DATE: March 24, 2025
TO: Mayor and Members of the City Council
President and Members of the EMID Board of Directors
VIA: Stefan Chatwin, City/District Manager
Marlene Subhashini, Assistant City/District Manager
FROM: Andrew Brozyna, Public Works Director/City Engineer Kurt Zander, Building and Vehicle Maintenance Manager
DEPARTMENT: Public Works
SUBJECT: BUILDING MAINTENANCE FUND BUDGET AND INTERNAL
SERVICE CHARGES FOR FY 2025-2026
RECOMMENDATION
It is recommended that the City Council review this report and its attachments and provide policy direction regarding the development of the Building Maintenance Internal Service Fund Budget for Fiscal Year 2025-2026.
EXECUTIVE SUMMARY
There are two budget impacts associated with the Building Maintenance Fund: (1) expenditures related to the Building Maintenance operation, including scheduled replacement projects and (2) funding transfers to support the Building Maintenance Operation and future replacement of building components.
If the budget is prepared as detailed in this report, the Building Maintenance Division is estimated to require the expenditure of $3,672,840 from Fund 505 Building Maintenance in FY 2025-2026, including $502,500 for scheduled replacements (Attachments 1, 2 and 5). In addition, the budget will reflect transfers totaling $3,917,014 to the Building Maintenance fund from the General and Enterprise Funds to support the maintenance operation and the planned future replacement of building components (Attachment 6).
Details of the cost and distribution of operation are contained in the attachments to this
report.
BACKGROUND
The building maintenance program was created to ensure that all City facilities are safe, clean, and comfortable through management, maintenance, inspection, repair, and replacement of all the systems that comprise the City/District’s seven City facilities totaling 132,448 square feet (this is a temporary reduction in square footage while the Recreation Center is under construction). Established maintenance protocols allow City staff to continue to provide the highest quality service to the Foster City community.
The Division’s staff completes work requests, emergency and routine repairs in a timely manner with the support of outside contractors to assist with preventative maintenance and special projects.
Building Maintenance Division Staff duties include but are not limited to:
•Emergency Repairs – such as gas leaks or water pipe breaks •Work Requests – such as electrical outlet failure or carpet stain removal •Regular Repairs – such as lighting ballast replacement or restroom plumbing •Supplies/Inventory – such as ordering and organizing regularly stocked supplies and materials
•Preventative Maintenance – such as maintaining industry standards with respect to fire extinguisher, safety and other inspections
•Special Projects – such as resurfacing floors, refurbishing building areas and upgrading and deploying the Lagoon Holiday Tree
•Administration – such as complying with contract and purchasing requirements, staffing, and managing and overseeing the division operations budget and replacement funds
In FY 2024-2025, Building Maintenance staff completed the following significant projects in addition to emergency and routine repair and preventative maintenance:
•Restored the City entry signs in 3 locations: East Third Avenue, Hillsdale Boulevard, and Highway 92 on-ramp
•Replaced a radiator unit in the Corporation Yard crane, saving $25,000 compared to hiring an outside contractor
•Worked with the Information Technology Division, wiring and video system in the Police Station
•Created a sleeping area in City Hall for Police Department staff holdovers •Repaired daylight domes in the library/community center, saving $30,000 compared to hiring an outside contractor
•Power-washed all City buildings: Library/Community Center, City Hall, Council Chambers, Vibe Teen Center
•Installed water fountains and water bottle filling station in the Vibe Teen Center and Community Center
•Supported the recreation center staff relocation and building decommissioning, including salvaging and repurposing furniture, fixtures, and appliances The Building Maintenance Fund provides for the distribution of costs for building management and maintenance among user departments and funds. It also serves as a funding mechanism for the replacement of building components such as roofs, flooring, paint, HVAC, lighting and elevators. Setting aside replacement funding and planning for replacement over the life of the building components provides for an orderly replacement process.
ANALYSIS
The Building Maintenance Fund relies on anticipation of replacement and major renovation costs for facilities. Regular replacement or renovation of lighting, elevators, paint, flooring, HVAC and roofs are identified, and the cost is spread over the life of the assets. Staff actively monitors and adjusts estimated useful life (Attachment 3) and replacement cost (Attachment 4) of each item to ensure that funding will be available as replacement is needed.
