Item No. 1
Town of Atherton
CITY COUNCIL STAFF REPORT – STUDY SESSION
TO: HONORABLE MAYOR AND CITY COUNCIL
GEORGE RODERICKS, CITY MANAGER
FROM: ROBERT BARRON III, FINANCE DIRECTOR
ROBERT OVADIA, DIRECTOR OF PUBLIC WORKS
DATE: JUNE 3, 2026
SUBJECT: REVIEW OF THE FY 2026/27 TOWN BUDGET SPECIAL REVENUE,
INTERNAL SERVICE FUNDS AND ALL FUNDS CHANGES ONLY
CAPITAL IMPROVEMENT PROGRAM
RECOMMENDATION
Review and discuss Operating Budget FY 2026/27 provide feedback Special Revenue, Internal Service Funds and Capital Improvement Program (CIP).
BACKGROUND & EXECUTIVE SUMMARY
The June 3 Study Session is the 4th meeting of the Council to discuss the FY 2026/27 Town Budget.
Prior meetings focused on General Fund and Capital Improvement Program. This Report also includes discussion of Special Revenue Funds and Internal Service Funds, returns the entirety of the budget back to the City Council and incorporates any adjustments from the last review (inclusive of the CIP).
Summary of Changes Since Last Council Meeting
General Fund
For FY 26/27, General Fund revenues are projected at $26,161,563 and General Fund expenditures are projected at $23,370,663. This reflects a single year surplus of $2,790,900 before the addition below the line of ERAF and transfers in/out for CIP. There is a projected year-end positive fund balance in the General Fund of $11.702 million. This is a decrease of approximately $2.145m from previous General Operations budget review. There is an allocation placeholder of $4.090 million and $250k annual facility replacement to the CIP below the line and this amount contributes to the decrease in fund balance. This will be discussed further in more detail in the CIP section of this report. The new fund balance amount includes an Unallocated Fund Balance of $4.691 million.
Town Financial Outlook Planning Model
FY 2026/27 Special Revenue, Internal Service Funds & CIP June 3, 2026
During the May 6 Budget Study Session, the Council discussed the 5-Year Planning Model and identified capital project priorities and new projects. In short, after review of the CIP the Council removed the Selby Bicycle Lane Project but added 4 projects discussed later that netted to approximately the same fiscal amount. The Council directed staff to incorporate all of the changes and return on June 3 with an updated spreadsheet.
Based on Council feedback, the updated FY 2026/27 allocation to CIP is $4,090,000 and $250,000 for Facility Replacement in the Financial Planning Model. This allocation is a transfer out from the General Fund in the FY 2026/27 budget towards the Capital Improvement Fund for Town project priorities in the Drainage, Bike & Ped, Streets, and Park Master plans. The Transfer out of $4.340 million is now incorporated below the line within the General Fund Revenues & Expenditure Summary.
With the changes made, there is a net available ending fund balance (after set-asides) of $4,691,207 (line 46) in FY 2026/27 in the Financial Planning Model Departmental Budget Changes
There was a slight decrease in adjustments to Revenues in the amount of $65,000 in the General Fund for FY 2026/27. There was an overall increase in General Fund Department expenditures in the amount of $5,832. The expenditures increase was due to department operation. o Police Department had an increase of $5,832 due to previous discussion and approval of adding specialty pay of 2.5% for the Therapy Canine Handler. The Police Department’s therapy canine program was established in July 2024. The therapy dog Emmy and her handler provide comfort, emotional support, and positive engagement during police and community interaction. There were also minor funding adjustments for County of San Mateo annual maintenance and Animal Control contracts.
CAPITAL IMPROVEMENT FUND
Staff provided the 5-Year Fiscal Outlook Spreadsheet and project list for Council review. Based on Council feedback, the total allocation amount from the General Fund for FY2026/27 is $4,340,000. The City Council reviewed the various baseline, on-going, and potential projects identified for funding consideration. Based on Council feedback, the allocation amount from the General Fund for the FY2026/27 CIP is $4,090,000 and $250,000 for facility replacement.
