance 3,157,985 3,148,184 3,564,940 3,577,368 3,577,368 3,557,368 3,546,492 Workers Compensation 1,506,158 1,506,466 1,271,880 1,390,837 1,400,081 1,409,510 1,419,128 Other 935,406 975,248 1,026,063 1,051,486 1,063,958 1,076,654 1,085,831 Supplies and Contract Services 15,679,988 16,301,012 16,682,965 16,996,252 17,292,519 17,638,625 17,991,345 Capital Outlay 75,000 75,000 40,000 -- -- -- --
Total department expenses $49,153,070 $49,775,273 $51,671,790 $53,287,925 $54,163,384 $55,501,020 $56,172,294 Internal Services Charges 7,581,446 7,852,232 7,704,958 9,548,402 8,920,448 9,090,438 9,264,666 Reallocation (3,483,033) (3,483,033) (2,998,861) (3,058,541) (3,120,020) (3,182,423) (3,246,075) Net Expenditures $53,521,483 $54,144,472 $56,377,887 $59,777,486 $59,963,812 $61,409,035 $62,190,085 Less: Expected Expenditure Savings -- -- -- (597,800) (599,600) (614,100) (621,900) Projected Expenditures $53,521,483 $54,144,472 $56,377,887 $59,179,686 $59,364,212 $60,794,035 $61,568,985 Source: City of Foster City fiscal year 2023-24 five-year forecast.
State Budget and its Impact on the City
General. The General Fund receives amounts from the State that could impact the services provided by the City. State budgets will be affected by national and state economic conditions and other factors over which the City has no control. To the extent that the State budget process results in reduced revenues to the City, the City will be required to make adjustments to its budget. Decreases in such revenues may have an adverse impact on the City’s ability to pay the Bonds.
Fiscal Year 2022-23 State Budget. On June 30, 2022, the Governor signed the fiscal year 2022-23 State Budget (the “2022-23 State Budget”), a $308 billion spending plan, including $234.4 billion in general fund spending, and a historic $100 billion budget surplus. The 2022-23 State Budget includes significant general fund investments, provides for tax rebates to millions of taxpayers, and provides for a $37.2 billion reserve.
Proposed Fiscal Year 2023-24 State Budget. On January 10, 2023, the Governor presented a proposed budget for fiscal year 2023-24 to the State legislature (the “2023-24 Proposed State Budget”). The State is facing an estimated budget gap of $22.5 billion, forecasting general fund revenues at $22.5 billion below the fiscal year 2022-23 budget act projections. The $297 billion budget proposes a variety of methods, including $7.4 billion in funding delays, $5.7 billion in reductions and pullbacks, $4.3 billion in fund shifts, $3.9 billion in trigger reductions and $1.2 billion in limited revenue generation and borrowing, to address the projected shortfall.
The 2023-24 Proposed State Budget allocates $35.6 billion in total reserves, including $22.4 billion in the State’s Budget Stabilization Account, fulfilling the constitutional minimum mandatory deposit and requiring $951 million to be dedicated to infrastructure investments in fiscal year 2023-24. The 2023-24 Proposed State Budget accelerates paydown of State retirement liabilities, with $1.9 billion in additional payments in fiscal year 2023-24 and
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approximately $5.3 billion projected to be paid over the next three years. In addition to addressing the $22.5 billion budget shortfall, the 2023-24 Proposed State Budget utilizes a number of resiliency measures to close shortfalls projected in the coming years.
Impact of State Budget on City. The City receives a portion of its funding from the State.
The City's projects that less than 2% of the City's total General Fund revenues will come from State sources.
Voters approved Proposition 1A in November 2004 to amend the State Constitution to place constraints on the State’s ability to divert certain specified revenues from local agencies to the State. Subsequently, in November 2010, voters approved Proposition 22 to amend the State Constitution to further constrain or eliminate the State’s ability to redirect revenues from local agencies. “CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING CITY REVENUES AND APPROPRIATIONS – Proposition 1A” and “– Proposition 22.” Information about the fiscal year 2022-23 State Budget, the 2023-24 Proposed State Budget, and other State budgets are available at www.ebudget.ca.gov. An impartial analysis of the budget is posted by the Legislative Analyst Office at www.lao.ca.gov. In addition, various State official statements, many of which contain a summary of the current and past State budgets, may be found at the website of the State Treasurer, www.treasurer.ca.gov. The information referred to in this paragraph is prepared by the respective State agency maintaining each website and not by the City or Purchaser, and the City and Purchaser take no responsibility for the continued accuracy of the Internet addresses or for the accuracy or timeliness of information posted there, and such information is not incorporated in this Official Statement by these references.
Property Taxes
Over the past 12 fiscal years, from fiscal year 2009-10 to fiscal year 2021-22, property tax revenues (excluding ERAF refunds) grew annually in the range of 2.5% to 22.3%. Under the provisions of Proposition 13, County Assessors make increases to the assessment rolls based on an inflation factor, the California Consumer Price Index, not to exceed 2%. The inflation factor used for fiscal year 2023-24 will be 2%. Based on preliminary assessed values tracked by the County Assessor’s Office, the City is projecting fiscal year 2023-24 property tax revenues to increase 3.99% to $34.38 million from its fiscal year 2022-23 estimate of $33.06 million. In the five-year financial plan, the City has forecasted a 2.5% increase in property tax revenues for fiscal year 2024-25 through fiscal year 2027-28 plus additional property taxes from the completion of development projects.
See Table 1 in the main body of the Official Statement for a history of assessed values in the City.
The County levies (except for levies to support prior voter-approved indebtedness) and collects all property taxes for property falling within the County’s taxing boundaries.
