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City of Fullerton Fullerton CA
City of Fullerton City of Fullerton
www.cityoffullerton.com/financialreports
Community Report
Fiscal Year Ending June 30, 2021
303 W. Commonwealth Ave, Fullerton, CA 92832
PAGE 01
MESSAGE FROM THE CITY MANAGER
I am pleased to present the Fiscal Year (FY) 2020-21 Annual Community
Report for the City of Fullerton, also known as the Popular Annual
Financial Report (PAFR). This report highlights the City’s financial position
and capital investments, and offers useful information about the City,
including where revenues come from and how they are spent to operate
our City. All this in a simpler, user friendly format in comparison with the
City's Annual Comprehensive Financial Report (ACFR)!
In recent years, the City of Fullerton has experienced challenges to
balancing its Operating General Fund Budget, while still providing the high
level of service our residents and community have come to expect. Some
of the contributing fiscal issues include: slow revenue growth, rising
pension retirement costs, and the ever increasing need to reinvest in our
aging streets, water and sewer lines, and other public facilities. Through
the budget process, the City has continued to implement prudent
strategies to balance the budget, including seeking service delivery
efficiencies and cost savings, right sizing of departments and services,
updating fees and identifying revenue-generating opportunities, and
negotiating with employee bargaining units to find solutions for these
unprecedented times.
In FY 2020-21, Fullerton, like all cities, continued to wrestle with the
impacts and public health effects of the COVID-19 pandemic. Despite the
ongoing pandemic and new reality we live in, the City, with the help of our
dedicated employees, has remained focused in accessing funding to
provide much-needed support, economic assistance, and aid to the
community. To actively address the needs of the Fullerton community and
contend with COVID-19, the City has also provided rental assistance and
small business grants, utility bills aid, and implemented Feed Fullerton as
well as other senior food programs. In addition, our City staff continues to
move the City Council’s initiatives forward – seeking a better Fullerton for
all. We hope you find this Community Report for FY 2020-21 helpful.
Please feel free to share any questions, concerns, or feedback you may
have with us.
Respectfully,
Jeffrey W. Collier
Acting City Manager
A special thank you to the City Manager and Administrative Services Department staff including
Anissa Livas, Toni Smart, John Ji, Steven Avalos and Cinndy Barrios
who compiled and produced this year’s Community Report.
Report to the Citizens of Fullerton
The Community Report summarizes the financial activities of the City of Fullerton’s governmental
and proprietary funds and draws its information from the FY 2020-21 Annual Comprehensive
Financial Report (ACFR), formerly known as the Comprehensive Annual Financial Report. The
ACFR was prepared in conformance with generally accepted accounting principles (GAAP) and
includes audited financial statements.
The ACFR can be found at www.cityoffullerton.com/financialreports
The Community Report is intended to increase awareness throughout the community of the
financial operations of the City. As such, this report is presented on a non-GAAP basis and
communicates complex financial and statistical information in a user-friendly manner to citizens
and other interested parties.
ABOUT FULLERTON PAGE 02
ALL ABOUT THE CITY OF FULLERTON
The City of Fullerton is located in northwestern
Orange County, approximately 25 miles southeast of
downtown Los Angeles. The City is ideally located for
transportation, bounded by 3 major highways, and
located 15 miles northwest of John Wayne Airport.
Prior to the pandemic, an average workday has
Fullerton’s Transportation Center serving an average
of 3,000 commuters on the Metrolink and Amtrak
trains. With a population of 139,431, Fullerton is the
42nd largest city in the State and 6th in Orange County.
Unemployment
Rate
Median Age
Square
Miles
Population
MAYOR & CITY COUNCIL
CITY EXECUTIVE TEAM
8.5%
34.5
22.4
139,431
ACTING CITY MANAGER
JEFFREY W. COLLIER
POLICE CHIEF LIBRARY DIRECTOR FIRE CHIEF DIRECTOR OF PUBLIC WORKS
BOB DUNN JUDY BOOTH ADAM LOESER MEG MCWADE
INTERIM INTERIM
DIRECTOR OF COMMUNITY & ECONOMIC DEVELOPMENT DIRECTOR OF HUMAN RESOURCES
GREG PFOST EDDIE MANFRO
DIRECTOR OF PARKS & RECREATION DIRECTOR OF ADMINISTRATIVE SERVICES
VACANT ELLIS CHANG
PAGE 03 ABOUT FULLERTON
OUR LOCAL ECONOMY
The Fullerton business community is diversified with no single
industry or business dominating its local economy. Major
employers in Fullerton include California State University-
Fullerton, Fullerton Community College, St. Jude Hospital,
Raytheon Systems Company, and AJ Kirkwood & Associates, Inc.
In addition to its diverse business industry base, the City is a
major center of higher education in Orange County and is
considered the “Education Community.” California State
University-Fullerton and Fullerton Community College are
located within the City, as well as three private colleges/
universities for a total enrollment of over 65,400 students.
