Fortuna finance director reports tighter budget but Measure E continues to fund public safety and parks

Aaron, Fortuna’s finance director, presented the fiscal year 2025–26 midyear review, telling the council the city’s general fund ended FY24‑25 with a $180,000 net deficit and projected a headline deficit of about $1.75 million for FY25‑26. He said much of that current‑year increase is attributable to a one‑time $1.5 million discretionary payment to CalPERS and that excluding that payment the adjusted deficit is roughly $254,000, an improvement versus the adopted budget.

“Tax and fee revenue is flat with only a $17,000 year‑over‑year increase,” Aaron said, while noting investment revenue exceeded expectations and staff added $50,000 to projections. He also said sales tax, the city’s largest general‑fund revenue source, is trending down — the current fiscal year is expected to be about 6% below the peak year (roughly $150,000 less) — and that modest growth is forecast into 2026‑27.

The council earlier heard the Measure E committee’s annual report from Measure E committee chair Sue Long. “Measure E is a three‑quarter‑percent sales tax measure that was approved by the voters in 2016,” Long said, emphasizing the revenue is locally restricted and cannot be taken by the state. She reported Measure E provided $1,916,924 to the city in FY24‑25 and summarized the measure’s FY24‑25 expenditures as approximately $422,000 to parks and recreation (20%), $1,102,000 to the police department (51%), $238,000 to cover the general‑fund deficit, and roughly $300,000–$400,000 to public works.

Long highlighted projects and uses funded by Measure E, including replacement of police vests, completion work on the police facility ($67,000 reported), purchase of parks equipment and a boom mower, and a set‑aside of $850,000 for improvements on the McLean property at Newberg Park. She told the council the committee and successive councils have aimed to keep Measure E spending aligned with voter intent.

City staff said they are not recommending supplemental adjustments tonight but will continue monitoring revenue and expenditures and will present additional items (if any) for council consideration in the coming special budget workshops. Aaron told council the next administrative steps include Measure E committee meetings in April and special council budget meetings in late April/early May ahead of a planned budget adoption in June.

The council did not take formal budget‑adjustment votes at this meeting; staff said any specific supplemental budget requests would be brought forward as separate agenda items.