Fortuna council adopts lean FY25-26 operating budget, flags sales-tax reliance

The Fortuna City Council adopted an annual operating budget for fiscal year 2025'26 by approving Resolution 2025-18 at its meeting.

City Manager Amy Nielsen told the council the general fund shows an operating surplus of $679 and one-time expenses of $381,400 that will be paid from reserves. Nielsen said the city's general fund and measure-related revenues are highly dependent on sales tax, which account for roughly $4,000,000, or about 50% of those funds, and that staff built a "bare-bones" expense budget based on flat sales tax estimates.

The budget was introduced in earlier special workshops, Nielsen said, and staff recommended opening a public hearing and adopting the budget. The council closed the public hearing and voted on the resolution; Council member Connolly, Council member Diaz, Council member Stevens, Mayor Pro Tem Trent and Mayor Johnson each voted in favor.

Why it matters: The adopted budget relies heavily on sales tax receipts and draws on accumulated reserves for one-time items, which narrows the city's flexibility if sales-tax revenue falls short.

Details and context: Nielsen said staff presented the proposed budget and enterprise-fund reviews at two special workshops, on May 1 and May 5, and that additional budget materials are included in the meeting packet. The council took no additional policy action beyond adopting the resolution.

Next steps: Staff will implement the adopted budget and continue providing budget documents and supporting detail in the city's materials as requested by council members.