Novato Planning Commission Meeting: Fiscal Sustainability Presentation & Consent Items - July 8, 2024

The Planning Commission met on July 8, 2024, to consider two consent items and receive a presentation on the city's fiscal sustainability. The consent calendar included a revised resolution for a drive-through use permit at Downtown Novato Center and approval of the June 10, 2024 meeting minutes. The main discussion was a presentation by City Manager Amy Cunningham and Assistant City Manager Jessica Deakyne on the city's financial outlook, revenue challenges, and a potential November 2024 ballot measure to increase the sales tax by 0.75%.

Consent Calendar

• D.1 Downtown Novato Center Pad Building and Drive-Through Use Permit (P2023-090): The Commission considered and adopted a revised resolution approving a use permit for a drive-through associated with a new pad building at Grant Avenue at 7th Street. The resolution had been revised per direction from a prior meeting. The applicant was reportedly comfortable with the new language. Commissioner Dawson requested a separate vote. The motion passed 4-1-1 (Commissioner Dawson voted no, Chair Havel abstained due to absence at the prior meeting, Commissioner Tiernan absent).
• D.2 Approval of Meeting Minutes of June 10, 2024: The Commission unanimously approved the minutes from the June 10, 2024 meeting. Motion passed 6-0-1 (Commissioner Tiernan absent).

Public Comments & Testimony

• No members of the public spoke during the public comment period, which was open for items not on the agenda.

Discussion Items

• Fiscal Sustainability Presentation (H.1): City Manager Amy Cunningham and Assistant City Manager Jessica Deakyne presented an overview of Novato's financial situation. Key points included:
  • The city's general fund forecast shows projected operating deficits of $3.3 million to $4 million annually over the next five years, with reserves depleted by fiscal year 2026-27 if no action is taken.
  • Novato's revenue structure is constrained: it receives only 7% of property tax dollars and 1.25% of the 8.5% sales tax rate. Other Marin cities charge up to 9.25% sales tax.
  • The city has reduced staffing from 234 employees in 2002-03 to 198 currently. Personnel costs account for 70% of the operating budget.
  • City Council is exploring a November 2024 ballot initiative to increase the local sales tax by 0.75% (three-quarters of a cent), which would generate approximately $10 million annually. Funds would be used for pothole repair, 911 response, wildfire risk reduction, and parks and recreation.
  • The tax would exempt groceries, medication, and professional services. An example was given: on a $200 purchase of clothing and household essentials, the additional tax would be $1.50.
  • Commissioners asked questions about property tax allocation, the impact of Prop 13, the potential for other revenue sources, and the timing of the measure. Several commissioners expressed support for the city's efforts to educate the public and noted the importance of maintaining services.

Key Outcomes

• The Commission approved the revised drive-through use permit resolution (4-1-1) and the June 10, 2024 meeting minutes (6-0-1).
• No formal action was taken on the fiscal sustainability presentation; it was informational.
• The next Planning Commission meeting is scheduled for August 12, 2024, where implementing ordinances for the housing element and an update to the accessory dwelling unit ordinance are expected.