The dispute began in November when council member Kathy McKeithen discovered that the website of the Environmental Programs Committee contained an argument against putting a new town library in Holbrook-Palmer Park.
In October, a split City Council had voted to choose the park as the "preferred site" for a new library.
Ms. McKeithen, council member Elizabeth Lewis, and residents Valerie Gardner and Frank Merrill Jr. are the only current members of the Environmental Programs Committee. It has openings for eight more members.
After Ms. McKeithen complained about the website, it was taken down. According to Ms. Gardner, the committee returned $9,600 in sponsorships, "because our website is down and no longer providing the visibility we committed to our sponsors."
In a report to the council, Interim City Manager John Danielson said Atherton residents had "questioned whether the EPC represents the views and opinions of the Town Council or, is an independent body creating opinion pieces on local governance issues."
"I have to say," said council member Jim Dobbie, "that ever since I've been on the council I've felt that the EPC has been out of control."
"I would certainly like to see it disbanded," he said.
But other council members worried that if the committee was eliminated the town would lose a large federal grant it has been given to promote energy efficiency in private homes in town.
Mayor Bill Widmer said he favored having the town look further into the committee's activities. "The issue at hand is ... were or were not any rules broken with the spending, with the postings on the website," he said.
Town officials said they need to do more research. "I'm not accusing anybody of any wrongdoing," said Mr. Danielson. "I couldn't trace back on the website where the opinion pieces were coming from."
Town Attorney William Conners said the town does not yet know exactly what the committee may have done inappropriately. "Right now we have more questions than we have answers," he said. Among other things the town needs to look into, "we need to have a better handle on who is approving expenditures," he said.
Council members voted to suspend all activities and meetings of the committee until the council meets in January.