The City of Cerritos is holding budget hearings this week. There may possibly be an 18 percent cut to the Performing Arts Center.
The City of Cerritos is holding budget hearings this week. There may possibly be an 18 percent cut to the Performing Arts Center. (Scott Varley / Staff Photographer)

CERRITOS — The city's fortunes appear to be on the upswing as financial projections point to rising sales tax revenues, but the City Council is nonetheless poised to approve a relatively lean budget.

The city's proposed operating budget, set to be voted on by the City Council on Thursday, would trim overall expenses, particularly within the department managing the Cerritos Center for the Performing Arts.

The budget for fiscal year beginning July 1 calls for nearly $83.7 million in expenses, a figure that's $3.5 million below the current year's spending levels. Adding capital expenses to the total, Cerritos' planned spending would total nearly $85 million over the new fiscal year.

Although city officials are counting on an improving business climate leading to greater tax revenues from Cerritos Auto Center and Cerritos Towne Center, Mayor Bruce Barrows said he remains concerned about what last year's dissolution of redevelopment agencies means for the city's financial future.

Not to mention whatever state politicians come up with next, he said.

"I think there are more bad things to come from Sacramento," Barrows said in a telephone interview, before adding the 2011 law that ended redevelopment came as a surprise to himself and others in local government.

"No one ever anticipated the state doing what they did," Barrows said.

The Legislature and Gov. Jerry Brown dissolved redevelopment agencies to divert the tax revenues claimed by those agencies to education and other operations. Many local government leaders like Barrows viewed the agencies, created under a law intended to reverse urban blight, as a key tool for promoting economic growth. Critics, however, viewed the agencies as just a means for politicians to offer corporate welfare to favored developers.

As it stands, redevelopment is a thing of the past, and Cerritos and other cities are in the midst of a complicated process to unwind the agencies' operations and determine which dollars go to Sacramento and which must be spent on the agencies' prior obligations.

In Cerritos' case, officials had counted on their agency repaying a nearly $7.5 million loan that had been issued to the agency from the city's treasury, but state officials have denied that repayment.

In terms of other sales-tax receipts, however, Cerritos' prospects are brighter. Cerritos officials project sales-tax revenues of $27.3 million over the coming fiscal year, and sales-tax receipts have been on the upswing since hitting a low point in 2009-10. Sales taxes account for about one-third of Cerritos' general fund revenues.

Yet even with more sales-tax money expected, Cerritos officials are not ready to ramp up spending to levels before cutbacks made as a result of the past recession. Spending levels in 2008-09 exceeded proposed expenditures for the coming fiscal year by more than $10 million.

"Even though we are looking at some glimmer of hope on the economic side, it's still not translating to the level we need to have in order to sustain our services," Councilwoman Carol Chen said.

Among city departments paid for with the general fund, the Theater Department's budget is set to be cut by nearly 19 percent to about $6.1 million, which will result in fewer events.

The department has run deficits over the past several years and is set to have a $2.5-million shortfall over the new fiscal year. Barrows said that if one considers the Cerritos Center for the Performing Arts as a magnet for the surrounding commercial area, it brings in money for the city.

"We're still making a profit from the Towne Center," he said.