Cerritos Holds First Budget Study Session of FY 2026-27

Details

The Cerritos City Council held its first budget study session for Fiscal Year 2026-27 and received a preliminary budget forecast from staff at the December 11 meeting. The City conducts a structured series of meetings to assess current trends and inform the development of the City’s annual budget.

The staff report to the City Council included an overview on projected revenues and expenditures and a 10-year financial forecast. The report also provided updates on the City’s Strategic Plan goals.

“As we go through the budget process, our top priority is to ensure the City is on a path of fiscal responsibility that funds essential services and maintains the high quality of life enjoyed by our residents, businesses, and visitors,” said Mayor Frank Aurelio Yokoyama. “Amid recent budget constraints, the City has been fiscally judicious and is examining revenues as part of its ongoing financial planning efforts.”

The early forecast for the Fiscal Year 2026-27 Budget points to a fiscal environment of slow revenue growth and rising expenditure pressures. Staff shared that sales tax has shown signs of softening and early indicators suggest that near-term sales tax growth will remain low. While the City's financial position remains guarded, long-term structural challenges continue to emerge, underscoring the importance of strategic prioritization throughout the upcoming budget cycle. Furthermore, forecasted expenses are expected to continue to outpace projected revenues over the next 10 years. This factors in prolonged economic uncertainty and the pending conclusion of Successor Agency loan payments, which will result in a noticeable reduction in revenues upon their conclusion.

In recent months, the City Council has taken steps toward strengthening fiscal sustainability in alignment with the City’s Strategic Plan. This included the adoption of a comprehensive Financial Reserve Policy that sets clear minimums and target reserve levels, with excess reserves supporting capital needs. The City Council has also adopted a formal Capital Improvement Program (CIP) prioritization framework, which uses analytically driven processes to evaluate and fund the City’s major infrastructure projects. Additionally, the City Council has explored cost recovery options with its water and sewer expenses, which for years have been subsidized by the City’s General Fund. A Proposition 218 process is currently underway to consider implementing new rates. Additionally, the City has initiated a comprehensive citywide fee study to evaluate the full cost of services across all departments.

“We are committed to ensuring that our community has a clear understanding of the City’s financial position,” said City Manager Robert A. Lopez. “City staff looks forward to engaging with the City Council and our residents as we progress in our budget review and ultimate adoption for Fiscal Year 2026-27.”

For More Information

To help inform Cerritos residents regarding key aspects of the City’s budget, a Budget at a Glance document has been mailed to each household in early December. More information, including a list of frequently asked questions, can be found at cerritos.gov/future.