Property Tax in Lieu of Vehicle License Fees. The City’s 2023-24 budget includes property tax in lieu of vehicle license fees (“VLF”), however, there is a potential change to the distribution formula used for excess ERAF and property tax in lieu of vehicle license fees, both currently pending evaluation with the County and State. Changes in the distribution formulas may reduce total property tax receipts by approximately $670,000 in fiscal year 2023-24. See “SECURITY FOR THE BONDS – ERAF Shift Legislation” in the body of this Official Statement for additional information.
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The County has incurred four consecutive VLF shortfalls since fiscal year 2019-20.
Historically, the State has made counties and cities whole by reimbursing in-lieu VLF shortfalls through a special appropriation in the State budget. This appropriation ensures that all counties and cities receive their full in-lieu VLF payment required by law. An appropriation to cover the County’s shortfall for the fiscal year 2021-22, was not included in the 2023-24 Proposed State Budget, which is the first the first time the state has failed to include a backfill of these revenues since the passage of Proposition 1A in 2004. The County, on behalf of itself and its 20 cities, has continued to advocate with the State's legislative leaders to include the backfill in their version of the FY 2023-24 state budget. The City's preliminary budget assumes that the State will continue to provide the VLF backfill to the County and the City. If the State’s final fiscal year 2023-24 budget excludes the backfill, the estimated loss to Foster City is approximately $677,000. In addition, as of April 11, 2023, the County's projected VLF shortfall for fiscal year 2022-23 is $1,397,297 for the City.
Other General Fund Revenues and Transfers.
Sales and Use Tax. The sales tax is an excise tax imposed on retailers for the privilege of selling or leasing tangible personal property. The use tax is an excise tax imposed for the storage, use, or other consumption of tangible personal property purchased from any retailer. The total sales tax rate within the City is currently 9.375%. The proceeds of sales and uses taxes imposed within the City are distributed by the State to various agencies, with the City receiving
1.0% of the amount collected.
Collection of the sales and use tax is administered by the California Department of Tax and Fee Administration (“CDTFA”). Under its procedures, the CDTFA projects receipts of the sales and use tax on a quarterly basis and remits an advance of the receipts of the sales and use tax to the City on a monthly basis. The amount of each monthly advance is based upon the CDTFA’s quarterly projection. During the last month of each quarter, the CDTFA adjusts the amount remitted to reflect the actual receipts of the sales and use tax for the previous quarter.
The CDTFA receives an administrative fee based on the cost of services provided by the CDTFA to the City in administering the City’s sales tax, which is deducted from revenue generated by the sales and use tax before it is distributed to the City.
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Total taxable sales during the first three quarters of calendar year 2022 in the City were reported to be $249,033,275, a 40.64% increase from the total taxable sales of $177,075,895 reported during the first three quarters of calendar year 2021.
CITY OF FOSTER CITY
TAXABLE TRANSACTIONS
(Figures in Thousands)
2017 2018 2019 2020 2021
Retail and Food Services:
Motor Vehicle and Parts Dealers n/a (1) n/a (1) n/a (1) n/a (1) n/a (1) Home Furniture and Appliances 28,661 25,988 18,114 16,704 22,714 Bldg. Materials, Farm Implements n/a (1) n/a (1) n/a (1) n/a (1) n/a (1) Food and Beverage Stores 16,723 14,452 15,827 15,761 14,947 Gasoline Stations 26,139 29,455 28,631 12,736 21,755
Apparel Stores 364 179 104 148 143
General Merchandise Stores n/a (1) n/a (1) n/a (1) n/a (1) n/a (1) Food Services and Drinking Places 51,243 58,811 60,701 38,682 48,660 Other Retail Stores 93,493(2) 117,381 116,660(2) 104,640(2) 111,904(2) Total Retail and Food Services 216,622 247,266 240,036 188,671 220,122 All Other Outlets 60,951 62,645 47,841 33,536 46,498
TOTAL ALL OUTLETS 277,574 309,911 287,877 222,208 266,620 (1) Sales omitted because their publication would result in the disclosure of confidential information. (2) Adjusted for disclosures.
Source: State Department of Tax and Fee Administration.
Factors that have historically affected sales tax revenues include the overall economic growth of the Bay Area, competition from neighboring cities, the growth of specific industries within the City, the City’s business attraction and retention efforts, and catalog and Internet sales.
Revenues from sales and use taxes is projected to be $3.93 million in fiscal year 2023-24 compared to a projected $3.84 million in fiscal year 2021-23 as the City has exceeded its pre- pandemic fiscal year 2018-19 level of $3.67 million.
Transient Occupancy Tax. The City imposes a transient occupancy tax (“TOT”) of 12% on temporary guests staying at the City’s three hotels: Crowne Plaza, Marriott Courtyard, and Towne Place Suites. Based on voter passage of Measure TT in November 2018, the City’s TOT rate is 12%.
As one of the City's most elastic revenue sources, TOT recovery was initially slow but has since accelerated. Fiscal year 2020-21 taxes plummeted to $993,000 from $4.39 million in fiscal year 2018-19, before rebounding to $1.98 million in fiscal year 2021-22. TOT revenues are projected to climb to an estimated $3.24 million in fiscal year 2022-23, and $3.56 million in fiscal year 2023-24.
Business License Tax. The Business License Tax Ordinance was updated in November 2013 based on voter approval. The increased minimum tax rates and maximum revenue caps upon which the tax is calculated was phased in over a three-year period from calendar year 2014 to 2016.
Fiscal Years 2022-23 revenues are estimated at $1.58 million and still below the fiscal year 2018-19 level of $1.76 million. The City had considered an increase in the gross receipts cap for a potential November 2022 ballot measure, but decided to revisit it for the November 2024 election cycle.
