City of San Mateo, California
Financial Policy
Capital Investment Reserve
I. Purpose
The Capital Investment Reserve is established within the Capital Projects Fund to finance major capital improvement projects that are critical to support municipal services. These projects may lack immediate funding or have funding not yet identified. This policy outlines how the Capital Investment Reserve will be funded and the conditions under which funds may be expended.
II. Funding the Reserve
1. Initial Funding:
City Council
reviews and approves initial funding for the Reserve, with future additional funding made in subsequent years, generally from the General Fund budgetary surplus.
2. Additional Funding:
Additional contributions to the Reserve may be made from surplus funds, one-time revenues, proceeds from the sales of City properties, or other unrestricted funding sources. These contributions will require City Council approval. City staff will review the General Fund’s funding levels annually and make recommendations to transfer funds from the General Fund to the Capital Investment Reserve as part of the annual budget adoption process.
3. Interest Earnings:
Any interest earned from the Reserve will be credited to the General Fund.
III. Conditions for Use of Reserves
1. Expenditures:
Reserve funds m
ay only be used for projects that are specifically authorized by the City Council.
These projects should be identified in the City's Capital Improvement Plan and must address critical unfunded capital needs. The reserve is not intended to cover operating expenditures or recurring costs.
2. Authority for Use:
Only the City Council can authorize the use of funds from the Capital Investment Reserve. The typical authorization process will occur with the adoption of the annual budget; however, Council can authorize the utilization of these funds at any other time through a resolution. This includes any inter-fund borrowing, which must be approved by the City Council, along with repayment terms.
IV . Annual Reporting
To ensure tra
nsparency and accountability, the Finance Director shall provide an annual report on the status of the Capital Investment Reserve. This annual report shall be presented to the City Council during a regularly scheduled financial update, such as the mid-year budget update or public hearings on the City’s budget. It shall include the reserve balance, contributions made during the fiscal year, expenditures, and if any, planned uses for future capital projects.
V . Annual Policy Review
This Policy will be reviewed annually during the budget process. The City Council may amend the policy at any time to ensure its effectiveness, alignment with the City’s long-term financial goals, or compliance with current best practices.
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Gann Appropriations Limit
CITY OF SAN MATEO APPROPRIATIONS LIMIT FOR FISCAL YEAR 2025-26 AMOUNT SOURCE A Last Y ear’s Limit $ 268,524,256 2024-25 Limit
B Adjustment Factors
1. Population 1.0009 CA Dept. of Finance
2. Inflation 1.0644 CA Dept. of Finance
1.0654 B1*B2
Total Adjustment % 0.0654 B1*B2-1
C Annual Adjustment $ 17,550,198 A*B
D This Y ear’s Limit $ 286,074,454 A+C
E Tax Proceeds Subject to the Limit
Property Tax $ 90,822,000 2025-26 Budget
Sales Tax 27,600,000 2025-26 Budget
Property Transfer Tax 8,600,000 2025-26 Budget
Other Tax 12,613,000 2025-26 Budget
Interest Allocation 6,030,000 2025-26 Budget
Total $ 145,665,000
Amount Under / (Over) Limit $ 140,409,454 D-E
City of San Mateo Gann Appropriations Limit as Defined in Article XIII B of the California State Constitution
The voters of California, during a special election in 1979, approved Article XIII-B of the California State Constitution.
Informally known as the “Gann Initiative,” Article XIII-B provides limits regarding the total amount of appropriations in any fiscal year from “the proceeds of taxes.”
In 1980, the State Legislature added Section 7900 et seq. to the Government Code, providing that the governing
body of each local jurisdiction must establish, by resolution, an appropriations limit for the following year. The
appropriations limit for any fiscal year was equal to the previous year’s limit, adjusted for population changes and the changes in the US Consumer Price Index (or California per capita personal income, if smaller). The necessary
statistical information is provided by the California
Department of Finance.
