North OC: Fullerton Faces $13.7M Deficit After $10M Accounting Error Surfaces

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[Fullerton] City Discovers $10M Accounting Error as Deficit Projections Reach $13.7 Million
At the March 17 City Council meeting, Interim Finance Director Stephen Avalos disclosed that $10 million previously counted as general fund reserves had already been spent or was legally restricted to other accounts, significantly shrinking the city's financial cushion. Combined with an operating deficit already projected at $3.7 million for the current fiscal year, Fullerton now faces a potential $13.7 million shortfall heading into FY 2026-27. Without corrective action, reserve levels could fall to approximately 2% well below the city's own 10% minimum policy floor. Mayor Fred Jung acknowledged the situation requires a "long-term revenue solution" and is advocating for a half-cent sales tax measure that could generate roughly $15 million annually. The Fiscal Sustainability Ad Hoc Committee is scheduled to meet publicly on March 30 at the Fullerton Community Center to evaluate options, including potential cuts to services. City Manager Eddie Manfro, appointed permanently in early March, is now tasked with navigating a budget season that could produce the most consequential service decisions the city has faced since the pandemic.

[Brea] City Adopts Airbnb Pilot Program with 100-License Cap and Geographic Quotas
On March 17, the Brea City Council adopted Ordinance No. 1270, formally establishing the city's first short-term rental program following years of prohibition. The pilot allows up to 100 licenses distributed across three sectors: 25 in the northwest, 50 in the southwest, and 25 in the east. Operators must obtain HOA authorization before applying, maintain a two-night minimum stay, pay a per-property license fee covering home inspections and code compliance, and collect Transient Occupancy Tax through their booking platform. Accessory dwelling units are explicitly excluded from the program to prevent speculative ADU construction for rental purposes. City leaders cited the 2026 FIFA World Cup and 2028 Olympics as key drivers behind the timing, anticipating a regional lodging shortfall across Southern California. The ordinance also gives the city new enforcement authority to identify and shut down existing unlawful STR operations that currently operate without oversight.

[Placentia] New ADU Rules Take Effect with 15-Day Processing Guarantee and SB 9 Lot Split Pathway
The Placentia City Council completed the second reading and adopted two housing ordinances on March 17, bringing the city into full compliance with California's 2026 housing mandates. Ordinance No. O-2026-01 updates local ADU and JADU regulations to include the "15-day completeness clock," which requires the city to determine whether an ADU application is complete within 15 days of submission or automatically deem it complete. This eliminates a common source of indefinite delays in the permitting process. Ordinance No. O-2026-02 activates the SB 9 pathway citywide, allowing qualifying residential lots to be split and developed with up to two units per parcel. Older residential tracts in Old Town Placentia and established single-family neighborhoods stand to be most directly affected, as homeowners now have a clearer and more predictable process for adding units or splitting lots.

What's Developing

[Stanton] 159-Unit Townhome Project on Katella Avenue Enters Design Review
A significant infill development at 8042 Katella Avenue cleared its initial Planning Commission review on March 18, with the applicant seeking approval for 159 townhomes and 15,949 square feet of ground-floor commercial space under Site Plan and Design Review (SPDR-823). The development team is requesting a Planned Development Permit and a Development Agreement that includes modifications to standard parking ratios, a common approach in high-density urban infill. The city maintains a concurrent moratorium on new medical services and public lodging facilities along the Katella corridor while planners evaluate neighborhood compatibility. The Planning Commission's next session is scheduled for March 25 and the City Council meets March 24, where related land use items may be heard.

[La Palma] $850,000 in Federal Funding Secured for Public Safety Center Modernization
La Palma has secured $850,000 in federal community project funding, delivered through the advocacy of U.S. Representative Derek Tran and U.S. Senator Alex Padilla, to modernize the La Palma Public Safety Center. The facility is shared by the La Palma Police Department and Orange County Fire Authority Station 13. Project improvements include replacing aging HVAC and lighting systems, integrating advanced security cameras and sensors, and completing comprehensive ADA upgrades throughout the building. Mayor Nitesh Patel issued a formal statement of appreciation, noting the funding ensures first responders have a facility that meets current safety and accessibility standards.

[Cypress / Los Alamitos / La Palma] Regional Sewer Replacement Project in Active Construction Phase
The Orange County Sanitation District is currently executing the Cypress Trunk Sewer Project, a regional replacement of approximately 7 miles of sewer lines across Cypress, Los Alamitos, and La Palma. The project replaces 50-year-old pipes with larger-diameter alternatives to extend system capacity for another 50 years. Active work is ongoing through late March along Bloomfield Street in the Los Alamitos and Cypress border area, with trenchless pipe replacement on La Palma Avenue near Denni Street expected to begin in late April. A completed segment on Orange Avenue at Alderbury Street in Cypress has already lifted its road closure.

[Anaheim] In-N-Out Burger Moving Forward with Euclid Street Location Near Disneyland
In-N-Out Burger is advancing plans to open a new location at 540 N. Euclid Street in Anaheim, redeveloping the former Marie Callender's site just minutes from Disneyland. The project adds a nationally recognized quick-service anchor to a retail corridor that has seen gradual reinvestment tied to the resort district economy. Separately, the Anaheim City Council approved the Housing Authority's FY 2026-27 Annual Public Housing Agency Plan during its mid-March session, preserving federal funding eligibility for the city's rental assistance programs. The council's next regular meeting is scheduled for April 8.

