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Should library funds help build Atherton town hall?

Original post made on May 26, 2009

Atherton needs money for a new city hall. Atherton's library has a healthy bankroll of reserve funds that could be used to expand the library. Is there a mutual benefit here?

Read the full story here Web Link posted Wednesday, May 27, 2009, 12:00 AM

Comments (24)

Posted by Charles Marsala, a resident of Atherton: West Atherton
on May 26, 2009 at 2:16 pm

Here is the current picture and detailed history regarding Atherton's Facilities for Public Safety, Library, Arts, Building Department, Public Works, Post Office, and Administration.

I will start with the current situation and conclude with the history.

In 1978, Rita Corbet Evans left her home to the Town to be used for Art. Since it was in a residential area, the town sold the home and hoped to put a facility in the park. When I joined the Arts Committee in 1999, I was asked to work on this project with the City Council and Park and Recreation Commission.

In 2002 as a member of the Park and Recreation Commission, we surveyed residents of the town on activity desires and interests. We found that 75% of the residents indicated they would participate in lectures, 65% in political Talks, 40% in Photography, and 61% in Art Exhibits.

In 1978 Prop 13 Passed and set aside fixed allocations for Property Taxes. The Atherton Library receives 3.44% of our Property Taxes. It has been running a surplus of $500,000 a year for the last three years and will grow to more than $600,000 in FY2009-2010. The total surplus by the end of 2010 will be over $4,000,000; by 2012 it will be over $5,000,000.

In 1983 plans were developed to expand the library South into the Reading Park. The children's area is close to the adult area and computer area, there are noise issues.

In 1999 Atherton joined the San Mateo Library JPA as one of ten cities and the unincorporated lands of San Mateo County. From 2003 through 2008, I served as the town's representative to the JPA. Reserves have grown from $300,000 in 2003 to $3,200,000 today.

Two other towns in the JPA are "Donor Cities", Portola Valley and Woodside. "Donor Cities" are towns whose Property Tax revenue exceeds the cost to operate their Library. Other towns receive property taxes from unincorporated San Mateo county to offset costs.

The JPA agreement allows for Library Donor City Funds to be used for "Facility Expansion". If Atherton did not own the land and the council chambers building and wished to purchase them to expand the library, that would clearly qualify as expansion. So the question is, if another Town of Atherton department owned the land could the asset be transferred to the library for cash in a validated manner? Or would Atherton have to sell it to a third party and then buy it for "Library Expansion." ?

The San Mateo JPA has developed many outstanding activities including lectures, concerts, and movies. The current council chambers is within thirty feet of the library and has tall ceilings. Should we as a town consider turning this facility into an auditorium for use for library activities? Should we consider using this for an occasional local artist exhibit? Is it our decision or up to the JPA?

In 2003, when I became Atherton's JPA representative, City Manager Jim Robinson advised me of the $300,000 surplus. In 2006 as Mayor and along with Vice-Mayor Alan Carlson we began asking the JPA for clarification of the JPA agreement regarding usage of donor city funds, by this point in time the surplus had grown to $1.6Million.

In 2006, Hurricane Katrina brought attention to the need for cities to have Emergency Operation Centers (EOCs), The Atherton council chambers built in 1928 had been designated for this purpose. Seismic and other concerns lead the town to move the EOC to the Public Works office. The State of California has requirements for EOCs that Atherton does not meet. As a council member, I believe we have a duty to address the Emergency Response needs of our residents.

Win-Win solution

I see the expanding of the library into council chambers as a win-win solution. Atherton would transfer the amount from a validated appraisal of the land and building from the Library's reserve and the Library would have a place to expand. By the time any of this would happen, say 2012, we will have more than $5,000,000 in the Library reserves. If $1,500,000 were transferred to cover the cost of the land and building, then $3,500,000 remains to upgrade the facilities.

Not included in the $3.5 Million would be any donations or the annual surplus Donor City funds coming in after 2012. I would also suggest we allocate some of the Rita Corbet Evans trust to the facility and give the Art Committee access to the space.

