City of Fullerton, CAJune 3, 2025
Adoption of Annual Operating & Capital Budget and Appropriations Limit for FY 2025-26
FY 2025-26 Annual Operating & Capital Budget
All City Funds Budget
FY 2025-26 General Fund Budget
Capital Improvement Plan (CIP) / Infrastructure
Recommendations
2 Budget Process Overview
Collaborative Budget Process with all Departments
City Council Priorities: Public Safety, Infrastructure and Fiscal & Organizational Stability Community Engagement
Cost Containment Strategies
3 Budget Community Meetings’ Findings
2 Budget Community Meetings held – 12-15 participants total for the 2 meetings Budget Overview & Q&As with City Staff
Surveys completed – Improving Streets, Public Safety & improving 911 times & Revenue-Generating opportunities were top (‘Very Important’ and ‘Important”) rated.
Community Comments and Recommendations
Hillcrest Park Plan – Concern to Allocate funds to complete Hillcrest Park Project Fullerton Main Library - Return to being open 7 days a week. 4th of July Alternative – Consider Drone Show (Reduced Noise and Potential Lower Cost). 4 FY 2025-26 Proposed Budget Highlights
Proposed All Funds Budget ~ $270.5 million
General Funds, Enterprise Funds, Special Revenues Funds, Internal Services Funds, Capital Improvement Program (CIP) Fund & Successor Agency Proposed General Fund Budget ~ $137.8 million
Public Safety ~ Enhanced Service levels w/ new In-House Ambulance Program, Ambulance Cost Recovery in State (VRRP) Program and Homeless Encampment Safety Services Investment in the Labor Workforce
Continued Key Community Events ~ Fourth of July, First Night & Hunt Library 17% Contingency Reserves projected in FY 2025-26 for 1 additional year.
Proposed Capital Projects/CIP Budget ~ $32.2 million
Proposed All Other Funds Budget ~ $100.5 million
5 All Funds Proposed Budget
6 Proposed All Funds Budget ~ $270.5 Million
7 All Funds by Fund Type
FY 25-26
Proposed
General Fund
$137,781,505
Special Revenue Funds
36,150,459
Water Fund (Operating Only)
43,303,509
Other Enterprise Funds (Operating Only)
12,059,701
CIP Program
32,163,535
Successor Agency
9,047,795
All Funds Expenditures Total
$270,506,504
Citywide All Funds Budget - $270.5 Million
General Fund, Enterprise Funds, Special Revenues Funds, Successor Agency & Capital Improvement Program (CIP).
Supported by ongoing revenues, available fund balances and interfund transfers (funds set aside for capital).
General Fund Operating Budget
8 Changes from Budget Study Session
9 Reduces General Fund Support of IT Projects
Defers Citywide PC Refresh of 300 PCs for another year ($195,800 Savings) Defers setting aside funds for PD Cloud Migration Project ($176,706 Savings) Fire Network Upgrade Project to be deferred for another year ($412,000).
Reconsidered and Re-instated Fire Network Upgrade Project for $412,000 Critical Need as Network and Hardware are no longer supported and at end of life.
General Fund deficit reduced from $3.95 million to $3.55 million.
FY 2025-26 General Fund Revenues of $137.5 Million
10 $137.5 M
FY 2025-26 General Fund Revenues
General Fund Revenues $137.5 Million – $9.8 million (or 7.7%) increase Property Tax – $62.7 million; $4.6 million increase
Diverse & stable property tax base
Strong assessed valuations & increase in RDA residual property tax receipts Sales Tax – $31.1 million
Relatively Flat growth
Diverse economic sales tax base; but no major increase to keep up w/ expenditures.
TOT – $3.4 million
TOT rate at 10% compared to 10%-15% in surrounding Cities.
Charges for Services – $17.8 million; $2.4 million increase Ambulance Billing Revenue – $3.5 million ($1.8 million net cost increase); Participation in new State VRRP Program to recover unfunded ambulance transport costs.
Other Taxes and Revenues – $22.1 million
11 FY 2025-26 General Fund Expenditures of $137.8 Million 12 FY 2025-26 General Fund Expenditures
General Fund Expenditures ~ $137.8 Million
Investment in Labor Workforce – Approved Labor Agreements with all Labor Groups Salaries & Benefits – $6.2 million increase
CalPERS Pension UAL – $1.9 million increase
Improved employee retention and service delivery.
