Forbes was arrested in July after she was caught breaking into several boats at the Sausalito Yacht Harbor.
Sausalito Mayor Joan Cox announced Tuesday that Forbes is no longer employed by the city.
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In a statement, the mayor said Forbes is taking time to focus on her health and healing.
The Sausalito City Council unanimously appointed Brandon Phipps as interim city manager for the next six months.
Phipps has been employed by the city since 2022.
The leadership change comes in the wake of Forbes' July arrest and her subsequent departure from city government.