Another challenging fiscal year awaits the city of Orange.
The City Council approved nearly $18 million in general fund budget cuts for the new fiscal year that starts this month, slashing public events, services and city staff positions, freezing hiring of public safety personnel, limiting overtime and deferring infrastructure repairs.
Even still, the council fell short of passing a balanced general fund budget, something they said they intended to do at the beginning of this year’s budget cycle review.
Instead, the city will face another general fund budget deficit of nearly $2 million.
“The current uncertain economy and budget deficit continue to provide a challenge to the city’s long-term fiscal sustainability and the level of services residents and businesses depend on,” city budget manager Michelle Kresan told councilmembers before they passed the budget on June 24.
In a last-ditch effort to cut back a bit more spending, Councilmember Kathy Tavoularis forfeited more than $650,000 in capital improvement funds earmarked for her district. Councilmember John Gyllenhammer questioned spending from a designated parks improvement fund. Otherwise, the councilmembers seemed to grimly accept another year with a structural general fund budget deficit, making few comments on the item.
The deficit is a far cry from the $19.1 million shortfall Orange faced in May of last year.
After making some cuts before fiscal year 2024-25, the council also supported a half-cent local sales tax measure on November’s ballot that would have raised about $20 million in city revenue over each of the next 10 years.
But voters narrowly rejected that ballot measure, leaving their elected officials in a position of needing to make yet more cuts.
The council has hired a new city manager, Jarad Hildenbrand, to try to right the ship when he takes the helm in August. An Orange native, Hildenbrand is the city manager of Laguna Hills.
In the meantime, Orange will cut its budget in fiscal year 2025-26 by eliminating seven vacant positions, freezing 16 vacant positions and reducing part-time staff hours.
The city will also defer vehicle replacements, reduce spending on IT and continue to underfund its accrued liability, kicking the ball down the road on another multimillion-dollar issue while hoping that interest rates do not increase.
This city did not host a fireworks show for the first time in nearly three decades.
The event, like all others traditionally sponsored by the city, has been cancelled due to budget cuts.