Policy discussion by the Council resulted in confirmation of current priorities and continuation of on-going projects with the noted exception of the Selby Bicycle Lane Project. Below are the resultant updated changes to the CIP program:
Added CIP Projects FY 2026/27:
- Middlefield Road Pedestrian Improvements (Design): $300,000 - El Camino Real/Atherton Avenue Intersection Study (study only): $350,000 - Drainage Master Plan Update: $350,000
FY 2026/27 Special Revenue, Internal Service Funds & CIP June 3, 2026
- HPP Asphalt Pathway Repairs (design and construction): $325,000 Staff noted that some of the projects or priorities have potential grant or non-general funds offsets.
These amounts reduced the General Fund contribution reflected in the final Unallocated balance of $4.090 million for CIP projects. There is a spreadsheet of baseline, ongoing, and new CIP projects attached. This spreadsheet includes the current status of each project.
The grant and offsets by Fiscal Year are as follows:
FY 2026/27
$300,000 from Library Funds
$1,000,000 – Alameda de las Pulgas Traffic and Safety Improvements (SMCTA – Awarded) $125,000 – El Camino Real/Selby Intersection Improvements (SMCTA – Awarded) FY 2027/28
$2,875,000 – El Camino Real/Selby Intersection and Drainage Improvements (SMCTA – Awarded)
$750,000 – Middlefield Road Pedestrian Improvements (SMCTA, C/CAG, or other - Potential) Without these funds, the General Fund would be required to make up the funding difference or the projects would not move forward. The Town continually reviews the 5-year Outlook that includes the above recommended updates and changes based on the Council's feedback on projects and priorities for General Fund allocation at tonight’s study session.
Ongoing and new major Capital Projects in the attached CIP Program Book and Project Status Spreadsheet include:
Traffic Safety Improvement Program – Page 14, #56064
Previously Funded Projects (Ongoing)
• Alameda de las Pulgas Traffic and Safety Improvements – This project includes a roundabout at the ADLP/Atherton Avenue intersection. The project is currently in the final design phase pending environmental clearance and grant funding approvals. Construction is anticipated to begin in FY 2026/27.
Funding for this project includes a $2m Federal Grant.
- $600,000 (FY 2022/23)
- $1,850,000 (FY 2023/24)
- $600,000 (FY 2024/25)
- $1,600,000 (FY 2025/26)
• Evaluation of traffic control devices and other improvements at both Middlefield Road/Fair Oaks Lane and Middlefield/Watkins Avenue - $100,000 (FY 2025/26)
FY 2026/27 Projects
• $1,000,000 – Alameda de las Pulgas Traffic and Safety Improvements (SMCTA Grant) • $350,000 – El Camino Real / Atherton Avenue Intersection Improvements Study • $15,000 (Annual) - Purchase/Replace fixed solar powered radar speed indicators (Measure M)
FY 2026/27 Special Revenue, Internal Service Funds & CIP June 3, 2026
• $25,000 (Annual) - Traffic Counts and Speed Surveys (Measure A) Future Projects
• $1,000,000 - Traffic Signal at Middlefield Road/Watkins Avenue (construction – FY 2027/28)
Bicycle Pedestrian Master Plan Implementation Program – Page 15, #56059 Previously Funded (Ongoing)
• Stockbridge Avenue at Alameda de las Pulgas Pedestrian Crossing Improvements (Rectangular Rapid Flashing Beacons – Funded FY 2023/24).
Design is complete, with construction in 2026.
• Watkins Avenue Pedestrian Improvements, Middlefield Road to McCormick Lane (Funded in FY 2022/23). Conceptual design completed and final design is pending.
• Bicycle and Pedestrian Master Plan Update. In Progress –$250,000 (2024/25) and $50,000 (FY 2025/26). Draft Active Transportation Plan developed, and final adoption anticipated in 2026.
• ECR Complete Streets Gap Closure Project – SamTrans lead (consultant support) - $100,000 (FY 2025/26).
• ECR/Selby Lane Intersection Improvements multi-year project - $250,000 (FY 2025-26).
