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Orange unveils preliminary FY26 budget showing tight reserves; council approves recommended actions
Summary
Staff presented a FY26 preliminary budget that proposes $147 million in revenues, $149.6 million in general-fund expenditures and a projected $2.6 million operating deficit; the council approved five recommended actions and several agenda votes, including an ordinance limiting fireworks in parts of the city.
City staff presented the City of Orange's preliminary fiscal year 2026 budget on June 3, outlining revenues, proposed expenditure reductions and multi-year forecast concerns as the council approved immediate recommended actions to balance the plan.
An unidentified staff presenter reviewed the numbers: proposed FY26 operating revenues of about $147,000,000 and proposed general-fund expenditures of about $149,600,000, after $17.3 million in identified budget reductions. Staff said those measures reduce but do not eliminate an operating deficit, which the presentation estimated at roughly $2,600,000 for FY26. "Fiscal year 26 proposed operating revenues total approximately $147,000,000," the presenter said during the briefing.
Staff noted the budget uses one-time transfers (including a $3 million road-mitigation transfer) and other temporary measures to limit the near-term gap and emphasized the budget’s sensitivity to sales-tax volatility in the fuel and service-station sector. The presentation said projected sales-tax receipts from that sector moved from an expected 12.9% decline to a steeper 21% decline in the latest estimate, a major driver of the revenue outlook.
Council members pressed staff on assumptions and risks. Council Member Barrios asked whether the projection that leaves an undesignated general-fund balance of roughly $21,000 for FY26 was correct; staff confirmed it was after balancing actions and one-time transfers. Council members also asked about grant strategies for an active-transportation plan, the timetable for a pending fee study and the budget treatment of frozen or vacant FTEs and third-party contract costs used to cover services.
At the meeting's close, the council voted to approve the staff’s five recommended actions related to the preliminary budget and the five-year capital-improvement program (motion by Council Member Barrios, second by Council Member Dimitru). The vote was 5–0.
Votes at a glance: - Consent calendar: motion to approve (mover recorded as Council Member Dimitru; second by Council Member Tavares) — approved as announced by the clerk. - Ordinance O-4-25 (prohibition on "safe and sane" fireworks in certain areas): moved by Council Member Demetra; second by Council Member Tavares — adopted 4–1 (Council Member Barrios voted no). - Strategic-plan quarterly update (item 3.7): motion to approve by Council Member Barrios; second by Council Member Tavares — approved 5–0. - Public hearing on Cypress Barrio rezoning (zone change 1267-12b; EIR noted): motion to continue the item to a date uncertain (mover Council Member Tavares, second Council Member Dimitru) — approved 5–0. - FY26 preliminary budget and five-year CIP recommended actions: motion by Council Member Barrios; second by Council Member Dimitru — approved 5–0.
Next steps: staff will return for formal budget adoption on June 24 and continue to monitor revenues and report quarterly; council members requested additional departmental FTE breakdowns, vacancy analyses, and projected third-party contract impacts to better evaluate operating assumptions.
