Atherton City Council
July 17, 2024

Other Total
Governmental Governmental
Funds Funds
$3,998,355 $31,085,594
94,782 549,624
39,216
84,919
51,587
46,093
$4,093,137 $31,857,033
$33,978 $805,730
444,580
24,198
4,718,142
33,978 5,992,650
46,093
4,026,436 7,062,697
2,670,000
32,723 5,030,065
11,055,528
4,059,159 25,864,383
$4,093,137 $31,857,033
25

TOWN OF ATHERTON
Reconciliation of the

GOVERNMENTAL FUNDS -- BALANCE SHEET
with the

STATEMENT OF NET POSITION
JUNE 30, 2023
Total fund balances reported on the governmental funds balance sheet $25,864,383 Amounts reported for Governmental Activities in the Statement of Net Position are different from those reported in the Governmental Funds above because of the following:

CAPITAL ASSETS
Capital assets used in Governmental Activities are not current assets or financial resources and therefore are not reported in the Governmental Funds. 84,942,769

ALLOCATION OF INTERNAL SERVICE FUND NET POSITION
Internal service funds are not governmental funds. However they are used by management to change the costs of certain activities, such as insurance and central services and maintenance to individual governmental funds. The net current assets of the Internal Service Funds are therefore included in the Governmental Activities in the following line items in the Statement of Net Position.

Cash and investments 5,386,795
Capital assets, net 357,677
Accounts payable (7,426)
Compensated absences (1,096,373)
Claims payable (62,590)

DEFERRED INFLOWS AND OUTFLOWS OF RESOURCES
The balances below are not due and payable in the current period and therefore not reported in the funds:

Deferred outflows related to pensions 10,478,291
Deferred inflows related to pensions (4,620,022)
Deferred outflows related to OPEB 852,730
Deferred inflows related to OPEB (2,505,557)

LONG-TERM ASSETS (LIABILITIES)
The Assets( liabilities) below are not counted in the current period and therefore is not reported in the Funds:

Other long term liabilities (6,690,142)
Net OPEB asset (liabilities) 426,932
Net pension liability (17,868,828)
NET POSITION OF GOVERNMENTAL ACTIVITIES $95,458,639
See accompanying notes to financial statements
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TOWN OF ATHERTON

GOVERNMENTAL FUNDS

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED JUNE 30, 2023
Special Facilities Capital
Tax Special Library Construction Improvement
Revenue Special Capital Capital
General Fund Fund Revenue Fund Projects Fund Projects Fund

REVENUES
Property taxes $16,116,493 $931,066
Sales taxes 300,138
Other taxes 1,569,963
Measure A grants
From other governmental agencies 31,145 $49,932
Permit and licenses 269,739 4,810
Fines and forfeitures 974,993
Service charges 2,696,853
Use of money and property 450,603 $7,366 130 $3,495 56,453 Miscellaneous 78,747 297,000 11,000
Total Revenues 22,488,674 7,366 931,196 300,495 122,195

EXPENDITURES
Current:

General government 3,327,227
Planning 935,145
Building 1,171,571
Police 8,815,919
Public works 2,314,415 443,579 75,690
Non-departmental 243,137
Capital outlay 373,853 19,981 1,693,309 175,162
Debt service:

Principal 727,473
Interest 134,398
Total Expenditures 17,800,001 463,560 243,137 1,768,999 175,162

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 4,688,673 (456,194) 688,059 (1,468,504) (52,967) Other Financing Sources (uses):

Proceeds from leases
Transfers in (Note 4) 548,854 1,441,101 3,340,000
Transfers (out) (Note 4) (4,529,037) (800,918)
Total Other Financing Sources (uses) (4,529,037) (252,064) 1,441,101 3,340,000 Net change in fund balances 159,636 (456,194) 435,995 (27,403) 3,287,033 BEGINNING FUND BALANCES 13,758,357 1,006,313 2,050,147 313,171 1,278,169 ENDING FUND BALANCES $13,917,993 $550,119 $2,486,142 $285,768 $4,565,202 See accompanying notes to financial statements
Major Funds
28

Other Total
Governmental Governmental
Funds Funds
$188,780 $17,236,339
300,138
1,569,963
524,932 524,932
548,006 629,083
274,549
974,993
2,696,853
48,560 566,607
386,747
1,310,278 25,160,204
3,327,227
935,145
1,171,571
8,815,919
23,047 2,856,731
243,137
491,781 2,754,086
727,473
134,398
514,828 20,965,687
795,450 4,194,517
5,329,955
(5,329,955)
795,450 4,194,517
3,263,709 21,669,866
$4,059,159 $25,864,383
29

TOWN OF ATHERTON
Reconciliation of the

NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS
with the

STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2023
The schedule below reconciles the Net Changes in Fund Balances reported on the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balance, which measures only changes in current assets, current liabilities and current deferred outflows/inflows of resources on the modified accrual basis, with the Change in Net Position of Governmental Activities reported in the Statement of Activities, which is prepared on the full accrual basis.

NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS $4,194,517 Amounts reported for governmental activities in the Statement of Activities are different because of the following:

CAPITAL ASSETS TRANSACTIONS
Governmental Funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is capitalized and allocated over their estimated useful lives and reported as depreciation expense.

The capitalized expenditures are therefore added back to fund balance 1,961,358 Depreciation expense is deducted from the fund balance (2,220,520)

ACCRUAL OF NON-CURRENT ITEMS
The amounts below included in the Statement of Activities do not provide or (require) the use of current financial resources and therefore are not reported as revenue or expenditures in governmental funds (net change):

Principal payments 1,040,889
Net OPEB liabilities and OPEB-related deferred outflows/inflows of resources 1,398,519 Net pension liabilities and pension-related deferred outflows/inflows of resources 182,548

ALLOCATION OF INTERNAL SERVICE FUND ACTIVITY
Internal Service Funds are used by management to charge the costs of certain activities such as equipment acquisition, maintenance, and insurance to individual funds.

The portion of the net revenue (expense) of these Internal Service Funds arising out of their transactions with governmental funds is reported with governmental activities, because they service those activities.

Change in Net Position - All Internal Service Funds 546,965 CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES $7,104,276 See accompanying notes to financial statements
30

TOWN OF ATHERTON

GENERAL FUND

STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2023
Variance with
Budgeted Amounts Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Property taxes $15,874,178 $15,874,178 $16,116,493 $242,315 Sales taxes 295,000 295,000 300,138 5,138
Other taxes 1,768,980 1,768,980 1,569,963 (199,017)
Permits and licenses 268,000 268,000 269,739 1,739
Fines and forfeitures 127,000 127,000 974,993 847,993
From other governmental agencies 83,000 83,000 31,145 (51,855) Service charges 3,074,140 3,133,040 2,696,853 (436,187) Use of money and property 295,008 295,608 450,603 154,995 Other 113,400 113,400 78,747 (34,653)
Total Revenues 21,898,706 21,958,206 22,488,674 530,468 EXPENDITURES:

Current:

General government
City council 61,513 56,513 56,531 (18)
Administration 1,011,073 1,377,746 1,359,912 17,834
City attorney 310,000 310,000 282,725 27,275
Finance 895,096 895,096 842,676 52,420
Non-departmental 743,468 786,468 784,183 2,285
General government total 3,021,150 3,425,823 3,326,027 99,796 Planning 611,471 951,471 935,145 16,326
Building 1,452,283 1,521,033 1,171,571 349,462
Public works 2,984,236 3,115,546 2,314,415 801,131
Police 9,017,552 9,243,651 8,815,919 427,732
Capital outlay 736,457 743,689 373,853 369,836
Debt Service 863,071 863,071 863,071
Total Expenditures 18,686,220 19,864,284 17,800,001 2,064,283

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 3,212,486 2,093,922 4,688,673 2,594,751

OTHER FINANCING SOURCES USES
Proceeds from leases
Transfers (out) (Note 4) (3,793,135) (4,529,037) (735,902) NET CHANGE IN FUND BALANCE $3,212,486 ($1,699,213) 159,636 $1,858,849 BEGINNING FUND BALANCES 13,758,357
ENDING FUND BALANCES $13,917,993
See accompanying notes to financial statements
31

TOWN OF ATHERTON

SPECIAL TAX SPECIAL REVENUE FUND

STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2023
Variance with
Budgeted Amounts Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Use of money and property $7,366 $7,366
Total Revenues 7,366 7,366
EXPENDITURES:

Current:

Public works $245,000 $652,970 443,579 209,391
Capital outlay 250,000 269,945 19,981 249,964
Total Expenditures 495,000 922,915 463,560 459,355

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (495,000) (922,915) (456,194) 466,721 Net change in fund balance ($495,000) ($922,915) (456,194) $466,721 Fund Balance, beginning of year 1,006,313
Fund Balance, end of year $550,119
See accompanying notes to financial statements
32

TOWN OF ATHERTON

LIBRARY SPECIAL REVENUE FUND

STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2023
Variance with
Budgeted Amounts Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Property taxes $249,000 $249,000 $931,066 $682,066
Use of money and property 25,000 25,000 130 (24,870)
Total Revenues 274,000 274,000 931,196 657,196
EXPENDITURES:

Current:

Library Maintenance 248,909 248,909 243,137 5,772
Total Expenditures 248,909 248,909 243,137 5,772

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 25,091 25,091 688,059 662,968

OTHER FINANCING SOURCES (USES)
Transfers in (Note 4) 548,854 548,854
Transfers (out) (Note 4) (300,000) (300,000) (800,918) (500,918) Total Other Financing Sources (Uses) (300,000) (300,000) (252,064) 47,936 NET CHANGES IN FUND BALANCE ($274,909) ($274,909) 435,995 $710,904 BEGINNING FUND BALANCE 2,050,147
ENDING FUND BALANCE $2,486,142
See accompanying notes to financial statements
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PROPRIETARY FUNDS

INTERNAL SERVICE FUNDS
Internal Service Funds account for special activities and services performed by a designated Town department on a cost reimbursement basis.

The concept of major funds does not extend to internal service funds because they do not do business with outside parties. For the Statement of Activities, the net revenue or expenses of the internal service fund is eliminated by netting them against the operations of the other Town departments which generated them.

The remaining balance sheet items are consolidated with these same funds in the Statement of Net Position. 35

TOWN OF ATHERTON

PROPRIETARY FUND

STATEMENT OF NET POSITION
JUNE 30, 2023
Governmental
Activities -
Internal Service
Funds
ASSETS
Current assets
Cash and investments (Note 3) $5,386,795
Total current assets 5,386,795
Noncurrent Assets:

Capital assets (Note 5):

Depreciable 1,861,066
Less accumulated depreciation (1,503,389)
Total capital assets 357,677
Total noncurrent assets 357,677
Total Assets 5,744,472

LIABILITIES
Current liabilities:

Accounts payable 7,426
Compensated absences (Note 1G) 613,272
Claims payable (Note 9) 62,590
Total current liabilities 683,288
Non-current liabilities:

Compensated absences (Note 1G) 483,101
Total noncurrent liabilities 483,101
Total Liabilities 1,166,389
NET POSITION (Note 6):

Net investment in capital assets 357,677
Unrestricted 4,220,406
Total Net Position $4,578,083
See accompanying notes to financial statements
36

TOWN OF ATHERTON

PROPRIETARY FUND

STATEMENT OF REVENUES, EXPENSES

AND CHANGES IN FUND NET POSITION
FOR THE YEAR ENDED JUNE 30, 2023
Governmental
ActivitiesInternal Service
Funds

OPERATING REVENUES
Charges for services $2,217,859
Total Operating Revenues 2,217,859

OPERATING EXPENSES
Insurance 789,962
OPEB expense 335,220
Employee benefits earned 317,876
Depreciation 156,307
Supplies and maintenance 136,944
Total Operating Expenses 1,736,309
Operating Income (Loss) 481,550

NONOPERATING REVENUES (EXPENSES)
Interest income 65,415
Total Nonoperating Revenues 65,415
Change in net position 546,965
BEGINNING NET POSITION 4,031,118
ENDING NET POSITION $4,578,083
See accompanying notes to financial statements
37

TOWN OF ATHERTON

PROPRIETARY FUND

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2023
Governmental
ActivitiesInternal Service
Funds

CASH FLOWS FROM OPERATING ACTIVITIES
Interdepartmental charges $2,225,909
Payments to employees for benefits (523,441)
Payments to suppliers (960,131)
Cash Flows from Operating Activities 742,337

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Acquisition of capital assets, net (140,108)
Cash Flow from Capital and Related Financing Activities (140,108)

CASH FLOWS FORM INVESTING ACTIVITIES
Interest received 65,415
Cash Flow from Investing Activities 65,415
Net Cash Flows 667,644
Cash and investments at beginning of period 4,719,151
Cash and investment at end of period $5,386,795
Reconciliation of Operating Income to Cash Flows
from Operating Activities
Operating income $481,550
Adjustments to reconcile operating income to cash flows from operating activities:

Depreciation 156,307
Changes in assets and liabilities:

Accounts receivable 8,050
Accounts payable 4,185
Compensated absences 129,655
Cash Flows from Operating Activities $742,337
See accompanying notes to financial statements
38

FIDUCIARY FUNDS

FIDUCIARY FUNDS
Town has only one type of Fiduciary Funds: Custodial Funds The Custodial Funds are used to account for monies held by the Town in a custodial capacity are as follows:

H-P PARK IMPROVEMENT FUND donated for Holbrook-Palmer Park Foundation TREE COMMITTEE Fund maintained for the Atherton Tree Committee 39

TOWN OF ATHERTON

FIDUCIARY FUNDS

STATEMENT OF NET POSITION
JUNE 30, 2023
Custodial Funds
H-P Park Tree
Improvement Fund Committee Total
ASSETS
Cash and investments (Note 3) $6,637 $26,765 $33,402
Total Assets 6,637 26,765 33,402

NET POSITION
Restricted for organizations 6,637 26,765 33,402
Total Net Position $6,637 $26,765 $33,402
See accompanying notes to financial statements
40

TOWN OF ATHERTON

FIDUCIARY FUND

STATEMENT OF CHANGES IN FIDUCIARY

NET POSITION
FOR THE YEAR ENDED JUNE 30, 2023
Custodial Funds
H-P Park Tree
Improvement Fund Committee Total

ADDITIONS
Interest income $80 $325 $405
Total additions 80 325 405

DEDUCTIONS
Distributions
Total deductions
Change in net position 80 325 405
BEGINNING NET POSITION 6,557 26,440 32,997
ENDING NET POSITION $6,637 $26,765 $33,402
See accompanying notes to financial statements
41

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TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Town of Atherton (the Town) was incorporated as a general law City in 1923 and is situated between the cities of Menlo Park and Redwood City on the Peninsula of the San Francisco Bay Area. The Town operates under the Mayor-Council-Manager form of government. There are five Council Members who serve overlapping terms of four years, and the Council, in turn, elects one of the Council Members to serve as Mayor for one year. The Town provides the following services: public safety (police), public works and streets, park, building and planning, and general administration services.

The financial statements and accounting policies of the Town conform with generally accepted accounting principles applicable to governments. The Government Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles.

Significant accounting policies are summarized below:

A. Reporting Entity
The accompanying basic financial statements present the financial activity of the Town of Atherton, which is the primary government presented, along with the financial activities of its blended component unit Atherton Channel District, which is financially accountable, controlled by and dependent on the Town. Although it is separate legal entity, the blended component unit is in substance part of the Town’s operations and is therefore reported as an integral part of the Town’s financial statements.

The Atherton Channel District was established to assist in the maintenance and rehabilitation of the areas within the Town determined to be in the flood plain of the local stream. The District has all accounting and administrative functions performed by Town staff and the District receives property taxes to finance operations. The financial activities of the District have been included in the Atherton Channel District Capital Projects Fund in the accompanying basic financial statements.

B. Basis of Presentation
The Town’s Basic Financial Statements are prepared in conformity with accounting principles generally accepted in the United States of America. The Government Accounting Standards Board is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities in the U.S.A.

These Standards require that the financial statements described below be presented.

Government-wide Statements: The Statement of Net Position and the Statement of Activities display information about the primary government (the Town). These statements include the financial activities of the overall Town government, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities, except where interfund services have been received or provided. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions. 43

TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) B. Basis of Presentation (Continued)
The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the Town’s governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Program revenues include (a) charges paid by the recipients of goods or services offered by the programs, (b) grants and contributions that are restricted to meeting the operational needs of a particular program and (c) fees, grants and contributions that are restricted to financing the acquisition or construction of capital assets. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.

Fund Financial Statements: The fund financial statements provide information about the Town's funds, including fiduciary funds and blended component units. Separate statements for each fund category—governmental, proprietary, and fiduciary—are presented. The emphasis of fund financial statements is on major individual governmental and enterprise funds, each of which is displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds.

Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as investment earnings, result from nonexchange transactions or ancillary activities.

C. Major Funds
Major funds are defined as funds that have either assets and deferred outflows of resources, liabilities and deferred inflows of resources, revenues or expenditures/expenses equal to ten percent of their fund-type total and five percent of the grand total. The General Fund is always a major fund. The Town may also select other funds it believes should be presented as major funds.

The Town reported the following major governmental funds in the accompanying financial statements:

General Fund – Accounts for all the general revenues and financial resources of the Town not specifically levied or collected for the other Town funds, as well as the related expenditures.

Special Tax Special Revenue Fund – Accounts for parcel tax assessments received from property owners to be used for the maintenance of streets and drainage, and police services.

The tax assessment is no longer collected. Fiscal year 2017-18 was the last year of collection.

Residual funds remain.

Library Special Revenue Fund – Accounts for property tax funds dedicated to the Town’s library operations.

Facilities Construction Capital Projects Fund – Accounts for the funds dedicated to facilities construction.

Capital Improvement Capital Projects Fund – Accounts for capital improvement construction costs and financing sources.
44

TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Major Funds (Continued)
The Town also reports the following fund types:

Internal Service Funds - Accounts for equipment replacement, workers’ compensation insurance, general liability and employee benefits provided to other departments on a cost reimbursement basis.

Fiduciary Funds – Custodial Funds account for assets held by the Town as an agent for Atherton Tree Committee and Holbrook-Palmer Park Foundation. The financial activities of these funds are excluded from the Entity-wide financial statements, but are presented in separate Fiduciary Fund financial statements.

D. Basis of Accounting
The government-wide, proprietary, and fiduciary fund financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place.

Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The Town considers all revenues reported in the governmental funds to be available if the revenues are collected within sixty days after year-end. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. Governmental capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of governmental long-term debt and acquisitions under capital leases are reported as other financing sources.

Those revenues susceptible to accrual are sales taxes, gas taxes, charges for services, and interest revenue. Fines, licenses and permits are not susceptible to accrual because they are not measurable until received in cash.

Non-exchange transactions, in which the Town gives or receives value without directly receiving or giving equal value in exchange, include taxes, grants, entitlements, and donations. On the accrual basis, revenue from taxes is recognized in the fiscal year for which the taxes are levied or assessed.

Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.

The Town may fund programs with a combination of cost-reimbursement grants, categorical block grants, and general revenues. Thus, both restricted and unrestricted net position may be available to finance program expenditures. The Town’s policy is to first apply restricted grant resources to such programs, followed by general revenues if necessary.

Certain indirect costs are included in program expenses reported for individual functions and activities.
45

TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) E. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position or balance sheet reports a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position or fund balance that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then.

In addition to liabilities, the statement of financial position or balance sheet reports a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position or fund balance that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time.

F. Property Tax
Revenue is recognized in the period for which the tax and assessment is levied. The County of San Mateo levies, bills and collects property taxes and sewer charges for the Town; the County remits the entire amount levied and handles all delinquencies, retaining interest and penalties. Secured and unsecured property taxes are levied on January 1.

Secured property tax is due in two installments, on November 1 and February 1, and becomes a lien on those dates. It becomes delinquent on December 10 and April 10, respectively. Unsecured property tax is due on January 1 and becomes delinquent on August 31.

The term “unsecured” refers to taxes not secured by real property. These taxes are liens on the person or company named on the tax bill. Property tax revenues are recognized by the Town in the fiscal year they are assessed provided they become available as defined above.

San Mateo County distributes property taxes to jurisdictions according to the “alternate method of property tax distribution” known as the Teeter Plan. Under this plan, the County remits 100% of the levied taxes to the appropriate jurisdictions by June 30 each year, pursuing delinquencies and keeping related late penalties to cover their costs.
46

TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) G. Compensated Absences
Compensated absences comprise accrued compensated time-off, vacation and holiday pay for all regular employees; vacation and holiday pay for management employees. The Town’s liability for compensated absences is recorded in Governmental Activities. The liability for compensated absences is determined annually. For all governmental funds, amounts expected to be permanently liquidated (matured due to termination) are recorded as fund liabilities; the long-term portion is recorded in the Statement of Net Position.

The changes of the compensated absences during fiscal year 2023 were as follows:

Beginning Balance $966,718
Additions 821,242
Payments (691,587)
Ending Balance $1,096,373
Current Portion $613,272
The Long-term portion of governmental activities compensated absences is liquidated primarily by the Employee Benefits Fund followed by the General Fund.

H. Estimates and Assumptions
The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

I. Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Town categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The fair value hierarchy categorizes the inputs to valuation techniques used to measure fair value into three levels based on the extent to which inputs used in measuring fair value are observable in the market.

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 inputs are inputs – other than quoted prices included within level 1 – that are observable for an asset or liability, either directly or indirectly.

Level 3 inputs are unobservable inputs for an asset or liability.

If the fair value of an asset or liability is measured using inputs from more than one level of the fair value hierarchy, the measurement is considered to be based on the lowest priority level input that is significant to the entire measurement.
47

TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) J. OPEB Liabilities, OPEB Expenses and Deferred Outflows/Inflows of Resources Related to OPEB
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the Town’s OPEB Plan and additions to/deductions from the OPEB Plan’s fiduciary net position have been determined on the same basis as they are reported by PARS Trust. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.

K. Leases
As clarified by the Government Accounting Standards Board (GASB) Statement No. 87, a lease is defined as a contract that conveys control of the right to use another entity’s nonfinancial asset (the underlying asset) as specified in the contract for a period of time in an exchange or exchange-like transaction. Examples of nonfinancial assets include buildings, land, vehicles, and equipment. The Town recognizes lease receivables or liabilities with an initial, individual value of $50,000 or more, based on the future lease payments remaining at the start of the lease.

