The Line on Every Foster City Tax Bill That's Built to Shrink, Not Grow

Pull up any Foster City property tax bill and you'll find a line most buyers skim past on their way to the total. It reads something like "GO Bond 2018" or "Levee Improvement." A buyer who doesn't ask about it assumes it's one more fee stacked onto an already expensive parcel. A buyer who does ask usually hears the short version: it pays for the levee, it's been there since 2020, don't worry about it.

Both reactions miss what's actually going on. That line item is Measure P, and it's one of the more unusual pieces of municipal financing I've come across on the Peninsula, because it was designed from the start to get smaller, not bigger, and it exists specifically to replace a cost that would otherwise never go away. If you're weighing a Foster City purchase in 2026, understanding what you're actually paying for, and what you're not paying for because of it, changes how you should read that number on the bill.

What FEMA Found in 2014, and What Voters Did in 2018

The story starts with an accreditation problem, not a construction problem. In 2014, the Federal Emergency Management Agency determined that Foster City's levee no longer met the minimum criteria for flood protection under federal standards. That finding mattered because levee accreditation is what keeps a city's parcels out of a federally mapped flood zone, and losing it would have triggered mandatory flood insurance requirements for property owners across the city, not just those along the lagoon.

The city's answer went to the ballot. In 2018, Foster City voters approved Measure P with nearly 81 percent support, authorizing the city to issue up to $90 million in general obligation bonds to rebuild and strengthen the levee system. Construction began in October 2020, the Bay Trail reopened in phases through October 2023, and the project reached final completion with a ribbon cutting at Shorebird Park in February 2024. The engineering was handled by Schaaf & Wheeler Consulting Civil Engineers, with Shimmick Construction as the contractor.

The levy started appearing on tax bills that same fall of 2020, and it runs for 30 years. If you're doing the math, that puts the assessment on the books through roughly 2050, which means anyone buying in Foster City today is stepping into a financing obligation that's already six years into its term, with about 24 years left to run.

The Trade You're Actually Financing

Here's the part that gets lost when people call this "just another assessment." Measure P wasn't framed as an add-on cost. It was framed as a substitute for a bigger one.

The city's own estimate at the time of the vote put the first-year rate at approximately $36 per $100,000 of assessed value, dropping to an estimated $33 per $100,000 in subsequent years. Compare that to what the city projected homeowners would otherwise face: an estimated $2,000 to $3,000 or more per year in mandatory flood insurance, indefinitely, with no 30-year end date and no reason to expect the premiums would ever come down.

On a home assessed at $1.5 million, that's roughly $500 to $540 a year through Measure P, against a flood insurance bill that was running four to six times higher with no expiration date attached. That's the actual trade voters approved. It's worth saying plainly because it rarely gets explained this way at an open house: the line item on the tax bill isn't competing against zero. It's competing against a standing insurance premium that most Foster City owners no longer have to carry.

One clarification matters here too. This isn't a lagoon-only charge. Because Measure P is a general obligation bond secured by the city's full property tax base rather than a special assessment tied to a benefit zone, it's levied citywide based on assessed value, not proximity to water. A buyer looking at a home three blocks from the lagoon pays the same rate structure as a buyer looking at a home directly on it.

The $19 Million the City Absorbed So Your Bill Wouldn't

Large infrastructure projects rarely land at their original price, and this one didn't either. Reporting on the project in 2020 had the cost climbing from the original $90 million estimate to roughly $109 million, with the completion timeline pushed out as well.

That's usually where a buyer's instinct kicks in: if the project cost almost 20 percent more than planned, surely the assessment went up to cover it. It didn't, and the reason is structural. A general obligation bond is capped at what voters approved. The city couldn't simply raise the Measure P levy to cover the overage without going back to the ballot. Instead, records show the city issued $85 million in bonds in August 2020, then authorized the remaining $5 million in Measure P bonds in March 2023, using the full $90 million voters had approved. Alongside that, the city separately appropriated an additional $5 million from its own Capital Improvement Plan funds to help close the gap.

In practical terms, that means the cost overrun on this project was absorbed through the city's broader capital budget, not passed through as a bigger number on any individual owner's tax bill. If you're trying to gauge how predictable this line item is going forward, that's the relevant fact. The rate schedule set back in 2018 has held.

A Line Item Built to Shrink

This is the detail that surprises people who've dealt with special assessments elsewhere. Community Facilities District taxes, the Mello-Roos type of financing common in newer California developments, typically include an automatic annual escalator, often around 2 percent, so the dollar figure a homeowner pays tends to climb every year until the bond term ends.

Measure P works the opposite way. Because it's structured as a fixed debt service obligation spread across the city's total assessed valuation, and because Foster City's citywide assessed value grows most years through reassessment and turnover, the same total payment gets divided across a larger base over time. That's exactly why the city's own projections showed the per-parcel rate stepping down from about $36 to about $33 per $100,000 after the first year, with further gradual declines expected as long as assessed values keep rising. It's not a promise, since it depends on the tax base continuing to grow, but it's a meaningfully different design than the escalating structure buyers may be used to seeing in newer subdivisions elsewhere in the county.

What This Means If You're Underwriting a Foster City Purchase Right Now

If you're comparing homes and trying to build an honest picture of carrying costs, here's what I'd actually do with this information.

First, pull the current year's secured property tax bill for any home you're seriously considering and find the Measure P line item directly, rather than relying on a verbal assurance that "it's small." The dollar figure will vary with that specific parcel's assessed value, and assessed value under Prop 13 can differ substantially between a home that last sold in 2004 and one that sold in 2022, even on the same street.

Second, remember this obligation transfers with the property. It's tied to the parcel, not the seller, so whatever remains of the 30-year term becomes yours at close. With roughly 24 years left on the schedule as of 2026, it's a long-horizon cost worth factoring into a hold-period analysis the same way you'd factor in a fixed-rate mortgage payment.

Third, treat it as complementary information to what you already know about lagoon-front ownership in Foster City, not a substitute for it. Dock rights, lagoon frontage classifications, and the city's ongoing work on its municipal code around water access are a separate legal question from this financing mechanism. Measure P tells you what you're paying toward levee protection citywide. It doesn't tell you what kind of water access a specific parcel has, and the two shouldn't be confused during due diligence.

FAQ

Does the Measure P assessment apply only to homes on the lagoon? No. It's levied citywide based on each parcel's assessed value because it's a general obligation bond backed by the city's full tax base, not a special district tied to waterfront proximity.

How long will this assessment stay on the tax bill? The levy began appearing on bills in fall 2020 and runs for 30 years under the bond's terms, meaning it's scheduled to remain in place through roughly 2050.

Where do I find the exact dollar amount for a specific home? It appears as a distinct line item on the property's secured property tax bill from San Mateo County. Because the amount is based on assessed value rather than market value, it's specific to that parcel's tax history and won't match a neighboring home's figure exactly.

If you're weighing a purchase in Foster City and want help reading a tax bill or disclosure package line by line before you write an offer, that's exactly the kind of groundwork Andrew Klink walks clients through. Schedule a complimentary Peninsula market consultation and we'll go through the numbers together.