Morgan Hill City Council
March 16, 2022

Fisher Creek Detention Basin Expansion 69 Initial Study Morgan Hill January 2022
Impact NOI-1: The project would not result in generation of a substantial temporary or permanent increase in ambient noise levels in the vicinity of the project in excess of standards established in the local general plan or noise ordinance, or applicable standards of other agencies. (Less than Significant Impact)
Excavation of the Basin
The proposed project is planned to start construction in July 2021 and would be completed by September 2021. The construction activities in the detention basin areas would generate elevated noise levels during the excavation and hauling activities. The estimated noise levels for construction would range between 80 to 90 dBA at a distance of 50 feet from the project site. A more detailed breakdown of the noise generated can be seen in Table 4.13-2 below, under the far-right column entitled Public Works Roads & Highways, Sewers, and Trenches.

Table 4.13-2 Typical Ranges of Construction Noise Levels at 50 feet Domestic
Housing
Office Building,
Hotel, Hospital,
School, Public
Works
Industrial
Parking Garage,
Religious
Amusement &
Recreations,
Store, Service
Station
Public Works
Roads &
Highways,
Sewers, and
Trenches

I II I II I II I II
Ground
Clearing 83 83 84 84 84 83 84 84
Excavation 88 75 89 79 89 71 88 78
Foundations 81 81 78 78 77 77 88 88
Erection 81 65 87 75 84 72 79 78
Finishing 88 72 89 75 89 74 84 84
I - All pertinent equipment present at site.

II - Minimum required equipment present at site.

Sensitive receptors for noise impacts in the area surrounding the project site include the City of Morgan Hill El Toro Fire Station (approximately 450 feet west the center of the basin) and the Bender Circle single family residences (approximately 575 feet southwest the center of the basin).

The noise levels for the fire station are expected to range from 61 to 68 dBA and noise levels for the housing would range from 59 to 66 dBA during construction. The noise levels for construction would further decrease by approximately five to 10 dBA as the basin is deepened and more barriers are placed between activity and receptors. Therefore, the proposed project would not produce noise levels that would substantially exceed existing noise levels during excavation of the basin.

The proposed project is also located approximately 1,000 to 1,200 feet from the multi and singlefamily residences along Jarvis Drive and between the Old Monterey Road and the Union Pacific Railroad Tracks. These uses would experience noise levels from 52 to 61 dBA during unshielded DocuSign Envelope ID: 08C9986C-1739-404C-A3D4-14CDA85BC6D8

Fisher Creek Detention Basin Expansion 70 Initial Study Morgan Hill January 2022
construction and these noise levels would decrease by 5 to 10 dBA as the basin is deepened. As stated above, the traffic noise levels for areas surrounding the project site range from 55 to 65 dBA.

Therefore, the proposed project would not produce construction noise levels that would substantially exceed existing noise levels during excavation of the basin. (Less than Significant Impact) Hauling of Soil and Debris
Once materials are excavated from the Fisher Basin, the project proposes to haul these materials to the Kirby Canyon Landfill for disposal or to an unspecified development site in the City in need of surplus soil. Haul trucks would either utilize the route of Jarvis Drive to Monterey Road to Cochrane Road to Highway 101, or alternatively, the proposed project would use the new Sutter Boulevard extension to Butterfield Boulevard to Cochrane Road and Highway 101.

Based on the estimate of 50,581 cubic yards of materials and 12 cubic yards of hauling capacity per truck, the proposed project would require 256 truck hauls daily over the course of a 10-hour period over five weeks. Approximately 26 trips would occur each hour of the standard workday and these trips would create noise levels ranging from 54 to 57 dBA. This would typically be below the below ambient traffic noise levels in the area and would result in a less than significant impact. (Less than Significant Impact)
Operational Impacts
The proposed project would continue to be used as a detention basin which would not alter the existing noise levels of the site. No change in the operation of the existing pump is proposed or expected. Therefore, there would be no impact on noise levels at the site during operations. (No Impact)
Impact NOI-2: The project would not result in generation of excessive groundborne vibration or groundborne noise levels. (Less than Significant Impact) Construction Impacts
The proposed project would generate vibration through the operations of construction equipment on site during the excavation of the basin. The nearest uses to the project site are approximately 450 feet from the detention basin which is well outside the distance where construction equipment would create perceptible vibrations. Vibrations of standard construction equipment are described below in Table 4.13-3.

Table 4.13-3 Typical Vibratory Intensity at Different Distances Equipment
PPV (in/sec)
Source Level
(25 ft)
50 feet from the
Project Site
110 feet from
the Project Site
150 feet from
the Project Site
Clam shovel drop 0.202 0.094 0.040 0.028
Hydromill
(slurry wall)
in soil 0.008 0.004 0.002 0.001
in rock 0.017 0.008 0.003 0.002
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Fisher Creek Detention Basin Expansion 71 Initial Study Morgan Hill January 2022
Vibratory Roller 0.210 0.098 0.041 0.029
Hoe Ram 0.089 0.042 0.017 0.012
Large bulldozer 0.089 0.042 0.017 0.012
Caisson drilling 0.089 0.042 0.017 0.012
Loaded trucks 0.076 0.035 0.015 0.011
Jackhammer 0.035 0.016 0.007 0.005
Small bulldozer 0.003 0.001 0.001 0.000
Source: Transit Noise and Vibration Impact Assessment Manual, Federal Transit Administration, Office of Planning and Environment, U.S. Department of Transportation, FTA Report No. 0123, September 2018, as modified by Illingworth & Rodkin, Inc., July 2020.

The historic train trestle located adjacent to the site would also experience some vibration from construction, however, these would be less than the current daily operation of train traffic over the trestle and would not represent a significant impact. Based on the distance of the project site from any buildings, construction of the proposed project would not result in generation of excessive groundborne vibration or groundborne noise levels. (Less than Significant Impact) Operations
The proposed project would continue to be operated as a detention basin which does not create vibratory impacts under existing conditions. Therefore, operations of the proposed project would have no vibratory impacts. (No Impact)
Impact NOI-3: The project would not be located within the vicinity of a private airstrip or an airport land use plan or, where such a plan has not been adopted, within two miles of a public airport or public use airport. The project would not expose people residing or working in the project area to excessive noise levels. (No Impact)
The proposed project would not introduce sensitive land uses for excessive noise levels because the proposed project would retain the existing detention basin use. Additionally, the project site is located more than two miles from any airports in the area. Therefore, the proposed project would not expose people residing or working in the project area to excessive noise levels from airports or airstrips. (No Impact)
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Fisher Creek Detention Basin Expansion 72 Initial Study Morgan Hill January 2022

POPULATION AND HOUSING

4.14.1 Environmental Setting
Regulatory Framework
State
Housing-Element Law
State requirements mandating that housing be included as an element of each jurisdiction’s general plan is known as housing-element law. The Regional Housing Need Allocation (RHNA) is the statemandated process to identify the total number of housing units (by affordability level) that each jurisdiction must accommodate in its housing element. California housing-element law requires cities to: 1) zone adequate lands to accommodate its RHNA; 2) produce an inventory of sites that can accommodate its share of the RHNA; 3) identify governmental and non-governmental constraints to residential development; 4) develop strategies and a work plan to mitigate or eliminate those constraints; and 5) adopt a housing element and update it on a regular basis.24 The City of Morgan Hill Housing Element and related land use policies were last updated in 2015.

Regional and Local
Plan Bay Area 2040
Plan Bay Area 2040 is a long-range transportation, land-use, and housing plan intended support a growing economy, provide more housing and transportation choices, and reduce transportationrelated pollution and GHG emissions in the Bay Area. Plan Bay Area 2040 promotes compact, mixed-use residential and commercial neighborhoods near transit, particularly within identified Priority Development Areas (PDAs).25
ABAG allocates regional housing needs to each city and county within the nine-county San Francisco Bay Area, based on statewide goals. ABAG also develops forecasts for population, households, and economic activity in the Bay Area. ABAG, MTC, and local jurisdiction planning staff created the Regional Forecast of Jobs, Population, and Housing, which is an integrated land use and transportation plan through the year 2040 (upon which Plan Bay Area 2040 is based).

Existing Conditions
The project site does not contain housing or businesses that contribute to the population of Morgan Hill.
24 California Department of Housing and Community Development. “Regional Housing Needs Allocation and Housing Elements” Accessed December 21, 2020. http://hcd.ca.gov/community-development/housingelement/index.shtml. 25 Association of Bay Area Governments and Metropolitan Transportation Commission. “Project Mapper.” http://projectmapper.planbayarea.org/. Accessed December 21, 2020.

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4.14.2 Impact Discussion
Potentially
Significant
Impact
Less than
Significant
with Mitigation
Incorporated
Less than
Significant
Impact
No Impact
Would the project:
1) Induce substantial unplanned population
growth in an area, either directly (for example,
by proposing new homes and businesses) or
indirectly (for example, through extension of
roads or other infrastructure)?
2) Displace substantial numbers of existing
people or housing, necessitating the
construction of replacement housing
elsewhere?
Impact POP-1: The project would not induce substantial unplanned population growth in an area, either directly (for example, by proposing new homes and businesses) or indirectly (for example, through extension of roads or other infrastructure). (Less than Significant Impact)
The proposed project would not contribute to population growth in the area surrounding the project site. Expansion of the detention basin would provide additional drainage for the area around the proposed project however this would not expand the potential for future development in the area.

Therefore, the proposed project would not induce substantial unplanned population growth in an area, either directly or indirectly. (Less than Significant Impact) Impact POP-2: The project would not displace substantial numbers of existing people or housing, necessitating the construction of replacement housing elsewhere. (No Impact)
The proposed project is not occupied by housing and therefore, would not relocate existing people or housing, necessitating the construction of replacement housing. (No Impact) DocuSign Envelope ID: 08C9986C-1739-404C-A3D4-14CDA85BC6D8

Fisher Creek Detention Basin Expansion 74 Initial Study Morgan Hill January 2022

PUBLIC SERVICES

4.15.1 Environmental Setting
Regulatory Framework
State
Government Code Section 66477
The Quimby Act (included within Government Code Section 66477) requires local governments to set aside parkland and open space for recreational purposes. It provides provisions for the dedication of parkland and/or payment of fees in lieu of parkland dedication to help mitigate the impacts from new residential developments. The Quimby Act authorizes local governments to establish ordinances requiring developers of new residential subdivisions to dedicate parks, pay a fee in lieu of parkland dedication, or perform a combination of the two.

Government Code Section 65995 through 65998
California Government Code Section 65996 specifies that an acceptable method of offsetting a project’s effect on the adequacy of school facilities is the payment of a school impact fee prior to the issuance of a building permit. Government Code Sections 65995 through 65998 set forth provisions for the payment of school impact fees by new development by “mitigating impacts on school facilities that occur (as a result of the planning, use, or development of real property” (Section 65996[a]). The legislation states that the payment of school impact fees “are hereby deemed to provide full and complete school facilities mitigation” under CEQA (Section 65996[b]).

Developers are required to pay a school impact fee to the school district to offset the increased demands on school facilities caused by the proposed residential development project. The school district is responsible for implementing the specific methods for mitigating school impacts under the Government Code.

Regional and Local
Countywide Trails Master Plan
The Santa Clara County Trails Master Plan Update is a regional trails plan approved by the Santa Clara County Board of Supervisors. It provides a framework for implementing the County’s vision of providing a contiguous trail network that connects cities to one another, cities to the county’s regional open space resources, County parks to other County parks, and the northern and southern urbanized regions of the County. The plan identifies regional trail routes, sub-regional trail routes, connector trail routes, and historic trails.

