City of Foster City and the Estero Municipal Improvement District, 09-11-24

Item 6 September 11, 2024 To: LAFCo Commissioners From: Rob Bartoli, Executive Officer Subject: Consideration of Final Municipal Service Review for the City of Foster City and the Estero Municipal Improvement District Summary and Background LAFCo prepared comprehensive Sphere of Influence (SOI) studies and adopted SOIs for cities and special districts in 1985 and has subsequently reviewed and updated spheres on a three- year cycle. Updates focused on changes in service demand within the boundaries of cities and special districts. After enactment of the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000 (CKH Act) and the new requirement to prepare MSRs in conjunction with or prior to SOI updates, LAFCo began the process of preparing Municipal Service Review (MSR) and SOI updates in late 2003. This Final Municipal Service Review is the first MSR for the City of Foster City and the Estero Municipal Improvement District. The City of Foster City incorporated as San Mateo County’s 19th city in 1971. The City’s incorporation process was unique in that it was preceded by special legislation enacted in 1960 to create Estero Municipal Improvement District (EMID) to form a public agency to develop what was then known as Brewer’s Island. EMID was given broad powers to provide all municipal services except planning which remained with the County of San Mateo. Upon incorporation, the City of Foster City began receiving revenues available to cities in California, but it was EMID that levied taxes for services EMID provided within corporate boundaries. With the passage of Proposition 13, this resulted in EMID receiving property tax revenues and the City of Foster City receiving other revenues such as motor vehicle and sales tax. While they are two distinct governmental entities with EMID receiving property tax and utility revenues and employing personnel and the City receiving other revenues, the City of Foster City and EMID are combined for purposes of service delivery and budget presentation. COMMISSIONERS: KATI MARTIN, CHAIR, SPECIAL DISTRICT ▪ RAY MUELLER, VICE CHAIR, COUNTY ▪ VIRGINIA CHANG-KIRALY, SPECIAL DISTRICT ▪ HARVEY RARBACK, CITY▪ TYGARJAS BIGSTYCK, CITY ▪ WARREN SLOCUM, COUNTY ▪ ANN DRAPER, PUBLIC ALTERNATES: CHRIS MICKELSEN, SPECIAL DISTRICT ▪ ANN SCHNEIDER, CITY ▪ JAMES O’NEILL, PUBLIC ▪ NOELIA CORZO, COUNTY STAFF: ROB BARTOLI, EXECUTIVE OFFICER ▪ VACANT, MANAGEMENT ANALYST ▪ TIM FOX, LEGAL COUNSEL▪ DIANE ESTIPONA, CLERK September 11, 2024 Foster City/EMID MSR Page 2 The City provides the following municipal services: law enforcement, parks and recreation, library, streets, lighting, water, wastewater and storm drain and flood control. Like many agencies in San Mateo County, the City’s revenue was impacted by the COVID-19 pandemic but is now recovering. Updates to Final Circulation MSR San Mateo LAFCo received one comment during the comment period for the draft MSR from the City of Foster City related to minor updates to the five-year budget table for the City and EMID. This update has been made to the MSR. In response to comments at July 17, 2024 LAFCo meeting, a comment was added to the MSR that commends the City and EMID on its work related to sea level rise mitigation. Current Key Issues Key issues identified in compiling information on the City of Foster City and Estero Municipal Improvement District include the following: • While LAFCo staff has not identified any issues with the City’s budgeting practices, and the City continues to adopted a balanced budget, the City is anticipating having to utilize reserve funds in future years to balance the budget due to a structural deficit. The City is currently working on a possible revenue measure for Business License Tax to help address the City’s current structural deficit; however, as of now, the Council has not voted on this yet. • The City’s adopted Housing Element proposes to increase its housing stock by 13% over the next eight years. The City’s has evaluated potential impacts to City and EMID infrastructure. While water demand for proposed development under the 2023-2031 Housing Element will be able to be met, during single and multiple dry years, EMID’s total annual water demand is expected to exceed EMID’s available water supplies from 2025 to 2045 with or without the additional demand from the 2023-2031 Housing Element. The City and EMID is aware of this issue and is working on implementing policies and programs to address this. Proposed MSR Recommendations As required by State law, there are seven areas of determination, including local policies as set forth in Section 56430. 1. Growth and population projections for the affected area. 2. The location and characteristics of any disadvantaged unincorporated communities1 within or contiguous to the SOI. 3. Present and planned capacity of public facilities, adequacy of public services, and infrastructure needs or deficiencies including needs or deficiencies related to sewers, 1 “Disadvantaged community” means a community with an annual median household income that is less than 80 percent of the statewide annual median household income. This area of determination does not apply to the study area. September 11, 2024 Foster City/EMID MSR Page 3 municipal and industrial water, and structural fire protection in any disadvantaged, unincorporated communities within or contiguous to the SOI. 4. Financial ability of agencies to provide services. 5. Status of, and opportunities for, shared facilities. 6. Accountability for community service needs, including governmental structure and operational efficiencies. 7. Any other matter related to effective or efficient service delivery, as required by LAFCo policy. a. Water Resiliency and Climate Change b. Impact of Natural Hazards and Mitigation Planning For the Final MSR, LAFCo has the following determinations and recommendations: 1. Growth and Population Determination and Recommendation Currently, there are an estimated 13,174 housing units in the City of Foster City. The City’s housing element proposes to add 1,896 housing units to the City’s housing stock, which represents a 13% increase in housing production over the next decade. However, the City General Plan largely evaluated this potential future growth. While water demand for proposed development under the 2023-2031 Housing Element will be able to be met, during single and multiple dry years, EMID’s total annual water demand is expected to exceed EMID’s available water supplies from 2025 to 2045 with or without the additional demand from the 2023-2031 Housing Element. The City/EMID is aware of this issue and the Housing Element includes polices to work with EMID to develop water conservation requirements and/or increased water supply that will ensure sufficient water capacity to accommodate the RHNA, such as the potential use of water demand offset policies, require new and renovated developments to have “net neutral” water demand, or the use of recycled water for irrigation. Recommendation- 1. LAFCo encourages the City/EMID to continue work related to water conservation to allow the City to meet needs for future development of the City. 2. Disadvantaged Unincorporated Communities Determination The City’s and EMID’s spheres of influence and municipal boundaries are contiguous. 3. Capacity and Adequacy of Public Facilities and Services Determination and Recommendations LAFCo is not aware of any deficiencies in agency capacity to meet existing service needs for which the agency does not have a plan in place to resolve. The City and EMID is anticipated to be able to meet most service demands of foreseeable growth with project infrastructure improvements and other mitigation measures. Recommendation- September 11, 2024 Foster City/EMID MSR Page 4 1. EMID’s UMWP was last updated in 2021. EMID and the City should align the growth projections in the UMWP with the RHNA growth projections and the 2023- 2031 Housing Element in its next UMWP update. 4. Financial Ability Determination Like many public agencies, the City continues to address maintaining current levels of services as costs continue to rise. For FY23-27, the City is currently projected to achieve this reserve percentage, however starting in FY27-28, the General Fund Reserve would drop to 36% of total expenditures. This is due to the use of the reserves to balance the City’s budget in FY24-27 due to a structural deficit. To address pension costs, the City Council Subcommittee for Pension Liability, which meets on an as-needed basis and considers/evaluates the liability and any need to make a discretionary payment. The City is currently working on a possible revenue measure for Business License Tax to help address the City’s current structural deficit; however, as of now, the Council has not voted on this yet. The City Council and staff are dedicated to prudent fiscal management to ensure the continued financial health of the City. The City is well aware of these financial liabilities and a comprehensive MSR is unlikely to contribute additional valuable information. 5. Shared Service and Facilities Determination and Recommendations The City of Foster City/EMID partners with several agencies to share resources and reduce costs. LAFCo staff has not identified other opportunities that the City could engage in to share costs and/or reduce duplication of resources, facilities or infrastructure. 6. Accountability, Structure, and Efficiencies Determination The City of Foster City/EMID complies with disclosure laws and the Brown Act and ensures that public meetings are accessible and well publicized. Adopted budgets and annual budgets are available on the City’s website. While highly detailed, the budget documents could be enhanced by including a simplified summary table of revenue and expenditures for the City and EMID, particularly for the general fund. There are no recommended changes to the organization’s governmental structure or operations that will increase accountability and efficiency. Recommendations: 1. The City/EMID could explore a future a study of potential efficiencies and savings could be undertaken to determine the feasibility of a merger of EMID with the City. 2. Consider the inclusion of simplified summary table of revenue and expenditures for the City and EMID, particularly for the general fund, in future budget documents. September 11, 2024 Foster City/EMID MSR Page 5 7. Other Issues Determinations and Recommendations The City of Foster City/EMID is engaged in activities to address hazard mitigation, wildfire prevention and sea level rise for City residents and businesses. Recommendation - 1. LAFCo encourages the City of Foster City and EMID to continue its work in the areas of natural hazard mitigation and sea level rise and continue to coordinate with partner agencies. Sphere of Influence Determination LAFCo is required to make five written determinations when establishing, amending, or updating an SOI for any local agency that addresses the following (§56425(e)): 1. The present and planned land uses in the area, including agricultural and open-space lands. The boundaries of City of Foster City and EMID do not include agricultural land. 2. The present and probable need for public facilities and services in the area. The City of Foster City and EMID facilities and services meet the needs of its residents and businesses, and the City of Foster City and EMID anticipates that will be able to provide adequate facilities and services for the anticipated growth within its service area. 3. The present capacity of public facilities and adequacy of public services that the agency provides or is authorized to provide. The City and EMID currently provides adequate public services to its residents, including police protection, water, sanitary sewer and storm water services. In addition, the City routinely adopts a Capital Improvement Program to fund critical repairs, replacements and improvements to the City’s infrastructure and facilities. 