San Rafael appoints acting city manager in abrupt shift

The San Rafael City Council has installed an acting city manager in a major leadership transition it has yet to explain.

The city announced that Cristine Alilovich is on leave and the council has temporarily turned her responsibilities over to Paul Navazio, the finance director.

The council made the unanimous decision to appoint Navazio following closed session at a special meeting on Wednesday. The city would not say why the council made the change.

The move came after closed council discussion on Monday. The item was described on the agenda as the city manager’s “performance evaluation.”

While there was no reportable action from that meeting, Alilovich went on leave effective Tuesday, the city said.

On Thursday, the city published an agenda for a closed session set for 5 p.m. Tuesday. An agenda item is listed as “public employee discipline/dismissal/release.”

“Director Navazio assumed the role today and city operations continue without interruption,” City Attorney Rob Epstein said in an email Thursday. “The city manager is currently on leave and we anticipate issuing a formal Press release next Wednesday after the council’s next Tuesday night closed session.”

“Director Navazio brings more than 30 years of public sector experience, including prior service as city manager for the city of Woodland, and leadership roles in finance and administration in other California jurisdictions,” Epstein said.

“In his role as finance director for San Rafael, Paul has been closely involved in the city’s budget development and financial oversight, positioning him to guide the organization at this time,” he said.

Epstein did not say whether Alilovich’s leave is paid or unpaid.

Alilovich did not respond to a request for comment.

At the special meeting on Wednesday, Mayor Kate Colin said, “Thank you, acting city manager Navazio for your willingness to step into this role. We are honored.”

Contacted later, Colin would only say that Navazio was appointed but did not provide any other details.

In an email, Navazio said, “I look forward to providing the organization and community with continuity of leadership, while at the same time maintaining a focus on successfully managing the City’s short-term budget challenges.”

Alilovich was hired as assistant city manager in 2015 at a base annual salary of $156,060. Before joining the city, she was assistant director of finance for Marin County.

San Rafael promoted Alilovich to city manager in 2023. Her starting base salary for the position was $283,992 a year. Her current annual salary is $333,744.

Navazio joined the city as finance director in July 2023, receiving an annual salary of $199,500. His current salary is $232,692.

Epstein said no salary adjustments were made as part of the appointment to acting city manager this week.

“I can tell you that Paul has expressed he is glad to help the city in whatever way it needs,” Epstein said.

Karen Strolia, chief executive officer and president of the San Rafael Chamber of Commerce, said she was not privy to the details of the change in leadership.

“The Chamber has always had a good relationship with the city and anticipate that remaining the same with new leadership,” she said in an email. “Our goal is to ensure the business community is supported and this partnership is instrumental to that vision.”

The leadership change is one of many acute challenges the city has faced as of late.

City leaders have struggled with a variety of homelessness issues such as camping prohibitions, sanctioned camping areas and, more recently, surprise plans for a village of shelter cabins that set off public grievances and a lawsuit.

Housing also has been a flashpoint. Urbanization of the city, whose leaders have embraced housing growth, is on pace to rapidly alter the landscape and feel of downtown, as large-scale apartment projects, bolstered by state housing laws, have been approved in rapid succession. City planners and commissioners have been frustrated by their limited authority.

Housing proposals have been met with staunch criticism, and approvals for some development plans have drawn appeals.

The 17-story, 200-apartment building at 700 Irwin St. generated three appeals that are set to be heard by the council on Tuesday. An appeal of the 131-resident complex at 1030 Third St. is set to be heard at the same meeting.

At the last regular council meeting, Navazio detailed a grim budget forecast that projected a $3.5 million shortfall for next year. If left unchecked, that could grow to $6 million by 2030, depleting the city’s reserves, Navazio said.

Alilovich implemented a hiring freeze across all departments until at least the last day of the fiscal year, June 30. Exceptions were made for “sworn public safety personnel, dispatchers, lifeguards, and nongeneral fund temporary seasonal employees,” Navazio wrote in a staff report.

“This is aimed at merely taking some pressure off of current year personnel expenditures and meeting our budgeted salary savings targets,” Navazio said in an email.

The city is considering tax renewals and new tax proposals as part of a strategy to boost city revenue and shrink the projected deficit.

The city needs to act quickly to ensure it maintains existing revenue, Navazio said. That includes seeking the renewal of Measure D, a $72.02 per parcel tax to support library services that expires this year. The tax collects about $1.2 million annually.

The hiring freeze was necessary to ensure fiscal stability until officials knew the outcome of the proposed June ballot measure. Whether to continue the hiring freeze will be determined as part of the city’s budget process, Navazio said.

“At this time, we do not expect to require staffing or service level reductions as part of the budget-balancing plan,” he said.

The proposed ballot language will be considered by the council on Tuesday.

Any future revenue measure under consideration will be more focused on addressing significant unfunded needs, rather than addressing the short-term budget gap, Navazio said.