The Novato City Council voted to STOP the proposed sale of the Park at their closed session meeting on August 22, 2023, and announced on August 23.
EDITORIAL Marin Independent Journal
Thursday, September 7, 2023
Park residents show Novato how to improve
After a brief political dustup, the Novato City Council has turned down an unsolicited offer to buy the city-owned Marin Valley Mobile Country Club.
The city purchased the park in 1997 to protect the affordable senior housing it provides.
At the time, it was framed as a partnership where the rents that tenants — an estimated 400 residents — pay are supposed to cover the city’s loan and the park’s maintenance costs.
Whether that fiscal equilibrium has been achieved is still being debated.
To sell affordable housing at a time when there is a statewide push to build more doesn’t make sense.
The 2022-23 Marin County Civil Grand Jury, relying on city figures, concluded the park is costing the city money and it should sell the property as a way of righting the city’s budgetary ship.
The city is projecting a $2.6 million budget shortfall this year. At the same time, City Hall has run into a series of financial management problems, such as falling behind in its annual audits and the challenges implementing a new financial management software.
The $30 million offer from a Novato-based firm that owns mobile home communities was hard to avoid.
The sum looked attractive, but the cost was not right for the city.
Mayor Susan Wernick is right. City Hall has a responsibility to consider it.
The problem is that real estate negotiations are usually done behind closed doors, leaving the public with little insight to the figures and terms on the table.
By the time it reaches the public session, decisions have been made and the deal is essentially done — or turned down.
The uncertainty due to the council’s closed-door deliberations over the offer stoked the anxieties of the park’s tenants. About 200 park residents turned out for the Aug. 22 council meeting.
Among Marin’s cities, Novato has been a leader in building affordable housing, in large part due to the opportunities provided by the re-use of Hamilton.
Its commitment to step up and help the Marin Valley Mobile Country Club’s residents is part of that admirable reputation.
The city and the park’s tenants built a long-term partnership in 1997, including a provision that 40% of the park’s spaces be reserved for lower-income tenants.
The city’s loan is scheduled to be paid off in 2026.
Whether that partnership still pencils out the way it was intended is a matter of debate, with City Hall contending management of the park is consuming costly staff time and that the park is facing millions of dollars in projected maintenance costs.
The dustup has dissipated for now, but the City Council’s job is far from done. Before the 2026 payoff of the loan, the city needs to take a hard, public look at its long-term financial commitment to the park. The park’s tenants need to be involved in that decision.
Many of the 200 residents who jammed into city hall for that August meeting felt they were being left out of that public policy process.
Dick Spotswood — 8-29-23
Novato’s mobile park political malpractice was avoidable
The recent Novato City Council meeting was a textbook example of political malpractice.
The issue was the potential sale of the Marin Valley Mobile Country Club. The facility consists of 325 manufactured homes owned and is occupied by 410 Novato residents. They are all over age 55 and 41% have low or very low incomes.
The balance is working folks who saved to buy a manufactured house on land owned by the city.
Events were precipitated by Marin County Civil Grand Jury’s report, “Novato’s Chronic Fiscal Deficits: A Call to Action.” It focused on the poor state of Novato’s fiscal management. The report was in part based on a misleading “budget” that led to the jury’s conclusion that MVMCC was a “burden” to Novato taxpayers.
Malpractice Count One: The city sent erroneous information to the grand jury which led to an embarrassing incorrect finding. At the council meeting after prodding by Councilmember Pat Eklund, it was unanimously agreed that not one cent of taxpayer dollars ever went to subsidize MVMCC.
The $20.5 million debt to purchase the facility in 1997 is exclusively paid from tenant’s rent proceeds. Next time jurors examine Novato issues, they will be dubious about any information supplied by the city.
Malpractice Count Two: When the jurors’ report emerged, within five days a fully formed offer by HCA Property Management Inc., a reputable mobile home park owner, was made to purchase the MVMCC from the city. At no point did the city accept the MVMCC residents’ offer to meet and collaborate on a win-win resolution.
Malpractice Count Three: MVMCC lies within southeast Novato’s District 5 represented by rookie appointed Councilmember Mark Millberg. About 200 MVMCC residents attended the Aug. 22 council meeting. They expressed fear that sale of the land would impair their ability to live their lives out at the bayside facility just south of Hamilton.
During the meeting, Millberg said not a word to express his understanding over MVMCC residents’ fears. He’ll now need to spend many face-to-face hours to regain the trust of 400 constituents who are unlikely to forget his silence.
Malpractice Count Four: The grand jury report’s principal point is that Novato’s fiscal affairs are in disarray. The city believes it has an ongoing annual structural deficit of $2.5 million. It’s a guessing game since the city hasn’t had an audited financial report for three years.
Even a hot dog stand can’t be managed if its owners don’t know their precise finances. The city claims its lack of audited financials is due to short staffing and turnover. Ten of Marin’s 11 municipalities have audited financials. It’s hard to believe Novato can’t find one CPA firm to put its affairs in order by the end of 2023.
Malpractice Count Five: City Manager Adam McGill faces a tough task. To balance the city’s budget, he needed new sources of revenue. The offer to sell MVMCC to HCA, the first entity to make an offer for $30 million, must have been tempting. Simultaneously, a city manager’s duty includes keeping his council out of trouble and looking good. Needlessly aggravating 400 sprightly seniors is by definition “trouble” especially when they arrive with their own audited financials.
Malpractice Count Six: At the end of the meeting the council and staff met in closed session to consider HCA’s purchase offer. They did so without a current real estate appraisal, a basic requirement familiar to every landowner, public and private.