4. The existence of any social or economic communities of interest in the area if the Commission determines that they are relevant to the agency. There are no disadvantaged unincorporated communities within the City of Foster City’s or EMID’s SOIs. 5. For an update of a SOI of a city or special district that provides public facilities or services related to sewers, municipal and industrial water, or structural fire protection, that occurs pursuant to Section 56425(g) on or after July 1, 2012, the present and probable need for those public facilities and services of any disadvantaged unincorporated communities within the existing sphere of influence. No change to the City of Foster City’s or EMID’s SOIs is proposed at this time. Public/Agency Involvement The primary source of information used in this MSR has been information collected from agency staff and adopted plans, budgets, reports, policies, etc. On August 28, a Notice of Public Hearing for the Final MSR was released by LAFCo and published in the San Mateo County Times. September 11, 2024 Foster City/EMID MSR Page 6 In addition, notices were sent to every “affected agency”, meaning all other agencies and school districts with overlapping service areas. Environmental Review/CEQA The MSR is categorically exempt from the environmental review requirements of the California Environmental Quality Act (CEQA) under Section 15303, Class 6, which allows for the basic data collection, research, experimental management, and resource evaluation activities that do not result in a serious or major disturbance to an environmental resource. The MSR collects data for the purpose of evaluating municipal services provided by an agency. There are no land use changes or environmental impacts created by this study. The MSR is also exempt from CEQA under section 15061(b)(3), the common sense provision, which states that CEQA applies only to projects which have the potential to cause a significant effect on the environment and where it is certain that the activity will have no possible significant effect on the environment, the activity is exempt from CEQA. The MSR and SOI update will not have a significant effect on the environment as there are no land use changes associated with the documents. Recommendation 1. Open the public hearing and accept public comment. 2. Accept the Final Municipal Service Review for the City of Foster City and Estero Municipal Improvement District 3. Adopt the Municipal Service Review Determinations and Recommendations contained in this report. Attachment A. Final Municipal Service Review for the City of Foster City and Estero Municipal Improvement District B. Resolution No. 1328 for the City of Foster City and Estero Municipal Improvement District Municipal Service Review C. MSR Areas of Determinations and Recommendations for the City of Foster City and Estero Municipal Improvement District Municipal Service Review and Sphere of Influence Review for the City of Foster City and Estero Municipal Improvement District Final Adopted September 18, 2024 Municipal Service Review and Sphere of Influence Review for the Foster City and Estero Municipal Improvement District SUBJECT AGENCY: Foster City and Estero Municipal Improvement District 610 Foster City Boulevard Foster City, CA 94404 Contact: Stefan Chatwin, City Manager/General Manager CONDUCTED BY: San Mateo Local Agency Formation Commission 455 County Center, 2nd Floor Redwood City, CA 94063 (650) 363-4224 Commissioners: Commission Alternates: Kati Martin, Chair, Special District Member Chris Mickelsen, Special District Member Ray Muller, Vice Chair, County Member James O’Neill, Public Member Tygarjas Bigstyck, City Member Noelia Corzo, County Member Virginia Chang-Kiraly, Special District Member Ann Schneider, City Member Harvey Rarback, City Member Warren Slocum, County Member Ann Draper, Public Member Staff: Rob Bartoli, Executive Officer Diane Estipona, Commission Clerk Tim Fox, Legal Counsel LAFCo Municipal Service Review and Sphere of Influence Update City of Foster City and Estero Municipal Improvement District Table of Contents EXECUTIVE SUMMARY ........................................................................................................... 2 Section 1: MSR Overview ....................................................................................................... 2 San Mateo Local Agency Formation Commission .................................................................................... 2 Local Government in San Mateo County .................................................................................................. 3 Purpose of a Municipal Service Review/Sphere of Influence Update ...................................................... 3 Section 2. Summary of Key Issues ......................................................................................... 4 Section 3: Affected Agencies .................................................................................................. 4 Section 4: City of Foster City and Estero Municipal Improvement District ............................... 5 Background & Overview ........................................................................................................................... 5 1) Growth and Population ................................................................................................................... 7 2) Disadvantaged Unincorporated Communities ............................................................................. 10 3) Capacity and Adequacy of Public Facilities and Services ............................................................. 11 5) Shared Service and Facilities ......................................................................................................... 22 6) Accountability, Structure, and Efficiencies ................................................................................... 24 7) Other .............................................................................................................................................. 26 Determinations ....................................................................................................................................... 28 Appendix A. City of Foster City/EMID Fact Sheet .............................................................. 30 Appendix B. References .................................................................................................. 31 Final MSR─ City of Foster City EXECUTIVE SUMMARY Section 1: MSR Overview This report is a Municipal Service Review (MSR) and Sphere of Influence (SOI) update for the City of Foster City (City) and Estero Municipal Improvement District (EMID). California Government Code Section 56430 requires that the Local Agency Formation Commissions (LAFCos) complete MSRs and SOI reviews on all cities and special districts. LAFCo is an independent entity with jurisdiction over the boundaries of cities and special districts. An SOI is a plan for the boundaries of a city or special district. The MSR and SOI update do not represent a proposal1 for reorganization of agencies, but rather a State-mandated study of service provisions of an agency. Once adopted, the service review determinations are considered in reviewing and updating the SOI pursuant to Section 56425. The SOI, which serves as the plan for boundaries of a special district, is discussed in the second part of this report. This State-mandated study is intended to identify municipal service delivery challenges and opportunities and provides an opportunity for the public and affected agencies to comment on city, county, or special district services and finance; and opportunities to share resources prior to LAFCo adoption of required determinations. San Mateo Local Agency Formation Commission San Mateo Local Agency Formation Commission (LAFCo or “the Commission”) is a State- mandated, independent commission with county-wide jurisdiction over the boundaries and organization of cities and special districts including annexations, detachments, incorporations, formations, and dissolutions. LAFCo also has authority over extension of service outside city or district boundaries and activation or divestiture of special district powers. Among the purposes of the Commission are discouraging urban sprawl, preserving open space and prime agricultural lands, planning for the efficient provision of government services, and encouraging the orderly formation and development of local agencies based upon local conditions and circumstances. LAFCo operates pursuant The Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000 (CKH Act) contained in Government Code Sections 56000 and 57000. The Commission includes two members of the County Board of Supervisors, two members of city councils from the 20 cities, two board members of 21 of the 22 independent special districts, a public member, and four alternate members (county, city, special district, and public). LAFCo prepared comprehensive SOI studies and adopted SOIs for cities and special districts in 1985 and has subsequently reviewed and updated spheres on a three-year cycle. Updates focused on changes in service demand within the boundaries of cities and special districts. After enactment of the CKH Act and the new requirement to prepare MSRs in conjunction with or prior to SOI updates, LAFCo began the process of preparing MSR and SOI updates in late 2003. 1 An application for annexation may be submitted by 5 percent of the voters or landowners of territory proposed for annexation or by resolution of the District. 2 Final MSR─ City of Foster City Studies were first prepared on sub-regional and County-wide independent special districts, followed by South County cities and special districts. Local Government in San Mateo County Municipal service providers in San Mateo County include the County, 20 cities, 22 independent special districts, five subsidiary districts governed by city councils, and 33 County-governed special districts. It merits emphasis that the County plays a dual role that differs from cities or districts. Districts provide a limited set of services based on enabling legislation, while cities generally provide basic services such as police and fire protection, sanitation, recreation programs, planning, street repair, and building inspection. The County, as a subdivision of the State, provides a vast array of services for all residents, including social services, public health protection, housing programs, property tax assessments, tax collection, elections, and public safety. Along with independent water, sewer, and fire districts, the County also provides basic municipal services for residents who live in unincorporated areas. According to Census 2020 data, 63,205 of the County’s total 765,417 residents live in unincorporated areas. Purpose of a Municipal Service Review/Sphere of Influence Update This MSR/SOI Update examines the City of Foster City and the Estero Municipal Improvement District. LAFCo prepares the MSR and SOI update based on source documents that include Adopted Budgets, Basic Financial Reports and Audits, Capital Plans, Urban Water Management Plans, and Planning Documents, including the General Plan. Draft MSRs and SOI updates are then circulated to the agencies under study, interested individuals and groups. The Final MSR and SOI update will include comments on the circulation draft and recommended determinations for Commission consideration. MSR determinations must be adopted before the Commission updates or amends an SOI. Per Section 56430, the areas of MSR determination include: 1. Growth and population projections for the affected area. 2. The location and characteristics of any disadvantaged unincorporated communities2 within or contiguous to the SOI. 3. Present and planned capacity of public facilities, adequacy of public services, and infrastructure needs or deficiencies including needs or deficiencies related to sewers, municipal and industrial water, and structural fire protection in any disadvantaged, unincorporated communities within or contiguous to the SOI. 4. Financial ability of agencies to provide services. 