JPA Motions

I have made two motions at JPA meetings, discussed this in a Town Forum over a year ago, and had it on several council agendas.

The motion at the September 2008 JPA meeting was, "Atherton should be allowed to use donor city funds for purposes of acquiring existing lands and buildings to expand the library." The motion was seconded by a council member of East Palo Alto and passed 10-0.

The motion at the February 2009 JPA meeting was, "To direct (JPA) staff to get legal opinion on the JPA Agreement and for that opinion to include provisions for donor cities to be able to transfer donor city reserves for assets in a validated manner." The motion was seconded by a council member from Foster City and passed 11-0.


When the Town was funded in 1923, the first council meetings were at the mayor's house and later the Circus Club. Around 1927, a bond was approved to build the first town center. It failed. A year later it passed.

In the 1960s a second bond was passed to build the current Public Safety Building and Town Offices. Those buildings do not meet current codes and OSHA has been out to inspect.

The council started looking for solutions in 1993. By 1998 the Building Department, Public Works Department, and part of the Police Department were in "Temporary Modulars".

In February 2009 as part of the Stimulus Plan, Build America Bonds (BABs) were created. They will expire in 2010 or when the funds are gone.

In May 2000, council increased building fees to set aside $200,000 per year for a permanent building for the Building Department.

These factors should be reason for us to consider working on solutions and moving ahead to rid the CARA neighborhood of the "Modulars", build an adequate Emergency Operations Center, provide our staff with safe and efficient workspace, and develop a facility where residents can enjoy the activities put on by the Library. A place where we can interact at lectures, political talks, concerts, art exhibits.

Putting the concept on the council agenda for comments and suggestions hopefully is seen as outreach and a chance to refine the concept.


Posted by arun singh, a resident of Atherton: West of Alameda
on May 27, 2009 at 8:38 am

I don't see how the town is going to be able to finance its ongoing operations much less build a new town hall with all those lawsuits.

If I read the closed session agenda for last month, there are three lawsuits the Town. It costs money to defend these.


Posted by Need some answers, a resident of Atherton: West of Alameda
on May 27, 2009 at 9:34 am

Charles Marsala's exposition sounds reasonable, but I'd like to hear from the other side. If this idea was so widely talked about in advance, why are library supporters so shocked? If it's so fair and reasonable, why are they calling it attempted theft?

I understand there was a meeting last night at which this was discussed. Anyone know what happened?


Posted by andy char, a resident of Atherton: other
on May 27, 2009 at 10:13 am

Marsala's proposal may be creative but it is a lousy way to solve the Town's financial problems.

Marsala should explain how paying for a seismically unsafe building (that being the city council chambers) will benefit the library.

The taxpayers of this town would be better off by contracting with the Sheriff for police services. This approach would easily save $2 million annually, well in excess of what is required to finance a new town hall.




Posted by Charles Marsala, a resident of Atherton: West Atherton
on May 27, 2009 at 12:46 pm

Andy,

Thanks for the question.

This proposal does not solve the Town's financial problems, those have to be addressed in other ways. However a new town center with Mail Boxes would increase sales tax reveune to the town from businesses who make Atherton their tax base.

I see it as a possible solution to solve the space needs of the library, meet the activity desires of the residents from the 2002 survey, and provide funds for an Emergency Operations Center (EOC) for the Town. The EOC will have other town uses.

If Library funds were used to acquire the land and historic building, council chambers, which does need substantial upgrading. It would benefit the library by giving the library the needed space.

Inflation will eat away at the library reserves at 8% per year. On $4,000,000 that is $320,000 a year in lost purchasing power. In five years the lost purchasing power of the $4,000,000 will be equal to more than what would be spent on acquiring the land and building.

As for as Sheriff Services, in the 2006 town survey- 90% of the responses wanted to keep the Atherton Police. Using the sheriff's deptartment is not an option we have considered.

The majority vote at last night's meeting was not to recommend to council the use of donor city funds for acquiring the council chambers. A second motion to encourage a vacated council chambers to be used by Atherton was approved. We voted on ten or so recommendations which will be out by July.


