The Foster City Council is holding off on making financial decisions about the city’s new recreation center because of uncertainty surrounding another city project: raising the levee.

The City Council was scheduled to pick a funding plan for the $40 million recreation center at a meeting Monday, but agreed to table that decision until it receives an update on the schedule and cost of the levee project, which has been delayed six months, according to city officials.

In 2018, voters overwhelming approved a $90 million bond known as Measure P to pay for the upgraded levee, but the project could cost more than that because of the delay.  

“The more we wait, the [levee] project could potentially cost us more,” said Mayor Sam Hindi. “I think the most fiscally responsible action we can take is to wait to authorize any spending on the rec center until we get bids on the levee project.” 

Hindi blamed the San Francisco Bay Conservation and Development Commission’s “painfully slow” approval process and the most recent government shutdown for delaying the levee project.  

“We’ve been told [by BCDC] this date, then that date and then that date,” Hindi said.

The project is necessary because the Federal Emergency Management Agency determined the city’s existing levee system would no longer protect the community from a 100-year flood and needs to be raised. The levee currently ranges from 12 feet to 13 feet and FEMA is requiring it to be raised to 16 feet in certain areas. 

City Manager Jeff Moneda said in a best-case scenario, permits for the levee project would be secured by the end of October and the contract would be awarded in December or January. Construction is expected to take about two years, but Moneda suggested that timeframe could potentially be accelerated.  

While the council did not approve a funding plan for the recreation center during the meeting, a subcommittee comprised of Vice Mayor Herb Perez and Councilwoman Catherine Mahanpour did come up with a recommendation. 

Their recommendation is to fund the design of the recreation center with $5 million from the general fund cover the rest of the project with $15 million from the capital asset acquisition and replacement fund, to be repaid in future years, plus $20 million in general fund lease revenue bonds. 

To repay the lease revenue bond, Moneda said the city would have to increase the hotel tax by 2% and the sales tax by 0.5% to make annual payments of $1.15 million. Foster City’s sales tax rate is currently 9.25% and its hotel tax rate is 12%. 

The prospect of raising taxes isn’t sitting well with at least one resident.

“Staff said there are other cities that have 9.75% sales tax, but that’s still going to be the highest in the state,” said Bob Innes. “Our sales tax is already pretty high and I’m not sure that the citizens of Foster City want to pay an extra half of a percent.” 

Other funding sources include the city’s community benefits fund, which currently has a balance of $819,000, the construction and demolition fund, with a balance of $734,000, grants, sponsorships and public/private partnerships, among other options. 

The project came about because the existing recreation center is 50 years old and in need of significant repairs, officials regularly point out. The latest $40 million price tag was selected by the council during a study session in May after outcry among residents that a previous proposal totaling $71 million was too expensive. For that option, the building itself was pegged at $54 million and it would be surrounded by $17 million worth of park improvements. 

While there has been extensive community outreach over the past year and a comprehensive list of desired programming and amenities has been compiled, it is unclear exactly what programs would be accommodated in the latest $40 million proposal.  

Furthermore, Perez suggested the aforementioned community outreach is inadequate during the meeting. He said most community workshops failed to attract the demographics that may be using the new facility the most.

“I’m not convinced that the public that should be having the conversation about the recreation center was adequately involved in the process,” he said. “The median age of the group that was opining on this were older and didn’t really have kids that were using the rec center.” 

Perez also revisited the possibility of patching up the existing recreation center in lieu of a clear path forward for the new one.

“We might be better off to continue to repair it because we’re going to have to regardless for the next couple of years until something is built or a decision is made,” he said. “We’re going to have to deal with the roof issue and other things so we’ll have to set aside adequate budget and a plan to do that.”

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