Atherton is trimming staff, cutting expenses, and dipping into its reserve fund to make ends meet in the fiscal year beginning July 1. The $17 million operating and capital improvement budget for 2009-10 was approved by the City Council at its June 17 meeting.
The vote was 4-1, with Councilman Charles Marsala opposed.
Mr. Marsala said he was concerned that the town is overcharging on road impact fees, and since the budget doesn't address that situation, he is voting against it. City Attorney Wynne Furth said a report on road impact fees should come to the council next month, and if there is an issue with the fees, it can be addressed then.
After spending hours at several special budget meetings scrutinizing everything from bottled water to business trips, the council pruned operating expenses by nearly $547,000. Town staff is shrinking a bit, with the police department leaving two positions unfilled.
"I want to thank staff for all the hard work they've done in whittling down their budgets," said Councilwoman Elizabeth Lewis.
The town's general fund balance will drop by $500,000 in order to help fund a new expense in the budget -- setting aside money to pay for retiree health benefits -- bringing the town's reserves to $5.7 million.
If it wasn't for the town's problematic business license tax, Atherton's revenues would put the town in the black in the coming fiscal year, according to Louise Ho, Atherton's finance director. However, the need to issue refunds to building contractors and subcontractors who were overcharged in the past two years pushes Atherton's revenue picture into the red. Atherton is setting aside $817,000 in its budget for business tax refunds.
Since learning of the problem, the town has changed its method for figuring the business license tax.
Property tax revenues are projected to rise 3 percent over last year, while building permit revenue is expected to decline, according to Ms. Ho.
Capital improvement projects funded by the budget include road maintenance and repairs, several drainage improvement projects, and the town's share of a jointly funded new traffic signal at Encinal Avenue and Middlefield Road.