Foster City has lost its largest sales tax producer and about $1 million a year in revenue at a time the city is about to close its structural deficit, an unfortunate scenario, according to a third-quarter financial update the City Council will hear this Monday.
The report does not say which company is relocating because of state law but indicated the move of its sales office out of Foster City started in October and was expected to be complete by the end of March.
The Daily Journal has learned, however, that the company in question is Life Technologies Corporation, a global biotechnology tools company, located at 850 Lincoln Centre Drive.
The company, formerly Applied Biosystems, employs about 1,600 people in Foster City and was just bought by Thermo Fisher for $13.6 billion, the company announced two weeks ago.
The move will affect Foster City’s long-term financial situation but the city is still expected to end this fiscal year with about $900,000 more in revenue than originally expected.
Foster City’s revenue this past year was about $31.2 million.
The quarterly financial report also highlights development activities that are progressing earlier than anticipated, which will bode well for future revenue forecasts, according to the report.
Property taxes for the year are exceeding projections by $469,000 and hotel taxes are about $150,000 better than expected, according to the report.
“The loss of the largest sales tax generator will reduce the sales tax base by nearly 25 percent which in turn impacts the long-range forecast. The positive revenue trends in the areas of property, transient occupancy and franchise taxes, combined with the ongoing development of various commercial and mixed-use properties in Foster City, will still allow the city to achieve a balanced budget for FY 2013-14 while it assesses the long-range impact of the sales tax losses ... ,” the report states.
The report also states that of the $12.7 million the city lost when its Redevelopment Agency was dissolved, about $3.3 million was returned to the city by the county Controller’s Office that the City Council pledged 100 percent toward building affordable housing, only one of two agencies in the county that took the same action, including San Mateo.
The city also spent about $400,000 less this past year with department savings, including $200,000 the fire department will save the city with its shared services agreement with the San Mateo Fire Department.
The Foster City Council meets 6:30 p.m., Monday, City Hall, 620 Foster City Blvd., Foster City.
(650) 344-5200 ext. 106