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Foster City aims for strong budget: Revenue up, but salary and pension obligations remain
June 07, 2014, 05:00 AM By Samantha Weigel Daily Journal

After four years of slimming down, Foster City pulled itself out of a $5 million deficit and is expecting a $22.1 million rainy-day fund while anticipating that increasing property values will boost revenue as it reviews its budget and five-year financial forecast.

However, because the city has a wave of employee salary and pension obligations that will take up a large chunk of its budget, the City Council plans to continue sharing services with other cities and promoting revenue-generating development projects.

The City Council reviewed its proposed 2014-15 budget on Monday, which includes a total budget of $115 million with $93 million in revenue and $74 million in expenditures, said Assistant City Manager Steve Toler.

The city also has substantial assets to fund necessary capital improvement projects and the creation of two new parks, Toler said.

Last year, the city was able to meet its goal set in 2010 to have a balanced budget and Mayor Charlie Bronitsky is confident in the coming years.

“We are fortunate that the economy has improved and that there is a lot of development in Foster City, both of which have helped substantially. We have also found ways to cut costs without sacrificing the quality of the services we deliver and we are continuing to work to generate additional and sustainable income, while managing growth, and looking at ways to partner with other cities through shared services to stabilize and reduce costs,” Bronitsky wrote in an email.

The city’s general fund has about $32 million, however, $25 million of it will be spent on employees, Toler said.

Although the proposed budget currently outlines a $1.2 million surplus, that could change based on labor negotiations over the coming weeks, Toler said.

“During the recession, we ended up working with labor groups to freeze salaries as well as reduce some of the pension obligations,” Toler said. “All of the groups (police, fire, management staff) came up this year so now it’s time for the city and the City Council to make some decisions on what it wants to do as it relates to employee compensation.”

The discussions may not conclude prior to the budget being voted on during a June 16 meeting, however, the city has used a 2 percent place setter to account for cost-of-living increases for subsequent years in its five-year financial forecast, Toler said.

Councilman Herb Perez said the city needs to adjust the salary portion of its budget.

“Foster City has a certain quality of life based on services and as a result of that, that costs money. … So I don’t believe our salaries are out of line with the kind of services we get,” Perez said. “We’re trying to find a way to be responsible to the constituents and responsible to the employees who provide the quality of life.”

To help generate revenue, the city will raise its master fees, such as utility and water rates, development and permitting fees, business license fees, development and planning fees and others, according to a staff report.

Even with a general 3 percent increase, Perez said Foster City’s master fees are lower than those of surrounding cities.

Perez said development projects within the city such as hotels, office buildings and retail space provide substantial revenue. But the council needs to look at what continual impacts those developments have on the city, Perez said.

Toler said a major portion of the city’s revenue in the upcoming budget is generated from developments and about $27 million from the recent sale of its 15-acre site at the city’s center. The council will also consider taking a portion of the money it receives and reinvesting it to assist with affordable housing needs, Toler said.

To help generate sales tax within the city, the council will create a new daytime shuttle that would help bring employees from companies based in Foster City, many of whom take public transportation, to its shopping centers, Toler said.

The San Mateo County Transit Authority would primarily fund this $100,000 project, Toler said.

Another area it has found cost savings is continuing to share fire services with Belmont and San Mateo. The cities are also looking at creating and sharing a new emergency preparedness coordinator, Toler said.

Foster City’s proposed budget sets aside about $11 million in capital improvement projects, Toler said.

Similar to San Mateo and Belmont, Foster City is also looking at owing a hefty amount for the rehabilitation of a wastewater treatment plant.

The proposed budget outlines about $6 million for sewer-related improvements, Toler said.

There are some exciting improvements accounted for in the new budget, such as the appropriation of about $2.6 million for the creation of the city’s new Werder and Destination parks, Toler said.

It has taken time, but the city’s budget is solid and its five-year forecast looks promising, Toler said.

“It goes to show, not only how conservative and good stewards the city’s been and the council and the staff have been in managing their resources,” Toler said. “But it’s also something that I think a lot of people overlook in terms of the fiscal health of their city as they make a decision on where they want to live, where they want to work and where they want to enjoy their life.”

The Foster City Council will review and vote on its 2014-15 fiscal year budget at a meeting June 16. For more information visit

(650) 344-5200 ext. 106



Tags: toler, budget, million, city, council, foster,

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