1 CITY OF FORTUNA - MEMORANDUM
TO: Honorable Mayor and City Council Members
FROM: Measure E Oversight Committee
SUBJECT: Annual Report to the City Council
DATE: February 3, 2025
Introduction
Measure “E” is a 3/4% sales tax measure that was approved by the voters of the City of Fortuna on November 8, 2016. Measure E was set to terminate on March 31st, 2025. However, on November 3, 2020 the voters of the City approved Measure “G”. Measure G extend,ed Measure E 8 additional years. Measure E is now set to terminate on March 31st, 2033.
Measure E is a general tax. The City is committed to primarily using these general tax dollars to protect and maintain essential City services, including increasing and restoring police officers and programs, repairing aging/deteriorating streets and potholes, parks maintenance, and programs for youth and seniors. The Measure E committee was set up by the City Council in order to assist the Council in taking public input and review staff recommendations on the expenditure of funds derived from Measure E.
The primary duties of the Measure E Oversight Committee are as follows:
a. Review requests for funding from City departments.
b. Conduct public hearings to examine the requests and weigh the value of the various proposals.
c. Make recommendations based on the proposals received, for the expenditures that should be funded given the projected amount of revenue to be derived from the local sales tax to the City Council for inclusion in the annual budget.
d. Become familiar with current and projected City revenues and expenditures. e. First meeting of every calendar year, provide a forum for public expression of desires regarding expenditure of funds derived from the local sales tax.
Committee Members
The City Council made the appointments to the committee with staggered terms as follows:
a. Two (2) members at two (2) years
b. Three (3) members at three (3) years
c. Two (2) members at four (4) years
2 Members serve at the pleasure of the City Council. There are no restrictions on reappointment of members for successive terms. Currently, the Measure E Oversight Committee is composed of the following seven members:
MEMBERS
Term
Expires
Sue Long, Chair 12/31/25
Donald Ingram 12/31/25
Debi August 12/31/25
Martin Morris 12/31/26
Vacant 12/31/2X
Vacant 12/31/2X
Vacant 12/31/2X
Staff Liaison: Aaron Felmlee, Finance Director
The Committee holds regular meetings on the third Wednesday in January, third Tuesday in March, September, and December, and the first Tuesday in April. Meetings commence at 5:30 pm as agreed upon by the committee. Special meetings are held as needed.
Transactions & Use Tax (Measure E) Revenue
The sales tax rate in the City of Fortuna is 8.50 percent. Of this amount, the State receives 6.00 percent, the County Transportation Fund receives 0.25 percent, the County receives 0.50 percent (with the passage of the County’s Measure “Z”) and the City of Fortuna receives 1.0 percent (Bradley-Burns). The City’s Measure E transaction and use tax adds another 0.75 percent, which brings the total sales tax rate to 8.50 percent.
3 Graph 1: Sales Tax Rate Distribution Comparison
During fiscal year (FY) 2023-24, the City of Fortuna received $1,938,466 (net of administration costs of $7,160) from the City’s transactions and use tax. This represents receipts received for the period of July 2023 through June 2024. These revenues represent approximately 19 percent of the City’s total general fund revenue.
The following data summarizes and compares the revenue generated by Measure E (0.75%) transaction and use tax to the Bradley Burns (1.00%) sales tax by business type for fiscal year 2023-24.
Table 1: Tax Revenue by Business Type
Measure “E” Compared to Sales Tax Revenue
1 Cent
Sales Tax
Revenue
0.75 Cent
Measure
“E”
Revenue
75% of
Sales Tax
Revenue
Favorable
(Unfavorable)
Variance
Ratio of Measure
"E" to Sales Tax
Autos & Transportation $230,309 $425,730 $172,732 $252,998 184.9% Building & Construction
275,597
240,137
206,698 33,439 87.1%
Business & Industry
319,722
296,997
239,792 57,206 92.9%
Food & Drugs
220,651
178,745
165,488 13,257 81.0%
Fuel & Service Stations
296,376
262,538
222,282 40,256 88.6%
General Consumer Goods
172,698
318,609
129,524 189,086 184.5%
70%
3%
12%
9%
6%
6.00%, State of
California
0.25%, County
Transportation
Funds
1.00%, City of
Fortuna
0.75%, City of
Fortuna (Measure E)
0.50%, County of
Humboldt (Measure
Z)
4 Restaurants & Hotels
267,051
200,971
200,288 683 75.3%
Transfers & Unidentified
1,697
21,899
1,273 20,626 1290.5%
Gross Revenue
1,784,101
1,945,626
1,338,076 607,550 109.1%
County/State Pool
439,323
State Board of Equalization
Admin Fees
(16,259)
(7,160)
Net Revenue
2,207,165
1,938,466
Graph 2: Comparison of Transactions and Use Tax as Percentage of Sales Tax The Transactions and Use Tax (Measure E) rate is 75 percent of the City’s portion of the sales tax rate (1% Bradley Burns). Due to this, one would expect the percentage of Transactions and Use Tax revenue to sales tax revenue to be 75 percent. However, for fiscal year 2023-24, the City’s Transactions and Use Tax generated approximately 109 percent of the revenue received from sales tax before other adjustments.