L. Subscription-Based Information Technology Arrangements (SBITAs) Accounting As clarified by the Government Accounting Standards Board (GASB) Statement No. 96, a Subscription-Based Information Technology Arrangement (SBITA) is a contract that conveys control of the right to use another party’s (a SBITA vendor’s) IT software, alone or in combination with tangible capital assets (the underlying IT assets), as specified in the contract for a period of time in an exchange or exchange-like transaction.

At the commencement of a SBITA, the Town initially measures the subscription liability at the present value of payments expected to be made during the contract term. Subsequently, the subscription liability is reduced by the principal portion of payments made. The subscription asset is initially measured as the initial amount of the subscription liability, adjusted for payments made at or before the SBITA commencement date, plus certain initial direct costs. Subsequently, the subscription asset is amortized on a straight‐line basis over the shorter of the subscription term or the useful life of the underlying IT assets. The Town recognizes SBITA liabilities with an initial, individual value of $50,000 or more, based on the future SBITA payments remaining at the start of the contract.

Key estimates and judgments related to SBITAs include how the Town determines (1) the discount rate it uses to discount the expected subscription payments to present value, (2) subscription term, and (3) subscription payments as follows:
• The Town uses the interest rate charged by the IT vendor as the discount rate. When the interest rate charged by the IT vendor is not provided, the Town uses its estimated incremental borrowing rate as the discount rate for subscription liabilities. • The subscription term includes the noncancellable period of the subscription. • Subscription payments included in the measurement of the subscription liability are composed of fixed payments and purchase option price that the Town is reasonably certain to exercise.
48

TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) L. Subscription-Based Information Technology Arrangements (SBITAs) Accounting (Continued) The Town monitors changes in circumstances that would require a remeasurement of its subscription and will remeasure the subscription asset and liability if certain changes occur that are expected to significantly affect the amount of the subscription liability.

Subscription assets are reported with other capital assets and subscription liabilities are reported with liabilities on the statement of net position.

M. Implementation of Governmental Accounting Standards Board (GASB) Pronouncements The following Governmental Accounting Standards Board (GASB) pronouncement was effective in fiscal year 2023:

GASB 96 – Subscription-Based Information Technology Arrangements (SBITAs) This Statement provides guidance on the accounting and financial reporting for subscription-based information technology arrangements (SBITAs) for government end users (governments). This Statement (1) defines a SBITA; (2) establishes that a SBITA results in a right-to-use subscription asset—an intangible asset—and a corresponding subscription liability; (3) provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA. To the extent relevant, the standards for SBITAs are based on the standards established in Statement No. 87, Leases, as amended.

The requirements of this Statement are effective for reporting periods beginning after June 15, 2022, and all reporting periods thereafter. The Town has no SBITAs subject to GASB#96 for the fiscal year 2023.

NOTE 2 – BUDGETS AND BUDGETARY ACCOUNTING
A. Budgets and Budgetary Accounting
The Town follows these procedures in establishing the budgetary data reflected in the financial statements:
• By June 30, the Town Manager submits to the Town Council a proposed operating and capital budget for the year commencing July 1. The operating and capital budget includes proposed expenditures and the means of financing them. Continuing appropriations are rebudgeted by the Town Council as part of the adoption of the subsequent year’s budget. • Public hearings are conducted to obtain taxpayer comments. • The budget is legally enacted through passage of resolution during a Town Council meeting in the month of June.

49

TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 2 – BUDGETS AND BUDGETARY ACCOUNTING (Continued)
A. Budgets and Budgetary Accounting (Continued)
• The Town Manager is authorized to transfer budget appropriations within the same department in conformance with the adopted policies set by the Town Council. All other transfers must be approved by the Town Council. Any revisions that alter the total expenditures of any department must be approved by the Town Council. Expenditures are budgeted at, and may not legally exceed, the department level. Budgeted amounts shown are as originally adopted, or as amended by the Town Council during the year. • Formal budgeting is employed as a management control device during the year for the general and certain special revenue funds.
• Budgets for the general and certain special revenue are adopted on a basis consistent with generally accepted accounting principles (GAAP).
• Budgets for capital projects are adopted on a project-life basis. • The Town does not budget for the Storm Drainage Capital Project Fund.

B. Expenditures in Excess of Budget
The funds below incurred expenditures in excess of their budgets on the departmental level in the amounts below for the year ended June 30, 2023:

Amount
General Fund
City Council ($18)
Nonmajor Special Revenue Funds:

County Measure A
Public Works (16,580)
Gas Tax
Public Works (5,308)
Refuse Rate Stabilization
Public Works (285)
Fund Name
NOTE 3 – CASH AND INVESTMENTS
The Town’s dependence on property tax receipts requires it to maintain significant cash reserves to finance operations during the remainder of the year. The Town receives property tax in November (5%), December (45%), March (5%), April (35%), May (5%) and June (5%). The Town pools cash from all sources and all funds except Cash with Fiscal Agents so that it can be invested at the maximum yield, consistent with safety and liquidity, while individual funds can make expenditures at any time.

50

TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 3 – CASH AND INVESTMENTS (Continued)
A. Policies
California Law requires banks and savings and loan institutions to pledge government securities with a market value of 110% of the Town’s cash on deposit or first trust deed mortgage notes with a value of 150% of the Town’s cash on deposit as collateral for these deposits. Under California Law, this collateral is held in an investment pool by an independent financial institution in the Town’s name and places the Town ahead of general creditors of the institution pledging the collateral.

The Town’s investments are carried at fair value, as required by generally accepted accounting principles. The Town adjusts the carrying value of its investments to reflect their fair value at each fiscal year end, and it includes the effects of these adjustments in income for that fiscal year. In the Town’s case, fair value equals fair market value, since all of the Town’s investments are readily marketable.

B. Classification
Cash and investments are classified in the financial statements as shown below.

Statement of Net Position
Cash and investments available for operations $36,472,389 Fiduciary Funds
Cash and investments available for operations 33,402
Total Cash and Investments $36,505,791
Cash and investments as of June 30, 2023 consist of the following:

Cash on hand $875
Cash in bank 3,396,276
Investments 33,108,640
Total Cash and Investment $36,505,791
Cash and investments are used in preparing the Proprietary Fund statement of cash flows since those funds participate in the Town-wide cash and investment pool. The fund equity in the pool is in substance a demand deposit which may be drawn down at any time.

51

TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 3 – CASH AND INVESTMENTS (Continued)
C. Investments Authorized by the California Government Code and the Town’s Investment Policy The Town’s Investment Policy and the California Government Code allow the Town to invest in the following provided the credit ratings of the issuers are acceptable to the Town; and approved percentages and maturities are not exceeded. The table below also identifies certain provisions of the California Government Code or the Town’s Investment Policy where it is more restrictive:

Authorized Investment Type
Maximum
Maturity
Minimum
Credit Quality
Maximum Percentage
of Portfolio
Maximum Investment
in One Issuer
U.S. Treasury Obligations 5 years N/A No Limit No Limit U.S. Agency Securities 5 years N/A No Limit 25%
Repurchase Agreements 30 days A / A-1 No Limit No Limit Medium-Term Corporate Notes 5 years A 30% 5%
Commercial Paper 270 days A / A-1 25% 5%
State Local Agency Investment Fund N/A N/A 50% $75M per account Money Market Mutual Funds N/A AAAm 20% No Limit
Negotiable and Non-Negotiable
Certificate of Deposits 5 years A-1+ 10% $250,000
D. Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Normally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The Town generally manages its interest rate risk by holding investments to maturity.

Information about the sensitivity of the fair values of the Town’s investments (including investments eld by bond trustees) to market interest rate fluctuations is provided by the following table that shows the distribution of the Town’s investments by maturity or earliest call date:

Investment Type
12 Months
or less
13 to 24
Months
25 to 60
Months Total
U.S. Treasuries $3,219,391 $335,781 $2,261,855 $5,817,027 U.S. Agency Securities 3,964,156 1,414,414 5,378,570
Corporate Notes 3,488,992 1,035,751 4,524,743
California Local Agency Investment Fund 14,888,451 14,888,451 San Mateo County Investment Pool 2,487,040 2,487,040
Money Market Mutual Fund 12,809 12,809
Total Investments $28,060,839 $335,781 $4,712,020 33,108,640 Cash in banks 3,396,276
Petty cash 875
Total Cash 3,397,151
Total Cash and Investments $36,505,791

52

TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 3 – CASH AND INVESTMENTS (Continued)
E. Credit Risk
Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization (NRSRO). The Standard and Poor’s investment ratings as of June 30, 2023 are as follows:

Investment Type AAAm AA+/AA/AA- A+/A/A- Not Rated Total U.S. Treasuries $5,817,027 $5,817,027
U.S. Agency Securities 5,378,570 5,378,570
Corporate Notes 585,958 $3,938,785 4,524,743
California Local Agency Investment Fund $14,888,451 14,888,451 San Mateo County Investment Pool 2,487,040 2,487,040
Money Market Mutual Fund $12,809 12,809
Total Investments $12,809 $11,781,555 $3,938,785 $17,375,491 $33,108,640 F. Concentration of Credit Risk

At June 30, 2023, the Town had one investment in the securities of any individual issuer, other than U. S. Treasury securities, mutual funds, and external investment funds, that represented 5% or more of total Entity-wide investments and General Fund investments. The six securities are from the Federal Home Loan Mortgage Association in the amount of $2,904,371.

G. Local Agency Investment Fund
The Town is a participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The Town reports its investment in LAIF at the fair value amount provided by LAIF, which is the same as the value of the pool share. The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. Included in LAIF’s investment portfolio are collateralized mortgage obligations, mortgage-backed securities, other asset-backed securities, loans to certain state funds, and floating rate securities issued by federal agencies, government-sponsored enterprises, United States Treasury Notes and Bills, and corporation. At June 30, 2023, these investments matured in an average of 260 days.

H. San Mateo County Investment Pool
The Town’s investment held under San Mateo Library Donor Trust Fund was invested by the San Mateo Library (Library) in the San Mateo County Investment Fund (SMCIF) that is regulated by California Government Code Section 53600 under the oversight of the treasurer of the County of San Mateo. The Town reports its investment in SMCIF at the fair value amount provided by the Library.

The balance available for withdrawal is based on the accounting records maintained by SMCIF, which are recorded on an amortized cost basis. Included in SMCIF’s investment portfolio are U.S.

Treasury Notes, obligations issued by agencies of the U.S. Government, LAIF, corporate notes, commercial paper, collateralized mortgage obligations, mortgage-backed securities, other asset-backed securities, and floating rate securities issued by federal agencies, government-sponsored enterprises, and corporations. The Town reports its investments in SMCIF at the fair value amounts provided by SMCIF, which is the same as the value of the pool share. During fiscal year 2023, SMCIF released the funds to the Town for use towards the construction of the library and the balance is $2,487,040 as of June 30, 2023.
53

TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 3 – CASH AND INVESTMENTS (Continued)
I. Fair Value Hierarchy
The Town categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure fair value of the assets. Level 1 inputs are quoted prices in an active market for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs.

The following is a summary of the fair value hierarchy of the fair value of investments of the Town as of June 30, 2023:

Level 1 Level 2 Total
Investments by Fair Value Level:

U.S. Treasuries $5,817,027 $5,817,027
U.S. Agency Securities $5,378,570 5,378,570
Corporate Notes 4,524,743 4,524,743
Subtotal $5,817,027 $9,903,313 15,720,340
Investments Measured at Amortized Cost:

Money Market Mutual Funds 12,809
Investments Exempt from Fair Value Hierarchy
California Local Agency Investment Fund 14,888,451
San Mateo County Investment Pool 2,487,040
Total Investments $33,108,640
Investment Type
U.S. Treasury Notes, classified in Level 1 of the fair value hierarchy, are valued using quoted prices in active markets. U.S. Agency Securities and Corporate Notes, classified in Level 2 of the fair value hierarchy, are valued using quoted prices for a non-active market portfolio at fiscal year-end.

These prices are obtained from various pricing sources by our custodian bank. Fair value is defined as the quoted market value on the last trading day of the period. Money market funds were reported at amortized cost.
54

TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 4 – INTERFUND TRANSACTIONS
A. Transfers Between Funds
With Town Council approval, resources may be transferred from one Town fund to another. The purpose of the majority of transfers is to reimburse a fund, which has made an expenditure on behalf of another fund. Less often, a transfer may be made to open or close a fund.

Transfers between funds during the fiscal year ended June 30, 2023 were as follows:

Amount
Fund Receiving Transfer Fund Making Transfer Transferred Library Special Revenue Fund General Fund $548,854 (A)
Facilities Construction Capital Projects Fund General Fund 640,183 (A) Library Special Revenue Fund 800,918 (A)
Capital Improvement Capital Projects Fund General Fund 3,340,000 (A) $5,329,955
(A) Transfer used to fund capital projects
NOTE 5 – CAPITAL ASSETS
All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Contributed capital assets are valued at their estimated acquisition value on the date contributed.

The Town has recorded all its public domain (infrastructure) capital assets, which include streets and roads, curbs and gutters, traffic control devices, drainage systems and street lighting systems.

All capital assets with limited useful lives are depreciated over their estimated useful lives. The purpose of depreciation is to spread the cost of capital assets equitably over the life of these assets. The amount charged to depreciation expense each year represents that year’s pro rata share of the cost of capital assets.

The Town has set the capitalization threshold at $5,000 for capital assets, except for infrastructure at $100,000, and a half year of depreciation is recorded in the year of acquisition. Depreciation is provided using the straight line method which means the cost of the asset is divided by its expected useful life in years and the result is charged to expense each year until the asset is fully depreciated. The Town has assigned the useful lives listed below to capital assets:

Buildings 40 years
Other improvements 20 years
Computer Equipment and Software 3 years
Furniture and fixtures 10 years
Vehicles 5 to 10 years
Machinery and Equipment 5 to 20 years
Infrastructure 20 to 50 years
Major outlays for capital assets and improvements are capitalized as projects are constructed. 55

TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 5 – CAPITAL ASSETS (Continued)
A. Current Year Capital Asset Activities

Balance Balance
Governmental Funds July 1, 2022 Additions Retirement Transfers June 30, 2023 Capital assets not being depreciated:

Land $690,884 $690,884
Construction in progress 65,224,734 $1,961,358 ($65,837,694) 1,348,398 Total non-depreciable capital assets 65,915,618 1,961,358 (65,837,694) 2,039,282 Capital assets being depreciated:

Buildings 818,762 ($14,373) 64,864,088 65,668,477
Other improvements 1,125,668 1,125,668
Computer equipment and software 338,597 384,769 723,366 Furniture and fixtures 34,798 458,795 493,593
Vehicles 23,434 23,434
Machinery and equipment 439,081 130,042 569,123
Infrastructure 62,992,555 62,992,555
Total depreciable capital assets 65,772,895 (14,373) 65,837,694 131,596,216 Less accumulated depreciation for:

Buildings 699,368 828,865 (14,373) 1,513,860
Other improvements 958,546 27,487 986,033
Computer equipment and software 338,597 19,238 357,835
Furniture and fixture 34,798 22,940 57,738
Vehicles 23,434 23,434
Machinery and equipment 405,583 12,390 417,973
Infrastructure 44,026,256 1,309,600 45,335,856
Total accumulated depreciation 46,486,582 2,220,520 (14,373) 48,692,729 Depreciable capital assets, net 19,286,313 (2,220,520) 65,837,694 82,903,487 General capital assets, net 85,201,931 (259,162) 84,942,769 Internal Service Funds
Depreciable capital assets:

Vehicles 1,269,160 140,108 1,409,268
Computer equipment 327,621 327,621
Other equipment 124,177 124,177
Total depreciable capital assets 1,720,958 140,108 1,861,066 Less: accumulated depreciation for
Vehicles 902,811 148,782 1,051,593
Computer equipment 323,442 4,178 327,620
Other equipment 120,829 3,347 124,176
Total accumulated depreciation 1,347,082 156,307 1,503,389 Internal Service Funds capital assets, net 373,876 (16,199) 357,677 Total governmental activities capital assets, net $85,575,807 ($275,361) $85,300,446

56

TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 5 – CAPITAL ASSETS (Continued)
B. Capital Asset Contributions
Some capital assets may be acquired using federal and State grant funds, or they may be contributed by developers or other governments. These contributions are accounted for as revenues at the time the capital assets are contributed.

C. Depreciation Allocation
Depreciation expense is charged to functions and programs based on their usage of the related assets. The amounts allocated to each function or programs are as follows:

Public works $2,200,144
Police 19,868
Building 508
Governmental activities subtotal 2,220,520
Internal Service Fund 156,307
Total $2,376,827
NOTE 6 – FUND BALANCES AND NET POSITION
A. Net Position
Net Position is the excess of all the Town’s assets and deferred outflows over all its liabilities and deferred inflows, regardless of fund. Net Position is divided into three captions. These captions apply only to Net Position, which is determined only at the Government-wide level, and are described below:

Net Investment in Capital Assets describes the portion of Net Position which is represented by the current net book value of the Town’s capital assets, less the outstanding balance of any debt issued to finance these assets.

Restricted describes the portion of Net Position which is restricted as to use by the terms and conditions of agreements with outside parties, governmental regulations, laws, or other restrictions which the Town cannot unilaterally alter. These principally include developer fees received for use on capital projects, debt service requirements, and Federal and State grant funds.

Unrestricted describes the portion of Net Position which is not restricted to use.

57

TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 6 – FUND BALANCES AND NET POSITIONS (Continued)
B. Fund Balances
Governmental fund balances represent the net current assets of each fund. Net current assets generally represent a fund’s cash and receivables, less its liabilities.

The Town’s fund balances are classified based on spending constraints imposed on the use of resources. For programs with multiple funding sources, the Town prioritizes and expends funds in the following order: Restricted, Committed, Assigned, and Unassigned. Each category in the following hierarchy is ranked according to the degree of spending constraint:

Nonspendables represents balances set aside to indicate items do not represent available, spendable resources even though they are a component of assets. Fund balances required to be maintained intact, such as permanent funds, and assets not expected to be converted to cash, such as prepaids, notes receivable, and land held for redevelopment, are included. However, if proceeds realized from the sale or collection of nonspendable assets are restricted, committed or assigned, then nonspendable amounts are required to be presented as a component of the applicable category.

Restricted fund balances have external restrictions imposed by creditors, grantors, contributors, laws, regulations, or enabling legislation, which require the resources to be used only for a specific purpose. Nonspendable amounts subject to restrictions are included along with spendable resources.

Committed fund balances have constraints imposed by formal action of the Town Council, which may be altered only by formal action of the Town Council. Nonspendable amounts subject to Council commitments are included along with spendable resources.

Assigned fund balances are amounts constrained by the Town’s intent to be used for a specific purpose, but are neither restricted nor committed. Intent is expressed by the Town Council or its designee and may be changed at the discretion of the Town Council or its designee. This category includes nonspendables, when it is the Town’s intent to use proceeds or collections for a specific purpose, and residual fund balances, if any, of Special Revenue, Capital Projects and Debt Service Funds that have not been restricted or committed.

Unassigned fund balance represents residual amounts that have not been restricted, committed, or assigned. This includes the residual general fund balance and residual fund deficits, if any, of other governmental funds.

58

TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 6 – FUND BALANCES AND NET POSITIONS (Continued)
B. Fund Balances (Continued)
Detailed classifications of the Town’s Fund Balances, as of June 30, 2023, are below:

Major Major
Special Revenue Funds Capital Projects Funds Other
General Facilities Capital Governmental
Fund Special Tax Library Construction Improvement Funds Total Nonspendable:

Prepaids $46,093 $46,093
Total Nonspendable 46,093 46,093
Restricted for:

Street drainage and police services $550,119 550,119
Library operations $2,486,142 2,486,142
Measure A $1,289,407 1,289,407
Gas tax 350,814 350,814
Measure W 670,662 670,662
Measure M 214,049 214,049
Refuse Services 560,959 560,959
Supplemental Law Enforcement Services 185 185
Channel Drainage District 940,360 940,360
Total Restricted 550,119 2,486,142 4,026,436 7,062,697
Committed to:

Emergency disaster 2,670,000 2,670,000
Total Committed 2,670,000 2,670,000
Assigned to:

Tennis program 126,357 126,357
Tree committee 20,015 20,015
Capital projects $285,768 $4,565,202 32,723 4,883,693
Total Assigned 146,372 285,768 4,565,202 32,723 5,030,065 Unassigned 11,055,528 11,055,528
Total Unassigned 11,055,528 11,055,528
Total Fund Balances $13,917,993 $550,119 $2,486,142 $285,768 $4,565,202 $4,059,159 $25,864,383 C. General Fund Committed Fund Balance for Emergency Disaster The Town Council has committed to set aside 15 percent of the actual annual General Fund operating expenditures specifically for emergency contingencies defined as a state of Federal and/or State emergency or declaration of a local emergency as defined in Atherton’s Municipal Code Section 2.44.010.

D. General Fund Unassigned Fund Balance Policy
The Town Council established the General Fund unassigned fund balance policy such that in no circumstances shall the total General Fund unassigned fund balance be less than 20% of the actual annual operating expenditures.
59

TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 7 – PENSION PLAN
A. General Information about the Pension Plan
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Plan and additions to/deductions from the Plan’s fiduciary net position have been determined on the same basis as they are reported by the CalPERS Financial Office. For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.

Plan Description – All qualified permanent and probationary employees are eligible to participate in the Town’s separate Safety and Miscellaneous (all other) Employee Pension Rate Plans. The Town’s Safety and Miscellaneous Plans are part of the public agency cost-sharing multiple-employer defined benefit pension plan (PERF C), which is administered by CalPERS. PERF C consists of a miscellaneous pool and a safety pool (also referred to as “risk pools”), which are comprised of individual employer miscellaneous and safety rate plans, respectively. Individual employers may sponsor more than one miscellaneous and safety rate plan. The employer participates in one cost-sharing multiple-employer defined benefit pension plan regardless of the number of rate plans the employer sponsors. Benefit provisions under the Plan are established by State statute and Town resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

Benefits Provided – CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service.

