News - May 11, 2011

Atherton council greenlights staff, spending cuts

by Renee Batti

Major staffing and spending cuts are likely to be made soon in Atherton City Hall after the City Council, in a special meeting on Monday, May 9, gave the town's interim manager the support he was seeking to begin the difficult process.

A presentation by finance director Louise Ho early in the 8 a.m. meeting revealed sobering budgetary figures that project deficit spending of about $856,000 in the 2011-12 fiscal year budget, assuming no salary increases and no capital improvement spending. This deficit would amount to about 8 percent of the current fiscal year's budget of $10.6 million.

Ms. Ho also projected that the town's reserves, which have been tapped into in recent years to balance the budget, will be exhausted by 2015, offering no bail-out of the town's projected $1.2 million deficit in the 2015-16 fiscal year.

"This is the picture of a structurally insolvent (entity)," interim City Manager John Danielson told grim-faced council members after Ms. Ho's presentation.

Noting that 80 percent of the town's costs are for labor, he said there is no way to solve the problem that could lead to bankruptcy without cutting staff. And, he said, he must do it soon to complete the 2011-12 budget, "although I don't have a final tally" on which services and employees will be affected.

Council members Jerry Carlson and Kathy McKeithen, and Mayor Jim Dobbie, told Mr. Danielson that they would support whatever cuts he felt he must make, noting that he was hired to tackle the town's growing fiscal crisis. "John, whatever you need to do, you have my support," Ms. McKeithen said. "Good luck to you and good luck to the town."

Praising Mr. Danielson's job performance and judgment since his hiring in January, Mayor Dobbie said: "He'll be using a scalpel, not an ax. Therefore, he has my support."

Councilman Bill Widmer acknowledged that the town must take "a hard look at how we're providing services," but added that caution must be taken to retain the "institutional knowledge" that many staff members provide. "I offer my support and expertise to (help) decide what to outsource," he said.

Councilwoman Elizabeth Lewis complained that the public was informed about the special meeting only days before. "I know a number of people who would have liked to be here," she said, adding that the majority of residents "have no idea" the meeting was being held. "We are remiss in the outreach" needed to inform residents, she said.

Ms. Lewis also said Ms. Ho's presentation of budget projections was "the first I've seen of these numbers."

After the meeting, Mayor Dobbie defended the scheduling of the meeting, saying that the town announced it well in advance of the 24 hours required for a special meeting. The agenda was posted and notices sent out on Thursday, May 5.

On May 5, Mr. Danielson told the Almanac the meeting had been scheduled for 8 a.m. Monday morning because of scheduling conflicts among council members. Time to complete the budget is running short, he said, so it was necessary to call a special meeting quickly to give the council "one last opportunity to say I'm on the right track" with his strategy for addressing the budget shortfall.

In addition to outright spending and staff cuts, the town also will pursue employee concessions in contract talks, according to Mr. Danielson and Mayor Dobbie. All contracts, except for the police officers association's agreement, expire June 30.

But it's possible, if not likely, that the police officers' contract will be reopened. Current contract terms allow that to happen if the rate of property tax revenue-increase falls below 2 percent from the previous year — which is already the case — and the town publicly declares a fiscal crisis, Mayor Dobbie said and Ms. Ho confirmed.

A Ducky sighting

Because Monday's special meeting is certain to be followed by layoffs and spending cuts, one town resident who has followed the town's budget woes was stunned to see a police car in the detail area of Ducky's Car Wash in Menlo Park shortly after the meeting.

The resident, who asked that his name not be used, was there to get a price on having his own car detailed — which at $180 he determined to be too much. He asked staff at the carwash what it will cost the police department for detailing the patrol car, and was told $200 to $250, he told the Almanac. "I couldn't believe it," he said.

The resident soon after called Mayor Dobbie, who then put a call in to the interim city manager, Mr. Dobbie told the Almanac. The mayor said he's reserving judgment until he learns more, but his initial reaction was: "It's absolutely unbelievable to me. You can get your car washed on Marsh Road for $6."

After checking out the situation, Mr. Danielson, who has been on the job only since January, said he learned that each of the police department's patrol cars gets detail service once a year, at a cost of only $150. The cars are driven 24 hours a day, he said, and "they get a lot of dings and scratches." The detail work helps prevent rusting and other problems.

"We keep those cars a long time, too," he said.


