{"id":228849,"date":"2026-03-20T17:57:10","date_gmt":"2026-03-20T17:57:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ca\/228849\/"},"modified":"2026-03-20T17:57:10","modified_gmt":"2026-03-20T17:57:10","slug":"how-cooked-is-fullertons-budget","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ca\/228849\/","title":{"rendered":"How Cooked is Fullerton\u2019s Budget?"},"content":{"rendered":"

Fullerton\u2019s leaders found out their budget is in much worse shape than they realized this week, when city staff told them they erroneously accounted for over $10 million in reserves that was actually money already spent.\u00a0<\/p>\n

It comes right as they need to spend almost all their remaining reserves, with city staff warning them that without major budget cuts, their reserves will be almost empty by the end of next summer.\u00a0<\/p>\n

Now, council members are asking how their staff missed a $10 million mistake for years, with an unclear path to balancing the municipal budget that\u2019s due at the end of June \u2013 all while the city stares down a nearly $14 million deficit that officials will have to close.<\/p>\n

\u201cYou\u2019re talking about a balance on our reserves that shouldn\u2019t have been there,\u201d said Mayor Fred Jung in a Thursday interview. \u201cI don\u2019t want to say it\u2019s deceptive, but it\u2019s not realistic.\u201d\u00a0<\/p>\n

\u201cI think we were set up to fail.\u201d<\/p>\n

How Did Fullerton Misplace $10 Million?<\/p>\n

\"\"Downtown Fullerton on Oct. 5, 2025. Credit: ERIKA TAYLOR, Voice of OC<\/p>\n

At Tuesday\u2019s city council meeting, staff explained that over $10 million of the city\u2019s roughly $26 million in general fund reserves was actually allocated for specific purposes, meaning they have a substantially weaker contingency bucket than they expected.<\/p>\n

\u201cThese funds remain part of the city\u2019s overall fund balance, but are now set aside in a way that better reflects their intended purpose,\u201d said Steven Avalos, the city\u2019s finance director, at Tuesday night\u2019s meeting.\u00a0\u00a0<\/p>\n

Around $2.9 million of the money was meant to go to the city\u2019s successor agency and was sent to the general fund in an accounting error, while the remaining $7.1 million was either spent on balancing the budget or was already allocated to other projects without noting that in the budget.<\/p>\n

Tax Measures on Horizon Amid Projected $14M Budget Deficit<\/p>\n

\"\"A large pothole on Washington Avenue in Fullerton on Saturday, Sept. 17, 2022. Credit: Zia Bella Blair<\/p>\n

City staff are projecting a roughly $13.7 million deficit going into the next fiscal year this summer and ending that year with their contingency reserve at 2% \u2013 significantly below the 10% contingency minimum set for themselves.<\/p>\n

The shortfall comes as officials in a host of OC cities \u2013 including Fullerton \u2013 are once again eying placing a variety of tax measures on the ballot this year as they continue to struggle to get a handle on widening budget gaps as spending steadily outpaces revenue.<\/p>\n

Last fall, city council members directed staff to reconvene their fiscal sustainability ad-hoc committee with potentially new members to help formulate two 0.5% tax measures \u2013 one to fund infrastructure improvements like road repairs and another for public safety.<\/p>\n

[Read: Another Orange County City Considers Tax Increase to Solve Budget Woes<\/a>]<\/p>\n

City staff said the city manager will meet with the city\u2019s fiscal ad hoc committee to discuss the budget issues on March 30 at the Fullerton Community Center boardroom, which will be open to the public and livestreamed on Zoom.<\/p>\n

Jung said a sales tax is essential now, and urged Fullerton residents who\u2019ve overwhelmingly denied previous tax increases to approve the new one that he\u2019s seeking to put on the ballot that would go toward fixing the city\u2019s crumbling roads.\u00a0<\/p>\n

