Although Atherton has 8% of the residents in the fire district, it provided 31.7% of the district's total property tax revenues, which led to a subsidy by the town of more than $7 million in tax revenue for the fire agency's coffers, according to the 2015-16 survey.
"This is the double-edged sword that residents of Atherton and neighborhoods like West Menlo Park have to deal with," district board member Virginia Chang-Kiraly told The Almanac. "When you live in the wealthiest zip code in the country sometimes you have to pay for things that primarily benefit other people."
Atherton also pays a higher share of taxes to the Las Lomitas and Menlo Park City school districts and the Sequoia high school district, even though not very many Atherton residents have children who attend schools in the districts, she noted.
Atherton could conceivably contract out its fire services, but some sort of arrangement would have to be made with the district about what to do with Fire Station 3, which is in Atherton, Chang-Kiraly said.
"Station 3 is the fire district's property, and we also own the neighboring property next to the station," she said. "Five stations out of seven are located outside of Atherton but also serve the Atherton community."
Losing Atherton as a region in its service area would be a tremendous blow to the district and, depending on how the exit was handled, would result in major budget cuts, said Robert Jones, who was elected board president earlier this month.
"We would have to adjust, and we would have to make it work for us with less funds," he said. "Hopefully, we wouldn't have to go out of business or consolidate."
Former fire board member Peter Carpenter thinks that Atherton's concerns represent an ethical issue because the taxation system is based on ability to pay rather than on the value of the services that are received.
"We live in a society that says that people who are better off pay higher taxes than people who are not better off," Carpenter told The Almanac. "What the Atherton Town Council has said is that we don't think we should pay more than what the cost of our services are.
"Atherton residents pay more for every public service than they receive in direct benefits from (the providing agencies), not just fire," Carpenter added.
Fire Chief Harold Schapelhouman said in an interview that the effect on the fire district and the remaining communities in the district could be "devastating."
"The amount of money we would have might not cover all the costs of providing the services to other communities, and there would need to be a dramatic reduction of those services," he said.
If Atherton were to proceed with an exit plan, it would have to get the permission from the San Mateo County Local Area Formation Commission (LAFCo), which "has not been encouraging' of the idea up to now," said Martha Poyatos, the commission's executive officer.
"We encourage dropping boundaries and becoming larger rather than becoming smaller," she said. What the town is talking about "isn't consistent with anything I see in LAFCo law."
If Atherton applied to LAFCo for permission, it would trigger a property tax exchange in which the county Board of Supervisors would negotiate with the town on the proportion of property tax revenue to be transferred into its coffers to provide fire protection service, Poyatos wrote in an email.
"The most that the town could get is what the fire district currently receives from property taxes generated by the town of Atherton, but it could get less because it's subject to negotiation," Poyatos said.
If LAFCo were to approve the application, Atherton residents would be entitled to a protest period. If more than 50% of residents protested, the approval would be canceled; if 25% to 50% protested, the Board of Supervisors would call an election and a simple majority would be needed for approval.
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