However, the original Article XIII-B (Proposition 4) and its implementing legislation were modified by Proposition 111 and SB 88 by the voters in June 1980. The changes were
incorporated into the fiscal year 1990-91 and fiscal year 1991- 92 appropriations limits. Beginning with the fiscal year 1990- 91 appropriations limit, a city may choose annual adjustment factors. The adjustment factors include the
growth in the California per capita income or the growth in the non- residential assessed valuation due to construction within the City and the population growth within the county or the city.
The table below provides the calculation for the
appropriations limit for fiscal year 2025-26, as well as the total appropriations subject to the limit. The adjustment factors utilized for the fiscal year 2025-26 calculation include the growth in California per capita income and the population growth within the County of San Mateo. As the table demonstrates, the City’s appropriations subject to the limit ($139.4 million) are well below the appropriations limit itself ($286.1 million).
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Budget Changes
Full Time Equivilant (FTE) Personnel Changes
DEPARTMENT ACTION 2025-26
PROPOSED POSITION/SERVICE ENHANCEMENTS FUNDING
SOURCE
FISCAL
IMPACT
Reallocate 1.0 FTE Assistant City Attorney to 1.0 FTE Senior Assistant City Attorney
Reallocating to provide a pathway for career advancement within the department.
Reallocate 1.0 FTE Systems Analyst ll to 1.0 FTE Senior Systems Analyst
Reallocating to provide a pathway for career advancement within the department. The additional costs of $25,000 will be offset by budget savings within the department
Add 1.0 FTE Human Resources Technician for a two-year limited term.
Support recruitment, onboarding, training and benefit
administration for the new Waste Water Treatment Plant.
Net Change to Merit Positions 1.0 FTE 166,500$
NewHuman Resources 1.0 Sewer Fund 140,000
26,500$
Net ZeroGeneral Fund Information Technology
City Attorney Reallocate
Reallocate
-
-
General Fund
and
Comprehensive
Liability Fund
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Budget Changes
Non-Personnel Operating Changes
DEPARTMENT SERVICE ENHANCEMENTS FUND
2025-26
PROPOSED
BUDGET
City Manager's Office Community survey, polling, and communication services. General Fund 250,000$ Information Technology Catergraph system renewal. General Fund 20,900 Information Technology Purchase Nutanix clusters. General Fund 20,900 Information Technology Cisco licensing cost. General Fund 37,708 Police Budget savings from Real Time Information Center (RTIC) General Fund (210,000) Police Axon contractual costs (RTIC/Fusus). Measure CC Fund 200,000 Police Per diem staffing need for the RTIC. General Fund 160,000 Police Overtime to meet staffing need for Youth Services General Fund 70,000 Police Overtime to meet staffing need for the Patrol Unit General Fund 300,000 Police To meet funding need for the annaul contract with San Mateo County for Animal Control Services General Fund 50,000
Public Works Expenditure controls and cost shift: Budget savings due to the negotiated office lease General Fund (135,000) Public Works Remaining funding needed to purchase electric sweeper in addition to C/CAG grant funding. Solid Waste Fund 631,000
Public Works Worker Resource Center Pilot Program: Additional cleaning services for Downtown and 25th Ave.
Solid Waste Fund 60,000
Solid Waste Fund 100,000
General Fund (100,000)
Advanced Planning
Fund
131,808
General Fund (131,808)
Public Works Enhancing cost recovery: Increase CIP Staff Chargeback to improve cost recovery for the General Fund
General Fund (1,000,000)
Public Works 1st year of mitigation plan design and development plan including joint agency lagoon general maintenance permit mitigation and reporting costs. Storm Fund 90,000 Public Works Increase budget to support the new WWTP facility coming online in FY 2025-26. Sewer Fund 772,200 Public Works Expenditure controls and cost shift: clean up budget no longer needed Fleet and Building Maint. Fund (130,000)
Public Works Increase budget for elevator maintenancce Fleet and Building Maint. Fund 50,000
Fleet and Building
Maint. Fund 120,000
General Fund (120,000)
Totals 1,237,708$
Expenditure controls and cost shift: Transportation staffing costs related to implementation of the General Plan Update will be charged to the Advanced Planning Fund instead of the General Fund.