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Investment Earnings. With the multitude of Federal Reserve rate hikes since March 2022, staff has escalated its investment returns assumption to 3.5% for fiscal year 2023-24 while continuing to prioritize its investment objectives based on safety, liquidity, and then yield.
Employee Retirement System
The City participates in two pension plans administered by the California Public Employees Retirement System (“CalPERS”). The first is an agent multiple-employer defined benefit plan for its miscellaneous employees (the “Miscellaneous Plan”) and the second is its cost-sharing multiple-employer defined benefit pension plan for its safety employees (the “Safety Plan”). An agent multiple-employer plan is one in which the assets of the participating government employers are pooled for investment purposes but separate accounts are maintained for each individual employer. A cost-sharing multiple-employer defined benefit pension plan is a plan in which the pension obligations to the employees of more than one employer are pooled and pension plan assets can be used to pay benefits of the employees of any employer that provides pensions through the plan.
Plan Descriptions. All qualified permanent employees are eligible to participate in the City’s Safety Plan (police and fire employees) and the Miscellaneous Plan (all other employees) agent multiple employer defined benefit pension plans administered by CalPERS.
The Miscellaneous Plan is an agent multiple-employer defined benefit pension plan which acts as a common investment and administrative agent for its participating member employers.
Benefit provisions under the Plans are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.
The City’s Safety Plan is a cost-sharing multiple-employer defined benefit pension plan administered by CalPERS since the plan has less than 100 active members, commonly referred to as risk pool. The City has three retirement benefit tiers in the Safety Plan. Tier 1 is for employees hired prior to January 1, 2012. Tier 2 is for employees hired between January 1, 2012 to December 31, 2012. Tier 3 is for employees hired on or after January 1, 2013.
Benefits Provided. CalPERS provides retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees, and their beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment, age and the average of the final 3 years’ compensation. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1959 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.
The plans provisions and benefits in effect at June 30, 2022, are summarized in the following tables.
Miscellaneous
-Classic-
Miscellaneous
-PEPRA-
Prior to On or after
Hire date 1/1/2013 1/1/2013
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Benefit formula 2.7%@55 2%@62
Benefit vesting schedule 5 years service 5 years service Benefit payments Monthly for life Monthly for life
Retirement age 55 62
Final Compensation period Three year Three year
Monthly benefits, as a % of annual salary 2% to 2.7% 1% to 2.5% Required employee contribution rate 8.00% 6.25%
Required employer contribution rate* 38.840% 38.840%
Total employee contribution rate FY 2021-22 $605,548 $289,705 Total employer contribution rate FY 2021-22 $4,193,547 $497,397 *Including Unfunded Actuarial Liability contribution rate.
Source: City of Foster City.
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Safety
-Classic-
Safety
-Classic-
(Police)
Safety
-PEPRA-
Prior to On or after On or after
Hire date 1/1/2012 1/1/2012 1/1/2013
Benefit formula 3%@50 2%@50 2.7%@57
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments Monthly for life Monthly for life Monthly for life Retirement age 50 50 57
Final Compensation period Three year Three year Three year Monthly benefits, as a % of annual salary 9% 9% 13.00%(police) Required employee contribution rate 8.99% 8.95% 13.00%
Required employer contribution rate* 22.480% 18.190% 13.13%(Police)
0.00%(Fire)
Total employee contribution rate FY 2021-22 $255,827 $23,273 $296,293 Total employer contribution rate FY 2021-22 $4,012,998 $54,356 $326,980 *Including Unfunded Actuarial Liability contribution rate.
Source: City of Foster City.
Employees Covered. The following employees were covered by the benefit terms of the Miscellaneous Plan as of the most recent actuarial valuation date of June 30, 2020; information for the Safety Plans was not provided from CalPERS for cost-sharing multiple-employer defined benefit pension plans.
Miscellaneous*
Inactive Employees or Beneficiaries Currently Receiving Benefits 220 Inactive Employees Entitled to but not yet Receiving Benefits 164 Active Employees 126
Total 510
* All tiers of the Miscellaneous and Safety Plans were combined together on GASB 68 report by CalPERS.
Contributions. Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of change in the rate.
Funding contributions for both Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rates of employees.
For the year ended June 30, 2022, the contributions to the Plans were as follows:
Miscellaneous* Safety Plans* Total
Contributions-employer $4,690,944 $4,394,334 $9,085,278 Contributions-employee 897,253 575,393 1,472,646
* All tiers of the Miscellaneous and Safety Plans were combined together on GASB 68 report by CalPERS.
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Actuarial Assumptions and Other Inputs. The City’s net pension liabilities of $21,542,718 was measured as of June 30, 2021, and was determined by an actuarial valuation as of June 30, 2020 using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified: inflation 2.50%, discount rate 7.15%, payroll growth 2.75%, and an investment rate of return of 7.00%, net of pension plan investment and administrative expense, including inflation. Projected salary increases vary by entry age and service. Mortality rates were derived using CalPERS membership data for all funds and the mortality table used was developed based on CalPERS specific data. The table includes 15 years of mortality improvement using Society of Actuaries Scale 90% of Scale MP 2016.
Pension Expense. At June 30, 2022, the City recognized pension expense of $3,220,816 for the Miscellaneous Plan and pension expense of $7,327,264 for the Safety Plan, with a total pension expense of $10,548,080. These expenses include the contributions made post measurement date of June 30, 2021.
For more information regarding the City’s pension plans, see Note 9 of APPENDIX B to the Official Statement.