5. Status of, and opportunities for, shared facilities. 6. Accountability for community service needs, including governmental structure and operational efficiencies. 2 “Disadvantaged community” means a community with an annual median household income that is less than 80 percent of the statewide annual median household income. This area of determination does not apply to the study area. 3 Final MSR─ City of Foster City 7. Any other matter related to effective or efficient service delivery, as required by LAFCo policy. a. Water Resiliency and Climate Change b. Impact of Natural Hazards and Mitigation Planning Sphere of Influence Determinations: LAFCo is required to make five written determinations when establishing, amending, or updating an SOI for any local agency that address the following (§56425): 1. The present and planned land uses in the area, including agricultural and open-space lands. 2. The present and probable need for public facilities and services in the area. 3. The present capacity of public facilities and adequacy of public services that the agency provides or is authorized to provide. 4. The existence of any social or economic communities of interest in the area if the Commission determines that they are relevant to the agency. 5. For an update of a sphere of influence of a city or special district that provides public facilities or services related to sewers, municipal and industrial water, or structural fire protection, that occurs pursuant to Section 56425(g) on or after July 1, 2012, the present and probable need for those public facilities and services of any disadvantaged unincorporated communities within the existing sphere of influence. Disadvantaged Unincorporated Communities SB 244 (Chapter 513, Statutes of 2011) made changes to the CKH Act related to “disadvantaged unincorporated communities,” including the addition of MSR determination #2 and SOI determination #5 listed above. Disadvantaged unincorporated communities, or “DUCs,” are inhabited, unincorporated territories (containing 12 or more registered voters) where the annual median household income is less than 80 percent of the statewide annual median household income. City of Foster City does not have any disadvantaged unincorporated communities within its SOI. Section 2. Summary of Key Issues Section 3: Affected Agencies County and Cities: City of Foster City and San Mateo County School Districts: San Mateo-Foster City School District Boundaries, San Mateo Union High School District, and San Mateo County Community College District Independent Special Districts: Peninsula Health Care District, San Mateo County Harbor District, San Mateo County Mosquito & Vector Control District Dependent Special Districts: Estero Municipal Improvement District 4 Final MSR─ City of Foster City Section 4: City of Foster City and Estero Municipal Improvement District Background & Overview The City of Foster City incorporated as San Mateo County’s 19th city in 1971. The City’s incorporation process was unique in that it was preceded by special legislation enacted in 19603 to create Estero Municipal Improvement District (EMID) to form a public agency to develop what was then known as Brewer’s Island.4 EMID was given broad powers to provide all municipal services except planning which remained with the County of San Mateo. The need for special legislation was justified by the lack of existing laws that would enable the use of a public agency for financing public infrastructure, land reclamation, and infrastructure construction for a new community built from the ground up. The enabling legislation created a three-member board to represent land ownership since there were no residents. EMID sold general obligation bonds for extensive planning and engineering studies followed by further land reclamation and initial capital improvements. Improved residential lots were sold and the first families moved in during 1964. The Foster City Community Association (FCCA) was formed in 1966. Initially FCCA focused on school issues and eventually focused on incorporation. A primary issue was the fact that EMID was using general obligation bonds partly to finance each increment of infrastructure improvements and partly to pay interest on previous bonds, and that Foster City residents were obligated to pay the growing debt but had no representation on the EMID board. Community interest in incorporation picked up momentum after special legislation in 1967 allowed for expansion of the EMID board to five members, which resulted in controversy over how board members were selected and subsequent concern over the ability of the District to continue to sell bonds to implement the Foster City plan of development. In addition, incorporation would provide for local land use control and was a means to receive revenues such as sales tax and State subventions that were not available to EMID. Community interest in self-determination resulted in several studies and eventually incorporation in 1971, at which time EMID was made a subsidiary district of the City with the City Council serving as the governing body of the District. Upon incorporation, the City of Foster City began receiving revenues available to cities in California, but it was EMID that levied taxes for services EMID provided within corporate boundaries. With the passage of Proposition 13, this resulted in EMID receiving property tax revenues and the City of Foster City receiving other revenues such as motor vehicle and sales tax. While they are two distinct governmental entities with EMID receiving property tax and 3 Statutes of 1960, First Extra Session, Chapter 82, Page 459 4 The area that is now Foster City was once marshland in San Francisco Bay. The marsh was diked and drained in 1901 by Frank Brewer and became known as Brewer’s Island. Brewer and later owners used the reclaimed land for agricultural purposes and salt evaporation. In the late 1950s, developers T. Jack Foster and Richard Grant acquired an option to purchase the land and sought special legislation to allow formation of a public agency for development of Brewer’s Island. According to the 2005-2010 Urban Water Management Plan, a massive construction operation was necessary to convert the land to the Foster City that exists today. Approximately 18 million cubic yards of fill were necessary to provide gradient for the storm water runoff and cover for the utility lines as well as support for the buildings. Two hundred twelve acres of lagoons were created for collecting storm water, which is pumped into San Francisco Bay. 5 Final MSR─ City of Foster City utility revenues and employing personnel and the City receiving other revenues, the City of Foster City and EMID are combined for purposes of service delivery and budget presentation. The City is a general-law city with five council members elected at large. The Council selects the Mayor and appoints the City Manager/District Manager, City Attorney, and City Clerk. The City Council meets on the first and third Mondays of the month at 6:30 pm at the City Council Chambers located at 620 Foster City Boulevard, Foster City. Agendas, staff reports and minutes are available on the City’s website and through e-mail subscription. Agendas are also posted in locations throughout the City. Existing Sphere of Influence The City’s Sphere of Influence (SOI) and EMID’s SOI is coterminous with the City’s boundaries and EMID’s boundaries respectively. Municipal Services SERVICE RESPONSIBLE AGENCY Public Safety Police protection Foster City Fire protection San Mateo Consolidated Fire Emergency Medical Service San Mateo Consolidated Fire Animal Control San Mateo County Animal Control Utilities Water distribution Foster City/EMID Wastewater collection Foster City/ EMID Wastewater treatment Foster City/EMID/San Mateo/ San Mateo Regional Water Quality Control Plant Electricity Pacific Gas & Electric Natural Gas Pacific Gas & Electric Solid Waste Collection & Disposal Recology San Mateo County (franchise agreement) Stormwater Foster City Street Maintenance Foster City Street Lighting Foster City Community Services Parks and recreation Foster City Library San Mateo County Libraries Mosquito abatement and vector control San Mateo Mosquito and Vector Control Planning, Building, Code Enforcement Foster City Public transportation SamTrans The MSR determinations checked below are potentially significant, as indicated by “yes” or “maybe” answers to the key policy questions in the checklist and corresponding discussion on the following pages. If most or all of the determinations are not significant, as indicated by “no” answers, the Commission may find that an MSR update is not warranted. 6 Final MSR─ City of Foster City Growth and Population Disadvantaged Unincorporated Communities Capacity, Adequacy & Infrastructure Financial Ability to Provide Services Shared Services Accountability, Structure, and Efficiencies Other 1) Growth and Population Growth and population projections for the affected area. Yes Maybe No X a) Is the agency’s territory or surrounding area expected to experience any significant population change or development over the next 5-10 years? X b) Will population changes have an impact on the subject agency’s service needs and demands? X c) Will projected growth require a change in the agency’s service boundary? Discussion5,6 As of 2020 the City of Foster City is home to approximately 33,806, representing 6% of the population in San Mateo County. Between 2000 and 2020, population increased by approximately 3,000 residents. The population of Foster City increased by 17.2% from 1990 to 2020, slightly below the growth rate of 19% for San Mateo County and well below the growth rate of 29% for the Bay Area. The number of homes in Foster City increased 5.7% from 2010 to 2020, which is above the growth rate for San Mateo County (3.6%) and the Bay Area Region (5.0%). In 2020, 35.4% of homes in Foster City were single family detached, 20.0% were single family attached, 7.0% were in small multi-family buildings (2-4 units), and 37.5% were medium or large multifamily buildings (5+ units). The Association of Bay Area Governments (ABAG), the agency responsible for forecasting population, housing and economic trends in the nine Bay Area counties, in coordination with the California Department of Housing and Community Development (HCD) estimates the housing need for the region and allocates a portion of projected need to every jurisdiction. In collaboration with Bay Area partner agencies, non-profit organizations and residents, ABAG developed Plan Bay Area 2050, a long-range regional plan that, among other activities, projects the population growth of each region throughout the Bay Area. 5 U.S. Census Bureau, City of Foster City 2020 U.S. Census Bureau Profile 6 City of Foster City Housing Element adopted May 2023 7 Final MSR─ City of Foster City To accommodate the projected growth, cities and counties throughout the State are updating their housing elements every eight years to accommodate the regional housing need assessment (RHNA) allocation for the upcoming cycle. The County and the cities in San Mateo County are currently in the process of updating their Housing Elements to be consistent with the RHNA allocations. The Housing Element is a required component of a city’s or county’s General Plan, and the RHNA allocations for each cycle may require an update to zoning ordinances to demonstrate how it plans to meet the housing needs in its community. For the sixth RHNA cycle, ABAG tasked the City of Foster City with identifying appropriately zoned or re-developable land to accommodate 1,896 housing units by 2031. The City’s submission to HCD includes buffer to ensure that the City is prepared to meet its RHNAs obligations through projects that are currently in the pipeline (74), proposed accessory dwelling units (24), and developable property included in the sites inventory (1,763). The City of Foster City adopted its sixth cycle Housing Element on May 22 2023 and revisions were adopted in March 2024. The Housing Element was certified by the state on Apri 18, 2024. Distribution of RHNA allocation for the City of Foster City Housing Element RHNA RHNA Income Level Units Completed 2015-2023 2015-2023 2023-2031 Very Low Income (50% 148 89 520 Average Median Income [AMI]) Low Income (60% AMI) 87 50 299 Moderate Income 76 14 300 (80% AMI) Above Moderate 119 679 777 Income (120% AMI) Total: 430 823 1,896 a) Is the agency’s territory or surrounding area expected to experience any significant population change or development over the next 5-10 years? In the last ten years, Foster City has seen the development of several large apartment buildings and commercial development, including Foster Square, a mixed-use commercial project including 155 assisted living units (including 24 memory care units), 66 below market rate apartments and 200 for-sale units along with up to 35,000 square feet of commercial, and the Pilgrim-Triton developments that included The Plaza, The Triton, 100 Grand, Laguna Vista, and 501 Pilgrim Drive, the 22-unit workforce housing development purchased by the City in 2022. In all, when the remaining units under construction at Laguna Vista are completed, these Pilgrim Triton developments have provided 805 new housing units, of which 163 are below market rate units. The City’s new workforce housing development includes eight rent-restricted units, and 14 income and rent restricted units. The workforce housing units have a preference priority for first responders and city employees. 