Charles Marsala
Council Member


Posted by JMay, a resident of Atherton: other
on May 27, 2009 at 7:27 pm

Mr. Marsala: how did you arrive at an 8% annual rate of inflation?


Posted by Charles Marsala, a resident of Atherton: West Atherton
on May 27, 2009 at 8:13 pm

Portola Valley hosted the San Mateo County monthly meeting last Winter at their new facility. During the presenatation they mentioned that they decided to do all three buildings at once due to the annual increasing cost. The number they presented was 8%.

Last year steel went up 15% due to worldwide demand. I sell steel products. Steel prices maybe be down currently, but five years from now they will be higher. Or maybe with the federal stimulus plan, demand stays high.

I would except a lower figure given today's economy. But we have seen other projects reduced just prior to construction starting due to price increases. MA Performing Arts Center comes to mind. Seating capacity was reduced.

Regrads,
Charles







Posted by back to reality, a resident of Atherton: other
on May 28, 2009 at 12:30 pm

Dear Mr. Marsala

I believe your time would be better spent finding a more economical means of providing law enforcement services to the town residents.


Posted by JMay, a resident of Atherton: other
on May 28, 2009 at 6:56 pm

Charles

Steel is a commodity hence the 15% change - commodity pricing is just a component of the rate of inflation. A figure mentioned at a meeting in Portola Valley does not qualify as the 'rate of inflation'. The rate of inflation in 2008 was @ 3.85%. It appears that you are trying to get by on 'vapor' not facts.


Posted by moneywise, a resident of Atherton: Lindenwood
on May 28, 2009 at 8:09 pm

Dear Charles

Rather than try and sell the library district a white elephant at an inflated price, perhaps you and your colleagues on the council should learn to live within your means.

Had you done so, rather than spend frivously on a bloated beauracracy and overly generous pensions you'd be able to finance a town hall on your own.


Posted by V. Gregorian, a resident of Atherton: West Atherton
on May 28, 2009 at 10:46 pm

This sounds like a creative idea and it's worth exploring.

However, I do take issue with Charles' statement:

"As for as Sheriff Services, in the 2006 town survey- 90% of the responses wanted to keep the Atherton Police. Using the sheriff's deptartment is not an option we have considered."

What was the precise question asked in the survey? If it was "Should the Town of Atherton continue to use the Atherton Police or outsource to the sheriff," the 90% survey response is frankly meaningless.

A well-written survey would have said (and maybe this one did, I don't know - hope to get some clarification): "The Atherton Police Department costs Atherton $X million dollars per year. If Atherton moved to use Sheriff services, this would be reduced to ____. The impact to Atherton would be: less "custom" police services such as picking up newspapers, _____, _____, but a considerable amount of money saved."

Sorry to take note of the elephant in the room, as others have, but frankly Atherton can't afford to have its own police department anymore.


Posted by V. Gregorian, a resident of Atherton: West Atherton
on May 28, 2009 at 10:48 pm

Sorry, response got cut off. I understand that Atherton's per capita police cost is TWICE that of Menlo Park. I'm assuming this is because costs don't scale with size of the community (i.e., the department needs a chief, administration, dispatcher(s), etc., whether there are ten officers or fifty officers).

This point illustrates why Atherton can't afford the police department.


Posted by Charles Marsala, a resident of Atherton: West Atherton
on May 29, 2009 at 8:57 am

I appreciate the dialog and see the benefit of the Town Forum concept of the Almanac.

Here are responses to questions:
As far as rate of increase on new construction, that is always a guess. Things have been volatile for the last few years. Some are now concerned that with the national debt growing so fast, we will have to increase the money supply and that will add to inflation.

We can not use the rate of inflation on all goods and services, as that does not isolate factors of new construction. Steel could be at 15% and apples at 1%; Steel is what we need to consider. We could use 4% annually, but could it be higher?

I was the San Mateo County League of Cities representative to the State for the Employee Relations Policy Committee during 2007 and 2008. This coincided with a task force the Governor created to review Employee Pension and Medical costs. Neither group took a stance on offering a two-tier retirement system, which I hoped would happen. Two suggestions which I supported were 1. to make public the pension and medical costs and 2. to pre-fund them. Atheton's unfunded medical is over $7,000,000 from the actuarial study just released.