As described above, the City has taken various actions to address the increase in CalPERS pension costs. In June, 2019, the City made a discretionary payment of $3.48 million to reduce its unfunded pension liability with CalPERS. In June 2021 City Council authorized another $7.5 million discretionary payment to further reduce its liability. The combination of CalPERS’ 21.3% investment returns for fiscal year 2020-21 and the additional discretionary payments helped lower the City's Unfunded Accrued Liability from an estimated $92.1 million to $64.1million and its pension funded status to approximately 81.2% as of June 30, 2021.
Recent Actions Taken by CalPERS. On February 18, 2014, the CalPERS Board (the “CalPERS Board”) approved new demographic actuarial assumptions based on a 2013 study of recent experience. The largest impact, applying to all benefit groups, is a new 20-year mortality projection reflecting longer life expectancies and that longevity will continue to increase. Because retirement benefits will be paid out for more years, the cost of those benefits will increase as a result. The CalPERS Board also assumed earlier retirements for Police 3% at age 50, Fire 3% at age 55, and Miscellaneous 2.7% at age 55 and 3% at age 60, which will increase costs for those groups. As a result of these changes, rates increased beginning in fiscal year 2016-17 (based on the June 30, 2014 valuation) with full impact in fiscal year 2020-21.
On November 18, 2015, the CalPERS Board adopted a funding risk mitigation policy intended to incrementally lower its discount rate – its assumed rate of investment return – in years of good investment returns, help pay down the pension fund's unfunded liability, and provide greater predictability and less volatility in contribution rates for employers. The policy established a mechanism to reduce the discount rate by a minimum of 0.05 percentage points to a maximum of 0.25 percentage points in years when investment returns outperform the existing discount rate, currently 7.0%, by at least four percentage points. CalPERS staff modeling anticipates the policy will result in a lowering of the discount rate to 6.5% in about 21 years, improve funding levels gradually over time and cut risk in the pension system by lowering the volatility of investment returns. More information about the funding risk mitigation policy can be accessed through CalPERS’ web site at the following website address: https://www.calpers.ca.gov/docs/funding- risk-mitigation-policy.pdf
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The reference to this Internet website is provided for reference and convenience only. The information contained within the website may not be current, has not been reviewed by the City, and is not incorporated in this Official Statement by reference.
On December 21, 2016, the CalPERS Board voted to lower its discount rate from 7.5% to
7.0% over the next three years according to the following schedule.
Valuation
Date
Fiscal Year Required
Contribution
Discount
Rate
June 30, 2016 2018-19 7.375%
June 20, 2017 2019-20 7.250
June 30, 2018 2020-21 7.000
For public agencies like the City, the new discount rate began increasing contribution costs in fiscal year 2018-19. Lowering the discount rate means employers that contract with CalPERS to administer their pension plans will see increases in their normal costs and unfunded actuarial liabilities and that active members hired on or after January 1, 2013, under PEPRA will see their contribution rates rise. The three-year reduction of the discount rate resulted in average employer rate increases of about 1 percent to 3 percent of normal cost as a percent of payroll for most miscellaneous retirement plans, and a 2 percent to 5 percent increase for most safety plans.
Additionally, many CalPERS employers saw a 30 to 40 percent increase in their current unfunded accrued liability payments. These payments were made to amortize unfunded liabilities over 20 years to bring the pension fund to a fully funded status over the long-term.
On November 15, 2021, the CalPERS Board selected a new asset allocation mix that will guide the fund’s investment portfolio for the next four years, while at the same time retaining the reduction of discount rate from 7.0% to 6.8%. Notable changes for employers include a decrease in median total employer contribution rates, from less than 1% in miscellaneous plans to a decrease of more than 2% in some safety plans. Contribution changes will take effect in fiscal year 2023-24 for public agencies.
Other Post-Employment Retirement Benefits (OPEB)
Plan Description. All City employees, their surviving spouses, and eligible dependents can continue to participate in the health care program under the provisions of the formal City- sponsored single employer plan at their own cost (the “Plan”). The City will only contribute the minimum amount provided under Government Code Section 22825 of the Public Employee Medical and Hospital Care Act by which, the City paid $143 and $149 per month per family for the period from July 1, 2021 to December 31, 2021 and January 1, 2022 to June 30, 2022, respectively. The City’s contribution for fiscal year 2022 amounted to $417,873 which included $242,899 implied subsidy benefit payment. No assets are accumulated in a trust that meets the criteria in paragraph 4 of Governmental Accounting Standards Board Statement No. 75.
Membership of the Plan consists of 159 active employees, 132 inactive employees receiving benefits, and 67 inactive employees entitled to but not yet receiving benefits.
Actuarial Assumptions and Other Inputs. Projections of benefits for financial reporting purposes are based on the substantive Plan (the Plan as understood by the employer and the Plan participants) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and Plan participants to that point. The actuarial methods and assumptions used include techniques that are designed to
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reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.
For the June 30, 2022 actuarial valuation, the entry age normal actuarial cost method was used. The actuarial assumptions included a 3.69% discount rate and a 2.50% general inflation assumption. The healthcare cost trend rate minimum was assumed to annually increase by
2.75%. The valuation includes implied subsidy as required by Actuarial Standards of Practice No.
6. The UAAL is amortized as a level percentage of projected payrolls over 15 years on a closed basis commencing in 2014.
Changes in Total OPEB Liability. The components of the total OPEB liability were as follows:
CITY OF FOSTER CITY
Total OPEB Liability
Total OPEB
Liability
Balance as of June 30, 2021 $11,081,957
Service Cost 655,321
Interest on the Total OPEB liability 221,344
Differences between expected and actual experience (1,567) Changes of assumptions (2,135,304)
Benefit Payments (174,974)
Implicit Rate Subsidy Fulfilled (242,899)
Net Changes (1,678,079)
Balance as of June 30, 2022 $9,403,878
Source: City of Foster City.
