Cerritos warns of budget gap; council reviews $128 million operating budget and water-rate study

Mayor Frank Aurelio Yokoyama told the State of the City audience that Cerritos faces fiscal pressures and is reviewing a preliminary fiscal year 2025–26 budget that projects expenditures to outpace revenues.

Nut graf: The mayor said the city is pursuing cost savings and a water-rate study to address revenue shortfalls, noting municipal sales tax structure and limited property tax revenue as contributing factors.

Details: Yokoyama said forecasts show expenditures are projected to exceed revenues and that the city operates with a fiscal structure in which it receives about 1% of the total 9.75% sales tax collected in Cerritos. He said Cerritos receives relatively low property-tax revenue compared with many cities.

He provided headline budget figures: an annual operating budget of approximately $128,000,000 and a capital improvement program totaling $23,000,000. "The budget process for the city of Cerritos involves managing and planning for an annual operating budget of approximately $128,000,000 and a capital improvement program budget of $23,000,000," he said.

Actions and tools: The mayor said the council identified more than $2,000,000 in cost savings and revenue enhancements during the budget-review period. He also announced a planned water-rate study, noting water rates have not changed for four years and are insufficient to cover delivery and infrastructure costs.

Context: Yokoyama attributed part of the challenge to broader economic headwinds, including uncertainty in Washington, D.C., and persistently high interest rates. He framed the financial steps as protecting services and preparing for future needs.

Next steps: The mayor invited residents and businesses to participate in shaping solutions as the council finalizes the capital improvement program and completes the budget review. Public comment on the State of the City item was deferred to the city council meeting on June 26.