City of Fullerton, CAJuly 21, 2026
FY 2026-27 Proposed Budget Review
FY 2026-27 Proposed Budget Background
Budget Study Session held at Special Meeting on 7/14/26 Review of All Funds’, CIP & General Fund Proposed Budgets General Fund – 3 Budget Scenarios presented to City Council to balance $3.8M operating deficit. 2 FY 2026-27 Proposed General Fund Budget
3 Current General Fund Proposed FY 26-27 Budget
4 General Fund Current Fiscal Landscape
A structural deficit occurs when the recurring cost of providing municipal services grows faster than the recurring revenues available to support those services.
Like the State of California and many cities within the State, Fullerton is facing an operating deficit in their General Fund.
Rising expenditure costs (i.e. competitive salaries and UAL pension costs), revenue growth challenges & growing cost of doing business.
Baseline Structural deficit of $3.8 million.
Scenario Budget Options for Council consideration to reduce operating deficit / assist in balancing the operating budget. 5 Budget Scenarios A, B & C
6 Scenario A
Baseline Service & Use of Reserves
Scenario B
Balanced Budget for FY 26-27 (Year 1 only) & Service Reductions and Deferrals Scenario C
Balanced Budget FY 26-27 – FY 28-29 (3 Years) & Structural Deficit Reductions Budget Reduction: ($4,602,528)
Unfunding of 9 FTEs
Use of Reserves: ($3,811,272)
Budget Reduction: ($6,165,500)
Unfunding of 24 FTEs
Increased Use of 1-Time Funds in Year 1
Use of Reserves: $0
Budget Reduction: ($6,997,193)
Unfunding of 32 FTEs
Use of 1-Time Funds over 3 years
Use of Reserves: $0
Projected Ending Available General Fund Balance (in Millions) Budget Scenario
FY 2026-27
FY 2027-28
FY 2028-29
Scenario A –
Baseline Services & Use of Reserves
$12.26 M
$9.35 M
$4.69 M
Scenario B –
Balanced Budget (Year 1)
$16.07 M
$15.15 M
$11.99 M
Scenario C –
Balanced Budget (3 Years)
$16.07 M
$16.07 M
$16.07 M
7 Projected General Fund Reserve Levels
Budget Scenario
FY 2026-27
FY 2027-28
FY 2028-29
Scenario A –
Baseline Services & Use of Reserves
8.5%
6.3%
3.0%
Scenario B –
Balanced Budget (Year 1)
11.1%
10.2%
7.8%
Scenario C –
Balanced Budget (3 Years)
11.1%
10.8%
10.4%
8 Recommendations
Provide direction on the Proposed FY 2026-27 General Fund Budget, specifically on the proposed Budget Scenarios A, B, or C.
Continue Public Hearing for consideration to adopt the FY 2026-27 Annual Operating Budget and Master Schedule of Fees and Charges on August 18, 2026. 9