Existing Conditions
The project site does not necessitate the need for public services such as schools, parks, or other public facilities such as community centers.

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Fire Protection
The project site ls located approximately 150 feet from the nearest fire station, El Toro Fire Station, located at 18300 Old Monterey Road in Morgan Hill.

Police Protection
The project site is nearest to the Morgan Hill Police Department located approximately 2 miles to the south at 16200 Vineyard Boulevard in Morgan Hill.

4.15.2 Impact Discussion
Potentially
Significant
Impact
Less than
Significant
with Mitigation
Incorporated
Less than
Significant
Impact
No Impact
Would the project result in substantial adverse
physical impacts associated with the provision of
new or physically altered governmental facilities,
need for new or physically altered governmental
facilities, the construction of which could cause
significant environmental impacts, in order to
maintain acceptable service ratios, response times,
or other performance objectives for any of the
public services:
1) Fire Protection?
2) Police Protection?
3) Schools?
4) Parks?
5) Other Public Facilities?
Impact PS-1: The project would not result in substantial adverse physical impacts associated with the provision of new or physically altered governmental facilities, need for new or physically altered governmental facilities, the construction of which could cause significant environmental impacts, in order to maintain acceptable service ratios, response times, or other performance objectives for fire protection services. (No Impact) The existing use of the project site would not be altered by the proposed project. The fire services provided by the nearby fire station would not be impacted by the proposed project and no new facilities would be needed. Therefore, the proposed project would result in no impact on the provision of fire protection services. (No Impact)
Impact PS-2: The project would not result in substantial adverse physical impacts associated with the provision of new or physically altered governmental facilities, need for new or physically altered governmental facilities, the construction of which could cause significant environmental impacts, in order to maintain acceptable service ratios, response times, or other performance objectives for police protection services. (No Impact) DocuSign Envelope ID: 08C9986C-1739-404C-A3D4-14CDA85BC6D8

Fisher Creek Detention Basin Expansion 76 Initial Study Morgan Hill January 2022
The existing use of the project site would not be altered by the proposed project. The police protection services provided by the nearby police station would not be impacted by the proposed project and no new facilities would be needed. Therefore, the proposed project would result in no impact on the provision of police protection services. (No Impact) Impact PS-3: The project would not result in substantial adverse physical impacts associated with the provision of new or physically altered governmental facilities, need for new or physically altered governmental facilities, the construction of which could cause significant environmental impacts, in order to maintain acceptable service ratios, response times, or other performance objectives for schools. (No Impact)
The proposed project is excavation of an existing detention basin, this would result in no impact on school facilities because the project neither requires nor expands the need for school facilities. (No Impact)
Impact PS-4: The project would not result in substantial adverse physical impacts associated with the provision of new or physically altered governmental facilities, need for new or physically altered governmental facilities, the construction of which could cause significant environmental impacts, in order to maintain acceptable service ratios, response times, or other performance objectives for parks. (No Impact)
The proposed project is excavation of an existing detention basin, this would result in no impact on park facilities because the project neither requires nor expands the need for park facilities. (No Impact)
Impact PS-5: The project would not result in substantial adverse physical impacts associated with the provision of new or physically altered governmental facilities, need for new or physically altered governmental facilities, the construction of which could cause significant environmental impacts, in order to maintain acceptable service ratios, response times, or other performance objectives for other public facilities. (No Impact) The proposed project is excavation of an existing detention basin, this would result in no impact on other public facilities because the project neither requires nor expands the need for other public facilities. (No Impact)
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RECREATION

4.16.1 Environmental Setting
Regulatory Framework
State
Government Code Section 66477
The Quimby Act (included within Government Code Section 66477) requires local governments to set aside parkland and open space for recreational purposes. It provides provisions for the dedication of parkland and/or payment of fees in lieu of parkland dedication to help mitigate the impacts from new residential developments. The Quimby Act authorizes local governments to establish ordinances requiring developers of new residential subdivisions to dedicate parks, pay a fee in lieu of parkland dedication, or perform a combination of the two.

Existing Conditions
The project site does not feature park facilities and does not contain population that contributes to the use of park facilities. The nearest park facility is Sierra Park located approximately 600 feet west of the project site on Llagas Road.

4.16.2 Impact Discussion
Potentially
Significant
Impact
Less than
Significant
with Mitigation
Incorporated
Less than
Significant
Impact
No Impact
1) Would the project increase the use of existing
neighborhood and regional parks or other
recreational facilities such that substantial
physical deterioration of the facility would
occur or be accelerated?
2) Does the project include recreational facilities
or require the construction or expansion of
recreational facilities which might have an
adverse physical effect on the environment?
Impact REC-1: The project would not increase the use of existing neighborhood and regional parks or other recreational facilities such that substantial physical deterioration of the facility would occur or be accelerated. (No Impact)
The proposed project would not increase the population of Morgan Hill and would not accelerate the deterioration of park facilities. Therefore, the project would have no impact on the physical condition of park facilities. (No Impact)
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Impact REC-2: The project does not include recreational facilities or require the construction or expansion of recreational facilities which might have an adverse physical effect on the environment. (No Impact) The proposed project only includes the excavation of the existing basin and would not require the construction or expansion of recreational facilities. Therefore, the proposed project would have no adverse physical impact associated with the construction of expansion of recreational facilities. (No Impact)
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TRANSPORTATION

4.17.1 Environmental Setting
Regulatory Framework
State
Regional Transportation Plan
MTC is the transportation planning, coordinating, and financing agency for the nine-county San Francisco Bay Area, including Santa Clara County. MTC is charged with regularly updating the Regional Transportation Plan, a comprehensive blueprint for the development of mass transit, highway, airport, seaport, railroad, bicycle, and pedestrian facilities in the region. MTC and ABAG adopted Plan Bay Area 2040 in July 2017, which includes a Regional Transportation Plan to guide regional transportation investment for revenues from federal, state, regional and local sources through 2040.

Senate Bill 743
SB 743 establishes criteria for determining the significance of transportation impacts using a vehicle miles traveled (VMT) metric intended to promote the reduction of GHG emissions, the development of multimodal transportation networks, and a diversity of land uses. Specifically, SB 743 requires analysis of VMT in determining the significance of transportation impacts. Local jurisdictions were required by Governor’s Office of Planning and Research (OPR) to implement a VMT policy by July 1, 2020.

Regional and Local
Congestion Management Program
VTA oversees the Congestion Management Program (CMP), which is aimed at reducing regional traffic congestion. The relevant state legislation requires that urbanized counties in California prepare a CMP in order to obtain each county’s share of gas tax revenues. State legislation requires that each CMP define traffic LOS standards, transit service standards, a trip reduction and transportation demand management plan, a land use impact analysis program, and a capital improvement element.

VTA has review responsibility for proposed development projects that are expected to affect CMPdesignated intersections.

Existing Conditions
The project site does not contain sources of trips and does not generate traffic during normal operations.

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4.17.2 Impact Discussion
Potentially
Significant
Impact
Less than
Significant
with Mitigation
Incorporated
Less than
Significant
Impact
No Impact
Would the project:
1) Conflict with a program, plan, ordinance, or
policy addressing the circulation system,
including transit, roadways, bicycle lanes, and
pedestrian facilities?
2) Conflict or be inconsistent with CEQA
Guidelines Section 15064.3, subdivision (b)?
3) Substantially increase hazards due to a
geometric design feature (e.g., sharp curves or
dangerous intersections) or incompatible uses
(e.g., farm equipment)?
4) Result in inadequate emergency access?
Impact TRN-1: The project would not conflict with a program, plan, ordinance, or policy addressing the circulation system, including transit, roadways, bicycle lanes, and pedestrian facilities. (Less than Significant Impact) The proposed project would not generate trips on an ongoing basis that would affect the existing roadways or other modes of transportation in the area. Construction activity would occur over five weeks and utilize two Haul Routes with approximately 336 trips per day. The haul routes would either exit the site from the northwest corner onto Monterey Road and then proceed down Cochrane Road to Highway 101 or exit the site on the southeast boundary, proceed north on Butterfield Boulevard, and turn onto Cochrane to continue to Highway 101.

The increased truck traffic would not contribute substantially to traffic on these major roadways and would not impact pedestrians or bicycle routes. Additionally, the short-term nature of the construction traffic would mean that the traffic patterns would only be temporarily changed and would not substantially alter traffic patterns along the haul routes. Therefore, the proposed project would not conflict with a program, plan, ordinance, or policy addressing the circulation system, including transit, roadways, bicycle lanes, and pedestrian facilities. (Less than Significant Impact) Impact TRN-2: The project would not conflict or be inconsistent with CEQA Guidelines Section 15064.3, subdivision (b). (Less than Significant Impact) The proposed project would not contribute to operational VMT and would only require temporary trips to and from the site for hauling of soils and other materials during construction. Therefore, the proposed project would not conflict or be inconsistent with CEQA Guidelines Section 15064.3, subdivision (b) because the proposed project would not generate additional VMT during operations of the project. (Less than Significant Impact)
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Impact TRN-3: The project would not substantially increase hazards due to a geometric design feature (e.g., sharp curves or dangerous intersections) or incompatible uses (e.g., farm equipment). (No Impact)
The proposed project would not alter the circulation of roads in the area surrounding the project site.

The proposed haul routes for transporting excavated soil are currently used by trucks on a regular basis. Therefore, the proposed project would not increase hazards due to a geometric design feature or incompatible use. (No Impact)
Impact TRN-4: The project would not result in inadequate emergency access. (No Impact)
Access to the site would be maintained and emergency access would be maintained through coordination with the City of Morgan emergency service providers. Additionally, the access points to the project site would not be modified, therefore, the proposed project would have no impact on emergency access. (No Impact)
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TRIBAL CULTURAL RESOURCES

4.18.1 Environmental Setting
Regulatory Framework
State
Assembly Bill 52
AB 52, effective July 2015, established a new category of resources for consideration by public agencies called Tribal Cultural Resources (TCRs). AB 52 requires lead agencies to provide notice of projects to tribes that are traditionally and culturally affiliated with the geographic area if they have requested to be notified. Where a project may have a significant impact on a tribal cultural resource, consultation is required until the parties agree to measures to mitigate or avoid a significant effect on a tribal cultural resource or until it is concluded that mutual agreement cannot be reached.

Under AB 52, TCRs are defined as follows:
• Sites, features, places, cultural landscapes, sacred places, and objects with cultural value to a California Native American tribe that are also either:
o Included or determined to be eligible for inclusion in the California Register of Historic Resources, or
o Included in a local register of historical resources as defined in Public Resources Code Section 5020.1(k).
• A resource determined by the lead agency to be a TCR.

Existing Conditions
AB 52 requires lead agencies to conduct formal consultations with California Native American tribes during the CEQA process to identify tribal cultural resources that may be subject to significant impacts as a result of a project. This consultation requirement applies only if the tribes have sent written requests for notification of projects to the lead agency. The City of Morgan Hill has not been contacted for notification and consultation by a tribe pursuant to AB 52.

4.18.2 Impact Discussion
Potentially
Significant
Impact
Less than
Significant
with Mitigation
Incorporated
Less than
Significant
Impact
No Impact
Would the project cause a substantial adverse
change in the significance of a tribal cultural
resource, defined in Public Resources Code
Section 21074 as either a site, feature, place,
cultural landscape that is geographically defined in
terms of the size and scope of the landscape,
sacred place, or object with cultural value to a
California Native American tribe, and that is:

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1) Listed or eligible for listing in the California
Register of Historical Resources, or in a local
register of historical resources as defined in
Public Resources Code Section 5020.1(k)?
2) A resource determined by the lead agency, in
its discretion and supported by substantial
evidence, to be significant pursuant to criteria
set forth in subdivision (c) of Public Resources
Code Section 5024.1? In applying the criteria
set forth in subdivision (c) of Public Resources
Code Section 5024.1, the lead agency shall
consider the significance of the resource to a
California Native American tribe.