Expenditure controls and cost shift: Power washing of Downtown and 25th Avenues will be funded by the Solid Waste Fund instead of the General Fund.
Expenditure controls and cost shift: Reallocating City Hall Cal Water and PG&E charges to the Fleet and Building Maint. Internal Service Fund.
Public Works
Public Works
Public Works
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Equity Initiatives FY 24-25 Results
Department Equity Initiative Work Plan Status Update
City
Attorney’s
Office
Assist City staff
with municipal
code amendments
implementing DEI
framework
Prepare amendments to Community
Relations Commission (CRC), Senior Citizens
Commission ordinances. Draft code changes
allowing youth participation on additional
boards/committees.
Complete: staff prepared the code amendments allowing for youth participation on certain commissions which was adopted on September 3, 2024, and the code update to the CRC ordinance was adopted on the same day. Changes to the Senior
Commission ordinance were adopted on December 9, 2024.
City Clerk’s
Office
Broaden outreach
and recruitment
strategies for
Boards,
Commissions, and
Committees to
bolster inclusive
participation
reflecting the
diversity of the City
of San Mateo’s
community.
• Increase the number of applicants per
vacancy.
• Broaden the range of applicants by
engaging with individuals from
underrepresented groups.
• Utilize established partnerships and
explore new collaborations to advertise
and highlight vacancies.
• Inform the community about the City's
advisory committees and ways for
individuals to engage and take part in
these opportunities.
Complete: The City Clerk’s Office continued to advance its commitment to equity and inclusive civic engagement through its second full implementation of the Outreach Success Plan. This initiative focuses on expanding awareness of Boards,
Commissions, and Committees (BCCs) and increasing participation from underrepresented segments of the community. The 2025 spring recruitment cycle delivered measurable outcomes, most notably: A 78% increase in total applications compared to 2024 and a 368% increase compared to the 2023 recruitment cycle. 202
Department Equity Initiative Work Plan Status Update
City
Manager’s
Office
Enhance
community
engagement and
dialogue with our
underrepresented
populations.
Evaluate and gather comprehensive input
from diverse neighborhoods, including
Asian, Pacific Islander, and Black
communities, and to strengthen
connections between residents and the City.
Complete: Over the past eight City Manager’s Office staff hosted a series of community conversations aimed at building stronger connections with its diverse populations, specifically the Asian/Pacific Islander, African American, and Latinx
communities—groups that have historically had less engagement with the City. These dialogues provided essential insights into the unique needs, challenges, and aspirations of these communities, helping to shape a clear vision for a more inclusive and vibrant San Mateo.
Key issues identified during the conversations included housing affordability, transportation, and traffic congestion. Additionally, residents expressed a strong desire for increased civic engagement opportunities and community events that foster stronger neighborhood connections.
Community
Development
Establish a CDD
Outreach and
Engagement Policy
that incorporates
the DEI Framework
Establish a consistent and reliable
framework which Incorporates DEI, for
hosting a community meeting
Complete: The Community Development Department established a consistent and reliable framework which Incorporates DEI, for hosting a community meeting.
As of May 27, 2025 the Department created a methodology and framework for an outreach plan incorporating many elements including a community meeting.
Finance Improve Finance
counter services for
business license
To enhance the process for obtaining a new
business license and managing annual
renewals, here are some improvements for
the work plan: (1) extend office hours; (2)
enhance the Finance Dept’s website to
provide clear step-by-step guides for
business license application and renewals,
and (3) for over-the-counter customers,
provide printed guides (in major languages)
that clearly outline the process, necessary
documents, and fees involved.
Complete: Effective October 21, 2024, the Finance Department extended its public counter hours from 8:00–11:30 AM and 1:00– 4:00 PM to 8:00 AM–12:00 PM and 1:00–4:30 PM. This change improves customer service availability for both residents and businesses.
