Fiscal Sustainability

The City of Foster City is dedicated to maintaining our quality of life and supporting local residents. The City maintains key services including public safety, parks, and infrastructure such as streets, roads, storm drains and more that our residents, businesses, and visitors depend upon.

Currently, the City is confronted with several challenges, including escalating costs and a structural budget deficit. The current estimate included a $4.54 million deficit in the City’s General Fund, which City leadership addresses using its General Fund reserve funds. Current forecasts suggest upcoming years will be similarly challenging.

To address these challenges the City is exploring avenues for potential additional revenue to sustain local services. This may include revisions to the City’s existing Business License Tax. As part of this, the City is seeking input from residents and other stakeholders to inform its decision-making processes. We encourage you to utilize this webpage to learn more about the City's services and budgetary landscape, and to participate in the survey provided below to articulate your priorities for the City.

Public Safety

The City is committed to maintaining rapid emergency response times, and preserving police patrols in neighborhoods and business areas to help prevent crimes and burglaries and keep residents and their property safe.

The Foster City Police Department’s authorized staffing levels are for 39 Sworn Police Officers, as well as 16 support staff, including Community Service Officers. The City has historically rated among the safest cities in California and the nation. Broader trends in property crime and commercial burglaries have not left the City untouched, however. The Police Department responded to over 26,000 calls for service in 2023, a slight increase overthe prior year.

Foster City contracts with the San Mateo Consolidated Fire Department for fire and emergency medical response. Those calls for service have increased approximately 10% per year over the last several years, and approximately 65% of fire calls are for medical emergencies.

Streets, Roads and Infrastructure

Foster City was built in the mid-1960s, and some of its oldest infrastructure components (typically underground pipes, as well as the Corporation Yard buildings) date back to that era, which requires ongoing maintenance to assure reliability and safety. The City maintains 120 miles of streets and roads and 4 bridges. The most recent study of the condition of the City’s roads rated them as the best maintained in San Mateo County, and among the best in the Bay Area.

The Foster City Lagoon, a unique feature of the City, functions as a drainage detention basin and is designed to successfully withstand a storm of 100-year return frequency or a storm of such severity that it is likely to occur only once each century, providing maximum drainage security for Foster City. 

Foster City also maintains the levee along the Bayfront, which provides protection from flood hazards and storms. The Federal Emergency Management Agency (FEMA) conducted a coastal flood hazard study in 2014, which determined that roughly 85% of the City’s levee system did not meet FEMA requirements. The City recently completed a $95 million upgrade to the levee.

What is Our City’s Budget?

The City’s General Fund budget for the current fiscal year is $58.3 million. This General Fund is the primary funder of many of the basic services of the City, including much of the Public Safety, Parks and Recreation, Public Works and other departments.

The City is projecting economic volatility for several of its key revenue streams that support its General Fund. While transient occupancy (hotel) tax revenues in Foster City have improved steadily since the COVID-19 pandemic, the expansion of video conferencing in lieu of in-person meetings has likely reduced business travel and therefore hotel occupancy. These revenues continue to trail pre-pandemic levels.

Higher interest rates have had multiple impacts as the City's investment income has expanded but so has the cost of service and supplies as well as supply chain disruptions.

While the City has seen recovery for most of its key revenues that were impacted by the COVID-19 pandemic, transient occupancy tax (TOT) revenues are still expected to only reach $3.95 million by the end of the current fiscal year, which is still $0.44 million behind its $4.39 million level in FY 2018-19.

As of December 31, 2023, the  estimated deficit for the current fiscal year is $4.54 million.  Thereafter through FY 2027-28, the financial plan indicates an annual structural deficit of $6.78 million, $8.31 million, $7.70 million, and $6.35 million respectively.

What is an Example of a Revenue Measure to Maintain Service Levels?

The Business License Tax Ordinance was last updated in November 2013 with approval of Foster City’s voters. The current tax rate is 0.075% charged against a firm’s annual Gross Receipts, with a cap on how high the tax may rise.

One option under consideration for the City is to revisit this measure to modernize how it is applied to businesses of varying sizes and other factors. The current Business License Tax generates approximately $1.7million in annual revenue for the General Fund.

Any such measure would have to first be referred to the ballot by a super-majority vote of the City Council, and then approved by a majority vote of City voters.

Stakeholder Outreach Meetings

City staff and our consultant would like to engage in a dialogue with your business leadership team to present some draft business license tax models that we are considering and understand your needs and perspectives on this matter. The presentation will also include an overview of the services that the City provides, the City’s financial outlook and some critical infrastructure needs. The feedback we receive from you will help inform the City’s decision-making process.

For your convenience, we are offering one-hour time slots for both in-person (at City Hall) and virtual meetings. You can make an appointment by clicking here: 

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Past Meetings