8 Final MSR─ City of Foster City b) Will the population changes have an impact on the subject agency’s service needs and demands? As noted in the recently adopted housing element, the City conducted a Water Capacity Study to assess total projected water supplies available during normal, single-dry, and multiple-dry water years during a 20-year projection compared to the projected water demand associated with the 2023-2031 Housing Element. While water demand for proposed development under the 2023-2031 Housing Element will be able to be met, during single and multiple dry years, EMID’s total annual water demand is expected to exceed EMID’s available water supplies from 2025 to 2045 with or without the additional demand from the 2023-2031 Housing Element. The Housing Element includes polices to work with EMID to develop water conservation requirements and/or increased water supply that will ensure sufficient water capacity to accommodate the RHNA, such as the potential use of water demand offset policies, require new and renovated developments to have “net neutral” water demand, or the use of recycled water for irrigation. c) Will projected growth require a change in the agency’s service boundary? The projected growth will occur within the City’s boundaries and will not require a change in the agency’s service boundary. Growth and Population MSR Determination Currently, there are an estimated 13,174 housing units in the City of Foster City. The City’s housing element proposes to add 1,896 housing units to the City’s housing stock, which represents a 13% increase in housing production over the next decade. However, the City General Plan largely evaluated this potential future growth. While water demand for proposed development under the 2023-2031 Housing Element will be able to be met, during single and multiple dry years, EMID’s total annual water demand is expected to exceed EMID’s available water supplies from 2025 to 2045 with or without the additional demand from the 2023-2031 Housing Element. The City/EMID is aware of this issue and the Housing Element includes polices to work with EMID to develop water conservation requirements and/or increased water supply that will ensure sufficient water capacity to accommodate the RHNA, such as the potential use of water demand offset policies, require new and renovated developments to have “net neutral” water demand, or the use of recycled water for irrigation. Recommendations: LAFCo encourages the City/EMID to continue work related to water conservation to allow the City to meet needs for future development of the City. 9 Final MSR─ City of Foster City 2) Disadvantaged Unincorporated Communities The location and characteristics of any disadvantaged unincorporated communities within or contiguous to the sphere of influence. Yes Maybe No a) Does the subject agency provide public services related to X sewers, municipal and industrial water, or structural fire protection? b) Are there any “inhabited unincorporated communities” within or adjacent to the subject agency’s sphere of X influence that are considered “disadvantaged” (80% or less of the statewide median household income)? c) If “yes” to both a) and b), it is feasible for the agency to be reorganized such that it can extend service to the X disadvantaged unincorporated community (if “no” to either a) or b), this question may be skipped)? Discussion: a) Does the subject agency provide public services related to sewers and municipal and industrial water, and structural fire protection? Yes. The City of Foster City/EMID provides public services related to sewers, municipal and industrial water, and structural fire protection to City residences and businesses. b) Are there any inhabited unincorporated communities within or adjacent to the subject agency’s sphere of influence that are considered disadvantaged (80% or less of the statewide median household income)? Not applicable as the City’s and EMID’s SOIs are coterminous with its boundaries. c) If yes to both, is it feasible for the agency to be reorganized such that it can extend service to the disadvantaged unincorporated community? Not applicable. Disadvantaged Unincorporated Communities MSR Determination The City’s and EMID’s spheres of influence and municipal boundaries are contiguous. 10 Final MSR─ City of Foster City 3) Capacity and Adequacy of Public Facilities and Services Present and planned capacity of public facilities, adequacy of public services, and infrastructure needs or deficiencies including needs or deficiencies related to sewers, municipal and industrial water, and structural fire protection in any disadvantaged, unincorporated communities within or contiguous to the sphere of influence. Yes Maybe No a) Are there any deficiencies in agency capacity to meet X service needs of existing development within its existing territory? b) Are there any issues regarding the agency’s capacity to X meet the service demand of reasonably foreseeable future growth? c) Are there any concerns regarding public services provided X by the agency being considered adequate? d) Are there any significant infrastructure needs or deficiencies X to be addressed? e) Are there changes in state regulations on the horizon that X will require significant facility and/or infrastructure upgrades? f) Are there any service needs or deficiencies for disadvantaged unincorporated communities related to X sewers, municipal and industrial water, and structural fire protection within or contiguous to the agency’s sphere of influence? Discussion: Water: Estero Municipal Improvement District (EMID) operates and maintains the water supply, distribution and system in the City of Foster City and as well as a portion of the City of San Mateo called Mariners Island which is adjacent to Foster City. The system , including approximately 116 miles of pipeline, eight pumping stations, four production wells and eight storage tanks. Foster City. EMID delivers water to residential, commercial, and a small number of industrial businesses. As of 2020, the total population served was approximately 36,516 through a total of 8,170 service connections. EMID purchases all of its potable water supplies from the San Francisco Public Utilities Commission (SFPUC) 7. 7 2020 Urban Water Management Plan, Estero Municipal Improvement District 11 Final MSR─ City of Foster City Water maintenance, operations and capital improvements are entirely paid for through revenue received through water service fees that fund the Water Enterprise Fund. Water Enterprise Fund revenue is entirely dedicated to the water system and cannot be used for other purposes. Since the Water Enterprise Fund is intended to fully support Water activities, the City evaluates water rates and fees on a routine basis to determine if the forecasted revenue is sufficient for ongoing water operations, maintenance and capital improvements. The District has a two-tiered model for its residential customers where higher levels of water consumption are subject to higher water rates based on a proportionate share of conservation program costs. Commercial customers are charged a uniform rate, which includes commercial customer’s proportionate share of conservation program costs. The latest update to the water rates was adopted by the City Council/EMID Board in June 2024. City of Foster City/EMID Adopted Water Rate Schedule Wastewater: The Wastewater Division of the Foster City/EMID Public Works Department provides sanitary sewer services and is responsible for the operations and maintenance of the 12 Final MSR─ City of Foster City wastewater collection system, including all sewer mains, manholes. The Public Works Department Wastewater Division operates and maintains more than 43 miles of sanitary sewer lines, more than 8.5 miles of sewer force mains, 49 pumping stations, 15 permanent standby generators, and four (4) portable generators to ensure that the nearly three (3) million gallons of wastewater generated by Foster City each day is transmitted to the joint-owned San Mateo Treatment facility. City of Foster City/EMID Wastewater Rates The City of San Mateo and Foster City/Estero Municipal Improvement District (EMID) jointly own the San Mateo Wastewater Treatment Plant (WWTP) through a Joint Powers Agreement (JPA). San Mateo operates the plant as the Lead Agency of the JPA. The facility treats wastewater for the citizens of the City of San Mateo and Foster City/EMID, in addition to surrounding communities. Foster City/EMID owns 25% of the WWTP. Stormwater: The stormwater component of the Streets & Stormwater Division, funded via the Stormwater Enterprise Fund, is part of the Public Works Departments and is responsible for the maintenance of and capital improvements to the stormwater conveyance system. The City funds Stormwater Projects using the City’s General Fund and minimally with Measure M Funding (a countywide vehicle registration fee). Streets & Sidewalks: The City’s Public Works Department maintains and repairs the City’s streets and sidewalks, including pothole repairs, removal of trash in public rights-of-way and maintaining city streetlights for the safety of motorists, bicyclists and pedestrians. As of 2022, Foster City’s pavement condition index (PCI) score is 78, or Good, and is the second highest 13 Final MSR─ City of Foster City rated city in the County8. The five-year CIP for FY 24-95 is $99M, 19% is dedicated to street and traffic improvements. Police: The City of Foster City is a full-service policing agency that provides public safety services twenty-four hours a day, seven days a week. The Police Department is staffed by a team of approximately 55 FTE employees including 39 Police Officers, three Senior Community Service Officers, seven Dispatchers, four records staff, one Management Analyst and one Administrative Assistant II. Police expenditures accounted for a little less than a third of the general fund budget for FY 24-25.9 Public safety services provided by the Foster City Police Department include patrol, traffic and parking enforcement, investigations, and dispatch. According to the Police Department’s 2023 Annual Report, the Department responded to 25,966 police incidents in 2023. Of those incidents, 16,428 (63%) were initiated by calls from service from the community, and approximately 323 arrests were made. City Police Station was remodeled in 2001. Parks and Recreation10: Recreation services and activities are provided by the