At a July 18 Atherton City Council meeting about the latest Matrix Consulting report, council members said the town's next step should be getting the fire district to agree to discuss the report publicly with the town.
After the release of the first report showing the town providing a nearly $7 million annual operating subsidy to the fire district, council members asked Matrix to return with more information showing what the town could do about the disparity.
That report, discussing the steps Atherton would need to take to detach from the fire district or push to have property taxes generated in the town reallocated, was on the July 18 agenda.
Atherton resident Bob Polito, a member of the town's Audit and Finance Committee, summarized the issue: "This situation we have with the fire district, which is a very affluent fire district, is one of the unintended consequences of Proposition 13."
Polito said that because Atherton has close to zero growth combined with high property tax revenue growth, "the problem's not going to go away. It's growing at an astronomical rate."
Atherton has no businesses or multifamily residential zoning.
His research showed that by 2025, the annual subsidy to the fire district generated within Atherton could approach $20 million, Polito said.
A bigger portion of each property tax dollar generated in Atherton goes to the fire district than to the town. While the exact percentage varies by neighborhood, in the largest tax rate area in Atherton the fire district gets nearly 16 percent of each property tax dollar while the town gets less than 11 percent.
Council member Elizabeth Lewis said the Matrix report has "opened a lot of the residents' eyes to what has really been happening."
"It's just not sustainable; something has to be done," she said. "There's no way that I want to take money away from levels of services to any of the other entities in our district," she said, but "what would be reduced is the growth of the slush fund."
Mayor Cary Wiest, who is the town's liaison to the fire district, said he thinks the town should "start the process of at least opening a conversation" with the fire district.
"It's disappointing at this point that there is no clear path. What is clear is there is a need for reform," he said. "We're not talking a little money, we're talking a lot of money."
Wiest said he also has concerns about how the fire district is spending its funds. "I have some extreme concerns," he said. "The cost of services from the district are escalating beyond even their control."
"Can the district survive without Atherton's funds? Absolutely they can," he said.
The most recent Matrix report explored options including going through the San Mateo County Local Agency Formation Commission (LAFCO) to detach from the fire district, negotiating directly with the fire district to reallocate some of the property tax dollars that come from Atherton property owners, or asking the state Legislature to reallocate the property tax revenues.
This story contains 566 words.
Stories older than 90 days are available only to subscribing members. Please help sustain quality local journalism by becoming a subscribing member today.
If you are already a subscriber, please log in so you can continue to enjoy unlimited access to stories and archives. Subscriptions start at $5 per month and may be cancelled at any time.