The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement
Town’s labor contracts (MOU) require the Town to pay the employees’ contributions as well as employer’s portion, except for the sworn officers, who are responsible for 2% of 9% after the Town makes a 7% contribution for them. However, as of July 1, 2013, Miscellaneous Plan employees started to pay their own portion of the required employee contribution rate of 7%. The Town and the Atherton Police Officers Association (APOA) adopted a new MOU on October 1, 2013. Effective on January 1, 2014, the Town’s payment of the employee share of the mandatory member contribution for the CalPERS retirement benefit shall be 5%. Effective January 1, 2015, the Town’s payment of the employee share of the mandatory member contribution shall be reduced to 2.5%. Effective January 1, 2016, the Town shall cease paying any portion of the employees’ share and the employees shall pay 100% of the employee share of the mandatory member contribution, presently 9% for sworn and 7% for civilian.

60

TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 7 – PENSION PLAN (Continued)
A. General Information about the Pension Plan (Continued) During the fiscal year 2018-2019, the Town adopted amendments with CalPERS that allows sharing of additional employer costs passed to the employees. The Town implemented a cost sharing within the pension plans among Public Safety and Local Miscellaneous employees. This included Public Safety sworn staff picking up the employers CalPERS share of 3% and 1% for Miscellaneous employees. These are the maximum under CalPERS law for the passing on of costs of the employer’s share. These were amendment changes to the contract between the Board of Administration California Public Employees’ Retirement System and The Town as proposed changes in Section 20516 (Employees Sharing Additional Costs). Increase in employee contribution rates results in a respective decrease in employer contribution rates. The Plan’s provisions and benefits in effect at June 30, 2023, are summarized as follows:

Miscellaneous
Hire date
Prior to
January 1, 2013
On or after
January 1, 2013
Benefit formula 2% @ 55 2% @ 62
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50-67 or older 52-67 or older
Monthly benefits, as a % of eligible compensation 1.426% to 2.418% 1% to 2.5% Required employee contribution rates 7.00% 7.25%
Required employer contribution rates 11.06% 7.76%
Safety
Hire date
Prior to
January 1, 2013
On or after
January 1, 2013
Benefit formula 3% @ 50 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50-55 or older 50-57 or older
Monthly benefits, as a % of eligible compensation 3% 2% to 2.7% Required employee contribution rates 9% 13.75%
Required employer contribution rates 25.64% 13.66%
Beginning in fiscal year 2016, CalPERS collects employer contributions for the cost-sharing plan as a percentage of payroll for the normal cost portion as noted in the rates above and as a dollar amount for contributions toward the unfunded liability and side fund. The dollar amounts are billed on a monthly basis. The Town’s required contribution for the unfunded liability was $1,268,243 in fiscal year 2023.

61

TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 7 – PENSION PLAN (Continued)
A. General Information about the Pension Plan (Continued) Contributions – Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for the Plan are determined annually on an actuarial basis as of June 30 by CalPERS.

The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The Town is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions.

For the year ended June 30, 2023, the contributions to the Plan were as follows:

Miscellaneous
Miscellaneous
PEPRA Safety
Safety
PEPRA
Contributions - employer $579,764 $87,481 $1,056,584 $273,931 Contributions - employee 106,569 98,324 134,407 354,083 B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
As of June 30, 2023, the Town reported a net pension liability for its proportionate share of the net pension liability of the Plan as follows:

Proportionate Share
of Net Pension Liability
Miscellaneous - Classic & PEPRA $6,365,417
Safety - Classic & PEPRA 11,503,411
Total Net Pension Liability $17,868,828
The Town’s net pension liability for the Plan is measured as the proportionate share of the net pension liability. The net pension liability of the Plan is measured as of June 30, 2022, and the total pension liability for the Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2021 rolled forward to June 30, 2022 using standard update procedures. The Town’s proportion of the net pension liability was based on a projection of the Town’s long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. The Town’s proportionate shares of the net pension liability for the Plan as of June 30, 2021 and 2022 were as follows:

Miscellaneous Safety
Proportion - June 30, 2021 0.17367% 0.25479%
Proportion - June 30, 2022 0.13604% 0.16741%
Change - Increase (Decrease) -0.03763% -0.08738%
62

TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 7 – PENSION PLAN (Continued)
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
For the year ended June 30, 2023, the Town recognized pension expense of $1,815,212. At June 30, 2023, the Town reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Miscellaneous - Classic & PEPRA
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date $667,245 Differences between actual and expected experience 127,830 ($85,615) Changes in assumptions 652,270
Change in employer's proportion and differences between the employer’s contributions and the employer’s
proportionate share of contributions 32,945 (66,210)
Change in employer proportion (205,238)
Net differences between projected and actual earnings
on plan investments 1,165,975
Total $2,646,265 ($357,063)
Safety - Classic & PEPRA
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date $1,330,515 Differences between actual and expected experience 476,084 ($124,918) Changes in assumptions 1,159,892
Change in employer's proportion and differences between the employer’s contributions and the employer’s
proportionate share of contributions 3,048,986 (249,567) Change in employer proportion (3,888,474)
Net differences between projected and actual earnings
on plan investments 1,816,549
Total $7,832,026 ($4,262,959)
Grand total $10,478,291 ($4,620,022)

63

TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 7 – PENSION PLAN (Continued)
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
$1,997,760 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2023. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Miscellaneous Safety Total
Fiscal Year Ended Amortization Amortization Amortization June 30 Amount Amount Amount
2024 $400,663 $658,244 $1,058,907
2025 329,983 443,262 773,245
2026 178,161 196,529 374,690
2027 713,150 940,517 1,653,667
$1,621,957 $2,238,552 $3,860,509
Actuarial Assumptions – The total pension liabilities in the June 30, 2021 actuarial valuations were determined using the following actuarial assumptions:

Valuation Date June 30, 2021
Measurement Date June 30, 2022
Actuarial Cost Method Entry Age Actuarial Cost Method
Actuarial Assumptions:

Discount Rate 6.90%
Inflation 2.30%
Payroll Growth 2.80%
Projected Salary Increase Varies by Entry Age, Service, and type of employment Investment Rate of Return 6.90% (1)
Mortality Derived using CalPERS Membership Data for all Funds (2) (1) Net of pension plan investment expenses, including inflation (2) The mortality table used was developed based on CalPERS' specific data. The table includes generational mortality improvements using Society of Actuaries Scale 80% of Scale MP 2020. For more details on this table, please refer to the November 2021 experience study report (based on CalPERS demographic data from 2001 to 2019) that can be found on the CalPERS website.

The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2021 valuation were based on the results of a November 2021 actuarial experience study for the period 2001 to 2019. Further details of the Experience Study can be found on the CalPERS website.

64

TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 7 – PENSION PLAN (Continued)
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Discount Rate – The discount rate used to measure the total pension liability for the Plan was

6.90%. The projection of cash flows used to determine the discount rate for the Plan assumed that contributions from all plan members in the Public Employees Retirement Fund (PERF) will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations. Using historical for all the funds’ asset classes, expected compound (geometric) returns were calculated over the next 20 years using a building-block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 basis points.

The table below reflects the expected real rates of return by asset class.

For Miscellaneous and Safety Plan
Asset Class (a)
Assumed Asset
Allocation
Real Return
(a, b)
Global Equity - Cap-weighted 30.0% 4.54%
Global Equity - Non-Cap-weighted 12.0% 3.84%
Private Equity 13.0% 7.28%
Treasury 5.0% 0.27%
Mortgage-backed Securities 5.0% 0.50%
Investment Grade Corporates 10.0% 1.56%
High Yield 5.0% 2.27%
Emerging Market Debt 5.0% 2.48%
Private Debt 5.0% 3.57%
Real Assets 15.0% 3.21%
Leverage -5.0% 0.59%
Total 100%
(a) An expected inflation of 2.30% used for this period. (b) Figures are based on the 2021 Asset Liability Management study. 65

TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 7 – PENSION PLAN (Continued)
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate – The following presents the Town’s proportionate share of the net pension liability for the Plan, calculated using the discount rate for the Plan, as well as what the Town’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:

Miscellaneous Safety
1% Decrease 5.90% 5.90%
Net Pension Liability $9,419,835 $18,962,100
Current Discount Rate 6.90% 6.90%
Net Pension Liability $6,365,417 $11,503,411
1% Increase 7.90% 7.90%
Net Pension Liability $3,852,388 $5,407,617
Pension Plan Fiduciary Net Position – Detailed information about the pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

NOTE 8 – POST EMPLOYMENT HEALTH CARE BENEFITS
A. General Information about the Town’s Other Post Employment Benefit (OPEB) Plan and the OPEB Trust Fund
OPEB Trust Plan Administrator – The City Manager is the Town’s appointed plan administrator to act on behalf of the Town. The Public Agency Retirement Services (PARS) administers the trust for the Town’s retiree healthcare benefit plan.

Plan Description – The Town’s Post Employment Benefit Plan is an agent multiple-employer defined benefit OPEB plan. By Town Council resolution, the Town provides certain medical benefits for employees and dependents who retire directly from the Town at fifty years or older and who are vested in the California Public Employees Retirement System (CalPERS).

Benefits Provided – The Town of Atherton participates in the CalPERS medical program. Retirees who qualify for a CalPERS pension are entitled to employer paid CalPERS medical benefits as described below. The Town does not pay for dental, vision or other health and welfare benefits for retirees.

Employees who retire from the Town, receive a PERS pension and continue their CalPERS medical coverage are eligible to receive the benefit described below. This benefit continues throughout the life of the retiree and surviving spouse.

Management Employees (non-represented), hired before adoption of Management Resolution on November 17, 2010 - The Town pays 100% of premiums for any medical coverage and any family status.
66

TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 8 – POSTEMPLOYMENT HEALTH CARE BENEFITS (Continued) A. General Information about the Town’s Other Post Employment Benefit (OPEB) Plan and the OPEB Trust Fund (Continued)
Management Employees (non-represented), hired after adoption of November 17, 2010 and before June 30, 2013 - The Town pays up to a maximum of the single employee Kaiser premium regardless of family status. A spouse or dependent is only covered if the employee's premium is less than this maximum. After age 65, the Town pays up to a maximum of the reduced post age 65 single employee Kaiser premium.

Employees retiring from the Town and CalPERS concurrently with at least 5 years of service will receive the basic Public Employees Medical and Hospital Care Act (PEMHCA) minimum contribution by law.

Management Employees (non-represented), hired on or after July 1, 2013 - The Town pays the CalPERS minimum benefit.

APOA Police Officers, retired before October 1, 2013 - The Town pays a maximum monthly benefit of $1,247.06 which is assumed to not increase in the future. APOA employees retiring on disability from employment of the Town while in a job classification covered by this MOU and said disability arising from employment with the Town, shall be exempt from this cap.

Members of the APOA Police Officers, hired before October 1, 2013 but retired or will retire after October 1, 2013 – The Town pays up to a maximum of 90% of the Kaiser premium for any family status. This cap is assumed to increase at half the excess of the assumed rate of increase over 3% each year, with a minimum of 0%. This assumption is based on the language in Resolution 13-37, page 8, Paragraph C. a., and assumes that the same language will continue in years after 2016.

Employees retiring from the Town and CalPERS concurrently with at least 5 years of service will receive the basic Public Employees Medical and Hospital Care Act (PEMHCA) minimum contribution by law. If they have 10 or more years of service, they are subject to a vesting schedule.

APOA employees retiring on disability from employment of the Town while in a job classification covered by this MOU and said disability arising from employment with the Town, shall receive 90% of the Town contribution of Kaiser.

APOA Police Officers, hired on or after October 1, 2013 – The Town pays up to a maximum of the PEMHCA Minimum ($151 in 2023, $157 in 2024).

APOA Miscellaneous Employees – The Town pays the same benefit as for APOA Officers. It has been assumed that this benefit will continue after 2016.

Teamsters and Confidential employees – (non-management, miscellaneous) hired before January 19, 2011 - The Town pays up to a maximum benefit of 95% of Blue Shield Access Plus basic/supplemental Bay Area/Sacramento HMO premiums. This applies to any medical coverage and any family status. After age 65, the Town pays only 95% of the reduced post age 65 premiums.

67

TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 8 – POSTEMPLOYMENT HEALTH CARE BENEFITS (Continued) A. General Information about the Town’s Other Post Employment Benefit (OPEB) Plan and the OPEB Trust Fund (Continued)
Employees Covered by Benefit Terms – Membership in the plan consisted of the following at the measurement date of June 30, 2023:

Active employees 39
Retirees receiving benefit payments 41
Total 80
To comply with Actuarial Standard of Practice No. 6 (ASOP 6), the actuarial valuation includes an implicit subsidy liability. When premiums for retirees are determined using a blend of active employee and retiree experience, it creates an implicit subsidy to the retirees, since retiree healthcare costs are generally higher than active employees. ASOP 6 effectively requires most public agencies to calculate an implicit subsidy liability whenever their retirees participate in the group medical plans, but only pay the same premiums as active employees.

As a result of the required ASOP 6, the Town’s Actuarial Accrued Liability at June 30, 2023 included an implicit subsidy liability of $1,087,994.

B. Net OPEB Liability (Asset)
Actuarial Methods and Assumptions – The Town’s net OPEB liability and total OPEB liability were determined by an actuarial valuation based on the following dates, actuarial methods and assumptions:

Actuarial Assumptions • June 30, 2023 Measurement Date
Valuation Date • June 30, 2022
Actuarial Cost Method • Entry Age Normal
Contribution Policy • The Town intends to contribute the full ADC to the PARS trust each year Inflation • 2.50% per annum
Payroll Increases • 2.80% annual increases
Medical Trend • Pre-65: 6.50% for 2023
• Post-65: 5.40% in 2023 decreasing to an ultimate rate of 3.94% by 2075 Mortality • CalPERS 2020 Scale MP-2020
Discount Rate and Long Term
Expected Rate of Return on
Investment
• 6.00%, based on PARS investment allocation Moderate

68

TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 8 – POSTEMPLOYMENT HEALTH CARE BENEFITS (Continued) B. Net OPEB Liability (Asset) (Continued)
OPEB Trust Investment Policy - PARS offers different investment portfolios as part of the investment vehicle. The Town has elected to invest pre-funded contributions using a Moderate Index Plus portfolio. The investment objective of this strategy is to provide current income and moderate capital appreciation.

The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Long-Term
Target Expected Real
Asset Class Allocation Rate of Return
Equity 48.25% 4.37%
Fixed income 45.00% 1.10%
REITS 1.75% 3.54%
Cash 5.00% -0.45%
Total 100.00%
The expected long-term real rate of return of the OPEB Trust is 6.00% as of June 30, 2023. This rate of return was determined using a building-block method in which best-estimate ranges of expected future real rates of return net of investment expense are developed for each major asset class.

The above table shows the target asset allocation in the PARS Trust Moderate investment policy.

Discount Rate – The discount rate is based on a blend of (a) the long-term expected rate of return on assets for benefits covered by plan assets and a yield or index for 20-year, tax-exempt general obligation municipal bonds with an average rating of AA/Aa or better for benefits not covered by plan assets. The projection of cash flows used to determine the discount rate assumed that Town contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan’s fiduciary net position was projected to be available to make all projected OPEB payments for current active and inactive employees and beneficiaries. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability.

OPEB Trust Annual Money-Weighted Rate of Return – For the year ended June 30, 2023, the annual money-weighted rate of return on investments, net of investment expense, was (6.20%). The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. 69

TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 8 – POSTEMPLOYMENT HEALTH CARE BENEFITS (Continued) C. Changes in Net OPEB Liability (Asset)
The changes in the net OPEB liability follows:

Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability/(Asset)
(a) (b) (a) - (b)
Balance at June 30, 2022 Measurement Date $7,736,578 $7,829,922 ($93,344) Changes Recognized for the Measurement Period:

Service Cost 105,341 105,341
Interest on the total OPEB liability 451,942 451,942
Changes in benefit terms
Differences between expected and actual experience 224,199 224,199 Changes of assumptions
Net investment income 532,619 (532,619)
Contributions
Employer - Town's contribution 626,765 (626,765)
Employer - implicit subsidy
Benefit payments (628,249) (628,249)
Implicit subsidy credit
Administrative expenses (44,314) 44,314
Net changes 153,233 486,821 (333,588)
Balance at June 30, 2023 Measurement Date $7,889,811 $8,316,743 ($426,932) Plan fiduciary net position as a percentage of the total OPEB liability 105.4% The OPEB plan does not issue separate financial statements.

D. Sensitivity of the Net OPEB Liability to Changes in the Discount Rate and Healthcare Cost Trend Rates
The following presents the net OPEB liability of the Town, as well as what the Town's net OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentage-point higher than the current discount rate:

Net OPEB Liability (Asset)
Discount Rate -1% Current Discount Rate Discount Rate +1% (5.00%) (6.00%) (7.00%)
$464,389 ($426,932) $1,170,708
The following presents the net OPEB liability of the Town, as well as what the Town's net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower or 1-percentage-point higher than the current healthcare cost trend rates as discussed above:

Net OPEB Liability (Asset)
Current Healthcare Cost
1% Decrease Trend Rates 1% Increase
($1,234,407) ($426,932) $524,092
70

TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 8 – POSTEMPLOYMENT HEALTH CARE BENEFITS (Continued) E. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the year ended June 30, 2023, the Town recognized OPEB expense of $1,398,519. At June 30, 2023, the Town reported deferred outflows and inflows of resources related to OPEB from the following sources:

Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between actual and expected experience $421,259 ($952,278) Changes of assumptions (1,553,279)
Net differences between projected and actual earnings on plan investments 431,471
Total $852,730 ($2,505,557)
The deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in future fiscal years as part of OPEB expense as follows:

Year
Ended June 30 Amortization
2024 ($897,431)
2025 (630,122)
2026 (187,171)
2027 24,533
2028 37,364
Total ($1,652,827)
NOTE 9 – RISK MANAGEMENT
A. Coverage
The Town is a member of Pooled Liability Assurance Network (PLAN), which provides general liability coverage of $5,000,000 above the Town’s deductible of $25,000 per occurrence, risk property insurance of $500,000 above the Town’s deductible of $5,000 for property damage and $5,000 for auto / vehicle damage. PLAN is governed by a board consisting of representatives from member municipalities. The board controls the operations of PLAN, including selection of management and approval of operating budgets, independent of any influence by member municipalities beyond their representation on the Board.

Audited financial statements may be obtained from PLAN Services, 1750 Creekside Oaks Drive, Suite 200, Sacramento, CA 95833.

71

TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 9 – RISK MANAGEMENT (Continued)
A. Coverage (Continued)
Alliant Insurance Services covers employment theft up to $2,000,000 for each claim and in the aggregate and the Town’s deductible is $10,000 per claim.

The Cities Group covers workers’ compensation claims up to $1,000,000 each for miscellaneous employees, up to $1,500,000 each for safety officers, and has coverage above that limit to a maximum of $10,000,000. The Town has no deductible for the claims.

Audited financial statements may be obtained from Cities Group, address, P.O. Box 111, Burlingame, CA 94011-0111.

B. Uninsured Claims
The Town’s liability for uninsured claims, including estimated claims incurred but not reported, was estimated by management based on prior years claims experience and was computed as follows as of June 30:
2023 2022
Beginning balance $100,000 $66,426
Net change in claims liabilities (948) 85,260
Claims paid (36,462) (51,686)
Ending balance $62,590 $100,000
Claims liabilities due within a year $62,590 $100,000

For the years ended June 30, 2023, 2022, and 2021 the amount of settlements did not exceed insurance coverage.

NOTE 10 – LONG TERM LIABILITIES
The Town generally incurs long‐term debt to finance projects or purchase assets, which will have useful lives equal to or greater than the related debt. This debt will be repaid only out of governmental funds but is not accounted for in these funds because this debt does not require an appropriation or expenditure in this accounting period.

The City’s debt issues and transactions are summarized below and discussed in detail thereafter.

A. Current Year Transactions and Balances
Balance at Balance at Due Within Due in More
June 30, 2022 Retirements June 30, 2023 One Year Than One Year Direct borrowings:

San Mateo County Bayfront Canal Loan $1,442,759 ($313,416) $1,129,343 $313,612 $815,731 Town Center Project Capital Lease 6,288,272 (727,473) 5,560,799 743,566 4,817,233 Total $7,731,031 ($1,040,889) $6,690,142 $1,057,178 $5,632,964 72

TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 10 – LONG TERM LIABILITIES (Continued)
B. San Mateo County Bayfront Canal Loan (Direct Borrowing) The Town of Atherton entered into a $165,000 loan agreement for the Bayfront Canal and Atherton Channel Collaborative Memorandum of Understanding between the City of Redwood City, City of Menlo Park, Town of Atherton, and the County of San Mateo.

San Mateo County Resolution Number 075608 adopted on December 5, 2017, authorized the president of the Board of Supervisors to execute a loan agreement between the Town of Atherton and the County that provides a $165,000 loan to the Town of Atherton for the planning design, and environmental permitting for the Bayfront Canal and Atherton Channel Flood Management and Restoration Project. This amount is the proportionate share of the costs of planning, design, and environmental permitting services for the Bayfront Canal and Atherton Channel Flood Management and Restoration Project. The loan in the amount of $165,000 is to finance the Town's obligation pursuant to the MOU, with said loan being repaid over a ten (10) year period.

On December 9, 2022 the Town of Atherton entered into a sublease with the County of San Mateo for the construction of the Bayfront Canal Restoration Project related to the San Mateo County Intra-County Lease Agreement. The County loaned the Town of Atherton $1,350,000 for the Town’s portion of the construction costs of the Bayfront Canal Project. The loan is to be repaid over a five (5) year period through reduction of Atherton property taxes remittance from the County for a fix amount of $148,500 on April 15 and December 15 annually. As of June 30, 2023, the outstanding amount on the loan is $1,129,343.

C. Town Center Project Capital Lease Agreement (Direct Borrowing) On June 1, 2020, the Town entered into Lease Agreements with the Public Property Financing Corporation of California, which subsequently assigned the Agreement to Capital One Public Funding LLC (Assignee), under which the Town leased certain land and improvements initially consisting generally of the Holbrook-Palmer Park and the land on which the Town Center Project will be located, for which the Assignee made a one‐time up‐front lease payment to the Town in the amount of $7,680,000.