Administration and Recreation Division of the Parks and Recreation Department. The City maintains 100 acres of park and open space land including bike paths, dog exercise areas, a lighted softball field, soccer and youth baseball fields, tennis courts, pickleball courts, basketball courts, volleyball courts, picnic facilities, and a wildlife refuge. In 2015, the City constructed two new parks - Bridgeview Park and Shorebird Park. The City’s lagoon system is over 200 acres in size. The City’s Parks and Recreation Department offers a wide variety of classes year-round including creative arts, sports, and fitness programs for children, teens, adults and seniors. Staffed by 3o FTEs the budget for Recreation represents 18% of the City’s general fund. For 2023, the City had 5,674 participants in our programs, and the City had adequate staffing and facilities to meet that need. Contract Services/JPA Agencies Animal Control: Twenty cities in San Mateo County, including the City of Foster City, contract with the County to operate a countywide animal control program. The County contracts with the Peninsula Humane Society & SPCA to enforce all animal control laws, shelter homeless animals and to provide a variety of other related services. Fire Protection: The San Mateo Consolidated Fire Department (SMC Fire Department) provides fire protection to the City of Foster City. SMC Fire is a Joint Powers Authority comprised of the Belmont Fire Protection District/City of Belmont, the City of Foster City, and the City of San Mateo. SMC Fire started operations on January 13, 2019. In 2023, SMC Fire response to 15,641 incidents11. The service area of the San Mateo Consolidated Fire Department consists of just 8 ABAG/MTC PCI index 2022 9 FY 24-25 Budget 10 FY 23-24 Budget 11 San Mateo Consolidated Fire Department 2023 Annual Report 14 Final MSR─ City of Foster City over 40 square miles. Foster City represents nearly 20 square miles, San Mateo nearly 16 square miles, and Belmont nearly five square miles. Of those, about 19 square miles is water within the San Francisco Bay12. The department provides emergency operations, hazardous materials response program, training, community risk reduction and fire prevention, office of emergency services, and administrative support. SMC Fire has 164.31 FTEs as of 2023 and budget of $49.6 million for FY23-24. 84% of the budget is allocated to operations. The vast majority, (94%) of the revenue for SMC Fire comes from funding from the three member agencies. In accordance with the governance section of the JPA, the contribution breakdown is 20% from Belmont, 20% from Foster City, and 60% from San Mateo. The San Mateo Consolidated Fire Department is currently an ISO Class 2 Department, with Class 1 being the highest ranking. The San Mateo Consolidated Fire Department prepared a Community Risk Assessment in 2023 The Community Risk Assessment evaluated the department’s performance, facilities and organizational structure and operations and deployment. The Assessment made several recommendations to the Department, including: • The department should consider conducting performance and outcome measurements to share with the community and the elected officials. • Consider hiring enough additional firefighters to ensure a minimum of 4-person staffing daily on Fire Engines. • Consider constructing or relocating the San Mateo Consolidated Fire Department Administrative Facility and replacing two fire stations due to the age and poor conditions of the stations. • Consider developing a long-term Capital Facilities Replacement Plan • Consider moving the Finance and Human Resources (HR) administrative positions within San Mateo Consolidated Fire Department’s Administration. These services are currently provided by the City of San Mateo. • Developing and updating standard operating guidelines and all policies and procedures. Solid Waste: Garbage/ /recycling/composting: The City of Foster City contracts with Recology San Mateo County to provide for the collection of solid waste and recycling from residences and business. Library: The Foster City Library (a branch of the San Mateo County Library) is located in the Civic Center complex at 1000 East Hillsdale Boulevard. This library building includes 18,500 sq. ft. of library space and the 9,000 sq. ft. Community Center. a) Are there any deficiencies in agency capacity to meet service needs of existing development within its existing territory? 12 Community Risk Assessment for San Mateo Consolidated Fire Department, January 2023 15 Final MSR─ City of Foster City LAFCo staff has not identified any deficiencies to meet the needs of existing development within the City of Foster City/EMID. b) Are there any issues regarding the agency’s capacity to meet the service demand of reasonably foreseeable future growth? The City of Foster City is planning for significant growth over the next eight years and expects to have sufficient water supply during non-drought years and resources to fund sewer, police, fire and emergency response services, as well as administrative services to support administrative and some public works functions. The City and EMID are implementing steps to address projected water shortages in drought years. The City’s/EMID’s enterprise funds for water and sewer have sufficient fundings for proposed capital improvement projects. c) Are there any concerns regarding the public services provided by the agency being considered adequate? LAFCo staff does not have any concerns regarding the adequacy of the public services being delivered by the City of Foster City to its residents and businesses. d) Are there any significant infrastructure needs or deficiencies to be addressed? The City/EMID continues to implement capital improvements to road, sewer and water system, and building and park improvements with allocations to capital improvement funds for projects. e) Are there changes in state regulations on the horizon that will require significant facility and/or infrastructure upgrades? The City is not aware of any new state regulations and legislation that will require significant facility and/or infrastructure upgrades. f) Are there any service needs or deficiencies for disadvantaged unincorporated communities related to sewers, municipal and industrial water, and structural within or contiguous to the agency’s sphere of influence? Not applicable. Capacity and Adequacy of Public Facilities and Services MSR Determination LAFCo is not aware of any deficiencies in agency capacity to meet existing service needs for which the agency does not have a plan in place to resolve. The City and EMID is anticipated to be able to meet most service demands of foreseeable growth with project infrastructure improvements and other mitigation measures. Recommendations: 1. EMID’s UMWP was last updated in 2021. EMID and the City should align the growth projections in the UMWP with the RHNA growth projections and the 2023-2031 Housing Element in its next UMWP update. 16 Final MSR─ City of Foster City 4) Financial Ability Financial ability of agencies to provide service Yes Maybe No a) Does the organization routinely engage in budgeting practices that may indicate poor financial management, X such as overspending its revenues, failing to commission independent audits, or adopting its budget late? b) Is the organization lacking adequate reserve to protect X against unexpected events or upcoming significant costs? c) Is the organization’s rate/fee schedule insufficient to fund X an adequate level of service, and/or is the fee inconsistent with the schedules of similar service organizations? d) Is the organization unable to fund necessary infrastructure X maintenance, replacement and/or any needed expansion? e) Is the organization lacking financial policies that ensure its X continued financial accountability and stability? X f) Is the organization’s debt at an unmanageable level? Discussion: a) Does the City routinely engage in budgeting practices that may indicate poor financial management such as overspending its revenue, failing to commission independent audits, or adopted its budget late? LAFCo staff has not identified any issues with the City’s budgeting practices. The City of Foster City/EMID prepares an annual operating and capital improvement program (CIP) budget for the upcoming fiscal year that gets adopted by the City Council at a noticed public hearing before June 30th. Prior to adoption, the Foster City City Council participates in one or more study sessions to review the City’s priorities, agency and department achievements, any financial or service challenges and an overview of the CIP and planned expenditures. Throughout the year, the City Council receives quarterly financial reports to assess and evaluate budget variances during the year. The City also adopts a 5-year financial plan13 The City also produces an Annual Comprehensive Financial Report (ACFR) that is reviewed by City Council. 13 City of Foster City FY 24-25 Budget 17 Final MSR─ City of Foster City Per City FY24-25 budget document, the City is facing a structural deficit over the next few years. The preliminary five-year financial plan for FY 2024-25 through FY 2028-29 indicates General Fund annual structural deficit of $5.58 million, $6.62 million, $8.53 million, $8.87 million, and $9.82 million respectively. These deficits largely steam from increased pension and labor costs, and the potential loss or reduction of Vehicle License Funds in future years. The City’s estimated revenue for FY 24-25 is $143 million, $62 million of which is dedicated the City’s General Fund. Water and Sewer Enterprise funds total $45 million. $5.58 million dollars is proposed to be transferred from reserves to balance the general fund budget for FY24-25. The City is working on additional or updated revenue opportunities, cost recovery measures, and operational efficiencies. The City is currently working on a possible revenue measure for Business License Tax; however, as of now, the Council has not voted on this yet. City of Foster City/EMID General Fund Budget FY2020-2025 FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25 Approved Approved Actuals Actuals Actuals Budget Budget Revenue Property Tax $30,803,263 $31,525,503 $33,873,554 $34,384,300 $35,476,460 Sales Tax $3,131,071 $3,899,280 $4,447,372 $3,927,700 $4,099,600 Transient Occ. Tax $992,616 $1,982,779 $3,435,359 $3,559,800 $4,698,500 (TOT) Vehicle License Fee $2,709,686 $4,345,596 $5,681,466 $4,387,980 $4,288,848 Business Tax $1,506,696 $1,583,789 $1,735,472 $1,615,500 $1,890,000 Departmental $912,542 $1,607,283 $2,091,294 $1,738,209 $1,604,506 Revenue Excess ERAF $3,547,948 $3,100,633 $3,295,053 $1,619,850 $2,800,000 Other Revenue $5,525,293 $9,343,752 $11,538,198 $6,815,448 $7,189,124 Total Revenue $49,129,115 $57,388,615 $66,097,768 $58,048,787 $62,047,038 Expenditures Parks & Rec $10,088,307 $9,106,299 $9,542,991 $11,012,244 $11,354,928 Police $15,969,511 $14,969,116 $15,134,593 $17,886,289 $18,768,530 Fire $11,931,423 $10,861,609 $11,352,653 $11,686,922 $12,531,604 Community $3,434,513 $2,947,704 $3,262,087 $4,589,661 $4,453,562 Development Public Works $2,321,554 $2,407,200 $2,844,722 $4,604,965 $5,259,983 General $6,422,488 $5,731,714 $6,424,288 $8,891,151 $9,640,583 Government Total Expenditures $50,167,796 $46,023,642 $48,561,334 $58,671,232 $62,009,190 18 Final MSR─ City of Foster City Foster City’s general fund primary revenue sources are property tax, sales tax, Vehicle License Fee, and TOT. Property within the City of Foster City has an average assessed value of approximately $1.5 Million per property, higher than the average assessed value of the County of $1.4 Million and)14. The City acknowledges that Excess Educational Revenue Augmentation Fund (ERAF) is an unreliable revenue source and budgets it as one-revenue that gets allocated to City reserves. Currently the City is projected $2,800,000 in Excess ERAF. As of June 30, 2023, The City/District’s total net position increased by $41.26 million, or 11.38%, to $403.77 million