Novato City Council Meeting: Budget Hearing & AB 2011 Project Approval - June 11, 2024

The Novato City Council held a public hearing on the Fiscal Year 2024/25 Preliminary Operating and Capital Improvement Budget and a separate public hearing on the 3rd Street & Grant Avenue Mixed-Use project proposed under AB 2011. The council also approved a consent calendar, heard public comments, and reluctantly approved the mixed-use project despite widespread community opposition.

Proclamations & Presentations

• Pride Month: Proclamation accepted by Grace Constantino, faculty sponsor for GSA at San Jose Middle School, who spoke on the importance of representation and mental health for LGBTQ+ youth.
• Alzheimer's and Brain Awareness Month: Proclamation accepted by Lauren Vriedlin Long from Age and Disability Friendly Novato, who highlighted the prevalence of Alzheimer's and the need for brain health.

Consent Calendar

• Approved unanimously (5-0): routine items including approval of meeting minutes, appointment of Allison Skinner and Keith Buchignani to the Multicultural Advisory Commission, a contract with PlaceWorks for the Safety Element Update ($182,388), a janitorial services contract amendment (up to $652,000), and other administrative actions.

Public Comments & Testimony - Budget Hearing

• Marin Valley Mobile Country Club (MVMCC) representatives (John Hansen, Jay Shelfer, Mary Curry, Carol Joy Harris, Serena Fisher) urged adoption of the MVMCC budget, citing the need for capital projects to protect health and safety of low-income senior residents. They noted a $600,000 DSCR reserve requirement limiting maintenance.
• No other public speakers on the budget.

Public Comments & Testimony - 3rd Street & Grant Avenue Mixed-Use Project

• Downtown Novato Business Association (Stephanie Kohler) expressed support for downtown housing but opposed the lack of parking, stating businesses depend on available parking and the project would harm the 19% of the city's tax base from downtown.
• Resident and business owners (including Robert Sunberg, Harvey McKean, Carlos Small, Lucy Hollingsworth, Frank Dular, Lucy Hollingsworth, Robin Strom, Jeannie Jarnot, Barbara Slack, Peter Tarantino, Chris Dunham, Susan Palm, Larissa Cooley, Janine Perra, Michael Atkinson, Steve Jordan, Zachary Griggie) overwhelmingly opposed the project. Key concerns: no parking (only 0 spaces for 56 units), height (5 stories, dwarfing downtown), lack of community engagement, small unit sizes (411-450 sq ft), potential contamination from dry cleaner, and negative impact on local businesses. Several speakers supported affordable housing but argued the project was out of scale and would worsen parking.
• Lucy Hollingsworth (housing attorney) spoke in favor, noting overcrowding due to lack of affordable housing and the project’s potential to alleviate it.
• Dylan Casey (California Housing Defense Fund) argued the project meets state law, provides needed low-income housing, and relies on transit proximity (SMART station). He noted this is one of the first AB 2011 projects in the state.
• Harvey McKean (Carpenters Union) cautioned about labor compliance, mentioning a recent DIR decision against AMG's typical contractor for failing to pay prevailing wage.

Discussion Items

• Budget FY 2024/25: Finance Director Carla Carvalho-Degraff and Jennifer Maldonado presented. Revenues projected at $50.3 million, expenses at $54.3 million, deficit of $4.05 million. Staff recommended using reserves, leaving the reserve at 9% (below 15% policy). Council discussed fund balances, CalPERS unfunded liability, long-term maintenance deficits, and the need for a parking study. Councilmember Eklund raised concerns about the city's financial trajectory.
• Parking Study Amendment: Councilmember O'Connor proposed adding $250,000 for a downtown parking study and strategy. Staff suggested refining the cost; council agreed to include $250,000 in the budget and bring back a refined scope by June 25.
• 3rd Street & Grant Avenue Mixed-Use Project: City staff presented the 56-unit, 100% affordable (55 deed-restricted) project at 1212-1214 Grant Avenue. The project uses AB 2011 (ministerial permitting) and state density bonus laws for unlimited density, height increase (5 stories, 64 ft 4 in), five concessions (e.g., FAR, open space, stepback), and a full parking waiver. No on-site parking. Council questions focused on parking impacts, contamination, modular construction and prevailing wage, and lack of community outreach. Council members expressed frustration with state preemption but acknowledged legal constraints.

Key Outcomes

• Budget: Council directed staff to include $250,000 for a parking study and strategy plan, with refined cost to be presented at the June 25 meeting. The budget will be adopted then.
• 3rd Street & Grant Avenue Mixed-Use Project: Approved reluctantly (5-0, with all members voicing opposition but citing state law). The motion passed with a "reluctant aye" from Councilmember Warnick and "under duress" from Mayor Pro Tem O'Connor. The resolution approves the project, density bonus, concessions, parking waiver, and tentative map. Council members urged AMG to work with the community to modify the project (e.g., height, parking). AMG representatives said they would consider feedback.
• Consent Calendar: Approved 5-0.
• Meeting Adjourned at approximately 10:00 p.m. with no further reports.