Impact TCR-1: The project would not cause a substantial adverse change in the significance of a tribal cultural resource that is listed or eligible for listing in the California Register of Historical Resources, or in a local register of historical resources as defined in Public Resources Code Section 5020.1(k). (Less than Significant Impact)
As described in Section 4.18.1, no tribes have requested notice under AB 52 and no known tribal cultural resources are present on-site.

However, in the event of the unintentional discovery of undocumented human remains or other tribal cultural resources, measures listed under Standard Condition CUL-1 would be implemented. For these reasons, the project would not cause an adverse change in the significance of tribal cultural resources listed on the California Register or City of Morgan Hill historic properties inventory. (Less than Significant Impact)
Impact TCR-2: The project would not cause a substantial adverse change in the significance of a tribal cultural resource that is determined by the lead agency, in its discretion and supported by substantial evidence, to be significant pursuant to criteria set forth in subdivision (c) of Public Resources Code Section 5024.1. (Less than Significant Impact) As discussed in the response to Impact TCR-1, there are no known tribal cultural resources on-site.

The project would, therefore, have a less than significant impact in the significance of a tribal cultural resource. (Less than Significant Impact)
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UTILITIES AND SERVICE SYSTEMS

4.19.1 Environmental Setting
Existing Conditions
The project site is a detention basin that does not have utilities connections. Water drains into the detention basin through multiple stormwater drainage inlets including a 24-inch stormdrain pipe on the northeast side of the basin, an 84-inch stormdrain pipe on the east corner of the basin, and an 18- inch stormdrain pipe on the south corner of the basin. In addition, the project site features two 30- inch inlet pipes leading to a pump station with pumps into a 48-inch concrete stormdrain on the north corner of the basin.

4.19.2 Impact Discussion
Potentially
Significant
Impact
Less than
Significant
with Mitigation
Incorporated
Less than
Significant
Impact
No Impact
Would the project:
1) Require or result in the relocation or
construction of new or expanded water,
wastewater treatment or stormwater drainage,
electric power, natural gas, or
telecommunications facilities, the construction
or relocation of which could cause significant
environmental effects?
2) Have insufficient water supplies available to
serve the project and reasonably foreseeable
future development during normal, dry and
multiple dry years?
3) Result in a determination by the wastewater
treatment provider which serves or may serve
the project that it does not have adequate
capacity to serve the project’s projected
demand in addition to the provider’s existing
commitments?
4) Generate solid waste in excess of state or local
standards, or in excess of the capacity of local
infrastructure, or otherwise impair the
attainment of solid waste reduction goals?
5) Be noncompliant with federal, state, or local
management and reduction statutes and
regulations related to solid waste?
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Impact UTL-1: The project would not require or result in the relocation or construction of new or expanded water, wastewater treatment or stormwater drainage, electric power, natural gas, or telecommunications facilities, the construction or relocation of which could cause significant environmental effects. (No Impact)
The proposed project would not increase the need for water, wastewater treatment or stormwater drainage, electric power, natural gas, or telecommunications facilities at the project site because the proposed project would retain the use of a detention basin on site. Additionally, alterations to the detention basin would not alter the storm drainage system leading into the detention basin. Therefore, the proposed project would not result in the relocation or construction of new and expanded facilities and would have no impact on the environment from the construction of these facilities. (No Impact) Impact UTL-2: The project would not have insufficient water supplies available to serve the project and reasonably foreseeable future development during normal, dry and multiple dry years. (No Impact)
The proposed project would not require water supplies to serve the project, nor would it affect groundwater recharge to the underlying aquifer. Therefore, the proposed project would have no impact on water supplies. (No Impact)
Impact UTL-3: The project would not result in a determination by the wastewater treatment provider which serves or may serve the project that it does not have adequate capacity to serve the project’s projected demand in addition to the provider’s existing commitments. (No Impact) The proposed project would not require wastewater treatment capacity to serve the project.

Therefore, the proposed project would have no impact on wastewater treatment capacity. (No Impact)
Impact UTL-4: The project would not generate solid waste in excess of state or local standards, or in excess of the capacity of local infrastructure, or otherwise impair the attainment of solid waste reduction goals. (Less than Significant Impact)
During construction to proposed project would require the disposal of soil and other debris to local waste disposal sites, in the event excavated soils are not suitable for use in a development site needing fill soils. The 50,000 cubic yards of material is a small fraction of the remaining capacity of the nearby landfills and therefore this would not represent a significant impact on local infrastructure.

During operations the proposed project would not contribute to solid waste disposal capacity and therefore, the proposed project would not impact solid waste disposal needs. (Less than Significant Impact)
DocuSign Envelope ID: 08C9986C-1739-404C-A3D4-14CDA85BC6D8

Fisher Creek Detention Basin Expansion 86 Initial Study Morgan Hill January 2022
Impact UTL-5: The project would not be noncompliant with federal, state, or local management and reduction statutes and regulations related to solid waste. (Less than Significant Impact)
The proposed project would not require substantial, ongoing waste disposal and would comply with all waste disposal regulations and management statues. Additionally, the proposed project would not require waste disposal during operations and therefore, the proposed project would maintain compliance with federal, state, or local management and reduction statutes and regulations related to solid waste. (Less than Significant Impact)
DocuSign Envelope ID: 08C9986C-1739-404C-A3D4-14CDA85BC6D8

Fisher Creek Detention Basin Expansion 87 Initial Study Morgan Hill January 2022

WILDFIRE

4.20.1 Environmental Setting
Regulatory Framework
State
Fire Hazard Severity Zones
CAL FIRE is required by law to map areas of significant fire hazards based on fuels, terrain, weather, and other relevant factors. Referred to as Fire Hazard Severity Zones (FHSZs), these maps influence how people construct buildings and protect property to reduce risk associated with wildland fires.

FHSZs are divided into areas where the state has financial responsibility for wildland fire protection, known as state responsibility areas (SRAs), and areas where local governments have financial responsibility for wildland fire protection, known as local responsibility areas (LRAs). Homeowners living in an SRA are responsible for ensuring that their property is in compliance with California’s building and fire codes. Only lands zoned for very high fire hazard are identified within LRAs.

California Fire Code Chapter 47
Chapter 47 of the California Fire Code sets requirements for wildland-urban interface fire areas that increase the ability of buildings to resist the intrusion of flame or burning embers being projected by a vegetation fire, in addition to systematically reducing conflagration losses through the use of performance and prescriptive requirements.

California Public Resources Code Section 4442 through 4431 The California Public Resources Code includes fire safety regulations that restrict the use of equipment that may produce a spark, flame, or fire; require the use of spark arrestors on construction equipment that uses an internal combustion engine; specify requirements for the safe use of gasolinepowered tools on forest-covered land, brush-covered land, or grass-covered land; and specify fire suppression equipment that must be provided onsite for various types of work in fire-prone areas.

These regulations include the following:
• Earthmoving and portable equipment with internal combustion engines would be equipped with a spark arrestor to reduce the potential for igniting a wildland fire (Public Resources Code Section 4442);
• Appropriate fire suppression equipment would be maintained during the highest fire danger period, from April 1 to December 1 (Public Resources Code Section4428); • On days when a burning permit is required, flammable materials would be removed to a distance of 10 feet from any equipment that could produce a spark, fire, or flame, and the construction contractor would maintain appropriate fire suppression equipment (Public Resources Code Section 4427); and
• On days when a burning permit is required, portable tools powered by gasoline-fueled internal combustion engines would not be used within 25 feet of any flammable materials (Public Resources Code Section 4431).

DocuSign Envelope ID: 08C9986C-1739-404C-A3D4-14CDA85BC6D8

Fisher Creek Detention Basin Expansion 88 Initial Study Morgan Hill January 2022
California Code of Regulations Title 14
The California Board of Forestry and Fire Protection has adopted regulations, known as SRA Fire Safe Regulations, which apply basic wildland fire protection standards for building, construction, and development occurring in a SRA. The future design and construction of structures, subdivisions and developments in SRAs are required to provide for the basic emergency access and perimeter wildfire protection measures discussed in Title 14.

Fire Management Plans
CAL FIRE has developed an individual Unit Fire Management Plan for each of its 21 units and six contract counties. CAL FIRE has developed a strategic fire management plan for the Santa Clara County Unit, which covers the project area and addresses citizen and firefighter safety, watersheds and water, timber, wildlife and habitat (including rare and endangered species), unique areas (scenic, cultural, and historic), recreation, range, structures, and air quality. The plan includes stakeholder contributions and priorities and identifies strategic areas for pre-fire planning and fuel treatment as defined by the people who live and work with the local fire issues.

Existing Conditions
The project site is not located in the very high fire severity zone as determined by the Cal Fire’s Fire and Resource Assessment Program (FRAP) maps.26

4.20.2 Impact Discussion
Potentially
Significant
Impact
Less than
Significant
with Mitigation
Incorporated
Less than
Significant
Impact
No Impact
If located in or near state responsibility areas or
lands classified as very high fire hazard severity
zones, would the project:
1) Substantially impair an adopted emergency
response plan or emergency evacuation plan?
2) Due to slope, prevailing winds, and other
factors, exacerbate wildfire risks, and thereby
expose project occupants to pollutant
concentrations from a wildfire or the
uncontrolled spread of a wildfire?
3) Require the installation or maintenance of
associated infrastructure (such as roads, fuel
breaks, emergency water sources, power lines,
or other utilities) that may exacerbate fire risk
or that may result in temporary or ongoing
impacts to the environment?
26 Cal Fire. Fire and Resource Assessment Program Very High Fire Severity Map: Morgan Hill. October 9, 2008.