This project will be partially funded with a grant from the San Mateo County Transportation Authority (SMCTA)
FY 2026/27 Projects
• $250,000 – ECR/Selby Lane Intersection Improvements (design) • $300,000 – Middlefield Road Pedestrian Improvements (design) • $25,000 – Grant applications for funding and partnerships to design or implement improvement
Future Projects
• $2,500,000 – ECR/Selby Lane Intersection Improvements (Construction – FY 2027/28) • $1,000,000 – Middlefield Road Pedestrian Improvements (Construction – FY 2027/28) Drainage Improvements Program – Page 19, #56034
Previously Funded (Ongoing)
• Atherton Channel Assessment and Relining Upstream of Alameda de las Pulgas. Project design is underway and initial regulatory consultations are initiated. Completion of project design and start of construction is anticipated in FY 2025/26.
- $400,000 (FY 2022/23)
- $2,400,000 (FY 2023/24)
- $2,000,000 (FY 2025/26)
• El Camino Real Long-Term Drainage Solutions. Conceptual design is complete and includes proposed de-watering stations, piping and appurtenances. Project design and implementation split into two phases:
1) ECR Drainage North (ECR/Selby w/extension to
Stockbridge) - project design initiated and will be integrated with planned intersection improvements at ECR/Selby.
Timing contingent on permitting by Caltrans for the
FY 2026/27 Special Revenue, Internal Service Funds & CIP June 3, 2026
integrated project
2) ECR Drainage South (ECR/Isabella w/extension to
Almendral) – project design will follow design of the North segment.
- $250,000 (FY 2023/24)
- $400,000 (FY 2024/25)
- $475,000 (FY 2025/26)
• The Atherton Channel culvert and detention system improvements at Alameda de las Pulgas and Las Lomitas Elementary School. This project has a $1.38m Federal grant (pending FEMA approval). Initiation of the project has been deferred pending grant approval.
- $225,000 (FY 2023/24)
- $2,750,000 (FY 2024/25) (included anticipated grant)
FY 2026/27 Projects
• $350,000 - Drainage Master Plan Refresh
• $150,000 - Green Infrastructure Plan Implementation.
• $50,000 – Miscellaneous storm drain related improvements throughout Town Future Projects
• $1,500,000 – Construction of ECR Drainage Solutions (N) (FY 2027/28) • $4,000,000 – Construction of ECR Drainage Solutions (S) (FY 2029/30) Town Center Master Plan Implementation Program - Page 23, #54015 Previously Funded (Ongoing)
• $60,000 - Solar Carports/EV Charging design to add solar carports and EV Charging to Town Center (design)
• $15,000 - Parking Lot Modifications towards design to add parking stalls in mulch along tracks, near Corporation Yard
• Town Center & Library parking and Circulation Project – Holbrook-Palmer Park Connection - $215,000 (FY2025/2026) towards review and analysis of providing additional parking at the Town Center/Library complex as well as pedestrian connectivity options, including analysis of traffic adjustments around the Town Center to facilitate access and mobility through the Town Center and to Holbrook-Palmer Park.
FY 2026/27 Projects
• $100,000 – Miscellaneous Town Center Infrastructure Improvements (FY 2025/26)
• $600,000 – Town Center & Library Parking Circulation Project – Holbrook-Palmer Park Connection - towards implementation of connectivity improvements between Town Center/Library complex to/from Holbrook-Palmer Park – Funding split between Library and Capital Improvement.
Future Projects
• Solar Carports/EV Charging at Town Center/Library (construction) Park Master Plan Implementation Program – Page 24, #56063 FY 2026/27 Special Revenue, Internal Service Funds & CIP June 3, 2026
Previously Funded (Ongoing)
• Park Playground Improvements – under construction
- $200,000 (FY 2023/24) Design
- $1,000,000 (FY 2024/25) Construction
- $300,000 (FY 2025/26) Construction
• Park Playground Restroom Replacement
- $800,000 (FY 2024/25) Construction
- $50,000 (FY 2025/26) Construction
• Fencing Improvements along Watkins Avenue, Middlefield Road to McCormick Lane – Funded in FY 2022/23. To be implemented with the Watkins Avenue Pedestrian Improvements Project.
