Cerritos council adopts FY2025–26 budget after $2.2 million gap-closing, leaves $407,000 shortfall

The Cerritos City Council on June 26 adopted the city’s fiscal year 2025–26 budget, approving the annual combined financial program and related resolutions after a series of amendments that reduced a projected shortfall from $2.9 million to $407,000.

The vote followed weeks of staff briefings and public comment. Director of Administrative Services Drew Schneider told the council the budget includes negotiated pay adjustments and reserve policy targets, and summarized recent adjustments: "As part of our with the adoption of 25–26 budget, we will implement a 3.1% cost-of-living adjustment as negotiated in the current labor agreement with AFSCME." Schneider said updated sales-tax estimates from HDL had driven the larger shortfall earlier in the process and that council actions since then reduced the gap.

Why it matters: the budget sets Cerritos’ spending for city services, capital projects and staffing for the year that begins July 1. Council members and residents debated program consolidations, revenues, and whether to use reserves or further cuts to eliminate the remaining gap.

Key details and council direction

- Sales-tax revision and deficit history: staff said an HDL revision to sales-tax projections increased the initial shortfall to about $2.9 million; council-led reductions of roughly $2.2 million brought the shortfall down to $700,000, and a final amendment changed that to $407,000. Schneider summarized the financial picture and reserve policy when he told the council the city maintains reserves to cover contingencies.

- Pay and benefits: the budget implements a 3.1% cost-of-living adjustment for represented employees and the same percentage for unrepresented management, per a council resolution referenced in the presentation.

- Library hours and labor process: the budget includes a $200,000 reduction tied to reducing the Cerritos Library’s operating hours by one day per week. Councilmembers and staff confirmed any change to hours will be subject to a meet-and-confer process with employee representatives before implementation. As Councilmember Seay put it during discussion, implementation follows additional steps and briefings to the council prior to closing any changes.

- Staffing and vacancies: staff reported several vacant positions and noted the city has been actively hiring; council discussion explored whether delaying a subset of unfilled positions could close the remaining shortfall without further program cuts. City staff warned some positions are contract-sensitive and pausing them could require additional negotiations.

Quotes from the meeting

- Drew Schneider (Director of Administrative Services): "As part of our with the adoption of 25–26 budget, we will implement a 3.1% cost-of-living adjustment as negotiated in the current labor agreement with AFSCME." (presentation)

- Councilmember Jennifer Hong: "I am unable to approve the budget with the deficit as presented… I rather still have a balanced budget so that people think, okay. We're in control, and everybody can spend within the budget." (public floor)

Votes and formal actions

- The council voted unanimously (5–0) to adopt the annual combined financial program, associated pay schedules and related joint resolutions approving the fiscal year 2025–26 budget (motion by Councilmember Mark Pulido; second not specified on the record). The vote also included adoption of the city’s investment policy and the implementation steps described above.

Next steps

- Staff will pursue the council-directed meet-and-confer discussions on proposed operational adjustments (library hours and any labor-sensitive position changes) and return to the council with results before implementation.

- The council asked staff to continue pursuing recurring revenue options and to prioritize public-safety and deferred infrastructure maintenance in future planning.