Cerritos City Council Adopts Fiscal Year 2026-2027 Budget

Details

The Cerritos City Council has adopted the City’s Fiscal Year 2026-2027 Budget, effective July 1, initiating a series of service adjustments that will be phased in over the next several months. 

The action during its meeting on Monday, June 22, was preceded by a public hearing on the budget. It followed months of community engagement on Cerritos’ fiscal climate amid challenging economic conditions. The adopted budget requires $10.6 million in General Fund reserves to cover the gap between total forecasted revenues and expenditures. 

The City’s long-term fiscal outlook has been the focus of multiple public budget meetings, community workshops, and input from an ad hoc Resident Budget Task Force on potential budget balancing strategies. Early conversations included considering expenditure reductions combined with a voter-approved Transactions and Use Tax (TUT), one of two budget scenarios in the City’s dual budget planning framework. Absent approval of the TUT scenario by the City Council, the City proceeded with a singular budget option that assumes no new revenue and requires significant expenditure and service reductions.

“I want to thank our community for their engagement during this budget process. Your feedback to the City Council was appreciated and heard. You value quality services, efficient operations, and want what is best for Cerritos,” said Cerritos Mayor Lynda Provido Johnson. “The City Council shares this perspective. We worked to incorporate some of our community’s suggestions into the budget while recognizing that others are not feasible at this time. We also acknowledge that balancing our budget by transferring millions of dollars from our General Fund reserves is not sustainable. My City Council colleagues and I remain committed to pursuing cost-effective budgeting, efficient practices, and revenue-generating strategies to improve our future fiscal position.”

Forecasts show that, absent new revenues and/or service reductions, the City’s General Fund reserves will be depleted within six years. Reserves could run out faster when considering the outcomes of a potential initiative petition to repeal recently adopted water and sewer rates. Lower-than-expected revenues and decreasing reserves are accelerated by the pending conclusion of State of California payments to the City for the former Cerritos Redevelopment Agency. During the 2028-2029 Fiscal Year, the long-standing loan owed to the City will be fullfilled, thus ending millions of dollars in annual revenue. 

Expenditure reductions in the Fiscal Year 2026-2027 Budget include a limited hiring freeze projected to save approximately $1.7 million, a reduction of nearly $700,000 in non-Arts Education-related programming at the Cerritos Center for the Performing Arts (CCPA), and the suspension or reduction of nearly $3.7 million in public infrastructure, maintenance, and landscaping. The City will be initiating scheduling changes in the coming weeks at various facilities, resulting in more than $700,000 in projected savings. Factored into that total is the continued one-day a week closure of the Cerritos Library. Additional changes include a reduction in operating hours at the Cerritos Senior Center, and one-day closures at the Cerritos Sports Complex, Cerritos Olympic Swim & Fitness Center, the Cerritos Park East, Heritage Park, and Liberty Park community centers, and the Iron-Wood Nine Golf Course. One-day closures every two weeks will also be implemented at City Hall and the Community Safety Division front counter. These savings are in addition to the $3.5 million in projects that were already deferred in the preliminary budget.

The City Council has also directed the City Manager to review the feasibility and potential impacts of outsourcing the operations and maintenance of the Cerritos Iron-Wood Nine Golf Course to a private operator. A report will be brought by City staff to the City Council at a future meeting.

The final budget restores select community events and consolidates others that were previously canceled in the preliminary budget. This includes restored funding for the Christmas Tree Lighting Ceremony, which will incorporate elements of the Santa's Sleigh Day event into a single event. The annual Spring Fling event will also continue, and feature elements of the Festival of Friendship into a single event. Meanwhile, the Tuesday Family Showcase and Thursday Concerts in the Park are suspended and will not take place this summer. Additionally, the City will not sponsor UbeFest or hold a Halloween Festival, among other suspended activities, during the new fiscal year. 

Additional service adjustments unveiled at Monday night’s meeting will improve efficient governance and restore a popular summer activity. From July through December, the City Council will hold just one regular monthly meeting on the fourth Monday of the month. This is in addition to a decrease in the frequency of Commission and Committee meetings and the suspension of Community Safety Committee meeting television broadcasts. The City Council also approved restoration of the previously canceled National Night Out and Concert in the Park event, which will take place on August 6.
 
Despite millions in service reductions, new budget considerations by the City Council in recent weeks contributed to a larger final budget deficit than in the preliminary budget. This includes the postponement of the City’s next water and sewer rate increase from January 2027 to July 2027 to align the change with the start of the 2027-2028 Fiscal Year. The delayed rate increase for residents and businesses is equal to an approximately $2.3 million reduction in revenue to the City during that period. The budget also includes $2.2 million in potential special elections costs and revenue reductions related to councilmember recall and water and sewer rate initiative repeal efforts.

For More Information

For additional information on the adopted Fiscal Year 2026-2027 Budget, view the agenda report and presentation found at cerritos.gov/agendas. For the latest on the City’s budget process, including an activity timeline and updated frequently asked questions, visit cerritos.gov/future.