from the previous year15. The City/EMID has several internal service funds as well. These funds, which include vehicle and equipment replacement, building maintenance, employee benefits, and compensated absences are financial health and can be used to help balance the general fund in times of deficits. The City/EMID also adopts annual Gann Appropriation Limits at a public meeting. Enterprise Funds The City of Foster City/EMID has two Enterprise Funds – Water and Wastewater. The Enterprise Funds deliver services that are supported by the rates and fees levied by each respective fund. The City/EMID has not experienced any challenges to raising Water or Wastewater rates or fees. Wastewater rates are evaluated annually and currently adopted for five years. Water rates are evaluated annually and have been adopted annually, although the City/EMID is anticipating a five-year adoption next year. Both of these funds are adequately funded and have sufficient reserves. The Water Enterprise fund totals $21,955,045 and is projected to have an increase of $817,099 in fund balance. The Wastewater Enterprise fund totals $42,480,508 and is projected to have an increase of $6,367,653 in fund balance. Capital Improvement Program (CIP) The City of Foster City/EMID prepares and adopts a Capital Improvement Program (CIP) on an annual basis that identifies projects and funding over a five-year period. The FY 2024-29 CIP identified 47 projects and programs and $99 million in funding to be programmed over that time. 14 of projects to funded related to park capital improvement projects. Pensions & Pension Liability Pensions account 16%, or $10.80M, of budgeted General Fund Revenues in FY 24-25. It is anticipated that these costs will continue to rise to $10.96 million for FY 2025-26; $11.54 million for FY 2026-27; $11.37 million for FY 2027-28; and $12.33 million for FY 2028-29. The only revenue sources to fund employee pensions come from investment earnings, employee contributions and employers’ contributions. Although the City has implemented the reduced 14 San Mateo County Assessor’s Office 15 City of Foster City FY 22-23 ACFR 19 Final MSR─ City of Foster City pension benefits formula (PEPRA), the City will not see the impact of those changes for several more years. The City Council has a City Council Subcommittee for Pension Liability, which meets on an as- needed basis and considers/evaluates the liability and any need to make a discretionary payment. The most recent discretionary payments the City has made were in FY 2021 for $7.5 million and in FY 2019 for $3.5 million. Other Post Employment Benefits (OPEB) The City contributes towards the OPEB liability cost and is trying to build a reserve balance based on every year’s need. As of 6/30/23, the City is approximately 71.6% funded towards a total actuarial liability of $8.78 million. b) Is the organization lacking adequate reserves to protect against unexpected events or upcoming significant costs. In FY 2020-21, Sustainable Foster City was added to the General Fund Group. The fund balance includes a minimum reserve equal to 50% (6 months) of annual budgeted operating expenditures as dictated by City Council / Estero Municipal Improvement District Board policy Technology Reserve with a goal with a goal of 25% of fund expenditures. The City’s General Fund has a reserve balance of $54.3 million as for FY23-24. The City has general reserve policy of 50% of the general fund. For FY23-27, the City is currently projected to achieve this reserve percentage, however starting in FY27-28, the General Fund Reserve would drop to 36% of total expenditures. This is due to the use of the reserves to balance the City’s budget in FY24-27 due to a structural deficit. The City also has the following funds that include a reserve component: • Capital Investment - City Fund • Water Capital Investment Fund • Wastewater Capital Investment Fund • Self-Insurance Fund Several other City/EMID funds have reserve/fund balances as well. c) Is the City’s rate/fee schedule insufficient to fund an adequate level of service, and/or is the fee inconsistent with the schedules of similar service organizations? Per City staff, the City/EMID has not experienced any challenges to raising Solid Waste/Water/Wastewater rates or fees; Wastewater and Solid Waste rates are evaluated annually and currently adopted for five years. Water rates are evaluated annually and have been adopted annually, although the City/EMID is anticipating a five-year adoption next year. The San Mateo Consolidated Fire Department last did a fee study in and is undertaking a new fee study in 2024. SMC Fire Department has not faced any challenges raising fees for service, which is only for services offered beyond normal response. These fees are predominantly fees for services provided for Fire Prevention services. 20 Final MSR─ City of Foster City The City also amended its franchise agreement with Recology San Mateo County in 2017. The City approved rate increases for a five-year period starting on January 1, 2024. d) Is the agency unable to fund necessary infrastructure maintenance, replacement and/or any needed expansion? The City/EMID routinely adopts an Operating Budget and Capital Improvement Plan to fund necessary infrastructure maintenance, replacement and any needed expansion for City facilities. As part of the Operating Budget, the City Council approves an equipment and vehicle replacement fund, which is used to accumulate funds for replacement of equipment and vehicles. Departments are charged an annual replacement charge to cover future equipment replacement costs. The City/EMID also charges impact fees on development to off-set impacts to city services, such as roads, water, and sewer. e) Is the agency lacking financial policies that ensure its continued financial accountability and stability? The City of Foster City/EMID has adopted several policies to ensure its continued financial accountability and stability, including policies purchasing policy, investment, credit card use, reimbursement16. f) Is the agency’s debt at an unmanageable level? For the fiscal year ending June 30, 2022, the City/EMID had total long-term debt outstanding of $85 million, $7.7 million in OPEP liability, and $87 million in net pension liabilities for a total $177 million in long-term liabilities. In anticipation of the issuance of revenue bonds and the associated debt service payments, in 2017, the EMID Board approved the adoption of a 5-year rolling wastewater rate increase of 14.25% per year starting in FY 2017-18. In 2018, the EMID Board approved an additional 14.25% rate increase for FY 2022-23. In 2019, the District Board further approved a 10% rate increase to the rolling five-year model for FY 2023-24, and a 2% increase for FY 2024-25. The City has a Levee Protection Planning and Improvements General Obligation Bond Fund which accounts for the payment of debt service (principal and interest) on the City’s general obligation bond debt used for financing up to $90 million levee improvements costs. Financial Ability MSR Determination Like many public agencies, the City continues to address maintaining current levels of services as costs continue to rise. For FY23-27, the City is currently projecting to utilize reserve funds to maintain a balanced budget due to a structural deficit. To address pension costs, the City Council Subcommittee for Pension Liability, which meets on an as-needed basis and considers/evaluates the liability and any need to make a discretionary payment. 16 City of Foster City FY 23-24 Budget 21 Final MSR─ City of Foster City The City is currently working on a possible revenue measure for Business License Tax to help address the City’s current structural deficit; however, as of now, the Council has not voted on this yet. The City Council and staff are dedicated to prudent fiscal management to ensure the continued financial health of the City. The City is well aware of these financial liabilities and a comprehensive MSR is unlikely to contribute additional valuable information. 5) Shared Service and Facilities Status of, and opportunities for, shared facilities Yes Maybe No a) Is the agency currently sharing services or facilities with X other organizations? If so, describe the status of such efforts. b) Are there any opportunities for the organization to share services or facilities with neighboring or overlapping X organizations that are not currently being utilized? c) Are there governance options to allow appropriate facilities and/or resources to be shared, or making excess X capacity available to others, and avoid construction of extra or unnecessary infrastructure or eliminate duplicative resources? a) Is the agency currently sharing services or facilities with other organizations? Fire Department: Since 2010, the City of Foster City and the City of San Mateo have shared a fire chief position. This partnership expanded over the next few years to include the sharing of several other command staff position. In 2013, the City of Belmont/Belmont Fire Protection District joined the partnership. At that time, the three cities agreed to share, jointly staff, and relocate the Foster City Ladder Truck to a centralized location that better served the three communities. In 2015, the three cities conducted a study regarding the viability of completing the merger of all fire protection services. Staff from the cities and fire departments explored available options and determined a JPA was the most viable option. The JPA was officially established on November 22, 2017, and on January 13, 2019, San Mateo Consolidated (SMC) Fire commenced operations as an independent fire department. 17 The Board of Directors, also known as the Fire Board, is comprised of a City Council member from each of the three cities within the San Mateo Consolidated Fire Department’s jurisdiction. Each Board member has a designated alternate from their City Council who serves as a backup in the event of their absence. 17 https://www.smcfire.org/about-us/history/ 22 Final MSR─ City of Foster City Animal Control: Along with 20 other San Mateo County Cites, Foster City contracts with the County to operate a countywide animal control program. The County contracts with the Peninsula Humane Society & SPCA to enforce all animal control laws, shelter homeless animals and to provide a variety of other related services. Solid Waste: Foster City is a member of the 11-agency South Bayside Waste Management Authority (SBMWA, or RethinkWaste) which is responsible for assisting the City to provide solid waste collection services and related outreach and regulatory compliance measures. Wastewater Treatment: The City of San Mateo and Foster City/Estero Municipal Improvement District (EMID) jointly own the San Mateo Wastewater Treatment Plant (WWTP) through a Joint Powers Agreement (JPA). San Mateo operates the plant as the Lead Agency of the JPA. The facility treats wastewater for the citizens of the City of San Mateo and Foster City/EMID, in addition to surrounding communities. Foster City/EMID owns 25% of the WWTP18. Water Distribution: Estero Municipal Improvement District (EMID) operates and maintains the water supply, distribution and system in the City of Foster City and as well as a portion of the City of San Mateo called Mariners Island which is adjacent to Foster City. Foster City is a member of the Bay Area Water Supply and Conservation Agency (BAWSCA), a special district that provides regional water supply planning, resource development, and conservation program services to enhance the reliability of the 16 cities, 8 water districts, and 2 private water providers that provide water to over 1.8 million people and over 40,000 commercial, industrial and institutional accounts in Alameda, San Mateo and Santa Clara Counties. City of Foster City Minimum Wage Ordinance Enforcement: The City contracts with the City of San Jose for enforcement for the City’s minimum wage ordinance. b) Are there any opportunities for the organization to share services or facilities with neighboring or overlapping organizations that are not currently being utilized? Staff has not identified any additional opportunities for the City/EMID to share services or facilities with neighboring or overlapping organizations that are not currently being utilized. c) Are there governance options to allow appropriate facilities and/or resources to be shared, or making excess capacity available to others, and avoid construction of extra or unnecessary infrastructure or eliminate duplicative resources? Staff has not identified any governance options that would reduce duplication of resources, facilities or infrastructure. Shared Services MSR Determination 18 https://www.fostercity.org/publicworks/page/wastewater 23 Final MSR─ City of Foster City The City of Foster City/EMID partners with several agencies to share resources and reduce costs. LAFCo staff has not identified other opportunities that the City could engage in to share costs and/or reduce duplication of resources, facilities or infrastructure. 