Simultaneously, the Town will lease back from the Assignee with annual lease payments over a lease term of 10 years, at a fixed interest rate of 2.20% per year. The Sublease is secured by the leased property. The Sublease is repayable in semi‐annual payments beginning December 1, 2020 through June 1, 2030. The pledge of repayment is from the General Fund.

73

TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 10 – LONG TERM LIABILITIES (Continued)
D. Debt Services Requirements
Annual debt service requirements are shown below for all long‐term debt with specified repayment terms:

San Mateo County Town Center Project
Year ending June 30 Principal Interest Principal Interest Total 2024 $313,612 $885 $743,566 $118,305 $1,176,368
2025 313,815 683 760,015 101,856 1,176,369
2026 314,016 482 776,828 85,044 1,176,370
2027 179,221 277 794,012 67,859 1,041,369
2028 8,679 71 811,577 50,294 870,621
2029 - 2030 1,674,801 46,331 1,721,132
Total $1,129,343 $2,398 $5,560,799 $469,689 $7,162,229
Bayfront Canal Loan Capital Lease
NOTE 11 – JOINT POWERS AUTHORITIES
The Town participates in joint ventures discussed below through separate entities established under the Joint Exercise of Powers Act of the State of California. As separate legal entities, these entities exercise full powers and authorities within the scope of the related Joint Powers Agreements including the preparation of annual budgets, accountability for all funds, the power to make and execute contracts and the right to sue and be sued.

Each joint venture is governed by a board consisting of representatives from member municipalities. Each board controls the operations of the respective joint venture, including selection of management and approval of operating budgets, independent of any influence by member municipalities beyond their representation on that board. Obligations and liabilities of these joint ventures are not the Town's responsibility and the Town does not have an equity interest in the assets of each joint venture except upon dissolution of the joint venture.

The Joint Powers Agreement is effective for the year ended June 30, 2018 and continues on a year to year basis until the parties agree to terminate the agreement or if a majority of the parties have withdrawn from the Joint Powers pursuant to Section 6 of the agreement.

A. Town/County Association of Governments of San Mateo County (C/CAG) Town/County Association of Governments of San Mateo County was formed in 1990 between the various cities in San Mateo County to prepare, adopt, monitor and enforce state mandated plans for the management of traffic congestion, integrated solid waste, airport land use and hazardous waste.

The Town’s contribution to C/CAG was $23,072 for the year ended June 30, 2023. Financial statements may be obtained by mailing a request to the City of San Carlos, 600 Elm Street, San Carlos, CA 94070.

B. Alcohol Violation Temporary Housing Authority (AVTHA) AVTHA was established between the County and most of the cities and towns in the County to provide temporary housing and counseling to persons accused of alcohol related law violations.

AVTHA contracts with an operator to provide such services. The costs of operating the temporary housing are allocated to each member based on alcohol related arrests occurring within each member’s jurisdiction. Financial statements for AVTHA may be obtained by mailing a request to Redwood City, 801 Marshall Street, Suite 600, Redwood City, California 94063. 74

TOWN OF ATHERTON

NOTES TO BASIC FINANCIAL STATEMENTS
For the Year Ended June 30, 2023
NOTE 11 – JOINT POWERS AUTHORITIES (Continued)
C. Library Joint Powers Agreement (JPA)
In 1999, the Town joined with the County and ten other municipalities in the County to coordinate and expand library services throughout the County, including those in the Town.

Property tax revenues in excess of the JPA’s costs of maintaining the library are remitted to the Town and are deposited into the Library Special Revenue Fund. Expenditures of this fund are subject to the approval of the Library JPA.

NOTE 12 – CONTINGENT LIABILITIES
The Town is subject to litigation arising in the normal course of business. In the opinion of the Town Attorney there is no pending litigation that is likely to have a material adverse effect on the financial position of the Town.

The Town participates in Federal and State grant programs. When required, these programs are audited in accordance with the provisions of the Federal Single Audit Act, as amended and applicable State requirements. These programs are also subjected to further examination by the grantors, and the amount, if any, of expenditures that may be disallowed by the granting agencies, cannot be determined at this time. The Town expects such amounts, if any, to be immaterial.

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REQUIRED SUPPLEMENTARY INFORMATION

REQUIRED SUPPLEMENTARY INFORMATION
COST-SHARING MULTIPLE-EMPLOYER DEFINED PENSION PLAN – LAST 10 YEARS* SCHEDULE OF PLAN’S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY Miscellaneous
Measurement Date 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 Plan's proportion of the Net Pension
Liability (Asset) 0.04366% 0.10574% 0.11181% 0.11522% 0.11852% 0.12379% 0.12799% 0.17367% 0.13604% Plan's proportion share of the
Net Pension Liability (Asset) $2,716,530 $2,901,033 $3,884,053 $4,542,046 $4,466,539 $4,957,053 $5,398,568 $3,297,589 $6,365,417 Plan's Covered Payroll $1,473,083 $1,595,884 $1,772,771 $1,912,587 $2,040,240 $2,127,834 $2,314,721 $2,320,927 $4,610,367 Plan's Proportionate Share of the Net Pension
Liability/(Asset) as a Percentage of its
Covered Payroll 184.41% 181.78% 219.10% 237.48% 218.92% 232.96% 233.23% 142.08% 138.07% Plan’s Fiduciary Net Position as a Percentage of the
Total Pension Liability 83.03% 78.28% 73.20% 75.39% 75.39% 75.17% 73.24% 82.62% 90.49% Safety
Measurement Date 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 Plan's proportion of the Net Pension
Liability (Asset) 0.10505% 0.18865% 0.19496% 0.19379% 0.19992% 0.20325% 0.20805% 0.25479% 0.16741% Plan's proportion share of the
Net Pension Liability (Asset) $6,536,499 $7,773,056 $10,097,455 $11,579,520 $11,730,572 $12,687,811 $13,861,231 $8,941,944 $11,503,411 Plan's Covered Payroll $2,030,918 $2,391,765 $2,488,471 $2,414,626 $2,608,708 $2,672,010 $2,668,668 $3,004,022 $4,610,367 Plan's Proportionate Share of the Net Pension
Liability/(Asset) as a Percentage of its
Covered Payroll 321.85% 324.99% 405.77% 479.56% 449.67% 474.84% 519.41% 297.67% 249.51% Plan’s Fiduciary Net Position as a Percentage of the
Total Pension Liability 81.46% 78.52% 73.96% 71.74% 71.74% 72.10% 70.82% 82.62% 86.61% * - Fiscal year 2015 was the 1st year of implementation.

Last 10 Years*
Prepared for Town of Atherton, a Cost-Sharing Multiple-Employer Defined Pension Plan As of fiscal years ending June 30, 2015 through 2022

SCHEDULE OF THE PLAN'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY

78

REQUIRED SUPPLEMENTARY INFORMATION
COST-SHARING MULTIPLE-EMPLOYER DEFINED PENSION PLAN – LAST 10 YEARS*

SCHEDULE OF CONTRIBUTIONS
Miscellaneous
Fiscal Year Ended June 30 2015 2016 2017 2018 2019 2020 2021 2022 2023 Actuarially determined contribution $179,934 $150,616 $305,597 $349,365 $416,994 $480,181 $510,812 $211,663 $667,245 Contributions in relation to the actuarially
determined contributions (179,934) (150,616) (305,597) (349,365) (416,994) (480,181) (510,812) (605,437) (667,245) Contribution deficiency (excess) $0 $0 $0 $0 $0 $0 $0 ($393,774) $0 Covered payroll $1,595,884 $1,772,771 $1,912,587 $2,040,240 $2,127,834 $2,314,721 $2,320,927 $4,610,367 $2,537,827 Contributions as a percentage of
covered payroll 11.27% 8.50% 15.98% 17.12% 19.60% 20.74% 22.01% 13.13% 26.29% Safety
Fiscal Year Ended June 30 2015 2016 2017 2018 2019 2020 2021 2022 2023 Actuarially determined contribution $646,174 $466,548 $849,073 $939,476 $1,042,632 $1,202,924 $1,359,480 $463,859 $1,330,515 Contributions in relation to the actuarially
determined contributions (646,174) (466,548) (849,073) (939,476) (1,042,632) (1,202,924) (1,359,480) (6,470,904) (1,330,515) Contribution deficiency (excess) $0 $0 $0 $0 $0 $0 $0 ($6,007,045) $0 Covered payroll $2,391,765 $2,488,471 $2,414,626 $2,608,708 $2,672,010 $2,668,668 $3,004,022 $4,610,367 $3,274,919 Contributions as a percentage of covered payroll 27.02% 18.75% 35.16% 36.01% 39.02% 45.08% 45.26% 140.36% 40.63% * Fiscal year 2015 was the 1st year of implementation.

Prepared for Town of Atherton, a Cost-Sharing Multiple-Employer Defined Pension Plan As of fiscal year ending June 30, 2023
Last 10 Years*

SCHEDULE OF CONTRIBUTIONS

79

REQUIRED SUPPLEMENTARY INFORMATION

SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS Retiree Healthcare OPEB Plan - Agent Multiple Employer
Last 10 fiscal years*
Measurement Date 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023 Total OPEB Liability
Service Cost $257,258 $167,493 $175,867 $215,662 $261,221 $105,341 Interest 755,515 610,002 623,286 622,420 483,322 451,942 Changes in benefit terms
Differences between expected and actual experience (574,495) (11,091) 558,111 (18,835) (1,404,646) 224,199 Changes of assumptions (2,299,690) (849,626) (1,698,656) (7,409) Benefit payments (401,170) (466,422) (419,991) (444,395) (628,249) Implicit subsidy credit (85,496) (91,325) (137,858) (151,197) Net change in total OPEB liability (1,861,412) 279,738 (50,109) (1,437,258) (1,263,104) 153,233 Total OPEB liability - beginning 10,269,746 12,532,328 10,487,049 10,436,940 8,999,682 7,736,578 Total OPEB liability - ending (a) $10,670,916 $10,549,484 $10,436,940 $8,999,682 $7,736,578 $7,889,811 Plan fiduciary net position
Employer - Town's contributions $493,288 $747,885 $672,323 $566,672 $594,061 $626,765 Employer - implicit subsidy 85,496 91,325 137,858
Net investment income 380,626 417,827 322,036 1,432,366 (986,583) 532,619 Administrative expense (15,183) (33,395) (38,683) (44,195) (48,456) (44,314) Benefit payments (401,170) (466,422) (419,991) (444,395) (628,249) Implicit subsidy credit (85,496) (91,325) (137,858) (151,197) Other miscellaneous income/(expense) (54,026) (85,496)
Net change in plan fiduciary net position 804,705 645,651 489,254 1,534,852 (1,036,570) 486,821 Plan fiduciary net position - beginning 5,855,635 6,842,386 7,331,640 8,866,492 7,829,922 Plan fiduciary net position - ending (b) $804,705 $6,501,286 $7,331,640 $8,866,492 $7,829,922 $8,316,743 Net OPEB liability (Asset) - ending (a)-(b) $9,866,211 $4,048,198 $3,105,300 $133,190 ($93,344) ($426,932) Plan fiduciary net position as a percentage of
the total OPEB liability 7.5% 61.6% 70.2% 98.5% 101.2% 105.4% Covered-employee payroll $4,648,758 $4,799,843 $4,983,389 $4,410,693 $5,142,900 $5,737,638 Net OPEB liability as a percentage of
covered-employee payroll 212.23% 84.34% 62.31% 3.02% -1.82% -7.44% * Fiscal year 2018 was the first year of implementation for GASB 75

80

REQUIRED SUPPLEMENTARY INFORMATION
Fiscal Year Ended June 30, 2018 2019 2020 2021 2022 2023 Actuarially determined contribution $693,890 $419,511 $435,103 $465,571 $519,144 $142,708 Contributions in relation to the
actuarially determined contribution 493,288 833,381 763,648 704,530 594,061 626,765 Contribution deficiency (excess) $200,602 ($413,870) ($328,545) ($238,959) ($74,917) ($484,057) Covered-employee payroll $4,648,758 $4,799,843 $4,983,389 $4,410,693 $5,142,900 $5,737,638 Contributions as a percentage of
covered-employee payroll 10.61% 17.36% 15.32% 15.97% 11.55% 10.92% * Fiscal year 2018 was the first year of implementation for GASB 75

SCHEDULE OF CONTRIBUTIONS
Retiree Healthcare OPEB Plan - Agent Multiple Employer
Last 10 fiscal years*
Actuarial Cost Method • Entry Age Normal
Contribution Policy • The Town intends to contribute the full ADC to the PARS trust each year Inflation • 2.50% per annum
Payroll Increases • 2.80% annual increases
Medical Trend • Pre-65: 6.50% for 2023
• Post-65: 5.40% in 2023 decreasing to an ultimate rate of 3.94% by 2075 Mortality • CalPERS 2020 Scale MP-2020
Retiree Healthcare OPEB Plan - Agent Multiple Employer

NOTES TO SCHEDULE OF EMPLOYER CONTRIBUTION
Methods and Assumptions for Actuarially Determined Contribution Discount Rate and Long Term
Expected Rate of Return on
Investment
• 6.00%, based on PARS investment allocation Moderate
81

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SUPPLEMENTARY INFORMATON

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NON-MAJOR GOVERNMENTAL FUNDS

SPECIAL REVENUE FUNDS
COUNTY MEASURE A FUND accounts for funds received from the County of San Mateo Measure A funds for local transportation purposes.

GAS TAX FUND accounts for funds received from the State of California for road improvement.

EVANS CREATIVE DESIGN FUND accounts for funds received from the Evans estate.

MEASURE M FUND accounts for funds received from the Congestion Management Agency for San Mateo County.

REFUSE RATE STABILIZATION FUND accounts for the surplus of refuse fees.

CAPITAL PROJECTS FUNDS
STORM DRAINAGE FUND accounts for the operation and maintenance costs of drainage systems in the Town.

CHANNEL DRAINAGE DISTRICT accounts for tax revenues collected and channel maintenance costs. 85

County Supplemental Law
Measure A Gas Tax Enforcement Services Measure M
ASSETS
Cash and investment $1,257,175 $328,896 $185 $215,896
Receivables:

Taxes 39,130 29,850
Total Assets $1,296,305 $358,746 $185 $215,896

LIABILITIES
Accounts payable $6,898 $7,932 $1,847
Total Liabilities 6,898 7,932 1,847

FUND EQUITY
Fund balances
Restricted 1,289,407 350,814 $185 214,049
Assigned
Total Fund Balances 1,289,407 350,814 185 214,049
Total Liabilities and Fund Balances $1,296,305 $358,746 $185 $215,896

SPECIAL REVENUE FUNDS

TOWN OF ATHERTON

NON-MAJOR GOVERNMENTAL FUNDS

COMBINING BALANCE SHEET
JUNE 30, 2023
86

CAPITAL PROJECT FUNDS
Refuse Channel Total Nonmajor
Rate County Storm Drainage Governmental
Stabilization Measure W Drainage District Funds
$556,477 $649,971 $32,723 $957,032 $3,998,355
4,672 20,691 439 94,782
$561,149 $670,662 $32,723 $957,471 $4,093,137
$190 $17,111 $33,978
190 17,111 33,978
560,959 $670,662 940,360 4,026,436
$32,723 32,723
560,959 670,662 32,723 940,360 4,059,159
$561,149 $670,662 $32,723 $957,471 $4,093,137

SPECIAL REVENUE FUNDS
87

County Supplemental Law
Measure A Gas Tax Enforcement Services Measure M

REVENUES
Property taxes
Measure Grants $524,932
From other agencies $336,585
Use of money and property 15,267 3,994 $2 $2,623
Miscellaneous
Total Revenues 540,199 340,579 2 2,623

EXPENDITURES
Current:

Police
Public Works 16,580 5,308
Capital Outlay 113,764 340,954 19,952
Total Expenditures 130,344 346,262 19,952
NET CHANGE IN FUND BALANCES 409,855 (5,683) 2 (17,329)
BEGINNING FUND BALANCES 879,552 356,497 183 231,378
ENDING FUND BALANCES $1,289,407 $350,814 $185 $214,049

SPECIAL REVENUE FUNDS

TOWN OF ATHERTON

NON-MAJOR GOVERNMENTAL FUNDS

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2023
88

Total
Refuse Channel Nonmajor
Rate County Storm Drainage Governmental
Stabilization Measure W Drainage District Funds
$188,780 $188,780
524,932
($22,104) $233,525 548,006
6,758 7,894 $398 11,624 48,560
(15,346) 241,419 398 200,404 1,310,278
285 874 23,047
17,111 491,781
285 17,985 514,828
(15,631) 241,419 398 182,419 795,450
576,590 429,243 32,325 757,941 3,263,709
$560,959 $670,662 $32,723 $940,360 $4,059,159

SPECIAL REVENUE FUNDS CAPITAL PROJECTS FUNDS
89

SPECIAL REVENUE FUNDS
County Measure A Gas Tax
Variance Variance
Positive Positive
Budget Actual (Negative) Budget Actual (Negative)

REVENUES
Property taxes
Measure A grants $370,000 $524,932 $154,932
From other agencies $364,979 $336,585 ($28,394)
Use of money and property 15,267 15,267 3,994 3,994
Miscellaneous
Total Revenues 370,000 540,199 170,199 364,979 340,579 (24,400)

EXPENDITURES
Current:

Police
Public Works 16,580 (16,580) 5,308 (5,308)
Non-departmental
Capital Outlay 718,484 113,764 604,720 469,000 340,954 128,046 Total Expenditures 718,484 130,344 588,140 469,000 346,262 122,738 NET CHANGE IN FUND BALANCES ($348,484) 409,855 $758,339 ($104,021) (5,683) $98,338 BEGINNING FUND BALANCES 879,552 356,497
ENDING FUND BALANCES $1,289,407 $350,814

TOWN OF ATHERTON

BUDGETED NON-MAJOR GOVERNMENTAL FUNDS

COMBINING SCHEDULE OF REVENUES, EXPENDITURES

BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2023

AND CHANGES IN FUND BALANCES
90

SPECIAL REVENUE FUNDS
Measure M Refuse Rate Stabilization
Variance Variance Variance
Positive Positive Positive
Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $155,000 ($155,000) $75,000 ($75,000) ($22,104) ($22,104) 146 $2 (144) 2,623 $2,623 6,758 6,758
155,146 2 (155,144) 77,623 2,623 (75,000) (15,346) (15,346) 285 (285)
144,616 19,952 124,664
144,616 19,952 124,664 285 (285)
$155,146 2 ($155,144) ($66,993) (17,329) $49,664 (15,631) ($15,631) 183 231,378 576,590
$185 $214,049 $560,959
(Continued)
Supplemental Law Enforcement Services
91

TOWN OF ATHERTON

BUDGETED NON-MAJOR GOVERNMENTAL FUNDS

COMBINING SCHEDULE OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2023

SPECIAL REVENUE FUNDS
County Measure W
Variance
Positive
Budget Actual (Negative)

REVENUES
Property taxes
Measure grants
From other agencies $145,000 $233,525 $88,525
Use of money and property 7,894 7,894
Miscellaneous
Total Revenues 145,000 241,419 96,419

EXPENDITURES
Current:

Police
Public Works
Non-departmental
Capital Outlay 130,000 130,000
Total Expenditures 130,000 130,000
NET CHANGE IN FUND BALANCES $15,000 241,419 $226,419
BEGINNING FUND BALANCES 429,243
ENDING FUND BALANCES $670,662
92

INTERNAL SERVICE FUNDS
Internal Service Funds are used to finance and account for special activities and services performed by a designated department for other departments in the Town on a cost reimbursement basis.

The concept of major funds does not extend to internal service funds because they do not do business with outside parties. For the Statement of Activities, the net revenues or expenses of each internal service fund is eliminated by netting them against operations of the other Town departments, which generated them. The remaining balance sheet items are consolidated with these same funds in the Statement of Net Position.

However, internal service funds are still presented separately in the Fund financial statements, including the funds below.

EQUIPMENT REPLACEMENT FUND accounts for the financing of replacement equipment within the Town such as vehicles and computer software.

WORKERS’ COMPENSATION INSURANCE FUND accounts for the financing of the Town’s outstanding worker’s compensation liability.

GENERAL LIABILITY FUND accounts for other liabilities including employment liabilities and hosts the insurance costs for liability claims and property losses. The activities for this fund provides for costs to general liability insurance, employment practice insurance, and self-insured retention claim expense.