[Read: How Did Fullerton\u2019s Roads Get So Bad?<\/a>]<\/p>\n

\u201cThe burdens haven\u2019t changed. The systemic things and foundational issues the city had five years ago, we still have it now,\u201d Jung said in an interview. \u201cWe\u2019ve got to find other ways to generate revenue and modernize our city.\u201d\u00a0<\/p>\n

Councilman Ahmad Zahra said the drop of the reserves to 2% was indicative of future massive cuts to public services.<\/p>\n

\u201cEither major cuts are coming or our fate is going down the same road as Westminster, because this city council couldn\u2019t care less, apparently, because elections are more important,\u201d he said at Tuesday\u2019s meeting.<\/p>\n

After the meeting, Zahra highlighted that a tax measure wouldn\u2019t help the city in the near term since their new budget is due in June, while the soonest a tax increase could start up is next year.\u00a0<\/p>\n

\u201cThis is a massive failure,\u201d Zahra said in a Thursday interview. \u201cA sales tax is not going to save us because these cuts have to happen now.\u201d<\/p>\n

Council Members Sound Off on Staff and Each Other<\/p>\n

\"\"The flag on the Fullerton City Hall building blows during a windy day on April 7 2023.<\/p>\n

Zahra publicly questioned how city staff missed out on the errors in the past.\u00a0<\/p>\n

\u201cThe successor agency has been around for a long, long time. Any city manager worth their knowledge would know that,\u201d he said during Tuesday\u2019s meeting. \u201cWe wiped out our entire reserves from one year to the next because of a clerical error of $10 million. That should raise massive red flags.\u201d<\/p>\n

Jung agreed the error was massive, but pushed back on Zahra for scrutinizing staff.<\/p>\n

\u201cIt\u2019s so tiresome that you continue to do this and you continue to jab away at staff,\u201d Jung said on Tuesday. \u201cIt is egregious and it is significant. What I don\u2019t appreciate is you continuing to interject things to downgrade staff, most of whom were not here when this occurred.\u201d<\/p>\n

Earlier in the meeting, Zahra said the issue was being minimized.<\/p>\n

\u201cThe problem I\u2019m seeing here is that we\u2019re downplaying a gap of $10 million,\u201d Zahra said.\u00a0<\/p>\n

\u201cNobody is downplaying anything,\u201d Jung interjected.\u201cNone of us are happy about it. You were briefed on it extensively so for you to grandstand here now, I point out, as if somehow you\u2019re the victim in this.\u201d\u00a0<\/p>\n

\u201cI\u2019m not the victim, the public is the victim,\u201d Zahra interjected.<\/p>\n

\u201cWhat I see is the staff trying to correct the wrong and I appreciate them doing that,\u201d Jung said, calling other council members to ask questions.<\/p>\n

\u201cDude it\u2019s $10 million,\u201d Zahra said.<\/p>\n

\"\"The Fullerton City Hall in Fullerton, Calif., on Oct. 3, 2024. Credit: QUINCI CARTMELL, Voice of OC<\/p>\n

Councilman Nicolas Dunlap said it\u2019s a complicated situation that officials needed to have a dialogue on.<\/p>\n

\u201cThen don\u2019t interrupt me,\u201d Zahra chimed in. \u201cI was just asking staff questions.\u201d<\/p>\n

\u201cListen, let me speak. I sat there and listened to you for minutes, rambling on,\u201d Dunlap said, slamming his hand on the dais.<\/p>\n

\u201cI\u2019m not rambling, I\u2019m asking legitimate questions,\u201d Zahra interjected.<\/p>\n

\u201cExcuse me, please do not interrupt me. I\u2019m not going to ask you again,\u201d Dunlap shouted.<\/p>\n

\u201cDo not get angry, sir,\u201d Zahra responded.<\/p>\n

\u201cI\u2019m not angry,\u201d Dunlap replied.\u00a0<\/p>\n

\u201cYou slammed your hand,\u201d Zahra said.<\/p>\n

\u201cHey pal, you haven\u2019t seen angry okay \u2013 so be quiet, let me finish,\u201d Dunlap shot back.<\/p>\n