Finance staff are enhancing the department’s website to include step-by-step guides for business license applications and renewals, along with multilingual PDF resources. For in-person visitors, staff are developing printed guides in major languages including Spanish, including large-print versions for improved visual accessibility.
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Department Equity Initiative Work Plan Status Update
Human
Resources
Update
recruitment
marketing and
outreach strategies
• Develop & implement ideas to expand
recruitment outreach and diversify the
City’s applicant pool, especially with
respect to youth and seniors.
• Work to attract and retain youth/young
adult interns by partnering with outside
organizations and centralizing internship
opportunities.
In Progress: The Human Resources Department is currently developing a proposal to establish a formal and customized “Recruitment, Marketing, and Outreach Plan” for the City of San Mateo. The purpose is to expand recruitment, marketing, and outreach activities in an effort to develop partnerships to build pipelines for City jobs and diversify the City’s applicant pool, including youth and seniors. Currently, we are in the planning phase in identifying options and developing work plans, timelines, and estimated costs.
Information
Technology
Implement a
Customer
Relationship
Management
system
Apply the DEI Strategic Framework to the
selection and implementation of a CRM that
will coordinate and manage citizen requests
Complete: Information Technology included DEI considerations in the selection of the product to be implemented for the Customer Relationship Management RFP. Specifically, the RFP asks vendors to provide the following features and functionality:
• Mobile device accessibility (for those without home
computers or Internet, but have access to a smartphone) • Accessibility compliance with WCAG 2.1 Level AA
standards to ensure accessibility for users with disabilities • Bilingual Public Support in both English and Spanish
• Enhanced Accessibility Features including support of
accessible attachments (e.g., tagged PDFs), high contrast themes, and allowance for text resizing without loss of functionality.
Information Technology also required the system allow City staff to enter cases for those who call or walk-in to a City location for help (people with no access to technology).
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Department Equity Initiative Work Plan Status Update
Library Strengthen and
expand outreach
services as well as
improve services to
neurodiverse
patrons.
Purchase new outreach van. Hire full-time
community services coordinator. Identify
underserved areas where we can expand
outreach.
Complete: The library has made efforts to successfully carry out their initiative. This can be seen through monthly outreach to Hillcrest Juvenile Hall and consistent engagement with English language learners in local public high schools help us connect with underserved youth. For the past year, children’s librarians have visited Peninsula Family Services and Intercommunal Preschool monthly to provide story times. They prioritize visits to preschools that are state subsidized. In addition, The Library has maintained a strong presence at local cultural and resource events, including the B Street Fiesta, AAPI Cultural Event, and Lunar New Year celebrations. These events allow The Library to build meaningful connections with residents across linguistic, cultural, and socioeconomic backgrounds who live in different parts of the city.
The Library has made an effort to offer programming in the North Central neighborhood with the bilingual cultural performance, San Mateo Juega, and an accompanying resource fair. The hiring of the new Community Services Coordinator greatly assisted the work for Juega and other San Mateo Celebrates events as we were able to effectively utilize volunteers. The new outreach van was purchased and The Library is in the process of designing a wrap for the vehicle.
Additionally, The Library partners with the SMC Veterans Outreach Group for monthly tabling at the library and participate in events such as the SMCO Veterans Christmas Event and the Veteran's Curation Program Networking Event. They are also enhancing our senior outreach through a new partnership with enABLE Care Management, launching our first collaborative program in July 2025. Librarians make visits to local senior housing such as the Villa Apartments to inform residents about library services and resources.
The Library's first Spanish-language gardening program was a success and reflects our commitment to expanding bilingual and culturally relevant programming. Outreach to the Peninsula Jewish Community Center and participation in school-based resource fairs further The Library's goal of reaching a wide range of communities. The children’s division added a Portuguese 205
Department Equity Initiative Work Plan Status Update
storytime in February due to community interest. Now, the library has three monthly world language storytimes in Portugese, Polish, and Persian.
