At a time when many other cities have continued to struggle with the economic downturn, Cerritos has weathered the storm with steady sales-tax revenue, businesses opening and a healthy revenue stream.
That was the message delivered by and at the .
Hundreds of people gathered inside the Sierra Room at the , listening and taking note of the city’s successes and struggles over the past year, which were highlighted in a slideshow presentation.
Before Mayor Chen delved into a look back at the city’s achievements, the audience watched an innovative video titled “Soarin' Over Cerritos.” (You can watch the city's video in our image carousel.)
The short film highlighted neighborhood staples like the , the CCPA, , the Civic Center, and many parks and residential neighborhoods. But it wasn’t just a simple montage of images; the video showcased a bird’s eye view of photographs taken by a state-of-the-art, 6-foot long, unmanned helicopter equipped with a camera, drawing exclamations of surprise and delight from the audience. (See video in our image carousel.)
Cerritos Business Developments
After the video, the mayor ticked off a list of the city’s many business developments and successes over the past year, which included:
- Receiving the 2010 “Most Business Friendly City” Eddy Award for cities with less than 60,000 residents from the Los Angeles Economic Development Commission.
- The opening in the Cerritos Auto Square in July 2010.
- The Cerritos Towne Center upgrading its entry portal and paseo and other exterior improvements.
- Pacific Sales opening in the Cerritos Towne Center in mid-May.
- Anna’s Linens signing a lease to take over the location of the former Old Navy store in the Cerritos Towne Center.
- The Apple Store successfully opening at the Los Cerritos Center in June 2010 and continuing to thrive as one of its largest and most popular locations.
Mayor Chen then spoke of the city’s sales tax rankings in comparison to 538 other cities in California. As home to roughly 50,000 residents and several small and large business organizations, Chen pointed out that Cerritos continues to generate most of its revenue from sales taxes, which help support city programs and operations.
In 2010, the city received nearly $20 million in sales tax revenue, and in comparison to other California cities, Cerritos ranks number 54 in total sales tax collected.
She also said that Cerritos received $362 per capita in sales tax revenue in 2010, placing the city in the 22nd spot on the list of sales tax per capita in California. Cities behind Cerritos include Costa Mesa (26) – home of the popular South Coast Plaza shopping mall – Santa Monica (32), Newport Beach (39), and Irvine (96).
Cerritos’ Improvements and Changes
After listing Cerritos’ many business accomplishments, the mayor reviewed past, current and future project developments and successes within the city’s infrastructure, including:
- ; The DOE has provided the Cerritos with another grant worth $380,600 to fund installation of a second photovoltaic system in the city’s Corporate Yard
- The resurfacing and repaving of city streets funded by propositions 1B and 42 in two areas: 1) South Street between Studebaker and the San Gabriel River – a $643,102 project; and, 2) Norwalk Boulevard between Del Amo Boulevard and the MTA right-of-way – a $643,102 project.
- The enhancement of city communications with residents and businesses through the new E-News and smartphone-app services offered through the city’s Website.
- The city’s receipt of a $16,338 grant from the Department of Justice to fund the purchase of new bicycles for the sheriff’s new bicycle patrol.
- The dedication of the “Angelic Duet” sculpture near the building – a sculpture loaned to the city from the State of California.
CITY FINANCES AND THE FORECAST
While Mayor Chen spent time looking back at the city’s overall accomplishments and achievements, City Manager Art Gallucci spent most of his time explaining what the numbers meant.
Before launching into an overview of Cerritos’ finances, Gallucci reviewed the city’s demographics.
According to 2010 Census data prepared by the Southern California Associations of Government, Cerritos has 49,041 residents, indicating that the city’s population has decreased since the last census – a statistic that Gallucci says the city intends to contest given the fact that Cerritos has continued to build and expand in homes, schools and businesses over the past decade.
Other interesting facts pointed out by the Census data included:
- The median age in the city is 42.3.
- Non-Hispanic Asians comprise 61.5% of the population.
- 84.2% of all residents own their homes.
- $95,797 is the median household income.
- $530,000 is the median existing home sales price.
- There are 33,081 people employed in the city.
Cerritos’ Retail Sales
Despite the shaky economic landscape, Gallucci says the city’s retail sales are expected to improve as follows:
- Overall retail sales are expected to increase by 9.1% with sales estimated at $174,970,000 in 2011-12 Fiscal Year.
- An improvement in retails sales is expected to result in a $1,749,700 increase in sales tax revenue in 2011-12 Fiscal Year.
The city manager said that a major portion of an expected uptick in future sales revenue will come from anchor businesses like the Cerritos Auto Square and Los Cerritos Center.
The Auto Square, currently housing 27 franchises and 14 dealerships, is a major sales tax source that continues to help boost the city’s revenue.