DocuSign Envelope ID: 08C9986C-1739-404C-A3D4-14CDA85BC6D8

Fisher Creek Detention Basin Expansion 89 Initial Study Morgan Hill January 2022
Potentially
Significant
Impact
Less than
Significant
with Mitigation
Incorporated
Less than
Significant
Impact
No Impact
If located in or near state responsibility areas or
lands classified as very high fire hazard severity
zones, would the project:
4) Expose people or structures to significant
risks, including downslope or downstream
flooding or landslides, as a result of runoff,
post-fire slope instability, or drainage
changes?
The project site is not located in or near state responsibility areas or lands classified as very high fire hazard severity zones; therefore, the project would not result in wildfire impacts. (No Impact) DocuSign Envelope ID: 08C9986C-1739-404C-A3D4-14CDA85BC6D8

Fisher Creek Detention Basin Expansion 90 Initial Study Morgan Hill January 2022

MANDATORY FINDINGS OF SIGNIFICANCE
Potentially
Significant
Impact
Less than
Significant
with Mitigation
Incorporated
Less than
Significant
Impact
No Impact
1) Does the project have the potential to
substantially degrade the quality of the
environment, substantially reduce the habitat
of a fish or wildlife species, cause a fish or
wildlife population to drop below selfsustaining levels, threaten to eliminate a plant or animal community, substantially reduce the
number or restrict the range of a rare or
endangered plant or animal, or eliminate
important examples of the major periods of
California history or prehistory?
2) Does the project have impacts that are
individually limited, but cumulatively
considerable? (“Cumulatively considerable”
means that the incremental effects of a project
are considerable when viewed in connection
with the effects of past projects, the effects of
other current projects, and the effects of
probable future projects.)
3) Does the project have environmental effects
which will cause substantial adverse effects on
human beings, either directly or indirectly?
Impact MFS-1: The project does not have the potential to substantially degrade the quality of the environment, substantially reduce the habitat of a fish or wildlife species, cause a fish or wildlife population to drop below selfsustaining levels, threaten to eliminate a plant or animal community, substantially reduce the number or restrict the range of a rare or endangered plant or animal, or eliminate important examples of the major periods of California history or prehistory. (Less than Significant Impact)
As discussed in the previous sections of this Initial Study, the proposed project would not degrade the quality of the environment with implementation of identified Standard Permit Conditions and mitigation measures. As discussed in Section 4.4, Biological Resources, with implementation of the identified standard Habitat Plan measures, the project would not significantly impact sensitive habitats or species. As discussed in Section 4.5, Cultural Resources, with implementation of the identified standard measures, the project would result in a less than significant impact on archaeological resources. The project would have a less than significant impact on the historic train trestle and would have no impact on tribal cultural resources. (Less than Significant Impact) DocuSign Envelope ID: 08C9986C-1739-404C-A3D4-14CDA85BC6D8

Fisher Creek Detention Basin Expansion 91 Initial Study Morgan Hill January 2022
Impact MFS-2: The project does not have impacts that are individually limited, but cumulatively considerable. (Less than Significant Impact) Under Section 15065(a)(3) of the CEQA Guidelines, a lead agency shall find that a project may have a significant effect on the environment where there is substantial evidence that the project has potential environmental effects “that are individually limited, but cumulatively considerable.” As defined in Section 15065(a)(3) of the CEQA Guidelines, cumulatively considerable means “that the incremental effects of an individual project are significant when viewed in connection with the effects of past projects, the effects of other current projects, and the effects of probable future projects.” This Initial Study evaluates the environmental impacts of the proposed basin excavation project. This Initial Study also takes into account other past, pending, and probable future projects whose impacts could combine to produce cumulative impacts.

Resource Topics not Impacted by the Project
The project would result in no wildfire hazards and would have no impact on aesthetics, agricultural resources, mineral resources, public services, recreational facilities, or wildfire; therefore, the project has no potential to combine with other projects to result in cumulative impacts to those resources. (No Cumulative Impact)
Resource Topics with Less than Significant Project Impacts Air Quality
The proposed project would contribute to emissions in the air basin during the construction period of the project. Additionally, the construction would create dust in the form of PM2.5 And PM10 which would be mitigated through best management practices on site. With the incorporation of best management practices, the proposed project would not significantly contribute to harmful particulates in the area around the project site. Additionally, the proposed project would only temporarily contribute to air quality impacts in the area and would not significantly contribute to cumulative impacts in the project area. Therefore, the proposed project would not result in significant cumulative impacts to air quality. (Less than Significant Cumulative Impact) Biological Resources
The proposed project would disturb species and habitats on site and result in the removal of wetland areas within the detention basin. The proposed project would comply with the Habitat Plan protecting biological resources in the area which would require the payment of fees and incorporation of standard conditions to reduce impacts and protect resources in the environment around the project site. The proposed project is adjacent to two other detention basin excavations within the same parcel, which have been analyzed in other environmental clearances. These basins would contribute to impacts near the project site however, they would also have to comply with the conditions in the habitat plan and would have their impact reduced to a less than significant level and would not contribute to a significant cumulative impact. Through compliance with the Habitat Plan the impacts of the proposed project would be limited to the project site and would not significantly contribute to impacts in the surrounding area. Therefore, the proposed project would have a less than significant cumulative impact. (Less than Significant Cumulative Impact) DocuSign Envelope ID: 08C9986C-1739-404C-A3D4-14CDA85BC6D8

Fisher Creek Detention Basin Expansion 92 Initial Study Morgan Hill January 2022
Cultural and Tribal Cultural Resources
The proposed project would require the excavation of the bottom of the detention basin which would potentially disturb unknown cultural resources on site. The proposed project would comply with standard measures protecting cultural resources if they are discovered on site, therefore, the proposed project would not result in significant cumulative impacts because the project would not contribute to the loss of cultural resources within the area around the project site. Other construction and development projects in the area would be subject to the same standard measures to protect known and unknown resources that may be present. (Less than Significant Cumulative Impact) Energy Resources
The proposed project would utilize energy resources efficiently during construction and would not contribute to long term increases in energy at the project site. The proposed project would not significantly contribute to ongoing energy impacts or create a substantial use in energy which would interfere with the implementation of energy conservation plans. Therefore, the proposed project would have a less than significant cumulative impact. (Less than Significant Cumulative Impact) Geology and Soil Resources
The proposed project would disturb soil on site however, construction of the project would incorporate standard construction measures to prevent the loss of soil on site. The detention basin would not increase the risk of loss of life or damage of property as a result of geologic incident.

Therefore, the proposed project would result in a less than significant cumulative impact. (Less than Significant Cumulative Impact)
Greenhouse Gas Emissions
The proposed project would temporarily result in emissions from increased construction activities, however the proposed project on its own would not significantly result in the release of greenhouse gas emission. Therefore, the proposed project would have a less than significant cumulative impact on greenhouse gas emission in the air basin. (Less than Significant Cumulative Impact) Hazards and Hazardous Materials
The project would not increase the concentration of hazardous materials used on site or result in the transport of hazardous materials in the area around the project site. Therefore, the project would not impact the surrounding sites and would not result in cumulative increases in hazards around the project site. (Less than Significant Cumulative Impact) Hydrologic Resources
The proposed project would incorporate standard measures to prevent water quality impacts during construction as a result of ground disturbance within the detention basin. The proposed project would have a localized less than significant impact and would not substantially contribute to water quality issues in water bodies around the project site. Therefore, the proposed project would result in a less than significant cumulative impact. (Less than Significant Cumulative Impact) DocuSign Envelope ID: 08C9986C-1739-404C-A3D4-14CDA85BC6D8

Fisher Creek Detention Basin Expansion 93 Initial Study Morgan Hill January 2022
Land Use
The proposed project would not substantially change the land uses on the project site and would not contribute to changes in the surrounding land uses. Therefore, the proposed project would result in a less than significant cumulative impact. (Less than Significant Cumulative Impact) Noise
The proposed project would create construction noise for the five-week duration of the excavation of the detention basin, however the construction of the basin would not coincide with the construction of other surrounding projects and the proposed project would result in a less than significant cumulative impact. Once constructed, the project would not contribute to operational noise in the area. (Less than Significant Cumulative Impact)
Population
The proposed project would allow for greater drainage capacity for the surrounding area; however this would not eliminate an existing constraint on growth, and would have no impact on the prospective development planned in the surrounding area beyond what is planned in the General Plan. Additionally, the proposed construction would not displace existing housing, therefore, the proposed project would not contribute to significant cumulative population and housing impacts. (Less than Significant Cumulative Impact)
Transportation
The proposed project would not alter the transportation systems in the area around the project site and would only result in temporary traffic increases during construction due to soil hauling. The proposed project would not contribute to existing transportation impacts in the area and would not result in long term impacts to the area around the project site. Therefore, the proposed project would have a less than significant cumulative impact. (Less than Significant Cumulative Impact) Utilities
The proposed project would result in a minor increase in solid waste generation through the transport of soil to local landfills. This waste would be a minor increase in the overall waste disposal of the county and would not significantly contribute to an increase in solid waste. Therefore, the proposed project would result in a less than significant cumulative impact. (Less than Significant Cumulative Impact)
Impact MFS-3: The project does not have environmental effects which will cause substantial adverse effects on human beings, either directly or indirectly. (Less than Significant Impact)
Consistent with Section 15065(a)(4) of the CEQA Guidelines, a lead agency shall find that a project may have a significant effect on the environment where there is substantial evidence that the project has the potential to cause substantial adverse effects on human beings, either directly or indirectly.

Pursuant to this standard, a change to the physical environment that might otherwise be minor must DocuSign Envelope ID: 08C9986C-1739-404C-A3D4-14CDA85BC6D8

Fisher Creek Detention Basin Expansion 94 Initial Study Morgan Hill January 2022
be treated as significant if people would be significantly affected. This factor relates to adverse changes to the environment of human beings generally, and not to effects on particular individuals.

While changes to the environment that could indirectly affect human beings would be represented by all of the designated CEQA issue areas, the impact areas of the project that could directly affect human beings is air quality. Implementation of the best management practices, standard permit conditions, mitigation measures, and adherence to General Plan, City Code, and state and federal regulations described in these sections of the report, would avoid significant impacts. No other direct or indirect adverse effects on human beings have been identified. (Less than Significant Impact) DocuSign Envelope ID: 08C9986C-1739-404C-A3D4-14CDA85BC6D8

Fisher Creek Detention Basin Expansion 95 Initial Study Morgan Hill January 2022
SECTION 5.0 REFERENCES
The analysis in this Initial Study is based on the professional judgement and expertise of the environmental specialists preparing this document, based upon review of the site, surrounding conditions, site plans, and the following references:

California Department of Transportation. “Scenic Highways.” Accessed December 10, 2020. https://dot.ca.gov/programs/design/lap-landscape-architecture-and-community-livability/lapliv-i-scenic-highways.

City of Morgan Hill. 2035 General Plan. July 27, 2016. http://www.morganhill.ca.gov/75/GeneralPlan.

California Department of Conservation. “Farmland Mapping and Monitoring Program.” Accessed December 21, 2020. http://www.conservation.ca.gov/dlrp/fmmp/Pages/Index.aspx.

California Department of Conservation. “Land Evaluation & Site Assessment Model.” Accessed December 21, 2020. http://www.conservation.ca.gov/dlrp/Pages/qh_lesa.aspx.

California Department of Conservation. “Williamson Act.” http://www.conservation.ca.gov/dlrp/lca.

California Department of Forestry and Fire Protection. “Fire and Resource Assessment Program.” Accessed December 21, 2020. http://frap.fire.ca.gov/.

City of Morgan Hill. 2035 General Plan. December 2017. https://www.morganhill.ca.gov/DocumentCenter/View/22839/MH2035-General-Plan---December-2017?bidId=.

BAAQMD. Final 2017 Clean Air Plan. April 19, 2017. http://www.baaqmd.gov/plans-andclimate/air-quality-plans/current-plans.

California Office of Historic Preservation. “CEQA Guidelines Section 15064.5(a)(3) and California Office of Historic Preservation Technical Assistance Series #6.” Accessed August 31, 2020. http://www.ohp.parks.ca.gov/pages/1069/files/technical%20assistance%20bulletin%206%20 2011%20update.pdf.

California Building Standards Commission. “California Building Standards Code.” Accessed December 21, 2020. https://www.dgs.ca.gov/BSC/Codes#@ViewBag.JumpTo.

California Energy Commission (CEC). “2019 Building Energy Efficiency Standards.” Accessed December 21, 2020. https://www.energy.ca.gov/programs-and-topics/programs/buildingenergy-efficiency-standards/2019-building-energy-efficiency.

Santa Clara County. Santa Clara County Geologic Hazard Zones. Map. Oct 26, 2012.

United States Environmental Protection Agency. “Superfund: CERCLA Overview.” Accessed May 11, 2020. https://www.epa.gov/superfund/superfund-cercla-overview.

