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Signal Hill City Council reviews 2018-2020 budget

Department presentations on the $22.2-million balanced budget raise few questions

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Anita W. Harris | Signal Tribune
Signal Hill City Council members, department heads and members of the public convene at a special May 31 council meeting to review the City’s proposed operating-and-capital budget for fiscal years 2018–2020.

The Signal Hill City Council held a special meeting on May 31 to review the City’s proposed operating-and-capital budget for fiscal years 2018 to 2020. Each of the City’s seven departments presented on its portions of the budget, as well as past accomplishments and future goals. The three-hour process went smoothly, eliciting little concern from the attending public or the council.

“The fact that members of the community kept […] leaving is a good thing because, to me, that means that people are happy with what they’re hearing and don’t need to stay and fight about anything,” said Mayor Tina Hansen.

Scott Williams, finance director, said that the two-year, $22.2-million balanced budget should be adopted at the council meeting on June 26 in advance of the July 1 start of the new fiscal year.

“[This is] a structurally balanced budget,” he said. “A budget where ongoing available resources are covering ongoing expenditures.”

Williams said the budget also includes adequate reserve funds of $15.9 million and allows for infrastructure projects.

“Once adopted, the budget reflects council priorities [and] supports strategic goals,” he said. “At its most basic level, the budget establishes funding levels for City services, which are primarily safety and infrastructure.”

Williams also said the budget is based on conservative projections for both revenues and expenses.

“We would much rather err on the side of conservative [and] have a little bit left over at fiscal year’s end,” he said. “That’s part of how we built the reserves over the years.”

As a case in point, Williams estimates that at the end of the current fiscal year on June 30, the general fund will have a positive balance of $6.5 million.
Charlie Honeycutt, city manager, said that budgeted revenue projections for the next two years are relatively unchanging, mostly because sales tax, which accounts for 71 percent of total revenue, or about $15 million, is expected to remain flat.

Both Honeycutt and Williams briefly discussed the City’s reliance on sales-tax revenue.

“The strong presence of sales tax represents a strength as well as vulnerability,” said Williams. “It’s part of the larger discussion for a need for diversification.”

Williams mentioned additional auto-dealership revenue and potential new hotel transient-occupancy-tax revenue as examples of diversifying.

Honeycutt said that another example is revenue generated by the EDCO refuse-transfer station.

“We get a ‘host’ fee, basically a percentage of the gross revenue that comes through that facility […], and so that’s a different form of revenue,” he said. “It’s becoming a fairly significant revenue source for us.”

Each department head presented on their department’s share of expenses, highlighting completed projects as well as continuing efforts over the next two years.

Data courtesy City of SH
Pie chart based on the proposed Signal Hill 2018-2019 budget, which the Signal Hill City Council reviewed at a special meeting on May 31, showing that 71 percent of the City’s revenue comes from sales tax

Pie chart based on the proposed Signal Hill 2018-2019 budget, which the Signal Hill City Council reviewed at a special meeting on May 31, showing expense distribution across City departments, 43 percent of which are allocated to the Police Department and 22 percent to the Public Works Department

Courtesy City of SH
Distribution of Signal Hill Police Department expenses in the 2018-2020 fiscal-year budget, which the Signal Hill City Council reviewed at a special meeting on May 31

Police department
With the largest share (43 percent) of the City’s expenses, Christopher Nunley, chief of police, said that his department is most focused on recruiting and retaining qualified personnel and continuing to apply for grants to supplement its budget in order to expand community outreach and upgrade technology.

He noted that the department used several grants it received in the last fiscal year to obtain safety equipment, conduct DUI-checkpoints and host five community-outreach events.

To connect with the community even more, Nunley said that the department wishes to expand its social-media presence.

“We’ve found it to be a pretty successful crime-fighting tool and also an outreach tool,” he said. “The more that we can get out there, the more people will follow us and we can get our message out there when necessary.”

Nunley added that the department recently created a Twitter account.

“You can follow me on it, if you’d like,” he said.

Public Works
Kelli Tunnicliff, public works director, said she and her department of 28 full-time employees and four interns, representing 22 percent of the City’s expense budget, have been busy in the past year.

