Fullerton residents will see at least two new City Council members after November’s election as City Hall leaders grapple with a nagging deficit and a proposed sales tax increase to keep the general fund afloat.
The tax measure before voters on the November ballot would raise sales tax by 1.25% throughout the city. Without it city staff say the council would need to cut $5 million out of the budget every year, and could still run out of savings by 2025.
If voters approve the tax measure, the city still has a hard financial future ahead, with a small staff caused by budget shortages and crumbling infrastructure that is a city-wide problem. Staff are also recommending that the city nearly double its rainy-day fund going forward.
Three Council seats are up for grabs against the backdrop of the financial crisis caused by the coronavirus pandemic, with two open seats as Mayor Jennifer Fitzgerald and Councilwoman Jan Flory are not running for reelection.
All the candidates said bringing in new businesses and adding more tax revenue is the key to fixing roads and restoring the budget, but each has a different approach to the issue. And all but one candidate are against the proposed sales tax increase.
There are two candidates in the northwest district, both businessmen, who are against the sales tax measure, have similar plans to help improve the city’s finances and want to increase spending on road repairs — an issue residents constantly bring up during public comment at Council meetings.
Andrew Cho, who owns an Anaheim-based bankruptcy law firm, said the city needs to increase its sales tax base instead of raising sales tax. He said City Council members need to be more proactive in attracting new businesses to the city.
“I would personally reach out and not only rely on staff,” Cho said. “I would like to focus on something high tech.”
Cho said the city can leverage its investment in fiber optic internet technology to lure some tech companies to town.
‘I’d like to see if that can be leveraged for maybe data centers, maybe leasing of land that’s owned by the city for the development of something hightech,” Cho said.
Once the economy begins turning around, he said he’d like to ease some of the permitting and planning processes to speed up new businesses development.
“There’s got to be a way the city can streamline that,” Cho said.
For too long, he said, adding new tax revenue for the city has been neglected.
“It’s been decades of policy decisions and my sense is that the can has been kicked down the road long enough to where the current council put [the sales tax measure] on the ballot to let the voters decide.”
Fred Jung, who owns a screen printing company in Paramount, said the city needs to diversify its tax revenue streams.
“Everything has to be about economic development — it just has to be,” Jung said. “You have to generate revenue outside of the basic property tax.”
Jung said city officials should focus on attracting Asian and Latino markets to the city so residents don’t go to nearby towns to shop at those businesses.
“Buena Park has four Asian markets, Fullerton has one. And that should tell everybody where we need to be. La Habra has a Northgate Market, we have none,” Jung said. “We’re not serving a culture and a constituency that would actively shop at those locations, keep our sales tax dollars in Fullerton.”
He also said the city needs to bring in businesses like Costco.
“There are a quarter of our residents that shop at another city’s Costco,” Jung said.
He pointed to the various businesses in nearby La Habra, which has big box stores like Walmart and Costco to small restaurants and businesses.
“They courted the right businesses to sign these long term investments with the city and that’s what we have to do.”
In the most packed district in the race, four candidates are running to represent the newly created second district.
All three of the candidates who spoke with Voice of OC said they were against the proposed sales tax measure.
Nick Dunlap, a businessman, said he helped the opponents of the measure write their argument on the ballot, and raised concerns that the money would go to pay raises for public employees and not infrastructure.
“I think if you really look at it, we live in a time where taxes, fees and rates only go higher. If we were to raise taxes at this point, we would have the second highest taxes in Orange County,” Dunlap said.
Dunlap said the city needs to do a better job working with California State University, Fullerton to build some business opportunities and development.
He said they can bring some classes or seminars to meeting rooms around Downtown Fullerton to help drum up some business and create a new customer base for the area.
Dunlap also said the city needs to streamline its business permitting and licensing process to speed up business development.
“The industrial base that we have between the 91 freeway and pretty much Commonwealth — there’s great potential there in industrial, manufacturing, shipping, logistics, things of that nature. If you bring those businesses, I think that’s going to help expand the tax base. I think big box retail is important as well,” Dunlap said.