Posted by John, a resident of Atherton: other
on May 13, 2011 at 1:45 pm

To the Town council and the City Manager. Your going to cut jobs, How about telling us all about how your going to lay off half the employees of the town just to replace the with an outside company that is going to cost more money. That's what put our country in this mess to begin with .Do you people think that is responsible? The problem isn't the people that work for the town, its the city council and the rest of the management that is spending our money on recent purchases ,such as new larger monitors, higher quality and expensive paper stock for management,new business cards for the city manager and the town council because of a logo change.When are people going to wake up? It has always been blamed on labor ,but in fact its been high dollar management with there high dollar retirement . Take a look at the police department.Its the biggest drain on the community that there is .This police force is larger than any I have seen for a city that size. Ask yourself ,how long have the last three captains stayed in there positions? Its only been long enough to get that big raise in their pension. I can tell you that 3% at 50 years is unsustainable for a town that only has a few sources of income ,your property taxes and the building dept, and that from what I hear is going to be outsourced by a company that charges more money per employee.The only problem I see here is the out of control town council and the temporary City Manager.

Posted by Ed, a resident of Atherton: other
on May 13, 2011 at 3:43 pm

The above statement is clearly a reflection of long time Atherton lower level staff finally trying to voice their concerns in a public forum, likely in frustration with the complete failure of bottom/up communication ever reaching the top. I agree whole heartedly with the sentiment expressed above, that the council has regularly failed to recognize for many years now, that middle management (meaning the various City Managers, Assistant City Managers and Police Chiefs) on whom the council have relied, have interrupted any healthy information flow and instead manipulated the system only to their own convenience and survival.
NOW is most certainly the time for beleaguered staff to become vocal with any input on how to right this sinking ship.
I would encourage staff to participate or at least attend next wednesdays council meeting, and to post here if they are in any way discouraged by anyone from doing so.

Posted by Ed, a resident of Atherton: other
on May 13, 2011 at 6:31 pm

Does Mr, Danialson's most recently printed business card referenced above, still say "INTERIM" before the title ATHERTON CITY MANAGER?
YES or NO?

Posted by POGO, a resident of Woodside: other
on May 13, 2011 at 7:00 pm

I don't think anyone is proposing replacing staff with more expensive alternatives. The idea is to SAVE money.

As many have said, the current level of spending by our government - local, state and national - is absurd and unsustainable. We are in the midst of a big correction and it won't be pretty.

Posted by John, a resident of Atherton: other
on May 13, 2011 at 9:05 pm

His card no longer says interim nor does the building official and the public works director. Mr.Pogo needs to check facts. The plan is to lay off all the building dept. and parks to replace them with consultants. This is what these high priced so called interim city officials are planning The public needs to put the outsourcing of not only the town but America in check.Here is a fact ,the code enforcement consultant from CSG who works one day per week makes $105 dollars per hour makes $43,680 for 52 days.You also have Community Service Officer who works in PD who could take over code enforcement.You could also make the City Manager pay for the the high maintenance house that he lives in for free, or rent the home.

Posted by Translator, a resident of Atherton: West Atherton
on May 13, 2011 at 10:42 pm

As a resident I'd like to attempt to translate what I think John is saying. Everyone understands "belt tightening" and tough economic times. I believe most people, residents and staff alike, understand across the board sacrifices. But when sacrifices are directed at one group rather than in a uniform way, resentment develops as well as a feeling of politics at work rather than parsimoniousness. This is not what this town needs. There has been enough disenfranchisement of residents and staff members alike by disparate treatment that special efforts should be made to go overboard on a sense of fair play. Hiring new police officers in a town that is already overwhelmed by these costs while simultaneously engaging in wholesale firing of other departments does not seem fair. According to the late Supreme Court Justice Potter Stewart, fairness is what justice really is, and the converse is also true. The quote seems especially apt for Atherton's own particular budget situation.

Posted by POGO, a resident of Woodside: other
on May 14, 2011 at 7:00 am

I think it may be John who is a little too clever with his "facts."

John said "The plan is to lay off all the building dept. and parks to replace them with consultants." I suppose the point is that a consultant may earn more per hour than the current staff and that may be true. But that isn't the point. I'd rather hire a part-time consultant for the one day a week I need them (your example, not mine) who I have to pay $43,680 a year (your example, not mine) INSTEAD of a full time employee - who I apparently don't need for four of the days I'm paying him! - making $100,000 a year, with health benefits that cost me another $15,000 a year... and a pension of $50,000 a year for twenty or thirty years after they retire!