6) Accountability, Structure, and Efficiencies Accountability for community service needs, including Yes Maybe No governmental structure and operational efficiencies a) Are there any issues with meetings being accessible and well publicized? Any failures to comply with disclosure laws X and the Brown Act? b) Are there any issues with staff turnover or operational X efficiencies? c) Is there a lack of regular audits, adopted budgets and X public access to these documents? d) Are there any recommended changes to the organization’s governance structure that will increase accountability and X efficiency? e) Are there any governance restructure options to enhance X services and/or eliminate deficiencies or redundancies? f) Are there any opportunities to eliminate overlapping boundaries that confuse the public, cause service inefficiencies, unnecessarily increase the cost of X infrastructure, exacerbate rate issues and/or undermine good planning practices? Discussion: Foster City is general law city and utilize a Council-Manager form of government. The five city council members are elected at large. The five city council members also serve as the board of directors of EMID. a) Are there any issues with meetings being accessible and well publicized? Any failures to comply with disclosure laws and the Brown Act? The City Council meets in person at the City Council Chambers located 610 Foster City Boulevard, Foster City, CA 94404 on the First and third Mondays of every month at 6:30pm. Regular meetings are also accessible for viewing to the public by Zoom, meetings are streamed live online at www.fostercity.org/fctv or on FCTV on Comcast Channel 27 and AT&T Channel 99. 24 Final MSR─ City of Foster City Agendas, agenda packets and meeting presentations are posted to the City website at least 72 hours prior to meeting dates. Neither the City of Foster City nor LAFCo staff were able to identify any failures by the City to comply with disclosure laws and the Brown Act. The City’s website contains a public request portal which enables members of the public to search through available records directly through the City website. The website also contacts a public record request page to make requests of records that not available through the portal. b) Are there issues with staff turnover or operational efficiencies? In FY 23-24, the City reported a total of 177 FTE. The City acknowledges that upcoming retirements pose a risk to institutional knowledge. City staff state that recruiting for firefighter positions is somewhat challenging industry wide in the Fire Service, though the City has not had any issues with turnover on a large scale outside of normal retirements. c) Is there a lack of regular audits, adopted budgets and public access to these documents? The City of Foster City regularly prepares an annual budget and contracts with an accounting firm to conduct an annual ACFR, both of which are presented to the City Council at a public hearing and are published on the City’s website. d-f) Changes in governance structure: LAFCo staff does not recommend any changes to or restructuring options of the City’s governance structure that would increase accountability and efficiencies, enhance services and/or eliminate deficiencies. EMID was created by special legislation to provide municipal services except planning and land use function to an unincorporated area which later became the City of Foster City. EMID currently is the entity that provided water and sewer to customers in Foster City and portions of the City of San Mateo. EMID also is the agency that currently receives the property tax allocation for City. Two potential governance alternatives have been identified for EMID: Status Quo EMID is a subsidiary district of the City of Foster City and is governed by the City Council. No significant issues have been identified by LAFCo as part of this MSR. Dissolution of EMID and merger with the City of Foster City The original purpose for EMID was to provide several municipal functions to an unincorporated area in anticipation of urban development and the potential future incorporated on the area. Now that the City of Foster City has been incorporated, the specific purpose of EMID has been fulfilled. EMID sold bonds to finance the major improvements needed for development of the City, of which the last bond payment was made in 2007. EMID provides water and sewer service to the City of Foster City and to Mariner’s Island in San Mateo. EMID is also the entity that receives the City’s allocation of property tax and Excess ERAF. The City began receiving revenues available to cities in California, but it was EMID that levied taxes for services EMID provided within corporate boundaries. With the passage of 25 Final MSR─ City of Foster City Proposition 13, this resulted in EMID receiving property tax revenues and the City of Foster City receiving other revenues such as motor vehicle and sales tax. In the past few years, there has been discussions at the State level about reducing Excess ERAF for cities and eliminating it for special districts. As EMID is considered a special district, EMID was at risk of having its ERAF funds eliminated even though it is a subsidiary district of the City. If EMID was dissolved and merged with the City, the City could then become entity that receives property tax revenue and Excess ERAF Funds, as well as becoming the successor agency of any agreements that EMID has in place regarding water and sewer services. A full merger of EMID with the City could result in long-term operational and administrative cost savings. A study of potential efficiencies and savings could be undertaken to determine the feasibility of this government structure alternative. Currently, the City/EMID have not explored the potential of a merger/dissolution of EMID. Accountability, Structure, and Efficiencies MSR Determination The City of Foster City/EMID complies with disclosure laws and the Brown Act and ensures that public meetings are accessible and well publicized. Adopted budgets and annual budgets are available on the City’s website. While highly detailed, the budget documents could be enhanced by including a simplified summary table of revenue and expenditures for the City and EMID, particularly for the general fund. There are no recommended changes to the organization’s governmental structure or operations that will increase accountability and efficiency. Recommendation: 1) The City/EMID could explore a future a study of potential efficiencies and savings could be undertaken to determine the feasibility of a merger of EMID with the City. 2) Consider the inclusion of simplified summary table of revenue and expenditures for the City and EMID, particularly for the general fund, in future budget documents. 7) Other Any other matter related to effective or efficient service Yes Maybe No delivery, as required by commission policy. a) Are there any other service delivery issues that can be X resolved by the MSR/SOI process? b) Water Resiliency and Climate Change i) Does the organization support a governance model that enhances and provides a more robust water supply X capacity? ii) Does the organization support multi-agency X collaboration and a governance model that provide risk 26 Final MSR─ City of Foster City reduction solutions that address sea level rise and other measures to adapt to climate change? c) Natural Hazards and Mitigation Planning i) Has the agency planned for how natural hazards may X impact service delivery? ii) Does the organization support multi-agency collaboration and a governance model that provides risk X reduction for all natural hazards? a) Other service delivery issues that can be resolved by the MSR/SOI process. LAFCo staff has not identified other service delivery issues that could be resolved through the MSR/SOI process. b) Water Resiliency and Climate Change Foster City has an adopted Urban Water Management for EMID and a Climate Action Plan for the City. The Plan was last updated in 2022. The City/EMID has completed several projects related to water resiliency and climate change that discussed in the next section of the MSR. c) Natural Hazards and Mitigation Planning Along with the County and other San Mateo County cities, Foster City participated in the 2021 Local Hazard Mitigation Plan (LHMP) that assessed hazard vulnerabilities and identified opportunities for mitigation to reduce the level of injury, property damage and community disruption that could occur in manmade and natural disasters. In addition to participation in the LHMP, the City has taken the completed the following projects: • Water Tanks and Water Booster Pump Station – A current CIP is under construction to provide some seismic retrofitting to components of the City’s 3 steel water tanks, the Water Booster Pump Station, and the City’s Lagoon Pump Station. • Lagoon Pump Station – A current CIP is under preliminary design to investigate increasing City’s pumping capacity of the lagoon pump station, to combat increasingly intense storm events that have been experienced in recent years. Additionally, an assessment and recommendation for rehabilitation is planned for the City’s oldest building, the Lagoon Pump House. • 24-Inch Water Transmission Main – The City’s sole supply of water is a 24-inch cement mortar lined and coated steel transmission main. A recently completed CIP project (2023), provided for the installation of bypass connections on either side of a pedestrian bridge along East Third Avenue upon which the transmission main is attached. In the event of an earthquake and/or catastrophic failure of the pedestrian bridge along East Third Avenue, staff will be able to engage the bypass (temporarily connecting aluminum pipe to the bypass connections) to 27 Final MSR─ City of Foster City continue to supply the City with water. A project in the City CIP is planned to install a permanent bypass on the vehicular bridge crossing East Third Avenue in the event the pedestrian bridge collapses in a seismic event. • Levee Project – City completed 6.5 miles of levee improvements, to raise the levee elevation to meet sea level rise resilience to 2100 including 2 feet of wave run-up and storm surge. • Waste Water Treatment Plant – City embarked on a 10-year CIP project to construct a new liquid processing facility to manage wet-weather events. The project is anticipated to go on-line at the end of 2024 and be completed in 2025. The new plant will better manage wet weather flows from the City, meet more stringent regulatory guidelines for effluent discharge to the bay, and provide a higher quality effluent that is Title 22 compliant. The plant was constructed to be resilient to sea level rise to 2100. Master Plans for both the Water and Wastewater Collection Systems were completed in 2021 outlining prioritized improvements over the next 20-years. • Emergency Preparedness – Staff actively participates in emergency preparedness exercises and tabletop exercises through the Fire and Police Departments. (i.e.: Emergency