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P.O. BOX 3130 • CERRITOS, CALIFORNIA 90703-3130 1111 e
TO:
FROM:
INITIATED BY:
DATE:
SUBJECT:
PHONE: (562) 860-0311 • CERRITOS.GOV
AGENDA REPORT
Honorable Mayor and Members of the City Council
Robert A. Lopez, City Manager�
Kristin Aguila, Assistant City Manager�
Drew Schneider, Director of Administrative ServiceS...L/¥" 1�_ David Siris, Finance and Budget Manager/ _� Treasurer �/'
Natalie Equihua, Accounting Administrator,r
September 28, 2026
2008
AN INFORMATIONAL BUDGET AND AUDIT COMPLIANCE REPORT
AND RATIFICATION OF BUDGET AMENDMENTS FROM THE FOURTH
QUARTER OF FISCAL YEAR 2025-26
The purpose of this report is to provide an overview and update of the City's current fiscal status using the recent financial data from the fourth quarter of Fiscal Year (FY) 2025-26, which ended on June 30, 2026.
BACKGROUND
The City Council adopted the Combined Financial Program for FY 2025-26 on June 26, 2025.
While the City remains on guarded financial footing, the broader economic climate continues to present challenges. Revenue growth has remained largely stagnant, with sales tax declining over multiple years due to reduced consumer spending and ongoing shifts in purchasing behavior. At the same time, the cost of providing municipal services has continued to rise, driven by inflationary pressures, higher labor costs, and increases in contract and materials pricing. These conditions have required the City to take a measured approach to balancing service delivery with long-term fiscal sustainability. Through continued oversight and prudent resource management, the City remains committed to maintaining essential services and supporting the community despite these economic headwinds and rising costs.
The Budget appropriated $154.4 million, including $131.4 million in operating expenditures and $23.0 million for the Capital Improvement Program (CIP). Of the operating total, $127.7 million reflected ongoing expenditures, and $3.7 million represented strategic onetime investments funded with non-recurring resources. Total revenues were forecast at $138.9 million, including $127.3 million in recurring revenues and $11.6 million in one-time sources.
LYNDA P. JOl1N50N
MAYOR
MARK E. PULIDO
MAYOR PRO TEM
JENNIFER HONG
COUNCILMEMBER
SOPHIA M. TSE
COUNCILMEMBER
FRANK AURELIO YOKOYAMA
COUNCILMEMBER
11 2
FY 2025-26 Budget and Audit Compliance Report
September 28, 2026
FINDINGS
In preparation for this report, fourth quarter financial data was analyzed to prepare the FY 2025-26 year-to-date and year-over-year summaries of actual and encumbered revenues, operating expenditures, and CIP progress. As this report focuses on City operations and the CIP, activity for the Successor Agency to the Cerritos Redevelopment Agency is not included. The revenues, operating expenditures, and CIP totals presented in this report are preliminary and subject to change after a full review by staff and the City's auditors as part of the Annual Comprehensive Financial Report (ACFR) preparation process.
The FY 2025-26 Budget Adjustment Log (BAL) condenses all fourth quarter budget amendments executed fiscal year-to-date in both operational and CIP project accounts {see Exhibit 1 - FY 2025-26 Budget Adjustment Log). Budget adjustments through the fourth quarter include carryovers and encumbrances for obligations and appropriations from the previous fiscal year, as well as adjustments approved as part of any separate City Council or City Manager direction.
