After three years of fiscal conservatism, Foster City has a balanced budget and its officials are working to keep it that way as preparations begin for its five-year financial plan and next fiscal cycle.
The City Council Monday heard a general summary of options that included changes to employee compensation policies, sharing services with other cities, changing its water policies, investing in capital improvement funds, continuing to contribute to its reserve and finding ways to generate revenue. Specifics on the last item are in the early stages, but Assistant City Manager Steve Toler said some ideas are including rate payers in the costs of wastewater treatment plant upgrades, new affordable housing impact fees for developers and making sure fees for planning, building and recreation reflect the city’s cost.
The City Council and staff will continue to evaluate these options before adopting a budget in June.
“[We’re] taking a fresh look at master fees and making sure we’re covering the costs, look at shared service models further and [will] be willing to explore those further if they provide the same level or greater level of service … and [the council] affirmed the decision to proactively set aside money for capital improvement projects in the future,” Toler said.
Overall, city officials are pleased with its financial status and future policies will likely reflect those of previous years, Mayor Charles Bronitsky said.
“We did see a nice financial picture. Our revenues are up, we’ve received significantly more property tax and gas taxes and vehicle license taxes. The city is doing well, we’re ahead of our minimal 33 and one-third percent reserve level,” Bronitsky said.
The city increased its hotel tax to 9.5 percent and last year’s passage of Measure U business license tax is expected to contribute nearly $700,000 annually to the city by the 2015-16 fiscal year — both have greatly assisted in meeting those goals, Bronitsky said.
With those tax increases, the city won’t be evaluating others this year, however, it may increase service fees.
“We need to make sure the fees we charge for direct services such as building or planning permits, recreation fees, that those fees fully recover costs,” Toler said.
Foster City is a young city, however, it wants to ensure it plans for capital improvement projects such as upkeep of roads, sewers and parks, that will inevitably need to happen, Toler said.
The drought has put water policies on the tops of many cities’ minds. As a fiscally responsible and eco-friendly city, Toler said it needs to budget for costly improvements to its shared waster water treatment.
“One area we need to take a look at with San Mateo is the wastewater treatment plant. The upgrades will be significant … we’ll need to work with San Mateo to determine how best to approach financing it and how to include those costs to customers or rate payers,” Toler said.
The city is looking at a new fee that could generate revenue while helping the city meet county requirements, Toler said.
“We’re looking at the potential of implementing an affordable housing impact fee that would be placed on commercial or residential property developers that would cover the costs of the city’s obligation to provide affordable housing,” Toler said.
The city’s biggest expense is personnel costs, which account for 80 percent of its general fund’s operations. In the last 12 years, managing those costs resulted in 54 full-time positions being cut, according to a staff report. The council may consider continuing to freeze salary increases, asking employees to contribute more toward their pension and negotiating with employee groups, according to the report. City compensation rates have been and will continue to be talked about in closed sessions, however, Bronitsky said the city wants to ensure it is able to draw qualified candidates.
“Everybody on our council believes our employees should be fairly compensated,” Bronitsky said.
Personnel expenses could be reduced by sharing service with other cities, Bronitsky said.
Currently, Foster City, San Mateo and Belmont share administrative fire personnel, however, it may look at sharing equipment such as its ladder truck and firefighters, Bronitsky said.
The city found benefit in sharing its adult softball league with its neighbors and may also consider sharing law enforcement services such as SWAT and various task forces, according to the report. The council will only consider shared service models if it provides residents will the same quality, if not better, services, Toler said.
“We’re interested in looking further at how we can save more money by sharing services and not just economically, but will our residents still receive the same level of services our citizens are used to getting? It’s got to make sense both for the residents and economically,” Councilman Gary Pollard said.
The council wants the city to continue to provide excellent service while remaining fiscally sound and preparing for the future, Toler said.
“We have to make sure our residents are always taken care of. From the services we provide to the roads they drive on, from the overall experience,” Pollard said. “Public service has to be at the forefront of what we do.”
(650) 344-5200 ext. 106