OPEB Expense. For the year ended June 30, 2022, the City recognized an OPEB expense of $819,578, which includes deferred outflow of resources as of June 30, 2022.
For more information regarding the City’s OPEB and assumptions used in its most recent actuarial study, see Note 9 of Appendix B to the Official Statement.
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Labor Relations
As of April 1, 2023, the City’s actual employee count was approximately 158 full-time and 23 part-time employees. There are two employee unions as shown below. In addition, the City employs approximately 48 unrepresented management employees. The City has not experienced any work stoppages or strikes by its employees.
The City has recently engaged in labor negotiations with FCPOA, recognizing that each of its labor agreements expire on June 30, 2023. A City Council closed session has been scheduled for the unrepresented management employees in June, but no meetings have been scheduled with the AFSCME unit yet.
CITY OF FOSTER CITY
Labor Relations
Labor Organization Employees Contract Expiration Date(1) American Federation of State, County and Municipal
Employees (“AFSCME”)
71 June 30, 2023
Foster City Police Officers Association (“FCPOA”) 39 June 30, 2023 (1) Terms of contract remain in effect after expiration until new contract becomes effective.
Source: City of Foster City.
Risk Management
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City is self-insured for general liability claims up to $100,000. General liability claims in excess of $100,000 are insured with PLAN JPA, a joint powers agency for the funding and pooling of insurance coverage. PLAN JPA is a self-insured public-entity risk pool. Workers’ compensation claims are insured with The Cities Group, a joint powers agency for the funding and pooling of insurance coverage. The Cities Group purchases third-party commercial insurance to cover for the claims at the limit $2,485,000 with an excess layer of $10,000,000 per incident by reinsurance contracts for all employees. Charges to the General Fund for general liability claims are determined from an analysis of self-insured claim costs. Such charges are recorded as expenditures in the General Fund and revenues in the Self-Insurance Internal Service Fund. The City considers incurred but not reported claims in determining if an accrual for loss contingencies is required for claims.
Settled claims have not exceeded the City’s excess coverage in any of the past three fiscal years. Claims expenses and liabilities are reported for self-insured deductibles when it is probable that a loss has occurred, the amount of that loss can be reasonably estimated and includes incremental claim expenses. Allocated and unallocated claims adjustment expenses are included in the claims liability balance. These losses include an estimate of claims that have been incurred but not reported. At June 30, 2022, the liability for general liability self-insurance claims was $100,000.
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City Debt
The City has previously issued general obligation bonds that are secured by ad valorem taxes levied and collected in the City. See “DEBT SERVICE SCHEDULES – Combined Debt Service Schedule” in the front part of this Official Statement for a summary of the City’s outstanding general obligations.
Employment
The City is included in the San Francisco-Redwood City-South San Francisco Metropolitan Division (“MD”). The unemployment rate in the MD was 2.8% in February 2023, up from a revised 2.7% in January 2023, and below the year-ago estimate of 3.0%. This compares with an unadjusted unemployment rate of 4.8% for California and 3.9% for the nation during the same period. The unemployment rate was 2.8% in San Mateo County.
The following table summarizes the civilian labor force, employment, and unemployment in the MD for the calendar years 2017 through 2021.
SAN FRANCISCO-REDWOOD CITY-SOUTH SAN FRANCISCO METROPOLITAN DIVISION (SAN FRANCISCO AND SAN MATEO COUNTIES)
Civilian Labor Force, Employment and Unemployment
(March 2021 Benchmark)
2017 2018 2019 2020 2021
Civilian Labor Force (1) 1,008,000 1,017,500 1,037,700 995,900 977,200 Employment 979,200 993,600 1,015,200 920,600 929,900
Unemployment 28,800 23,900 22,500 75,300 47,200
Unemployment Rate 2.9% 2.3% 2.2% 7.6% 4.8%
Wage and Salary Employment: (2)
Agriculture 1,900 1,700 1,700 1,600 1,700
Mining and Logging 100 100 200 200 200
Construction 39,800 42,400 44,400 42,600 41,100
Manufacturing 41,300 40,900 41,100 37,900 37,200
Wholesale Trade 25,000 25,200 24,500 21,700 21,400
Retail Trade 82,100 81,400 79,500 68,200 67,700
Transportation, Warehousing, Utilities 44,200 47,700 51,200 46,100 46,000 Information 76,400 85,200 97,500 105,300 112,200
Finance and Insurance 59,300 60,900 62,200 61,900 62,600 Real Estate and Rental and Leasing 21,600 22,200 23,800 21,000 20,400 Professional and Business Services 271,800 282,700 293,900 282,900 283,800 Educational and Health Services 136,000 138,900 146,100 142,100 145,800 Leisure and Hospitality 142,400 143,600 147,500 90,100 91,300 Other Services 41,100 41,400 41,500 32,500 33,600
Federal Government 17,600 16,900 16,600 17,000 16,200
State Government 36,100 37,000 37,900 38,300 40,500
Local Government 76,200 77,500 77,100 73,300 72,500
Total, All Industries (3) 1,112,700 1,145,800 1,186,500 1,082,500 1,094,200 (1) Labor force data is by place of residence; includes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(2) Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(3) Totals may not add due to rounding.
Source: State of California Employment Development Department.
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The following tables show the major employers in the City and the County.
