Is Novato going bankrupt?
In the short term, no. In the long term, probably yes.
Why? Because the California Public Employees’ Retirement System (CalPERS) is sucking money out of local city treasuries to keep afloat a $360 billion pension system that is underfunded by $150 billion.
Furthermore, CalPERS is generally recognized by arms-length non-political assessors as being not well or responsibly managed. Others in the financial community who have a money-making vested interest in the fund continuing as their cash cow, hype it to an unaware public as a “global leader in the investment industry”.
Rather than an evenhanded focus on maximizing the pension fund’s rate of return, the fund’s management uses a portion of those employee pension benefit assets as a political tool for self-appointed politically correct “shareholder activism”, secure with the knowledge that they have the state’s cities taxpayers there to bail them out when their pet political investment strategy becomes an embarrassing failure – which it has.
CalPERS unabashedly plays politics, with no respect for the taxpayers whose city tax money is used to fund CalPERS, despite the fact those taxpayers may disagree with CalPERS political bias and machinations. Unashamedly, it frequently acts as a political tool for progressive social engineering interest groups. A financially conservative or prudent investment approach is not in its lexicon.
California cities are rapidly reaching that point where CalPERS’ continually increasing demands levied against
those cities is resulting in insufficient funds remaining in city treasuries to adequately perform basic city functions. City roads continue to deteriorate, computer systems are no longer updated, infrastructure maintenance is continually deferred, and so on.
Are we doomed? The unfortunate news is “yes” unless the City of Novato declares bankruptcy or begins printing money. The good news is even the Titanic sank slowly.
But there is some optimism in that the City of Novato’s Citizens Finance Advisory/Oversight Committee, with the support of Novato’s new Finance Manager Tony Clark, is doing a yeoman’s job of maintaining order on the decks despite Novato’s ever-increasing glide angle into bankruptcy. Nonetheless, The City is running out of fingers with which to plug leaks in the failing financial dike.
Unlike many in City Hall who strive to maintain a contrived sense of self-importance when interacting with residents, Clark is relaxed and answers directly, and most importantly, he answers the question asked. Imagine that. Too often, guarded obtuse answers are the norm in most senior City management dialogues with residents.
No doubt Tony Clark’s breadth and depth of experience acquired while developing a diversified portfolio that includes both private and public financial positions has much to do with his easy manner. He is financially bi-lingual as his financial reference framework includes both the private and government sectors.
Upon graduation from Cal State Long Beach with a BS in Finance & International Business, Clark took an initial post as a commercial financial analyst in the private sector with Manufacturers Bank in Los Angeles. Next, followed two years as a staff auditor for the City of Long Beach.
Then, Clark returned to the private sector as a senior auditor with Sovereign Bank followed by a stint as internal audit specialist with the creative electronics company Plantronics in Santa Cruz, California. Next, came nine years as a senior accountant for the County of Santa Cruz.
Clark came to the City of Novato with a private-public sector blend of experience increasingly rare in public finance circles. It enables him to confidently exchange views and seamlessly converse with residents voluntarily serving on city appointed committees or ad hoc civic groups while avoiding the suffocating interest-killing bureaucratic argot behind which many city financial denizens hide.
Novato’s Citizens Finance Advisory Committee is tasked with providing to the City Council “regular feedback, insight and recommendations” regarding the City’s financial condition. It also acts as the official Citizens Oversight Committee for tax ordinances such as Measure F & Measure C.
Keen financial insight and experience are an essential qualification to sit on the Committee. Novato is indeed fortunate to have seven members who gamely arrive at 7:30 AM once a month at City Hall to review the City’s financial health using reports provided by the City Finance Staff. Refreshments are not served. Everyone just gets down to business.
Committee members are well qualified and successful in their specific areas of financial expertise. They serve on the Committee because they care about Novato. If the City Council does not listen to the recommendations of the Committee, members leave. Recently, committee member Bob Ratto did just that when the City Council ignored the Committee’s (and City Staff’s) financial recommendation to NOT build a downtown train station and then give it SMART who would not guarantee any trains would ever stop there.
Committee sessions become intriguing when committee members question or seek clarification on submitted reports. Rarely, are voices raised. Rather, presumably innocent questions sail stiletto-like across the room aimed at illuminating a potential piece of financial or political pork. Or, when examining the rationale behind the classification of a seemingly innocuous allocation of funding.
The Committee constantly pushes City Staff to make reports brief, concise and comprehensible to a curious resident. Terminology is to be explained before use. It is easier said than done, but must be done.
The Wall Street Journal is the poster child for doing exactly this. It is the nation’s second largest newspaper built on promoting their readers’ understanding of financial information.
Members of the Committee bring a positive attitude toward understanding the financial challenges and issues the City’s Financial Group faces. The current Committee Chair is Tim O’Conner who brings a history of banking experience with JP Morgan Chase, Wells Fargo, Exchange Bank, Bank of Marin, etc. He is now a Procurement Manager with UC Berkeley.
David Bentley is the long serving Auditor-Controller for the North Marin Water District. He brings a critical attention to detail illuminating the consequences of seemingly minor but significant reporting errors or omissions.
Robert Scott is a retired Hewlett-Packard executive who adds the leavening of extensive experience in large private enterprise management.
Cris MacKenzie is currently a Regulatory Compliance and Privacy Officer with Kaiser Permanente. She serves as an officer with the Marin Community Clinics. Her corporate experience provides an extraordinarily useful perspective on employee retention issues.
Regina Bianucci Rus, CPA owns a small accounting firm located on Grant Avenue. Her small business perspective provides insight into potential unintended consequences of City
Caitrin Devine brings substantial experience in business administrative support. She has a Master’s degree in Public Administration and serves on the administrative team at Marin Breast Health.
Rafelina Maglio is VP Marketing Manager with the Bank of Marin. She has served as a Branch Manager and has been with the Bank for over 21 years.
It is refreshing to recognize that qualified individuals can address difficult financial issues with Senior City Staff managers and develop options to be considered by The City
Council. While there are other City-resident committee interfaces that do not work well, the Citizens Finance Committee is doing a stand-up job, and it and Tony Cark should be commended.
Novato residents deserve their high-quality input. Now it’s up to the City Council to do the right thing by heeding the Citizen’s Finance Committee’s advice.
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