Table 1
Cumulative Revenues - Fourth Quarter FY 2025-26
Revenues
Recurring Revenues
One-Time Revenues
Total Revenues
Table 2
BUDGET
Adopted
$127.3M
11.6M
$138.9M
Amended
$127.0M
14.SM
$141.SM
Cumulative Expenditures - Fourth Quarter FY 2025-26
BUDGET
Expenditures Adopted Amended
Operating Expenditures $131.4M $134.3.M
CIP Expenditures 23.0M 34.0M
Total Expenditures $154.4M $168.3M
Source: City of Cerritos OpenGov Reports
ACTUAL
Actual &
Encumbered
$122.2M
13.SM
$135.7M
% of Amended
Budget
96%
93%
960/o
ACTUAL
Actual & % of Amended
Encumbered Budget
$124.0M 92%
22.0M 65%
$146.0M 870/o
As summarized in Table 1 and Table 2, the amended FY 2025-26 Budget reflects operating expenditures of $134.3 million, an increase of $2.9 million over the adopted Budget, and CIP expenditures of $34.0 million, an increase of $11.0 million. These adjustments primarily reflect adjustments made in response to C-4 Water Well emergency repairs, associated costs of purchasing imported water, CIP budget carry-over from FY 2024-2025, and adjustments made during the midyear budget review process. 2 3
FY 2025-26 Budget and Audit Compliance Report
September 28, 2026
At the close of the fourth quarter, actual revenues totaled $135.7 million, representing 96% of the amended Budget. This includes $122.2 million in recurring revenues and $13.5 million in one-time revenues, which typically follow different timelines and project-specific triggers. On the expenditure side, actual operating expenditures were $124.0 million, representing 92% of the amended Budget amount, while CIP expenditures totaled $22.0 million, or 65% of the amended Budget amount.
Revenue
As referenced in the City's adopted Strategic Financial Plan and Budget Preparation Policy, a balanced budget exists when recurring revenues such as taxes, ground rent, fees, and interest income wholly fund ongoing City operating costs comprised of personnel, maintenance, services, and programs. Conversely, the use of resources such as reserves, grants, restricted funds, and reimbursements are typically directed towards one-time expenses such as those associated with CIP projects. Given the importance of maintaining a balanced budget, revenues are closely monitored throughout the year to help ensure accurate forecasting such that resources remain efficiently allocated and City services and capital projects are funded appropriately.
The adopted Budget originally forecasted $138.9 million in combined revenues across all City funds, including approximately $127 .3 million in recurring revenues to support operating expenditures. The total budgeted combined revenues decreased by $0.6 million from the prior quarter. Various recurring revenue adjustments were included in the MidYear (MY) Budget amendment, along with amendments made in the fourth quarter, which decreased budgeted recurring revenue projections by $0.3 million for the year-end estimate across the various governmental and proprietary funds. Overall, recuring revenue projections remain largely consistent with the adopted Budget. Total budgeted one-time revenues remained the same from the prior quarter but increased by $2.9 million from the adopted budget due primarily to increased projections for Measure A and Measure W funds.
Figure 1 on the following page displays total actual revenues through the fourth quarter at $135.7 million, representing 96% of the amended Budget ($141.5 million). [This space intentionally left blank.]
3 4
FY 2025-26 Budget and Audit Compliance Report
September 28, 2026
Figure 1
Cumulative Revenues - Q4 Trends and FY 2025-26 Budget
Vl
C:
,g
:E
$150 $120
$90
$60 $30
$-
$132.2 $127.9
Jun 21-22 Jun 22-23
Source: City of Cerritos OpenGov Reports
Sales Tax
$133.8
Jun 23-24
$130.6
Jun 24-25
$135.7
Jun 25-26
Actual
$141.5
FY 2026
Amended
Budget
The City's primary source of revenue is sales tax, which typically accounts for approximately one-third of annual revenues. For FY 2025-26, the adopted forecast for sales tax revenue was $43.8 million, based on analysis provided by the City's sales tax consultant, HdL Companies (HdL). This initial projection anticipated modest growth, signaling a transition toward economic stagnation following recent fluctuations.
The Sales Tax Update for the first quarter of calendar year 2026 reflects a 0.2% year-overyear decline in local sales tax receipts, indicating continued softening in the economy (see Exhibit 2, City of Cerritos Sales Tax Update 1Q2026). The autos/transportation and building/construction sectors experience modest declines compared to the prior year's quarter due to elevated pricing and higher interest rates.