CITY OF FOSTER CITY
Major Employers
June 30, 2022
Employer
Number of
Employees
% of Total
Employment
Gilead Sciences, Inc. 5,747 33.19%
Visa U.S.A. Inc. 2,863 16.53
Visa Technology & Operations LLC, FKA Inovant LLC 1,094 6.32 Cybersource Corporation 427 2.47
CSG Consultants, Inc. 329 1.90
Sledgehammer Games Inc. 304 1.76
Coscto Wholesale Corporation 276 1.59
IBM Corporation 248 1.43
Qualys Inc 240 1.39
Penninsula Jewish Community Center 231 1.33
Source: City of Foster City, Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2022. [Remainder of Page Intentionally Left Blank]
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COUNTY OF SAN MATEO
Major Employers
(Listed Alphabetically)
April 2023
Employer Name Location Industry
Bart Daly City Station Daly City Transit Lines
Box Inc Redwood City Prepackaged Software
Electric Charging Station Menlo Park Research Service
Electronic Arts Inc Redwood City Game Designers (mfrs)
Fisher Investments San Mateo Investment Management
Fisher Investments Woodside Investment Management
Forced Dump Debris Box Svc Burlingame Garbage Collection Franklin Resources Inc San Mateo Asset Management
Genentech Inc S. San Francisco Biotechnology Products & Services Gilead Sciences Inc Foster City Biological Products (mfrs) Kaiser Permanente Redwood City Redwood City Hospitals
Kaiser Permanente South Sn S. San Francisco Hospitals
Lsa Global Redwood City Training Consultants
Meta Platforms Inc Menlo Park Social Media
Mills-Peninsula Medical Ctr Burlingame Hospitals
Palo Alto VA Hosp Med Ctr Menlo Park Government-Specialty Hosp Ex Psychiatric Plateau Systems San Mateo Computer Software
San Francisco Intl Airport San Francisco Airports
San Mateo County Behavior San Mateo Government Offices-County San Mateo County Tax Collector Redwood City Tax Return Preparation & Filing San Mateo Medical Ctr San Mateo Hospitals
Sciex LLC Redwood City Scientific Apparatus & Instruments-Mfrs SRI International Menlo Park Engineers-Research
Visa Inc Foster City Credit Card & Other Credit Plans
Youtube LLC San Bruno Online Services
Source: State of California Employment Development Department, extracted from The America's Labor Market Information System (ALMIS) Employer Database, 2023 1st Edition.
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Effective Buying Income
“Effective Buying Income” is defined as personal income less personal tax and nontax payments, a number often referred to as “disposable” or “after-tax” income. Personal income is the aggregate of wages and salaries, other labor-related income (such as employer contributions to private pension funds), proprietor’s income, rental income (which includes imputed rental income of owner-occupants of non-farm dwellings), dividends paid by corporations, interest income from all sources, and transfer payments (such as pensions and welfare assistance).
Deducted from this total are personal taxes (federal, state and local), nontax payments (fines, fees, penalties, etc.) and personal contributions to social insurance. According to U.S. government definitions, the resultant figure is commonly known as “disposable personal income.” The following table summarizes the total effective buying income for the City of Foster City, the County of San Mateo, the State and the United States for the period 2019 through 2023.
CITY OF FOSTER CITY AND COUNTY OF SAN MATEO
Effective Buying Income
As of January 1, 2019 through 2023
Year Area
Total Effective
Buying Income
(000’s Omitted)
Median Household
Effective Buying
Income
2019 Foster City $2,206,166 $116,601
San Mateo County 39,578,320 93,319
California 1,183,264,399 62,637
United States 9,017,967,563 52,841
2020 Foster City $2,317,301 $122,613
San Mateo County 40,511,605 96,614
California 1,243,564,816 65,870
United States 9,487,165,436 55,303
2021 Foster City $2,500,193 $132,495
San Mateo County 43,397,132 102,641
California 1,290,894,604 67,956
United States 9,809,944,764 56,790
2022 Foster City $2,733,604 $150,209
San Mateo County 48,351,364 120,425
California 1,452,426,153 77,058
United States 11,208,582,541 64,448
2023 Foster City $2,578,841 $151,179
San Mateo County 46,729,979 123,273
California 1,461,799,662 77,175
United States 11,454,846,397 65,326
Source: Claritas, LLC.
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Construction Activity
Provided below are the building permits and valuations for the City of Foster City for calendar years 2017 through 2021.
CITY OF FOSTER CITY
Total Building Permit Valuations
(Valuations in Thousands)
2017 2018 2019 2020 2021
Permit Valuation
New Single-family $0.0 $0.0 $15,022.1 $1,930.6 $17,002.7 New Multi-family 0.0 0.0 0.0 0.0 2,863.7
Res. Alterations/Additions 10,670.2 12,004.4 11,728.1 11,294.5 15,042.9 Total Residential 10,670.2 12,004.4 26,750.2 13,225.1 34,909.3 New Commercial 73,903.7 0.0 95.0 738.1 46,067.8
New Industrial 0.0 0.0 0.0 0.0 0.0
New Other 606.4 1,421.8 1,859.9 887.1 18,518.3
Com. Alterations/Additions 110,877.4 191,290.7 25,794.6 12,023.6 70,508.5 Total Nonresidential 185,387.5 192,712.5 27,749.5 13,648.8 135,094.6 New Dwelling Units
Single Family 0 0 21 14 25
Multiple Family 0 0 0 0 4
TOTAL 0 0 21 14 29
Source: Construction Industry Research Board, Building Permit Summary.
