DATE: March 23, 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
Marlene Suhashini, Assistant City/District City Manager
FROM: Andrew Brozyna, Public Works Director
DEPARTMENT: Public Works
SUBJECT: BUILDING MAINTENANCE FUND BUDGET AND INTERNAL
SERVICE CHARGES FOR FY 2026-2027 AND 2027-2028
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 Years 2026-2027 and 2027-2028.
EXECUTIVE SUMMARY
There are two budget impacts associated with the Building Maintenance Fund:
1. Building Maintenance Fund expenditures for Building Maintenance Division operations, including scheduled replacement projects (Attachments 1 and 2); and
2. Transfers into the Building Maintenance Fund to support the Building Maintenance Operation and future replacement of building components. These transfer costs are allocated to each user department based on building use and future replacement projects (Attachment 6)
The proposed budget for the Building Maintenance Division includes expenditures of $4,833,608 from Fund 505 (Building Maintenance Fund) in FY 2026-2027, including $1,536,507 for the replacement of maintenance equipment and building components scheduled for replacement. For FY 2027-2028, the estimated expenditure is $5,128,981,
including $1,777,000 for the replacement of maintenance equipment scheduled for replacement.
The budget also reflects transfers totaling $3,714,364 in FY 2026-2027 and $ 3,843,779, in FY 2027-2028 to the Building Maintenance fund from the General and Enterprise Funds to support the maintenance operation and the planned future replacement of building components.
Details of the cost and distribution of operation are contained in the attachments to this report.
BACKGROUND/ANALYSIS
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 approximately 161,110 square feet. Last year the funding allocation attributed to departments was updated to reflect the temporary, smaller facilities used by Recreation Division during the construction of the new Community Center (formerly called the Recreation Center). The new Community Center is expected to be occupied early in FY 2026-27, therefore the reduced square footage has been updated to reflect the new building footprint.
Established maintenance protocols allow City staff to continue to provide the highest quality service to the Foster City community.
The Building 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 2025-2026, Building Maintenance staff completed the following significant projects in addition to emergency and routine repair and preventative maintenance:
Police Department
Renovated hallways and men’s restrooms
Police Department Kitchen Remodel (CIP 301-711)
Converted the radio/interrogation room into a staff break room Renovated two holding rooms and installed new ceiling-mounted surveillance cameras Converted the former records room into an office for the Dispatch Office Replaced the HVAC unit serving the Dispatch computer room Renovated the radar/body camera closet and improved the charging station area Upgraded door access for two rooms from an electronic key system to a card-access system
Upgraded lighting in select rooms, break rooms, and kitchen areas from fluorescent to LED
Repaired the exterior gym wall after a vehicle collision and installed parking bumpers to prevent recurrence
Repaired the Police Department HVAC system
Removed exterior window tint at the Police Department
Coordinated with IT to install wiring and a video system in the Police Station Corporation Yard
Completed Corporation Yard Exterior Painting (CIP 301-699) Installed four commercial-grade steel double doors
Repaired damaged wood throughout shop sheds
Set up a new Engineering office for an employee
Upgraded high-pole and wall-mounted exterior lights to LED Replaced the radiator unit in the Corporation Yard crane City Hall
Sealed the rear side of City Hall to address exterior leaks Installed bird netting to protect the HVAC unit and filters from nesting and debris Converted fluorescent lighting to LED in in several areas Created a rest area in City Hall for Police Department Library and Community Center Annex
Installed a new water cooler with bottle dispenser in the library Replaced the boiler expansion tank
Retrofitted lighting to LED in various areas including high-ceiling metal halide fixtures to LED throughout Community Center Annex hallways
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.
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 in the Building Maintenance Division budget. The total recommended Building Maintenance Division budget is $4,833,608 for FY 2026-2027 and $5,128,981 for FY 2027-2028, which includes staffing, maintenance supplies, utilities and funding for scheduled maintenance projects to be performed during the year. (Attachments 2 and 5).