This occurs because the City’s TUT is assessed and allocated to the district where goods are delivered or placed into use rather than where the sale was negotiated like general sales tax (aka Bradley Burns) is. This means that the City is capturing TUT tax on the sale of automobiles and other registered modes of transportation, like boats, motorcycles and airplanes that occur outside of the City’s taxing district and on business and industry items that are brought into the district from outside (online) suppliers.
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
Autos &
Transportation
Building &
Construction
Business &
Industry
Food & Drugs Fuel & Service
Stations
General
Consumer
Goods
Restaurants &
Hotels
1 Cent Sales Tax Revenue 0.75 Cent Measure “E” Revenue 75% of Sales Tax Revenue 5 Fiscal Year 2023-24 Expenditures
Graph 3: Expenditures by Department
As stated before the City committed to primarily using Measure E general tax dollars to protect and maintain essential City services, including increasing and restoring police officers and programs, repairing aging/deteriorating streets and potholes, parks maintenance, and programs for youth and seniors. The above chart demonstrates the use of Measure E monies by department. As you can see from the chart the Police Department accounted for 71% of expenditures, Public Works 8%, Parks and Recreation 12%, and the remaining 9% going to Administrative/City Hall general fund deficit expenses, intended for covering the structural General Fund deficit. Funds that went to the General Fund reserves that were not needed to cover the General Fund deficit will be expended in future fiscal years. Below are individual department reports on the funds derived from Measure E and expended in FY 2023-24.
Public Works Expenditures
12 Street Integrated Stormwater Enhancement Project
The project included installing a number of LID raingardens and new stormdrain pipe along 12th Street in between Loni Drive and K Streets, which has helped address gutter flooding issues along 12th Street as well as future state board permit trash capture requirements. The project construction was fully completed in December of 2023. In FY 2020-21 and 2021-22, the Measure E Committee approved a total $105,100 allocation for the project. In the FY 2023-24 budget, $30,000 of these funds were remaining and were added to that year’s budget. The overage shown in the accounting is due to unforeseen construction contingency dollars that were used to execute change orders due to unforeseen field circumstances. Although shown as a cost overage in the Meaure E fund, 90% $2,330,504
Police
71%
$246,509
Public Works
8%
$282,695
Cover General
Fund Deficit -
Admin/City Hall
9%
$409,387
Parks and
Recreation
12%
6 of this amount was reimbursed by the state grant, and the final 10% was paid from using the Measure E storm drain maintenance fund. The Measure E funding was used as grant match for the project, and in total the City received over $1 million in grant funding from the State Water Resources Control Board (Prop 1).
Stormwater Infrastructure Hazard Identification Project The City’s Stormwater Infrastructure Hazard Identification Project was initially awarded $37,500 in funding in fiscal year 2020/21. This project was an engineering and field reconnaissance study that included physical inspections of various City stormdrain facilities, resulting in a prioritized list of stormdrain replacement and upgrade projects. This project is also partially funded by a grant from FEMA in the amount of $112,500, and the Measure E funds allocated to this project will act as the project’s required local match. The project was completed in early 2024, and the grant has since been closed out with CalOES/FEMA. The project shows a budget overage in the last fiscal year of approximately $1,500, however, the project was completed fully within the established grant budget. The overage is due to staff slightly over-estimating budget expenditure at the time the budget was finalized.
Street Maintenance Projects
In FY 2023-24, the City budgeted $125,000 towards street maintenance projects from Measure E.
With this funding the City was able to complete paving and striping projects at the following locations:
Roadway and striping rehabilitation along 12th Street near K Street; Paving rehabilitation at 10th and H Streets
Pavement rehabilitation on Rohnerville Road near Newell Drive and near the intersection of Newburg and Rohnerville Road.