Neighborhood Pulse

[Los Alamitos] Police Department Finalizing Body Camera Rollout as Last OC Municipal Agency to Adopt
The Los Alamitos Police Department is in the final implementation phase of its body-worn camera program following a $344,000 five-year contract with Axon, approved in late 2025. The cameras integrate with a new Axon digital evidence portal connected directly to the Orange County District Attorney's office, allowing time-stamped footage to be submitted seamlessly. Officers are currently completing virtual training while a formal body-camera use policy is being drafted for eventual City Council approval. Los Alamitos was the final municipal police department in Orange County to adopt the technology, a delay city leadership attributed to deliberate waiting for infrastructure and integration capabilities to mature.

[Cypress] City Appoints First Female City Manager, Shifts Council Meetings to Tuesdays
Shannon DeLong was officially appointed as Cypress City Manager on February 24, 2026, becoming the first woman to lead the city's administrative operations. The appointment provides executive stability during an active planning period, including the ongoing General Plan survey process and a Cypress College-adjacent development pipeline. Separately, the City Council moved its regular meetings from Mondays to the second and fourth Tuesdays of each month, effective March 10, to reduce conflicts with federal holidays and improve staff preparation capacity. Mayor Leo Medrano noted the change aligns Cypress with the scheduling standards of neighboring municipalities.

[La Habra] Safe Routes to School Plan Launched with Measure M2 Funding
The La Habra City Council authorized a Notice to Proceed on March 16 for the Safe Routes to School Action Plan Development Project, contracting Fehr and Peers of Irvine to lead the study. The initiative is funded through Measure M2 Fair Share transportation funds and focuses on identifying and mitigating hazards for students commuting to school on foot or by bicycle. The project is designated as City Project No. 1-TC-24 and covers routes serving multiple school campuses across La Habra. A parallel workforce development agreement approved at the same meeting funds vocational training and job placement through LGL College and the READY S.E.T. OC program.

[Cypress] City Launches "Mia's Corner" Mental Health Resource Webpage
On March 17, the City of Cypress launched "Mia's Corner", a dedicated mental health resource webpage created in honor of Mia Mejia. The page provides residents with access to counseling information, wellness tools, and community support resources, and was explicitly framed by city officials as an effort to reduce mental health stigma and expand equitable access to behavioral health services across all income levels. The launch coincides with the city's ongoing Citizens Academy program running through March, which educates residents on city operations and public safety protocols.

[Anaheim] Housing Authority Approves FY 2026-27 Plan, Maintaining Federal Rental Assistance Eligibility
The Anaheim Housing Authority approved its FY 2026-27 Annual Public Housing Agency Plan during the city's mid-March council session. The plan, along with its associated Administrative Plan, is required to maintain Anaheim's eligibility for federal housing assistance funding and establishes operational protocols for the city's rental support programs. The approval keeps federal resources flowing to the city's rental market as West Anaheim and Stanton neighborhoods continue absorbing new residential density from active development projects.

Conversation Starters

What does the city's budget crisis actually mean for me?

Fullerton is navigating a serious fiscal moment. An internal accounting error revealed that $10 million in funds previously counted as general reserves had already been spent or restricted to other purposes, leaving the city with a contingency reserve below its own targets and a projected $13.7 million deficit heading into next year. Without cuts or new revenue, reserves could fall to 2%, far below the city's 10% minimum. The city is exploring a half-cent sales tax measure that would require voter approval. For residents and property owners, the near-term implications include the possibility of delayed services, adjusted fee structures, and increased political pressure around development approvals as the city moves into budget season. The Fiscal Sustainability Ad Hoc Committee meets publicly on March 30, and that session will provide the clearest indication of what changes are coming.

Can I finally build an ADU without the runaround?

Placentia just made the permitting process significantly more predictable. Under new ordinances adopted March 17, the city must now determine whether an ADU application is complete within 15 days of submission, or it is automatically deemed complete. This eliminates the open-ended waiting period that stalled many projects. The city also activated the SB 9 pathway citywide, allowing eligible single-family lots to be split and developed with up to two units per parcel. For homeowners in older residential neighborhoods, including Old Town Placentia, this opens a genuine income and equity-building opportunity. Anyone seriously considering an ADU build or lot split should move sooner rather than later to lock in current fee schedules and avoid any future regulatory adjustments.

Can I rent my home on Airbnb now?

Brea just unlocked this for the first time, with strict limits. The newly adopted STR pilot program allows up to 100 licensed properties citywide, allocated by neighborhood sector. To qualify, an owner needs HOA authorization before even applying for a city license, and the property must operate under a two-night minimum stay. ADUs are explicitly excluded. Licenses are distributed via a lottery system, so availability will be competitive from the start. For investors looking at Brea specifically for rental income potential, this is a meaningful new data point, but the program's limitations are deliberate and the geographic caps mean not every property will have access.