DocuSign Envelope ID: 08C9986C-1739-404C-A3D4-14CDA85BC6D8

Fisher Creek Detention Basin Expansion 96 Initial Study Morgan Hill January 2022
United States Environmental Protection Agency. “Summary of the Resource Conservation and Recovery Act.” Accessed May 11, 2020. https://www.epa.gov/laws-regulations/summaryresource-conservation-and-recovery-act.

California Environmental Protection Agency. “Cortese List Data Resources.” Accessed May 28, 2020. https://calepa.ca.gov/sitecleanup/corteselist/.

California Department of Water Resources, Division of Safety of Dams. Accessed June 9, 2020. https://water.ca.gov/Programs/All-Programs/Division-of-Safety-ofDams#:~:text=Since%20August%2014%2C%201929%2C%20the,Safety%20of%20Dams% 20(DSOD).

City of Morgan Hill. 2035 Morgan Hill General Plan FEIR. January 13, 2016.

California Department of Housing and Community Development. “Regional Housing Needs Allocation and Housing Elements” Accessed December 21, 2020. http://hcd.ca.gov/community-development/housing-element/index.shtml.

Association of Bay Area Governments and Metropolitan Transportation Commission. Accessed December 21, 2020. “Project Mapper.” http://projectmapper.planbayarea.org/.

Cal Fire. Fire and Resource Assessment Program Very High Fire Severity Map: Morgan Hill.

October 9, 2008.

DocuSign Envelope ID: 08C9986C-1739-404C-A3D4-14CDA85BC6D8

Fisher Creek Detention Basin Expansion 97 Initial Study Morgan Hill January 2022
SECTION 6.0 LEAD AGENCY AND CONSULTANTS

LEAD AGENCY
City of Morgan Hill
Chris Ghione, Director of Public Works
Yat Cho, Senior Project Manager

CONSULTANTS
David J. Powers & Associates, Inc.

Environmental Consultants and Planners
Akoni Danielsen, Principal Project Manager
Patrick Kallas, Associate Project Manager
Ryan Osako, Graphics Artist
Illingworth and Rodkin, Inc.

Air Quality and Noise Consultant
Live Oak Associates, Inc.

Arborist
H.T. Harvey and Associates, Inc.

Biological Consultant
DocuSign Envelope ID: 08C9986C-1739-404C-A3D4-14CDA85BC6D8

7 CITY COUNCIL STAFF REPORT
MEETING DATE: March 16, 2022
PREPARED BY:

Michelle Bigelow, City Clerk
APPROVED BY: City Manager
APPROVE THE MARCH 2, 2022 SPECIAL/REGULAR CITY COUNCIL

MEETING MINUTES

RECOMMENDATION(S)
Approve the March 2, 2022 Special/Regular City Council Meeting Minutes.

Meeting Minutes
City Council
Rich Constantine - Mayor
Gino Borgioli - Mayor Pro Tem
John McKay - Council Member
Yvonne Martinez Beltran - Council Member
Rene Spring - Council Member
Wednesday, March 2, 2022 5:30 PM
Virtual Meeting

CALL TO ORDER
Mayor Constantine called the Special City Council meeting to order at 5:30 p.m.

ROLL CALL ATTENDANCE
City Clerk Michelle Bigelow called the roll.

PRESENT Rich Constantine, Rene Spring, Gino Borgioli, John McKay, Yvonne Martinez Beltran
ABSTAIN None
ABSENT None
EXCUSED None
Council Member McKay joined at 5:32 p.m.

DECLARATION OF POSTING AGENDA
City Clerk Michelle Bigelow declared the posting of the agenda.

OTHER BUSINESS

1. INTERVIEW CANDIDATES TO FILL ONE (1) SEAT ON THE PLANNING

COMMISSION
Recommendation:

March 2, 2022
2 1. Discuss the characteristics/traits that a successful applicant(s) would possess;

2. Conduct Interviews;

3. Council Members identify top applicant(s) and provide recommendation to the Mayor; and

4. Discuss and/or appoint applicant(s).

Estimated Time: 90 Minutes
Mayor Constantine asked the Council Members to share what they are looking for with a Planning Commissioner.

The following applicants were interviewed:
• Chelsea Doiguchi
• Mark Grisedale
• Paul Lake
• Thomas Spitters
Paul Lake was appointed to the Planning Commission with a term ending June 1, 2023.

The meeting recessed at 7:12 p.m. and reconvened at 7:22 p.m.

REGULAR MEETING
The regular meeting was called to order at 7:22 p.m.

PROCLAMATIONS
Proclaiming the month of March 2022 as Youth Arts Month

CITY COUNCIL REPORTS
Council Member Spring spoke regarding his assignment with the South County Regional Wastewater Authority. He shared that he is the Vice-Chair of the Santa Clara Valley Habitat Agency Governing Board and serves on their Implementation Board. He really enjoys serving on those boards as the agency does a great job of purchasing land for preservation, including a large area of the Tilton Ranch. He attended a wonderful event this weekend to show Morgan Hill's solidarity with the people of Ukraine. We have residents of Ukraine living in our community with families still living in Ukraine and asked for a moment of silence thinking of the people of Ukraine. He would like to ask as a future agenda item for staff to come back with a resolution in solidarity with Ukraine and hang the Ukrainian flag at 3 locations in the City.

March 2, 2022
3 CITY MANAGER'S REPORT
City Manager Christina Turner announced the change in irrigation rules that started yesterday, March 1 through October 31st, typical lawn and garden bed sprinkler irrigation is now limited. More information can be found on the website:
www.mhvalueswater.com. The County announced changes to the current mask mandate that went into effect today. Teammates and members of the public may choose to continue to wear or remove their face coverings indoors and outdoors regardless of vaccination status. The California Department of Public Health continues to require masking in higher-risk settings such as public transit, healthcare facilities, shelters, jails, and long-term care facilities. The Mayor’s State of the City Address will be held virtually on Zoom next Wednesday, March 9th at 7:00 pm. She also gave some project updates. The sewer main on East Fifth Street between Monterey Road and Depot Street, through Hale Lumber Yard to Diana Avenue is being upgraded. Work is underway and will take approximately two more weeks. The Depot/Church Realignment Project will realign Depot Street with Church Street through the Community and Cultural Center (CCC) Parking lot. Work on the clearing of that site has commenced and work in the public right-of-way will begin later this month, continuing through the summer. In collaboration with Valley Water and Graniterock Construction, an approximately twomile paved trail has been installed along the maintenance road at West Little Llagas Creek from Monterey Road to Middle Avenue and Watsonville Road. Construction of the Magical Bridge Playground in Community Park is nearing completion and we hope to announce a Grand Opening date soon.

CITY ATTORNEY'S REPORT
No report.

OTHER REPORTS
Council Member Martinez Beltran expressed gratitude to the Morgan Hill Police Department on behalf of herself and her neighbors for the police department's professionalism, communication, and respectful behavior during a scary event involving a suspect that had evaded police and was hiding near her home. She thanked Sergeant Woodrow and Officer Tolentino for doing an excellent job.

Council Member McKay expressed his support for the Ukrainian people both here in our community and throughout the world. He shared that if you are looking to contribute to supporting refugees, Chuck Bergoff has brought forward a Non-Governmental Organization (NGO) that is highly rated, World Central Kitchen. You can go to WCK.org to contribute.

Mayor Constantine announced that he will adjourn tonight's meeting in honor of the Ukrainian people.

March 2, 2022
4 PUBLIC COMMENT
Public comment opened at 7:35 p.m. The following people were called to speak:

Laura Clendaniel with Healthier Kids Foundation
Melissa Clark
Jim Perteet
There being no further requests to speak, public comment closed.

ADOPTION OF AGENDA
MOTION:

Adopting the agenda as posted.

RESULT: Passed
MOVER: Council Member Spring
SECONDER: Council Member Martinez Beltran
AYES: Mayor Constantine, Council Member Spring, Mayor Pro Tem Borgioli, Council Member McKay, Council Member Martinez Beltran
NAYS: None
ABSTAIN: None
ABSENT: None

CONSENT CALENDAR
MOTION:

Approving consent calendar items 2 through 10 and 12.

RESULT: Passed
MOVER: Mayor Pro Tem Borgioli
SECONDER: Council Member Martinez Beltran
AYES: Mayor Constantine, Council Member Spring, Mayor Pro Tem Borgioli, Council Member McKay, Council Member Martinez Beltran
NAYS: None
ABSTAIN: None
ABSENT: None

2. RECEIVE UPDATE REGARDING PAVEMENT REHABILITATION PLANNING Recommendation:

Receive update on pavement rehabilitation planning.

3. ACCEPT BRITTON MIDDLE SCHOOL PEDESTRIAN ENHANCEMENT

PROJECT
Recommendation:

March 2, 2022
5 1. Accept as complete the Britton Middle School Pedestrian Enhancement Project;

2. Authorize the City Engineer to sign the Notice of Completion; and

3. Direct the City Clerk to file the Notice of Completion with the County Recorder's Office.

4. AWARD 2022 SIDEWALK REPAIR PROJECT TO ASG BUILDERS, INC.

Recommendation:

1. Adopt a resolution amending the Fiscal Year 2021-22 adopted budget to appropriate an additional $13,407 from Fund 346: Public Facilities for the 2022 Sidewalk Repair Project;

2. Award a contract to ASG Builders, Inc. in the amount of $67,860; and authorize the expenditure of 40% construction contingency funds not to exceed $27,144 for a total authorization of $95,004; and

3. Authorize the City Manager to execute and administer that certain construction contract with ASG Builders, Inc.

5. AWARD AGREEMENT FOR COMPLETION OF THE SEWER PIPE

INSPECTION AND CONDITION ASSESSMENT
Recommendation:

Approve and authorize the City Manager to execute an agreement with Water Works Engineers, LLC. in the amount of $679,852 inclusive of a 10% contingency to complete the sewer pipeline inspection and condition assessment project.

6. ADOPT RESOLUTION ADDING SECTION 20516 COST SHARE TO THE

MANAGEMENT, PROFESSIONAL, AND CONFIDENTIAL EMPLOYEES
RESOLUTION NO. 21-050
Recommendation:

Adopt resolution adding Section 20516 Cost Share to the Management, Professional, and Confidential Employees Resolution No. 21-050.

7. ADOPT RESOLUTION AMENDING THE CITY’S SOLID WASTE BUDGET AND

APPROVE AN AMENDMENT TO THE FISCAL AGENT SERVICE

AGREEMENT WITH THE COUNTY OF SANTA CLARA
Recommendation:

1. Adopt a Resolution appropriating an additional $156,658 to the City’s Countywide Solid Waste Program (Fund 246);

2. Accept the first amendment to the Fiscal Agent Service Agreement with the County of Santa Clara to increase the amount of the contract by $119,170 for a total contract amount of $528,136;

3. Authorize the City Manager to execute and administer the amendment with the County of Santa Clara; and

March 2, 2022
6 4. Authorize the City Manager to extend the term of the Fiscal Agent Service Agreement with the County of Santa Clara for up to four additional oneyear terms.

8. ADOPT RESOLUTION AUTHORIZING SUBMITTAL OF APPLICATIONS FOR

THE ANNUAL RECYCLING PAYMENT PROGRAM AND A ONE-TIME
REGIONAL GRANT TO SUPPORT SB 1383 PROGRAMS
Recommendation:

Adopt a resolution authorizing the City's application for recycling program funding through the annual CalRecyle payment program and for a one-time regional grant application to fund activities related to SB 1383 compliance.