Despite decreased sales in recent years, Gallucci says that First Quarter automotive-sales reports indicate that slowing sales over the past six years are finally appear to be trending upward with several factors:
- New vehicle registrations have increased by 20.2% nationwide, 19.7% statewide, and 30.1% in L.A. and Orange counties (excluding fleets); and,
- In the past four and half months, the Auto Square has sold 14,677 vehicles.
During its peak in 2005, the Auto Square averaged about 900 car sales a week, garnering up to $1.2 billion in sales, Gallucci said. He added that the auto mall was also a good source of jobs, employing more than 2,100 individuals.
The city’s other major sales-tax source stems from Los Cerritos Center – a 1.367 million-square-foot shopping center, which generated roughly $581 in sales per square foot in 2010. When a mall crosses over the $500 mark, it means “you’re in a mega mall,” Gallucci said, adding that sales from the center stayed fairly even despite the economic downturn and recession.
The mall generated $296 million in sales in 2010 – a $10 million increase from the year before. The center, which had 8.5 million people pass through its doors last year, also employs 4,450 people.
Cerritos Funds, Balances and Budget
And while Cerritos has managed to weather the storm, both Mayor Chen and Gallucci recognize that the city did not walk away unscathed by the economic downturn.
Since 2005, city and Redevelopment Agency funds -- including fixed assets -- have continued to decline by well over $30 million, and are projected to drop even further in the coming fiscal year. Although for the first time since 2008, interest on all city funds should see a hike this year.
And like most cities, hard economic times have forced the city to slash $9 million from its budget since 2008, in order to maneuver through the recession. These cuts were made by leaving vacant more than 30 city positions – a savings of about $2.5 million per year.
While Cerritos’ 2011-12 operating expenditures will exceed its revenue, the city will use its reserves to make up for the shortfall, Gallucci said. City sales-tax revenue is also expected to improve in the coming year, with a projected $2.09 billion in retail sales.
The city manager said that rent revenue from businesses like the Cerritos Towne Center, Jaguar/Land Rover, and Auto Storage facilities should also continue to bring in millions in city earnings.
The city is also continuing to endure hits from the State, which recently appropriated $2.4 million of Cerritos’ property- tax revenue, in addition to $11.8 million taken last year. Although Gallucci joked that the city did receive an IOU from the State that it plans to collect on one day.
During his presentation, Gallucci briefly touched on current and future city projects, which include:
- Plans to develop 247 affordable apartments for seniors -- ages 55 and older -- at the present site of the office.
- A continuation of the services and programs offered to the community through city facilities such as the , the Parks & Recreation Programs, the , the , the CCPA, and the .
- The Cerritos Library maintaining its reputation as one of the best libraries in both the state and country.
- An ongoing partnership with the – a 24-hour staffed facility that has 60 sworn sheriff’s deputies, 19 sheriff’s support staff and 40 Community Safety employees that serve the city and have an annual safety budget of $14,765,000.
- $283,200 granted by the city this year to community groups, including recipients of the largest amounts: Cerritos Regional Chamber of Commerce; Rio Hondo Temporary Home and the Community Family Guidance Center.
- The City’s Adaptive Recreation Program, which offered 60 recreation classes annually, serving more than 850 participants.
- CCPA ticket sales totaling $4,634,318 during the 2010-11 season with 85,642 seats sold, and more than 100 performances planned for the upcoming 2011-2012 season.
Opportunities for the Year to Come
The city manager wrapped up his presentation with a look at future city plans and projects in the coming year, which included:
- Construction of Buffalo Wild Wings restaurant at Best Plaza along 183rd Street east of Gridley Road and its opening, expected this fall.
- Sales of industrial and commercial properties totaling roughly $76.7 million from May 2010-May 2011.
- Addition of the Stacked restaurant chain at Los Cerritos Center.
Cerritos has Survived the Storm but Must Continue to Develop and Forge Ahead
The message delivered by both Mayor Chen and Gallucci was one of optimism that the City, while still affected by the recession, has managed to survive and thrive, and continues to be an ideal place to work and live.
But both speakers put emphasis on the importance of residents and businesses continuing to “be ambassadors for the city” by finding ways to draw business to the area, which in turn would create more revenue.
“Spread the word on why you should do business in Cerritos,” Chen said, adding that research by economic experts indicates that three major industries expected to boom in coming years are technology, entertainment and tourism.
“We should all be paying attention to these (types of) businesses,” the mayor said.
Gallucci Receives City's First "Vision Award"
Before the conclusion of the State of the City luncheon, Mayor Chen presented Gallucci with the city's first-ever "Vision Award" -- an award that recognizes an individual for his/her outstanding leadership and dedication in helping pave the way for the city's future.
"We appreciate your innovative approach," Chen said to Gallucci, who received a crystal glass plaque and a standing ovation from the crowd. The mayor lauded Gallucci's service to the city, and said the community would continue to look to him for guidance in bringing the "city to new heights in future years."
Gallucci was hired as the city's Recreation Superintendent in 1971, and headed the Human Affairs Department from 1973 to 1981, when he was named Assistant City Manager. He began his tenure as the City Manager in 1991.