The upshot was that after the council emerged from its late-night closed session, the city clerk disclosed, “The Novato City Council has decided not to pursue the offer from HCA to purchase the Marin Valley Mobile Country Club. As identified in the City’s Strategic Plan, the City Council has identified MVMCC as a strategic priority.”
After all the hubbub, common sense and fairness ultimately prevailed.
CBS News video — Sale of Novato Retirement Community Put to a Halt:
https://www.cbsnews.com/sanfrancisco/video/sale-of-novato-retirement-community-put-to-a-halt/
Marin IJ front page — Novato Rejects $30M Offer to Sell Mobile Home Park:
https://www.marinij.com/2023/08/23/novato-rejects-30m-offer-to-sell-mobile-home-park/
Novato rejects $30M offer to sell mobile home park
The Novato City Council decided early Wednesday to decline a $30 million offer to purchase Marin Valley Mobile Country Club, the city-owned mobile home park.
The decision, which followed an emotional public meeting that started Tuesday evening, concluded two months of closed-door discussions between the city and the proposed buyer, HCA Property Management Inc. The company, which is owned by Novato resident Dean Moser and operates 17 mobile home communities on the West Coast, offered to buy the 63-acre complex in June.
Moser’s offer came shortly after a Marin County Civil Grand Jury report was released concerning the city’s ongoing financial problems, including a projected $2.6 million budget deficit this year.
The report said the neighborhood’s rental payments have been insufficient to cover expenses and maintenance, placing an increasing financial burden on the city. Neighborhood residents have pushed back on the accuracy of the report.
Mayor Pro Tem Mark Milberg, whose district includes the neighborhood, said it was in the best interest of the city to at least consider Moser’s unsolicited offer in light of the city’s budget issues and the park’s financial management.
But amid conflicting views on the neighborhood’s finances and a strong response from the community, Milberg said keeping the site under city ownership ensures residents are able to stay in their homes and the city can continue to provide a path for senior and affordable housing.
“It took a while but I think it finally came through to the rest of the council that it would be very tough to disrupt that,” Milberg said Wednesday. “We are confident we are going to be able to look at other ways to get to a more balanced budget.”
Mayor Susan Wernick said that while the offer caught the council off guard, the city had a fiduciary responsibility to explore it.
“I acknowledge how stressful it was for the residents,” Wernick said Wednesday. “It was stressful for the council and our staff as well. Moving forward, I hope we’ll be reviewing and updating the city’s policies surrounding Marin Valley.”
Reached Wednesday, Moser said he was out of the country and unprepared to comment on the council’s decision.
About 200 residents of the mobile home neighborhood attended the standing-room-only meeting on Tuesday evening to urge the council not to sell the property, with a few residents breaking down in tears. The neighborhood is home to more than 400 residents and is reserved for people 55 and older. About 40% of the spaces are reserved for tenants with low or very low incomes.
Residents expressed concern that a private operator would raise rents to unaffordable levels, an occurrence at other mobile home parks throughout the country. They said this could force them to sell homes they hoped to spend the rest of their lives in.
“Solving the city’s finances on the backs of 400 residents is unjust and unconscionable,” park resident Michele Rodriguez told the council.
“Does the city really want to stand behind a $30 million, unearned windfall in the face of driving low-income residents out of their homes we purchased with our life savings?” Joan Cervisi, a neighborhood resident who is on its governing board, told the council.
Others said selling the property would renege on a city promise to transfer park ownership to residents once they paid off the loan the city made to buy the property in 1997. Wernick said statements about such a promise are inaccurate.
Polly St. John-Hughes, 70, has lived in the neighborhood since 2004 and said she is one of the low-income residents. She said residents have been losing sleep over the potential sale but have rallied in the last two months to challenge the proposal.
“The park really pulled together in a way that was so remarkable,” she said on Wednesday. “If we can do that then we can run our own park.”
Novato is projecting a $2.6 million budget deficit this fiscal year in the fourth consecutive budget with a shortfall. Officials said the city can expect continued budget deficits unless new revenue sources can be found or significant service cuts are made.
The grand jury report said the city has been aware of the challenges for the past 10 years but has not taken actions to address them. The report named the mobile home community as one of the city’s financial challenges, saying it “operates at a substantial deficit, has ongoing deferred maintenance, and presents increasing administrative and financial burdens on the city.”
The community’s operations and maintenance are covered by residents’ rent payments. However, the grand jury report and city officials said these payments will be insufficient to cover an estimated $40 million to $70 million in planned maintenance and infrastructure projects at the site.
The city projects the community’s reserve funds will be depleted within the next five years unless it can find new revenue. In June, the City Council voted to raise rents by 5%, the first rent increase since 2016.
Additionally, officials said the city has not been charging the community enough to cover its administrative costs and about $200,000 in water utility costs.
Residents and the community’s resident-led, nonprofit operator — the Park Acquisition Corporation, or PAC — have challenged the report’s accuracy. They state the report relies on projected budgets rather than actual financial statements. The grand jury report states the community’s expenses exceeded revenues by $3.6 million during the past four years, including a projected $82,000 deficit in the current fiscal year. PAC members said their financial statements show the park had a $2.1 million surplus during this time.
City staff warned the council last month to not rely on these financial statements because the city only has certified its financial audits through the 2019-2020 fiscal year.
Mimi Willard, president of the Coalition of Sensible Taxpayers, a Marin nonprofit watchdog group, cautioned the council against making a decision on selling the park when it doesn’t have a solid understanding of its accounts.
“I don’t think you could be able to in good conscience and proper representation of your citizens make a big decision on this based on a total lack of financial information,” Willard told the council.