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APPENDIX B
ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR YEAR ENDED
JUNE 30, 2022
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APPENDIX C
PROPOSED FORM OF OPINION OF BOND COUNSEL
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APPENDIX D
FORM OF CONTINUING DISCLOSURE CERTIFICATE
This Continuing Disclosure Certificate (this “Disclosure Certificate”) is executed and delivered by the City of Foster City (the “City”) in connection with the issuance of the bonds captioned above (the “Bonds”). The Bonds are being issued under the Constitution and laws of the State of California, including but not limited to, Article 4.5 of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California, under a resolution adopted by the City Council of the City on May 15, 2023 (the “Bond Resolution”).
The City hereby covenants and agrees as follows:
Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the City for the benefit of the holders and beneficial owners of the Bonds and in order to assist the Participating Underwriter in complying with S.E.C. Rule 15c2- 12(b)(5).
Section 2. Definitions. In addition to the definitions set forth above and in the Bond Resolution, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section 2, the following capitalized terms have the following meanings:
“Annual Report” means any Annual Report provided by the City pursuant to, and as described in, Sections 3 and 4.
“Annual Report Date” means the date not later than April 1 after the end of each fiscal year of the City (currently June 30th).
“Dissemination Agent” means the City or any other Dissemination Agent designated in writing by the City and which has filed with the City a written acceptance of such designation.
Urban Futures, Inc. has been appointed as the initial Dissemination Agent. “Listed Events” means any of the events listed in Section 5(a). “MSRB” means the Municipal Securities Rulemaking Board, which has been designated by the Securities and Exchange Commission as the sole repository of disclosure information for purposes of the Rule.
“Official Statement” means the final official statement executed by the City in connection with the issuance of the Bonds.
“Participating Underwriter” means any of the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds. “Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time.
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Section 3. Provision of Annual Reports.
(a) The City shall, or shall cause the Dissemination Agent to, not later than the Annual Report Date, commencing April 1, 2024, with the report for the 2022-23 fiscal year, provide to the MSRB in an electronic format as prescribed by the MSRB, an Annual Report that is consistent with the requirements of Section 4 of this Disclosure Certificate. Not later than 15 Business Days prior to the Annual Report Date, the City shall provide the Annual Report to the Dissemination Agent (if other than the City). If by 15 Business Days prior to the Annual Report Date the Dissemination Agent (if other than the City) has not received a copy of the Annual Report, the Dissemination Agent shall contact the City to determine if the City is in compliance with the previous sentence. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the City may be submitted separately from the balance of the Annual Report, and later than the Annual Report Date, if not available by that date. If the City’s fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(b). The City shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by the City hereunder.
(b) If the City does not provide (or cause the Dissemination Agent to provide) an Annual Report by the Annual Report Date, the City shall provide (or cause the Dissemination Agent to provide) to the MSRB, in an electronic format as prescribed by the MSRB. (c) With respect to each Annual Report, the Dissemination Agent shall:
(i) determine each year prior to the Annual Report Date the then-applicable rules and electronic format prescribed by the MSRB for the filing of annual continuing disclosure reports; and
(ii) if the Dissemination Agent is other than the City, file a report with the City certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, and stating the date it was provided.
Section 4. Content of Annual Reports. The City’s Annual Report shall contain or incorporate by reference the following:
(a) The City’s audited financial statements prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the City’s audited financial statements are not available by the Annual Report Date, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available.
(b) Unless otherwise provided in the audited financial statements filed on or before the Annual Report Date, financial information and operating data with respect to the City for the preceding fiscal year, substantially similar to that provided in the Official Statement:
(i) Assessed value of taxable property within the jurisdiction of the City;
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(ii) Summary of property tax rates for all taxing entities within the City expressed as a percentage of assessed valuation in the form of Table 5 of the Official Statement;
(iii) Top twenty property taxpayers for current fiscal year, taxable value and percentage of total assessed value in substantially the form of Table 6 of the Official Statement;
(iv) If and to the extent such information is available from the County, property tax collection delinquencies for the City; and
(v) Amount of all general obligation debt of the City outstanding, and total scheduled debt service on such general obligation debt. (c) In addition to any of the information expressly required to be provided under this Disclosure Certificate, the City shall provide such further material information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading.
(d) Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the City or related public entities, which are available to the public on the MSRB’s internet web site or filed with the Securities and Exchange Commission. The City shall clearly identify each such other document so included by reference.
Section 5. Reporting of Significant Events.
(a) The City shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds:
(1) Principal and interest payment delinquencies.
(2) Non-payment related defaults, if material.
(3) Unscheduled draws on debt service reserves reflecting financial difficulties.
(4) Unscheduled draws on credit enhancements reflecting financial difficulties.
(5) Substitution of credit or liquidity providers, or their failure to perform. (6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or
determinations with respect to the tax status of the security, or other material events affecting the tax status of the security. (7) Modifications to rights of security holders, if material. (8) Bond calls, if material, and tender offers.
(9) Defeasances.
(10) Release, substitution, or sale of property securing repayment of the securities, if material.
(11) Rating changes.
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(12) Bankruptcy, insolvency, receivership or similar event of the City or other obligated person.
(13) The consummation of a merger, consolidation, or acquisition involving the City or an obligated person, or the sale of all or substantially all of the assets of the City or an obligated person (other than in the ordinary course of business), the entry into a definitive agreement to undertake such an action, or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material.
(14) Appointment of a successor or additional trustee or the change of name of a trustee, if material.
(15) Incurrence of a financial obligation of the City, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City or an obligated person, any of which affect security holders, if material. (16) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the City, any of which reflect financial difficulties. (b) Whenever the City obtains knowledge of the occurrence of a Listed Event, the City shall, or shall cause the Dissemination Agent (if not the City) to, file a notice of such occurrence with the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of 10 business days after the occurrence of the Listed Event. Notwithstanding the foregoing, notice of Listed Events described in subsections (a)(8) and (9) above need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to holders of affected Bonds under the Fiscal Agent Agreement.
