The Atherton City Council voted 5-0 to approve the town's 2020-2021 fiscal year budget at its June 17 meeting, with signs that the town is weathering the storm of economic impacts brought on by COVID-19.
A staff report shows that the town's general fund revenue is projected to be approximately $16.3 million for the fiscal year, which began July 1. Property taxes make up roughly 72% ($12 million) of the town's general revenue. The budget reflects a single-year revenue surplus of roughly 8%.
"In general, the FY 2020/21 Operating Budget reflects a positive outlook, despite potential short- and long-term impacts from COVID-19," wrote town Finance Director Robert Barron in the staff report. "The town is weathering the short-term impact of COVID-19 with anticipation that a quick recovery period will resume with ramp up of town residential construction and the continued construction of the Town Center project."
After having halted most residential construction for seven weeks due to COVID-19 shelter-in-place orders, San Mateo County health officials began allowing residential construction again at the beginning of May, allowing Atherton to begin making revenue from issuing permits again.
Atherton's resiliency during the COVID-19 era is due largely to the town's reliance on property taxes, City Manager George Rodericks said in an email.
"Like other communities, we have our financial and operational challenges due to COVID-19, loss of revenues, etc., but, because we are not reliant on sales tax or transient occupancy taxes (hotel taxes), our revenue streams don't fluctuate up and down as much and are less 'people' dependent," he wrote. "As a result, we are less impacted financially as a result of COVID-19's impacts."
Atherton's new Town Center remains the town's primary capital improvement project, with a recommended expenditure of $16.6 million, according to the city staff report. After having halted construction due to COVID-19 concerns in March, work on the project resumed on April 9, and is slated for completion midway through the 2020-2021 fiscal year.