The Fullerton City Council will address the city’s finances on Tuesday, July 21, taking up a package of items, including whether to ask voters this November to approve a new half-cent sales tax for streets and public infrastructure — and how to close a $3.8 million hole in next year’s operating budget.

The agenda is unusually heavy, and nearly every item comes back to the same problem: a structural deficit that staff says cannot be solved by cuts alone. Alongside the tax question and three competing budget scenarios, the Council will consider authorizing up to $180 million in tax-exempt bonds to preserve nearly 400 apartments near Cal State Fullerton as affordable housing, roughly $4 million in construction contracts, and more than $2 million in new federal housing grants.

Before the public session, the Council will meet in closed session on several matters, including existing litigation in Ralph and Marie Kaneshiro v. City of Fullerton and Anne Hamilton v. City of Fullerton, one case of anticipated litigation, and real-property negotiations involving 3535 West Commonwealth Avenue and 110 East Santa Fe Avenue.

Note the later start time: a notice from the City Clerk moved the proceedings from their originally scheduled 4:00 pm Closed Session to begin at 5:00 pm, and the regular meeting follows at 5:30 pm in the Council Chamber at 303 West Commonwealth Avenue.

How to participate

Residents can attend Tuesday’s meeting in person, watch the livestream at fullerton.legistar.com, or tune in on Spectrum Cable Channel 3 and AT&T U-Verse Channel 99. Remote public comment is available by Zoom (Meeting ID 160 256 5242) or by phone at 1-669-254-5252. Speakers are allowed up to three minutes per item, and written comments emailed to CouncilMembers@cityoffullerton.com become part of the public record. The full agenda packet is posted at fullerton.legistar.com.

Item 18: The ballot measure

Under Item 18, staff will present two versions of a proposed streets-and-infrastructure ballot measure for the November 3, 2026 General Municipal Election, carrying out direction the Council gave at its July 14 special meeting. Both versions would add a new chapter to the city’s municipal code imposing a half-cent transactions and use tax — a local add-on sales tax administered by the California Department of Tax and Fee Administration — that staff estimates would raise roughly $15 million a year.

The versions are identical but for one feature: durability. Option A would include a 15-year sunset, meaning the tax would expire automatically at the end of that term. Option B would make the tax permanent, with no built-in expiration.

Neither version addresses whether the infrastructure budget would be removed from the annual budget and how creative accounting could disrupt the flow of funds, as it did with ARPA funds.

Because the revenue would be dedicated specifically to roads and infrastructure rather than the general fund, the measure is a “special” tax, which carries a higher bar: it would need approval from two-thirds of voters in November, and placing it on the ballot requires a two-thirds vote of the Council — four of the five members. Whichever version the Council chooses, it would introduce the accompanying ordinance for a first reading and adopt resolutions calling the election, requesting that Orange County consolidate the vote with the statewide general election, and setting the rules for ballot arguments and rebuttals. The supporting details run to six single-spaced pages in the agenda packet.

Item 19: A $3.8 million gap

The tax measure is inseparable from the budget hearing directly tied to it. Under Item 19, staff is asking the Council to pick one of three General Fund scenarios to fold into the Fiscal Year 2026-27 Proposed Operating Budget, then continue the hearing to August 18, when the final proposed budget returns for consideration.

The scale of the challenge was laid out at the July 14 study session. According to a report from Councilmember Dr. Shana Charles, the city’s anticipated expenditures for 2026-27 total roughly $290 million, against a $3.8 million structural deficit — what staff defines as recurring service costs growing faster than the recurring revenue available to pay for them. That gap already reflects about $10 million in cuts made to shrink it, including nine full-time positions.

The three scenarios differ mainly in how deep the cuts go and whether they touch reserves. As summarized in meeting materials, each relies on “underfunding” a growing number of vacant positions — nine, 24 and 32, respectively:

• Scenario A would use reserves to balance a single year, but already includes service reductions such as eliminating general-fund support for community events like First Night Fullerton, cutting a Deputy Fire Chief position meant to oversee the city’s in-house ambulances, and reducing graffiti removal from two trucks to one.
• Scenario B would rely on additional cuts and some one-time funds to balance 2026-27 without drawing down reserves, though staff notes reserves would come under pressure in later years absent new revenue.
• Scenario C would impose the deepest cuts to match revenue projections over three years without touching reserves.

There is no option on the table that avoids some reduction in services next year, and that other belt-tightening reaches into daily operations — for example, funding for Library books and materials would shift from the city to the Library Foundation. Police Chief Radus told the Council that Fullerton fields about 0.8 sworn officers per 1,000 residents, below the 1.3-to-1.5 range often cited as best practice. A projection prepared by the auditing firm Grant Thornton found that even the most aggressive scenario would not balance the budget within four years without additional revenue.

Item 21: $180 million in housing bonds near CSUF

Carried over from the June 16 meeting, Item 21 asks the Council to adopt a Tax Equity and Fiscal Responsibility Act (TEFRA) resolution clearing the way for the California Statewide Communities Development Authority to issue tax-exempt bonds not to exceed $180 million. The financing would support acquiring and rehabilitating the UCE and UCA apartment homes — two 1970s-era complexes totaling 395 existing units near Cal State Fullerton, at 600 Langsdorf Drive and 2404 Nutwood Avenue — and converting them into affordable housing.

Because the state authority, not the city, issues the debt, Fullerton’s role is largely to hold the required public hearing and sign off; the city takes on no financial obligation or liability. The approval simply allows the federally rooted financing, channeled through the statewide authority, to move forward.

Consent Calendar Item 17: Infrastructure and public-safety spending

Much of Tuesday’s remaining spending sits on the 17-item consent calendar, which the Council typically approves in a single motion unless a member pulls an item. Among the larger commitments:

• A $1,360,000 contract with A2Z Construct Inc. for the Independence Park gym renovation, plus additional architectural services.
• A $1,138,075 contract with R.J. Noble Company for the Harbor Boulevard rehabilitation, which would also waive city noise rules to allow nighttime paving near homes and businesses.
• A $636,480 contract with Cora Constructors Inc. for emergency generator sets at the Las Palmas and Laguna pump stations.
• A $622,000 contract with Onyx Paving Company for the Candlewood-area street rehabilitation.

Consent Calendar Item 10: Water infrastructure

Water infrastructure features prominently. Item 10 would approve temporary easements with Rexford Industrial to build and operate a temporary PFAS treatment plant at the city’s Well 10, part of an ongoing effort to address contaminants that have drawn scrutiny across Orange County. The Council is also slated to receive, file and formally respond to two 2025-2026 Orange County Grand Jury reports — one on PFAS and public awareness in local drinking water, another titled“Wildfires Hit Home.“

Public-safety spending rounds out the list, including acceptance of a $463,024 California Highway Patrol Cannabis Tax Fund grant for the Police Department, a purchase order of up to $150,000 for police equipment lockers, and $245,795 to outfit eight new police interceptor vehicles.

Item 20: Housing grants

Under Item 20, the Council will consider approving Fullerton’s Fiscal Year 2026-2027 Annual Action Plan for the Community Development Block Grant program — a requirement to secure more than $2 million in new federal HUD funding for housing rehabilitation, homeless services, senior meals, after-school activities and even some street work.

Also on the calendar

Separately, residents can weigh in on the city’s future waste and recycling service at two community meetings featuring the three potential providers: July 23 at the Fullerton Community Center and July 28 at the Hunt Branch, both at 6:00 pm. The City Council’s first August meeting, scheduled for August 4, has been canceled.