The proposed 23-24 Fullerton City Budget is available on the City of Fullerton website: http://www.cityoffullerton.com

The City Council will hold closed study sessions to provide staff direction toward developing a final draft. The public may comment on the proposed budget during the regularly scheduled Public Comments section of all regularly held City Council meetings. You are encouraged to review the proposed budget, monitor adjustments, and provide feedback at those opportunities. Your district representative will vote at the June 6th Council meeting.

Most of us have not taken the opportunity to review a city budget, and it can be intimidating. So here is a brief introduction to the major components of a city budget.

Just as family budgets must consider available income and expenses, so must cities consider available revenue and needs assessments. When incomes fall short, options may include a better-paying job, a second job, or ways to reduce expenses. The goal for a family or a city is much the same. Make the two balance.

The City of Fullerton’s proposed revenues for 23-24 is $244.0 million. However, its proposed expenditures are $ 253.7 million leaving a shortfall of $9.7 million. Tough choices will have to be made!

Fullerton’s total revenues include property taxes, sales taxes, TOT ( hotel bed tax), gas taxes, charges/ fees for city permits/services, state/federal aid, and grants. They are subdivided into expenditure categories.

General funds are discretionary, meaning they may be allocated as directed by the Council, and non-discretionary funds are restricted to funding specific projects or types of projects most often found in the CIP(Capital Improvement Plan). Property taxes make up about 46% of the City’s General Fund. Higher property assessments and a robust real estate market in the last few years are significant factors.

The second largest source of General Fund revenue is sales tax, with an $0.8 million increase over 22-23. Total sales tax for this year is projected at $30.2 million due to a healthy economic recovery and inflation that boosted these numbers.

Despite losing a hotel in 22-23, TOT (Transient Occupancy Tax) is expected to contribute another $3.5 million. In addition, if approved, the proposed permit and service fees will help offset costs and enhance the delivery of services. So, the total General Fund revenue for 23-24 is $119,722,607, an increase of 5.4% over last year.

Now that we have a pretty good idea of total City revenues, $244 million, we can discuss how it might be spent. There are primarily two categories of expenditures, Operating Budget and CIP. In addition, project funding may come from restricted funds, the General Fund, or both.

As the name implies, the Operating Budget addresses the City’s day-to-day expenses: staffing, supplies, street sweeping, and park and building maintenance.

The Operating Budget includes a $1.5 million increase over 22-23 for recruiting and retaining staff. The City has vacancies in several departments, including Fire and Police services, that were left vacant during the uncertainties of the past few years and are open for discussion in this budget.

The CIP(Capital Improvement Plan) covers infrastructure rehabilitation, major repairs, and new construction. It may also include major purchases requiring financing like systems, equipment, and vehicles.

The total proposed CIP budget is $40,314,550. Everyone will be pleased to know that $14.3 million is designated for street rehabilitation, with another $1.5 million in enhancements recommended by the City Manager. Other projects include a replacement elevator and technology upgrade for the library, park exercise and playground equipment, new traffic signals, main water replacement, and water, sewer, and storm drain infrastructure improvements. In addition, FAA, State Aviation, and Airport Enterprise funds will add fencing and a Runway Precision Approach Path Indicator at the airport.

Measure M2, a street repaving fund, requires cities to provide matching funds yearly. To ensure the City would have those funds available beginning Fiscal Year 25-26, the staff recommends setting aside $5.5 million in reserves from this year’s General Fund.

A couple of highlights that are worthy of mention. The City has an AA credit rating, the 23-24 proposed General Fund is projected to have $6.8 million ABOVE the goal of 17% in reserves, and the City’s finances have improved and are stable. Some of these positive outcomes can be attributed to federal ARPA (American Rescue Plan Act) funds, dramatically increased property assessment values, and other state and federal programs designed to help communities recover from the pandemic years. However, these are not ongoing programs and cannot be counted on for future budgets.

The City Council should focus on identifying and implementing economic development plans to create future revenues and look at partnerships and cooperative efforts to reduce costs wherever possible. These are BIG jobs, and they will require commitment, a willingness to consider new ideas, and the democratic perspective of sharing authority with one’s peers.

As citizens in a democracy, we, too, must be responsible for carrying our share of the load. Thoughtful participation based on investigation and knowledge of issues we care about must translate from us to those who decide on our behalf. Sometimes it seems too much to ask, but if you don’t speak up, someone else will, and it may not be a message you want delivered.