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Letter: Setting the record straight on Fullerton’s finances

April 3, 2026

I am writing in response to your April 1 editorial titled “Fullerton wants to tax public to fix dumb mistake.” While we appreciate the opportunity for public dialogue on important fiscal issues, the editorial contains several inaccuracies and lacks critical context that may lead to a misunderstanding of the city’s actual financial condition.

First, the assertion that the City “erroneously accounted for over $10 million in reserves that was actually money already spent” is incorrect. These funds were not spent or missing. Approximately $10.2 million of the General Fund balance is allocated for specific purposes—such as capital projects, General Plan updates, and Downtown Parking Program revenues—and must be used accordingly. This is a standard municipal accounting practice. These funds remain part of the City’s total fund balance but are not available for general discretionary use.

Similarly, the referenced $2.9 million “accounting error” reflects a prior-period adjustment identified through the City’s independent audit. This correction ensured that certain assets were properly attributed to the Successor Agency rather than the General Fund. It was not a loss of funds, but a technical adjustment made to comply with established accounting standards.

The characterization that Fullerton’s reserves have been “obliterated” is also misleading. At the close of Fiscal Year 2024–25, the City’s General Fund balance totaled $30.0 million, including $19.8 million in contingency reserves—approximately 14% of General Fund expenditures. This remains above the City’s adopted minimum reserve policy of 10%. While reserves have declined, this was the result of a budget that was publicly presented, discussed, and approved by the City Council.

It is also important to note that the City’s financial challenges are not the result of a single “mistake,” but rather reflect broader structural factors impacting municipalities statewide, including rising labor costs, inflationary pressures, and long-standing infrastructure needs. Like many older cities, Fullerton is addressing the cumulative effects of deferred maintenance over time.

Importantly, the City is actively working to reduce its structural deficit through cost containment strategies, operational efficiencies, and evaluation of potential revenue opportunities—regardless of any future ballot measure. Any potential measure would require voter approval and, even if approved, would not generate revenue until approximately Spring 2027. As such, the City must and will address its current budget deficit independent of any future measure.

Any discussion of a potential local funding measure should be viewed in this broader context. Such a measure would include accountability provisions such as independent audits, public reporting, and citizen oversight, ensuring transparency and responsible use of funds. The goal is to provide a locally controlled funding source to address critical infrastructure needs—particularly street repairs, which remain a top priority for residents.

We remain committed to transparency and welcome the opportunity to provide accurate information and context. We respectfully request that future commentary reflect a more complete and fact-based understanding of the City’s financial position.

Daisy Perez is deputy city manager of the city of Fullerton

Orange County Register

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Letter: Setting the record straight on Fullerton’s finances

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