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Firmly in the black, Atherton ponders the long term in its budget

 

Atherton's civic budget is looking so good that some long-time council members appear to be having trouble believing it can continue.

"That's pretty good, compared to other years in the recent past," said council member Elizabeth Lewis at a June 3 budget study session after hearing that the town's general fund budget projects spending of about $800,000 less than it will bring in.

"This is not a bubble?" asked Ms. Lewis, who was first elected in 2008.

"This is not a bubble," City Manager George Rodericks assured the council.

Mr. Rodericks said Atherton continues to project healthy balances in its operating budget and to pay down long-term liabilities, but still needs to figure out how it will fund major capital improvement projects such as drainage systems repairs, work in Holbrook-Palmer Park and street improvements.

At the study session, in preparation for the June 17 City Council meeting where the town's 2015-16 budget is scheduled for adoption, Mr. Rodericks said Atherton has general fund revenues of about $12.6 million and general fund spending of about $11.8 million.

The budget presentation is available on the town's website.

The revenue figure does not include an estimated $1.2 million the town expects to get in additional property taxes from the educational revenue augmentation funds (ERAF), money that the state years ago shifted from local governments to schools. Only San Mateo, Napa and Marin counties do not use all of their ERAF to support their schools, so some of the money is returned to local governments in those counties each year.

In 2013 Atherton decided not to count the ERAF money as part of its general fund revenue, because it could be taken away by the state at any time. Instead, the town uses ERAF funds to pay one-time expenses, such as reducing long-term liabilities that include retirement pensions and benefits, and workers' compensation.

The town also has healthy reserves, including a 15 percent emergency reserve of about $1.8 million and a 20 percent contingency reserve of about $2.4 million.

The town is in even better shape than the general fund numbers indicate, because it is starting the year with nearly $11.5 million in the general fund. Once the projected spending and the reserves are taken out, and money is budgeted so the town can continue paying down its long-term retirement and workers compensation costs, Atherton is expected to end up with an ending balance of $7.3 million, Mr. Rodericks said.

He has recommended that the council put a big chunk of that balance into its capital improvements fund, to save for major expenditures that are predicted for the near future.

While just how much of that balance will be moved into the town's capital improvements fund will be decided at the June 17 meeting, Mayor Rick DeGolia said he is comfortable moving $3 million, and council member Cary Wiest said he would accept moving $3.5 million into the capital improvements fund.

The town must start building up money to pay for major upcoming expenses, Mr. Wiest said, such as the town's drainage system. Otherwise, he said, "we can continue to look the other way and watch the (Marsh Road drainage) channel fall in on itself."

The capital improvements budget was also part of the discussion about the town's parcel tax, which varies by lot size but is a maximum of $750 for homes on lots of between one-half and two acres.

The council must set the tax rate each year, and will formally vote on doing so on June 17. City Manager Rodericks has proposed that about $1.5 million of the $1.86 million raised by the parcel tax go into the capital improvements budget, with the remaining $372,000 put into the general fund to augment police department funding.

The town has $1.6 million in capital improvement projects budgeted for 2015-16, and the special tax will provide 68 percent of the funding.

Council members briefly discussed reducing the parcel tax for the coming year by about 20 percent because the town had received what is believed to be a one-time use tax payment from the state of over $324,000. Mr. Rodericks said no one has yet been able to tell him why the town received the payment.

"My inclination is to approve the entire parcel tax," Mr. DeGolia said. "I think we have a lot of infrastructure work to do.

"We need every dollar we can get and we need to use it," he said.

Council member Mike Lempres said spending the money on capital improvements now could save the town money in the long run as costs increase. "Who knows what the future will bring?" he said.

"We have a lot of need. ...I think we can spend this money productively now."

Budgeted spending for most town departments decreases or shows only slight increases in the currently proposed budget. The police department, however, shows an increase of nearly $340,000, mostly because an additional dispatcher is being added to the staff, and midway through the current budget year a code enforcement officer was added.

The public works department also shows an increase because midway through the current year a town arborist was added to the staff, and the department also bears part of the cost of the code enforcement officer.

Comments

10 people like this
Posted by Broken promises
a resident of Atherton: other
on Jun 5, 2015 at 12:13 pm

At the last vote for the parcel tax, the council promised that if it wasn't needed, it would be rebated. This is clearly not happening. The opponents accurately predicted that the city manager would find ways to spend whatever extra money was garnered. That's just the way things tend to work. I guess an obvious question is what did the council members, Lewis, Degolia, mean when they promised to rebate monies that were needed? What would it possibly take for this rebate to occur?

Next go around, I predict there will be substantial opposition to the parcel tax. On top of that, add the bond and extra taxes Lewis and Degolia want to sneak in to pay for the town center because their friends are not coming up with the private donations.


4 people like this
Posted by MEMBERONE
a resident of Atherton: Lindenwood
on Jun 5, 2015 at 12:26 pm

Got money in your pocket burning a hole.
Gotta spend it.

I suggest we add a police officer.


