Cordova staff warns of FY2026 revenue shortfall as fisheries receipts fall short

City of Cordova finance staff told the City Council at a Oct. 1 work session that the proposed fiscal year 2026 general fund revenue forecast needs revision after several revenue lines shifted.

Staff said the city’s remote sellers tax has come in higher than expected but that sales and use tax forecasting remains cautious because the city’s largest quarter posts in October. Most notably, revenue‑sharing payments tied to fisheries were budgeted at $1,000,000 for 2025 but the city received $637,000, a shortfall staff described as difficult to predict because the state does not publish its calculation method. “We received 637,000, so another hit through our 2025 budget,” the staff presentation said.

Staff summarized the net effect as a gap when comparing the current position to the original 2025 budget: “If you just look at the bottom…we are 664,000 below that number,” the presentation said. Councilors responded by pressing staff on conservative budgeting approaches, including the option of using the recent lower receipt in the FY26 baseline or relying on a multi‑year average; staff noted a seven‑year average would still approximate $1,000,000 and recommended finding a middle ground.

The council discussed possible revenue options. Staff estimated the set of surtax increases discussed (municipal accommodation taxes, vehicle rentals and public accommodations treated together) would yield roughly $74,000 — useful but insufficient to close the gap. Members debated targeted approaches (seasonal or split sales taxes, short‑term rental taxes) and noted the legal and financial cost of pursuing annexation or gross‑receipts changes. The council repeatedly emphasized that relying solely on tax increases could harm year‑round residents and small businesses.

Several councilors urged non‑tax alternatives to support the local economy, including measures to retain processors and encourage long‑line fleet deliveries (hauling/haul‑out capacity, storage and services). Staff and councilors suggested a dedicated work session with the Fishery Advisory Committee to gather industry input and develop options staff could cost out.

Staff said it will return with more detailed department budget breakdowns (personnel versus operating costs) and enterprise fund impacts at upcoming meetings; staff also noted the city audit has been submitted and will be presented to council in early November. The council did not take formal revenue votes at the work session; it directed staff to supply additional financial detail for council deliberations.

The work session adjourned and council moved into the regular meeting, where the budget discussion will continue in October and November as staff provides requested breakdowns.