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Atherton staff projects $26.2M in general-fund revenue and $2.87M one-year surplus in draft FY26–27 budget
Summary
At a second study session staff presented a draft FY26–27 general fund budget projecting $26.2 million in revenue and $23.3 million in expenditures, producing a one-year surplus of about $2.87 million; council discussed revenue risks tied to VLF shortfalls and one-time RAP receipts.
At its study session the town heard a detailed presentation from finance staff on the proposed FY26–27 general fund budget, which projects $26.2 million in revenues and $23.3 million in operating expenditures, producing a single-year surplus of roughly $2.87 million.
Finance staff told the council that property taxes account for the largest share of general-fund revenue (about 68%), with fees, franchise fees and intergovernmental sources making up smaller shares. Staff said the budget includes a below-the-line one-time RAP/RAF component of $2.75 million for 26–27 after receiving slightly more than $3.0 million this year; those one-time receipts are not treated as baseline operating revenue.
Council members pressed staff on multi-year shortfalls in vehicle-license-fee (VLF)/BLF receipts, with staff reporting cumulative shortfalls across recent fiscal years of about $1.76 million. Staff said the 26–27 VLF projection is conservatively budgeted at $1.3 million, below historical peaks nearer $1.7–$1.8 million, and cautioned that such variability creates risk for future budgets.
On the expenditure side, staff highlighted cost drivers including a 2.5% CPI-based salary/benefit adjustment, an increase in workers' compensation (~$114,000) associated with joining a new joint-powers authority, and department-specific contract adjustments that raise building and public-works budgets. Staff also outlined a proposed $2.265 million transfer from operating to the capital-improvement program (CIP) for 26–27 and noted the town’s COP debt service (about $861,000) that sunsets in 2030.
Staff said the projected 26–27 ending general fund balance would be about $13.8 million after required reserves (15% emergency and contingency) and the proposed CIP transfer. The council suggested improvements to public-facing budget tools, and staff demonstrated a new online budget dashboard that will be expanded to include historical comparisons.
The study session was informational; no formal budget vote was taken. Staff will update the draft and return with further iterations as the council finalizes spending and CIP priorities.
