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DATE: June 1, 2026
TO: Mayor and Members of the City Council
VIA: Stefan Chatwin, City Manager
Marlene Subhashini, Assistant City Manager
FROM: Nate Cruz, Finance Director
Waqas Hassan, Assistant Finance Director
DEPARTMENT: Finance
SUBJECT: ESTABLISHING THE PROPERTY TAX RATE FOR GENERAL OBLIGATION BONDS FOR FISCAL YEAR 2026-27
RECOMMENDATION
It is recommended that the City Council approve the attached resolution establishing the property tax rate for General Obligation Bonds for Fiscal Year (“FY”) 2026-27.
EXECUTIVE SUMMARY
In August 2020, the City issued General Obligation Bonds, Series 2020 (Levee Protection Planning and Improvements Project) "Bonds" in the aggregate principal amount of $85 million. In July 2023, due to the subsequent increase in the total cost of the Project, the City issued a second tranche of $5 million Bonds for a total of $90 million.
The City Council is required annually to levy property tax sufficient to pay the principal and interest on the Bonds. City staff has determined that a combined tax rate of $0.0277 per $100 of assessed value (equates to $27.70 per $100,000 of assessed value) upon taxable properties in the City is necessary to pay for the total annual debt service including principal and interest of $4,254,163 (payable on February 1, 2027 and August 1, 2027).
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BACKGROUND/ANALYSIS
In June 2018, Foster City voters approved a ballot measure authorizing the issuance of up to $90 million in General Obligation Bonds for the Levee Protection Planning and Improvements Project. In August 2020, the City Council authorized the issuance of the first tranche of the General Obligation Bonds in the aggregate principal amount of $85 million. In July 2023, due to the subsequent increase in the total cost of the Project, the City issued a second tranche for $5 million Bonds of the total approved amount of $90 million. In order to pay the total annual debt service of $4,254,163 including principal and interest (payable on February 1, 2027 and August 1, 2027), City staff has determined that a combined property tax rate of $0.0277 per $100 of assessed value (equates to $27.70 per $100,000 of assessed value) is appropriate in FY 2026-271.
This combined rate corresponds to separate tax rate of $0.0256 per $100 of assessed value (equates to $25.60 per $100,000 of assessed value) for the 2020 General Obligation Bonds and $0.0021 per $100 of assessed value (equates to $2.10 per $100,000 of assessed value) for the 2023 General Obligation Bonds. The County requires a City Council resolution providing the County with the authority to add this levy to their tax roll.
California Environmental Quality Act
Not Applicable
FISCAL IMPACT
The recommended General Obligation Bonds tax levy provides funds needed in the City's Debt Service Fund for principal and interest payments for the bond year ending August 1, 2027. There is no impact on the General Fund.
CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Staff Empowerment and Operational Excellence
Facilities and Infrastructure
ATTACHMENTS:
Attachment 1 – Resolution
1 Notably, the tax levy proposed in this staff report applies to FY2026-27 even though the second debt service payment date of August 1, 2027 is in the following fiscal year. This allows sufficient time to collect property tax payments (which typically are received by the City in December and April) prior to the debt service due date.