I have my doubts about this story, but supposing for a moment that it's true, I can't decide whether the council is genuinely confused about what might upset atheists; is aflicted by some kind of reverse or false political correctness in saying hey, atheists can be offended too, you know; or is trying to insinuate that atheists have some kind of position or creed that could be offended against, as believers do.
Either way, I suspect atheists in general are likely to be offended more by the patronising tone than anything else. Very few atheists have a problem with religious language or iconography (much more so than are members of rival religions, certainly). We don't want to destroy churches or books. We don't wish to deny that many people believe in some god or other. We just wish to quietly persist in our non-belief without being told we'll spend eternity in hell as a result.
That is what's offensive to atheists.