To say that the Atherton City Council is aiming to cut costs in Town Hall is to state the obvious. This town, home to some of the wealthiest people in the country, is facing a long-term structural deficit and unsustainable costs — for pensions, for health benefits, for police services.
An improving economy, were that to come along, may help indirectly by turning around the real estate market, but since there are no retail businesses in Atherton, there is no sales tax revenue.
A report by City Manager Jerry Gruber on a feasibility study of cutting the size of Town Hall staff did not go over well with Mayor Kathy McKeithen at the Aug. 18 council meeting.
"This does not look like a classification study," Ms. McKeithen began, using the term of art for such a report. The report is too subjective, too focused on opportunities for staff advancement, and insufficiently cognizant of the interests and needs of the citizens, she said.
The report mentions several "weaknesses" in Town Hall staffing:
• The Public Works Department should establish career ladders and more training to help retain skilled workers. An additional entry-level position would meet "minimum safety staffing" in the department.
• The town's deputy city clerk position, which was reclassified from city clerk to reduce costs, is being supervised by the city manager and assistant city manager. The deputy needs a career ladder to advance.
• The assistant city manager lacks clerical and administrative support because the person with that job spends most days on post office and cashier duties.
• A yet-to-be-hired environmental programs coordinator should take over green programs from public works.
"Weaknesses, weaknesses, weaknesses, and yet I don't see the weaknesses," Ms. McKeithen said. "It's basically like a career path analysis for the staff. It doesn't have the distance perspective that was necessary to properly evaluate fellow staff members."
Councilman Jim Dobbie faulted the report for missing the point. "It doesn't address the new priority in town, which is 'How do we get a balanced budget?'" he said. "It's going in exactly the wrong direction."
But Town Hall is moving ahead, Mr. Gruber noted. The town has cut temporary employment in public works, eliminated landscaping contracts for mowing, not filled the position of office assistant, and downgraded the city clerk and the assistant finance director positions; the latter position was reclassified to accountant.
Council members Elizabeth Lewis and Charles Marsala viewed the report more positively. "I honestly think that it was very well researched," Ms. Lewis said, calling it a first step and suggesting that Ms. McKeithen may have had unrealistic expectations.
The report, Mr. Marsala said, notes Town Hall's successes, addresses green mandates, and skirts personnel issues best discussed behind closed doors. "I think you've done a good job in finding that line and giving us advice," he told Mr. Gruber.
Councilman Jerry Carlson posed a question to Mr. Gruber: "Is the town headed for a financial crisis?"
"I think we need to spend more time on the five-year plan," Mr. Gruber replied. "I have concerns but I don't think we're headed for the train wreck that we think we're headed for. We do need to be cost-conscious."
"It's been one of those perfect storm situations," he said, noting hits to the general fund from lawsuits and refunds to residents from business license and road impact fees. "Those are all issues that I've inherited," Mr. Gruber added.
"I think our residents want the best. I think our residents deserve the best. Whether you want to hear this or not, (town staff) have to have opportunities to advance," he said. "It's not solely an expense issue. It's a revenue issue. ... Every building we have is ready to fall down."
In response, Mr. Carlson said that "revenue enhancement," while a priority, ought to be at the bottom of the list. At the top, he said, should be what Finance Committee member and economist Alain Enthoven noted in three papers: employee pensions, employee and retiree health benefits, and police services.
"I really think we do have a crisis situation," Mr. Carlson said. "We've got to do something different and we don't have a long time frame to do that."
Mr. Dobbie did not mince words. "A couple of (Town Hall) positions are being paid way over what they should be," he said. "The sledge hammer way to do this is to start laying off people. I don't want to do that. If we're paying somebody $30 for a $10 job, that's something we need to take a look at."
This is a "very serious situation (that will be) extremely difficult to solve," and cutting salaries won't do it, Mr. Marsala said. The town has no sales tax revenue and is home to "numerous" residents who pay less than $1,000 a year in property taxes, he said.
Resident Loren Gruner, during the public comment period, advised the council to find creative ways that involve all stakeholders, as she has done in her company. "Oh my gosh, they totally rise to the occasion when it's a situation of jointly working together," she said.
Employee qualifications should be a priority, said resident Kimberly Sweidy. "You're looking at one side of the coin," she told the council. "I think if you actually get qualified people in here, they'll be efficient and effective."
"Unfortunately," Finance Committee member Jeff Wise said, "in order to solve our financial problems, it's going to involve some pain. If we're just talking about this for another year, we're going to be in really serious trouble."
These discussions will be more fruitful when the council meets in closed session and can frankly discuss employee compensation, said Assistant City Manager Eileen Wilkerson.
Closed session is not necessary, City Attorney Wynne Furth said. "The town's goals have to do with what it wants to provide and how it wants to pay for them," she said. "It's legitimate to talk about the cost of a function" in open session.