Teen programs are intentionally inclusive, welcoming
neurodiverse and neurotypical participants alike. Based on feedback from parents, they would like for their children to participate in programs that are open to everyone and not just neurodiverse teens. Staff participated in several trainings on neurodiversity. The children’s team made a connection with The Burkhard School, an independent school designed for
neurodivergent learners to thrive. They are hoping to visit the school soon to learn more about their services and how the library can provide support. In recognition of Autism Awareness Month the Children’s Division hosted Sally J. Pla, neurodiversity advocate and award-winning author on April 24. Sally conducted two morning school assemblies, at Sunnybrae Elementary and College Park Elementary as well as an evening event at the Main Library.
Parks &
Recreation
Change Title of
Senior Citizens
Commission to
Senior Advisory
Commission.
Change the Title of the Senior Citizens
COmmission to the Senior Advisory
Committee to be more inclusive.
Complete: In regard to Parks & Recreation, the Commission title was updated to "Senior Advisory Commission" following
evaluations of other agencies and input from resident surveys after the Commission shared the original Senior Citizens Commission title may be perceived as exclusive to citizens. On December 9, 2024, the Municipal Code was revised to include the title update and broaden the commission’s scope, orienting it to address city-wide projects and programs beyond focus on the San Mateo Senior Center. This initiative reflects the growing needs of the senior community across the city and allows increased input on City services.
Police Domestic Violence
Emergency
Response Team
(DVERT)
Incorporate DEI into the DVERT program.
Invite select community members to join
our working group to help us craft our
program (policy, training, hiring, etc.)
Complete: The Police Department, in close collaboration with the County and Community Overcoming Relationship Abuse (CORA), has continued to advance the Domestic Violence Emergency Response Team (DVERT) co-response model. This innovative 206
Department Equity Initiative Work Plan Status Update
Ensure that the program evaluator includes
DEI in the evaluation, with a heavy emphasis
on community feedback on the program's
progress.
partnership strengthens our collective response to domestic violence by integrating trauma-informed, survivor-centered practices.
In alignment with our commitment to Diversity, Equity, and Inclusion (DEI), we are incorporating DEI principles throughout all facets of the DVERT program, including policy development, training, and hiring practices. To ensure authentic community representation, we have initiated the formation of a working group that includes select community members who will provide guidance and feedback as the program evolves.
Additionally, the program evaluator has been directed to include DEI as a core component of the evaluation framework, with a strong emphasis on collecting and incorporating community feedback on the program’s progress and impact.
Following an exhaustive recruitment effort, a promising candidate for the DVERT role has been identified. A comprehensive background investigation is currently underway and is expected to be completed shortly.
Public Works Deploy feminine
hygiene products in
all City staff
bathrooms.
Identify all city staff bathrooms that
currently don’t have supplies of feminine
hygiene products. Facilities staff to procure
and install the necessary hardware for
distribution. Amend/revise janitorial
services contract to include provision of
appropriate supplies for all restrooms going
forward.
In Progress: Public Works Facilities staff have installed equipment for provision of feminine hygiene products in approximately 30% of City facilities to-date and provision of products via the custodial contract is incorporated into the new custodial agreement that starts on July 1. Facilities staff will continue deploying the distribution equipment after budget is replenished on July 1 with adoption of the FY 2025-26 operating budget. 207
Glossary
Appropriation
An authorization granted by the City Council to make
expenditures and to incur obligations for specific purposes.
Audit
A review of the City’s accounts by an independent
accounting firm to verify that the City’s financial statements accurately reflect the City’s financial position.
Base Budget
Estimate of the funding level, excluding limited term items, required to continue existing service levels during the next fiscal year.
Budget
A comprehensive financial plan of operation embodying an estimate of proposed expenditures for a given period and the proposed means of financing them.
Capital Acquisitions
Items of a permanent or semi-permanent nature that last multiple years.
Capital Improvements
A permanent major addition to the City’s real property
assets including the design, construction, purchase, or major renovation of land, buildings, or facilities. Examples are the installation or repair of new or existing streets, traffic signals, sewer lines, roads, and parks.