However, some segments showed modest improvement. General consumer goods weakened nationally, but the City defied the trend and experienced a modest increase compared to the prior year's first quarter. Sales totals from restaurant-hotels increased slightly due to higher foods costs and the business-industry sector reported modest gains in multiple sectors when compared to the year ago period.
[This space intentionally left blank.]
4 5
FY 2025-26 Budget and Audit Compliance Report
September 28, 2026
Figure 2
Sales Tax History, Budgets, and Forecast
$47
$42
FY 2022 FY 2023 FY 2024 FY 2025
....,_Actual ..._Budget ...,.__Forecast
Source: Hdl Companies
FY 2026 FY .2027
Figure 2 presents the City's sales tax revenue history alongside budget estimates and HdL's latest projections, which continue to indicate revenue stagnation. For FY 2025-26, HdL has revised its projection to $43.4 million for the City's General Fund, a $0.4 million (0.8%) decrease from the adopted budget of $43.8 million.
HdL's updated forecast for FY 2026-27 estimates sales tax revenues at $44.5 million, a
2.5% increase over the revised FY 2025-26 projection. Sales tax trends will continue to be monitored, with an updated forecast anticipated in October 2026.
Operations Expenditures
The City's operating costs, which include personnel, operations, and maintenance, and capital equipment (excluding CIP), were adopted at $131.4 million in the overall Budget. As detailed in the BAL, operational expenditure amendments through the fourth quarter increased the Budget by approximately $2. 9 million, bringing the revised total to $134.3 million.
New allocations during the fourth quarter totaled just over $0.5 million, primarily for repairs to the damaged reclaimed water transmission line at Gridley Park, increased recycled water purchases from the Los Angeles County Sanitation District, and increased expenditures related to building and safety services that were offset with increased permit and fee revenues. Transfer amendments totaled $838,712 but did not impact the overall operating budget.
Figure 3 on the following page illustrates that actual operational expenditures through the fourth quarter totaled $124.0 million, representing 92% of the amended Budget year-todate ($134.3 million). Compared to the same period last fiscal year, actual and encumbered operational expenditures increased by $7.1 million at the twelve-month mark. 5 6
FY 2025-26 Budget and Audit Compliance Report
September 28, 2026
Figure 3
Cumulative Operating Expenditures - Q4 Trends and FY 2025-26 Budget $140
$120 $111.4 $116.9
$102.4
$100 $89.8
"' C: $80 0
$60 $40 $20
SJun 21-22 Jun 22 23 Jun 23-24 Jun 24-25
Source: City of Cerritos OpenGov Reports
Capital Improvement Program
$134.3
$124.0
.
.
.
Jun 25-26 FY 2026
Actual Amended Budget
The adopted CIP Budget initially allocated $23.0 million from various funding sources for 34 projects. Through the fourth quarter, amendments increased the Budget by $11.0 million, bringing the total to $34.0 million, as reflected in the BAL. Notable fourth-quarter adjustments included CIP budget carry-over from FY 2024-2025 for Cerritos Center for Performing Arts and Information Technology projects for $2.1 million.
Although recognized as new allocations in the Budget for the current year, any adjustment identified as a project carryover from FY 2024-25 utilizes approved and unspent funding from the previous year that remains in fund balance. This is a typical and anticipated aspect of the CIP, as many projects conclude in a year following their initial approval and start date.
Figure 4
Cumulative CIP Expenditures - Q4 Trends and FY 2025-26 Budget $40 $35 $30 $25.2
"' $25 C:
$20 $17.0 $15 $14.0 I $9.8 I $10 I $5 $-
Jun 21-22 Jun 22-23 Jun 23-24 Jun 24-25
Source: City of Cerritos OpenGov Reports
$22.0
Jun 25-26
Actual
$34.0
FY 2026
Amended
Budget
6 7
FY 2025-26 Budget and Audit Compliance Report
June 8, 2026
Actual CIP expenditures including encumbrances for scheduled work, were $22.0 million, representing 65% of the amended Budget year-to-date as shown in Figure 4 ($34.0 million). When compared with the fourth quarter of last fiscal year, actual and encumbered CIP expenditures were down $3.3 million year-over-year. The decrease is primarily attributable to the FY 2025-26 CIP budget ($34 million) being lower than the FY 2024-25 CIP budget ($35 million), resulting in lower overall project expenditures and encumbrances.
