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Julian's Grandmother was a former resident of the Sunnyvale Trailer Park and caretaker of Julian, as well as the original owner of the Shitmobile and what would be come Julian's and later Lahey and Randy's trailer.
While his parents were making their leave from the park, Bubbles' mother visited Julian's grandmother and arranged for Bubbles to stay with her and Julian, with the former saying the later will look after him. ("Dear Santa Claus, Go Fuck Yourself")
Julian's grandmother was also known for getting rather drunk and driving around the park with the Shitmobile, causing excessive damage to the car itself. ("The Kiss Of Freedom") This implies that Julian's taste for drinking is hereditary, and could explain why he was raised by his grandmother and not his parents, who both may have had a habit of heavy drinking, making them unable to raise Julian properly.
While not made explicitly clear, it's likely that Julian's grandmother died prior to 1997 (after all, she was a grandmother) but like several other parental figures it is also indicated that she simply left the park.