Big Shift In City Finances Presented At Novato Council Meeting

NOVATO, CA — The City of Novato’s 2025 audit results show a clean bill of financial health, according to a presentation at the Tuesday City Council meeting.

The city's independent auditors issued a "clean" opinion on the 2024–25 Annual Comprehensive Financial Report, the highest level of assurance. The finance team and the audit partner confirmed that all previous serious financial weaknesses have been resolved. The focus is now on minor control issues and management notes.

The overall net position is up by $6.2 million compared to last year thanks to operating income and investment earnings across all the city's activities, both governmental and business-related. Key contributors to this positive shift include the Marin Valley Mobile Country Club enterprise fund, internal service funds, general governmental operations and funds related to capital projects, official said.

Finance Director Carla Carvalho-DeGraff and her team also highlighted the city’s renewed eligibility to submit the report for the Government Finance Officers Association award for financial reporting, after several years of delayed audits.

Councilmembers publicly praised the finance staff’s work to catch up and stabilize the city’s financial reporting.

Councilmember Pat Eklund called the effort incredible.

“It almost took a decade for us to get back to where we were some time ago,” Eklund said. She thanked the team for reconciling several checkbooks and a lot of money with the city.

Councilmember Tim O’Connor focused on fiscal resilience.

“Is it correct to say our emergency reserve fund is now fully funded according to reserve policy?” O’Connor asked, to which staff replied that it stands at approximately 32% of related expenditures.

Councilmember Sandeep Karkal said he was pleased to see an actual increase in net position year over year alongside a clean audit opinion.

The council voted to accept the audit results and authorized a transfer from the emergency reserve to cover the negative unassigned fund balance in the General Fund, as required by council reserve policy.