9. APPROVE FINAL MAP FOR SAN SEBASTIAN PHASE 3A - TRACT NO. 10530 AND RELATED SUBDIVISION IMPROVEMENTS AGREEMENT
Recommendation:

1. Approve the Final Map;

2. Authorize the City Manager to execute the Subdivision Improvements Agreement with Toll CA XX, L.P.; and

3. Authorize the recordation of the Final Map and Subdivision Improvements Agreement.

10. APPROVE AN IMPROVEMENT AGREEMENT WITH MORGAN HILL

MULTIFAMILY LLC FOR THE BUTTERFIELD VILLAGE PROJECT
Recommendation:

1. Approve an Improvement Agreement with Morgan Hill Multifamily LLC;

2. Authorize the City Manager to execute the Improvement Agreement; and

3. Authorize the recordation of the Improvement Agreement.

12. APPROVE THE JANUARY 28 & 29, 2022 GOAL SETTING MINUTES AND FEBRUARY 16, 2022 CITY COUNCIL MEETING MINUTES
Recommendation:

Approve the January 28 & 29, 2022 Goal Setting Minutes and February 16, 2022 City Council Meeting Minutes.

ITEM PULLED FOR DISCUSSION

11. APPROVE THE CONSULTANT AGREEMENT WITH CIVITAS ADVISORS IN THE AMOUNT NOT TO EXCEED $64,500 FOR THE FORMATION OF

MORGAN HILL DOWNTOWN PROPERTY BUSINESS IMPROVEMENT

DISTRICT (MHDPBID) AND DIRECT THE CITY MANAGER TO SIGN THE

PETITION IN SUPPORT OF THE DOWNTOWN PBID FORMATION
Recommendation:

March 2, 2022
7 1. Approve and authorize the City Manager to execute and administer a consulting agreement with Civitas Advisors not to exceed $64,500 to form a Morgan Hill Downtown Property Business Improvement District (MHDPBID); and

2. Direct the City Manager to sign the MHDPBID petition indicating the City’s support of the PBID formation.

Economic Development Director Matt Mahood provided the report and presentation. John Lambeth of Civitas answered questions.

This item was paused to start the Redistricting Public Hearing which had a time certain start of 8:00 p.m. The discussion on item 11 continued at the conclusion of item 15.

MOTION:

Extending the meeting until 12:00 a.m.

RESULT: Passed
MOVER: Council Member Spring
SECONDER: Council Member Martinez Beltran
AYES: Mayor Constantine, Council Member Spring, Mayor Pro Tem Borgioli, Council Member McKay, Council Member Martinez Beltran
NAYS: None
ABSTAIN: None
ABSENT: None
Public comment opened at 11:06 p.m. The following people were called to speak:

Joe Baranowski
Armando Benavides
There being no further requests to speak, public comment closed.

SUBSTITUTE MOTION:

Direct staff to come back with a new contract to work with Civitas to prepare the district map and engineering report and look at excluding non-profits and public facilities and looking at including commercial residential.

RESULT: Failed
MOVER: Council Member Martinez Beltran
SECONDER: None
AYES: None

March 2, 2022
8 NAYS: None
ABSTAIN: None
ABSENT: None
MOTION:

Approving the recommended actions including what the exposure is to our nonprofits, commercial residential, and city properties.

RESULT: Passed
MOVER: Council Member McKay
SECONDER: Mayor Pro Tem Borgioli
AYES: Mayor Constantine, Mayor Pro Tem Borgioli, Council Member McKay
NAYS: Council Member Spring, Council Member Martinez Beltran ABSTAIN: None
ABSENT: None
MOTION:

Extending the meeting to 1:00 a.m.

RESULT: Failed
MOVER: Mayor Constantine
SECONDER: Mayor Pro Tem Borgioli
AYES: Mayor Constantine, Mayor Pro Tem Borgioli
NAYS: Council Member Spring, Council Member McKay, Council Member Martinez Beltran
ABSTAIN: None
ABSENT: None
MOTION:

Extending the meeting to hear items 14 and 18.

RESULT: Passed
MOVER: Council Member Martinez Beltran

March 2, 2022
9 SECONDER: Council Member Spring
AYES: Council Member Spring, Council Member McKay, Council Member Martinez Beltran
NAYS: Mayor Constantine, Mayor Pro Tem Borgioli
ABSTAIN: None
ABSENT: None

OTHER BUSINESS

13. MONTHLY BUDGET UPDATE AND JANUARY 2022 FINANCIAL AND

INVESTMENT REPORTS
Recommendation:

Accept and file report.

Estimated Time: 10 Minutes
Item 13 was not heard.

14. ADOPT RESOLUTION CERTIFYING THE INITIATIVE PETITION TITLED:

CITIZENS’ INITIATIVE AMENDING THE GENERAL PLAN TO REQUIRE

VOTER APPROVAL OF ANY FUTURE MONTEREY ROAD LANE

REDUCTION AND DIRECT STAFF TO PREPARE AN IMPACT REPORT
Recommendation:

1. Adopt resolution accepting the City Clerk’s Certificate of Sufficiency for the Initiative Petition Titled: Citizens’ initiative amending the General Plan to require voter approval of any future Monterey Road lane reduction; and

2. Direct staff to prepare an impact report under Elections Code section 9212 within 30 days and no later than April 1, 2022, for City Council consideration at the April 6, 2022 City Council meeting.

Estimated Time: 15 Minutes
City Clerk Michelle Bigelow provided the report.

MOTION:

Adopting the resolution certifying the petition and placing the initiative on the November 8, 2022 ballot.

RESULT: Failed
MOVER: Council Member Martinez Beltran
SECONDER: None
AYES: None
NAYS: None

March 2, 2022
10 ABSTAIN: None
ABSENT: None
Public Comment opened at 12:10 a.m. The following people were called to speak:

Joe Baranowski
Armando Benavides
Patricia Darling
There being no further requests to speak, public comment closed.

SUBSTITUTE MOTION:

Adopt resolution certifying the initiative, placing it on the ballot, and ensuring no action is taken to close lanes in Downtown prior to the results of the election.

RESULT: Failed
MOVER: Council Member Spring
SECONDER: Council Member Martinez Beltran
AYES: Council Member Spring, Council Member Martinez Beltran NAYS: Mayor Constantine, Mayor Pro Tem Borgioli, Council Member McKay
ABSTAIN: None
ABSENT: None
MOTION:

Approving the recommended actions and directing staff to study all items listed on the staff report.

RESULT: Passed
MOVER: Mayor Pro Tem Borgioli
SECONDER: Council Member Martinez Beltran
AYES: Mayor Constantine, Council Member Spring, Mayor Pro Tem Borgioli, Council Member McKay, Council Member Martinez Beltran
NAYS: None
ABSTAIN: None
ABSENT: None

March 2, 2022
11 PUBLIC HEARING (TO BE HEARD AT 8:00 P.M.)

15. REVIEW AND ADOPT NEW CITY COUNCIL DISTRICT MAP
Recommendation:

1. Review and discuss draft maps 103, 104,105, 106,108, and NDC Green, including what about the maps work and does not work and what communities of interest would be protected or potentially divided; and

2. Adopt resolution adopting a City Council District map.

Estimated Time: 60 Minutes
City Clerk Michelle Bigelow, City Attorney Donald Larkin, and Dr. Justin Levitt with National Demographics Corporation provided the report and presentation.

Public comment opened at 9:27 p.m. The following people were called to speak:

Joe Baranowski
Julissa Martinez
Patricia Darling
Delia Gomez
Yolanda
Elizabeth Garcia
Sally Casas
Roberto Aguirrez
Armando Benavides
Kathy Chavez Napoli
Edith
There being no further requests to speak, public comment closed.

The meeting recessed at 10:05 p.m. and reconvened at 10:10 p.m.

MOTION:

Call the question.

RESULT: Failed
AYES: Mayor Pro Tem Borgioli, Council Member McKay
NAYS: Mayor Constantine, Council Member Spring, Council Member Martinez Beltran
ABSTAIN: None
ABSENT: None
MOTION:

Adopt resolution adopting the NDC Green map.

March 2, 2022
12 RESULT: Failed
MOVER: Council Member McKay
SECONDER: Mayor Pro Tem Borgioli
AYES: Mayor Pro Tem Borgioli, Council Member McKay
NAYS: Mayor Constantine, Council Member Spring, Council Member Martinez Beltran
ABSTAIN: None
ABSENT: None
MOTION:

Adopt resolution adopting public map 103.

RESULT: Passed
MOVER: Council Member Martinez Beltran
SECONDER: Council Member Spring
AYES: Mayor Constantine, Council Member Spring, Council Member Martinez Beltran
NAYS: Mayor Pro Tem Borgioli, Council Member McKay
ABSTAIN: None
ABSENT: None

PUBLIC HEARINGS

16. ADOPT INDUSTRIAL PRESERVATION AND OPTIMIZATION POLICY Recommendation:

Adopt an Industrial Land Preservation and Optimization Policy Estimated Time: 30 Minutes
Item 16 was not heard.

17. ADOPT ZONING CODE AMENDMENT TO SECTION 18.26.020 (LAND USE REGULATIONS) OF CHAPTER 18.26 (INDUSTRIAL ZONING DISTRICTS) OF TITLE 18 (ZONING) TO MODIFY THE LAND USES PERMITTED IN THE

INDUSTRIAL ZONING DISTRICTS
Recommendation:

1. Open/close the public hearing.

2. Waive first and second reading of the Ordinance Amendment; and

3. Introduce Ordinance Amendment as recommended by staff and amended

March 2, 2022
13 by the Planning Commission.

Estimated Time: 30 Minutes
Item 17 was not heard.

18. ADOPTION AND RATIFICATION OF ORDINANCE NO. 2320 PREVIOUSLY

ADOPTED AS AN URGENCY ORDINANCE
Recommendation:

1. Open/close the public hearing;

2. Waive first and second reading of the Ordinance;

3. Introduce Ordinance; and

4. Adopt resolution placing Ordinance on the November 2022 ballot.

Estimated Time: 15 Minutes
Economic Development Director Matt Mahood provided the report and presentation.

The public hearing opened at 12:31 a.m.

Joe Baranowski was called to speak.

There being no further requests to speak, the public hearing closed.

MOTION:

Waiving the first and second reading of the ordinance.

RESULT: Passed
MOVER: Council Member Martinez Beltran
SECONDER: Council Member Spring
AYES: Mayor Constantine, Council Member Spring, Mayor Pro Tem Borgioli, Council Member McKay, Council Member Martinez Beltran
NAYS: None
ABSTAIN: None
ABSENT:

MOTION:

Introducing the ordinance and adopting the resolution placing the measure on the November 8, 2022 ballot.

RESULT: Passed
MOVER: Council Member Martinez Beltran
SECONDER: Council Member Spring

March 2, 2022
14 AYES: Mayor Constantine, Council Member Spring, Mayor Pro Tem Borgioli, Council Member McKay, Council Member Martinez Beltran
NAYS: None
ABSTAIN: None
ABSENT: None

FUTURE COUNCIL INITIATED AGENDA ITEMS
Council Member Spring requested a resolution come to the Council in support and solidarity of Ukraine, including a request to raise the Ukrainian flag for 30 days.

Council Member Martinez Beltran requested team building.

ADJOURNMENT
There being no further business, Mayor Constantine adjourned the meeting at 12:42 a.m. in honor and recognition of Ukraine and the Ukrainian people.

