DATE: March 16, 2026
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: Nate Cruz, Finance Director
SUBJECT: AGREEMENT TO REIMBURSE CITY OF SAN MATEO FOR
FOREGONE INTEREST EARNINGS
RECOMMENDATION
It is recommended that the City Council/Estero Municipal Improvement District Board of Directors (City Council) adopt the attached resolutions approving the reimbursement of the City of San Mateo for foregone interest earnings related to the Waste Water Treatment Plant Master Plan Improvements Project and authorize the City Manager to sign the Agreement.
EXECUTIVE SUMMARY
In 2023, San Mateo began using its Sewer Enterprise reserve funds to front Foster City’s share of Waste Water Treatment Plant (WWTP) construction costs while the waiting for additional sources of funds to become available under the State Revolving Fund (“SRF”). It was thought that SRF funds would become quickly available, but it took approximately two years. As a result, San Mateo lost interest earnings it would have otherwise earned, while EMID retained and earned interest on its cash.
Due to staff turnover in San Mateo, no written agreement governing these advances was executed, nor was EMID invoiced for its share of the WWTP Project costs. The proposed Agreement provides reimbursement to San Mateo for its foregone interest earnings for the period of April 2023 through November 2023, when EMID requested an invoice to pay its full share of the cost.
Interest is calculated at 1.9%, equal to the WWTP Project’s average debt cost, and applied to the monthly advances which accumulated to $19,665,305 by November of 2023. The total foregone interest reimbursement is $148,141.70.
FISCAL IMPACT
The fiscal impact of the proposed agreement is a $148,141.70. However, the interest earned by Foster City during the period of the advances by the City of San Mateo offsets the cost of this agreement.
CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Staff Empowerment and Operational Excellence
ATTACHMENTS
Attachment 1 – City Resolution
Attachment 2 – EMID Resolution
Attachment 3 - Agreement