During its Tuesday, Feb. 22 meeting, the Signal Hill City Council reviewed the City’s 2021-2022 mid-year budget showing it is “on track” as of Dec. 31, 2021, according to City staff.
Though the City pulled in slightly less revenue than expected after the first six months of its fiscal year, it spent even less than budgeted.
The council also agreed to reallocate some of the City’s budget toward needed projects, including installing security cameras at the library and community center, putting a radar speed sign along a curved road at Obispo and Temple avenues, increasing park pest control and placing a permanent trash can at a litter-ridden trail overlook on Sea Ridge Drive.
Sales-tax revenue on track, though some sectors continue to lag
Accounting Manager Jonathan Orozco said Signal Hill’s business portfolio continued to be “revenue resilient” during the first six months of this fiscal year, from July 1 to Dec. 31, 2021. Sales taxes are predicted to reach pre-pandemic levels between now and the end of this fiscal year of June 30, he added.
Sales taxes—which account for 72% of Signal Hill’s total income, its largest revenue category—are on track with budget expectations as of Dec. 31, 2021, Orozco said.
Though the City’s second-largest income source of property taxes was only about a quarter of what was budgeted, the City’s share of that tax comes in periodically and Orozco said he expects it to meet budget expectations by June 30.
Like the rest of the nation, COVID-19 variants slowed economic recovery in Signal Hill for the first half of its fiscal year, Orozco noted, along with related supply chain issues and higher inflation. If those don’t worsen, he said, the economy is predicted to continue growing—though not evenly.
“Some parts of the economy may permanently change and not recover fully—or take longer to recover—due to changes in business operations and consumer behavior during the pandemic,” he said.
Signal Hill auto dealerships and retailers saw increased sales between July 1 and Dec. 31 last year, as did gas stations, restaurants and hotels, Orozco said. But drug sales continue to be negatively impacted by the pandemic, he noted.
Pharmaceutical sales have been hindered by less face-to-face contact with physicians during the pandemic, according to a 2021 report by Deloitte Consulting.
However, the City continued to benefit from increased online shopping, receiving more than it expected from State and County tax pools since the pandemic started in March 2020, Orozco said. But he added that online shopping is expected to drop back to pre-pandemic levels in the near future.
Council agrees to reallocate budgeted expenses toward needed projects
Though the City’s overall revenue was about 2% under budget as of Dec. 31, its expenses were nearly 10% under budget due to departmental “fiscal discipline,” Orozco said.
As part of its mid-year review, the council agreed to City staff recommendations to reallocate budgeted expenses and transfer in money from reserve funds to pay for specific municipal needs, with an overall positive net impact to the City’s general fund of about $300,000.
The council agreed to draw from the City’s vehicle replacement reserve fund to replace a police car that was involved in an accident for $52,000.
The council also agreed to bolster the general fund with about $382,000 from two stormwater-related reserve funds and $250,000 from a gas-tax reserve fund to help cover newly budgeted expenses.
Among the additional expenses, the City needs to pay about $77,000 more this year than it received from planning grants to cover updating its housing element, which will include plans to build 571 State-required new dwelling units by 2029.
The council also approved budgeting $21,000 from the general fund to install security cameras at the Signal Hill Public Library and Signal Hill Community Center.
In addition, the council approved $25,000 from the general fund for a radar speed sign to be placed along a curved road at Obispo and Temple avenues. The solar-powered sign will alert drivers on how fast they’re traveling compared to the speed limit.
Mayor Keir Jones noted that an automobile recently hit a light pole at that location and another car hit the boundary wall of an adjacent neighborhood.
The council also agreed to allocate $5,000 to pay for pest control at its parks and another $5,000 to collect trash at a trail overlook point on Sea Ridge Drive where pedestrians frequently litter.
City Manager Hannah Shin Heydorn said the City installed a temporary trash receptacle there after residents complained but will replace it with a permanent one and pay more to a landscape maintenance company to pick up that trash in addition to its other work.
The Signal Hill City Council has scheduled a public workshop on May 26 to discuss the City’s budget for the next two fiscal years beginning July 1. More information can be found as of May 1 on the City’s website, CityofSignalHill.org.