EMPLOYEE BENEFITS FUND accounts for financing the liabilities for compensated absences and other post-employment benefits other than pension for Town General Fund departments. 93

TOWN OF ATHERTON

INTERNAL SERVICE FUNDS

COMBINING STATEMENTS OF NET POSITION
JUNE 30, 2023
Workers'
Equipment Compensation General Employee
Replacement Insurance Liability Benefits Total
ASSETS
Current Assets:

Cash and investments $909,740 $1,964,738 $720,840 $1,791,477 $5,386,795 Total Current Assets 909,740 1,964,738 720,840 1,791,477 5,386,795 Non-Current Assets:

Capital assets:

Depreciable 1,861,066 1,861,066
Less: accumulated depreciation (1,503,389) (1,503,389)
Net Capital Asset 357,677 357,677
Total noncurrent assets 357,677 357,677
Total Assets 1,267,417 1,964,738 720,840 1,791,477 5,744,472

LIABILITIES
Current liabilities
Accounts payable 7,426 7,426
Claims payable 62,590 62,590
Compensated absences 613,272 613,272
Total current liabilities 7,426 62,590 613,272 683,288
Noncurrent liabilities
Compensated absences 483,101 483,101
Total noncurrent liabilities 483,101 483,101
Total Liabilities 7,426 62,590 1,096,373 1,166,389
Net investment in capital assets 357,677 357,677
Unrestricted 902,314 1,964,738 658,250 695,104 4,220,406 Total Net Position $1,259,991 $1,964,738 $658,250 $695,104 $4,578,083 94

TOWN OF ATHERTON

INTERNAL SERVICE FUNDS

COMBINING STATEMENTS OF REVENUES, EXPENSES

AND CHANGES IN FUND NET POSITION
FOR THE YEAR ENDED JUNE 30, 2023
Workers'
Equipment Compensation General Employee
Replacement Insurance Liability Benefits Total

OPERATING REVENUES
Charges for services $487,740 $355,416 $473,812 $900,891 $2,217,859 Total Operating Revenues 487,740 355,416 473,812 900,891 2,217,859

OPERATING EXPENSES
Insurance 279,688 510,274 789,962
OPEB expense 335,220 335,220
Employee benefits earned 317,876 317,876
Depreciation 156,307 156,307
Supplies and maintenance 136,944 136,944
Total Operating Expenses 293,251 279,688 510,274 653,096 1,736,309 Operating Income (Loss) 194,489 75,728 (36,462) 247,795 481,550

NONOPERATING REVENUES (EXPENSES)
Interest income 11,049 23,860 8,754 21,752 65,415
Total Nonoperating Revenues (Expenses) 11,049 23,860 8,754 21,752 65,415

OTHER FINANCING SOURCES (USES)
Transfers in
Total Other Financing Sources (Uses)
Change in Net Position 205,538 99,588 (27,708) 269,547 546,965 BEGINNING NET POSITION 1,054,453 1,865,150 685,958 425,557 4,031,118 ENDING NET POSITION $1,259,991 $1,964,738 $658,250 $695,104 $4,578,083 95

TOWN OF ATHERTON

INTERNAL SERVICE FUNDS

COMBINING STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2023
Workers'
Equipment Compensation General Employee
Replacement Insurance Liability Benefits Total

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from other funds $495,790 $355,416 $473,812 $900,891 $2,225,909 Payments to employees for benefits (523,441) (523,441)
Payments to vendors (132,759) (279,688) (547,684) (960,131) Cash Flows from Operating Activities 363,031 75,728 (73,872) 377,450 742,337

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Acquisition of capital assets, net (140,108) (140,108)
Cash Flows (used for) Capital and Related
Financing Activities (140,108) (140,108)

CASH FLOWS FROM INVESTING ACTIVITIES
Interest received 11,049 23,860 8,754 21,752 65,415
Cash Flows from Investing Activities 11,049 23,860 8,754 21,752 65,415 Net Cash Flows 233,972 99,588 (65,118) 399,202 667,644
Cash and investments at beginning of period 675,768 1,865,150 785,958 1,392,275 4,719,151 Cash and investments at end of period $909,740 $1,964,738 $720,840 $1,791,477 $5,386,795 Reconciliation of operating income (loss) to
net cash flows from operating activities:

Operating income $194,489 $75,728 ($36,462) $247,795 $481,550 Adjustments to reconcile operating income to
net cash flows from operating activities:

Depreciation 156,307 156,307
Compensated absences 129,655 129,655
Change in assets and liabilities:

Accounts receivable 8,050 8,050
Accounts payable 4,185 4,185
Claims payable (37,410) (37,410)
Cash Flows from Operating Activities $363,031 $75,728 ($73,872) $377,450 $742,337 96

CUSTODIAL FUNDS
Custodial Funds account for assets held by a governmental unit in the capacity of agent for individuals, governmental entities, and non-public organizations.

The Custodial Funds used to account for monies held by the Town in a fiduciary capacity are as follows:

H-P PARK IMPROVEMENT FUND donated for Holbrook-Palmer Park improvement.

TREE COMMITTEE Fund maintained for the Tree Committee.

97

TOWN OF ATHERTON

CUSTODIAL FUNDS

STATEMENTS OF CHANGES IN ASSETS AND LIABILITIES
FOR THE YEAR ENDED JUNE 30, 2023
Balance Balance
June 30, 2022 Additions Deductions June 30, 2023
H-P Park Improvement Fund
ASSETS
Cash and investments $6,557 $80 $6,637
Total assets $6,557 $80 $6,637

LIABILITIES
Deposits payable $6,557 $80 $6,637
Total liabilities $6,557 $80 $6,637
Tree Committee
ASSETS
Cash and investments $27,094 $325 $27,419
Total assets $27,094 $325 $27,419

LIABILITIES
Deposits payable $27,094 $325 $27,419
Total liabilities $27,094 $325 $27,419
All Custodial Funds
ASSET
Cash and investments $33,651 $405 $34,056
Total assets $33,651 $405 $34,056

LIABILITIES
Deposits payable $33,651 $405 $34,056
Total liabilities $33,651 $405 $34,056
98

INDEPENDENT AUDITOR’S REPORT ON

INTERNAL CONTROL OVER FINANCIAL REPORTING

AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN

AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE

WITH GOVERNMENT AUDITING STANDARDS
To the Honorable Members of the City Council
Town of Atherton, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the basic financial statements of the Town of Atherton, California, as of and for the year ended June 30, 2023, and have issued our report thereon dated December 21, 2023.

Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Town’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Town’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Town’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Town’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that have not been identified. 99

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Town’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

We have also issued a separate Memorandum on Internal Control dated December 21, 2023, which is an integral part of our audit and should be read in conjunction with this report.

Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the result of that testing, and not to provide an opinion on the effectiveness of the Town’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Town’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Pleasant Hill, California
December 21, 2023
100

TOWN OF ATHERTON

MEMORANDUM ON INTERNAL CONTROL

FOR THE YEAR ENDED
JUNE 30, 2023

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TOWN OF ATHERTON

MEMORANDUM ON INTERNAL CONTROL
For the Year Ended June 30, 2023
Table of Contents
Page
Memorandum on Internal Control ............................................................................................................ 1 Schedule of Other Matters .................................................................................................................... 3

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MEMORANDUM ON INTERNAL CONTROL
To the City Council of
the Town of Atherton, California
In planning and performing our audit of the basic financial statements of the Town of Atherton (Town), as of and for the year ended June 30, 2023, in accordance with auditing standards generally accepted in the United States of America, we considered the Town’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Town’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Town’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Town’s financial statements will not be prevented, or detected and corrected on a timely basis.

Our consideration of internal control was for the limited purpose described in the first paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses. In addition, because of inherent limitations in internal control, including the possibility of management override of controls, misstatements due to error or fraud may occur and not be detected by such controls.

Given these limitations during our audit, we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

Included in the Schedule of Other Matters are recommendations not meeting the above definitions that we believe are opportunities for strengthening internal controls and operating efficiency.

This communication is intended solely for the information and use of management, City Council, others within the organization, and agencies and pass-through entities requiring compliance with Government Auditing Standards, and is not intended to be and should not be used by anyone other than these specified parties.

Pleasant Hill, California
December 21, 2023
1

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TOWN OF ATHERTON

MEMORANDUM ON INTERNAL CONTROL

SCHEDULE OF OTHER MATTERS
2023-01 Stale Outstanding Checks
Criteria: Items in the outstanding checklist should be kept current to reflect the Town’s cash balance accurately.

Condition: We noted the Town has over thirty outstanding checks, totaling approximately $195 thousand and more than one year old.

Cause: The Town does not have a formal/informal policy for handling outstanding checks.

Potential Effect: This practice does not promote proper control over disbursements.

Recommendation: We recommend that the Town to:
• Establish a formal policy and standard procedures for handling stale checks. • Take appropriate measures to follow up on the existing stale checks and designate staff to follow up regularly every six months.
• Consider publishing stale checks older than one year and writing them off with proper approval if they are not claimed after publication, or send them to the State as unclaimed property.

Management Responses:

The Town is aware that the outstanding checklist should be kept current to reflect the Town’s cash balance accurately. Of the thirty outstanding checks totaling approximately $195 thousand and more, there was one check for $100,000 for refund outstanding to a public utility company for public works deposit. This was voided and reissued to public utility.

The Town informal policy is that it attempts to contact the payee for any outstanding checks to determine if they want/need a check voided and reissued to them accordingly. If contacting the payee is unsuccessful, and the check remains outstanding for up to a year, it is moved to unclaimed property with the state. After 3 years, if still unclaimed, a notice is placed in the local newspaper identifying the unclaimed check. Finally, if this effort does not produce any results, the Town may escheat the checks to the State of California instead of reversing the asset to the Town’s balance sheet. The Town staff will work on publishing checks older than 1 year and those not claimed after publication will be escheated to the State of California. Staff will follow up regularly every six months with payee of outstanding checks. 2023-02 Timeliness of Finalizing Financial Reports
Criteria: Effective organizations develops plans to ensure that adequate resources are available to analyze the general ledger to ensure that all accounts are accurate and the financial reports are reviewed timely for the reporting year.

Condition: Upon the audit completion, the financial report draft was subsequently provided to the finance for review in November 2023. However due to Town staff communication oversight the review was in progress, but was delayed till March of 2024.

Cause: Town Staff reviewed the financial report draft in December and January, noted updates to the financial statements and made notes on updated items. However, staff did not properly update the auditor of their report review and potential changes until March 2024. With the FY 2023/24 mid-year review and the start of the budget process following the new year, staff worked on completing the management discussion analysis. Management bandwidth was overextended on priorities. 3

TOWN OF ATHERTON

MEMORANDUM ON INTERNAL CONTROL

SCHEDULE OF OTHER MATTERS
2023-02 Timeliness of Finalizing Financial Reports (Continued) Potential Effect: The above condition delayed the finalization of the audited financial reports, increasing the risk that unauthorized transactions, errors or misstatements may go undetected, and corrections may not be made in a timely manner.

Recommendation: The Town should analyze staff resources to ensure that the financial report is reviewed timely.

Management Responses:

Staff resources and priorities have been evaluated and are adequate for future financial reports review.

Financial Management dealt with extenuating circumstances that occurred during the Fiscal Year 2022/23 audit. These circumstances are being overcome and staff prioritizes continued adequate finalization of audit reports timely.
4

TOWN OF ATHERTON

MEMORANDUM ON INTERNAL CONTROL

SCHEDULE OF OTHER MATTERS

NEW GASB PRONOUNCEMENTS OR PRONOUNCEMENTS NOT YET EFFECTIVE The following comment represents new pronouncements taking affect in the next few years. We cite them here to keep you informed of developments:

EFFECTIVE FISCAL YEARS 2022, 2023 and 2024:

GASB 99 – Omnibus 2022
The objectives of this Statement are to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing (1) practice issues that have been identified during implementation and application of certain GASB Statements and (2) accounting and financial reporting for financial guarantees. The practice issues addressed by this Statement are as follows:
• Classification and reporting of derivative instruments within the scope of Statement No. 53, Accounting and Financial Reporting for Derivative Instruments, that do not meet the definition of either an investment derivative instrument or a hedging derivative instrument • Clarification of provisions in Statement No. 87, Leases, as amended, related to the determination of the lease term, classification of a lease as a short term lease, recognition and measurement of a lease liability and a lease asset, and identification of lease incentives • Clarification of provisions in Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements, related to (a) the determination of the public-private and public-public partnership (PPP) term and (b) recognition and measurement of installment payments and the transfer of the underlying PPP asset
• Clarification of provisions in Statement No. 96, Subscription-Based Information Technology Arrangements, related to the subscription-based information technology arrangement (SBITA) term, classification of a SBITA as a short term SBITA, and recognition and measurement of a subscription liability
• Extension of the period during which the London Interbank Offered Rate (LIBOR) is considered an appropriate benchmark interest rate for the qualitative evaluation of the effectiveness of an interest rate swap that hedges the interest rate risk of taxable debt • Accounting for the distribution of benefits as part of the Supplemental Nutrition Assistance Program (SNAP)
• Disclosures related to nonmonetary transactions
• Pledges of future revenues when resources are not received by the pledging government • Clarification of provisions in Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, as amended, related to the focus of the government-wide financial statements
5

TOWN OF ATHERTON

MEMORANDUM ON INTERNAL CONTROL

SCHEDULE OF OTHER MATTERS
GASB 99 – Omnibus 2022, (Continued)
• Terminology updates related to certain provisions of Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position • Terminology used in Statement 53 to refer to resource flows statements.

The Requirements of this Statement are Effective as Follows:

The requirements in paragraphs 26–32 related to extension of the use of LIBOR, accounting for SNAP distributions, disclosures of nonmonetary transactions, pledges of future revenues by pledging governments, clarification of certain provisions in Statement 34, as amended, and terminology updates related to Statement 53 and Statement 63 are effective upon issuance.

The requirements in paragraphs 11–25 related to leases, PPPs, and SBITAs are effective for fiscal years beginning after June 15, 2022, and all reporting periods thereafter.

The requirements in paragraphs 4–10 related to financial guarantees and the classification and reporting of derivative instruments within the scope of Statement 53 are effective for fiscal years beginning after June 15, 2023, and all reporting periods thereafter.

Earlier application is encouraged and is permitted by individual topic.

How the Changes in This Statement Will Improve Financial Reporting The requirements of this Statement will enhance comparability in the application of accounting and financial reporting requirements and will improve the consistency of authoritative literature. Consistent authoritative literature enables governments and other stakeholders to more easily locate and apply the correct accounting and financial reporting provisions, which improves the consistency with which such provisions are applied. The comparability of financial statements also will improve as a result of this Statement. Better consistency and comparability improve the usefulness of information for users of state and local government financial statements.
6

TOWN OF ATHERTON

MEMORANDUM ON INTERNAL CONTROL

SCHEDULE OF OTHER MATTERS
EFFECTIVE FISCAL YEAR 2023/24:

GASB 100 – Accounting for Changes and Error Corrections The primary objective of this Statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability.

This Statement defines accounting changes as changes in accounting principles, changes in accounting estimates, and changes to or within the financial reporting entity and describes the transactions or other events that constitute those changes. As part of those descriptions, for (1) certain changes in accounting principles and (2) certain changes in accounting estimates that result from a change in measurement methodology, a new principle or methodology should be justified on the basis that it is preferable to the principle or methodology used before the change. That preferability should be based on the qualitative characteristics of financial reporting—understandability, reliability, relevance, timeliness, consistency, and comparability. This Statement also addresses corrections of errors in previously issued financial statements.

This Statement prescribes the accounting and financial reporting for (1) each type of accounting change and (2) error corrections. This Statement requires that (a) changes in accounting principles and error corrections be reported retroactively by restating prior periods, (b) changes to or within the financial reporting entity be reported by adjusting beginning balances of the current period, and (c) changes in accounting estimates be reported prospectively by recognizing the change in the current period. The requirements of this Statement for changes in accounting principles apply to the implementation of a new pronouncement in absence of specific transition provisions in the new pronouncement. This Statement also requires that the aggregate amount of adjustments to and restatements of beginning net position, fund balance, or fund net position, as applicable, be displayed by reporting unit in the financial statements.

This Statement requires disclosure in notes to financial statements of descriptive information about accounting changes and error corrections, such as their nature. In addition, information about the quantitative effects on beginning balances of each accounting change and error correction should be disclosed by reporting unit in a tabular format to reconcile beginning balances as previously reported to beginning balances as restated.

Furthermore, this Statement addresses how information that is affected by a change in accounting principle or error correction should be presented in required supplementary information (RSI) and supplementary information (SI). For periods that are earlier than those included in the basic financial statements, information presented in RSI or SI should be restated for error corrections, if practicable, but not for changes in accounting principles.
7

TOWN OF ATHERTON

MEMORANDUM ON INTERNAL CONTROL

SCHEDULE OF OTHER MATTERS
EFFECTIVE FISCAL YEAR 2024/25:

GASB 101 – Compensated Absences
The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures.

Recognition And Measurement
This Statement requires that liabilities for compensated absences be recognized for (1) leave that has not been used and (2) leave that has been used but not yet paid in cash or settled through noncash means. A liability should be recognized for leave that has not been used if (a) the leave is attributable to services already rendered, (b) the leave accumulates, and (c) the leave is more likely than not to be used for time off or otherwise paid in cash or settled through noncash means. Leave is attributable to services already rendered when an employee has performed the services required to earn the leave. Leave that accumulates is carried forward from the reporting period in which it is earned to a future reporting period during which it may be used for time off or otherwise paid or settled. In estimating the leave that is more likely than not to be used or otherwise paid or settled, a government should consider relevant factors such as employment policies related to compensated absences and historical information about the use or payment of compensated absences. However, leave that is more likely than not to be settled through conversion to defined benefit postemployment benefits should not be included in a liability for compensated absences.

This Statement requires that a liability for certain types of compensated absences—including parental leave, military leave, and jury duty leave—not be recognized until the leave commences. This Statement also requires that a liability for specific types of compensated absences not be recognized until the leave is used.

This Statement also establishes guidance for measuring a liability for leave that has not been used, generally using an employee’s pay rate as of the date of the financial statements. A liability for leave that has been used but not yet paid or settled should be measured at the amount of the cash payment or noncash settlement to be made. Certain salary-related payments that are directly and incrementally associated with payments for leave also should be included in the measurement of the liabilities.

With respect to financial statements prepared using the current financial resources measurement focus, this Statement requires that expenditures be recognized for the amount that normally would be liquidated with expendable available financial resources.

Notes To Financial Statements
This Statement amends the existing requirement to disclose the gross increases and decreases in a liability for compensated absences to allow governments to disclose only the net change in the liability (as long as they identify it as a net change). In addition, governments are no longer required to disclose which governmental funds typically have been used to liquidate the liability for compensated absences. 8

TOWN OF ATHERTON

MEMORANDUM ON INTERNAL CONTROL

SCHEDULE OF OTHER MATTERS
GASB 101 – Compensated Absences (Continued)
How the Changes in this Statement Will Improve Financial Reporting The unified recognition and measurement model in this Statement will result in a liability for compensated absences that more appropriately reflects when a government incurs an obligation. In addition, the model can be applied consistently to any type of compensated absence and will eliminate potential comparability issues between governments that offer different types of leave.

The model also will result in a more robust estimate of the amount of compensated absences that a government will pay or settle, which will enhance the relevance and reliability of information about the liability for compensated absences.
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Town of Atherton
Measure A Special Revenue Fund
Report on Compliance with the
Agreement for Distribution of San Mateo County
Measure A Funds for Local Transportation Purposes
For the Year Ended June 30, 2023

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INDEPENDENT AUDITOR'S REPORT ON MANAGEMENT’S ASSERTION
Honorable Mayor and Members of City Council of the
Town of Atherton, California
We have examined management of the Town of Atherton’s assertion, included in accompanying Management’s Report on Compliance with the Agreement for Distribution of San Mateo County Measure A Funds for Local Transportation Purposes (the Agreement) between the Town of Atherton (the Town) and the San Mateo County Transportation Authority dated January 21, 2009, that the Town of Atherton complied with the requirements of the Agreement during the year ended June 30, 2023. Management is responsible for that assertion. Our responsibility is to express an opinion on management’s assertion about the Town’s compliance based upon our examination.

Our examination was conducted in accordance with the attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the examination to obtain reasonable assurance about whether management’s assertion that the City complied with the requirements of the Agreement is fairly stated, in all material respects. An examination involves performing procedures to obtain evidence about management’s assertion. The nature, timing and extent of procedures selected depend on our judgment, including an assessment of the risks of material misstatement of management’s assertion, whether due to fraud or error. We believe that the evidence we obtained is sufficient and appropriate to provide a reasonable basis for our opinion.

We are required to be independent and to meet our other ethical responsibilities in accordance with relevant ethical requirements relating to the engagement.

In our opinion, management’s assertion that the Town complied with the requirements of the Agreement for the year ended June 30, 2023 is fairly stated, in all material respects.

This report is intended solely for the information and use of management and the City Council and mayor and is not intended to be and should not be used by anyone other than those specified parties; however, this restriction is not intended to limit the distribution of this report, which is a matter of public record.

Pleasant Hill, California
November 6, 2023

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TOWN OF ATHERTON

SCHEDULES OF MEASURE A FUND
AS OF AND FOR THE YEAR ENDED JUNE 30, 2023

BALANCE SHEET
Assets:

Cash and investments 1,257,175 $
Receivables:

Taxes 39,130
Total Assets 1,296,305 $
Liabilities:

Accounts payable 6,898 $
Total Liabilities 6,898
Fund Balance:

Restricted 1,289,407
Total Fund Balance 1,289,407
Total Liabilities and Fund Balance 1,296,305 $

SCHEDULE OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCE
Revenues:

Measure A sales tax 524,932 $
Use of money & property 15,267
Total Revenues 540,199
Expenditures:

C/CAG congestion relief fee 16,580
Capital outlay 113,764
Total Expenditures 130,344
Net Change in Fund Balance 409,855
Fund Balance - beginning 879,552
Fund Balance - ending $ 1,289,407

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Town of Atherton
Measure W Funds
Report on Compliance with the
Agreement for Distribution of San Mateo County
Measure W Funds for
Local Transportation Purposes in Accordance
with the San Mateo County Congestion Relief Plan
For the Year Ended June 30, 2023

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INDEPENDENT AUDITOR'S REPORT ON MANAGEMENT’S ASSERTION
Honorable Mayor and Members of City Council of the
Town of Atherton, California
We have examined management of the Town of Atherton’s assertion, included in accompanying Management’s Report on Compliance with the Agreement for Distribution of San Mateo County Measure W Funds for Local Transportation Purposes in Accordance with the San Mateo County Congestion Relief Plan (the Agreement) between the Town of Atherton and the San Mateo County Transportation Authority dated December 2, 2019, that the Town complied with the requirements of the Agreement during the year ended June 30, 2023. Management is responsible for that assertion. Our responsibility is to express an opinion on management’s assertion about the Town’s compliance based upon our examination.

Our examination was conducted in accordance with the attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the examination to obtain reasonable assurance about whether management’s assertion that the City complied with the requirements of the Agreement is fairly stated, in all material respects. An examination involves performing procedures to obtain evidence about management’s assertion. The nature, timing and extent of procedures selected depend on our judgment, including an assessment of the risks of material misstatement of management’s assertion, whether due to fraud or error. We believe that the evidence we obtained is sufficient and appropriate to provide a reasonable basis for our opinion.

We are required to be independent and to meet our other ethical responsibilities in accordance with relevant ethical requirements relating to the engagement.

In our opinion, management’s assertion that the Town complied with the requirements of the Agreement for the year ended June 30, 2023 is fairly stated, in all material respects.