During the fourth quarter of FY 2025-26, the Department of Public Works worked diligently to implement the City Council-approved CIP. As part of these efforts, the following projects have been completed:
• Historical Cow "Milking Time" Sculpture - $251,887.50 • CDBG Funded Curb Ramp/Sidewalk Repairs Phase III - $186,808.50 • Annual Valve Replacement Program - $139,396.39 • Citywide Playground Resurfacing Program - $49,260.00 • Annual Residential Parkway Tree and Sidewalk Inspection and Repair Program - $734,357 .32
• Annual Sidewalk Curb and Gutter Rehabilitation - $1,495,577.61 • Annual Arterial Landscaping at Various Locations - $449,917.33 • Biennial Rehabilitation/Replacement of Sewer Lift Stations - $13,388.88 Progress continued during the fourth quarter on the following CIP projects • Sewer Master Plan Development • Reclaimed Water Master Plan Development • Potable Water Master Plan Development
• Citywide Catch Basin Retrofit
• Citywide Facility Condition Assessment
• Heritage Park Play Island Renovation
The CIP projects that commenced construction in the fourth quarter of FY 2025-2026 include:
• Picnic Shelter Renovations at Various Parks
• Metro Hot Spot Intersection Improvements
• Annual Traffic Safety Corridor Improvements
Several projects are currently in the design and/or bid package phase:
• C-4 Well Site Re-Design and Water Treatment Design
• Civic Center HVAC Replacements
• Del Amo Boulevard Bridge Replacement and Appurtenant Improvements • Southeast Gateway Line (SGL) Project • Residential Street Rehabilitation Project • Regional Stormwater Capture Facility
• Gateway Cities Fiber Optic Project • CCPA Roof Replacement 7 8
FY 2025-26 Budget and Audit Compliance Report
September 28, 2026
AUDIT PROGRESS
The Finance and Budget Division coordinated with the City's independent auditor to complete the interim audit, including the submission of preliminary financial records and internal control documentation. Preparations are underway for the annual audit and preparation of the ACFR, with final audit fieldwork scheduled for late-September.
Budget amendments will be prepared for any FY 2025-26 encumbrances that remain uncompleted as of June 30, allowing for the carryover of unexpended funds into the new fiscal year. These amendments will be reported in upcoming FY 2026-27 quarterly budget reports.
RECOMMENDATION
It is respectfully recommended that the City Council:
1. Receive and file this report and its exhibits; and
2. Ratify the executed Budget Amendments from the fourth quarter of Fiscal Year 2025- 26 as detailed in the attached Budget Adjustment Log.