Although COVID-19 has had an adverse effect on the overall
economy, the City’s diverse local economic base has held up
and the City began to see recovery in FY 2020-21 from the
onset of the pandemic in the prior fiscal year. For sales tax,
General Consumer Goods and Business Industry both saw
gains from the prior year despite the pandemic. In addition, the City continues to benefit from the
increases to its County pool sales tax allocations, attributed to both an increase in online sales
activities as well as a new State law enacted last year.
SALES TAX REVENUE: FY2020-21 BY INDUSTRY
Source: Q2 2021 Sales Tax Update
* Revenue from online sales tax (county allocated)
CITY INITIATIVES PAGE 04
CITY STREET CONDITIONS
Deteriorating roadways have been of major concern for our residents. While every attempt is made
toward improvements, the extent of street damage far exceeds funding to make significant strides. For
the City to make noticeable improvements, a budget of at least $16 million per
year is needed. In an effort to address this, the City established a new
Infrastructure Fund in FY 19-20 to allocate a portion of incremental tax
increases dedicated for street improvements. The new Infrastructure
Fund is estimated to benefit from improved secured property tax and
sales tax revenue. While still insufficient to meet needed funding
requirements, it is estimated that about $500K-$1M annually of secured property tax and sales tax will
be dedicated to the Infrastructure Fund to help improve our City’s streets.
FUNDING VS. COSTS T O IMPROVE
STREETS T O GOOD CONDITION
Annual Funding
Arterial Street Costs
Local Street Costs
0 50 100 150 200
ANNUAL FUNDING BREAKDOWN
5.0 MILLION
8 . 0 MILLION
1 6.0 MILLION
(ACTUAL FUNDING)
( MIN. RECOMMENDED)
(PREFRRED MINIMUM)
CONDITION
O F ARTERIAL
STREETS
$ MILLION
2 3 0
CONDITION
OF LOCAL
STREETS
Good
CITY INITIATIVES PAGE 05
COVID-19 & THE CITY’S INITIATIVES
The City of Fullerton, like many agencies across the nation, has had to contend with the negative
economic impacts and public health effects of the COVID-19 pandemic which continued into FY 20-
21. Although COVID-19 has had a negative impact on the national and local economies, the City’s
diverse and local economic base has held up, and has even seen recovery in certain revenues,
such as sales tax in FY 20-21. In addition, the infusion of $6M of Federal CARES funding assisted
the City to actively mitigate against the pandemic and provide much needed support, economic
assistance, and aid to the community.
To assist efforts into reviving our local economy and
help local restaurants to stay open, Fullerton was the
first City in Orange County to open its “Walk on
Wilshire,” an al fresco dining experience and outdoor
community area that helped our local eateries stay
open during the pandemic. In addition, the City also
implemented a Small Business Grant program which
also assisted small businesses to stay open during the pandemic.
The City also assisted the community in support of our resident’s financial hardships experienced.
Staff developed housing assistance programs to ensure that residents were able to retain housing
when the financial crisis fully materialized. Rental Assistance programs also provided assistance
to over 150 residents during the pandemic. A Utility Relief program was also implemented, which
assisted residents with their water utility bills.
Another popular program for our community is the City’s
Feed Fullerton program. Feed Fullerton is an income-based
program that provided over 7,600 nutritious meals from
Fullerton’s local eateries. It was developed as a community-
based emergency feeding program created in response to
the COVID-19 pandemic and provides healthy meals to
residents in need and reinvests back into our local economy.
For our senior residents, the City continues to partner with
Meals on Wheels of Orange County and has provided over 7,300 healthy meals to our senior
community. In addition, the City’s Grocery Box distribution program, was a new program that
delivered over 8,800 groceries safely to seniors and our vulnerable populations in need.
In looking forward to FY 21-22, the City and community will benefit from additional Federal aid from the
American Rescue Plan Act, better known as ARPA, which will support stabilization of government finances
and reinvestment back into our community and local economy.
CITY FINANCIALS PAGE 06
GENERAL FUND
The General Fund is the chief operating fund of the City. For FY 20-21,
General Fund revenues totaled $103.1 million, and expenditures totaled
$100.8 million for the year, resulting in an operating surplus of $2.3 million
(includes transfers and special items). The operating surplus is due to cost
reduction measures to mitigate the fiscal impacts of COVID-19 and
expenditure reductions resulting from closures of City facilities and
corresponding programs along with an increase in property tax revenue
from unanticipated Successor Agency related residual receipts of property
tax revenue and an increase in sales tax revenue.
At the end of FY 20-21, the fund balance totaled $20.6
million. Of that amount, $13.3 million was assigned to a
contingency reserve, which is approximately 13.5% of
total General Fund expenditures. The General Fund’s
reserve policy is to maintain a minimum reserve equal to
10% and strive to reach a level of 17% of total General
Fund expenditures each year.
CITY FINANCIALS PAGE 07 9
EXPLANATION OF ACCOUNTING TERMS
Assets - This is what the City owns. Assets are
items that one can reasonably expect to convert to
cash, sell, or consume within one year, such as
selling a building or piece of equipment.
Capital Assets - The City's long-term investments,
which include property, plant, equipment, and
infrastructure assets. The City uses these capital
assets to provide services to citizens; conversely,
these assets are not available for future spending.
