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City Clarifies Councilmember's Statements Regarding Net Position
The City of Novato would like to clarify statements made in Councilmember Drew’s Marin Voice opinion on June 28, 2019, which states that the “city’s net position materially declined in strong economic times.”
Councilmember Drew’s statement is in reference to the City’s Comprehensive Annual Financial Report (CAFR) for fiscal year 2017/2018 which details a $7.6 million decrease in net position. This decrease is the result of a lawsuit between the City and the California Department of Finance, which required the City to reverse Successor Agency Loans to various City funds, including the General Fund. This reduction in loan receivables was not related to the regular operational activities of the City and did not have any significant fiscal impact on the City’s operations. The City’s net position would have increased, had it not been for the reversal of Successor Agency loans. Additionally, the newly implemented mandatory reporting of the City’s Other Post Employment Benefits (OPEB) liability further decreased the City’s net position. In previous years, full measurement of the OPEB liability had not been required to be reported in the CAFR. The OPEB liability has been similar for many years, however, the new reporting requirement contributed to the net position changes reported in the 17/18 CAFR.
To review the City’s CAFR for this and previous fiscal years, please visit novato.org/finance.
* The reversal of the successor agency loans and the change in reporting for OPEB liability resulted in a net position decrease for fiscal year 17/18.