\u201cOh, show me please,\u201d Zahra responded. \u201cI bet the public would love to see you be angry.\u201d<\/p>\n

Dunlap then said ensuring the budget was accurate was paramount for them to succeed financially.\u00a0<\/p>\n

\u201cStaff kind of shot us in the foot by including those flawed figures in the revenue to start with,\u201d te said. \u201cThe underlying fundamentals of this budget have to be correct, because, if not, it\u2019s hundreds of pages of garbage.\u201d<\/p>\n

Councilwoman Shana Charles said at the meeting the mistake needs to be investigated.<\/p>\n

\u201cIt is important that we go back and find out why,\u201d she said. \u201cThat we make sure that it doesn\u2019t happen again.\u201d<\/p>\n

Charles said in a Thursday night email she still trusts the city\u2019s budget, but believes the city\u2019s auditing processes need reform.<\/p>\n

\u201cI\u2019m not comfortable with leaving our audit processes in place at this point. This seems to have been missed for a number of years, as staff mentioned that part of the error dated back to 2021. We need reforms to ensure this doesn\u2019t happen again,\u201d she said.<\/p>\n

\u201cI am glad that our newly appointed city manager came forward with finding the error, as trust would have been more damaged if he covered it up. We clearly need to rebuild public trust in our budget process.\u201d<\/p>\n

Councilwoman Jamie Valencia said the accounting error was disappointing.<\/p>\n

\u201cI wasn\u2019t on council when it occurred. I am trying to understand how we can prevent this in the future. It is something that we have to just get through and I just hope that we have a plan forward so that we can get through this,\u201d she said at the council\u2019s Tuesday meeting.<\/p>\n

Grappling With Potential Spending Cuts<\/p>\n

\"\"Pedestrians walk past the Chapman building in Downtown Fullerton on Oct. 5, 2025. Credit: ERIKA TAYLOR, Voice of OC<\/p>\n

In an interview after the meeting, Jung said that the incident had lowered his trust in city staff, but called Zahra\u2019s comments \u201coverdramatic.\u201d\u00a0<\/p>\n

Jung compared the city\u2019s financial struggles to the City of Orange, where officials have grappled with ways to balance their budget.<\/p>\n

He said Fullerton officials are going to have to look at some major changes to close the nearly $14 million deficit heading into budget season.<\/p>\n

\u201cWe have to find a long term solution for all of that and it\u2019s hard to do without some sort of revenue enhancement on the ballot,\u201dJung said. \u201cI\u2019m going to be more reliant on my independent view of things in this cycle.\u201d\u00a0<\/p>\n

But no one has answers yet on where the cuts will come from.\u00a0<\/p>\n

Valencia did not respond to a request for comment.\u00a0<\/p>\n

Jung said he hopes to see the cuts focus on removing vacant job positions in the city budget, saying those roles will have to go unfulfilled, before there\u2019s any discussion on cutting city programs.\u00a0<\/p>\n

Dunlap pushed back on proposals for a tax increase in an interview, saying the only way forward would be major cuts, calling for an audit to find wherever they could trim the fat.\u00a0<\/p>\n

\u201cThe simple reality is that tax increases alone will not solve this problem,\u201d Dunlap said. \u201cIt\u2019s not a revenue problem, it\u2019s a spending problem.\u201d\u00a0<\/p>\n

Zahra said he has \u201cno idea\u201d what they\u2019re going to cut.\u00a0<\/p>\n

\u201cWhen the public really truly understands what\u2019s happening and the consequences of this there\u2019s going to be a distrust in the entire city,\u201d Zahra said. \u201cThe distrust is not just in our financing, but distrust in this council.\u201d<\/p>\n

Noah Biesiada is a Voice of OC reporter. Contact him at nbiesiada@voiceofoc.org.<\/p>\n

Hosam Elattar is a Voice of OC reporter. Contact him at\u00a0helattar@voiceofoc.org<\/a>.<\/p>\n

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