Atherton staff reports midyear budget: projected surplus but multi-year BLF shortfalls flagged

Unidentified staff presented the Atherton midyear budget for fiscal year 2025-26 and described the report as informational. "Midyear total fiscal year 2526 revenues are at $170,170,000.00," the presenter said, and cited a projected expenditure figure and a net positive position in the staff report.

The report identified two revenue items the town is watching closely. Staff said the property-tax-related BLF has produced a multi-year shortfall that, combined across years in the staff materials, amounts to a decline the presenter described as material and ongoing, driven in part by state-level actions and litigation affecting expected BLF receipts. On ERAP, staff said, "we projected to receive 3,058,000" for the year and recommended treating that sum as one-time funding and applying it to debt reduction or capital projects; staff suggested raising the ERAP budget assumption for next year from $2.5 million to $2.7 million based on recent receipts.

On the expenditure side, staff described a $323,000 midyear increase in appropriations across departments, including a $17,000 request to upgrade audiovisual and meeting systems in the council chambers and a $243,000 adjustment tied to a revenue-share change in the town's building life-and-safety contract stemming from the extended Interwest agreement. Staff said the building department is expected to account for higher fee revenue (projected at $210,000) and the contract change required an expense adjustment.

Public works items included a proposed $50,000 increase for contracted tree maintenance and removal after incidents involving large eucalyptus limbs; staff cited a $32,000 quote to remove a single tree that had damaged a town facility. The report summarized an estimated ending fund balance of about $10.5 million, with a 15% reserve requirement (approximately $3.4 million) and roughly $3.6 million unallocated in the midyear projection.

Council members asked clarifying questions about where one-time ERAP receipts would be allocated and why certain purchases were budgeted to particular line items. Staff repeatedly characterized the midyear report as informational; the chair closed the item and confirmed it was not a formal action item. No formal motions or votes were recorded on the midyear report during this session. The report will remain on file and staff said they will return with operating and CIP budget allocations during the regular budget study sessions in coming months.