Cost Containment Initiatives
With exception of approved agreements & contracts, no operating budget increases to department budgets.
Department 3% Vacancy Hold Factor & various operating savings across all Departments Reduced Department contributions’ to Liability and Workers Comp internal services funds.
Budget Recommendations – Continued Service Levels to Community Enhancements to Public Safety ~ New In-House Ambulance Program, improved Ambulance Cost Recovery in State (VRRP) Program and renewal of Operation Clean Streets Continued Investment in Streets Infrastructure and overall Capital Infrastructure 13 FY 2025-26 General Fund Expenditures
General Fund Transfers Out (Non-Operating) $4.1 Million Infrastructure Fund ~ $2.6 million to Infrastructure Fund/Projects $2 million for Streets
$0.6 million for City Facilities and ADA improvements
Streets Improvements ~ Additional $0.5 million General Fund contribution IT Infrastructure ~ $0.9 million for critical IT replacement and upgrade projects 14 FY 2025-26 General Fund Financial Position
15 Fiscal Challenges
Expenditures are Outpacing Revenue
Budget impacts from maintaining competitive salaries in region with approved labor agreements Even with Pension reform, Unfunded Actuarial Liability (UAL) remains high due to external factors (i.e., legislation, lowering the discount rate, investment returns, etc.) Uncertain business environment and growing cost of doing business Employee Retention & Service Level Demand
Revenues not growing in line with Expenditures
Need to grow, and explore / identify new revenues sources Create strategies to reduce reliance on reserves being used to support operational revenues Aging City Infrastructure
Road Repairs & Street Rehabilitation, Facility Repairs & IT Infrastructure Potential Measure M2 shortfall due to insufficient General Fund MOE funding. 16 CIP / Infrastructure Projects
17 FY 2025-26 Proposed CIP Budget
18 CIP Project Category
FY 25-26
Proposed
Street Rehabilitation
$8,150,000
Utility – Water System
16,100,000
Utility - Sewer and Storm Drain Systems
1,450,000
Traffic Systems
4,763,535
City Facilities (Buildings, Accessibility, etc.)
1,150,000
Parks
250,000
Misc. Projects (Sidewalk, PMP, etc.)
300,000
Total Proposed CIP Budget
$32,163,535
CIP / Infrastructure Projects
Street Rehabilitation Planned Projects:
Arterial Projects: Raymond Ave & State College Blvd
Residential: Sunny Hills-Twilight Area, Candlewood Area, Cannon-Shepard Area, Pacific-Wanda-Louise-Walnut Area.
Slurry Seal/Pavement Treatment: Various Streets.
Water Infrastructure Planned Projects:
Water Main Replacement
PFAS, SCADA upgrades, Generators, Advanced Metering
Sewer & Storm Drain Planned Projects:
Miscellaneous Storm Drain Repair and Rehabilitation
Sewer Main Replacements
19 CIP / Infrastructure Projects
Traffic Systems Planned Projects:
Traffic systems upgrades and repairs
Traffic signal synchronization
Street Light conversion
Miscellaneous Infrastructure Projects:
Curb, Gutter and Sidewalk Reconstruction
Pavement Management Plan (PMP) Update
City Facilities Projects:
Various City facilities repairs and renovations
ADA improvements
Bastanchury Greenbelt and Hillcrest Park Valley View Area (Design) 20 GANN Limit and Fee & Charges Schedule
21 Annual Appropriations or GANN Limit ~ $292.2 Million City is in compliance & $191 million under limit pursuant to CA State law.
Resolution to approve GANN Limit for FY 2025-26.
FY 2025-26 Master Fee & Charges Schedule to be taken on upcoming 6/17/25 Council meeting.
Recommendation
It is recommended that the City Council consider and adopt the following resolutions:
Resolution 2025-XXX - A Resolution of the City Council of the City of Fullerton, California, Approving and Adopting the City of Fullerton’s Annual Operating & Capital Budget for Fiscal Year 2025-26 and Appropriating the Funds Necessary to Meet the Expenditures Set Forth Therein Resolution 2025-XXX - A Resolution of the City Council of the City of Fullerton, California, Adopting the Annual Appropriations Limit for Fiscal Year 2025-26 Pursuant to Article XIII B of the California State Constitution 22