Atherton's City Council members made it clear at an April 1 study session that they have some major concerns about a county library system proposal that would end the practice of allowing all library tax revenue raised in a town or city to stay in that community.
While no vote was taken at the meeting, council members said they want to figure out how to keep as much of the town's library tax money as possible, while leaving open the possibility that they would consider sharing funds they don't need for expanded library services once their new library is completed.
Some of the audience members urged the council to withdraw from the county system and run its own library, however. Didi Fisher, a former Atherton council member and mayor, said she thinks the town should get out of the county system, even if it costs the town some tax dollars. The changes proposed by the county library staff, she said, could make "your lives hell," because they would leave the town uncertain about how much money it would have to operate its library.
Ms. Fisher said the town had considered leaving the county library system when she was on the council, in the 1990s, and had gone as far as getting bids from other libraries to run Atherton's library. "I wish we had done it then," she said.
Atherton is part of a Joint Powers Authority (JPA) that manages the county library system, along with Belmont, Brisbane, East Palo Alto, Foster City, Half Moon Bay, Millbrae, Pacifica, Portola Valley, San Carlos and Woodside as well as San Mateo County.
The current JPA agreement says that library property tax dollars ($32 per $100,000 in assessed value) beyond the amount needed to pay a town or city's library operating costs, plus a share of county library administration and overhead costs, go to the towns or cities that generated them. By state law the money can be used only for library-related expenses. Atherton is one of three so-called "donor cities" that generate excess funds; Woodside and Portola Valley are the other two.
Mayor Rick DeGolia, who serves on the JPA along with council member Elizabeth Lewis, and is also a member of a JPA subcommittee studying the donor city tax issue, says that Atherton now generates about $1.3 million more each year in library tax than is spent on Atherton library costs. Woodside generates about $450,000 a year and Portola Valley about $100,000 a year in surplus taxes.
Portola Valley has a new library, built as part of a new town center that was completed in 2008, and Woodside is about to begin a remodel of its library, which will deplete its donor fund.
At the end of June 2014, Atherton had accumulated $8.6 million in its fund, which will go to a new library. Once the library is built, however, even with higher operating expenses, the town will still bring in about $1 million a year in excess tax revenues, Mr. DeGolia said.
The tax rate could be lowered by the state legislature, but that wouldn't really save Atherton taxpayers any money, council member Lewis said, because the taxes that don't go to the library would just be spread among other county entities. "Your taxes wouldn't go down, but the revenues to other agencies would go up," she said.
Leaving the JPA is also complicated by the fact that the current agreement says that any community that leaves would have to give up any funds it has accumulated. This basically means that Atherton could not leave until it had built its new library and spent its accumulated funds.
Since the agreement also calls for a year's notice to any town or city leaving the JPA it also means a year's funds would be forfeited, according to City Attorney William Connors.
The county library staff has proposed the JPA agreement be changed so that if cities and towns generate excess library tax, half that money will go into the county library system's general fund and half go to the city or town, Mr. DeGolia said.
In addition, Mr. DeGolia said, the county staff has proposed that donor cities could accumulate no more than $1 million of the excess funds; any additional money would go into the county system. At the rate Atherton has figured it would accumulate excess funds once the new library is built, it could reach this cap in a year.
Any changes in the JPA agreement need approval by two-thirds of members, which means, the council members were told, that the non-donor cities could pass new rules even if Atherton, Woodside and Portola Valley all oppose them.
Atherton, however, has some pull in the JPA because it already contributes more than its share of funds, Mr. DeGolia said. "This library JPA really wants us to stay in the JPA," he said. So he has countered with his own proposal.
To start with, Mr. DeGolia said, he has asked that any changes in the JPA agreement be put off until mid-2017; at that point the town should have figured out how much it will spend on its new library and what some of its ongoing expenses might be.
He has also asked that the county not expect any sharing of donor city's funds until each city has spent as much as it needs to on library-related costs. He'd like those costs to include having Atherton install a high-speed fiber optic Internet system serving library users, "bringing the library into your living room," he said.
"Nobody challenges that the concept of conveying information electronically is not library services," he said.
Other council members said Atherton should study how it could spend all of its tax money on expanded services for its own library.
Mr. DeGolia said he has proposed that
the shared money would not go into the general fund, but instead into a pool that could be applied to "for special purposes" by staff or other libraries. He said that idea has been opposed by county library staff because it would not allow the money to be used for salaries.
Mr. DeGolia said the issue of whether there should be a cap on the donor cities' accumulated funds, and if so what the cap should be, is still open.
Anne-Marie Despain, the county library systems' director of library services, said that the JPA board, which is made up of representatives of each member community, began discussing the issue "based on the significant accumulation of library district revenue for the operation of three libraries and the limitations this presents for service improvements throughout the library system."
Ms. Despain said the subcommittee is still working on finding "a balance whereby member cities are not negatively impacted, yet the Library JPA is strengthened and able to move toward a solution that embraces the original intent and purpose of a County Free Public Library district."
Ms. Despain said no one from the county system attended the Atherton meeting.
Portola Valley council member Maryann Derwin, who is the chair of the donor funds subcommittee, said subcommittee members agreed at their last meeting that the three donor towns need to discuss the proposals for the unused funds and hear what their community members have to say.
Ms. Derwin said Portola Valley has not yet scheduled its discussion of the issue.
Woodside Town Manager Kevin Bryant said Woodside will discuss the matter as part of its budget deliberations, probably in April or May.