Minutes Prepared by:

Michelle Bigelow, City Clerk

7 CITY COUNCIL STAFF REPORT
MEETING DATE: March 16, 2022
PREPARED BY:

Kim Mancera, Municipal Services Assistant
APPROVED BY: City Manager
REAPPOINTMENT OF TWO (2) COMMISSIONERS ON THE LIBRARY,
CULTURE, AND ARTS COMMISSION (LCAC) AND TWO (2)

COMMISSIONERS ON THE PARKS AND RECREATION COMMISSION
(PRC) AND RECRUITMENT TO FILL VACANCIES ON THE TWO

COMMISSIONS

RECOMMENDATION(S)

1. Reappointment of Commissioners Emily Borchers and Patrice Lyn to the Library, Culture, and Arts Commission with terms ending April 1, 2026;

2. Reappointment of Commissioners Craig van Keulen and Maureen GrzanPieracci to the Parks and Recreation Commission with terms ending April 1, 2026;

3. Extending the terms of Commissioners Neil Berman and Ron Locicero until such time that their seats can be filled; and

4. Direct staff to commence recruitment efforts to fill the one (1) vacancy on the LCAC and the two (2) vacancies on the PRC.

Estimated Time:

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Supporting our Youth, Seniors, and Entire Community
Fostering a Positive Organizational Culture
Preserving and Cultivating Public Trust
Preserving our Community History
Enhancing Diversity and Inclusiveness
2022-2023 Strategic Priorities
Community Engagement and Messaging
REPORT NARRATIVE:

The Library, Culture, and Arts Commission (LCAC) has three (3) seats with terms ending on April 1, 2022. Commissioner Paul Lake was selected to fill a vacancy on the

7 Planning Commission during interviews that took place during the City Council Meeting on March 2, 2022, leaving one (1) vacant seat. Current LCAC commissioners Emily Borchers and Patrice Lyn have expressed interest in reappointment.

The Parks and Recreation Commission (PRC) has four (4) seats with terms ending on April 1, 2022. Commissioners Neil Berman and Ronald Locicero notified staff that they would not be seeking reappointment, leaving two (2) vacant seats. Additionally, Commissioners Berman and Locicero have offered to stay on the commission until such time that their seats can be filled. Current PRC commissioners Craig van Keulen and Maureen Grzan-Pieracci have expressed interest in reappointment.

Staff recommends the reappointment of Commissioners Borchers and Lyn to the LCAC and Commissioners van Keulen and Grzan-Pieracci to the PRC, extending the terms of Commissioners Berman and Locicero until such time that their seats can be filled, and to direct staff to commence recruitment efforts to fill the one (1) vacancy on the LCAC and the two (2) vacancies on the PRC. Interviews are tentatively scheduled for Wednesday, May 4, 2022, at 5:30 p.m. with a deadline to apply of Friday, April 22, 2022, at 5:00 p.m.

COMMUNITY ENGAGEMENT:

Involve
Recruitment efforts will be undertaken to encourage citizens to apply for City Council appointment consideration to the PRC and the LCAC via the Morgan Hill Times, City Website, Government Access Channel, Facebook, NextDoor, outreach to community groups, and the weekly 411 emails.

ALTERNATIVE ACTIONS:

The City Council may choose not to reappoint Commissioners Borchers and Lyn to the LCAC and Commissioners van Keulen and Grzan-Pieracci to the PRC, extend their current terms, and direct staff to conduct recruitment and interviews for all available seats with terms ending April 1, 2022.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

Every year, recruitment efforts are conducted to maintain the seven (7) member commissions.

FISCAL AND RESOURCE IMPACT:

There is no fiscal impact associated with the actions to interview and appoint, as the recruitment and appointment process is accommodated in the Council Services and Records Management operating budget.

CEQA (California Environmental Quality Act):

Not a Project.

7 The interview and appointment of commissioners is not a project, as defined in Section 15378 of the State CEQA guidelines.

 





 





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8 CITY COUNCIL STAFF REPORT
MEETING DATE: March 16, 2022
PREPARED BY:

Matthew Mahood, Economic Development Director
APPROVED BY: City Manager

ADOPT INDUSTRIAL PRESERVATION AND OPTIMIZATION POLICY

RECOMMENDATION(S)
Adopt an Industrial Land Preservation and Optimization Policy

Estimated Time: 30 Minutes

COUNCIL PRIORITIES, GOALS & STRATEGIES
2022-2023 Strategic Priorities
Fiscal Sustainability
Economic Development
Guiding Documents
Morgan Hill 2035 General Plan
Economic Blueprint
REPORT NARRATIVE:

POLICY CONSIDERATION:

The City is proposing an Industrial Land Preservation and Optimization Policy that would be implemented through amendments to the zoning code.

BACKGROUND:

In April 2017, the City Council unanimously adopted the 2017 Morgan Hill Economic Blueprint; an economic development strategy intended to foster economic growth by attracting investment, development, and jobs that will ensure fiscal sustainability and vitality for the community. The Economic Blueprint identifies four industries that are key to Morgan Hill’s future growth and further fiscal sustainability. The four key industries are:

1. Innovation and Advanced Manufacturing -- Grow existing companies, attract new industry and grow professional jobs.

2. Retail -- Grow retail offerings and strengthen commercial nodes.

3. Tourism -- Grow leisure, agriculture, wine country & recreational tourism.

4. Health Care -- Grow and foster the medical service and diagnostics industry by

8 attracting services and facilities.

The Economic Blueprint identified four core industries, 13 strategies and 35 action items. Amongst these items, the Economic Blueprint recommended adopting an employment (Industrial) land preservation policy (Action #1), and strengthening General Plan language to prevent the conversion of Industrial lands (Action #2).

To support the work outlined in the Economic Blueprint, in July 2020, the Economic Development Team, in partnership with the Urban Land Institute (ULI) and the Silicon Valley Economic Development Alliance (SVEDA), hosted four independent seminars with industry experts, and planning and economic development professionals to better understand today’s market at a national, regional and local level. The seminars examined the future of the industrial and retail sectors, especially post-Covid-19, and identified tactical strategies for Morgan Hill to consider that would support our industrial preservation and retail concentration goals. In addition, Strategic Economics performed an analysis of the City’s remaining industrial and commercial vacant properties. The findings and results from these presentations were shared at the September 22, 2020 Planning Commission Meeting.

On March 9, 2021, the Planning Commission conducted an Industrial Preservation Policy Workshop to review proposed changes to the Zoning Code to support goals associated with industrial preservation. The proposed policy takes into consideration the Planning Commission’s feedback and community feedback over the last year in regard to the Industrial Ordinance and rules and regulations for distribution facilities.

On February 8, 2022, the Planning Commission heard and adopted the proposed Industrial Preservation & Optimization Policy with one minor change. The original text of Goal E read, "Encourage conversion of Commercial Lands to Industrial Lands where appropriate." The Planning Commission expressed concern with the word "encourage" and requested to replace it with " consider" or "explore." Staff has made the amendment to Goal E to now read, "Explore conversion of Commercial Lands to Industrial Lands where appropriate." PROJECT DESCRIPTION: The City’s 2017 Morgan Hill Economic Blueprint identifies Innovation and Advanced Manufacturing as one of the four core industries key to Morgan Hill’s future growth and fiscal sustainability. One of the key strategies is to preserve Industrial Lands. Specifically, Action #1 calls for the adoption of an employment (Industrial) land preservation Policy, and Action #2 calls to strengthen the General Plan language to prevent conversion of Industrial lands. This Industrial Land Preservation and Optimization Policy, in conjunction with the City’s General Plan, Zoning Ordinance, and Economic Blueprint, aims to preserve the City’s limited supply of industrial land that is critical to the City’s economic vitality. The Industrial Land Preservation and Optimization Policy identifies five key goals (see below) that provide direction and guidance when developing, implementing, and managing policies, programs, and projects; including implementation of the Zoning Code and General Plan as it relates to industrial uses and industrial business parks.

FINDINGS:

8 The Importance of Jobs
Morgan Hill is a predominantly residential suburb and job exporter, with only 25.1 percent of Morgan Hill residents working within the City Limits. With 21,775 employed residents and 18,428 jobs in Morgan Hill, the ratio of jobs to resident workers is 0.85.

This seems to indicate that there is not the “right” balance between the types of jobs, and the skills of residents. Moreover, nearly 75 percent of commuting residents drive alone despite High-Occupancy Vehicle (HOV) lanes existing most of the distance between San Jose and Morgan Hill. A majority of commuting residents drive longer than 30 minutes to and from work. This pattern negatively impacts quality of life, stresses the City's and region’s transportation infrastructure, and is environmentally unsustainable.

There are several industry categories where the makeup of Morgan Hill business does not mirror the rest of Silicon Valley. Information, professional, scientific, education, and healthcare service careers are under-represented in Morgan Hill. Expanding job opportunities in these sectors, as well as continuing to attract advanced manufacturers, can help improve the match between resident skill sets and the jobs offered in Morgan Hill. To address the housing to jobs ratio, the City needs to continue to protect employment lands while growing high-quality jobs.

Loss of Employment Lands
Factors that can impact the City’s future job inventory, are the conversion of industrial land to commercial or residential uses and the granting of conditional use permits (CUP) to non-traditional industrial uses. Over the past 15 years, a significant amount of the City’s industrial land has been lost to conversion. In 2013, there were 294 acres of vacant industrial land available. Today, Morgan Hill has approximately 120 acres of industrial land available for development and virtually no existing product available for lease or sale with vacancy rates in office and research and development (R&D) at a historic low of 2.9 percent. In less than eight years, the total number of available industrial acreage within the City has declined 59.1 percent, reducing any future supply to a 19–95-year window depending upon market absorption. It is possible that within the current time horizon of the newly adopted Morgan Hill 2035 General Plan, all available industrial land will be exhausted.

In addition, over the last 15 years, the City has issued 25 CUP's which have repurposed a total of 68 acres of property in industrial areas to low intensity or non-industrial uses, predominately mini-storage, recreation uses, community assembly, and medical offices.

Lastly, considering the existing housing crisis and increasing challenges to meet the growing housing demand, pressure to convert industrial land to residential will only intensify. Currently, the California State Legislature is considering various legislation that could potentially allow the conversion of unused or under-utilized commercial lands to residential lands. Senate Bill 6 (SB6) is just one example of this type of pending and proposed legislation.

In 2020, the City Council approved Zoning Code Amendments that prohibit stand-alone large fulfillment centers and parcel sorting centers. This action endorses the focus on high-value employers in advanced manufacturing, R&D, innovation, and office uses.

8 When City staff engaged with industry subject-matter-experts and the Planning Commission to identify strategies and tactics to help protect employment lands and the City’s economic sustainability, the following recommendations were shared:

1. Use it. The best way to preserve industrial/employment lands is to use them for their industrial purposes.

2. Revisit Policy CNF-17.1 language within the General Plan and replace ‘discourage’ with “prohibit” the conversion of industrial lands.

3. Limit discretion of CUP uses in employment generating uses.

4. Hold the line. Prioritize wanted uses such as OEM (original equipment manufacturer).

5. Brand, market, and promote industrial parks.

6. Incentivize Industrial Uses. Explore how fee structures and taxes align with land use outcomes. Explore ways to incentivize industrial development.

7. Activate the ground floor of industrial with a mix of uses. Allow for mixed uses within industrial. Consider office or other uses.

8. Consider post-COVID-19 uses. The pandemic may create new products and uses that are not currently articulated in city codes. Be flexible to allow for industries and new operations.

CONCLUSION:

The proposed Industrial Land Preservation and Optimization Policy further clarifies the City’s goals as it relates to Industrial Lands. This policy, once adopted, in conjunction with the City’s General Plan, Zoning Ordinance and Economic Blueprint, will support the preservation and optimization of the City’s limited supply of industrial land that is critical to the City’s economic vitality. The proposed Industrial Land Preservation and Optimization Policy identifies five key goals that provide direction and guidance when developing, implementing, and managing policies, programs, and projects; including implementation of the Zoning Code and General Plan as it relates to industrial uses and industrial business parks.

