For years, Atherton officials have groused that it appears the Menlo Park Fire Protection District gets more property tax revenue from the town's property owners than Atherton does. Now, the town is considering doing something about it, with options including withdrawing from the fire district.
Atherton's City Council will hold a study session on the funding of the fire district at its Wednesday, Sept. 7, meeting, which starts at 3 p.m. in the town's council chambers at 94 Ashfield Road.
The staff report from City Manager George Rodericks says that in 2015, based on the assessed valuation of properties in Atherton, the fire district received more than $4.5 million more in property taxes from Atherton landowners than the town did: $13.8 million for the fire district versus $9.3 million for the town.
The report says that, according to the county assessor's office, of every property tax dollar paid by Atherton landowners, the fire district receives slightly less than 16 cents while the town receives slightly less than 11 cents. Atherton property owners also pay an additional parcel tax for town services.
Fire Chief Harold Schapelhouman says that a report done for the fire district comes up with different numbers: his report says Atherton provided $10.8 million to the district in the 2015-16 fiscal year, a figure that is also higher than the $9.3 million the town received from property tax.
The fire district provides fire, emergency response and emergency medical services to Atherton, Menlo Park, East Palo Alto and some adjacent unincorporated areas. Atherton provides services that include police, planning and building, park and public works, including drainage and street work, to its residents.
The funding levels are a legacy of Proposition 13, passed by California voters in 1978. The following year the state Legislature set the property tax allocations for various government entities at the percentage they had received the year before.
If the consultants find the cost to provide fire services to the town is considerably less than the amount of property tax revenue collected by the fire district, the town could "discuss alternative fire service models which could include, but not be limited to, detachment from the Fire District," Mr. Rodericks' report says.
It suggests the town could also ask the district to share tax revenue, offer additional services or offer more "fire-related infrastructure."
The town had earlier asked the fire district if it might be willing to help pay for an emergency operations center or other facilities that could be used by the district in the civic center now being designed, but the fire district declined to participate.
The report also goes into what the town would need to do if it wants to separate from the fire district.
Because the discussion is a study item, the council will not take any official action at the meeting, but it could direct staff to come back with more information.
The staff report says that a consultant could be hired by the end of the year and return with a report by summer 2017. The estimated cost of the study is $35,000 to $50,000.
"The Fire District would be involved at all phases of the analysis and any ultimate decisions made by the Council," the report says.
Fire board director Peter Carpenter, a resident of Atherton and the fire district's liaison with the town, called the town's efforts "deeply misguided." He said the town "lacks both the authority and the expertise to deal with this issue." The fire district's board is elected to represent residents' "interests on this matter," he said.
"There is no way that the town of Atherton can compel the fire district to make a contribution to the town," he said, adding that if the town did find a way to reduce the fire district's revenues, those property taxes would go back to the county for redistribution.
"Atherton property owners would receive practically none of the reduction," he said.
"We have a town that cannot survive without an on-going parcel tax and cannot even fund a replacement for a decrepit police station, so it is desperate to find money from anyone but its taxpayers," he said. "Sadly it is looking at a well-managed fire district to solve its poor fiscal management problems."
Chief Schapelhouman said he worries that even talking about possibly breaking up the fire district could cause problems with hiring and employee morale.
"This is a conversation they can have. But is it a necessary conversation?" he asked. "It almost feels like a little bit of a setup and a shakedown."
Chief Schapelhouman also questioned the timing of the study session, coming immediately after the town cancelled the November City Council election because only incumbents Elizabeth Lewis and Cary Wiest filed for the two open spots. The two were appointed to new terms on Aug. 24.
"Suddenly this huge issue comes up?" Chief Schapelhouman said. "It's convenient that it's right after the incumbents don't have challengers."