This report is intended solely for the information and use of management and the City Council and mayor and is not intended to be and should not be used by anyone other than those specified parties; however, this restriction is not intended to limit the distribution of this report, which is a matter of public record.

Pleasant Hill, California
November 6, 2023

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TOWN OF ATHERTON

SCHEDULES OF MEASURE W FUND
AS OF AND FOR THE YEAR ENDED JUNE 30, 2023

BALANCE SHEET
Assets:

Cash and investments 649,971 $
Taxes receivable 20,691
Total Assets 670,662 $
Fund Balance:

Restricted $ 670,662

SCHEDULE OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCE
Revenues:

Measure W Sales Tax 233,525 $
Use of Money & Property 7,894
Total Revenues 241,419
Fund Balance - beginning 429,243
Fund Balance - ending $ 670,662

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Item No. 8
Town of Atherton
CITY COUNCIL STAFF REPORT – REGULAR AGENDA
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: GEORGE RODERICKS, CITY MANAGER
DATE: JULY 17, 2024
SUBJECT: CONSIDER ACCEPTANCE OF A LOANED SCULPTURE
ENTITLED “CELEBRATION”; AND, IF APPROPRIATE, DIRECT

THE CITY MANAGER AND CITY ATTORNEY TO FINALIZE

THE TERMS OF THE ACCEPTANCE

RECOMMENDATION
It is recommended that the Council consider acceptance of a loaned sculpture entitled “Celebration”; and, if appropriate, direct the City Manage and City Attorney to finalize the terms of the acceptance.

BACKGROUND
The acceptance of art or sculpture donations rests with the City Council. Atherton resident, Valerie Gardner has asked that the Council consider acceptance of a loan of a sculpture created by her father and artist, Norman Gardner. The details and terms of the loan are noted below and the narrative is provided by Valerie Gardner.

ANALYSIS
The sculpture under consideration is titled
“Celebration.” It is a 7-foot tall, stainless steel
representational depiction of figures
celebrating in a circle, and is a one-of-a-kind
piece created and completed in 2006 by the
artist, Norman Gardner.

Over the course of his career, he completed
about a half dozen landscape-scale sculptures,
this is the last unique landscape sculpture he
produced and the only one that was fabricated
entirely of stainless steel.

Figure 1 - Photoshop Mock Up of Possible Location @
Town Center

Consideration of Sculpture Acceptance – Loan – “Celebration” JULY 17, 2024

The sculpture was originally commissioned for the entrance to a private day school in Palo Alto.

The sculpture was completed, shipped and installed at the school, where it has been for the last 18 years.

The terms for its loan to the school by Gardner-Tiemann family required that it remain accessible for viewing by the public. The school is no longer able to comply with that requirement, so the sculpture has been reclaimed by the family and is available for a new site that meets their terms.

The artist, Norman Gardner, died in 2017. Although he lived most of the year in Boca Raton, Florida, he frequently summered in Atherton to be near his children and grandchildren. He and I spent a lot of time working together on numerous projects, including this sculpture project, which was something of a collaboration. We funded the costs of the sculpture fabrication but my father donated all of his time and artistic talent well after he had retired on the expectation that the sculpture would be viewable by the public. Which is why we are considering relocating the sculpture to Atherton’s new and gorgeous town center.

This sculpture remains in my personal collection and, after a considerable amount of reflection, I realize that it has tremendous sentimental value to me and my family. Accordingly, I am not prepared to donate it but I am happy to provide the following terms that I believe will meet both my father’s preferences and the needs of the Town.

Terms for Loan of Gardner Sculpture

1. We are willing loan out “Celebration” to the Town of Atherton under a long-term loan of ten years, automatically renewable for subsequent ten-year terms, unless cancelled by either party.

2. We will agree on an outdoor location that is in open public space, of which there are several viable options at the Town Center, where the sculpture can be installed on a pedestal in public view. Once agreed, the sculpture will not be moved without Gardner-Tiemann family approval.

3. The Town will underwrite the cost of constructing a suitable pedestal (in concrete, exact design and dimensions to be agreed to between the Town and me) and moving the sculpture to the Town Center and installing it on the pedestal. There are three bolt holes in the sculpture’s base which make securing the sculpture to the pedestal relatively easy to do. I will, of course, assist with the moving and installation process at no cost for my time, and provide guidance, having been involved with the initial installment of the sculpture together with the artist in 2006.

4. The town will be responsible for providing light maintenance (occasionally removing dust) and insurance against vandalism or theft of the item valued at $250,000 (with proceeds to be provided to the owners). This sculpture requires little maintenance, as being made of stainless steel it will not rust, but it is irreplaceable.

5. We will also agree to the placement of a plaque with agreed on info about the artist and its status as being part of the Gardner-Tiemann family collection, on loan to the town. The GardnerTiemann family will underwrite the design, production and installation of the plaque on the pedestal base.

Consideration of Sculpture Acceptance – Loan – “Celebration” JULY 17, 2024

6. The Gardner family will have the right to reclaim the sculpture for any reason after the first 5 years of being sited at the Town, with a ninety-day written notice. Additionally, the Town will have the right to return the sculpture to the Gardner-Tiemann family after 5 years for any reason, with a ninety-day written notice. So long as both parties agree, the loan will automatically renew for additional 10-year terms, with an updated appraisal of the then value of the sculpture used for insurance renewal purposes.

7. The Town will have the right to purchase the sculpture at an agreed-to price. Should the Gardner-Tiemann family get a bona fide offer for the purchase of Celebration during the first tenyear term at a price that they are willing to accept, the Town will have a right of first refusal on the purchase of the sculpture at that price. If the Town does not wish to purchase the sculpture at the negotiated price received by the family, the family will be free to reclaim and/or sell the sculpture with a ninety-day notice following the end of the first five years.

8. The Town and the Gardner-Tiemann family will sign a more formal legal agreement memorializing these and other standard terms for the loan of artwork from a private collection for the purpose of public display and media announcements thereof.

Consideration of Sculpture Acceptance – Loan – “Celebration” JULY 17, 2024

FISCAL IMPACT
At this time, staff does not have an estimate of the cost of installation or the necessary insurance that will be required at the stated value. These costs are not anticipated to be excessive.

GOAL ALIGNMENT
This Report and its contents are in alignment with the following Council Policy Goals:
• Goal Area B – Preserve Small Town Character and Quality of Life

POLICY FOCUS
The City Council has traditionally accepted the “donation” of various pieces of sculpture and taken full responsibility for them. Maintaining a sculpture of this magnitude as an on loan sculpture is a different policy discussion for Council’s consideration.

PUBLIC NOTICE
Public notification was achieved by posting the agenda, with this agenda item being listed, at least 72 hours prior to the meeting in print and electronically. Information about the project is also disseminated via the Town’s electronic News Flash and Atherton Online. There are approximately 1,200 subscribers to the Town’s electronic News Flash publications. Subscribers include residents as well as stakeholders –to include, but be not limited to, media outlets, school districts, Menlo Park Fire Protection District, service provides (water, power, and sewer), and regional elected officials.

COMMISSION/COMMITTEE FEEDBACK/REFERRAL
This item has not been before a Town Committee or Commission

ATTACHMENTS
None

Item No. 9
Town of Atherton
CITY COUNCIL STAFF REPORT – REGULAR AGENDA
TO: HONORABLE MAYOR AND CITY COUNCIL

GEORGE RODERICKS, CITY MANAGER
FROM: ROBERT OVADIA, PUBLIC WORKS DIRECTOR
DATE: JULY 17, 2024
SUBJECT: INTERIM UPDATE - PICKLEBALL PILOT AT HOLBROOKPALMER PARK

RECOMMENDATION
It is recommended that the Council receive an interim update on the pickleball pilot at HolbrookPalmer Park.

BACKGROUND
Beginning February 2022, the Park & Recreation Committee undertook a review of pickleball options for Holbrook-Palmer Park which ultimately made its way to the City Council in March 2023. In March 2023, the Council directed that staff work with a Subcommittee of the City Council to create a community interest survey for pickleball at Holbrook-Palmer Park.

The purpose of the Survey was to understand and gather comments, both positive and negative, that would serve as a guide to the Council’s decision-making about pickleball in the Park. The Survey was released in early April 2023 and closed at the end of May 2023. The survey results were presented to the City Council at their regular meeting on July 19, 2023. Following discussion, the Council directed staff to review the costs of implementing a pickleball trial at Holbrook-Palmer Park by converting Court 1 for dual use with two pickleball courts striped over the existing tennis court and bring back to the City Council for review and direction.

Staff presented approximate costs for implementing the pilot program as outlined by the City Council for discussion at the September 20, 2023, regular City Council Meeting, and the City Council approved the implementation of the pickleball trial in October 2023, for implementation in January 2024.

ANALYSIS
Following Council approval of the pickleball trial, staff coordinated the striping of Court 1 to accommodate two pickleball courts (one on each side of the tennis net), purchased portable nets,

Pickleball Pilot Update
JULY 17, 2024

and coordinated with Player Capital Tennis to adjust the court reservation system to accommodate pickleball reservations on Court 1 during trial hours. The pickleball courts were available for reservation and use beginning on January 22, 2024, during approved hours. Court 1 is available for tennis reservations during non-pickleball hours. Staff also contracted with MCE to purchase and install the sound baffling materials on the interior fences of Court 1. The baffling material was installed on April 23, 2024.

Estimated Pickleball usage, based on reservations made through the On-line Court Reservation information provided by Player Capital Tennis is as follows:

Month Hours
January 2024 8
February 2024 15.5
March 2024 24
April 2024 52.5
May 2024 84.5
June 2024 124
As noted in the table, early usage of the pickleball courts were low in the initial months, likely due to the weather and awareness of the trial. Usage has been increasing steadily, with approximately 124 hours of reserved use in June 2024.

An assessment survey of the was released on June 20, 2024, and will be collecting input through the end of July. A high-level summary of interim results (July 8, 2024) are as follows:

High-level Summary (83 respondents):
• Residency:

Atherton 53
Menlo Park 25
Redwood City 2
Other (please specify) 3
• Are you aware of the trial?
Yes 78
No 4
• Do you use the courts:

For tennis 8
For pickleball 48
For both tennis and pickleball 9
I am a park visitor 14
I am a park neighbor 4

Pickleball Pilot Update
JULY 17, 2024

• Are you a current key holder:

Yes 39
No 44
• Did you purchase key for the trial?
Yes 29
No 52
• Easy or Difficult to reserve a court?
Easy 40
Somewhat difficult 12
Difficult 5
• On average, how many hours of Pickleball at Holbrok-Palmer Park:

I don't use the courts for pickleball 17
1 - 2 hours per month 12
1 - 2 hours per week 16
2 - 5 hours per week 18
greater than 5 hours per week 8
Other (please specify) 9
• Opinion of temporary pickleball courts:
generally positive 67
generally negative 13
• Does sound baffling make a difference:

Yes 45
No 4
Can't tell a difference 24
• Should reservations be required?
Yes, always 21
Mostly reservation, with limited drop-in play 30
Mostly drop-in, with limited reservation 16
No, never (drop-in only) 10
• Should the Town consider permanent pickleball facilities:

Yes 72
No 8
• If permanent courts were provided, where should they be located:

Continued joint use of an existing tennis court 13

Pickleball Pilot Update
JULY 17, 2024

Conversion of an existing tennis court to full-time pickleball court(s) 41 Separate court or courts located elsewhere in the park 18 Detailed interim results are provided in Attachment #1.

Anecdotally, year to date key sales (as of July 3, 2024) are 129 keys. A total of 99 keys were sold last year.

FISCAL IMPACT
None at this time.

GOAL ALIGNMENT
This Report and its contents are in alignment with the following Council Policy Goals:
• Goal Area F – Be Forward-Thinking, Well-Managed, and Well-Planned

POLICY FOCUS
The policy focus for this item is related to pickleball usage at Holbrook-Palmer Park.

PUBLIC NOTICE
Public notification was achieved by posting the agenda, with this agenda item being listed, at least 72 hours prior to the meeting in print and electronically. Information about the project is also disseminated via the Town’s electronic News Flash and Atherton Online. There are approximately 1,200 subscribers to the Town’s electronic News Flash publications. Subscribers include residents as well as stakeholders –to include, but be not limited to, media outlets, school districts, Menlo Park Fire Protection District, service provides (water, power, and sewer), and regional elected officials.

COMMISSION/COMMITTEE FEEDBACK/REFERRAL
This item has not been before a Town Committee or Commission

ATTACHMENTS

1. Pickleball Trial Assessment Interim Survey Results

Atherton Pickleball Trial - Assessment Survey
1 / 31

63.86%

30.12%

2.41%

3.61%
Q1 City of Residence
Answered: 83 Skipped: 0
TOTAL
# OTHER (PLEASE SPECIFY) DATE
1 Palo Alto 6/23/2024 3:51 PM
2 Portola Valley 6/22/2024 4:14 PM
3 North Fair Oaks 6/21/2024 5:29 PM
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Atherton
Menlo Park
Redwood City
Other (please
specify)

ANSWER CHOICES RESPONSES
Atherton
Menlo Park
Redwood City
Other (please specify)

Atherton Pickleball Trial - Assessment Survey
2 / 31

95.12%

4.88%
Q2 Are you aware that the Town initiated a pickleball trial at HolbrookPalmer Park? Answered: 82 Skipped: 1
TOTAL
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Yes
No

ANSWER CHOICES RESPONSES
Yes
No

Atherton Pickleball Trial - Assessment Survey
3 / 31

9.64%

57.83%

10.84%

16.87%

4.82%
Q3 Do you use the courts at Holbrook-Palmer Park
Answered: 83 Skipped: 0
TOTAL
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
For tennis
For pickleball
For both
tennis and
pickleball
I am a park
visitor
I am a park
neighbor

ANSWER CHOICES RESPONSES
For tennis
For pickleball
For both tennis and pickleball
I am a park visitor
I am a park neighbor

Atherton Pickleball Trial - Assessment Survey
4 / 31

46.99%

53.01%
Q4 Are you a current court key holder?
Answered: 83 Skipped: 0
TOTAL
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Yes
No

ANSWER CHOICES RESPONSES
Yes
No

Atherton Pickleball Trial - Assessment Survey
5 / 31

35.80%

64.20%
Q5 Did you purchase a key to participate in the pickleball trial? Answered: 81 Skipped: 2
TOTAL
# OTHER (PLEASE SPECIFY) DATE
1 Not an Atherton resident, but I would be happy to. 6/30/2024 1:37 PM 2 Atherton friend has key 6/30/2024 11:55 AM
3 Am intersted in learning about Pickleball 6/24/2024 7:37 PM 4 My wife and I like to support the park in any way we can. We have purchased a court key the past c few years to support the park and in anticipation of playing pickleball 6/24/2024 7:08 AM
5 Went with a friend who did. 6/23/2024 6:53 PM
6 Nope. A fellow pickleballer did. 6/23/2024 5:42 PM
7 I would buy a key if pickleball is permanently available 6/23/2024 2:46 PM 8 But am interested! 6/21/2024 6:26 PM
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Yes
No

ANSWER CHOICES RESPONSES
Yes
No

Atherton Pickleball Trial - Assessment Survey
6 / 31

70.18%

21.05%

8.77%
Q6 Do you find it easy or difficult to make a reservation for court use? Answered: 57 Skipped: 26
TOTAL
# WHY? DATE
1 Limited times and dates for pickleball play. Even when other courts are not in use. 6/30/2024 1:37 PM 2 Easy, BUT then one needs to organize a group to play with as opposed to an easy drop-in system.
6/29/2024 2:46 PM
3 we have still not received our email code, despite emailing and calling to get it 6/25/2024 7:41 AM 4 NA 6/24/2024 7:37 PM
5 N/A 6/24/2024 1:02 PM
6 NA 6/23/2024 6:53 PM
7 Can’t comment. Key holder makes the reservations. 6/23/2024 5:42 PM 8 Not applicable 6/23/2024 3:51 PM
9 Limited hours of court availability 6/23/2024 2:46 PM 10 Difficult to connect to sign up. It would be nice if we could just show up and enjoy a Pickleball game with whoever wants to play.
6/22/2024 9:37 PM
11 My good friend has a key and makes the reservations 6/22/2024 4:14 PM 12 So many lessons and usta matches 6/22/2024 9:01 AM
13 Not enough availability in early afternoons 6/22/2024 7:25 AM 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Easy
Somewhat
difficult
Difficult

ANSWER CHOICES RESPONSES
Easy
Somewhat difficult
Difficult

Atherton Pickleball Trial - Assessment Survey
7 / 31
14 no key no reservation 6/22/2024 7:18 AM
15 Very few times available 6/21/2024 11:25 PM
16 I would love to have more Monday and Friday availability as those are work from home days for most companies in the area.
6/21/2024 6:44 PM
17 Limited times and availability 6/21/2024 6:02 PM
18 N/a. I don’t have a key 6/21/2024 5:29 PM
19 Very restrictive due to hours 6/21/2024 5:24 PM
20 I don’t reserve because I don’t have a key. 6/21/2024 8:58 AM

Atherton Pickleball Trial - Assessment Survey
8 / 31

70.13%

10.39%

7.79%

3.90%

2.60%

5.19%
Q7 On average, how many hours do you play tennis at Holbrook-Palme Park?
Answered: 77 Skipped: 6
TOTAL
# OTHER (PLEASE SPECIFY) DATE
1 NA 6/24/2024 7:37 PM
2 I use the tennis courts intermittently 6/21/2024 6:04 PM 3 I use the courts for pickleball 6/21/2024 6:02 PM
4 On occasion by invitation. 6/21/2024 5:29 PM
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
I don't use
the courts for
tennis
1 - 2 hours
per month
1 - 2 hours
per week
2 - 5 hours
per week
greater than 5
hours per week
Other (please
specify)

ANSWER CHOICES RESPONSES
I don't use the courts for tennis
1 - 2 hours per month
1 - 2 hours per week
2 - 5 hours per week
greater than 5 hours per week
Other (please specify)

Atherton Pickleball Trial - Assessment Survey
9 / 31

21.25%

15.00%

20.00%

22.50%

10.00%

11.25%
Q8 On average, how many hours do you play pickleball at HolbrookPalmer Park? Answered: 80 Skipped: 3
TOTAL
# OTHER (PLEASE SPECIFY) DATE
1 I end up playing else due to limited availability. 6/30/2024 1:37 PM 2 I have tried to book three times and still can't get email access 6/25/2024 7:41 AM 3 I broke my foot doing something else, but did go once and planned to get a key. 6/23/2024 6:53 PM 4 Twice as guest. I have access to courts at several other locales. 6/22/2024 11:33 AM 5 I would love to, but I am a single player. I was hoping for drop in pickleball 6/22/2024 9:01 AM 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
I don't use
the courts for
pickleball
1 - 2 hours
per month
1 - 2 hours
per week
2 - 5 hours
per week
greater than 5
hours per week
Other (please
specify)

ANSWER CHOICES RESPONSES
I don't use the courts for pickleball
1 - 2 hours per month
1 - 2 hours per week
2 - 5 hours per week
greater than 5 hours per week
Other (please specify)

Atherton Pickleball Trial - Assessment Survey
10 / 31
6 Only used it twice 6/21/2024 8:55 PM
7 I have a shoulder injury so I have not been able to use the PB courts much the past few months.
6/21/2024 4:55 PM
8 varies, but I try to use the courts at least 5 hours/week 6/21/2024 4:46 PM 9 The limited availability impacts my ability to play here often. 6/20/2024 9:39 PM

Atherton Pickleball Trial - Assessment Survey
11 / 31
Q9 When do you play (or prefer to play) pickleball
Answered: 68 Skipped: 15

76.12%
51 31.34%
21 47.76%
32 89.83%
53 35.59%
21 32.20%
19 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Mornings Afternoons Evenings
Weekday
Weekend

MORNINGS AFTERNOONS EVENINGS TOTAL RESPONDENTS
Weekday
Weekend

Atherton Pickleball Trial - Assessment Survey
12 / 31

83.75%

16.25%
Q10 Please describe your opinion of the temporary pickleball courts (layout, striping, nets, noise)
Answered: 80 Skipped: 3
TOTAL
# PLEASE ELABORATE. DATE
1 Too noisy. All the competing lines are distracting. PB courts should be isolated from the tennis courts. Tennis is a game of quiet concentration. Pickleball is noisy and socially raucous. PB courts should not be near tennis
7/7/2024 12:40 PM
2 Pickleball has made booking tennis courts harder 7/6/2024 7:57 PM 3 Noise abatement is excellent. Nets and lining is very good. 7/3/2024 9:09 AM 4 However- the HPP tennis court perimeter is 2' wider than Nealon Park's...therefore there is plenty of room to stripe 4 pickleball courts on the one tennis court like Nealon. 6/29/2024 2:46 PM
5 Nice to have them, but need better lineage 6/29/2024 12:47 PM 6 Blue pickleball kitchen line blends in with tennis court. 6/26/2024 5:02 PM 7 Why absorb existing courts; just add 1 02 two Pickleball Courts away from the tennis courts 6/24/2024 7:37 PM 8 Very loud. 6/24/2024 1:02 PM
9 People love the Pickleball! Please keep these courts open - they bring such joy! 6/24/2024 9:34 AM 10 I know it's a delicate balance accommodating pickleball while trying to not disrupt tennis. For the trial, I think the courts are appropriate
6/24/2024 7:08 AM
11 We need more pickleball courts please! 6/23/2024 8:41 PM 12 We need four on the court. 6/23/2024 6:53 PM
13 need more hours of play 6/23/2024 6:38 PM
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
generally
positive
generally
negative

ANSWER CHOICES RESPONSES
generally positive
generally negative

Atherton Pickleball Trial - Assessment Survey
13 / 31
14 Courts are roomy. Court lines are Legible. 6/23/2024 5:42 PM 15 Well done! Night safety have four permanent courts there. 6/23/2024 5:16 PM 16 Need better striping and higher quality nets 6/23/2024 2:46 PM 17 Noise, Pickleball should not be played on tennis courts. Should have separate courts, 6/23/2024 7:52 AM 18 Nice to have court reservations; beautiful park. Lines could be more differentiated. Nets are good but permanent would be much better.
6/22/2024 4:14 PM
19 Striping is a bit confusing 6/22/2024 8:23 AM
20 Excellent! 6/22/2024 7:25 AM
21 Too noisy 6/21/2024 8:55 PM
22 This is a noisy game, period -- not much to be done about that, and it's annoying. 6/21/2024 8:52 PM 23 So great to have this sport available in our park! 6/21/2024 6:44 PM 24 N/A 6/21/2024 6:26 PM
25 Fun and appropriate addition to the park for residents 6/21/2024 5:38 PM 26 Lines could be painted a better color that is easier to distinguish 6/21/2024 5:29 PM 27 We would play MORE and in AFTERNOONS if court times not blocked off. Please open more court times!
6/21/2024 5:07 PM
28 I see quite a few people using the pickleball courts - more than use the tennis courts! I am delighted to see people using the Park.
6/21/2024 4:51 PM
29 Love the courts 6/21/2024 8:58 AM
30 The implementation of this trial is appreciated. I hope that play hours can be revisited and pickle ball players can have more play opportunities.
6/20/2024 9:39 PM

Atherton Pickleball Trial - Assessment Survey
14 / 31

61.64%

5.48%

32.88%
Q11 Has the sound baffling material installed between courts been effective in reducing noise related to pickleball use?
Answered: 73 Skipped: 10
TOTAL
# COMMENTS DATE
1 Don't know. 6/24/2024 7:40 PM
2 NA 6/24/2024 7:37 PM
3 Makes the courts really hot! 6/24/2024 9:34 AM
4 I do think it helps a bit....sound is a huge issue so it should be an ongoing effort to find different, effective, reasonable ways to mitigate the sound 6/24/2024 7:08 AM
5 Live in Lindenwood 6/23/2024 6:53 PM
6 Works well 6/23/2024 5:16 PM
7 Depends what court you play tennis 6/23/2024 7:52 AM
8 I never pay attention to Reduction of noise 6/22/2024 9:37 PM 9 I don't play tennis nor a resident of Felton Gables, which are the sides that face the baffling.