Storm Drain Maintenance Projects
In 2023/24 there was $246,000 budgeted for stormdrain repairs, of which $53,059 was used. The total repair budget included rollover funding from previous fiscal years as well. The funds spent in 2023/24 were used to address a number of smaller stormdrain maintenance projects, including repairing a 24” culvert on Elizabeth Barcus Way. Since the end of fiscal year 2023/24, all remaining funds have been used in this account to repair storm damage from the winter of 2023/24.
Boom Mower
In Fiscal year 2023/24 $37,500 was set aside for the purchase of a new boom mower for the public works department. The City’s current boom mower is aging and is regularly requiring repairs.
Additionally, the mower itself is approaching the end of its useful life as it pertains to California Air Resources Control Board (CARB) requirements for emissions. The funding set aside this year was for staff to use as grant match to pursue a USDA rural community assistance grant, however, the City was unsuccessful in obtaining grant funding. The boom mower is still a significant need, and staff will continue to seek additional funding to obtain a new boom mower.
Illegal Camp Cleanup
The Illegal Camp Cleanup for FY 2023-24 was primarily for funding efforts by the People of New Directions to address illegal encampments around the City. In total $2,113 was used.
Parks and Recreation Expenditures
RCRPD Benefit Assessment Project
The Rohner Community Recreation and Park District (RCRPD) has very limited annual funding, so the City assisted them with Measure E funds to pursue their general mission of planning for a 7 future aquatic center in Fortuna. During FY 2023-24, $50,000 of Measure E funding was allocated to the district to assist with the planning and consultation services (engineer’s report, calculations, ballot proceedings, etc.) related to the Benefit Assessment. Since the RCRPD did not proceed with the Benefit Assessment during FY 2023-24, nothing was spent, however, these funds are anticipated to be spent in future fiscal years.
Parks & Recreation Director
Measure E continued to fund the Parks & Recreation Director position, with Heather Stevens performing the duties of management, direction, and development of the City’s park and facilities system, recreation activities and programs, the Depot Museum, the River Lodge and Monday Club, and the operation of the Fortuna Transit bus service.
Recreation Program Supervisor Position
Measure E supported the Recreation Supervisor position, with Courtney Kadle serving in this role.
This position includes management and supervision of all of the City’s Recreation programs and leagues, scheduling, training, managing part-time staff, and organizing many community-driven events.
Replace Roller Skate Wheel Cleaning Machine
With the addition of the new Roller Skate Wheel Cleaning Machine, staff are able to clean skate wheels more effectively and efficiently. This helps prevent scuffs, marks and damage on the Pavilion floor, keeping the floor in great condition for skaters and other facility user groups as well.
Provide Transit to Eureka for Medical Appointments
In its seventh year funded by Measure E, Fortuna Transit continued to provide weekly service to persons with a disability and/or senior citizens with rides to Eureka for medical appointments, since the majority of care providers exist in Eureka. These funds supported the full cost of the service; including fuel, vehicle maintenance, and staff hours for transporting 2-4 riders per week every Tuesday. $6,000 was allocated for FY 23-24, and ultimately $7,378 was needed to fully fund this program.
Rohner Park Basketball Court Rehab and Expansion
In July of 2023 the City completed the installation of new basketball courts at Newburg Park. In FY 2023/24, $103,617 of Measure E funding was used to complete the project, in addition to funding from others sources.
Newburg Park Acquisition Improvements
$900,000 was budgeted in FY 2023-24 for this project, which envisions at its build-out installing two new regulation size soccer fields, a new parking lot, and a new snack shack and bathrooms on the vacant parcel adjacent to Newburg Park which the City acquired in 2022. During this fiscal year, the funding that was spent went towards the engineering design for the improvements, and currently the City’s engineer is working towards the 60% design submittal for the project. Staff hope to have a better understanding on project cost in the coming months, and at that time will have the ability to determine what improvements can be budgeted and constructed for as an initial phase of work.
Fortuna Senior Center Program MOU
The City of Fortuna entered into an MOU agreement with the Fortuna Senior Center for $40,000.
As part of the MOU the Senior Center agreed to provide the following programs to Fortuna seniors:
Provide a facility for seniors to congregate and visit Monday through Friday for six hours daily (on average)
8 Provide between six and eight hours of programming Monday through Friday including exercise, educational and enhancement opportunities that may include activities such as book club, music classes, sports, hiking, games, etc. and generally consistent with the programming currently being offered
Provide assistance upon request directing seniors to other resources and programs available in the community
Newburg Park Acquisition Improvements
The city did not receive the US Department of Agriculture funding as hoped. Staff will continue to seek grant funding that will assist in the cost for the replacement of the current wheelchair lift.
