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Fortuna staff outlines water and wastewater fund projections; $50 million state grant for plant uncertain
Summary
Staff presented enterprise fund projections showing water revenues near $4 million and wastewater revenues a little under $7 million, described transfers to capital and reserve levels, and said an anticipated $50 million state grant for a wastewater plant replacement remains uncertain and could affect borrowing needs.
Fortuna — At a special City Council meeting, city staff reviewed enterprise fund projections for fiscal year 2026–27 and stressed that recent rate‑study increases are built into the budget. The staff presentation covered water and wastewater revenue and projected transfers to capital improvement funds.
Staff said the water fund incorporates a 20% rate increase from a rate study adopted two years ago and estimates total water revenue at a little over $4 million. Staff reported operating uses of almost $3.6 million and a $500,000 transfer to the water capital improvement fund; scheduled water capital projects total $3.4 million, leaving an estimated ending cash balance a little over $3 million. Staff listed an operating capital reserve equal to 180 days (about $1,767,000) and roughly $1.3 million unreserved for future CIP projects.
On wastewater, staff said charges increased per the rate study and that total wastewater revenue is projected at a little under $7 million, with total uses around $5 million and a $1,785,000 transfer to wastewater capital funds. Staff estimated an ending wastewater cash balance of about $8.5 million, including an operating/working capital portion near $2.5 million.
Staff also told council that the CIP currently anticipates a $50 million state grant to replace the wastewater treatment facility but emphasized that it is not yet certain whether the full grant will be awarded or only a partial amount. "Depending on what that grant actually comes back at, [it] will have a big impact on how much reserves our wastewater fund has or if we have to go out and get a loan or bonds to fund the remaining amount needed to upgrade the treatment plant facility," staff said.
Staff further noted operating budget cost increases driven by higher health insurance and liability insurance and capital‑outlay increases to replace aging equipment. Council did not take formal action on the enterprise funds during the meeting; staff will incorporate any council direction into the final budget to be presented for adoption on June 1, 2026.
