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Finance staff: Measure M stabilizes Novato budget; council reviews FY 2026–27 assumptions
Summary
Staff told council that Measure M revenue is stabilizing the general fund and recommended allocations — streets and roads, reserves, pension set‑aside, and economic development support — while proposing a $150,000 facilities assessment to inventory deferred maintenance.
Finance staff presented the FY 2026–27 operating budget assumptions and an updated general fund forecast on April 14, emphasizing that Measure M has restored budget balance after prior deficits. Staff explained the forecast assumptions (modest revenue growth, cost inflation of roughly 0–2.5% on non‑labor items, MOUs covering salary increases through 2028) and showed scenarios with and without Measure M to illustrate the stabilizing effect of the measure.
Staff proposed allocating Measure M to maintain operations and address capital and reserve needs: a systemic deficit backfill, pension reserve contributions, a $150,000 set‑aside for a comprehensive facilities assessment to document deferred maintenance, $1.35 million for streets and roads (with specified capital and maintenance splits), and funding for economic development including a tenant improvement grant program. Personnel assumptions included a 3.5% COLA, assumed health cost increases, and a vacancy‑savings assumption of about $650,000.
Councilmembers asked staff for more detail on facilities needs and the CIP; the manager and finance staff said the full CIP will be presented at the next meeting and that some large HVAC and other projects will require multi‑year planning. Council expressed support for continuing the SAFE mobile crisis response partnership and for monitoring the tenant improvement grant program outcomes before increasing funding.
Staff will return with the CIP and refined budget numbers in the May workshop and will incorporate council direction about reserves, tenant‑improvement program scope, and facilities assessment timing.
