Signal Hill City Council OKs refinancing bonds for new library

The council also approved company to oversee construction of library

Photos by Anita W. Harris | Signal Tribune
Ellen Janssen (left) and William Janssen (center) speak during the Aug. 8 Signal Hill City Council meeting after receiving the Sustainability Award from Mayor Edward Wilson (right).

This version was corrected at 11:56 am, Friday.

New library funding and construction were central topics at the Signal Hill City Council meeting on Aug. 8. To help pay for the new library, the council approved refinancing bonds and forming a Signal Hill Municipal Financing Authority to potentially issue a new bond. It also awarded a contract to Simplus Management Corporation to oversee the library’s construction.

In other business, the council reviewed community recreation needs and a medical-marijuana initiative petition. It also approved the purchase of several replacement vehicles for City departments and updated its part-time salary schedule. Mayor Edward Wilson awarded proclamations to four outgoing City commissioners.

Library funding
City Manager Charlie Honeycutt reported that the new library project needs supplemental funding, leading the council to approve the refinancing of two existing tax-allocation bonds, as well as creation of a Signal Hill Municipal Financing Authority to potentially issue a new bond in the future.

Honeycutt explained that the original library budget was created in 2011 and the former Signal Hill Redevelopment Agency had issued bonds to cover a portion of the cost.

“At that time, the nation was trying to recover from job losses […] especially in the construction area,” he said. “Because of the recession, the library budget reflected the competitive construction pricing of that time period.”

But there was a four-year delay in implementing the bond measures due to the State eliminating redevelopment agencies in order to use the funds to address its own budget issues. The library project had to be put on hold.
“Because of the perseverance of the city council, Signal Hill continued to fight for the library bond funds and were able to gain approval from the State to use those funds, in late 2015,” Honeycutt said. “Unfortunately, the four-year delay had a financial impact on our project budget.”

In June, the council accepted staff’s recommendation to reject three bids received for construction of the library, since all were $2 to $4 million higher than staff’s construction cost estimate.

In explaining why bids were higher, Honeycutt cited a plethora of large-scale municipal and housing construction projects that have created a shortage of skilled construction workers, driving up costs.

The council had directed staff to explore options to reduce construction costs, as well as other funding options.

The result was that the Library Design Committee met with the project architect to develop cost-saving design recommendations. In addition, staff will change their approach in the next round of bidding, including considering non-prequalified contractors.

“Maybe we’ll find a contractor that’s in between projects, and this basically is a good way to fill up a year,” he suggested.

Staff also worked with financial consultant Suzanne Harrell to find ways to increase the library project budget.

Scott Williams, acting finance director, explained that current library funding is at $13 million, $1.5 million of which has already been spent. A 2011 Redevelopment Agency (RDA) bond provides about $6 million of the remaining funds. Two other main sources of funding include $1.7 million in a reserve library fund and $2 million from the City’s general fund.

However, diverting $2 million of general funds to the library would reduce the reserve amount to 47 percent, below the 50 percent required by City policy.

To avoid using $2 million from the City’s general fund reserves, Harrell advised the two-step approach that the council approved.

The first, refinancing two existing RDA tax-allocation bonds (TAB), reduces the amount of tax needed to pay the City’s enforceable obligations and repays the general fund coffers sooner, Harrell said.

“We thought that was a good way to manage the cost of the project and the funding of the project,” Harrell said.

The City will also consider issuing a new $8-million bond in the future to provide library funding, but to do so, the City would have to create a special agency.

“The City would need to create a joint-powers authority– a financing authority, so to speak– to act as a conduit issuer,” she said. Members of the council would serve as the board of the new authority, which will be formed over the course of the next few city council meetings.

Similarly, the RDA TAB refinancing plan will take time to implement, since the state Department of Finance can take up to 60 days to approve it.

Mayor Edward Wilson underscored the need for the municipal financing authority.

“It is going to be one of the tools that we use for development in the future,” he said.

Library construction
Part of the library funds will go to Simplus Management Corp., to which the council awarded a contract for overseeing library construction.

Mayor Edward Wilson (left) and Public Works Director Kelli Tunnicliff (right) introduce Sara Russo (center), a new management analyst in the Public Works Department, at the Signal Hill Council meeting Aug. 8.

The contract, for $1.3 million (based on project-management costs for the 2013 police station), will extend through December 2018.

Public Works Director Kelli Tunnicliff said she anticipates construction of the new library would begin in October or November, assuming a contractor is approved by September.

Simplus will assist staff in deciding on a contractor after the City receives its second round of bids.
Paul Buckley, president and CEO of Simplus, expressed his appreciation.

“It’s a pleasure working with a council that is so closely tied to the community and its projects,” he said.

Recreation assessment
Richard Fisher and Sue Leto, representatives from landscape consultants Richard Fisher Associates (RFA), presented a report updating Signal Hill’s community recreation needs.

The last such assessment was completed in 2008 and served as the basis for several new parks and recreations projects and programs.

For its assessment, RFA reviewed municipal documents and interviewed city staff and police. It also received input from the 438 individuals in the Signal Hill community– 322 by phone and 81 via a questionnaire. RFA based its analysis on a random selection of these responses.

Some highlights of community needs and wants, now and in the next five years, include trail connectivity and expansion, and a teen and senior mixed-use center.

Teen residents expressed specific interests in self-defense classes and art programs, but also in volunteering. Of 48 teens polled, 85 percent would like to volunteer but don’t.

“A surprising number of teens in this city who are not volunteering think it’s a great idea,” Fisher said.
Leto commended the teens and seniors of Signal Hill.