• $180,000 - Jennings Solar and Energy Resiliency Improvements for design and construction
FY 2026/27 Projects
• $100,000 - Holbrook Palmer Park General Assessment and repairs • $325,000 – Park Asphalt Pathway Repairs
Future Projects
• $250,000 - Holbrook Palmer Park Master-Plan Refresh (FY 2027/28)
INTERNAL SERVICE FUND/SPECIAL REVENUE FUND
The Town maintains a variety of Special Revenue and Internal Service Funds that are “restricted funds” designated for a specific purpose. Revenue to Internal Service Funds comes from the various departmental operational budgets based on allocated charges to those departments. Special Revenue and Internal Service Funds include the Library Fund, Tennis Fund, COPS Grant fund, Equipment Replacement Fund, Workers’ Compensation Fund, General Liability Fund, and Employee Benefit Fund.
LIBRARY FUND
REVENUES
The Town is a member of the San Mateo County Library JPA system. The Library is funded through property taxes that are collected and allocated to library services. Under the JPA, jurisdictions are permitted to retain excess funds generated from the local property taxes as long as the basic library services are met. With the completion of the new Atherton Library and repayment of the construction advance, annual Library tax funds, minus amounts needed for yearly operation of the Library are retained by the Library JPA on a 50/50 basis. The County holds all excess funds.
The FY 2025/26 beginning fund balance for the Library Fund is $2,907,292. This includes the SMCL funds in the amount of $2,280,905 held in trust retained by the Library JPA. This balance is net of the repayment of the advancement of the SMCL JPA funds of $1,157,910.
FY 2026/27 Special Revenue, Internal Service Funds & CIP June 3, 2026
The estimated FY 2026/27 revenue for the Atherton Library JPA is $5.561 million and the SMCL operations is estimated at $4.06 million. The Town estimate for FY2026/27 is $1,160,550. After deducting the Library related activities, the remaining excess Library funds is $340,376. This amount will be evenly split between the JPA and the Town at approximately $170,188 each. These funds will be held in the San Mateo County Library Trust for the Town. The estimated fund balance for FY 2026/27 Library Trust funds is $2,610,293.
EXPENDITURES
The FY 2026/27 projected expenditures for the Library are $1,160,550 for operations, utilities, maintenance costs, use of town facilities, development of spaces and remaining expenditures for the Children’s Garden. There is an increase in utilities costs of $5,000 for electricity and $8,000 for water as rates and usage have increased. There is an increase in Contract Maintenance Services of $3,000 due to contractual adjustment increase. Facility repair and contract custodial services costs increased an additional $5,500. Maintenance costs for facility contracts for Library increased an additional $35,000 for systems maintenance on the facilities. These amounts are based on the building needs and operations largely related to challenges with the HVAC system. There is Building Maintenance manager allocation of $20,000 of Town personnel to oversee management of Library facility and systems. There is an allocation for Other Supplies and Materials of $210,000 for the use of Town facilities for Library programming, various Town programming, additional storage, and aesthetics needs around the Library outdoor spaces. These include the use of Town facilities at the Park for various Library programs, purchases of various items for the development of spaces such as refresh of tables, canopies, umbrellas, café benches and community room furniture for an estimate of $200,000. Building & Campus improvements also includes an allocation of $200,000 for the remaining construction expenses of the Children’s Garden. There is an allocation of $300,000 for the Library portion of the pedestrian improvements to Station Lane.
OTHER RESTRICTED FUNDS
The Town maintains a variety of Special Revenue and Internal Service funds that are “restricted funds” for specific purposes beyond basic capital improvement. Revenue to internal service funds are in the form of General Fund department charges based on allocations by department and uses.
EQUIPMENT REPLACEMENT FUND
The Equipment Replacement Fund is an internal depreciation fund for the replacement of large assets. The Fund is the Town’s set aside accumulation account to replace large equipment assets over time – such as computer equipment, software assets, vehicles, trailers, emergency equipment, etc. Annual depreciation-style departmental allocations to this Fund reduces the impact to the Town’s Operational year funding to replace the equipment. There continues to remain sufficient funds in the fund to accommodate emergency replacement needs as well as planned needs.