I believe the town survey in 2006 on Atherton Police pointed out there would a cost savings going to the sheriff, but some services that Atherton Police provide are not provided by the sheriff.

The council spent five hours yesterday going on the budget, almost line by line. The meeting was public and the budget is public, anyone can review it and make suggestions. I welcome any specifics on where additional cuts could be made.

In almost every year since Prop 13 passed in 1978, the town has used a Parcel Tax to help make up differences in the budget to fund Police Services and capital improvements. The Parcel Tax has been a 4 year Tax, with the last one being for 5 years. Most recently it passed with 80% approval. The Parcel Tax also goes to fund Capital Improvements.

Back to the issue at hand:

We did receive a check last week for $770,000 for the FY2008-2009 Library surplus. The projection for FY2009-2010 is over $600,000 in surplus. At some point regardless of all the other issues concerning us, we need to decide how to best use those funds, which will be close to $4 Million by the end of next year and growing at a rate of more than $500,000 a year. These funds represent our tax dollars.

I have made a suggestion, if it has merit find and if not we can start working on better ideas.

Charles Marsala
Council Member


Posted by michael wright, a resident of Atherton: other
on May 29, 2009 at 9:47 am

Dear Charles

Would you go on record as opposing a change in service provider for public protection services to the City of Menlo Park or the Sheriff even if it meant that Atherto could save $2 million annually as was suggested in one of the posts I read?

It would seem to me that at the savings of $2 million annually the Town could either do away with the parcel tax completely or use the money to build a new town hall.

Thanks in advance for your response.


Posted by Charles Marsala, a resident of Atherton: West Atherton
on May 29, 2009 at 1:40 pm

Michael,

The Parcel Tax expires next June and the council will be surveying the town this year.

Personally I feel that the extra cost of the Parcel tax, which is income deductible, and provides the extra funds to have our own police deptartment increases the values of our homes and increases our own sense of security.

As a council member, I would respect the vote of the residents. I have been in Atherton for the last five Parcel Tax elections, which have all had a majority approval. However in 1999, 2000, & 2004 there was not the two-thirds super majority.

Charles


Posted by Fiscally responsible, a resident of Atherton: West Atherton
on May 29, 2009 at 8:33 pm

But Charles, we outsource the fire department and Atherton home values haven't gone down because of a fear that our homes may burn down without our own. Because of the budget going mostly to the police, and decreasing revenue, Atherton has had to cut police down to the bone. With the sheriff, we'd actually be more safe as there would be more officers for a lot less money.


Posted by michael wright, a resident of Atherton: other
on May 30, 2009 at 7:34 am

Dear Charles

Your arguments do not appear to be based in fact nor do they stand the test of logic.

You assert that having its ownpolice department, Atherton homeowners get a boost in property values. However to the best of my knowledge there is no evidence that Saratoga, Woodside, Portola Valley or Los Altos Hills suffer from depressed property values because they contract for law enforcement services.

You also argue that we should go ahead and pay a premium for law enforcement services, because it is tax deductible. I would expect someone in your position demand maximum value for services provided, irrespective of the tax treatment.


Posted by Charles Marsala, a resident of Atherton: West Atherton
on May 30, 2009 at 11:21 am

Here is the topic of this Almanac town forum:

Should library funds help build Atherton town hall?
Atherton, posted by Editor, The Almanac Online, on May 26, 2009 at 2:16 pm
Atherton needs money for a new city hall. Atherton's library has a healthy bankroll of reserve funds that could be used to expand the library. Is there a mutual benefit here?

Are there any thoughts on this issue? We have $3.2+Million in Library reserves and growing at $500,000+ a year, would it make sense to allocate some of those funds for the land and building next to the library to expand the library. Then use those allocated funds for an Emergency Operations Center (EOC)?