CEQA
Not Applicable
FISCAL IMPACT
There are two budget impacts associated with the Building Maintenance Fund.
Expenditures for the Building Maintenance operation are found in the Building Maintenance Division budget. The total recommended Building Maintenance Division budget is $3,672,840, which includes staffing, maintenance supplies, insurance, utilities and scheduled replacements (Attachments 2 and 5). Funding for the Building Maintenance operation is reallocated from the General and Enterprise funds through transfers from divisions based upon the percentage of total City facility space used by them.
Budget transfers are also used to accumulate funding for the future replacement of building components and equipment used to maintain the organization’s buildings. The total recommended transfer for these two budget components (operations and replacement) as distributed among funds, after adjusting for pre-funded building component replacements, is shown in detail in Attachment 6 and summarized below in Table 2.
Table 2: Building Replacement Fund Annual Replacement Charge (Transfer) Summary – All Funds Fund FY 24-25 FY 25-26
Increase
(Decrease)
%
Change
General 3,226,265 3,558,568 332,303 10.3%
Water 142,252 179,223 36,971 26.0%
Wastewater 142,252 179,223 36,971 26.0%
Totals 3,510,769 3,917,014 406,245 11.6%
During FY 2024-2025, there were two changes that significantly impacted the distribution of costs through the organization. In Fall 2024, the Recreation Division moved its operation out of the Recreation Center and into a combination of existing facilities and a much smaller temporary facility so that the facility could be demolished and rebuilt. This reduced the overall square footage of the City’s building footprint. In April 2025, the San Mateo Consolidated Fire Department will be moving its administrative offices from the Foster City fire station second floor, thus increasing the square footage that is available for City Hall operations and is maintained by the Building Maintenance division. The overall cost of the Building Maintenance Division was not impacted by the temporary reduction in building square footage, and the costs were distributed based on the remaining square footage. The Building Maintenance Division continues to support the Recreation Division during the Recreation Center project and will take over maintenance of the new facility once it is constructed.
Building Maintenance Fund Budget Analysis
The FY 2025-2026 Building Maintenance Fund line item budget reflects an increase for the Building Maintenance Division operation of approximately $613,000 (20%) compared to FY 2024-2025 (Attachments 2 and 5). The primary drivers of the decrease are:
•An overall increase of approximately $17,400 in personnel costs. •An increase of $47,000 to reflect higher costs for supplies and services. •An increase of approximately $98,000 in Internal Service Fund transfers for Equipment Replacement, Vehicle Replacement and Information Technology of which $85,000 is due to a significant realignment of items on the Building Maintenance Equipment Replacement list, including significantly reducing the useful lives of water heaters and increasing the replacement values of a number of items. These changes are detailed in the attachments to this report. •An increase of $451,000 for scheduled building projects compared to FY 2024- 2025.
Staff routinely monitors fund balances to ensure that adequate funds are available. Based on calculations from the Finance Department, the Building Maintenance Fund is expected to end Fiscal Year 2024-2025 with an available fund balance of $8,625,587. The amount directly attributable to the replacement of equipment and to scheduled building projects through the end of FY 2024-2025 is $4,078,845, and the Council-set minimum contingency reserve is $100,000, leaving an uncommitted balance of $4,446,742.
CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
As Building Maintenance provides for and maintains vehicles for nearly all City operations, the Building Maintenance budget addresses all of the City’s priority goals.
ATTACHMENTS:
•Attachment 1 - Items to be Replaced
•Attachment 2 - 505 – Building Maintenance Fund Expenses •Attachment 3 - Changes to Estimated Useful Lives
•Attachment 4 - Changes to Replacement Values
•Attachment 5 - Building Maintenance Fund Comparisons
•Attachment 6 - Internal Service Fund Charges
•Attachment 7 - Items Added To or Deleted From the Building Maintenance List •Attachment 8 - Building Maintenance Fund Narrative