The FY 2026-2027 Building Maintenance Fund line item budget reflects an increase for the Building Maintenance Division operation of approximately $1,162,579 (24%) compared to FY 2025-2026. The primary drivers of the increase are:
An overall increase of approximately $16,000 in personnel costs. An increase of approximately $93,000 to reflect higher costs for supplies and services (see Attachment 2 for details)
An increase of approximately $56,000 to account for janitorial services for the Community Center which were decreased while it was under construction An increase of $1,034,007 for scheduled building projects compared to FY 25-26.
The FY 2027-2028 Building Maintenance Fund line item budget reflects an increase for the Building Maintenance Division operation of approximately $295,373 (6%) compared to FY 2026- 2027 (Attachment 5). The primary drivers of the increase are:
An overall increase of approximately $34,000 in personnel costs. An increase of approximately $51,500 for utility costs An increase of $240,493 for scheduled building projects compared to FY 26-27 The increases are partially offset by a decrease due to planned purchase of equipment for $23,000 in FY 26-27, decrease in Vehicle Maintenance allocation, and a decrease in equipment maintenance charges
Additional details are in Attachment 5 – Building Maintenance Fund Comparisons.
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 estimated transfers are $3,714,364 in FY 2026-2027 and $3,843,779, in FY 2027-2028 to the Building Maintenance fund from the General and Enterprise Funds to support the maintenance operation and the planned future replacement of building components. 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 1. The approximately 5% overall decrease in FY 2026-2027 is primarily driven by lower equipment charges compared to the prior year. In the previous year, several items had their useful lives reduced, which increased charges. FY 2026- 2027 reflects a return toward more typical levels. The minor increase in FY 27-28 is attributed to minor increases in Building Maintenance Operations.
Table 1: Building Replacement Fund Annual Replacement Charge (Transfer) Summary – All Funds Fund FY 25-26 FY 26-27
Increase
(Decrease)
over FY 25-26
%
Change FY 27-28
Increase
(Decrease)
over FY 26-27
%
Change
General 3,558,568 3,398,720 (159,848) -4.5% 3,527,799 129,079 3.8% Water 179,223 157,822 (21,401) -11.9% 157,990 168 0.1%
Wastewater 179,223 157,822 (21,401) -11.9% 157,990 168 0.1% Totals 3,917,014 3,714,364 (202,650) -5.2% 3,843,779 129,415 4.0% Staff routinely monitors fund balances to ensure that adequate funds are available. In addition to typical expenditures, it is also recommended to use $342,771 of unreserved funds toward CIP 301-685 HVAC Improvements in City Buildings.
The table below shows the estimated fund balance in FY 2026-2027 and FY 2027-2028:
FY 26-27 FY 27-28
Estimated fund balance $11,372,108 Estimated fund balance $9,910,093 Allocations from Depts $3,714,364 Allocations from Depts $3,843,779 Expenditures (including
replacement items) $-4,833,608
Expenditures (including
replacement items) $-5,128,981
Recommended unreserved
balance toward (CIP 301-
685) HVAC Improvements
in City Buildings $-342,771
New Balance End of 26-27 $9,910,093 New Balance End of 27-28 $8,624,891 Reserved for replacement of
assets $-4,100,477
Reserved for replacement
of assets $-2,418,152
Fund contingency $-100,000 Fund contingency $-100,000
Total $5,709,616 Total $6,106,738
Based on the projected beginning fund balance, departmental allocations, and anticipated expenditures, the fund is expected to remain adequately funded in each fiscal year to cover planned vehicle replacement obligations as well as the established contingency reserve.
CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Facilities and Infrastructure
ATTACHMENTS:
Attachment 1a - Items to be Replaced FY 26-27
Attachment 1b - Items to be Replaced FY 27-28
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 6a - Internal Service Fund Charges FY 26-27
Attachment 6b - Internal Service Fund Charges FY 27-28
Attachment 7 - Items Added to or Deleted from the Building Maintenance List Attachment 8 - Building Maintenance Fund Narrative