To answer questions in previous comments:

Regarding law enforcement protection. For most of the last thirty years Atherton residents have been willing to pay an extra tax (the Parcel Tax) to keep our police deptartment because of the extra services it provides. At $300- $500 a year per household it has been acceptable to 80% of the residents. At $30,000-50,000 a year it would not. All of us would have a number somewhere in between where it changes from acceptible to not-acceptable.

My opinion is that it is worth the extra tax for the services our police provide. I do respect and acknowledge your positions.

Charles Marsala






Posted by Fiscally responsible, a resident of Atherton: West Atherton
on May 30, 2009 at 12:16 pm

Charles,

(1) Yes, your library idea makes sense. It's a creative idea and a good one. It's silly for funds that can never be utilized to sit in an account, and if the funds will be utilized to expand the library, I see nothing wrong with the library buying a building from the Town of Atherton to do so, particularly if this can solve other problems the Town of Atherton has.

(2) I also agree with you that there's a number in between $0 and $50,000 of additional tax per year at which at least 99.9% of the people in Atherton would agree having a police department makes sense. The trouble is, at the number that it seems most people can live with (the $300 to $500 per household you refer to; though my property tax bill shows an "Atherton Special Tax" of $750), the police department has been cut so far back that having the sheriff would actually provide more officers at a lower price. I do not believe this has been explained adequately to residents.

These topics are related, actually, as the impetus for your idea about the library frankly comes from the fact that Atherton doesn't have much money, and police services is a big part of the money that Atherton outlays.


Posted by art fielder, a resident of Atherton: Lloyden Park
on May 30, 2009 at 10:39 pm

I am a regular at the Library. It doesn\'t need more space.

The library has more money than it needs or knows what to do with this fact is undisputed.

There is a simple solution that appears to have evaded not just Marsala but the entire the Atherton City Council:

Refund the excess money to the Atherton homeowners who are already overburdened with property taxes.


Posted by also responsible, a resident of Atherton: West Atherton
on May 31, 2009 at 11:52 am

Fiscally responsible hit the nail on the head. If the Sheriff is able to cover Unincorporated West Menlo, Portola Valley, Ladera, Woodside, Unincorporated Redwood City and Unicorporated East Menlo...I think a call or two would not be a problem for them to cover tiny little Atherton. Let's face it people...you are paying MILLIONS to have newspapers picked up and little tiny extras. The police dept is a total waste of money. It draws lawsuits and other serious problems. Just think of all that extra money that would be saved.


Posted by Charles Marsala, a resident of Atherton: West Atherton
on May 31, 2009 at 9:34 pm

About 1/3 of the Parcel Tax ($650,000 out of $1.7Million) will go to operations this year and 2/3 will go to Capital Improvements. This is how I came up with the $300-$500 figure, instead of $750.00.

I am hearing your comments on other financial concerns.

Charles


Posted by get off the dime, a resident of Atherton: West Atherton
on Jun 2, 2009 at 10:54 pm

Instead of having the weekly city council packet delivered to your doorstep by uniformed officers collecting an overly generous pension, go pick the weekly town mail up yourself.

I agree with Gibboney, stop trying to steal money from the library to fund an underworked overpaid police department. It is a disgrace and a waste of money.

You are a businessman you should know better.


Posted by what a joke, a resident of Menlo Park: other
on Jun 4, 2009 at 10:55 am

It is true that uniformed police officers in atherton double as personal deleivery boys/girls for the mayor and all the counsel members. You see...every Friday and other days as well...they are required to deliver all their mail and counsel packets to their homes! The town is tiny. Why can't these people get off there rear ends and pick up their own mail/packets?? You see, the answer is simple...the police dept has nothing better to do! To fill the time and justify their existance this is "the extras" you are paying for that the sheriff will not provide! What a waste of taxpayer dollars!

In this ecomonic time, it is time to get real and save millions and millions of dollars. The idea of outsourcing law enforcement is a great one. Many Many affluent areas do this. Woodside, Portola Vallley, Ladera, Saratoga, Los Altos Hills, BlackHawk and on and on and on. The service provided would be absolutley great and the cost savings even greater. These "extras" that Charles likes to point out...like his mail being delivered to him every Friday night...well...that is ridiculous and self serving!


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