It's hard for me to tell any difference from the park side. 6/22/2024 8:20 AM
10 IT makes the courts very hot. I wish you would remove it 6/22/2024 7:18 AM 11 N/A 6/21/2024 6:26 PM
12 No noise concerns. 6/21/2024 5:07 PM
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Yes
No
Can't tell a
difference

ANSWER CHOICES RESPONSES
Yes
No
Can't tell a difference

Atherton Pickleball Trial - Assessment Survey
15 / 31
13 I’ve never been bothered by court noise - either pickleball or tennis. 6/21/2024 4:51 PM 14 I can't hear the tennis players so assume it's equally effective to block pickleball noise on the tennis courts.
6/21/2024 4:46 PM

Atherton Pickleball Trial - Assessment Survey
16 / 31

27.27%

38.96%

20.78%

12.99%
Q12 Should reservations be required for pickleball use? Answered: 77 Skipped: 6
TOTAL
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Yes, always
Mostly
reservation,
with limited...

Mostly
drop-in, with
limited...

No, never
(drop-in only)

ANSWER CHOICES RESPONSES
Yes, always
Mostly reservation, with limited drop-in play
Mostly drop-in, with limited reservation
No, never (drop-in only)

Atherton Pickleball Trial - Assessment Survey
17 / 31
Q13 If drop-in hours were available, when should they be provided? Answered: 64 Skipped: 19

58.06%
36 58.06%
36 61.29%
38 66.07%
37 64.29%
36 64.29%
36 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Mornings Afternoons Evenings
Weekdays
Weekend

MORNINGS AFTERNOONS EVENINGS TOTAL RESPONDENTS
Weekdays
Weekend

Atherton Pickleball Trial - Assessment Survey
18 / 31

88.89%

9.88%

1.23%
Q14 Should the Town consider installation of permanent pickleball facilitie at Holbrook-Palmer Park?
Answered: 81 Skipped: 2
TOTAL
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Yes
No
No opinion

ANSWER CHOICES RESPONSES
Yes
No
No opinion

Atherton Pickleball Trial - Assessment Survey
19 / 31

18.06%

56.94%

25.00%
Q15 If permanent courts were provided, where should they be located? Answered: 72 Skipped: 11
TOTAL
# WHERE? DATE
1 Away from the tennis courts 7/7/2024 12:40 PM
2 No preference, Somewhere away from tennis courts to avoid the sounds 7/6/2024 7:57 PM 3 Minimal cost. 7/3/2024 9:09 AM
4 Anywhere! 6/30/2024 11:55 AM
5 Confusing question as I take "permanent " to mean it's not joint use... if there are "permanent " pickle nets, how could one possibly play tennis on it? In any case- the one tennis court should be striped for 4 pickleball courts like at Nealon- plus HPP is bigger so there's plenty of room... more courts encourages more players and less waiting to play during drop-in days. Court 1 works.
6/29/2024 2:46 PM
6 You could also arrange pickle courts on an existing court such that you fit 3-4 on one court. (See Nealon Park). This would accommodate more players. 6/26/2024 5:02 PM
7 Back wall behind court 4-5 6/25/2024 9:23 PM
8 in left fiels foul area of baseball field 6/24/2024 7:37 PM 9 Strongly prefer to build pickle ball courts elsewhere in park. This is an amazing tennis facility.

Used by the best jr players in the country. Incredible resource. 6/24/2024 1:02 PM
10 Courts should absolutely NOT be located elsewhere in the park. I think the conversion of ONE court is appropriate, with the option of "portable" conversions of other courts as needed to 6/24/2024 7:08 AM
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Continued
joint use of an
existing ten...

Conversion of
an existing
tennis court...

Separate court
or courts
located...

ANSWER CHOICES RESPONSES
Continued joint use of an existing tennis court
Conversion of an existing tennis court to full-time pickleball court(s) Separate court or courts located elsewhere in the park

Atherton Pickleball Trial - Assessment Survey
20 / 31
accommodate peak times.
11 Anywhere as long as there are plenty of them. 6/23/2024 8:41 PM 12 The current temp court would be great for a permanent spot 6/23/2024 5:16 PM 13 any of the above 6/23/2024 4:53 PM
14 Yes 6/22/2024 9:37 PM
15 In back next to carriage house maybe? 6/22/2024 9:01 AM 16 More availability with minimal cost 6/22/2024 7:25 AM 17 Suggest converting the rarely used clay court; adjacent to current courts and/or where the rebound wall is located
6/21/2024 8:12 PM
18 Use current trial court 6/21/2024 6:48 PM
19 Maybe somewhere near the tennis courts 6/21/2024 6:26 PM 20 Or could put in additioal pickleball courts in another part of the park. 6/21/2024 6:13 PM 21 Use existing trial court. 6/21/2024 6:01 PM
22 There is such a growing popularity for PB that permanent courts are needed. It matters less where they are but that they should be permanent. Option B is cost effective and would increase availability of PB courts (a win-win!)
6/21/2024 5:07 PM
23 Near the railroad tracks so near by neighbors wouldn't hear the noise much. 6/21/2024 4:55 PM 24 It would be nice to have permanent courts. Location not so important to me. 6/21/2024 8:58 AM 25 closer to the main road 6/21/2024 8:33 AM

Atherton Pickleball Trial - Assessment Survey
21 / 31
Q16 Please provide any additional feedback regarding the pickleball trial Holbrook-Palmer Park.

Answered: 47 Skipped: 36
# RESPONSES DATE
1 The sooner the court #1 can be restored just for tennis the better 7/6/2024 7:57 PM 2 More availability please. 7/3/2024 9:09 AM
3 Convert clay court to pball, remove practice wall behind courts for additional pball courts. 7/1/2024 10:39 PM 4 Love it, so fun!!! 6/30/2024 11:55 AM
5 There should be alternate reservation days and drop-in days. (If the only way to get this past the City Council is to continue key sales then require drop-ins to be key holders or guests of key holders.) Try M/W/F/Sun for rez and Tue/Thur/Sat drop-in. However- Atherton is THE only town in the area without free Pickleball... so for the past 4 or 5 years, all us Athertonians have been using free courts in neighboring MP, RWC, & PA. We need to be more neighborly! 6/29/2024 2:46 PM
6 Loooooove pickleball!! Looking forward to many more years of enjoyment at Holbrook Palmer pickle courts PLEASE :)
6/27/2024 8:35 AM
7 Shared courts are fine as long as there enough hours for pickleball. Court 1 (the shared court) should be the last one available for tennis. Key holders should have some drop in options. I am a park neighbor as well. Loved meeting new community members through this trial. 6/26/2024 5:11 PM
8 afternoon sign ups are only available T/Th. Often no tennis players are playing then. It would be nice to allow either tennis or pickle in afternoons. It only takes one minute to move nets.

Also if other tennis courts are open tennis folks should sign up for those before taking court 1. 6/26/2024 5:02 PM
9 sound fencing has helped. Build separate pickle ball facilities 6/25/2024 12:17 PM 10 I have played at lots of different Pickleball courts in many towns. The way to go is to put in permanent pickle ball courts like the Ritz Carlton and Half Moon Bay has done. They are a great example.
6/25/2024 4:39 AM
11 Allow Pickleball in existing courts ASAP & build a new court elsewhere I enough "keys" are purchased
6/24/2024 7:37 PM
12 I can’t even tell you how much excitement, joy and community building these pickleball courts are bringing to my friends!!
6/24/2024 9:34 AM
13 I am in favor of pickleball in the park. However, I do think the sound of play is a true issue.

Continued efforts to limit sound disruption is paramount. Concerns and comments from our neighbors at Felton Gables should be listened to and given attentive consideration. A park should be about recreation, and part of that recreation could be accommodating pickleball players. The town, and the players enjoying the park need to be cognizant of the different opinions about the game, and the concerns of non-players. Active compromise by both should be an on-going effort to provide the activity while mitigating the sound. I am a resident of Atherton in nearby Lloyden Park (the "Poverty Pocket" as the great Jim Massey used to refer to it)
6/24/2024 7:08 AM
14 Please allow the pickleball courts to be drop in and please build more. 6/23/2024 8:41 PM 15 Pickleball has been the fastest growing sport over the past three years. Be progressive and hop on the pickleball bandwagon. Make HPP an inviting pickleball destination for all levels of play.
6/23/2024 5:42 PM
16 Very pleased to see my hometown embracing pickleball. Thank you 6/23/2024 5:24 PM

Atherton Pickleball Trial - Assessment Survey
22 / 31
17 Love having courts in our community since all other cities around us have pickleball too. It’s growing massively in popularity and HPP would be a great place to let locals play close to home.
6/23/2024 5:16 PM
18 it should not be a competition between tennis and pb 6/23/2024 4:53 PM 19 It’s been great using these pickleball courts, please keep them and expand 6/23/2024 3:51 PM 20 This is a great idea and a chance for people to play more pickleball. I'll definitely purchase a key if the program extends.
6/23/2024 2:48 PM
21 Love having the ability to play pickleball in HPP. Making the courts permanent would add a lot to the community. For permanent courts, you can get 3 or 4 pickleball courts on a single tennis court which means that 16 people could play simultaneously (like at Nealon Park in Menlo Park)
6/23/2024 2:46 PM
22 Drop in/open play should be encouraged! Social events surrounding PB should be initiated 6/23/2024 10:37 AM 23 Trial does not have enough people playing pickleball 6/23/2024 7:52 AM 24 I think that pickle ball is much more popular now than tennis. When I cannot play pickle ball at Holbrook Palmer Park I go to the Red Morton community center 6/22/2024 9:37 PM
25 Overall fantastic unique experience. Ideal would be move to permanent courts and maintain reservations to key holders only; there is enough drop in between Palo Alto and Menlo Park. I would be happy to require all users to buy a key.
6/22/2024 4:14 PM
26 I was looking forward to playing, but without drop-in hours, a single player is shut out. Would also love some drop tennis hours with courts separated by level. Also, think about being able to reserve 1 hour singles and 1.5 hours doubles for tennis 6/22/2024 9:01 AM
27 If there are separate courts that can be converted that would work as well. Any thing that will allow for permanent pickleball courts.
6/22/2024 8:23 AM
28 If there is some demand for pickleball, I would support continued joint use of an existing court between tennis and pickleball. If there is high demand for pickleball, especially if there are donations (a good demand indicator), an existing tennis court could be converted or new courts could be constructed. If the clay court is deemed not suitable for tennis anymore, it could be converted back to a hard court, whether that be tennis or pickleball play. That would keep the number of usable courts for tennis about equal as now. Alternatively, new pickleball courts could be constructed where the tennis hitting wall is currently located. There may be room for two or three courts there.
6/22/2024 8:20 AM
29 Please make pickleball a permanent option. Thank you! 6/22/2024 7:25 AM 30 Love playing at HPP!!! Please continue to let PB players have a court. 6/22/2024 7:18 AM 31 Pickleball is inclusive for old and young also pickle courts get used more. Build a full time court.
6/21/2024 11:25 PM
32 Don't do anything permanent until this fad wanes. It's a noisy game, and neighbors already have park noise. The entire town is so noisy with out of control construction, we need some respite. Spend the money on other much needed resources. Staffed offices, employees that answer the phone, planning department that is open longer hours, etc. 6/21/2024 8:55 PM
33 This is a very noisy sport, between the sound of the paddles/balls and the increasing number of players per square area of court. Unless there's a whole new place to put it that doesn't disturb neighbors, park visitors, or others, it just cannot be accommodated. Atherton budget would be much better spent cleaning streets, fixing gutters and drains, and other infrastucture. 6/21/2024 8:52 PM
34 Thank you for conducting the trial and continuing pickle ball fun for Atherton residents at Holbrook Palmer Park.
6/21/2024 8:12 PM
35 I love pickleball and it is a lovely way to meet fellow community members. I will continue to purchase a key if pickleball is perminent.
6/21/2024 6:13 PM
36 I'm supportive of having pickleball at the Hollbrook Palmer courts. Makes sense, since 6/21/2024 6:04 PM

Atherton Pickleball Trial - Assessment Survey
23 / 31
pickleball is so popular, and it's a service/function that our City ought to make available to its residents.
37 The town needs to realize that pickleball is yet another way for our more senior community to gather and enjoy each other.
6/21/2024 6:02 PM
38 Fun times! Great way to meet other residents from the community! 6/21/2024 6:00 PM 39 It would be great to have at least one permanent court and one dual purpose court as the tennis courts are not always used
6/21/2024 5:24 PM
40 Geez guys! Atherton is way behind the times of getting on board with the pickleball craze. It is the fastest growing sport in America, maybe the world. Two courts is not enough and stop with all the questions and get up to speed (no pun intended). 6/21/2024 5:10 PM
41 Not enough folks know about pickleball being available but the ones who do are frequent players. We just started playing PB brand new 2 months ago DUE to the pilot! Now we are avid players 3x per week and have shared PB with 8 friends so far who have begun playing.

PLEASE make some PB courts permanent and INCREASE availability (we often can't play now due to full reservations). Consider option for 90 min reservations if possible. 6/21/2024 5:07 PM
42 If it's not financially feasible to build new pickleball courts than it would be nice to have dedicated courts so converting an existing tennis court would be the next preferable option.

Also, would like Atherton residents to be the only players able to reserve the courts to ensure that the courts are not taken over by other players who do not live in the Town. 6/21/2024 4:55 PM
43 HPP is a jewel of Atherton! It is for all residents - not just dog walkers, not just soccer players, not just tennis players. I love that pickleball has brought in a whole new group of park users 6/21/2024 4:51 PM
44 The pickleball trial has shown how the community can benefit from permanent pickleball courts at HPP. As the trial continues, please consider extending the hours for pickleball use. 6/21/2024 4:46 PM
45 Love playing close to home. Courts are in great shape. Please keep pickleball alive at the park.
6/21/2024 8:58 AM
46 The community is enjoying the pickle trial. Please consider increasing our equity. 6/20/2024 9:39 PM 47 I think the trial is has been terrific, and I very much hope it becomes permanent. I use the courts frequently, I've met new friends here, including nearby neighbors who have been enthusiastic about the pickleball courts.
6/20/2024 3:10 PM

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Answered: 42 Skipped: 41
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Item No. 10
Town of Atherton
CITY COUNCIL STAFF REPORT – REGULAR AGENDA
TO: HONORABLE MAYOR AND CITY COUNCIL

GEORGE RODERICKS, CITY MANAGER
FROM: ROBERT OVADIA, PUBLIC WORKS DIRECTOR
DATE: JULY 17, 2024
SUBJECT: BICYCLE AND PEDESTRIAN MASTER PLAN UPDATE

REQUEST FOR PROPOSALS

RECOMMENDATION
It is recommended that the Council review, provide feedback and authorize release of a Request for Proposals (RFP) for the update of the Town’s Bicycle and Pedestrian Master Plan.

BACKGROUND
The Town’s Bicycle and Pedestrian Master Plan (Plan) was adopted in 2014. The development of the plan included an extensive public outreach process and outlined existing conditions, recommended policies and programs, and made recommendations regarding the Town’s bicycle and pedestrian network. The project recommendations included project estimates and priorities.

Since the plan was adopted, the Town completed various projects including:
• Townwide Class III Bike Route Improvements
• Peninsula Bikeway Improvements
• Middlefield Road / Oak Grove Avenue Complete Streets Enhancements • Middlefield Road Class II Bicycle Lane Improvements
The Town is also working on a cooperative project with the City of Menlo Park to improve the Valparaiso Avenue Class II bike lanes concurrent with the slurry seal of the street, has awarded a construction contract for the Fair Oaks Lane / Lloyden Drive Intersection Improvements project, and has initiated design of Class II bike lanes on Selby Lane.

Additionally, the Town, with the support of a grant from the San Mateo County Transportation Authority (SMCTA) has initiated the El Camino Real Complete Streets Gap Closure Planning Study. The Town has also initiated the Alameda de ls Pulgas Traffic and Safety Improvements project, partially funded by a Community Project Funding Grant supported by Congresswoman Eshoo’s office.

Bicycle and Pedestrian Master Plan Update
JULY 17, 2024

An update of the Plan is needed to recognize efforts and accomplishments to date and to identify and outline current needs and priorities. Best practices and the findings of the San Mateo County Civil Grand Jury recommend that jurisdictions update their bicycle and pedestrian plans every five years. Funding for the Bicycle and Pedestrian Master Plan Update was included in the FY 2024- 25 Capital Improvement Program Budget.

Following identification of the need to refresh the Plan, several ongoing projects highlighted the need to reengage the community in evaluation of priorities and development of conceptual designs that are supported by the community. The Town also recently received a grant through San Mateo City/County Association of Government (C/CAG) and the Metropolitan Transportation Authority MTC) to assist in updating the Plan through the Transportation Development Act – Article 3 (TDA) program.

ANALYSIS
The draft RFP seeks a qualified transportation planning consultant or team specializing in multimodal mobility and pedestrian/bicycle planning to provide professional and technical planning services to update the Town of Atherton’s Bicycle and Pedestrian Master Plan (Plan). The bicycle and pedestrian master plan update should recognize accomplishments, assess and understand current needs, update plan priorities and cost estimates, as well as develop conceptual designs for major projects in a collaborative manner with the public. Objectives include:
• Update data sets including traffic and bicycle counts along major routes and collector streets.
• Engage the community in defining needs and priorities. • Develop conceptual designs for major routes with input from residents and community stakeholders, including incorporation of green infrastructure and stormwater treatment measures.
• Update and amend current goals, policies and programs regarding bicycle and pedestrian access and safety. This may include recommendations on a right-of-way improvement requirement for certain development projects.
• Identify areas with high levels of pedestrian and bicycle activity where improvements can be cost-effective and beneficial.
• Develop a description of all proposed facilities, including cross-sections, right-of-way width needed, estimated cost, agency coordination needed, ownership, proposed street crossings, etc.
• Prioritize proposed projects into short-term and long-term timeframes with high, medium, and low priorities.
• Identify funding sources and strategies for implementation of the proposed projects including local, regional and federal funding programs. • Develop geographic information diagrams for the recommended bicycle, trail, and pedestrian improvements in a form that can continue to be modified and presented to the public.

Bicycle and Pedestrian Master Plan Update
JULY 17, 2024

• Attend Town of Atherton’s Transportation, Bicycle and Pedestrian Safety Committee meetings and incorporate their input into the plan update. • Follow best practices and guidance from C/CAG, MTC, SMCTA, Caltrans, and the National Association of City Transportation Officials (MACTO) and others as appropriate.
• Meet the requirements of the current TDA funding grant.

The following evaluation criteria are proposed for the RFP:
• Team’s Qualifications – 10%
• Project Manager’s Technical Experience and Approach - 25% • Understanding of Project Issues – 20%
• Quality of Proposed Work Plan and Schedule – 35%
• Quality of References – 10%
The timeline for the RFP is proposed as follows:

July 31, 2024 RFP available on Town of Atherton website August 16, 2024 Submission deadline for written questions August 23, 2024 Responses to written questions available on Town website September 10, 2024, 2pm Technical and Cost Proposals due September 23, 2024 (week of) Interviews with highest ranked proposers (if necessary) October 16, 2024 Recommendation to City Council

FISCAL IMPACT
The costs related to preparation and distribution of an RFP are limited.

GOAL ALIGNMENT
This Report and its contents are in alignment with the following Council Policy Goals:
• Goal Area B – Preserve Small Town Character and Quality of Life • Goal Area D – Manage Circulation and Improve Safety
• Goal Area F – Be Forward-Thinking, Well-Managed, and Well-Planned

POLICY FOCUS
Policy focus should be on need to update the Bicycle and Pedestrian Master Plan.

PUBLIC NOTICE
Public notification was achieved by posting the agenda, with this agenda item being listed, at least 72 hours prior to the meeting in print and electronically. Information about the project is also disseminated via the Town’s electronic News Flash and Atherton Online. There are approximately

Bicycle and Pedestrian Master Plan Update
JULY 17, 2024

1,200 subscribers to the Town’s electronic News Flash publications. Subscribers include residents as well as stakeholders –to include, but be not limited to, media outlets, school districts, Menlo Park Fire Protection District, service provides (water, power, and sewer), and regional elected officials.