Other options are being explored as well. Possibilities include, an outdoor accessible ramp on the backside of the building or a modular ramp to set up as needed inside of the building.
General Park Acquisition and Improvements
In July 2023, staff utilized $7,758 for Pavilion Floor refurbishing. Regular upkeep of the Pavilion floor is particularly important since the floor has reached a point that it can no longer be sanded.
Parks staff work hard to protect the remaining flooring with quality sports court sealant.
Additionally, during the busy 2024 spring field preparation season two hand mowers broke down leaving staff with inadequate tools to get the fields open for community groups. One of those mowers was beyond repair. $3,038 was utilized to purchase a walk behind hand mower to operate when fields are too wet for the bigger heavier mower.
Police Department Expenditures
Police Detectives
The Fortuna Police Department received Measure E funds allowing for two full-time police Detectives. These positions continue to provide much needed additional services to the Fortuna Police Department and our community. Detectives are a valuable resource, allowing for focused investigations and the ability to proactively address major crimes and circumstances which negatively affect our community. The following are just a few examples of the impact the Detectives have had addressing crime in our community during FY 2023-24. Detectives handled 1,109 incidents, 561 of which were self-initiated and 548 were calls for service.
Detectives conducted 122 investigations, not including the countless investigations they assisted patrol officers with.
Detectives investigated multiple child molestation and sexual assault cases, which resulted in arrests and convictions.
Detectives investigated criminal activity a schools, which resulted in the seizure of a loaded handgun from a juvenile student at school. Additionally, it lead to the arrest of additional subjects and seizure of further firearms.
Detectives located a chop shop in a residential neighborhood. During the investigation multiple stolen vehicles, stolen property and firearms were recovered. The suspect who is a convicted felon was arrested on numerous felony violations, as well as an outstanding arrest warrant for kidnapping.
Detectives located and apprehended an attempted murder suspect at large. Detectives investigated an armed robbery, solving the case, identifying the suspects and issuing warrants for their arrest.
Detectives investigated a drive by shoot / attempted homicide. As a result of the investigation two suspects were identified, arrested and recently convicted. As a result of the investigation Detectives pursued additional criminal leads which resulted in several illegal firearms being seized from juveniles.
9 Detectives executed or served multiple search warrants and investigations involving the possession and sales of narcotics, recovery of stolen property, and possession of firearms. Detectives assisted local partner/allied agencies throughout the county with officer involved shooting and homicide investigations, as well as arrests of wanted subjects.
Community Service Officer
The Fortuna Police Department received Measure E funds allowing for one full-time Community Service Officer. The Community Service Officer handles lower level misdemeanor type crimes, parking complaints/violations and animal control issues, freeing up our sworn officer staff to focus on more serious violations. The Community Service Officer is a non-sworn position and is assigned to handle property and evidence. During FY 2023-24 the full-time Community Service Officer handled 533 calls for service, in addition to parking enforcement, training a part-time Community Service Officer, property/evidence duties and animal duties such as licensing, kennel care and veterinary appointments. Having this non-sworn position is vital to the department.
Records Clerk
The Fortuna Police Department received Measure E funds allowing for one full-time Records Clerk. The Records Clerk is the initial point of contact for all walk in services and reports, the initial contact for many in moments of crisis. The Records Clerk assisted in processing police incidents, reports, body worn camera footage and much more for release and routing to allied agencies such as the District Attorney’s Office. The department handled 16,556 incidents and 1,433 investigations in FY 2023-24. The Records Clerk assists with over 800 livescans per year and many additional administrative assignments and projects. Having this non-sworn position with the required training to complete the aforementioned duties and assignments is a pivotal part of ensuring investigations are properly processed for prosecution.
Patrol Officer Over Hire (Formerly Measure Z SRO Position) The Fortuna Police Department received Measure E funds allowing the department to maintain a sworn officer position when Measure Z did not approve funding for the School Resource Officer position. With the position staffed the department was able to maintain critical relationships with schools, staff, students and their families during FY 2023-24. The department was able to manage and conduct the DUI Prevention Program, Every 15 Minutes. The former SRO also worked closely with Detectives in seizing and recovering illegal firearms from students/youth. This Officer handled 692 incidents and 69 investigations, many of which were associated with the safety of our schools, staff, students and their families.
Code Compliance Officer
The Fortuna Police Department receives Measure E funds allowing for a part-time Code Compliance Officer. This position addressed property abatement, municipal code violations and other criminal and quality of life issues. Properties requiring abatement sometimes have associated criminal activity ranging from illicit drug crimes to violent crime. Addressing the abatement issues and municipal code violations resulted in the elimination and/or reduction of criminal activity associated with these properties. In FY 2023-24 code enforcement has worked many investigations and made a profound impact on our community.
The following are a few highlights:
Code Compliance handled 230 incidents, 178 of which were self-initiated and 52 were calls for service during FY 2023-24.
Code Compliance handled 13 investigations/cases. 1 investigation is ongoing and the remaining were resolved with voluntary compliance.
Code Compliance Officer has established positive and effective working relationships with a multitude of departments and agencies throughout the county that have greatly aided in 10 the successful and expeditious abatement of blighted properties in violations of local codes and laws.
Approximately 50 properties with existing fire hazards were addressed and neutralized, the majority of these abatement processes were accomplished through self-initiated / proactive contacts. Of these properties approximately 90% were resolved with the initial notice and the rest were resolved with additional follow up from the Code Compliance Officer.
Thanks to the efforts of the Code Compliance Officer no city staff was involved in cutting back fire hazards on private property.
Code Compliance Officer is trained in addressing abandoned vehicles on our roadways and has taken a proactive approach in addressing abandoned vehicles.
K-9 Program
During FY 2023-24, the Fortuna Police Department utilized Measure E funding for the operations budget associated with the department’s K-9 program. The department has K-9 Cain and K-9 Blitz.
Both of the department K-9 teams have attended advanced training courses and are certified in patrol, apprehension works and narcotics detection. The K-9 teams have also attended courses in rural tracking, electronic collar function, stabilized tactical airborne body operations and they have ongoing maintenance training. In FY 2023-24 Measure E has continued to fund the routine monthly maintenance training associated with department K-9’s (Approx. 300+ hours of maintenance training).
The K-9 program provides an important element to crime deterrence and a significant de-escalation tool. The Fortuna Police Department’s K-9 program is a vital department resource and is deployed and used for special enforcement operations all over the region in Humboldt County. The department’s K-9 teams also provide an important community-policing tool and contribute to promoting a positive feeling of approachability toward department personnel by community members.
During FY 2023-24, department K-9 teams attended a significant number of public events which sparked community interest, and which provided platforms of opportunity to socialize and visit with children and families in attendance. Examples include but are not limited to:
School visits
First Fridays
Rodeo week and other large events in the city
During FY 2023-24, department K-9 teams have participated in numerous narcotic detection deployments, as well as patrol deployments. Some of the deployment highlights include:
67 deployments with 49 of them being detection deployments and 18 of them being patrol deployments. These deployments resulted in the apprehension of suspects and the seizure of narcotics and one firearm.
The following is a highlight of some of illegal narcotics seized. - Over 3 pounds of methamphetamine
- Over 2 pounds of cocaine
- Over 1 ounce of heroin
- Just under 1 pound of fentanyl
K-9 teams assisting the Humboldt County Drug Task Force in seizing illegal narcotics. Throughout the year K-9 teams had multiple non bite surrenders and one bite apprehension, successfully resolving many high risk situations.
11 The Fortuna Police have continued to fundraise and have received financial support in the form of contributions from both public and private donors to augment the Measure E program funding.
This support is reflective of the significant value the community places on this program.
Police Facility
Measure E funds assisted in the completion of the Fortuna Police Department facility at 2600 Newburg Road.
Committee Recommendation of Future Measure E Fund Expenditures There are several points the committee wants to be sure the Council pays attention to:
1. The ongoing Measure E Fund Support of streets will optimistically rise in coming years.
2. Police Department funded positions will be funded throughout the term of Measure E.
3. The committee is dedicated to utilizing reserves in excess of the reserve policy built up from unspent monies generated from Measure E to go towards large one time projects such as the Newburg Park acquisition improvements project in the coming fiscal years.
Conclusion
In light of the continuing adverse economic conditions and instability at the state level, the funds derived from Measure E have had a significant and positive effect on the financial stability of the City. The City receives almost the same amount of revenue from Measure E as it does from the General Sales Tax allocation. Without Measure E the City and public would be exposed to much greater risk City wide. Three additional police staff help protect and serve both public members and public property, storm drain funds help mitigate the risk of far greater catastrophes occurring by keeping up on maintenance and grant match funds help the City take on projects that would otherwise be unattainable with local City revenues.