Response Plan; COOP; Annex; Emergency Ops Plan, LHMP). The Fire Department has participated heavily in the LHMP process and helps to develop and maintain a variety of emergency plans for all 3 cities. Other Issues MSR Determination The City of Foster City/EMID is engaged in activities to address hazard mitigation, wildfire prevention and sea level rise for City residents and businesses. San Mateo LAFCo commends the City and EMID for the work they have undertaken in the areas of address hazard mitigation, wildfire prevention and sea level rise. Recommendation - 1) LAFCo encourages the City of Foster City and EMID to continue its work in the areas of natural hazard mitigation and sea level rise and continue to coordinate with partner agencies. Determinations Section 56425 requires the Commission to make determinations concerning land use, present and probable need for public facilities and services in the area, capacity of public facilities and adequacy of public services that the agency provides or is authorized to provide, and existence of any social or economic communities of interest in the area if the Commission determines that they are relevant to the agency. These include the following determinations: 1) The present and planned land uses in the area, including agricultural and open space lands. The boundaries of City of Foster City and EMID do not include agricultural land. 2) The present and probable need for public facilities and services in the area. 28 Final MSR─ City of Foster City The City of Foster City and EMID facilities and services meet the needs of its residents and businesses, and the City of Foster City and EMID anticipates that will be able to provide adequate facilities and services for the anticipated growth within its service area. 3) The present capacity of public facilities and adequacy of public services that the agency provides or is authorized to provide. The City and EMID currently provides adequate public services to its residents, including police protection, water, sanitary sewer and storm water services. In addition, the City routinely adopts a Capital Improvement Program to fund critical repairs, replacements and improvements to the City’s infrastructure and facilities. 4) The existence of any social or economic communities of interest in the area if the Commission determines that they are relevant to the agency. There are no disadvantaged unincorporated communities within the City of Foster City’s or EMID’s SOIs. 5) For an update of a sphere of influence of a city or special district that provides public facilities or services related to sewers, municipal and industrial water, or structural fire protection, that occurs pursuant to Section 56425(g) on or after July 1, 2012, the present and probable need for those public facilities and services of any disadvantaged unincorporated communities within the existing sphere of influence. No change to the City of Foster City’s or EMID’s SOIs is proposed at this time. On the basis of the Municipal Service Review: Staff has reviewed the agency’s Sphere of Influence and recommends that a SOI Update is NOT NECESSARY in accordance with Government Code Section 56425(g). Therefore, NO CHANGE to the agency’s SOI is recommended and SOI determinations HAVE NOT been made. Staff has reviewed the agency’s Sphere of Influence and recommends that a SOI Update IS NECESSARY in accordance with Government Code Section 56425(g). Therefore, A CHANGE to the agency’s SOI is recommended and SOI determinations HAVE been made and are included in this MSR/SOI study. 29 Final MSR─ City of Foster City Appendix A. City of Foster City/EMID Fact Sheet City Manager/General Manager: Stefan Chatwin Address: 610 Foster City Boulevard, Foster City, CA 94404 Phone Number & Email Address: (650) 286-3200 Date of Incorporation: April 27, 1971 City Councilmembers: Mayor & Councilmembers Term Expiration Date Patrick Sullivan, Mayor December 2024 Stacy Jimenez, Vice Mayor December 2026 Jon Froomin, Councilmember December 2024 Sam Hindi, Councilmember December 2024 Art Kiesel, Councilmember December 2026 Compensation: City Councilmembers receive $496 per month. Councilmembers shall be reimbursed for reasonable expenses incurred in the performance of duties imposed upon them by law or in the course of business on behalf of the City as authorized by the City Council. In addition, each Councilmember receives $25.00 for each Estero Municipal Improvement District meeting attended, not to exceed three meetings per month. Councilmembers are also eligible for certain other City benefits such as medical and dental insurance. Public Meetings: First and third Mondays of every month at 6:30pm. Services Provided: Police, Water, Sanitary Sewer, Stormwater Control, Streets & Sidewalks, Lighting, Parks & Recreation Agency staff: 179 Full time equivalent employees Area Served: City of Foster City and City of San Mateo portion of Mariners Island for water Population: 33,806 Sphere of Influence: Coterminous with City and EMID boundaries FY 2023-24 Budget: $142M, including $62M for Operating Expenditures 30 Final MSR─ City of Foster City Appendix B. References City of Foster City MSR response letters and comments on Administrative Draft 31 « Overview Foster City A N D B L V D 3rd AVE STATE H B I G E H A W C A H Y P 9 A 2 R K BLV D L S S I R E N RI A M B E A C H P A R K B STATE HIGH M W E A T Y R O 92 CENTER BLVD LV D Fra S B n a c a n y isco E HILL F S O DA S LE T B E LV R D CITY SHELL BLVD FOSTER CITY BLVD D E D G E W H PA R K BLV Y B L V D BEACH PARK BLVD A T E R B BE AC H A L S E LV D U S H FARRAGUT BLVD REDWOOD CITY IG H W A Y 101 SAN MATEO U S H IG H W A Y 101 County Boundary Source: Esri, DigitalGlobe, GeoEye, i-cubed, Earthstar Geographics, City Boundary CNES/Airbus DS, USDA, USGS, AEX, Getmapping, Aerogrid, IGN, IGP, BELMONT swisstopo, and the GIS User Community FOSTER CITY SPHERE OF INFLUENCE City boundaries are conterminous with county boundaries that extend into bay Legend Estero Muni Improvement District Foster City Boundary County Boundary / Foster City/Estero Muni Improvement District Tygarjas Bigstyck Virginia Chang-Kiraly Ann Draper Harvey Rarback Kati Martin Ray Mueller Warren Slocum Exhibit B Municipal Service Review (MSR) Areas of Determination and Recommendations for the City of Foster City and the Estero Municipal Improvement District (EMID) Areas of Determinations and Recommendations Growth and population projections for the affected area. Determination Currently, there are an estimated 13,174 housing units in the City of Foster City. The City’s housing element proposes to add 1,896 housing units to the City’s housing stock, which represents a 13% increase in housing production over the next decade. However, the City General Plan largely evaluated this potential future growth. While water demand for proposed development under the 2023-2031 Housing Element will be able to be met, during single and multiple dry years, EMID’s total annual water demand is expected to exceed EMID’s available water supplies from 2025 to 2045 with or without the additional demand from the 2023-2031 Housing Element. The City/EMID is aware of this issue and the Housing Element includes polices to work with EMID to develop water conservation requirements and/or increased water supply that will ensure sufficient water capacity to accommodate the RHNA, such as the potential use of water demand offset policies, require new and renovated developments to have “net neutral” water demand, or the use of recycled water for irrigation. Recommendation 1. LAFCo encourages the City/EMID to continue work related to water conservation to allow the City to meet needs for future development of the City. The location and characteristics of any disadvantaged unincorporated communities within or contiguous to the SOI. Determination The City’s and EMID’s spheres of influence and municipal boundaries are contiguous. Recommendation • None Present and planned capacity of public facilities, adequacy of public services, and infrastructure needs or deficiencies including needs or deficiencies related to sewers, municipal and industrial water, and structural fire protection in any disadvantaged, unincorporated communities within or contiguous to the SOI. Determination LAFCo is not aware of any deficiencies in agency capacity to meet existing service needs for which the agency does not have a plan in place to resolve. The City and EMID is anticipated to be able to meet most service demands of foreseeable growth with project infrastructure improvements and other mitigation measures. Recommendations - 1. EMID’s UMWP was last updated in 2021. EMID and the City should align the growth projections in the UMWP with the RHNA growth projections and the 2023-2031 Housing Element in its next UMWP update. Financial ability of agencies to provide services. Determination Like many public agencies, the City continues to address maintaining current levels of services as costs continue to rise. For FY23-27, the City is currently projected to achieve this reserve percentage, however starting in FY27-28, the General Fund Reserve would drop to 36% of total expenditures. This is due to the use of the reserves to balance the City’s budget in FY24-27 due to a structural deficit. To address pension costs, the City Council Subcommittee for Pension Liability, which meets on an as-needed basis and considers/evaluates the liability and any need to make a discretionary payment. The City is currently working on a possible revenue measure for Business License Tax to help address the City’s current structural deficit; however, as of now, the Council has not voted on this yet. The City Council and staff are dedicated to prudent fiscal management to ensure the continued financial health of the City. The City is well aware of these financial liabilities and a comprehensive MSR is unlikely to contribute additional valuable information. Recommendation • None Status of, and opportunities for, shared facilities. Determination The City of Foster City/EMID partners with several agencies to share resources and reduce costs. LAFCo staff has not identified other opportunities that the City could engage in to share costs and/or reduce duplication of resources, facilities or infrastructure. Recommendation • None Accountability for community service needs, including governmental structure and operational efficiencies. Determination The City of Foster City/EMID complies with disclosure laws and the Brown Act and ensures that public meetings are accessible and well publicized. Adopted budgets and annual budgets are available on the City’s website. While highly detailed, the budget documents could be enhanced by including a simplified summary table of revenue and expenditures for the City and EMID, particularly for the general fund. There are no recommended changes to the organization’s governmental structure or operations that will increase accountability and efficiency. Recommendations: 1. The City/EMID could explore a future a study of potential efficiencies and savings could be undertaken to determine the feasibility of a merger of EMID with the City. 2. Consider the inclusion of simplified summary table of revenue and expenditures for the City and EMID, particularly for the general fund, in future budget documents. Any other matter related to effective or efficient service delivery, as required by LAFCo policy including the following: i. Water Resiliency and Climate Change ii. Impact of Natural Hazards and Mitigation Planning Determination The City of Foster City/EMID is engaged in activities to address hazard mitigation, wildfire prevention and sea level rise for City residents and businesses. San Mateo LAFCo commends the City and EMID for the work they have undertaken in the areas of address hazard mitigation, wildfire prevention and sea level rise. Recommendation - 1. LAFCo encourages the City of Foster City and EMID to continue its work in the areas of natural hazard mitigation and sea level rise and continue to coordinate with partner agencies