Exhibit List:
1. FY 2025-26 Budget Adjustment Log
2. City of Cerritos Sales Tax Update lQ 2026 (January - March) 8 9
FY 202S-26 Budget Adjustment Log
GS PW E CIP cp2S208 FY 2025 carryover
- CCPA AC conditioning improvements New 55,000 04/01/2604 City Manager 65 PW E CIP cp12068 FY 2025 carryover
- CCPA carpet replacement New 200,000 04/01/2604 City Manager Tripepi Smith contract extension for public engagement on the 66AS E Ops 521-61430 City's fiscal planning New 75,000 04/08/2604 City Council Rectangular Rapid Flashing Beacons (RRFB)/sidewalk striping at 67 CD E Ops 221-63413 Del Amo Blvd and Claretta Ave
Repair damaged main reclaimed water transmission line at New 20,000
04/29/26 Q4 City Council
68 PW E Ops 366-61430 Gridley Park New 108,851 04/29/26 Q4 City Council Increase costs for recycled water purchases from LA County 69 PW E Ops 366-63720 Sanitation District, related ope
rations and maintenance expenses New 35,000 04/29/26 Q4 City Council Increase costs for recycled water purchases from LA County 69 PW E Ops 366-65212 Sanitation District, related operations and maintenance expenses New 152,000 04/29/2604 City Council 70 PW E Ops 342-65133 Traffic
engineering costs for Hartzog & Crabill Inc Transfer (20,000) 04/30/2604 City Manager 70 PW E Ops 321-61430 Traffic engineering costs for Hartzog & Crabill Inc Transfer 49,000 04/30/2604 City Ma nager
70 PW E Ops 342-65153 Traffic engineering costs for Hartzog & Crabill Inc Transfer il 5,000) 04/30/2604 City Ma
nager
70 PW E Ops 342-65174 Traffic engineerlne costs for Hartzog & Crabill Inc Transfer (4,000) 04/30/2604 City Manager 70 PW E Ops 341
-65134 Traffic engineering costs for Hartzog & Crabill Inc Transfer (10,000) 04/30/26 Q4 City Manager 71 PW E Ops 341-65050 TI< Elevator maintena nee costs Transfer 20,000 05/19/26 Q4 City Manager 71 PW E Ops 342-65175 TK Elevator maintenance costs Transfer (20 ,000) 05/19/2604 City
Manager
72 PW E CIP CP25704 To carryover prior year OP unspent funds New 1,268,750 04/30/26 Q4 City Manager
72 PW E CIP CP25703 To carryover prior year CIP unspent funds New 619,313 04/30/ 26 Q4 City Manager
Cover costs associated with the replacement of a broken ch lorine
73 PW E Ops 363-690S0 analyzer Transfer (10,000) 05/06/2604 City Manager Cover costs associated with the replacement of a broken chlorine 73 PW E Ops 363-63520 analyzer Transfer 10,000
05/ 06/26 Q4
City Manager
Cover costs associated with the replacement of confined space 74 PW E Ops 364-63710 equipment as air blowers and gaz analyzers Transfer (15,000) 05/06/2604 Cit y Manager
Cover casts associated with the replacement of confined space 74 PW E Ops 364--63530 equipment as air blowers and gaz analyzers Transfer 15,000 05/06/2604 City Manager
Cover costs associated with the replacement of of broken water 75 PW E Ops 366-63710 leak locators Transfer (10,000) 05/06/26 Q4 City Manager Cover costs associated with the replacement of of broken water
75 PW E Ops 366-63520 leak locators Tra
nsfer 10,000 OS/06/26 Q4 City Manager
Cover costs associated with temporary help• Public Works 76 PW E Ops 311-51010 Director Transfer (27,000) 05/12/2604 City Manager Cover costs associated with temporary help· Pub
lic Works
76 PW E Ops 311-61580 Director Transfer
27,000
05/12/2604 City Ma
nager
Smithsonian Sponsorship "Making History, Making Change Series" 77 ccs E Ops 571-63410 event related costs New 2,500 05/11/26 04 City Manager Cover costs associated with traffic
signal maintenance services
78 PW E Ops 342-65172 provided by Bear Electrical Sol
utions Tra
nsfer 40,000 05/19/26 Q4 City Ma
nager
Cover costs associated with traffic signal maintenance
services
78 PW E Ops 342-65155 provided by Bear Electrical Solutions Transfer (40,000) 05/19/26 Q4 City Manager