The FY 2027/26, departmental allocations (revenues) total $355,500 and the expenditures total $120,000. The largest allocation charge is $255,000 in the Police Department for FY 2026/27.
FY 2026/27 Special Revenue, Internal Service Funds & CIP June 3, 2026
This allocaton reflects the purchase of two (2) vehicles each year as part of the department’s regular maintenance and replacement schedule ($210k) and for replacement of new equipment, including Automated External Defribillators (AED) and a new radar trailer. This year, the Department does not anticipate the purchase of patrol vehicles as part of its regular equipment replacement schedule.
The Town uses the State and Federal Multiple-Award Schedule pricing to purchase vehicles from the Equipment Replacement Fund.
In FY 2026/27 the Police Department will also purchase replacement Automated External Defribillators (AED) $35,000. There is an additional purchase of a new radar trailer $10,000. These supplemental items include the necessary replacement of equipent for safety operatons. There is a $45,000 allocation expense to the replacement fund in Police Department operations budget for the purchase of this new equipment. The Finance Department anticipates an upgrade to its financial software cloud based system. The upgrade and migration is $75,000. There is sufficient allocation build to this fund for upgrade of the software.
WORKERS’ COMPENSATION FUND
The Workers’ Compensation Fund accounts for the cost and expense of managing the Workers’ Compensation Program through the Town’s self-insurance risk pool. As the Council is aware, the Cities Group JPA entered a dissolution plan under which the Cities Group would cease providing claims administration and all other benefit services on behalf of the Member Agencies on or before December 31, 2025. The Town joined the PLAN JPA Workers Compensation program beginning January 1, 2026. We currently are with PLAN JPA for general liability and property insurance programs. The consolidation of these programs with the workers’ compensation program creates a more coordinated risk management program. This Fund includes costs related to risk management and prevention – safety training, educational materials, and accident prevention programs. As a member of a JPA, the Town contributes an annual assessment to the JPA based on all recognized and potential liabilities. These assessments or contribution rates are calculated annually based on claims history and any increases in loss recovery due to excessive claims losses.
As part of the workers’ compensation program, the Town maintains a Self-Insured Retention (SIR) amount of $10,000 per claim. Since joining on January 1, 2026, there was also a half year assessment cost of $208,294. PLAN JPA offers reliable premium with a low SIR range, and an 85% confidence level on costs. A higher confidence level provides a greater likelihood that actual costs will fall within the projected estimate. The confidence level can be reduced over time by the JPA Board and is evaluated regularly. Estimated costs for a full fiscal year in PLAN JPA are $416,588. The current year’s assessment is 1% of salary for all departments and the total amount is $74,053. For FY 2026/27 staff is increasing the assessment for the Police Department from 1% to 4%. This will increase the allocation from $113,482 to $187,460 for FY2026/27. There are adequate reserves in the Workers Compensation Fund to absorb the difference for the year. Staff will ramp up allocation charges in future years as we build history with our new JPA. The Town's exposure risk in the pool is significant due to liability related to having a Police Department.
The Town maintains an active Workers’ Compensation Risk Management Program. Due to the Town’s diligence in building up its Workers’ Compensation Fund over the years, there has been a FY 2026/27 Special Revenue, Internal Service Funds & CIP June 3, 2026
healthy fund balance for transition from the Cities Group to the new PLAN JPA as the Town transitions its current (11) open clams to the JPA and for maintaining claims.
The current year assessment is $208,294 for half a year and is projected to increase $417,000 in FY 2026/27.
GENERAL LIABILITY FUND
The General Liability Fund accounts for the insurance cost of general liability claims and property losses. The Town is part of an insurance pool administered by PLAN JPA. The activities within this Fund provide for expenses related to general liability insurance, employment practice insurance and self-insured retention claims. Total internal service charges from the General Fund for FY 2026/27 are estimated at $672,391. This is an increase of 6%. The total FY 2026/27 projected expenditures for this fund are $772,391. This includes the self-insurance retention expense of $100,000 that allows the payout of four (4) claims at $25,000 per claim. The Town does not anticipate expending retention expenses of four (4) claims in the fiscal year; however, the amount is a requirement established by PLAN JPA. Average retention claims are about two (2) per year.
