Orange officials are planning to postpone spending over $7.2 million on renovating a couple of fire stations, city hall and other buildings as they once again plan to ask voters to raise taxes this November to help bail them out of a long time structural deficit.

The deferral comes after officials are expected to pull $17 million from funds intended in part for major infrastructure projects and IT needs like computers.

“To help address the City’s structural operating deficit, approximately $7.2 million in capital projects is recommended for deferral in FY27,” reads a city staff report.

“These deferrals do not reflect a lack of need; rather, they represent a necessary prioritization of limited funding toward more urgent operational, safety-related, and externally leveraged capital needs.”

City staff presented the capital improvement budget preview to Orange City Council members on Tuesday night and no elected official asked in-depth questions about the city’s deficit. 

Officials in one of Orange County’s oldest towns are still expecting to spend roughly $36 million from a host of funds mainly restricted to be used to help finance infrastructure projects and improvements like park repairs, maintaining roads and sewers.

Orange officials are looking at spending over $5.6 million of that on parks including $1.5 million for the Rampart Street park with a walking path and a dog amenity area. 

They are also planning to spend $8.7 million to maintain their streets, $6.5 for water infrastructure improvements, $3.5 million on maintaining their sewer network and $800,000 on replacing playground equipment.

Staff says they will not pull from general fund dollars to help fund the projects but will delve into unspent special revenues from last year to fill in any gaps.

The expected spending comes after staff told elected officials last month they will have to transfer $17 million from three different spending buckets to balance their budget in the coming fiscal year.

This includes pulling $10 million from the city’s capital improvement fund, $3.7 million from their EMT fund and $3.3 million from their capital improvement.

“The General Fund has a deficit when we were running through all of the numbers with revenue and expenditure and the only way that we can balance the budget is to transfer from capital project fund and from IT,” said Trang Nguyen, the city’s finance director, during Tuesday’s city council meeting. 

“We transfer a total of $17 million from special revenue into the general fund to help support fiscal year ‘27.” 

On the heels of that warning, officials directed staff to come back with a 1% sales tax increase ballot measure after voters shot down a smaller tax increase measure in 2024.

[Read: Orange to Again Ask Voters for a Sales Tax Increase to Save Budget]

Orange City Council members are not the only ones grappling with deep budget deficit projections going into the summer.

Officials in Irvine, Santa Ana and Fullerton are also dealing with multi-million dollar budget gaps, with the latter two eying putting tax measures on the November ballot this year.

Staff in Orange said in their report the project deferrals showcase their spending priorities amid the structural deficit.

“The proposed program prioritizes projects that support public safety, regulatory compliance, operational continuity, and long-term asset preservation, while deferring lower-priority projects until fiscal conditions improve.”

Hosam Elattar is a Voice of OC reporter. Contact him at helattar@voiceofoc.org.