Arcata adopts $95 million budget, adds $25,000 placeholder for climate manager

The City of Arcata City Council voted unanimously on June 17 to adopt its FY 2026–27 budget, approving a $95,000,000 spending plan that trims overall appropriations from the prior year and includes a $25,000 placeholder for a climate action manager.

Tabitha Miller, assistant city manager and finance director, told the council the budget is a response to declining tax receipts and rising costs: “The total budget this year is $95,000,000,” Miller said, adding the city’s capital program remains large at about $50,100,000 while the general fund has been reduced to roughly $21,600,000. Miller said the staff recommendation also includes a hiring freeze and a retirement incentive adopted earlier in June to reduce labor costs.

Why it matters: council members said the decision is intended to preserve core services while building a stronger reserve. Miller recommended increasing the city’s emergency reserve policy from 35% to 50% of operating expenses; the shift, she said, can be funded from unreserved balances without cutting current programs.

Council debate centered on whether to secure funding now for a climate action manager tasked with coordinating regional planning. After discussion, Council Member Matthews moved to adopt the budget with an amendment to add $25,000 from general-fund reserves as a line item for the climate manager. “I would like to then make a motion to adopt resolution number 256‑74 adopting the fiscal year 2627 budget…and also approve adding in a line item for $25,000 for a climate manager,” Matthews said. The motion was seconded and passed unanimously.

Public comment in favor: Joanne McGarry, a longtime local commenter, said she supported placing the climate position in the budget. “I appreciate having that put on as a budget line item,” McGarry told the council during the hearing.

Key numbers and context: staff said the budget reflects a roughly 14% drop from last year’s $110.7 million total, driven by weaker transaction‑and‑use (TUT) and transient‑occupancy tax receipts, rising insurance and pension costs, and elevated construction and technology expenses. Staff also said the city is planning a modest debt issuance later this year and expects to use a portion of fund balances—about $1.2 million from the general fund and roughly $6.2 million from wastewater reserves—to smooth capital and operating needs.

Next steps: with the vote, staff will publish the adopted budget document and proceed with the capital projects and personnel authorizations included in the plan. Council members said they expect periodic updates and may revisit spending choices at midyear if revenue trends change.