Cerritos Budget Increased, Keeps City Services Intact

Despite economic uncertainty, the city’s upcoming $88.8 million operating budget for fiscal year 2011-2012 will not eliminate community programs and impose layoffs on city employees, Cerritos City Manager Art Gallucci said as he presented his report to the City Council  last Tuesday.

“The City of Cerritos is in good financial shape given the fact that what’s going on in the country and the State of California specifically that it’s extremely difficult to determine and figure out what’s occurring and it changes literally on a daily basis,” he said.

Gallucci said that the city is “doing fairly well” in its finances and its reserves. The city will maintain a balanced budget for the upcoming fiscal year by using a $1,909,100 Redevelopment Agency repayment to the city and tapping into the city’s reserves.

Some departments, such as the Theater Department, which operates the Cerritos Center for the Performing Arts, will have their budgets cut slightly from last year due to reductions in marketing expenses and professional services for special events.

However, Gallucci said the unpredictability of the economic climate means a “very conservative” budget for the year, even though the proposed operating budget is up 3.26 percent from last year due to insurance, workers compensation and fringe benefit cost increases.

Most of the budget presentation at the special City Council meeting on June 7 addressed some of the topics discussed at last month’s . Some of the changes found in the budget include:

• An uptick in the city’s sales tax revenue for the upcoming fiscal year coming from anchor businesses such as the Los Cerritos Center and the Cerritos Auto Square.
• A $56,320 increase in Police and Safety services in the city due to a more costly Los Angeles County Sheriff’s Department contract.
• The Human Resources Division of the Administrative Services Department will see a $680,540 increase in expenditures due to general liability deposit expenses associated with the California Joint Powers Insurance Authority.
• Equipment purchases by Cerritos will still remain at a minimum, limited to items that are urgently needed for city functions.

Council reaction

Overall, the council praised Gallucci and city staff for presenting a budget that has shied away from cutting services.

“I’m glad that we can continue to provide high-quality services to our residents without cutting any programs,” Council Member Joseph Cho said.

Council Member Bruce Barrows questioned the calculations for the budget, stating that the budget analysts have overestimated revenues for a few years now.

City spokesperson Annie Hylton told Patch that Cerritos hired The HdL Companies to analyze their budget for the fiscal year, and that the city and HdL perform a more detailed analysis quarterly and adjusts revenue projections accordingly.

"The revenue projections are based on a variety of factors, including an analysis of current sales by industry and property sales activity," she said. "On a daily basis, city staff studies economic indicators such as the housing market and unemployment rates to monitor potential impacts on sales tax revenue, which is one of the city's largest sources of revenue."

Council Member Barrows also expressed concerns about the city’s public safety budget and asked Gallucci how it can reduce costs in the public safety budget and cited the rising costs of its contract with the Sheriff’s Department.

“Our costs [to provide public safety] did skyrocket a couple of years ago and remain high,” he said. “Other agencies are extracting concessions during these very difficult times and there are cities that are in a much worse position than we are.”

Gallucci said that since the city is in no position to set the spiraling rates for public safety in Cerritos, it has two primary choices—cut services and increase income. The Director of Administrative Services for the City, Denise Manoogian, added that the Council’s recent action to implement its contract with the union will result in long-term savings for Cerritos.

Barrows added that he predicted two to three more years of tight budgets to come because of the economic uncertainty and asked City staff if they are prudent to weather the problems facing Cerritos, including rising pension costs.

“We want to be sure that we stay within [our means] so we don’t enter into a position where we start really getting into our reserves,” he said. “My concern is if pensions rise a couple of million of dollars a year, it’s going to be difficult to maintain our budgets in the future.”

Before the discussion ended, Mayor Carol Chen sought to add an additional $50,000 to the proposed budget for maintaining the city’s public art works. The Council granted consent to the plan, with Councilmembers Joseph Cho and Mark Pulido dissenting.

Interim City Clerk Vida Barone said the City Council will make its final decision on the budget at the second meeting this month, scheduled for June 23. To read the proposed budget, visit this link.