The Signal Hill City Council voted April 16 to focus first on developing a new strategic plan for the city and consider two key recommendations for financial reform as part of their strategic planning.
The Council members determined Tuesday that during the process of developing a strategic plan they would discuss the recommendations to move to a two-year budget and to establish an audit committee.
The current strategic plan is about seven years old, has become outdated and includes the former redevelopment agency, according to City Manager Ken Farfsing. The city’s redevelopment agency was officially dissolved by the State more than a year ago.
These two suggestions have been discussed and debated for some time in Signal Hill. The Los Angeles County Civil Grand Jury last year recommended these key changes for charter cities like Signal Hill. This particular jury reviewed the administrative and financial structures of charter cities as a response to the problems and charges of corruption and fraud against officials in the City of Bell, another charter city.
The Signal Hill City Council scrutinized both of the jury’s recommendations, particularly that of establishing an audit committee. Councilmember Lori Woods focused on the importance of having an audit committee that was truly independent.
“If it’s truly going to be an arm’s length-type of decision-making body, with representation from either staff and council and city treasurer, then I think it’s a good thing,” she said at the Council meeting.
Maria Harris was the only resident who spoke on the issue. She also focused on the importance of having independent persons on the audit committee. She said commitcommittee members needn’t be certified public accountants to serve.
“What I’m concerned about,” Harris said, “is that the person be able to exert an independent judgment…have the sufficient honesty and integrity to do that, be able to do their homework and ask those important questions that need to be asked and do not shy from them.”
However, Vice Mayor Ed Wilson argued in favor of audit committee members who have the expertise to understand the auditing process.
“It isn’t something that you just pick up, unfortunately,” Wilson said, as he described how the auditing process is very technical. He stressed that members of the audit committee need to be able to ask specific questions.
“Otherwise, we’re filling seats with warm bodies, and that’s just an exercise that’s not really getting us anywhere,” Wilson said. Wilson is also a CPA.
City Attorney David Aleshire agreed with Wilson’s concerns that the members of an audit committee should have the technical expertise to understand an auditor if a committee is eventually established. He said that at least the experts like the city attorney and the auditing firm should be independent and explained that the committee should be focused on the “technical mission of the audit.”
Aleshire acknowledged in an interview after the Council meeting that Bell had an “unprecedented level of corruption.” Signal Hill’s city attorney has a unique perspective of where the officials in the City of Bell went wrong. Aleshire is now the city attorney for Bell and has been handling the litigation matters for that city since 2011.
Aleshire told the Council that at Bell, there were entities who could have provided a key outside perspective, who had been working with the City for a long enough time. Aleshire said during the Council meeting that “in the critical moments, they chose not to do that.”
“I think that if you set up an audit committee like this,” the city attorney added, “that they should be charged with demanding that the audit firm bring that perspective into its work and isn’t able to just retreat to presenting information in a way that basically people don’t understand it and don’t know what’s going on.”
The next City Council meeting will take place in a special session of the Council on April 30 at 7pm in the Council Chamber where the Council will be conducting Commission interviews.