News

Atherton has construction ahead, and cash flow problems

Wednesday study session will examine the problem and possible solutions

This architect's rendering shows what Atherton's new library will look like. (WRNS Studio/courtesy town of Atherton)

Atherton officials think they will have the funds to build a new civic center, but also project cash flow problems as the project proceeds.

The City Council will discuss how to handle the projected negative cash flow at a study session today (Jan. 10) starting at 4 p.m. in the town's council chambers, 94 Ashfield Road.

A report for the study session from City Manager George Rodericks and Finance Director Robert Barron says the civic center construction "will be the largest project the Town has undertaken in its history."

Construction will take two to three years and include parts of four fiscal years, from the current 2017-18 fiscal year to 2020-21.

But the way in which the town receives funds is unlikely to line up with its construction bills, the report says. For example property taxes, Atherton's largest source of revenues, are only paid twice a year, in April and December.

The spreadsheet prepared for the meeting shows the project will deplete all of the existing surplus library funds (which come from the county library system) as well as any additional surplus funds that come in during construction.

By June 2020, the town will also have spent all of its investment portfolio, except for a mandatory reserve fund of 35 percent of general fund expenditures of $5.2 million, the report says.

That means a negative cash flow is projected for the town from about October 2020 until July of 2021.

The report suggests the council use a certificate of participation, a type of bond that does not require voter approval, to raise $5- to $7.5 million to bridge that gap.

The staff report, cash flow spreadsheet and other meeting materials are on the town's website.

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Comments

5 people like this
Posted by Been there
a resident of Atherton: Lindenwood
on Jan 10, 2018 at 3:21 pm

Been there is a registered user.

The Civic Center has several options in my opinion.
1. Go back to the residents for donations. This time expand the search beyond the long time residents. The last attempt was controlled by one person who was unable to let others more experienced in fund raising. It is estimated that 50 Google employees live in Atherton. Facebook has lots of Athertonians.
2. If that doesn't make it. Borrow the money to be paid with future income.
Other alternatives to consider are to downside the project or reuse the existing Adminstration Building.
Just because the town has spent so much of the taxpayers money to plan this is no reason to blindly continue without reassessing what is best for the town.


10 people like this
Posted by Stop the inasanity
a resident of Atherton: other
on Jan 10, 2018 at 4:02 pm

Been there raises a good point. Didi Fisher, head of the civic project, failed at the fund raising, allegedly only going to her friends at the country club for money.

So why is she still running the show?

It's just one thing after another with this boondoggle. First, cost estimates exceeded.

Next, after DeGolia and the other council members promised the funds were on hand, now the cash is NOT ON HAND and more borrowing will take place??

AND WE'RE JUST GETTING STARTED!! Who knows just how much more this is going to mushroom.

Been there, here's another option. Replace the current cast of decision makers who have FAILED in relation to their objective (raise private funds), scale the center DOWN TO WHAT THE TOWN CAN AFFORD (afford = no borrowing), and then, and only then, proceed.


5 people like this
Posted by Sensible
a resident of Atherton: West Atherton
on Jan 11, 2018 at 8:19 am

To the wise and informative words of "Been There" and "Stop the Insanity" I would add, "Live within your means!" The old advice against trying to drink champagne while living on a beer budget applies everywhere including Atherton. The absurd amount that's already been spent just dreaming up this wishful project has delighted only the hired planners. To paraphrase Britain's Iron Lady, ". . . sooner or later they run out of other people's money."! Yep!


5 people like this
Posted by peninsula resident
a resident of Atherton: other
on Jan 11, 2018 at 10:59 am

"Live within your means!"

I'm as anti-debt, live-within-means as they come, but I have to ask...if you think the cost and scale of this project is too much, where were you people during the design process?????

The town made significant efforts for community engagement. I lost track of the number of times I saw notifications for a scheduled meeting asking for feedback on the initially-proposed design options.

Did you even try to chime in during the design process?


5 people like this
Posted by Where
a resident of Atherton: other
on Jan 11, 2018 at 11:11 am

Hey, Peninsula Resident, since Didi, DeGolia and Lewis would not admit to the press and public that the private donations weren’t going to make it, no design sessions ever took place under the pretext the tax payer would be footing the bill.

Do you see the significance of this? Some would call it a “bait and switch”. After all, if others are paying, why should I care how extravagant it is? If I’m paying, you bet I do.

Why didn’t Didi, the Grand Sachem of the Circus Club, give the green light to tell the public that this wasn’t going to be paid for by private donations when the design meetings were taking place? She had to have known that milestones were clearly not being met.


6 people like this
Posted by really?
a resident of Menlo Park: other
on Jan 11, 2018 at 11:21 am

Ridiculous vanity project that kills a small town's (?) limited finances. Atherton needs a library like EPA needs a polo field.


4 people like this
Posted by Get a loan
a resident of Menlo Park: Central Menlo Park
on Jan 11, 2018 at 3:01 pm

Civic centers are uncommon projects. The effective life and utility of a well designed town center should be ~50 time horizon. Use the funds you have and borrow the balance. This, or bonds, is standard practice for municipal projects.


3 people like this
Posted by peninsula resident
a resident of Atherton: other
on Jan 11, 2018 at 6:04 pm

OK, well, I'll give you kudos for being honest. You de facto admit you never attended any design meetings.

While I agree with some of the anti-town-center positions and think the members of town government should learn from how we got to this state, it's fair to point out the anti-town-center folks made mistakes too. For example, the fact that you didn't attend a single design meeting was pretty clearly a mistake, so...in the future perhaps you should try to very very slightly participate in the community instead of whining after-the-fact.

The scale of a new town center is fair to debate, and I support building whatever is the smallest footprint required to replace the functionality of the decrepit 'portables', seismically unsafe police station (with 1 bathroom? Really?) and other basic functions of town government.

But we must replace these buildings. They're unsafe, they no longer work for modern needs and are at their end of useful life. It would be simply irresponsible to keep the town center as-is, and frankly I suspect that that is what most of the anti-town-center folks want. I look forward to seeing you lose.


3 people like this
Posted by peninsula resident
a resident of Atherton: other
on Jan 11, 2018 at 6:09 pm

"Ridiculous vanity project that kills a small town's (?) limited finances. Atherton needs a library like EPA needs a polo field."

Uh, I recall that the library construction project is funded separately and is already fully funded.

I think this is part of the problem with the anti-town-center folks: they don't even know what they're opposing.


4 people like this
Posted by Bait and Switch
a resident of Atherton: West Atherton
on Jan 11, 2018 at 6:27 pm

Peninsula Resident – I am in favor of a new town center, but certainly not the $55M proposed project that is bound to grow in cost well beyond this initial estimate. That's well more than what Atherton needs, and obviously well beyond what it can afford.

I note in your swipes at citizens who oppose the $55M proposal, you did not address Where's point about how no public input was solicited with the accompanying disclosure to the public that they would be paying for it. As Where pointed out, the disclosure was the opposite: that "private donations" would be paying for it. Therefore, it's disingenuous to use the public input sessions to claim a mandate for the design.

I find this point pretty persuasive and if you want to restore some credibility, you should come to terms with it.


Like this comment
Posted by Barbara Wood
Almanac staff writer
on Jan 12, 2018 at 11:06 am

Barbara Wood is a registered user.

A story about this meeting and City Council discussion has been posted here: Web Link


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

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