Deferred Outflows - Outflows are not revenue or
expenses, nor are they assets or liabilities.
Deferred Outflows represents a consumption
of net position that applies to future periods.
For example, prepaid items and deferred
charges.
Deferred Inflows - Inflows are not revenue or
expenses, nor are they assets or liabilities.
Deferred Inflows represents an acquisition of net
position that applies to future periods. For
example, an advanced collection of fees or
anticipated future revenue.
Liabilities - These are primarily debts that can be
paid off in one year or less, and include accounts
payable, accrued payroll and accrued interest
payable. This includes money owed to vendors,
utility payments, and other similar short-term
items
Long-Term Liabilities - Represents mainly debt
obligations of the City, such as loan payments or
bonds payable. The proceeds from these are
used to finance various City projects, such as
road repair and major equipment purchases.
Net Investment in Capital Assets - One of three
components of net position, consisting of capital
assets net of accumulated depreciation, reduced
by outstanding related borrowing.
Restricted Net Position - Represents resources
with externally imposed restrictions for use. For
example, grant funds provided for a specific
purpose.
Unrestricted Net Position - These are resources
that are accessible to the City to provide services
to residents of Fullerton if there were no
additional revenues or resources available.
Net Position - Generally, the difference
between the City's assets and liabilities.
CITY FINANCIALS PAGE 08 9
STATEMENT OF NET POSITION
City's Assets and Liabilities Rounded to Nearest Thousand
The Statement of Net Position
presents information on all of the
City's assets and liabilities, with the
difference between the two
reported as a net position. Over
time, increases or decreases in net
position may serve as a useful
indicator of whether the financial
position of the city is improving or
deteriorating. In the case of the City
of Fullerton, assets exceed
liabilities by $475.7 million, an
increase of $12.9 million from the
previous year. This is primarily due
to water rate adjustments to
support safe and stable water
delivery, COVID-19 CARES Act,
Federal grant revenues, and an
increase in property and sales tax
revenue.
CITY FINANCIALS PAGE 09 9
FY 20-2 1 GOVERNMENT – WIDE EXPENDITURES
Total government-wide expenses decreased by 1% from the prior fiscal year. In governmental
activities, increased costs are primarily due to increased community development grant expenditures
offset by a decrease in human and leisure expenditures due to COVID-19. Additionally, for business-
type activities, expenses decreased mainly due to a decrease in Other Post Employment Benefit
expenses from a change in actuarial assumptions.
Expenditures (In Thousands)FY 20-21 FY 19-20 FY 18-19 FY 17-18 FY 16-17
General Government 7,814 6,368 5,675 6,862 1,594
Public Safety 83,200 83,043 76,743 75,773 65,249
Public Works 24,617 26,077 24,726 28,183 26,944
Community Development 10,123 8,524 10,645 8,761 6,687
Human and Leisure 11,058 13,574 13,065 12,670 11,670
Refuse Collection 12,862 11,716 10,878 10,394 10,384
Interest on Long-Term Debt 336 410 391 358 378
Water Utility 32,167 32,315 27,806 30,290 27,268
Airport 1,953 2,493 1,831 1,667 1,526
Parking Facilities 97 104 23 45 28
Brea Dam Recreational Facilities 2,730 2,679 2,945 2,770 2,857
Sewer Enterprises 3,412 4,831 3,384 3,735 3,495
CNG 170 196 140 274 396
Grand Total 190,539$ 192,330$ 178,252$ 181,782$ 158,476$
CITY FINANCIALS PAGE 10
FY 20-21 GOVERNMENT – WIDE REVENUES
Total government-wide revenues increased by 7% from the prior fiscal year. In governmental
activities, revenues increased primarily from property and sales tax revenue growth and operating
grants for COVID-19 offset by a decrease in investment income. Additionally, for business-type
activities, revenues increased primarily from updated water rates.
Revenue (In Thousands)FY 20-21 FY 19-20 FY 18-19 FY 17-18 FY 16-17
Charges for Services 96,442 85,933 85,303 77,979 74,632
Operating Contributions & Grants 13,978 10,538 9,035 8,897 13,748
Capital Contributions & Grants 5,027 5,363 27,937 23,369 24,178
Property Taxes 50,238 46,365 44,291 42,244 39,848
Sales Taxes 25,571 23,095 24,438 21,834 21,456
Franchise Taxes 4,382 4,358 4,493 4,336 4,181
Other Taxes 3,461 4,398 5,328 4,829 4,940
Use of Money/Property 3,498 9,065 8,489 4,633 4,014
Other 713 1,036 1,267 970 1,265
Gain on Sale of Capital Asset - - - 3,150 -
Grand Total 203,310$ 190,151$ 210,581$ 192,241$ 188,262$
FULLERTON FAST FACTS PAGE 1 1
139KResidents 12.1K Businesses 80K Flights/Year
3K Rail Commuters/Day 4 Colleges/Universities 28 Miles of Trails
53 Parks 35K Street Trees $210M Budget
21.5K K-12 students 290 Miles of streets 320 Miles of sewers
68 Miles of Storm Drain 420 Miles of Water Mains 64K Higher Ed Students