EMPLOYEE BENEFITS FUND
The Employee Benefits Fund tracks expenditures across various departments for employment, unemployment, retirement, and healthcare benefits. The Fund also represents an audit compliant set aside for compensated absences (time earned) – vacation, sick leave, holiday, compensatory time, etc.). Revenue to the fund comes through charges allocated back to each departmental budget based on number and type of personnel within each department. Revenue to the Fund for FY 2026/27 is $552,396. Expenditures for FY 2026/27 are $441,512. The expenditure includes $81,512 for the Town contribution of the minimum retiree health PEMHCA amount to CalPERS.
These costs are included and charged to the respective departments based on retiree health and allocated to the Employee Benefits Fund. The PEHMCA costs are paid directly to CalPERS and are reimbursable from the Town’s OPEB Trust. The Town is no longer budgeting the “pay as you go” retiree health benefit contribution as an operation expense as the retiree benefits are now funded through the OPEB Trust. During the FY 2025/26 budget (June 2025) the Town elected to make an additional $3m ADP to CalPERS towards paying down the pension UAL for Town’s Public Safety plan. There was an allocation of $800K from the Employee Benefit Fund.
Within this fund is also the employee benefits charge of $282,987. This is a charge of 3% to 4% of the General Fund Operational Departments salary expense that is allocated for personal leave contributions of sick, vacation, and holiday pay. The Police Department allocation is 4% and all other departments 3%. The Town has a total compensated absences balance of $1,229,506.
Compensated absences represent accrued time-off, vacation, and holiday pay for all employees and are required to be recorded as a liability. These are amounts that would be liquidated or mature due to the termination of Town staff.
FY 2026/27 Special Revenue, Internal Service Funds & CIP June 3, 2026
Included within this fund are also unemployment insurance charges if there are any future claims charged to the Town. This is a charge of 1% of Operational Departments salary expense Any claims would be paid out of this fund. The total budgeted charge is $77,386.
TENNIS FUND
The Tennis Fund projected revenues are $79,000. The majority of this revenue comes through the facility management servies contract with Player Capital. The contract provides yearly revenue of $50,000 to the Park. Keys are sold on an annual basis to any person (resident or non-resident) that wishes to use the Tennis courts. The standard key for residents is $110 and includes clay court key, and the non-resident key increased is $290.
Every year the Town resurfaces and maintains courts as needed. The tennis court resurfacing treatment includes crack filling and taping, followed by a new surface coating and striping. This is done on approximately every 3-5 years on a cyclical basis on each of the five (5) non-clay tennis courts. During the fiscal year the Town restriped the pickleball court to four courts on one tennis court, allowing for multiple games. We continue to monitor reservations and use of this court for pickleball.
The FY 2026/27 budget includes the purchase of tennis keys by residents and non-residents providing annual revenue of approximately $25,000. Each January, new tennis keys go on sale for the new court locks that get installed in February.
For FY 2026/27, the Town anticipates expenditures of $51,000. This includes $13,000 for contract maintenance services for MCE, general court maintenance and facility repairs needs of $35,000 and $3,000 for building security court gates upkeep.
COPS - CITIZEN’S OPTION FOR PUBLIC SAFETY
The COPS Office was created as a result of the Violent Crime Control and Law Enforcement Act of 1994. As a component of the Department of Justice, the mission of the COPS Office is to advance community policing in jurisdictions of all sizes across the nation. Community policing focuses on crime and social disorder through the delivery of police services that includes aspects of traditional law enforcement, as well as prevention, problem-solving, community engagement, and partnerships. In FY 1996/97, the California State Legislature created the Citizen’s Option for Public Safety (COPS) Program. Funds have been available through the State of California to local entities in the form of Citizen’s Option for Public Safety (COPS) Grant. The Town in recent years has seen an increase in funding and recently received approximately $194,000 from the grant. We project to receive $200,000 in grant funds for FY 2026/27. These funds must be used for front-line law enforcement only. The Town anticipates receipt of this funding on an annual basis and funds are used for sworn personnel salary related expenditures.