In private industry, we make these decisions all the time. Very few businesses that are the size of the Town of Atherton have full time accountants - we use consultants for the few days that we need them. Yes, we pay about double the hourly price of a full time employee, but we only pay when we need them, there are no benefits and no pensions.

So which is the smart decision?

By the way, in Woodside, we use consultants as both inspectors and plan checkers in our building department. It's more efficient and less expensive than when we had full time employees doing these same jobs. As you know, we also contract for law enforcement services with the San Mateo County Sheriff's Department. Although they don't water our lawn or feed our cats, we get excellent service from highly trained officers and, like Atherton, most of us know our deputies on a first name basis. We have instant access to detectives, crime labs, SWAT teams, search and rescue units, the bomb squad and they can flood an area with DOZENS of extra deputies and squad cars whenever they are needed.

The final fact: with all that service, our budget is not only balanced (and has been for years), we actually manage to run a small cash surplus! But you keep doing whatever works for you in Atherton.

Posted by Peter Carpenter, a resident of Atherton: Lindenwood
on May 14, 2011 at 7:35 am

Danielson was hired to make changes and to bring the budget into balance.He is doing exactly that.

You can't change without both actually changing and that almost always involves pain.

Those who feel the pain will object but stopping the change to stop the pain to stop the objections would be foolish.

Posted by Observer, a resident of another community
on May 14, 2011 at 8:04 am

POGO says, "As you know, we also contract for law enforcement services with the San Mateo County Sheriff's Department. ... The final fact: with all that service, our budget is not only balanced (and has been for years), we actually manage to run a small cash surplus!"

POGO unintentionally surfaces an issue which merits further exploration. In an era of pinching every penny, why does the Sheriff provide services to Portola Valley and Woodside at subsidized rates?

If PV and Woodside paid their full share for the services they receive, the Sheriff would be able to provide more services to those areas which aren't subsidized. In short, your "black" budget comes at the expense of sacrifice from those who can least afford it in unincorporated areas of North Fair Oaks where crime is rampant.

To be fair, the San Mateo County Sheriff is not the only one who subsidizes rates in order to build empires. The LA County Sheriff got caught doing the same thing.

The LA County Controller provides a good starting point (areas to be examined) for San Mateo County to use in getting Woodside and PV to pay their share: Web Link

Posted by Menlo Voter, a resident of Menlo Park: other
on May 14, 2011 at 12:01 pm


what do you mean they "subsidize" PV, Woodside, etc.? Do you have some documentary evidence to back up that assertion?

Posted by Stan, a resident of another community
on May 14, 2011 at 1:25 pm

Atherton needs a hybrid solution.

Contract with the County to provide a basic level of patrol as do Portola Valley and Woodside.

For those who want "concierge service", let the residents pay private security guards. What's happening now is that every homeowner pays an extra $750 per year whether they are willing to or not yet the extra services benefit a small handful of folks.

It's that simple.

Posted by John, a resident of Atherton: other
on May 14, 2011 at 4:15 pm

Apparently Mr. Pogo thinks that laying off all of the building department and parks department which are all fulltime positions and outsourcing even 2/3 of those with full time consultants positions is going to balance a very top heavy town is delusional.Take a look the police dept. again and try to justify %60 of the parcel tax to a force that most their duties are collecting mail and newspapers for those residents who are on vacation. Take a look at the supervisor to employee ratio

Posted by John, a resident of Atherton: other
on May 14, 2011 at 4:24 pm

I forgot to mention, that it doesn't seem to bother the people of the town that the ones make the decisions are already getting their %3 at 50 and the ones getting layed off are only in line for a %2 at 55 retirement,so really how is that going to fix the budget?

Posted by Menlo Voter, a resident of Menlo Park: other
on May 14, 2011 at 5:27 pm

The elephant in the room that no one, at least in Atherton, wants to see is their police force. It eats up 60% of the town's budget, for what? The crime rate has been generally rising over the course of the last ten years while crime rates in general have been dropping. Most of the services that they provide currently could be provided at much lower cost by private security forces and what law enforcemnt duties they actually do could be provided by the Sheriff's department at half the cost. Yet they are looking at laying off the building department and parks department? They need to look at the BIG costs. In addition to taking most of the town's budget, the police deptartment also incurs greater retirement liabilities than any of the other departments. This is just a no brainer to me. Is the town so wed to having concierge police service? It's just stupid.

