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.