Documents such as the Delegation Agreement and other documents between the City of Novato and PAC (now including the 1988 Delegation Agreement) are HERE https://marinvalley.net/park-acquisition-committee/
Below are PDFs of the presentation that Steve Plocher and Chris Blunk gave. Just clink on the link to open in a PDF viewer, and you can then scroll through the documents. The viewer also lets you download the presentations if you want to view them on your own computer.
Steve Plocher Handout
Chris Blunk PowerPoint Slides
BELOW IS PP. 11–12 OF THE 19-PAGE GRAND JURY REPORT, CONCERNING MVMCC
Novato’s Chronic Fiscal Deficits: A Call to Action
Marin Valley Mobile Country Club
Since 1997, Novato’s properties have included the Marin Valley Mobile Country Club (MVMCC), a 55-plus senior community of 315 manufactured homes situated on a secluded 63 acres south of Hamilton Field. MVMCC’s website describes the park as providing affordable housing “…in a self-sustaining community that operates with no financial support from local, county, state, or federal funds.”28 However, City financial documents and a staff report presented to the City Council on March 28, 2023, show that the park is neither self-sustaining nor independent of local government funds.29 Both the Grand Jury’s investigation and the staff report conclude that unless action is taken by the City Council, 1) operating and other essential expenditures will continue to exceed revenues at MVMCC, and 2) reserve funds designated for MVMCC will be exhausted within five years, leaving the City’s taxpayers to cover the deficits.
Many factors, including insufficient oversight and delayed actions by the City, have contributed to this situation. The financial impact is demonstrated at many levels by multiple sources.
- Novato’s 2022-2023 Adopted Budget shows that in the past four fiscal years MVMCC’s expenses have exceeded revenues by a total of more than $3.6 million.30 An independent analysis indicated that MVMCC operated at a loss with annual capital expenditures significantly impacting the extent of the deficit in those four years.31
- Over $200,000 per year (about $662 per residence) of utility costs are not fully recovered through pass-through charges to residents, leaving the balance to be paid by the City.32
- Since 1997, the City has relinquished the bulk of oversight and decision-making to the Park Acquisition Corporation (PAC), which is essentially the MVMCC homeowners’ association. A Delegation Agreement assigns the PAC responsibilities, such as hiring of a park management company, preparing annual budgets, accumulating funds for long term maintenance, and submitting financial reports to the City.33 The City Council consistently defers to the PAC regarding rental increases.
- The City intended MVMCC to be financially self-sufficient with revenues coming entirely from tenants’ pad rental fees. Yet at PAC’s request, the City Council has not raised rental fees since 2016, freezing rental income despite increasing park expenditures.34
28 marinvalley.net/marin-valley/about/, Accessed on 4/20/23.
29 novato.granicus.com/MetaViewer.php?view_id=7&clip_id=1908&meta_id=149692, Accessed on 4/20/23
30 www.novato.org/home/showpublisheddocument/34983/638009945823400000, page 131, Accessed on 4/20/23.
31 novato.granicus.com/MetaViewer.php?view_id=7&clip_id=1908&meta_id=149692, Accessed on 4/20/23.
32 novato.granicus.com/MetaViewer.php?view_id=7&clip_id=1908&meta_id=149692, Accessed on 4/20.23.
33 novato.granicus.com/MetaViewer.php?view_id=7&clip_id=1908&meta_id=149692, Accessed on 4/20/23.
34 novato.granicus.com/MetaViewer.php?view_id=7&clip_id=1908&meta_id=149692, Accessed on 4/20/23.
Marin County Civil Grand Jury Page 11 of 19
Novato’s Chronic Fiscal Deficits: A Call to Action
- In March 2022, the City Council again assisted MVMCC by appropriating $3 million of the City’s one-time funds from the American Rescue Plan Act (ARPA) for the MVMCC sewer system improvement projects. This was one third of the $9.1 million ARPA funds allocated to the entire City of Novato.35
- While MVMCC is described as “affordable housing,” just 41 percent (131) of rented spaces are required to be occupied by low- or moderate-income residents. Current monthly rates average $634, range from $518 to $937, and do not vary by tenant income level.36 Thus, all park residents benefit from the City Council’s decisions to maintain low rental fees and subsidize costs.
- In a recent three-year period (2020-2022), 28 MVMCC homes were sold for prices ranging from $110,000 to $717,000 with a median of $347,000.37
Even if enacted immediately, incremental rental fee increases that meet rent control requirements cannot provide the revenue needed by MVMCC’s projected financial needs.38 It is simply too little, too late. However, as the staff report notes, larger rent adjustments are allowable to 1) pass through the cost of necessary capital improvements, or 2) ensure the City receives “a fair and reasonable rate of return.”39 Such adjustments may be essential in this situation.
The City’s current debt service payment for MVMCC is about $651,000 a year and the loan balance of $2.3 million is scheduled to be paid in full in December 2026.40 The City’s most recent (2023-2031) Housing Element Update states that Novato will “Consider measures such as refinancing the Marin Valley Mobile Country Club to further save money and to permit the financing of future needed capital improvements to the park.”41 This, in concert with corresponding rent increases, is a logical option to examine.
In response to the recent staff report regarding the park’s financial sustainability, the City Council approved a workshop study session between City staff and MVMCC residents. Staff and Council members shared with the Grand Jury a broad spectrum of possibilities to address MVMCC’s financial condition, including investigating whether the property might be sold. Regardless of what solutions are considered, Novato is not in a financial position to take on more deficits. Delays in rectifying MVMCC’s financial instability are not in the best interest of the City or MVMCC residents.
35 legistarweb-production.s3.amazonaws.com/uploads/attachment/pdf/1273501/G.8_cc22- 052_MVMCC_Pump_Station.pdf, Accessed on 4/20/23.
36 novato.granicus.com/MetaViewer.php?view_id=7&clip_id=1908&meta_id=149693, Accessed on 4/20/23.
37 www.zillow.com/novato-ca/sold/, Accessed on 4/20/23.
38 novato.granicus.com/MetaViewer.php?view_id=7&clip_id=1908&meta_id=149692, Accessed on 4/20/23.
39 novato.granicus.com/MetaViewer.php?view_id=7&clip_id=1908&meta_id=149692, Accessed on 4/20/23.
40 novato.granicus.com/MetaViewer.php?view_id=7&clip_id=1908&meta_id=149692, Accessed on 4/20/23.
41 www.novato.org/home/showdocument?id=35310&t=638095538412570000, Accessed on 4/20/93.
Marin County Civil Grand Jury Page 12 of 19