There is good reason for Atherton residents to shake their heads and wonder how their cash-strapped town will pay its bills in the next few years.
The distressing news came at the council's March 17 budget discussion, where finance director Louise Ho's worse-case scenario shows that unless there are dramatic changes soon, the town's $7.2 million in reserves could virtually evaporate in the next five years.
The problem: expenses outstrip revenues every year through 2013-14 by an average of $1.3 million a year. The biggest bump up comes from a nearly $2 million increase in salary and benefits over the period. And the current year shows a $284,000 expense related to settlement of a lawsuit filed by a police officer.
Another dark cloud hanging over the budget is an internal council disagreement over the matter of refunding $1.6 million in road-impact fees, which the council has decided were collected improperly and should be given back.
At the March 17 meeting, Mayor Kathy McKeithen, referring to the five-year negative budget forecast, said she could not approve taking $1.1 million from reserves (projected to drop below $500,000 in the fifth budget year) to pay back the fees under such conditions. City staff had characterized the payback as correcting an accounting error that improperly put the road-impact fees into the general fund. She was joined by council member Jim Dobbie in opposing the transfer, which requires a super-majority of four votes to pass.
Mr. Dobbie said the council should not have rescinded the road- impact fee at all, while member Jerry Carlson countered:
"It's a simple issue. We're taking ill-gotten gains that ended up in our general reserves. I don't see why we need to keep bickering about it."
In April, the council will see a proposal to change the policy requiring a four-fifths vote to a simple majority. It will only require a simple majority vote to make the change.
A bad decision to table police oversight proposal
On another matter at the March 17 meeting, the council missed a golden opportunity to tone down the current negative rhetoric about the police department when it summarily tabled a proposal to consider forming a police oversight committee.
With Mayor McKeithen dissenting, the council voted 4-1 to shelve a proposal promoted heavily by residents Jon Buckheit (see guest opinion, opposite page) and Peter Carpenter to establish an oversight committee for the department.
The two men had high hopes, as did we, that the council would at least hear their proposal to form a committee to help ease tensions that have risen lately with the disclosure of how police treated Mr. Buckheit during a domestic disturbance several years ago. After a county judge declared him factually innocent in the case, Mr. Buckheit filed a lawsuit against the town in federal court in San Francisco.
Mr. Carpenter, president of the Atherton Civic Interest League, has long been a crusader for open government and had hoped the council would hear testimony from proponents of the plan. Now that opportunity is apparently lost, although Mr. Carpenter said he will continue to work on the issue of police review. If it does come up again, we believe the council should give police review serious consideration.