79 ccs E Ops 571-61170 Cover costs of SNAP schedule expenses Transfer 2,229 05/ 19/2604 City Manager 79 ccs E Ops 571
-63020 Cover costs of SNAP schedule expenses Transfer
(2,229) 05/19/26 Q4 City Manager
80 PW E Ops 331-61430 Cover costs for Bettencourt Landfill moothly costs Transfer 21, 745 05/ 21/2604 City Manager
BO PW E
Ops 341-65090 Cover costs for Bettencourt Landfill monthly costs Transfer (21,745) 05/21/2604 City Manager m
>< :::r
O"
;:;:
.... Exhibit 1
9 10
FY 2025-26 Budget Adjustment Log
Cover costs for Norcal Turf Tech & Reels to perform routine reel Bl PW E Ops 355-61430 sharpening services
Cover costs for Norcal Turf Tech & Reels to perform routine reel Transfer
(1,813) 05/21/26 Q4 City Manag
er
81 PW E Ops 355-61340 sharpening services Transfer 1,813 05/21/26 Q4 Oty Manager Cover cost to meet contractual obligations to artists and rental 82 Theater E Ops 651-61430 clients
Cover cost to meet contractual obligations to artists and rental
Transfer 49,000 05/27/26 Q4
City Manager
82 Theater E Ops 621-63410 clients Transfer
(49,000) 05/27/26 Q4
City Manager
Cover outstanding and anticipated contractor service invoice 83 PW E Ops 344-65020 related to City facilities maintenance Cover outstanding and anticipated contractor service invoice Transfer 45,000 05/27/26 Q4 City Manager
83 PW E Ops 344-61110 related to City facilities maintenance Transfer (45,000) 05/27/26 Q4
City Manager 84LA E Ops 121-51010 Cover costs for travel and meeting expenses Transfer (30,000) 06/02/26 Q4 City Manager 84 LA E Ops 111-53080 Cover costs for travel and meeting expenses Transfer 20,000 06/02/26 Q4 City Manager 84 LA E Ops 121-53080 Cover costs for travel and meeting expenses Transfer 10,000 06/02/26 Q4 City Manager 85 ccs E Ops 571-61170 Cover costs for SNAP schedule expenses Transfer 675 06/02/26 Q4 City Manager 85 ccs E Ops 571-63020 Cover costs for SNAP schedule expenses Transfer (675) 06/02/26 Q4 City Manager 86 PW E Ops 368-67131 Cover costs for Invoices pertaining to the Bou lder Canyon Project Transfer 11,000 06/04/26 Q4 City Manager 86 PW E Ops 368-67085 Cover costs for invoices pertaining to the Bou lder Canyon Project Transfer
(11,000)
Southwest Patrol payments and Automatic License Plate
06/04/26 Q4 City Manager
87 CS E Ops 451-61340 Recognition (ALPR) Transfer 309,000 06/10/26 Q4 City Council Southwest Patrol payments and Automatic License Plate
87 CS E Ops 451-61370 Recognition (ALPR)
Cover costs for Invoices pertaining to building and grounds Transfer (309,000) 06/10/26 Q4 City Council
88 PW E Ops 344-65020 maintenance Transfer 45
,000 06/22/26 Q4 City Manager
Cover costs for invoices pertaining to building and grounds 88 PW E Ops 341-65151 maintenance Transfer
(45,000) 06/22/26 Q4 City Manager
88.2 CD E Ops 211-61120 Building and Safety Services increased expenditures New 162,000 08/25/26 Q4 City Council
88.2 CD R Ops 211-41110 Building and Safety Services increased revenues New 574,000 08/25/26 Q4 City Council 89 PW E Ops 344-63520 Cover costs for invoices pertaining to special supplies Transfer 15,000 06/22/26 Q4 City Manager 89 PW E Ops 344-61110 Cover costs for invoices pertaining to special supplies Transfer (15,000) 06/22/26 Q4 City Manager
90 AS E Ops 551-61430 Cover JPIA additional costs Transfer 45 ,250 07/17/26 Q4 City Manager 90 AS E Ops 551-61260 Cover JPIA additional costs Transfer (45,250) 07/17/26 Q4 City Manager 91 LA E Ops 121-51010 Transfer to cover Federal Lobbyist Services and Temporary Help Transfer (30,000) 07/21/26 Q4 City Manager 91 LA E Ops 121-61430 Federal Lobbyist Services - City Managers Office Transfer 18,000 07/21/26 Q4 City Manager 91 lA E Ops 121-61580 Temporary Help
- City Managers Office
Transfer 12
,000 07/21/26 Q4 City Manager
92 PW E Ops 344-65010 Cover co
