Atherton forecast: severe problems ahead


Atherton's five-year budget forecast is in, and the future looks grim for the town. The town's finance director is projecting growing expenses that will drain the town's reserves in four years.

The conservative projections reflect "the worst scenario the town could face," said finance director Louise Ho at the March 17 Atherton City Council meeting. While it might be a worst-case scenario, it was one that council members seemed inclined to believe.

"Certainly, this is not an acceptable plan, and it's not one we will even try to pretend to make," said Councilman Jerry Carlson. "The rate of growth of expenses every year exceeds the rate of growth of revenue. That's a problem."

Ms. Ho's forecast shows property tax revenue, the town's single largest source of revenue, will not be sufficient to support the town's police and public works departments.

"It's shocking to have it spread out like this, because clearly things are going to have to change," said Councilwoman Elizabeth Lewis. "We have to make some severe cuts."

The council called for a study session meeting to delve into the problem more deeply.

"This is a 'When did we go bankrupt?' five-year plan," said Councilman Jim Dobbie.

City Manager Jerry Gruber said his goal is to create a balanced budget this year that doesn't dip into the town's reserves.

"We keep saying this is the worst-case, but frankly, it's not," said Mayor Kathy McKeithen, who pointed out that town is still facing significant legal expenses that aren't reflected in the five-year projections.

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Posted by True Blue
a resident of Atherton: other
on Mar 19, 2010 at 12:38 pm

The answer to Mr. Dobbie's question "When did we go broke??" is as follows.
The moment we CHOOSE to allow a whole series of residents and developers to litigate the Towns resources strait into the ground on the "principal" of (divine right???), instead of simply enforcing the laws. The logic at the time was that government could simply not afford to stand firm on mere laws or ordinances--but it set up the very predictable precedent that the town would cave in on anything that anyone sued for--which of coarse they did. This moment was 2006-2007 when with a 5 or 6 million dollar reserve which had been achieved by the previous finance director Mr. Johns, began going strait down the drain along with his job and reputation because the poor little council felt helpless to stop it.
Special Thanks to Charles Marsala and Jerry Carlson for this whole fiscal fiasco.

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Posted by disgruntled
a resident of Atherton: West Atherton
on Mar 19, 2010 at 12:40 pm

A place to cut is our public works department. I see very little done, if anything, on our streets, etc.. If we ourselves do not take care of the Atherton property, nothing is done. A rare time when I have seen a public works truck, no one seems to be working and merely standing around.

Our police department is not very effective and it is rare that I see so much as a police car. Perhaps, we can cut our inadequate police force?

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Posted by Alan Miller
a resident of Atherton: other
on Mar 19, 2010 at 2:32 pm

Separate from the article (responding only to the prior comment), I would like to say that I personally have seen nothing but excellent police service.

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Posted by George
a resident of Atherton: West Atherton
on Mar 19, 2010 at 6:07 pm

How much of this projected shortfall is due to pension obligations for retired employees? Don't know the answer but it's certainly not declining.

Like this comment
Posted by JLK
a resident of Atherton: West Atherton
on Mar 20, 2010 at 11:16 am

Atherton can't afford local services? Atherton?!! I don't get it. If we can't, who can? OK, big giveback to the developers so our roads are junk. Overpaid public employees. Pensions. Just read the Prop 13 thing on the Weekly website -- does somebody have the information for Atherton? Is everybody in Atherton passing their homes on to their kids under Prop 68 or something? I just don't get it. How is it that we just passed another tax and we are still running out of money sitting on billions of dollars worth of RE?

Like this comment
Posted by logical
a resident of another community
on Mar 20, 2010 at 12:37 pm

Time to contract and merge everything with Menlo Park.

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Posted by True Blue
a resident of Atherton: other
on Mar 20, 2010 at 12:42 pm

Logical--easy on that!
Menlo Park has been trying to annex Atherton since the early 1900s

Like this comment
Posted by reality check
a resident of Atherton: Lloyden Park
on Mar 20, 2010 at 1:50 pm

Ah, JLK, you say read the Prop 13 story on the WEEKLY website? Are you aware of which website you're reading now, and that you posted that comment on? It's the Almanac. You know, the newspaper that wrote and first posted the story, on this very website.

But back to the issue, I can't say I understand how a town like Atherton can be broke, either. Apparently, the turnover rate on housing is a lot higher than with commercial property, according to the Prop 13 story, so I doubt that has much to do with our problem. Is it a problem that begins in Sacramento? Didn't cities get funds from a state revenue-sharing program in the past? Also, I've read that the state is "borrowing" more money from cities to try to pay its bills.

Like this comment
Posted by Henry Riggs
a resident of Menlo Park: Suburban Park/Lorelei Manor/Flood Park Triangle
on Mar 20, 2010 at 1:53 pm

It's hard to blame a budget shortfall on giving back fees that shouldn't have been collected in the first place, as the city has admitted. It's time to look at why Atherton, like other California cities, has unsustainable expenses and obligations. Read the paper - any paper - it's not a secret.

Like this comment
Posted by Westside trucker
a resident of Atherton: West Atherton
on Mar 22, 2010 at 9:00 am

We have a revolving door on City managers and police chiefs. Sometimes they do dumb things that come back to haunt us. Why doesn't the Council reach out beyond the Town attorney and consult with some of the Free business experts that live in the town.

Like this comment
Posted by problem solved
a resident of Atherton: Lindenwood
on Mar 22, 2010 at 10:09 am

The solution is simple. Bring back John Johns and make him City Manager.

The Town did not have money problems when he was Finance Director.

He cleaned up the Building Department. He is one of the few who has the courage and the ability to clean up the Police Department.

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