Posted by Stan, a resident of another community
on May 14, 2011 at 9:02 pm

Menlo Voter just doesn't get it.

The Atherton Police Force does one thing another law enforcement agency cannot or will not do.

The Atherton Police Force protects a clique of wealthy, well connected people from the law.

If the Town wants to save money, get rid of that clique who, like puppet masters, are pulling the strings of the City Council and the interim City Manager.

It's that simple.

Posted by Agreement, a resident of Atherton: West of Alameda
on May 15, 2011 at 10:38 am

Agree with Menlo Voter. The police department takes up most of the budget, and has the highest salaries and pensions, so this should be looked at first. My guess is we'll see everyone else get laid off and an announcement that the cops have made the supreme sacrifice of limiting their raise this year like what happened with the San Mateo sheriff. {Portion deleted.]

Posted by POGO, a resident of Woodside: other
on May 15, 2011 at 10:46 am

Stan -

I think Menlo Voter gets it perfectly well.

It would appear to me that you are both in violent agreement.

Posted by John, a resident of Atherton: other
on May 15, 2011 at 1:16 pm

People need to go to the council meeting and voice their opinion for or against . Its time we all take a stand ! The meeting is at 7:00 pm on wed.

Posted by Stan, a resident of another community
on May 15, 2011 at 2:14 pm

Right you are Pogo.

Posted by peter carpenter, a resident of Atherton: Lindenwood
on May 15, 2011 at 2:27 pm

peter carpenter is a registered user.

These cuts are essential for short term deficit reduction but long term elected public officials and public employee unions need to understand that we have only three choices:

1 - renegotiate new contracts with defined contribution retirement benefits for everyone, both new hires and current employees. Defined benefit contributions earned to date would continue in force but there would be no new defined benefit contributions.

2 - outsource those functions which cannot be renegotiated into a sustainable cost structure

3 - go bankrupt

Posted by Fourth Choice, a resident of Atherton: West Atherton
on May 15, 2011 at 3:41 pm

Peter Carpenter leaves out the obvious fourth choice: residents of Atherton can decide what level of service they want, and pay for it. Assuming cutting back wages and benefits will offer residents the same service level is just wrong. Atherton residents have always wanted the best services and have consistently been willing to pay for them. It's a small price to pay (several hundreds of dollars per year in a parcel tax) knowing you are safe and the police won't ask you to write a letter to report a crime. They will come out. This is what Atherton residents want and are willing to pay for. Peter, please stop confusing everyone as this is just not the history of this community.

Posted by peter carpenter, a resident of Atherton: Lindenwood
on May 15, 2011 at 3:57 pm

peter carpenter is a registered user.

Fourth choice - you are correct in theory but I predict that the days of easy passage for another parcel tax are over.

Did you attend the meeting on the very slight increases in garbage fees?

Posted by Ed, a resident of Atherton: other
on May 15, 2011 at 4:12 pm

Fifth Choice--Hold the few council members and the few police officers who are responsible for abusing the public trust (fund) to a FULL account.
The surgical removal of a few bad apples from the public trough could well absolve the town of those pension liabilities of specific offenders as well as fortifying a budget to be less vulnerable to abuse in going forward.

Posted by Menlo Voter, a resident of Menlo Park: other
on May 15, 2011 at 4:51 pm


I don't think your police department is worth saving. The one metric upon which all departments are judged is crime rate. Atherton has shown a relatively steady rise over the last ten years, so they aren't really doing their job are they? The other things Atherton has their police doing are not police functions. You won't find any other city or town in the bay area who's police water lawns, take in mail, feed animals, etc. These are all things that can be outsourced at a tenth of the cost with no inherant structural deficit associated with pensions.

Posted by John, a resident of Atherton: other
on May 15, 2011 at 8:22 pm

Has any one checked public works? They have a Director , a Superintendent ,and a Supervisor for 3 employees .How does that make sense?

Posted by Menlo Voter, a resident of Menlo Park: other
on May 15, 2011 at 8:28 pm

If there is any department that should be left alone in Atherton it is Public Works. Given the [word deleted] poor way in which srorm water is handled in your town and the desperate need to remedy that, Public Works should be left alone. At least until your storm water issues are addressed.

Posted by Ed, a resident of Atherton: other
on May 15, 2011 at 11:13 pm

There are two threads on this topic that need to stay connected

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