OVERALL SUMMARY
FY 2026/27 Special Revenue, Internal Service Funds & CIP June 3, 2026
For FY 2026/27 the Town’s General Fund Revenues are projected at $26,161,563 against $23,370,663 in expenditures. This will result in a single year-end positive balance of $2,790,900 and a total ending Fund Balance of $11,702,402.
FY 2026/27 includes below the line items of $2,750,000 for ERAF, budgeted debt service payment of $861,871, Transfer Out to CIP Fund 401 for capital projects of $4,340,000. There will be a single-year projected change in fund balance by a negative $2,451,871. The negative change reflects the drawdown of unallocated reserves Fund Balance of $4.340 million for capital projects and Facility Replacement from the Town Financial Planning model.
Reserve Calculations
With Council direction, the unallocated reserve balance can be appropriated towards operational use, capital projects or to pay down liabilities. During its review of the Town Financial Planning model during the fiscal year 2026/27 budget process, the Council considered uses for the unallocated funds towards various priorities. For FY 2026/27, there is an allocation of $4.340 million for various set aside buckets for capital projects in the Town CIP.
The beginning of FY 2025/26 General Fund Balance was $11,950,140. The FY 2025/26 updated estimate actual projected year-end fund balance is $11,363,374. The table below reflects all the changes noted above.
FY 2026/27 Beginning Fund Balance $11,363,374
FY 2026/27 Projected Revenues (inclusive of ERAF) $28,911,563 Total Available Funds $40,274,937
COP Debt Service for FY 2026/27 ($861,871)
FY 2026/27 Expenditures (Projected Budget) ($23,370,663) FY 2026/27 Transfer Out CIP 401 Fund -Financial Planning ($4,340,000) Projected FY 2026/27 Ending Fund Balance $11,702,402
As shown below, the Town will meet its new 30% reserve requirements total of $7,011,199 in FY 2026/27 and projects an unallocated reserve that is 21% of projected expenditures.
FY 2026/27 Expenditures $23,370,663
Projected FY 2026/27 Ending Fund Balance $11,702,402
15% Emergency Reserve $3,505,000
15% Budget Stabilization Reserve $3,505,000
TOTAL RESERVE REQUIREMENT $7,011,199
Less Above Reserve Requirement = Unallocated Reserves $4,691,203 FY 2026/27 Special Revenue, Internal Service Funds & CIP June 3, 2026
This budget presents a plan for accomplishing the goals and objectives of the City Council within existing resources and core strategy of financial stability. Town priorities will focus again on CIP Master Plan projects and operational needs.
POLICY FOCUS
The Town’s Operating and Capital Improvement Budget represents one of the most significant Policy Documents approved by the City Council. Staff has crafted the attached Budget based on specific policy objectives of the City Council. This item discusses revenue and expenditure projections for FY 2026/27. The Council adopts a fiscal year budget that addresses any policies and or priorities of the Council while addressing the needs of the community.
FISCAL IMPACT
None.
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 District, service provides (water, power, and sewer), and regional elected officials.
The Town maintains a Fiscal Transparency web portal and includes all budget information on its website. Links to these various areas are below:
Fiscal Transparency Web Page:
http://www.ci.atherton.ca.us/index.aspx?NID=269
Archive of Town Budgets:
http://www.ci.atherton.ca.us/index.aspx?nid=273
Financial Data Portal (OpenGov):
http://www.ci.atherton.ca.us/index.aspx?nid=361
Financial Audit Archive:
http://www.ci.atherton.ca.us/Archive.aspx?AMID=39&Type=&ADID= Actuarial Valuations Archive:
http://www.ci.atherton.ca.us/Archive.aspx?AMID=61&Type=&ADID= Labor Contracts, Agreements, and Salary/Benefit Information:
http://www.ci.atherton.ca.us/index.aspx?nid=192
FY 2026/27 Special Revenue, Internal Service Funds & CIP June 3, 2026
ATTACHMENTS
FY 2026/27 General Fund Revenue and Expenditure details by department 5-Year Fiscal Outlook Planning Spreadsheet & Project Lists FY 2026/27 Capital Improvement Program
FY 2026/27 Internal Service, Library, Tennis Funds