(c) The City acknowledges that the events described in subparagraphs (a)(2), (a)(7), (a)(8) (if the event is a bond call), (a)(10), (a)(13), (a)(14) and (a)(15) of this Section 5 contain the qualifier “if material.” The City shall cause a notice to be filed as set forth in paragraph (b) above with respect to any such event only to the extent that the City determines the event’s occurrence is material for purposes of U.S. federal securities law. (d) For purposes of this Disclosure Certificate, any event described in paragraph (a)(12) above is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the City in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the City. (e) For purposes of Section 5(a)(15) and (16), “financial obligation” means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The term financial obligation shall not include municipal securities as to which a final official statement has been provided to the Municipal Securities Rulemaking Board consistent with the Rule.
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Section 6. Identifying Information for Filings with the MSRB. All documents provided to the MSRB under the Disclosure Certificate shall be accompanied by identifying information as prescribed by the MSRB.
Section 7. Termination of Reporting Obligation. The City’s obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the City shall give notice of such termination in the same manner as for a Listed Event under Section 5(b).
Section 8. Dissemination Agent. The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any Dissemination Agent, with or without appointing a successor Dissemination Agent. Any Dissemination Agent may resign by providing 30 days’ written notice to the City.
Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of an obligated person with respect to the Bonds, or type of business conducted;
(b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the primary offering of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and
(c) the proposed amendment or waiver either (i) is approved by holders of the Bonds in the manner provided in the Bond Resolution for amendments to the Bond Resolution with the consent of holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the holders or beneficial owners of the Bonds.
If the annual financial information or operating data to be provided in the Annual Report is amended pursuant to the provisions hereof, the first annual financial information filed pursuant hereto containing the amended operating data or financial information shall explain, in narrative form, the reasons for the amendment and the impact of the change in the type of operating data or financial information being provided.
If an amendment is made to the undertaking specifying the accounting principles to be followed in preparing financial statements, the annual financial information for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information, in order to provide information to investors to
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enable them to evaluate the ability of the City to meet its obligations. To the extent reasonably feasible, the comparison shall be quantitative. A notice of the change in the accounting principles shall be filed in the same manner as for a Listed Event under Section 5(b).
Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the City chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the City shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.
Section 11. Default. If the City fails to comply with any provision of this Disclosure Certificate, the Participating Underwriter or any holder or beneficial owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Bond Resolution, and the sole remedy under this Disclosure Certificate in the event of any failure of the City to comply with this Disclosure Certificate shall be an action to compel performance.
Section 12. Duties, Immunities and Liabilities of Dissemination Agent. (a) The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the City agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which they may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The Dissemination Agent shall have no duty or obligation to review any information provided to it by the City hereunder, and shall not be deemed to be acting in any fiduciary capacity for the City, the Bond holders or any other party. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. (b) The Dissemination Agent shall be paid compensation by the City for its services provided hereunder in accordance with its schedule of fees as amended from time to time, and shall be reimbursed for all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder.
Section 13. Notices. Any notice or communications to be among any of the parties to this Disclosure Certificate may be given as follows:
To the City: City of Foster City
601 Foster City Blvd.
Foster City, California 94404
(650) 286-3200
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To the Dissemination Agent: Urban Futures, Inc.
17821 17th Street, Suite 245
Tustin, CA 92780
Attention: Chief Executive Officer
Phone: 714-283-9334
Any person may, by written notice to the other persons listed above, designate a different address or telephone number(s) to which subsequent notices or communications should be sent.
Section 14. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the City, the Dissemination Agent, the Participating Underwriter and holders and beneficial owners from time to time of the Bonds, and shall create no rights in any other person or entity.
Section 15. Counterparts. This Disclosure Certificate may be executed in several counterparts, each of which shall be regarded as an original, and all of which shall constitute one and the same instrument.
Date: ______________, 2023CITY OF FOSTER CITY
By:
Director of Finance
ACKNOWLEDGED AND ACCEPTED:
URBAN FUTURES, INC.,
as dissemination agent
By:
Chief Executive Officer
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APPENDIX E
DTC AND THE BOOK-ENTRY ONLY SYSTEM
The following description of the Depository Trust Company (“DTC”), the procedures and record keeping with respect to beneficial ownership interests in the Bonds, payment of principal, interest and other payments on the Bonds to DTC Participants or Beneficial Owners, confirmation and transfer of beneficial ownership interest in the Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC. Accordingly, no representations can be made concerning these matters and neither the DTC Participants nor the Beneficial Owners should rely on the foregoing information with respect to such matters, but should instead confirm the same with DTC or the DTC Participants, as the case may be.
Neither the issuer of the Bonds (the “Issuer”) nor the trustee, fiscal agent or paying agent appointed with respect to the Bonds (the “Agent”) take any responsibility for the information contained in this Appendix.
No assurances can be given that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial Owners (a) payments of interest, principal or premium, if any, with respect to the Bonds, (b) certificates representing ownership interest in or other confirmation or ownership interest in the Bonds, or (c) redemption or other notices sent to DTC or Cede & Co., its nominee, as the registered owner of the Bonds, or that they will so do on a timely basis, or that DTC, DTC Participants or DTC Indirect Participants will act in the manner described in this Appendix. The current "Rules" applicable to DTC are on file with the Securities and Exchange Commission and the current "Procedures" of DTC to be followed in dealing with DTC Participants are on file with DTC.
1. The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the securities (the “Securities”). The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be issued for each issue of the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.
2. DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates.