ORDINANCE 2026-785
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF FORTUNA AUTHORIZING AN
ADDITIONAL CITY TRANSACTIONS AND USE TAX TO BE ADMINISTERED BY THE
CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION, SUBJECT TO
APPROVAL OF A MAJORITY OF THE ELECTORS VOTING ON THE TAX MEASURE AT THE GENERAL MUNICIPAL ELECTION TO BE HELD ON TUESDAY, NOVEMBER 3, 2026 WHEREAS, pursuant to California Revenue and Taxation Code § 7285.9, the City of Fortuna ("City") has the authority to levy a local transactions and use tax for general purposes ("TUT'); and WHEREAS, at the General Municipal Election on Tuesday, November 8, 2016, the qualified voters of the City of Fortuna approved Measure E, which imposed a three-quarters cent TUT for an eight (8) year period through and including March 31, 2025, to ensure a reliable, locally-controlled source of funds to address, plan, and prepare for community priorities including increasing police protection services; maintaining 9- 1-1 response; nuisance abatement; repairing and maintaining streets, sidewalks, and drainage; maintaining parks; maintaining programs for youth and seniors; and maintaining other essential services; and WHEREAS, at the General Municipal Election on Tuesday, November 3, 2020, the qualified voters of the City of Fortuna approved Measure G, which extended the sales tax through March 31, 2033; and WHEREAS, the revenues derived from Measure E are essential to maintain essential city services; however, due to rising costs and inflationary pressures, the revenues derived from Measure E are insufficient to continue to maintain the programs and services funded by Measure E; and WHEREAS, over the past several years, the City has seen a decrease in sales tax and transient occupancy tax and an increase in costs totaling $1.9 million, and WHEREAS, because of decreased revenues and rising costs the City has implemented a hiring freeze and the use of general reserves and discretionary service reductions; and WHEREAS, funds from this Measure will help maintain essential services in the City such as protecting public safety; increasing and restoring police officers; repairing aging/deteriorating streets and potholes; providing programs for seniors and youth; and keeping parks clean and safe; and WHEREAS, the City Council desires to propose to the qualified voters of the City of Fortuna an ordinance authorizing an additional transactions and use tax at the rate of three-quarters of one percent (0.75%), commencing April 1, 2027, with all revenues continuing to be subject to an independent audit and overseen by a community oversight committee; and
WHEREAS, the City Council intends that the transactions and use tax previously approved by the voters and extended through March 31, 2033, shall remain in effect through that date, and that the additional transactions and use tax authorized by this Ordinance shall commence on April 1, 2027, and continue thereafter unless repealed in accordance with this Chapter.
NOW, THEREFORE, the People of the City of Fortuna do ordain as follows:
SECTION 1. APPROVAL OF ADDITIONAL TAX. The qualified voters of the City of Fortuna hereby approve and adopt an ordinance amending Chapter 3.13 of Title 3 of the Fortuna Municipal Code to authorize an additional transactions and use tax at the rate of three-quarters of one percent (0.75%), to be administered by the California Department of Tax and Fee Administration. The additional tax authorized by this Ordinance shall become operative on April 1, 2027, and shall continue thereafter unless repealed in accordance with this Chapter.
SECTION 2. AMENDMENT TO THE MUNICIPAL CODE. Section 3.13.050 of Chapter 3.13 of Title 3 of the Fortuna Municipal Code is hereby deleted and replaced in its entirety as follows:
3.13.050 Transactions tax rate.
A. For the privilege of selling tangible personal property at retail, a tax is hereby imposed upon all retailers in the incorporated territory of the city at the rate of ¾-cent (0.75 percent) per dollar of the gross receipts of any retailer from the sale of all tangible personal property sold at retail in said territory on and after the operative date of this chapter.
B. Commencing April 1, 2027, an additional transactions tax is hereby imposed upon all retailers in the incorporated territory of the city at the rate of ¾-cent (0.75 percent) per dollar of the gross receipts of any retailer from the sale of all tangible personal property sold at retail in said territory. The tax imposed by this subdivision B is in addition to the tax imposed by subdivision A of this section and shall continue thereafter unless terminated in accordance with this chapter.
C. From and after April 1, 2027, through and including March 31, 2033, the combined transactions tax rate imposed under subdivisions A and B of this section shall be one and one-half percent (1.5%).
SECTION 3. AMENDMENT TO THE MUNICIPAL CODE. Section 3.13.070 of Chapter 3.13 of Title 3 of the Fortuna Municipal Code is hereby amended to read as follows:
3.13.070 Use tax rate.
A. An excise tax is hereby imposed on the storage, use or other consumption in the city of tangible personal property purchased from any retailer on and after the operative date of this chapter for storage, use or other consumption in said territory at the rate of 0.75 percent per dollar of the sales price of the property. The sales price shall include delivery charges when such charges are subject to state sales or use tax regardless of the place to which delivery is made.
B. Commencing April 1, 2027, an additional excise tax is hereby imposed on the storage, use or other consumption in the city of tangible personal property purchased from any retailer on and after April 1, 2027, for storage, use or other consumption in said territory at the rate of 0.75 percent per dollar of the sales price of the property. The tax imposed by this subdivision B is in addition to the tax imposed by subdivision A of this section and shall continue thereafter unless terminated in accordance with this chapter. The sales
price shall include delivery charges when such charges are subject to state sales or use tax regardless of the place to which delivery is made.
C. From and after April 1, 2027, through and including March 31, 2033, the combined use tax rate imposed under subdivisions A and B of this section shall be one and one-half percent (1.5%).
SECTION 4. AMENDMENT TO THE MUNICIPAL CODE. Section 3.13.200 of Chapter 3.13 of Title 3 of the Fortuna Municipal Code is hereby amended to read as follows:
3.13.200 Termination of Tax
A. The tax rate imposed by Sections 3.13.050(A) and 3.13.070(A) shall remain in effect through and including March 31, 2033, unless sooner repealed in accordance with law.
B. The tax rate imposed by Sections 3.13.050(B) and 3.13.070(B) shall commence on April 1, 2027, and shall continue thereafter unless repealed by the voters or reduced or repealed by the City Council to the extent permitted by law.
SECTION 5. EFFECTIVE DATE. This ordinance relates to the levying and collecting of the City transactions and use taxes and shall take effect only if approved by a majority of the voters voting on the measure at the November 3, 2026 General Municipal Election and shall become effective ten (10) days after the City Council declares and certifies by resolution the results of the election and that the measure was approved by a majority of the voters voting thereon.
SECTION 6. CERTIFICATION AND PUBLICATION. Upon approval by the voters, the City Clerk shall certify to the passage and adoption of this ordinance and shall cause it to be published according to law and transmitted to the California Department of Tax and Fee Administration.
SECTION 7. COMPLIANCE WITH THE CALIFORNIA ENVIRONMENTAL QUALITY ACT. The approval of this Ordinance is exempt from the California Environmental Quality Act (Public Resources Code §§ 21000 et seq., “CEQA,” and 14 Cal. Code Reg. §§ 15000 et seq., “CEQA Guidelines”). The transactions and use tax enacted by this Ordinance is a general tax that can be used for any legitimate governmental purpose; it is not a commitment to any particular action. As such, under CEQA Guidelines section 15378(b)(4), the tax is not a project within the meaning of CEQA because it creates a government funding mechanism that does not involve any commitment to any specific project that may result in a potentially significant physical impact on the environment. If revenue from the tax were used for a purpose that would have either such effect, the city would undertake the required CEQA review for that particular project. Therefore, pursuant to CEQA Guidelines section 15060 CEQA analysis is not required.
PASSED AND ADOPTED by the City Council of the City of Fortuna on the 4th day of May 2026, by at least a two-thirds vote of the City Council, as follows:
AYES:
NAYS:
ABSENT:
ABSTAIN:
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Mike Johnson, Mayor
ATTEST:
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Buffy Gray, Deputy City Clerk
Approved As To Form:
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Ryan T. Plotz, City Attorney