sts for air conditioning maintenance Transfer 22,000 07/23/26 Q4 City Manager 92 PW E Ops 344-61110 Cover costs for air conditioning maintenance Transfer (22,000) 07/23/26 Q4 City Manager 93 AS E Ops 511-61310 Cover JPIA additional costs Transfer 48,000 07/23/26 Q4 City Manager 93 AS E Ops 551-61260 Cover JPIA additional costs Transfer (48,000) 07/23/26 Q4 City Manager 94 LA E Ops 131-61310 Cover
remaining legal service across various departments Transfer 40,000 07/27/26 Q4 City Manager 94 LA E Ops 131-61315 Cover remaining legal service across various departments Transfer (40,000) 07/27/26 Q4 City Manager 10 11
CITY OF CERRITOS
SALES TAX UPDATE
1Q 2026 (JANUARY - MARCH)
CERRITOS -0.2% A 4.2% 4 4.0% 4
TOTAL S 10.311 295 102026 V COUNTY W STATE V
SALES TAX BY MAJOR BUSINESS GROUP
$4,000,000 $3,500,000
$3.000,000
$2,500,000 $2,000,000 $1,$00,000
$1,000,000
$500,000
so
Autos
and
Transportation
County
and State
Pools
I I
General
Consumer
Goods
Business
and
Industry
I
Restaurants
and
Hotels
@ CITY OF CERRITOS HIGHLIGHTS
Cerritos' receipts from January through
March were 6.3% below the first sales
period in 2025. Excluding reporting
aberrations, actual sales were down
0.2%.
The U.S. economy grew modestly in
the first quarter of 2026, with real GDP
increasing at an annualized 1.6%. Growth
was supported by exports, business
investment, consumer spending, and
government expenditures. However,
higher imports and slower consumer
demand tempered expansion. Inflation
remained elevated, with core price pressures persisting, while corporate profit growth moderated, signaling a resilient but uneven economic
environment.
The autos-transportation sector
continued to face headwinds from
elevated pricing and financing costs,
declining 5.1% over the quarter.
Building-construction continued to be
soft nationwide due to material pricing
and higher interest rates, ending down
4.6%.
www.l1dlcom paniP,.rnrn I 888.86 1.0220
While general consumer goods
weakened nationally as consumers
became more selective and prioritized
essential spending, the city defied
the trend with · 6.6% sector growth.
Business-industry, the busiest sector
for the quarter, experienced growth in
multiple sectors as businesses pushed
past economic concerns.
Restaurants experienced growth
despite elevated menu prices, as
diners continued to prioritize dining
experiences, ending up 1.7%. The fuelservice stations experienced growth due to the current conflict in the Middle East,
which helped push up gas prices.
The City's share of the countywide usetax pool increased 4.0% when compared to the same period in the prior year.
Net of aberrations, taxable sales for all of
Los Angeles County grew 4.2% over the
comparable time period; the Southern
California region was up 4.0%.
Bui
•
lding
and
Construction
Fuel
-
and
Service
Stations
Food
and
Drugs
Legend
01 2025'
e o1202s·
(§ TOP 25 PRODUCERS
Apple Autonation Toyota
Cerritos
Browning Mazda
CCC Information
Services
Cerritos Acura Cerritos Dodge Cerritos Nissan lnfiniti
Forward by Elyse
Walker
Golden Star Technology
Home Depot Honda Lease Trust
Hyundai lease Titling
Trust
Kia Of Cerritos Lexus of Cerritos
Macy's Nordstrom
Norm Reeves Ford &
Lincoln Superstore
Norm Reeves Honda
Superstore
Norm Reeves Hyundai
Superstore Cerritos
Penske Buick GMC
Penske Chevrolet of
Cerritos
Revolve Clothing.Com
Royal Plywood
Company
Target
Walmart Supercenter
HdL~ Companies
Published by I idl Companie., in '>urrnner 2026
Exhibit 2
11 12
tQ 2026 CITY OF CERRITOS SALES TAX UPDATE
© STATEWIDE RESULTS
California's local one cent sales and use the time of writing, the conflict appears to tax receipts posted moderate growth have subsided with the Strait of Hurmuz during the first quarter, reflecting resilient reopened reducing the possibility of future consumer behavior despite persistent strain.