1 person likes this
Posted by whatever
a resident of Menlo Park: Central Menlo Park
on Jun 5, 2015 at 6:10 pm

Memberone said "I suggest we add a police officer".

Only if he/she is dedicated to ECR to catch the wanton speeders; drivers under the influence; texters; and the gee whiz I forgot how to use my turn signal drivers.

You've got enough cops protecting Athertonians from the influences of the 99.9%.

That money could also be used for pedestrian and byciclist safety on ECR.


3 people like this
Posted by McNertney
a resident of Atherton: other
on Jun 9, 2015 at 3:57 am

The meeting I attended on the parcel tax discussed a wide range of options for the parcel tax. I do not recall any promise to rebate although it may have been one of the many possibilities dispatched.

Sneaky is one of the last descriptions of Mr. De Golia that should be used. I prefer hard working, honest, old fashioned gentleman a rare but appreciated councilman. Also I have always voted for Elizabeth Lewis & have admired her patience for years.

Also a note for whatever, it's 91.3%


15 people like this
Posted by peninsula resident
a resident of Menlo-Atherton High School
on Jun 9, 2015 at 9:42 am

> The town must start building up money
> to pay for major upcoming expenses,
> Mr. Wiest said, such as the town's
> drainage system. Otherwise, he said,
> "we can continue to look the other way
> and watch the (Marsh Road drainage)
> channel fall in on itself."

THIS. Mr. Wiest is absolutely right.

I remember clearly what the drainage channel looked like during our last wet winter; it was right on the brink of overflowing its banks, flooding nearby homes, Holbrook-Palmer Park and critical roads such as Marsh, Middlefield (this happened anyways) and El Camino.

Given our drought, it's easy to forget or de-prioritize storm drainage, but we urgently need to increase the capacity of the channel. Droughts don't last forever. Times of prosperity are the best times to plan for the worst.

I'm onboard with making efforts to keep the channel improvements aesthetically pleasing, but this work needs to begin YESTERDAY.


7 people like this
Posted by Broken promises
a resident of Atherton: other
on Jun 9, 2015 at 10:31 am

The drainage is a necessity. The new town center is a necessity. Having lavish offices and gymnasiums in the new town center is a necessity. Having a cafe built as part of the town center, providing subsidized lunches and snacks to Atherton police, is a necessity. Paying Atherton police at the top salary of anywhere in California is a necessity. The list goes on and on…

That's why Ms. McNertney remembers a rebate (or refraining from levying) the parcel tax was "one of the many possibilities dispatched." You see, at the time, Atherton own finance committee concluded that it was not necessary to levy the parcel tax. In response, Wiest, Lewis and Degolia said no problem, if that turns out to be the case, we just won't levy it.

Are they doing this now? NO. The opponents accurately predicted that once this money was collected, it would never be returned. This article outlines conditions for which if the parcel tax is not rebated, it will never be. One-time multi-million dollar surpluses. This council is not even saying they'll rebate it this year, to coincide with the one-time credits.

Now, would the "honest, old fashioned gentleman" Mr. Degolia please comment on what the level of private donations have been for the town center, and whether he said at a recent council meeting that it was "ALWAYS" the intention to have the voters fill in the gap for donation shortfalls through the issuance of a bond?


10 people like this
Posted by peninsula resident
a resident of Menlo-Atherton High School
on Jun 9, 2015 at 11:07 am

> The drainage is a necessity.

Yes.

> The new town center is a necessity.
> Having lavish offices and gymnasiums
> in the new town center is a necessity.
> Having a cafe built as part of the
> town center, providing subsidized
> lunches and snacks to Atherton police,
> is a necessity. Paying Atherton police
> at the top salary of anywhere in
> California is a necessity. The list
> goes on and on…

Including drainage in that list does not do justice to the urgency of flood prevention. People die in floods. Homes are destroyed in floods. Nobody dies from lack of easy access to a latte.

I voted against the parcel tax and even agree with you that there should be a rebate if that was promoted as part of the intent of the parcel tax.

But the storm channel improvements have no dependency on whether there is or isn't a tax rebate. One has nothing to do with the other.


10 people like this
Posted by Broken promises
a resident of Atherton: other
on Jun 9, 2015 at 11:20 am

I actually agree that monies should be set aside to deal with the drainage. I was using this as an example to show every expense, whether critical or not, is lumped into "we've got to do it," and monies will be spent by government if governments are given money. The point is a rebate can occur, and drainage can be dealt with. Funds are available to do both. I don't want the drainage, although a legitimate issue, to become a rallying cry for why no rebate should be given.


2 people like this
Posted by No more parcel tax
a resident of Atherton: West Atherton
on Jun 9, 2015 at 11:04 pm

DeGolia is finding out that Atherton residents are more frugal than he figured them for. That's why no private donations for the town center have been materializing.

The same dynamic is going to play out when he and Lewis and Wiest try to renew the parcel tax. There will be substantial organized opposition. They won't be able to slip anything by like last time.

This sad history of reneging on commitments to rebate the parcel tax will of course be brought up at that time.


Sorry, but further commenting on this topic has been closed.

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