On June 24, 2025, the Novato City Council unanimously approved the City Budget for Fiscal Year (FY) 2025/26. Shaped by extensive community input and supported by voter-approved Measure M, the budget focuses on community-identified priorities such as road repair, public safety, emergency response, park maintenance and local business support. Measure M funding allows the City to better align these community priorities with available resources.

Key investments in the FY 2025/26 Budget include:

  • Maintaining Services & Addressing Staffing Needs: 
    $4 million in Measure M funding to support existing service levels, including police, parks and street maintenance. And added funding for six new full-time positions, including two maintenance workers, to begin addressing long-standing staffing shortages critical to meeting service needs and community expectations. 
  • Strengthening Financial Reserves:
    Rebuilding emergency reserves to improve resilience against economic downturns, natural disasters or other unforeseen events.
  • Deferred Maintenance & Infrastructure:
    An additional $1.8 million allocated to the Annual Street Pavement Program and $500,000 in Measure M funding to add two new maintenance positions and support core maintenance, including weed abatement and road repairs.
  • Long-Term Financial Planning:
    An investment of $1 million to address long-term pension liabilities and ensure future fiscal sustainability.
  • Innovation & Economic Support:
    To improve operational efficiencies and service delivery, the investment of $150,000 to begin saving for a modern financial system. Support for local businesses and economic growth with $100,000 set aside for a Tenant Improvement Grant Program. 

The City of Novato experienced General Fund budget deficits for many years, in part due to expense outpacing revenue and expiration of Measure F on March 31, 2016. These deficits were not unexpected, and in fact were projected to start as early as 2017, however as a result of strict cost-cutting actions, these deficits did not actually materialize until 2020. Thereafter, despite efforts to continue to reduce costs, including eliminating staffing* and service levels, deferring critical infrastructure and maintenance investments, and using one-time funds and emergency reserves to sustain ongoing services, the annual deficits continued to grow (*sworn police staffing levels were preserved).
 
With voter approval of Measure M in November 2024, the City is now positioned to rebuild and restore services. It is important to note that because necessary service levels had not been funded for several years, the FY 2025/26 systemic deficit of $4M is not reflective of the true structural deficit. The structural deficit would be much higher because it would include the full cost of delivering City services at the levels the community expects, the FY 2025/26 adopted budget, is only the first step in rebuilding the organization and restoring services to those expected levels. 
 
The FY25/26 General Fund systemic deficit of approximately $4M is comprised of:

  • Previously approved compensation agreements necessary to recruit and retain staff.
    • FY2021/22 through FY2022/23 (adopted 07/13/21, 07/27/21, 08/24/21, 10/26/21)
      • Equity of 2%, All Police Department Units and SEIU only (1% each year)
      • COLAs +3%, all employees (effective 07/22)
      • Longevity Pay Expansion (+1%)
      • Certification Pay Expansion (+1% - SEIU only)
      • Bilingual Pay (+2% - PMA only)
    • FY2021/22 (adopted 03/22/2022)
      • o Mid-Contract Equity Adjustment +1.5%, All Police Department units only
    • FY2023/24 through FY2024/25 (adopted 06/27/2023)
      • COLAs +3.5% each year, all employees
      • Equity to bring all EE’s within 10% of market
      • Longevity Pay Expansion (+1%)
  • Restoring staff focused on customer service and core service delivery
  • Assuming operations of Hamilton Pool 
  • Restoring Measure A to capital investment in parks which had previously been diverted to support park operations (utilities)
  • Reinstating Internal Service Fund allocations, including maintenance of City facilities, replacement of fleet vehicles (Police, Public Works), technology
  • Correcting Long-Term Maintenance Fund contributions for infrastructure and facility maintenance and repairs, including streets and parks; and 
  • Adjusting reserve contributions to ensure compliance with Emergency and Disaster Response Policy
Measure M Sales Tax
Novato Businesses to Collect New Sales Tax as of April 1, 2025
What is Measure M?
Background Information
City Council Presentation: Fiscal Sustainability Update
City Council Presentation: Consideration of Local Sales Tax Measure
Pavement Management Program Presentation
City Budget 101
Share Your Thoughts and Ideas

Please share your thoughts as the City evaluates options for protecting essential services and enhancing locally controlled revenue.

Email: AssistantCityManager@novato.org

Phone: 415.899.8903

Get Involved - Attend a Meeting

The Novato City Council and the Finance Advisory Commission hold meetings regularly to discuss City business. Learn more about how to participate at an upcoming meeting at novato.org/agendas.

Novato City Council
2nd & 4th Tuesday of the month at 6pm
Novato City Hall, 901 Sherman Avenue

Finance Advisory Commission
3rd Thursday of the month at 7:30am
City Administrative Offices, Baget Conference Room, 922 Machin Avenue

Note: Meeting schedules are subject to change. Please check the City calendar for upcoming meeting dates at novato.org/calendar.