“When we were listening to your residents, the one thing that also impressed me that I never actually wrote in the report is how each of your residents […] had an understanding of other age groups’ needs,” Leto said. “So we had seniors knowing the importance of youth and childcare programs. We had teens understanding why we need programs for seniors. So they weren’t selfish in their thinking.”

The consultants recommended expanding communication through the City’s website, adding a resource guide for residents and creating recreation programs and services that include health-related activities and volunteer opportunities for seniors.

They also recommended utilizing the former Burroughs Elementary School for recreation purposes, as well as underutilized space at Spud Field on 21st Street.

“We think there’s some […] square footage, that you’re not achieving much use of now, that might be able to pair with somebody’s physical-fitness programs,” Fisher said.

Community Services Director Aly Mancini said that the report would be made available at the Signal Hill Library and online.

“We would certainly welcome and encourage the community to read through it,” Mancini said.

Medical marijuana
Honeycutt brought the council up to speed on an initiative proposed by local resident David Rice to change the municipal code to rescind prohibition of the dispensation, cultivation and delivery of medical marijuana in Signal Hill, which the council received and filed.

To qualify for a vote, the initiative would need signatures of 10 percent of registered voters, or about 690, Honeycutt said. If 15 percent of voter signatures are obtained, or about 1,035, then the City would need to call a special election, which would cost the City about $60,000. The proponent has until Dec. 11 to collect signatures.
Some residents are apparently confused by the nature of this initiative, however, Honeycutt said.

“We had received calls from concerned residents that were told by signature gatherers that this petition was supported by the City or it was for a drugstore,” Honeycutt said. “I would like to clarify for our residents that the City has not taken a position on the initiative, nor is it a petition for a drugstore such as a CVS.”

Honeycutt recounted that since 2015, there have been four attempts to legalize the sale of medical marijuana in Signal Hill, three by changing the municipal code, and one tax initiative for medical marijuana, Measure F, which was defeated in the March municipal election.

Honeycutt informed the council that Rice’s initiative proposes three dispensaries as well as cultivation, manufacturing, lab facilities and delivery of medical marijuana, and also one additional dispensary exclusively for household pets.

The initiative would restrict such facilities from operating within 1,000 feet of a school and 600 feet of a park or library, Honeycutt stated. Also, deliveries must be made by 9pm, and dispensaries would operate between 8am and 10pm.

The City would earn 8 percent sales tax on gross receipts at a dispensary and $10 per square foot of a cultivation facility, with a minimum annual tax on all facilities of $1,000.

“I would like to note that […] there was no financial analysis that was performed by the proponent to estimate the potential revenues that may be generated from the fees and taxes on medical-marijuana operations, or whether the revenue would cost the City to administer and enforce the provisions of the initiative,” Honeycutt stated.

Mayor Edward Wilson (center left) presents proclamations to outgoing commissioners Louise Cunningham (far left), Tom Benson (center right) and Devon Austin (far right) at the Signal Hill City Council meeting Aug. 8

Rice had already collected some signatures before being informed they are invalid because they were obtained before the initiative was publically noticed. City staff has since informed him of the procedure.
“It’s not going to go away,” said Councilmember Larry Forester of this type of initiative. “It’s now, I think, our duty to basically tell our citizens exactly what’s happening.”

Wilson concurred with the inevitability of such an initiative succeeding.

“Long Beach is in the process of issuing permits, so we will be surrounded,” he said.

Councilmember Lori Woods advocated a wait-and-see approach.

“It’s my position […] that while it’s coming, and eventually may overtake us […] that Signal Hill maintain its moratorium until we know what happens [in] much larger cities,” she said. “We’ll see what works and what doesn’t work. I personally feel at this point, unless proven otherwise, that whatever may come in in revenue is going to go right out in enforcement.”

The city attorney clarified that if the initiative succeeds in obtaining the requisite number of signatures, the council may take a public position, but it cannot spend public funds to advocate either way. It can only educate.

Wages and vehicles
In other business, the council adopted a resolution to ensure that salary ranges for hourly employees comply with the California Fair Wage Act of 2016.

Staff explained that one such City employee includes a part-time communication specialist being sought to work on the city’s social media presence, website, mobile app, newsletter and upcoming e-newsletter.

Another type of part-time employee, created for the City to engage more with community youth, are paid interns (unpaid interns receive academic credit instead).

Separately, the council authorized the replacement of several heavily utilized vehicles in the Police, Public Works and Community Development Departments, for a total cost of $234,500.

Presentations
Wilson introduced Sara Russo, a new management analyst in the Public Works Department.

Wilson also presented a Sustainability Award in the category of water-efficient landscaping to William and Ellen Janssen, property owners of 3372 Myrtle Ave.

Finally, Wilson presented proclamations to four outgoing commissioners, commending their dedication and work over many years of service.

Devon Austin, Tom Benson and Shannon Murphy (who could not attend) were honored for their diligent and fruitful efforts on the Planning Commission. Louise Cunningham was recognized for her nearly 30 years of dedicated service to the Parks and Recreation Commission.

“On behalf of the entire city council, I really want to recognize all of our outgoing commissioners,” Wilson said. “They’ve served with true dedication, and, really, their heart was in always wanting to make sure the city of Signal Hill was the best it could be.”

Wilson read from each of their proclamations, listing their many accomplishments and contributions to the City, amid much applause.

The next Signal Hill City Council meeting will take place Tuesday, Aug. 22 at 7pm in the council chamber at 2175 Cherry Ave.

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