economic headwinds. For the months
of January through March, revenues Autos-transportation posted a nominal increased
4% from the year ago quarter gain in first quarter 2026, as higher average transaction prices offset weaker unit sales. after adjusting for accounting anomalies.
These price increases reflected tariff
Strong consumer spending patterns did impacts reaching consumers after months not falter and was the main reason of of absorption by automakers, along with growth, partially enhanced by larger-than- rising material costs. As in the prior quarter, expected income tax refunds. Both online the transition to the new OMV payment retailers and brick and mortar merchants system for used vehicle dealers under AB 85 modestly reduced cash receipts, with
adjustments still pending.
Overall, the short-term outlook remains
REVENUE BY BUSINESS GROUP
Cerritos This
Quarter•
cautiously optimistic. Normal consumer
spending combined with multiple host sites
of World Cup matches and corresponding
tourism should sustain growth, albeit
varied regionally. The Middle East conflict
temporarily resulted in $6 per gallon
average peak pricing during the start of the
summer months. The forecast is coupled
with a national inflation rate that anticipates
an upward trend leaving little room for the
Federal Reserve to alter interest rates in a
favorable way for consumers, potentially
slowing down the retail economy.
experienced dynamic changes over
last year that far exceed expectations.
E-commerce remains the platform of
choice providing convenience, broad
product availability, and flexible payment
options - benefitting the business-industry sector and allocations via the countywide use tax pool. Family apparel and discount
department stores both boosted general
consumer goods the most, with a slight
bump in gas prices further pushing returns
from multiple vendors.
Cons.Goods•_r----=--""! 18%
BusJlnd.
Othen, ,-----6,.
Patronage at restaurants resulted in a
4.2% year over year jump. With demand
constrained due to increasing pricesensitivity and slower foot traffic, gains by all types of eateries signaled underlying
resolve to dine out. Temporary events
further contributed to the positive
outcome - Southern California wildfires
hindered 2025 and the Super Bowl lifting
2026.
The first quarter also included the initial
impacts of elevated tensions in the
Middle East which drove West Texas
Intermediate crude oil prices above $95
per barrel. This had an immediate impact
on local gas prices resulting in a modest
bump to receipts from gas stations and
created large amounts of uncertainty. At
15 %7
AutoslTrans. 35%
____ _,
Pools
19'
Restaurant•
8 •ADJUSTED FOR
ECONOMIC DATA
TOP NON-CONFIDENTIAL BUSINESS TYPES
Cerritos County HdL State
Business Type Q1 '26* Change Change Change
New Motor Vehicle Dealers 3,115.5 -6.9%. -2.2%. -0.6%0
Casual Dining 611.3 3.6% 4.9% 4.0%
Auto Lease 400.2 11 .1% 11 .0% 14.7%
Family Apparel 299.9 22.5% 10.2% 11.1%
Electronics/Appliance Stores 286.6 0.2% -3.3% -1.4%
Specialty Stores 187.1 5.3% -2.4% -1.9%
Heavy Industrial 159.4 -3.9% 2.0% 2.4%
Service Stations 136.1 2.0% 0.5% 1.0%
Women's Apparel 132.8 5.9% 13.2% 7.4%
Light Industrial/Printers 128.2 -16.4% 0.6% 3.9%
'Allocation aberrations have been ad usted to reflect sales act1v1t 'In thousands of dollars 12