COMMISSION/COMMITTEE FEEDBACK/REFERRAL
This item has not been before a Town Committee or Commission

ATTACHMENTS

1. Draft Request for Proposals for the Town of Atherton Bicycle and Pedestrian Master Plan Update.

TOWN OF ATHERTON

REQUEST FOR PROPOSAL
Bicycle and Pedestrian Master Plan Update
Issued:

July 31, 2024
Proposals Due:

September 10, 2024, 2 p.m.

Town of Atherton
Office of the City Clerk
80 Fair Oaks Lane
Atherton Ca 94027

2 Table of Contents:

A) OVERVIEW ----------------------------------------------------------------------------------------------- 3 B) BACKGROUND----------------------------------------------------------------------------------------------- 3 C) OBJECTIVES -------------------------------------------------------------------------------------------------- 4 D) REFERENCE DOCUMENTS -------------------------------------------------------------------------------- 4 E) SCOPE OF WORK ------------------------------------------------------------------------------------------- 4 F) SUBMISSION OF PROPOSALS --------------------------------------------------------------------------- 6 G) GENERAL TERMS AND CONDITIONS ----------------------------------------------------------------- 7 H) SUBMITTAL AND REVIEW PROCESS ----------------------------------------------------------------- 7 I) EVALUATION CRITERIA ------------------------------------------------------------------------------------ 7 J) PROPOSED TIMELINE ------------------------------------------------------------------------------------- 8

3 A. OVERVIEW
The Town of Atherton is seeking a qualified transportation planning consultant or team specializing in multi-modal mobility and pedestrian/bicycle planning to provide professional and technical planning services to update the Town of Atherton’s Bicycle and Pedestrian Master Plan (Plan). The Plan, completed in 2014, has been used as a basis to develop and implement improvements to the Town’s active transportation network. Since the adoption of the Plan, several improvements have been implemented, and other project studies initiated. An update of the Bicycle and Pedestrian Masterplan is needed to recognize accomplishments, assess and understand current needs, update plan priorities and cost estimates, as well as develop conceptual designs for major projects in a collaborative manner with the public.

B. BACKGROUND
The Town of Atherton, incorporated in 1923, is a small, semi-rural, residential community, with approximately 7,000 residents. The Town extends from slightly west of the Bayshore Freeway (US 101) up to I-280 and is approximately 4.5 miles long and 1.5 miles wide. Its municipal neighbors include Menlo Park to the south, Woodside to the west and Redwood City to the north, and San Mateo County to the east.

Within the Town, El Camino Real (Route 82) is a conventional state highway that bisects the community and provides primary access for vehicles in a northwest-southeast orientation. El Camino Real runs approximately 1.5 miles through the Town and is shared jurisdiction with Redwood City and San Mateo County to the north and Menlo Park to the south.

The Town of Atherton’s General Plan land use goal is to “preserve the Town’s character as a scenic, semi-rural, thickly wooded residential area with abundant open space.” The Circulation Element of the General Plan identifies all streets in Atherton as scenic routes. All transportation facilities must be planned and designed under the overriding principle of maintaining the Town’s semi-rural character. The Pedestrian and Bicycle Master Plan shall be consistent with the Town’s overarching goal to preserve the semi-rural character of the Town and scenic qualities of the streets.

The original Plan put forward visionary yet practical recommendations for improving travel safety and encouraging greater use of active, low-impact travel modes, while maintaining the semi-rural character of the Town. As noted above, The Town has completed several projects since development of the Plan including but not limited to:
• Townwide Class III Bike Route Improvements
• Peninsula Bikeway Improvements
• Middlefield Road / Oak Grove Avenue Complete Streets Enhancements • Middlefield Road Class II Bicycle Lane Improvements
• Valparaiso Avenue Bicycle Lane Enhancements (El Camino Real to Elena Avenue) – currently being implemented with the City of Menlo Park

4 • Fair Oaks Lane/Lloyden Drive Intersection Improvements currently under construction
Caltrans, in cooperation with the City of Redwood City, is developing a plan to install Class III and Class IV bike lanes on El Camino Real from Downtown Redwood City to Selby Lane.

Additionally, the Town, with the support of a grant from the San Mateo County Transportation Authority (SMCTA) has initiated the El Camino Real Complete Streets Gap Closure Planning Study. The Town has also initiated the Alameda de ls Pulgas Traffic and Safety Improvements project, partially funded by a Community Project Funding Grant supported by Congresswoman Eshoo’s office.

Following identification of the need to refresh the Plan, several additional projects highlight the need to reengage the community in evaluation of priorities and development of conceptual designs supported by the community. The Town recently received a grant through San Mateo City/County Association of Government (C/CAG) and the Metropolitan Transportation Authority MTC) to assist in updating the Plan through the Transportation Development Act – Article 3 (TDA) program.

C. OBJECTIVES
The updated Bicycle and Pedestrian Master Plan will build off the findings and recommendations from the 2014 Bicycle and Pedestrian Master Plan, engage the community in reassessing needs and priorities, develop recommendations short- and long-term projects to maximize the safety and mobility of cyclists and pedestrians throughout the community while maintaining the semi-rural character of the Town. Objectives include:
• Update data sets including traffic and bicycle counts along major routes and collector streets.
• Engage the community in defining needs and priorities. • Develop conceptual designs for major routes with input from residents and community stakeholders, including incorporation of green infrastructure and stormwater treatment measures.
• Update and amend current goals, policies and programs regarding bicycle and pedestrian access and safety. This may include recommendations on a right-of-way improvement requirement for certain development projects. • Follow best practices and guidance from C/CAG, MTC, SMCTA, Caltrans, and the National Association of City Transportation Officials (MACTO) and others as appropriate.
• Meet the requirements of the current TDA funding grant. • Meet the requirements of current bicycle and pedestrian grant programs such as Active Transportation Program (ATP) such that the plan can be used to support future grant opportunities.

5 • Identify and improve upon a comprehensive interconnected network of existing and planned bikeways and trails for transportation and recreation purposes. • Identify areas with high levels of pedestrian and bicycle activity where improvements can be cost-effective and beneficial.
• Develop a description of all proposed facilities, including cross-sections, right-of-way width needed, estimated cost, agency coordination needed, ownership, proposed street crossings, etc.
• Prioritize proposed projects into short-term and long-term timeframes with high, medium, and low priorities.
• Identify funding sources and strategies for implementation of the proposed projects including local, regional and federal funding programs. • Develop geographic information diagrams for the recommended bicycle, trail, and pedestrian improvements in a form that can continue to be modified and presented to the public.
• Attend Town of Atherton’s Transportation, Bicycle and Pedestrian Safety Committee meetings and incorporate their input into the plan update.

D. REFERENCE DOCUMENTS
Town documents are available that contain information relevant to this project. The available documents are noted below:
• Town of Atherton, 2014 Bicycle and Pedestrian Master Plan; (https://www.ci.atherton.ca.us/DocumentCenter/View/9527/AthertonBPMP?bidId=) • Town of Atherton, 2019 General Plan (see Chapter 2, Circulation Element); (https://www.ci.atherton.ca.us/DocumentCenter/View/7325/General-Plan2019_FINAL-DRAFT) • Alameda de las Pulgas Corridor Study:
https://www.ci.atherton.ca.us/documentcenter/view/11469 • Townwide Local Traffic Flow/Long Range Planning Solutions Study:
https://www.ci.atherton.ca.us/DocumentCenter/View/11470 • Neighborhood Traffic Management Program:
https://www.ci.atherton.ca.us/412/Neighborhood-Traffic-Management-Program • Neighborhood Traffic Management Action Plan:
https://www.ci.atherton.ca.us/DocumentCenter/View/9554/ITEM-19 • Town of Atherton Green Infrastructure Plan:
https://www.ci.atherton.ca.us/documentcenter/view/6813
E. SCOPE OF WORK
The successful consultant will enter into a professional services agreement for the update to the Bicycle and Pedestrian Master Plan. It should include, but not be limited to, the following tasks:

1. Review of adjacent agencies’ pedestrian, trail and bicycle plans.

Commented [CR1]: Likely a more recent edition

6 2. Identification of desired destination / facilities to provide connectivity too.

3. Identification of stakeholders.

Note: Stakeholders should include, but are not limited to residents, pedestrian and bicycle coalitions, schools, community groups, homeowners’ associations, police and fire.

4. Conduct public outreach (engagement meetings, interactive mapping website, etc.). The purpose of the outreach is to receive input from the public regarding the existing plan, current needs, issues, concerns and priorities to assist in development of the update and priority of the proposed projects.

5. Meet with stakeholders. At a minimum, the meetings with the stakeholders are to:
➢ Have an initial meeting:
i. Provide input to the scope of the work to be performed ii. Determine their level of involvement.
iii. Determine how the stakeholders would like to be involved. iv. Present the information developed, prior to presenting it to the public. v. Present the working draft prior to presentation it to the Transportation, Bicycle and Pedestrian Safety Committee.

As identified above, at a minimum three (3) meetings with the stakeholders are to be scoped. If the consultant feels additional meetings are required, this is to be included in the scope. At each meeting, the stakeholders’ comments are to be recorded and addressed in the plan or an explanation as to why the comments were not addressed is to be provided, in writing, to Town staff. The consultant will be responsible for all preparation required and meeting coordination for the stakeholders’ meetings.

6. Develop an initial plan to be presented to the stakeholder’s group.

7. Have a public meeting to present the initial plan. The purpose of the meeting is to receive input from the public regarding the plan, additional connections and for the public to provide input on the priority of the proposed projects. ➢ Note: The consultant is responsible for the development of meeting notification material, (i.e. press release and meeting flyers). Town staff will be responsible for the coordination of location, issuing press releases and notifying the public.

8. From input received, a working draft plan is to be developed. This plan is to be presented to the stakeholders for review and comment.

9. Prepare adequate CEQA documentation for the Master Plan. It is anticipated that an Initial Study and Mitigated Negative Declaration will be the appropriate level of Commented [CR2]: Unsure of what this is

7 documentation required for this project. A Mitigation Monitoring Program will also be required.

10. Develop a final draft plan to be presented to the Transportation, Bicycle and Pedestrian Safety Committee.

11. Present the plan to the Planning Commission.

12. Present the plan to City Council.

13. For each meeting, (stakeholders, public meeting, Transportation, Bicycle and Pedestrian Safety Committee, Planning Commission and City Council) comments are to be recorded and addressed in the plan or an explanation as to why the comments were not addressed is to be provided, in writing, to Town staff. Additional tasks that add value and will enhance the plan are to be included in the scope of work.

Additional tasks that add value and will enhance the plan are to be included in the scope of work.

Deliverables:

F. SUBMISSION OF PROPOSALS
Town staff will evaluate the proposals received and develop a short list of the most qualified firms. They may be invited to interview and may be asked to submit more detailed information. Proposals should be concise and contain at least the following information:
• Firm or Person Introduction: including information such as form of organization, length of time in business, office location(s), number of staff and a general summary of qualifications documenting the strengths of the firm or person, areas of expertise and licensing. Include name, email address and phone number for the firm’s contact person.
• APPROACH: the person or firm’s project management practices, methodologies and processes.
• PROJECT EXPERIENCE: listing specific experience in developing and updating bicycle and pedestrian masterplans and design of complete streets projects, including public outreach and engagement. Project experience should list the type of work provided with the client contact information for each project. If SubConsultants are proposed, include information on joint work, if any, and their roles in those projects.
• WORK PLAN: A description of project understanding, detailed approach, and methodology, including estimated hours by task by job title for the project. • KEY STAFF: including the identification of the Principal-in-Charge and key staff.

This section should identify the qualifications and related experience of key staff assigned to the project; and include their resume showing experience in

8 remodeling and repurposing of historic buildings, historical museums and displays. Include an organizational chart for this project. • REFERENCES: Provide client references, for all similar projects in the past five (5) years, that have working experience with the project team and companies proposed for assignment to this project. Furnish the name, title, address, and telephone number of the person(s) at the client reference who is most knowledgeable about the work performed and can comment on the professional qualifications/expertise of the staff.
• PROJECT SCHEDULE – Propose a timeline for completion of the project, and include start date, phases, milestones, and target completion dates. Any assumptions regarding turnaround time and City Council meetings should be clearly noted.
• LITIGATION: a list of any current litigation to which the firm or person are parties by virtue of their professional service, in addition to a list of any such litigation from the past ten years.
• DISCLOSURE: of any past, ongoing, or potential conflicts of interest that the firm or person may have as a result of performing the anticipated work. Consultant shall also provide a list of any work currently being performed for any jurisdiction or substantial property owner/developer within a five (5) mile radius of the Town of Atherton.
• PROFESSIONAL SERVICES AGREEMENT: Consultant will be expected to execute the Town’s Standard Professional Services Agreement. The Consultant shall list any required modifications with their proposal. The Town reserves the right to accept or reject any such modifications or may reject proposals based on the proposed modifications.
• FEE INFORMATION: Provide fee information that ties tasks to specific tasks.

Provide a description of the level of effort required, listing the estimated hours required for each task in the Scope of Services, hourly rates of personnel, and expected incidental expenses such as travel, supplies, communications, reproduction, mailing, etc. Identify the fee that will be charged for additional public or City Council meetings not identified in the scope of services. One (1) copy of the cost proposal shall be submitted in a separate sealed envelope at the same time as submittal of the technical proposal.

G. GENERAL TERMS AND CONDITIONS
• The Town reserves the right to reject any and all proposals. • The Town will not be responsible for any costs incurred by respondents in the preparation and submittal of a response to this request. • The Town reserves the right to modify the scope of the project at any time, with appropriate fee adjustments to be negotiated.
• Documents and findings (regardless of format) that are associated with this project shall be the property of the Town.

9 • Proposal shall remain effective for 90 days beyond the submitted date.

H. SUBMITTAL AND REVIEW PROCESS
• Applicant questions: All questions regarding the RFP shall be submitted in writing to Tim Au, Associate Engineer, at [email protected]. Questions and responses will be posted on the Atherton Town website.
• Submittal Deadline: September 10, 2024, 2:00pm. Late submittals will not be accepted.
• Format and Delivery: Submit three (3) letter-sized copies with one (1) unbound copy of the proposal to: Town of Atherton, Office of the City Clerk; 80 Fair Oaks Lane; Atherton, CA 94027
• E-mail a PDF copy to Tim Au, Associate Engineer, at [email protected] • Submittals will not be returned.
• The Town reserves the right to accept or reject any or all proposals, or to alter the selection process in any lawful way, to postpone the selection process for its own convenience at any time, and to waive any non-substantive defects in this RFP or the proposals.
• The Town reserves the right to short list the most qualified firms for consideration during the RFP process.
• The Town reserves the right to negotiate with other qualified persons or firms, or to solicit additional statements of qualifications at any point in the project should it fail to negotiate a reasonable fee with the initially selected person or firm or should that firm fail to execute the Town’s Agreement.

I. EVALUATION CRITERIA
The Project Manager will be the key point of contact with City staff and will be expected to drive the project to meet schedule and budgetary goals. [Possibly add desired experience of Project Manager].

Proposals will be evaluated based on the following criteria:
• Team’s Qualifications – 10%
• Project Manager’s Technical Experience and Approach - 25% • Understanding of Project Issues – 20%

10 • Quality of Proposed Work Plan and Schedule– 35%
• Quality of References – 10%
J. PROPOSED TIMELINE
July 31, 2024 RFP available on Town of Atherton website August 16, 2024 Submission deadline for written questions August 23, 2024 Responses to written questions available on Town website September 10, 2024, 2pm Technical and Cost Proposals due September 23, 2024 (week of) Interviews with highest ranked proposers (if necessary) October 16, 2024 Recommendation to City Council

Item No. 11
Town of Atherton
CITY COUNCIL STAFF REPORT – REGULAR AGENDA
TO: HONORABLE MAYOR AND CITY COUNCIL

GEORGE RODERICKS, CITY MANAGER
FROM: ROBERT OVADIA, PUBLIC WORKS DIRECTOR
DATE: JULY 17, 2024
SUBJECT: CONSIDERATION OF KNOX PLAYSCHOOL LEASE

AMENDMENT

RECOMMENDATION
It is recommended that the Council consider an amendment to the current lease with Knox Playschools, Inc., adjusting payable rent and extending the lease term through August 31, 2025, and two additional one-year renewal options with associated payable rent adjustments.

BACKGROUND
Knox Playschools Incorporated operates a playschool in Holbrook-Palmer Park in facilities leased from the Town. The current lease was initially executed in 2001 and has been amended eleven (11) times, most recently in August 2024.

Amendment No. 11, approved by the City Council in July 2023, extended the lease to the Knox Playschool by one year with a rental amount based on enrollment. The amendment is coming to an end, expiring August 30, 2024.

Knox has advised that while they are no longer affected by Covid restrictions, enrollment at Playschool continues to be a challenge due to a variety of factors including: a reduced birth rate since 2020, young families moving out of the area, and most 4-year-olds attending transitional kindergarten (TK) at local public schools.

The Playschool has been adapting its program offerings in an attempt to attract more families. For the 2023-24 school year, they added extended care from 2:00- 5:00 pm, Mon-Thurs, to make it a nearly full-time program for preschoolers. They also added a 2 morning/week class (Tuesdays and Thursdays from 8:30-12:00) for the 2024-25 school year for those families who want a part time program.

Knox Playschools appreciates the support previously provided by the Council and is requesting

Knox Playschool Lease Amendment
JULY 17, 2024

similar consideration, continuing the linkage between the rental rates and enrollment, as were approved in the most recent lease amendments.

ANALYSIS
The current lease provides for payable rent based on school enrollment as follows:
• $125 per student per month, both during the academic year (September 1, 2023, through May 31, 2024), and the summer term (June 1, 2024, through August 30, 2024).

This was increased from $100 per student per month during the academic year (September 1, 2022, through May 31, 2023) and adjusted from $134 per student per month during the summer term (June 1, 2023, through August 30, 2023).

Knox Playschools is proposing an increase to payable rent from $125 per student per month to $135 per student per month for the September 1, 2024, August 30, 2025, lease extension. **Estimated revenue during the academic year (September 1, 2024 through June 30, 2025): 46 children for school year = $6210/month and during the summer camp months (July 1, 2024 through August 31, 2024) 32 children for summer = $4320/month
If the two 1-year options are approved by the Council, Knox Playschools is proposing an annual increase to payable rent of $10 per student per month each year. This would result in payable rent as follows:
• $145 per student per month, both during the academic year (September 1, 2025, through May 31, 2026), and the summer term (June 1, 2026, through August 30, 2026). • $155 per student per month, both during the academic year (September 1, 2026, through May 31, 2027), and the summer term (June 1, 2027, through August 30, 2027).

Knox Playschools is also asking to maintain termination cause approved in the most recent amendments, which allows for termination with a 30-day notice.

FISCAL IMPACT
Current enrollment estimates are 46 students per month during the upcoming academic year, and approximately 32 students per month during the summer term. The payable rent for the current lease year has been approximately $5,000 per month during the academic year and $4,000 per month during the summer term. The proposed rent for the lease extension, would be approximately $6,210 per month during the academic year and $4,320 per month during the summer term, a net increase of approximately $11,000 for the year, inclusive of the anticipated enrollment increases during the academic year.

GOAL ALIGNMENT
This Report and its contents are in alignment with the following Council Policy Goals:

Knox Playschool Lease Amendment
JULY 17, 2024

• Goal Area A – Maintain Fiscal Responsibility
• Goal Area B – Preserve Small Town Character and Quality of Life

POLICY FOCUS
Knox Playschool has been an asset to the Town. Susan has rented the Playschool for 26 years and the proposed rent adjustments would allow Susan to rent the facilities in the park for another year (or three years if the two 1-year options are approved).

PUBLIC NOTICE
Public notification was achieved by posting the agenda, with this agenda item being listed, at least 72 hours prior to the meeting in print and electronically. Information about the project is also disseminated via the Town’s electronic News Flash and Atherton Online. There are approximately 1,200 subscribers to the Town’s electronic News Flash publications. Subscribers include residents as well as stakeholders –to include, but be not limited to, media outlets, school districts, Menlo Park Fire Protection District, service provides (water, power, and sewer), and regional elected officials.

COMMISSION/COMMITTEE FEEDBACK/REFERRAL
This item has not been before a Town Committee or Commission

ATTACHMENTS

1. Knox Playschools Request Letter

June 10, 2024
To the Atherton Town Council:

Playschool is about to complete our 26th year here in Holbrook-Palmer Park and we are grateful to the Town of Atherton for allowing us to be a part of the community for all these years.

Thank you to the Council for reducing our rent during Covid and permitting the 30-day ‘out’ clause. Playschool likely would have closed permanently without those amendments to our lease during the past few years.

We are no longer affected by Covid restrictions, but enrollment at Playschool continues to be a challenge. We speculate that our reduced numbers are due to a variety of factors: the birth rate since 2020 is down, young families are moving out of the area for a myriad of reasons, and most 4 year olds now attend the local public schools’ transitional kindergarten (TK).

Playschool is adapting our program offerings in an attempt to attract more families. For the 2023-24 school year, we added extended care from 2:00- 5:00 pm, Mon-Thurs, to make it a nearly full time program for preschoolers.

And for those families who want a part time program, we added a 2 morning/week class (Tuesdays and Thursdays from 8:30-12:00 for the 2024- 25 school year).

Our current lease amendment with the Town of Atherton is expiring at the end of August. I would like to request another 1 year lease term (September 2024 through August 2025) with two additional 1 year options to renew.

1. I propose the payable rent to increase from $125 to $135 per student per month.
**Estimated revenue during the academic year (September 1, 2024 through June 30, 2025): 46 children for school year = $6210/month and during the summer camp months (July 1, 2024 through August 31, 2024) 32 children for summer = $4320/month

This would result in more yearly rent revenue for the Town in 2024-25 (est. $70k) than in 2023-24 (est. $56k).

2. If granted two 1 year options, for the second and third years, I propose the rent increase by the same $10/per child margin each subsequent year ($145 per child for 2025-26 and $155 per child for 2026-27). If we maintain similar enrollment, this would amount to approximately a $460/month rent increase per year.

3. While I don’t think we would close mid-year, and I have no intention of exercising it, I would appreciate continuation of the clause which allows 30 days’ notice for termination.

Thank you very much for your consideration of my requests.

Susan Knox
Knox Playschools, Inc.