She listed ongoing work by her department in several key areas that affect the City, including water quality, environmental compliance, repairing and improving streets and sidewalks and maintaining park landscapes, including trimming 2,000 trees.

Tunnicliff also presented on the progress of major capital-improvement projects (CIPs), such as completing the first phase of the Los Cerritos Channel stormwater-capture facility at the Long Beach Airport, retrofitting safety lights with LED lighting, completing the dog park and refurbishing artwork at Hilltop Park.

She also indicated that work has begun on Bixby Ridge Trail restoration and construction of the new library, which is scheduled to be completed in March 2019.

For the next fiscal year, with a budget of $20.6 million ($6.3 million of which is from grants), the Public Works Department will continue work on 13 CIPs, begin eight new projects and add 20 new projects in the following 2019-2020 fiscal year for an additional $6.7 million.

Finance Department
Along with his department’s continuing efforts in auditing and budgeting, at a cost of about 13 percent of the City’s expenses, Williams noted the implementation of a new enterprise-resource planning system to consolidate and streamline City services and information.

“It is important that we produce timely as well as accurate data,” he said.

Administration Department
Deputy City Manager Hannah Shin-Heydorn listed several citywide projects that her department supports but also discussed the department’s advocacy efforts in supporting and opposing local and State legislative bills.

One emerging statewide legislative issue introduced in April is SCA 20, the Bradley-Burns Uniform Local Sales and Use Tax Law, which would change the point where sales tax is assessed.

Honeycutt explained the significance of this senate-constitutional amendment to Signal Hill, especially in light of the City’s dependence on sales-tax revenue.

“What this is proposing to do is redistribute sales tax that would significantly affect cities that have fulfillment centers such as the City of Signal Hill,” he said. “We have our Office Depot fulfillment center. Basically, what this bill is proposing to do is change the allocation of sales tax from where the order is taken to where the order is delivered. Our Office Depot [provides] a significant part of our City’s sales-tax revenue and it would have significant impacts on our budget if this was to go through.”

Elise McCaleb, economic development manager, added that the Administration Department was also involved in refinancing the City’s investment bonds, negotiating the completed Zinnia workforce-housing development and continuing negotiations with Signal Hill Petroleum (SHP) and Vestar for additional property developments at Heritage Square and 700 E. Spring St.

Community Services Department
Aly Mancini, community services director, said that her department has three divisions: library, community and recreation services.

She listed several accomplishments, including: moving the existing library while construction continues on the new library; hosting several community events such as concerts, movies and youth and family day-camps; and opening the new dog park.

Community Development Department
Scott Charney, community development director, explained that his department has four full-time employees and two part-time.

“We are the smallest department, but I think you see evidence of our work every day,” he said.

Colleen Doan, senior planner, listed some of her department’s accomplishments over the last fiscal cycle, including remodeling the Honda dealership, opening Ten Mile Brewing Company and Mother’s Market and completing the Zinnia workforce-housing project and several of the planned 25 homes in the Crescent Square development.

Charney said that future development projects include an industrial park and working with SHP on the Heritage Square mixed-use retail and residential project.

Doan also noted that her department prepared a vacant-parcel ordinance to control stormwater-runoff, changed zoning to allow construction of the new dog park and continues to review conditional-use permits and business licenses.

Legislative
While technically part of the Administration Department, city council members discussed their portion of the budget, averaging about $242,000 annually over the next two years. That amount includes expenses for the city clerk and treasurer in addition to its five council members.

About 70 percent of the legislative budget is for salaries and benefits for these seven positions and 30 percent for expenses such as dues and memberships, training and meeting attendance.

Internet use
Looking ahead to future budget considerations, Councilmember Edward Wilson asked the city manager about “upgrading” the city as a whole in terms of technology.
“What’s available in the City from a technology level is an infrastructure that maybe we haven’t addressed yet,” he said. “[We need a plan] on how we become a ‘smarter’ city.”

The next Signal Hill City Council meeting will take place Tuesday, June 12, at 7pm in the council chamber at 2175 Cherry Ave.

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Signal Hill City Council reviews 2018-2020 budget