Fullerton officials say they have trimmed nearly $10 million from a projected $13.7 million deficit for the new fiscal year budget, but closing the remaining gap will force cuts to police, fire, parks, libraries and public works.
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Discretionary cuts and one-time funding reduction measures helped address the initial looming deficit ahead of Tuesday’s, July 21, budget hearing, where the City Council is expected to adopt the proposed 2026-27 fiscal year budget.
But city staff warned that as inflation and recurring costs from pensions and labor agreements have grown faster than the city’s recurring revenue stream, the remaining $3.8 million unresolved budget gap won’t be temporary.
As it stands, the proposed general fund budget for the new fiscal year is expected to have $146.3 million coming into city coffers and roughly $150.0 million going out in spending and obligations. To address the structural deficit, the council looked at three scenarios for closing the gap at a budget study session on July 14, which considered spending from reserves and cutting funding for vacancies and city services.
• Scenario A: Pull $3.8 million from reserves but city’s reserve cushion would fall below the desired 10%. Slash funding for baseline services by $4.6 million, reducing graffiti removal and funding for library collections, as well as cutting 11 vacancies for staff positions including a police lieutenant, records clerk, civil engineer, and the deputy director of admin services. Under this plan, the city would end the year with about $12.2 million in reserves, or roughly 8.5%.
Scenario B: Balance the budget without relying on reserves, but with additional service reductions amounting to a total of $6.2 million. It also leaves 27 vacancies unfunded, cutting positions for police officers, public works maintenance, and Community & Economic Development staffing.
Scenario C: Make roughly $7 million in service reductions and leave 35 vacant positions unfunded without drawing on reserves and instead aiming to balance the budget over the next three years.
An external audit by accounting firm Grant Thornton cautioned city officials that even under Option C, the city would likely fall below its 10% minimum reserve level within four years and continue to see declines, suggesting cuts may not be enough on their own.
Options A and B would temporarily balance the budget for a fiscal year, but do not address the root structural problems likely to resurface by the next fiscal cycle. Option C, described in a staff report as the “most sustainable approach” to addressing structural budget issues, also carries the greatest service and staff reductions.
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And while no layoffs are anticipated, City Manager Eddie Manfro said not being able to hire for the vacancies would directly impact services residents see every day, adding that departments have held some vacancies for years waiting to hire, only to be told “not yet, maybe not ever.”
Feedback collected during community workshops hosted earlier this month indicate Fullerton residents broadly back infrastructure spending and said they could support targeted revenue such as hotel taxes, but strongly opposed privatizing the water utility or Fullerton’s Municipal Airport. Public speakers were split between urging the council to contract police and fire to county agencies, sell surplus land or pursue tax measures, while others blamed the council majority for creating the crisis and urged leaders to own it rather than cut frontline services.
On Tuesday, the council will also consider placing a half-cent local sales tax before voters in November that would generate revenue earmarked specifically for streets and public infrastructure.
Public Works, the city’s largest department by both personnel and budget, is already “extremely lean” after years of attrition, according to the division’s director, Ted Bice. “Any (more) impacts will be felt by the community,” he warned, adding that freezing hiring for seven maintenance positions would mean more potholes, slower street repairs, and deferred landscaping care and facility maintenance across more than 30 city buildings.
Anita O’Keefe Torres, Fullerton’s library director, said two of the scenarios would entirely eliminate the collection development budget for adults, teens, and children. A Community and Economic Development staffer called the division a revenue generator that processes thousands of permits and plan checks annually, warning that one of the scenario’s proposed 31% cut to building professional services would hit “the front line” and threaten the 24-hour inspection policy.
Fullerton Police Chief Jon Radus said the proposed reductions could force him to collapse the Community Services Unit to refill patrol, shrink investigations and traffic bureaus, and eliminate specialty assignments that help retain officers.
In the same breadth, Fire Chief Adam Loezer told the council that unfunding the deputy chief/fire marshal position would undermine a department deliberately rebuilt in 2022 to provide proper oversight across fire prevention, emergency management, EMS and fire operations. Loezer stressed that in nearly nine years as chief, he has never operated without this position, and since it became vacant, he has personally absorbed the workload, telling the council: “It is a lot.”
Manfro told the council he didn’t take the cuts lightly but called them “a fiscal reality.”
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The City Council meets at 5:30 p.m. in Tuesday.