Charles Sargeant, a former businessman and owner of a nonprofit dog rescue, said the solution is to work on bringing more business into the city and that he was already speaking with businesses to move into Fullerton.
“I don’t dance around the answer like everyone else does … I’m not for the tax,” Sargeant said. “If it goes into the general fund, some of the other candidates will tell you it’s controlled when it gets into their hands … you don’t have the voice to control that fund. It has to be controlled with the ballot.”
Sargeant said the city needs to attract more auto dealership businesses to boost tax revenue.
“We used to have robust auto dealerships in this city — they let it go, they did nothing,” he said. “You’re not going to go into movie theaters, that’s not going to work. You’re not going to go into bowling alleys, that’s not going to work. So auto dealers.”
Mackenzie Chang, a federal officer who works with asylum seekers, says he thought the new measure wasn’t properly explained to the public.
“I think they were a little deceptive in how they put it forth,” Chang said. “The way that they promoted it doesn’t really explain that it goes to the general fund and they promoted it as a street repair fund.”
Chang said one of his top priorities is renegotiating labor contracts to reduce overtime and pension costs for the city.
“You really have to be able to come to a new contract concession with these labor groups. The overtime pay is way too high. We need to either shut down loopholes or other ways certain officers and firefighters are doubling their salary with overtime. As well as being able to look at restructuring pensions, of course.”
Dr. Faisal Qazi, a neurologist, wants to bring in new businesses by easing some fees and regulations at city hall and also by partnering with the North Orange County Chamber of Commerce.
“Our retail is decimated right now and you have to bring it back, you have to facilitate the retail returning as the opportunity arises,” Qazi said. “Municipality cannot stand in the way of issuing business permits on time, delaying the inspections and so on.”
And once the city starts seeing its tax revenue rebound, Qazi said road repair will have to be a top priority to help spur further economic growth.
“Our infrastructure is not safe, it’s not conducive to attracting new businesses and new business ideas and it’s also going to inevitably affect home prices and it also has an effect on home development,” Qazi said.
He said when revenue starts coming in, the city should aggressively apply for matching grants from state and local sources.
“As the business regenerates and we get more tax revenue, that gives us something to work with,” he said. “It’s a loop — it’s a whole circle, and it includes the interconnectedness of the infrastructure to economic growth and also public health.”
In the city’s southwest district, incumbent Councilman Bruce Whitaker is defending his seat against challenger Aaruni Thakur, a member of the Fullerton School Board and attorney.
Whitaker, a self-proclaimed libertarian, has sat on the council for the past decade and served as mayor twice. But his experience on the council is one of the primary things his opponent has taken issue with.
“Frankly, in ten years he has no accomplishments to show. He had a conversative majority, he was mayor twice, and he’s still talking about fixing the roads,” Thakur said.
Whitaker is also the only member of the city council not to endorse the tax measure, saying the real problem is the city’s spending beyond its means and raising concerns that the revenue created from the measure wasn’t specifically allocated anywhere in the budget.
“That is primarily due to larger pension contributions to CalPERS as a result of their poor investment practices,” Whitaker said. “But what the majority of the council have chosen to blame is the fact that the citizens aren’t taxed enough.”
He said the city needs to reduce its pension costs and have the employees “contribute a larger percentage to their pension plan thereby reducing the city’s pension that gets paid.”
Whitaker said his idea to reduce spending were broad cuts across the board, and to outsource city services and become more of a contract city. He also brought up that city employees should be paying larger percentages of their wages into their pension fund, rather than having the city pick up the slack.
Thakur disagreed, saying that the new taxes would be essential to help fix Fullerton’s infrastructure.
“If the measure passes and I’m elected, I’ve stated that the lion’s share should go to infrastructure,” Thakur said. “As a concerned citizen of Fullerton raised here, raising my family here, I’m voting for it. But ultimately it’s up to every other voter as well.”