Marin Voice: Tackling Novato budget challenge means setting goals, taking actions

Novato lists its mission statement on the city’s website. It says it intends to “provide excellent services and enrich the quality of life within the community in a fiscally responsible manner.”

As a 47-year resident of Novato, as well as a practicing certified public accountant for more than 42 years, I want to offer some proposed action plans that may prove worthy of consideration and helpful to the city’s long-term strategic goals of meeting budget objectives and fulfilling its general plan.

They consist of short- and long-term initiatives and may be helpful to carry out the city’s mission without the need to consider service cuts alone while helping Novato operate concurrently in alignment with its stated mission to excellent service, which our residents rely upon to maintain quality of life as well as public health and safety.

First off, the delinquent financial audits required by the state need to be completed and brought current without further delay. The June 30 audit should be completed and presented to the Novato City Council no later than its second November meeting.

Keep in mind that the later a financial audit is completed, and the later results are submitted to management and the council, the less useful it becomes. Additionally, management runs the risk of receiving a surprise that it could have addressed sooner than later.

Every single line item in the budget needs to be examined. For revenue, assurance must be made that all monies entitled to the city are being collected and all past debts are brought current.

Fees for services need to be evaluated for possible rate increases. All expense items need to be evaluated for necessity and measures put in place to make sure the city is not overpaying for anything.

All non-essential programs should be evaluated and considered for temporary suspension or reduction.

In addition to finding new ways to increase revenues, the city should draw on its emergency funds. Otherwise, services that residents rely upon for an enriched quality of life may be cut. Drawing on the emergency fund will provide time to adjust the budget with long term, sustainable financial measures that insure stability.

A monthly financial reporting system for the City Council should be created by city staff that will compare operating results to the budget. This is a well known best practice. It provides the council with the means to address matters of finance proactively versus reactively.

A healthy local economy means a healthy government. The city needs to develop a plan to attract more businesses to locate here. The plan may consist of financial incentives as well as other concessions. This should be a joint exercise with the Chamber of Commerce.

We should consider forming a 501(c)(3) nonprofit supporting organization governed by local residents to raise money for the city. Most recent Census data indicates that there are at least 52,000 people in Novato. If people were to give, on average, $10 per year, that amounts to $520,000 per year and potentially more.

Novato should hire a professional to do a process improvement study for all city departments. Improvements in efficiency and effectiveness lead to cost savings as well as improved services to residents.

Leaders ought to consider issuing municipal bonds, the proceeds of which could be used to pay off the city’s unfunded pension liability. The annual cost of debt service may well be less than the current cost to support the existing defined benefit plan. The unfunded liability is a runaway train and seems unlikely to go down, despite stock market gains.

In fine tuning the city’s strategic plan, we should ask city staff to perform a SWOT (strengths, weaknesses, opportunities and threats) analysis. This is a powerful management tool that will empower the city to improve how it operates and position the city for future growth and prosperity.

Solving the budget challenge is not easy and will take time. It will also require creativity, discipline, ingenuity, and yes, inspiration. Where there is a will, there is a way.

James Petray, of Novato, is a certified public accountant.