Fortuna Council directs manager to seek River Lodge lease and HTA transit analysis as budget gap looms

Fortuna — The Fortuna City Council on April 27 voted to direct the city manager to pursue leasing the River Lodge to a public agency or nonprofit and to request an operational analysis from the Humboldt Transit Authority (HTA) to explore more efficient options for the city’s transit service as staff described a tightening general fund for fiscal year 2026–27.

Staff presented a detailed general‑fund overview at the workshop, saying the proposed budget shows a $738,000 gap made up of a $550,000 one‑time general‑plan update cost and $190,000 in one‑time employee stipends. Staff reported that rising costs — notably a roughly 28% increase in health‑insurance premiums (about $841,000) and a ~15% rise in liability insurance (about $87,000) — together with flat sales tax and hotel tax revenues have eroded purchasing power and left reserves below policy targets.

The presentation highlighted that Fortuna’s sales tax is down relative to inflationary expectations, leaving roughly a $1,000,000 loss in purchasing power over five years, and that transient‑occupancy‑tax revenue is projected at about $700,000 for FY26–27 versus an inflation‑adjusted expectation near $1.1 million. Staff said the city’s ending general‑fund balance is estimated at about $4,665,000, approximately $1.1 million below combined reserve policy targets.

Staff recommended a package of deficit‑reduction measures — including a hiring…