Capital Improvement Program (CIP)
An ongoing plan of single and multiple-year capital
expenditures, which is updated annually.
Compensated Absences
An employee’s paid time off of work, which can consist of elements such as vacation time and sick leave.
Debt Service
The payment of interest and principal on borrowed funds.
Deficit
The result of an excess of expenditures over resources.
Department
A major administrative division of the City with overall management responsibility for an operation or a group of related operations within a functional area.
Depreciation
(1) Expiration in the service life of capital outlay assets attributable to wear and tear, deterioration, action of the physical elements, inadequacy, or obsolescence; (2) the portion of the cost of a capital asset that is charged as an expense during a particular period.
Division
An organizational subunit of a department which
encompasses a substantial portion of the duties assigned to a department.
Encumbrance
A commitment of funds for goods or services for which the expenditure has not yet occurred.
Enterprise Fund
A fund established to account for operations of the City that are financed and operated in a manner similar to private business enterprises.
Expenditure
The amount of cash paid or to be paid for services
rendered, goods received, or an asset purchased.
Fiscal Year
The twelve-month period to which the annual budget
applies. In San Mateo, this period of time is July 1 through June 30.
Full Time Equivalent (FTE)
Conversion of a position to full-time equivalent. For
example, one person working half time would count as 0.50 FTE; one person working full time would count as 1.00 FTE.
Fund
A separate, independent accounting entity used to set forth the financial position of operations related to the specific purpose for which the fund was created. Examples of funds used in the City of San Mateo are the General Fund, Capital Projects Fund, and Sewer Fund.
Fund Balance
The total dollars remaining in a fund after current
expenditures for operations and capital improvements are subtracted.
General Fund
The City’s principal operating fund, which is supported by general taxes and fees and which can be used for any legal governmental purpose.
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Grant
A contribution by a government or other organization to support a particular function or project. Grants may be classified as either categorical or block, depending upon the amount of discretion allowed the recipient.
Interdepartmental Charges and Credits
A mechanism through which one program may bill another
program (charges) and be reimbursed (credits) for the cost of various services provided. Interdepartmental charges and credits are based on the actual, direct costs of the service provided. They function as cost allocation tools, allowing the financial reports to more accurately reflect the real cost of individual programs.
Interfund Transfers
The movement of money from one fund to another to cover certain costs.
Internal Service Fund
A fund which is used to finance and account for goods and/ or services provided by one City department to other City departments on a cost-reimbursement basis.
Non-departmental
Program costs that do not relate to any one particular
department, but represent costs of a general, City-wide nature.
Non-recurring Costs
One-time activities for which the expenditure should be budgeted only in the fiscal year in which the activity is undertaken.
Operating Budget
Annual appropriation of funds to support ongoing program costs, including employee services, maintenance, supplies, and equipment.
Ordinance
A formal legislative enactment by the City Council,
which has the full force and effect of law within the City boundaries unless it is in conflict with any higher form of law, such as a state statute or constitutional provision.
Program
An activity or group of activities which is an operational subunit of a department and is directed toward providing a particular service or support function. Each City
department may be responsible for a number of programs.
Proprietary Fund
A term also used to describe funds that are accounted for on a “flow of economic resources” measurement basis and on a full accrual accounting basis. Enterprise funds and internal service funds are classified as proprietary funds.
Reserve
Funds set aside for specific purposes.
Resolution
A special order by the City Council which requires less legal formality than an ordinance in terms of public notice prior to approval.
Resources
Total amount available for appropriation, including
estimated revenues, beginning fund balances, and fund
transfers.
Revenue
Income received during the fiscal year from taxes, fees, permits, franchises, interest, intergovernmental, and other sources.
Special Revenue Fund
A fund used to account for revenue sources that are
restricted by law or administrative action to expenditures for specified purposes.
Structural Deficit
The permanent financial gap that results when ongoing
revenues do not match or keep pace with ongoing
expenditures.
Glossary
209