Menlo Park seems to have sidestepped flared tensions between the town of Atherton and the Menlo Park Fire Protection District, at least for now.
Its City Council members agreed Oct. 25 to send subcommittee members Catherine Carlton and Peter Ohtaki to meet directly with the fire district, rather than immediately joining the controversial fiscal review of the district's services that Atherton is planning.
Atherton made plans to retain an independent consultant to conduct a fiscal review of the fire district's services after the district told the town on Oct. 18 that it has "neither legal obligation nor any present intention to participate in the Town's (fire services fiscal review)," according to a letter from the fire board to Atherton included in the Menlo Park staff report.
Atherton's study is expected to cost about $50,000, and Menlo Park and East Palo Alto have been invited to join the study and split the costs.
The purpose of Atherton's study is to evaluate exactly how much money the fire district collects from property owners in Atherton and spends within the town's boundaries, Fire Chief Harold Schapelhouman said.
From the fire district's point of view, he said, it doesn't want to participate in the study because breaking the numbers down by city isn't likely to yield information the district deems "useful." Its boundaries cover Atherton, Menlo Park, East Palo Alto and unincorporated county areas, and the district treats its revenue and expenditures as one budget, rather than as pockets of funding and services to be parceled out by jurisdiction, he explained.
According to the staff report, the fire district receives $37.3 million in annual property tax revenue in the district. Of that total, 47.1 percent comes from Menlo Park, 31.7 percent from Atherton, 15.6 percent from unincorporated San Mateo County areas and 5.6 percent from East Palo Alto. Menlo Park property owners paid $17.5 million in property taxes to the fire district during the 2015-16 fiscal year, the staff report said.
As Menlo Park City Manager Alex McIntyre put it to the Menlo Park City Council at its Oct. 25 meeting: "Atherton's doing this. The question is, do we want to join them?"
The council decided to see if the city can get the information it needs from the fire district without spending taxpayer money to hire a consultant.
The city would still have the option to join Atherton's study before the new year. That decision will depend on the outcome of the meeting between the two council members and fire district officials.
Council members generally agreed the information the city would find useful is different from what Atherton wants. However, they were split on the philosophical question of whether the city should get involved in scrutinizing the spending of another local agency. Councilwoman Catherine Carlton told the council she had a phone call with Rep. Anna Eshoo, D-Menlo Park, who encouraged Menlo Park to pursue the study. Congresswoman Eshoo on Friday sent a letter to Atherton also supporting the study.
Councilman Ray Mueller said joining Atherton for the study would be "inherently political." "I don't think we should be getting into the business of auditing other agencies," he said.
Mayor Rich Cline said: "If this feels like an investigation, and its approach feels political and investigatory, then I think that's a poor approach. ... It could end up creating another political maelstrom here that's going to be just kind of laughable at the end."
Councilman Peter Ohtaki, who served on the fire board for three years before being elected to the City Council, said the city should stay focused on the question of impact fees.
The city and the fire district have different narratives of where things stand on development-impact fees: per-square-foot payments by property owners to cover the added costs to the fire district of providing emergency services for new development.
According to City Manager McIntyre, the fire district did a "nexus study" that would set those per-square-foot fees, but when he reviewed the study with county leadership and city managers in East Palo Alto and Atherton, they had some questions they wanted answered before they would bring the idea to their respective councils. They never said no to the idea, he said.
Fire Chief Harold Schapelhouman said that while the city managers may have not said no in such explicit terms, they were unwilling to bring the results to their respective town and city councils, which kept the process from moving forward.
Because an impact fee would require the agreement of all of the jurisdictions within the fire district, the district's board began looking into other funding options and may have landed on a way to implement developer payments similar to an impact fee.
The new idea is something called a "community facilities tax," and could be levied by the fire district. Such a tax would be a one-time fee commercial property owners (including owners of large multi-family housing developments) would pay if square footage or many new workers were added to an area in the district. Current per-square-foot estimates of what those fees could be, based on the nexus study are: 43 cents for retail, 35 cents for hotels, 57 cents for office/research and development space, and 22 cents for industrial. For other commercial categories, the fee could be $173 per employee.
Money collected would go toward funding the district's capital needs, such as firefighting vehicles, equipment or stations.