Foster City’s budget is looking better than anticipated so far this fiscal year, but a long-term structural deficit still looms, prompting councilmembers to brainstorm ways to cut costs and increase revenue streams.
Last fiscal year, which ended in June 2024, the city ended up with a surplus, despite originally projecting a deficit. According to a recent midyear budget update, the city still anticipates a deficit this fiscal year, though it’s expecting a $2.6 million gap versus the originally projected $5.6 million shortfall.
Last year’s council also discussed long-term strategies for revenue growth, and current members also reiterated the need for more economic development opportunities. Councilmember Phoebe Venkat said she’d like to see more initiatives from the city’s largest employers and businesses.
“We have a lot of exciting businesses that are not necessarily name brands like Gilead. We have startups, tech and AI companies. How can we have them share the load while they’re helping to promote their own brand?” she said. “How can they help contribute to incubating businesses that are already here or attracting other businesses that are like them to come here and make a home here?”
But most of the conversation centered around staff recommendations, which included increasing the hotel tax, sales tax, increasing city fees — such as building permits and recreation programs — or creating a stormwater utility district. Some of the potential solutions would require a ballot measure passed by voters.
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The council also discussed becoming a charter city, which would enable it to collect property transfer taxes, though it remains to be seen how much additional revenue could be expected.
Most councilmembers supported additional exploration of the charter city change, as well as creating a stormwater utility district.
“I have always been behind and pushing for a charter city,” Councilmember Suzy Niederhofer said. “I would like to see that. I think it provides more flexibility.”
Service cuts were also discussed, though City Manager Stefan Chatwin said that is not under consideration for the short term. Venkat added she would be in favor of investing more in tourism.
“Some other things I was thinking about are tourism and marketing our city more,” she said. “How can we make this a destination outside of those larger events? Day to day, how do we attract more people to come here? If it’s something about spending a little more money in tourism or marketing to attract people in the longer term, that’s something I’d love to help support.”
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