The five key goals are:

A. Encourage the attraction and expansion of Research and Development, Office and Advanced Manufacturing uses.

B. Prohibit stand-alone e-commerce Warehouse and Distribution uses.

C. Prohibit General Plan conversions of Industrial lands that cause a net loss of industrial employment lands.

D. Protect existing Industrial lands and business parks by prohibiting non-compatible uses such as community assembly and recreational uses.

E. Explore conversion of Commercial Lands to Industrial Lands where appropriate.

The Industrial Land Preservation and Optimization Policy supports amending the current zoning code to minimize and reduce incompatible uses within the industrial lands, while expanding compatible uses in the medical, healthcare, and medical office and clinic industries that meets current market demand, creates quality jobs and improves the quality of life for residents.

The team seeks the City Council's adoption of the Industrial Land Preservation and

8 Optimization Policy as amended by the Planning Commission.

COMMUNITY ENGAGEMENT:

Community engagement on this topic has taken place since July 2020 with the ULI and SVEDA seminars on Industrial Lands Utilization and Policy. The Planning Commission held meetings on this topic on September 22, 2020 and March 9, 2021. Staff presented the proposed policy at the Morgan Hill Chamber of Commerce Economic Development Committee meeting on January 13, 2022 and via a virtual City of Morgan Hill Townhall meeting on January 27, 2022. Information has been shared through the City’s Citywide 411 Newsletter, the Choose Morgan Hill Economic Development eNewsletter and emails have been sent to stakeholders including industrial property owners, businesses, and commercial real estate brokers. In addition, this item was heard and the policy was adopted with one minor edit at the February 8, 2022 Planning Commission meeting.

ALTERNATIVE ACTIONS:

The City Council may choose to amend the proposed policy language or to not adopt the policy.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

See above for Planning Commission actions.

FISCAL AND RESOURCE IMPACT:

No request of funds or negative impact to general fund.

CEQA (California Environmental Quality Act):

This policy is categorically exempt from environmental review pursuant to Section 15061(b)(3) of the California Environmental Quality Act (CEQA) Guidelines, as a City Policy is not a project with potential for causing a significant effect on the environment requiring California Environmental Quality Act (CEQA) analysis. Additionally, on July 27, 2016, the City Council certified an environmental impact report (EIR) for the Morgan Hill 2035 General Plan. This policy is consistent with, and implements, the General Plan and therefore was analyzed in the EIR for the 2035 General Plan. Pursuant to Section 15162 and Section 15183 of the State CEQA Guidelines, no additional review under the California Environmental Quality Act is required.

1 CP-22-___
SUBJECT: INDUSTRIAL LAND PRESERVATION & OPTIMIZATION POLICY EFFECTIVE DATE:

ORIGINATING DEPARTMENT: ECONOMIC DEVELOPMENT DEPARTMENT The City of Morgan Hill seeks to support a diverse local economy and an expanded tax base by preserving existing job-generating land. The City’s General Plan identifies strategies to diversify the economy, increase quality and quantity of job opportunities to support the community’s well-being.

Industrial lands are critically important to the economic health of the city and the community, by providing local jobs and supporting industry that contribute to the local economy.

The city seeks to have a job/housing balance, at a 1:1 ratio, that offers a job for every resident able to work in the city. Today, there are 21,775 employed residents, and 18,428 jobs in Morgan Hill - the ratio of jobs to resident workers is 0.85.

Industrial land supply has reduced over the years with conversions of industrial land to housing or allowance of non-industrial uses within the industrial parks. In eight years, available industrial land has declined by 59.1%. Today, Morgan Hill has approximately 120 acres of industrial land available for development and a historically low 2.6% vacancy rate. Additionally, non-industrial uses such as schools, recreational facilities, community assembly further threaten the ability to attract and retain industrial users due to conflicts with sensitive receptors.

The City’s 2035 General Plan’s Economic Development Element provides guidance on the type of jobs, uses, and activities that support the City’s economic vitality and long-term sustainability. The Economic Blueprint identifies Innovation and Advanced Manufacturing as a key industry for Morgan Hill’s future growth and further fiscal health.

This Industrial Land Preservation & Optimization Policy, in conjunction with the City’s General Plan, Zoning Ordinance, and Economic Blueprint, aims to preserve the City’s limited supply of industrial land that is critical to the City’s economic vitality. The Industrial Land Preservation & Optimization Policy identifies five key goals that provide direction and guidance when developing, implementing, and managing policies, programs, and projects; including implementation of the Zoning Code and General Plan as it relates to industrial uses and industrial business parks. To preserve and optimize the City’s limited industrial land inventory, the City should:

A. Encourage the attraction and expansion of Research and Development, Office, and Advanced Manufacturing uses

CITY OF MORGAN HILL

CITY COUNCIL POLICIES AND PROCEDURES

2 Given the limited availability of industrial lands and to maximize job and revenue-generating potential, the City through its Zoning Code, policies, and programs, should encourage and support innovation, advanced manufacturing, R&D, and office uses. To support the goals of the Economic Blueprint and to grow medical and healthcare amenities, medical office and clinics should be considered within the light industrial zoning.

Supporting General Plan Policy & Goal:

ED-3.1 Business Retention, Expansion, and Attraction Efforts. Encourage retention and expansion of existing businesses, and attract new businesses, that:
 generate revenue to the City General Fund (such as retail and point-of-sale manufacturing)  help provide greater financial strength and stability to the City  add industry diversity to the local economy
 stimulate other businesses to develop in the city
ED-8.1 Office and Industrial Development: Support the development of office and industrial facilities to meet local demand, compete for regional growth opportunities, and create high-quality jobs that match with local housing opportunities.

Goal, ED-1. High quality jobs for residents that support household incomes in line with local housing costs and higher-education institutions that enhance skills and increase access to high-quality education.

B. Prohibit stand-alone e-commerce Warehouse and Distribution uses Logistics, warehouse, and distribution uses are one of the fastest growing sectors. While these uses are part of the eco-system that support retail, manufacturing, R&D and other desired uses in Morgan Hill; stand-alone distribution and warehouse uses are not desired uses. The limited inventory of available industrial land should maximize the job and revenue potential of these sites.

Additionally, warehouse and distribution uses generate traffic, have impact to the City’s infrastructure and have limited benefit to the economic health of the city or quality of life of the community. Finally, large distribution and warehouse uses do not fit the small-town aesthetic that Morgan Hill seeks to retain.

C. Prohibit General Plan conversions of Industrial lands that cause a net loss of industrial employment lands
As vacant land becomes more constrained, pressure to convert industrial land to residential will intensify to meet the growing housing demand. To protect the City’s future economic sustainability, the City should update the General Plan language to prohibit the conversion of industrial lands to non-industrial uses unless there is a concurrent conversion of property ensuring there is a no net loss of industrial designated land.

Supporting General Plan Policy:

Policy CNF-17.1 Industrial Land Conversion. Discourage the conversion of property designated for industrial to non-industrial uses.

Policy, Ed-3.2 Employment Land Supply. Preserve the city’s supply of industrial and commercial lands to support the City’s goals and policies related to economic development and jobs-housing balance.

D. Protect existing Industrial lands and business parks by prohibiting non-compatible uses such as community assembly and recreational uses.

To protect the health of the longevity of the industrial parks and ensure current and future industrial users can locate in these parks, the City should minimize conflicts with sensitive receptors that may

3 adversely impact industrial activity. To prevent future non-compatible uses, the Zoning Code should prohibit specific non-compatible uses, including community assembly and commercial recreation uses by eliminating conditional use permits in these zones.

Supporting General Plan Policy:

Policy CNF-17.2 Industrial Land Use Conflicts. Ensure proposed new uses adjacent to industrial uses do not introduce land use conflicts that would adversely impact industrial activities.

Policy ED-3.7 Flexible Business District Zoning. Maintain flexibility within industrial, business park, and office zoning districts that support modern industry uses and that are integrated appropriately with other land uses and attract a broad range of users.

E. Explore conversion of Commercial Lands to Industrial Lands where appropriate To grow our available industrial lands inventory, when appropriate, the City should work with property owners to identify possible property sites that can be converted from commercial to industrial and facilitate the conversion.

Supporting General Plan Policy:

General Plan, Policy ED-1.2, Jobs/Housing Balance. Balance jobs and housing supplies to minimize traffic congestion, and commute times, and to optimize economic diversity and capacity to provide services.

General Plan, Policy ED-3.2 – Employment Land Supply: Preserve the City’s supply of industrial and commercial lands to support the City’s goals and policies related to economic development and jobhousing balance.

From: Joe Baranowski
To: Rich Constantine; Yvonne Martinez Beltran; Rene Spring; John McKay; Gino Borgioli Cc: Edith Ramirez; Christina Turner; Matt Mahood; Michelle Bigelow; CC Public Comment Subject: [EXTERNAL] Agenda Item 16, Adopt Industrial Preservation and Optimization Policy, March 2, 2022 City Council Meeting
Date: Tuesday, March 1, 2022 12:13:45 PM
Re. Agenda Item 16, Adopt Industrial Preservation and Optimization Policy, March 2, 2022 City Council Meeting
Dear Council Members:

A policy is a set of ideas or plans that is used as a basis for making decisions. It is pointless to spend time writing, reviewing and approving a policy if there is no intention of using it as a basis for making decisions. On the flip side, it should be recognized that once something is included in a policy it is very likely that it will be used to justify a decision.

The Industrial Land Preservation and Optimization Policy that you will be asked to adopt tomorrow is a big improvement from previous drafts. Importantly, instead of promoting last-mile and other forms of Distribution, the updated version recognizes that warehouse and distribution uses generate traffic, have impact to the City’s infrastructure and have limited benefit to the economic health of the city or quality of life of the community.

However, the Staff has included an idea that is not necessary, is a slippery slope, and is not consistent with what members of this Council have told the public. I urge you to consider adopting the proposed Policy with the condition that the fifth component of the policy is removed.

The fifth idea in the five point policy is:

Explore conversion of Commercial Lands to Industrial Lands where appropriate. To grow our available industrial lands inventory, when appropriate, the City should work with property owners to identify possible property sites that can be converted from commercial to industrial and facilitate the conversion.

This is not an 'appropriate' idea for 'City' because it is not their role, it is not necessary because there already is a well defined process by which a property own can request a change in General Plan and/or Zoning designation, it can be reasonably expected that it would be used by members of the Planning Commission to justify their decision if a request if brought before them, and most importantly it completely ignores the basic principle that the 'Guiding Documents' should be 'honored'. To be clear, while the policy does not explicitly mention changing the General Plan or Zoning Code, the only logical outcome if the policy is followed is to do exactly that.

Land Use is perhaps the most fundamental aspect of the General Plan and Zoning Code and how those land uses are defined should involve careful and deliberate

study that takes a long term view AND includes the 'thoughtful planning" of residents.

Mr. Constantine you have told the community:

This thoughtful planning is the result of endless hours of work by many of our residents that came together to help us develop our General Plan, our Zoning Code, and other guiding documents such as the Parks, Trails and Bikeways Master Plan, the Public Safety Master Plan, and the Economic Blueprint. To continue to maintain our community’s character and grow in a smart and sustainable way, we must honor and implement these guiding documents that took hundreds of community hours and represent the goals of our community.

Mr. McKay you have told the community:

Please look at Morgan Hill’s General Plan map (our guiding document for community development and services developed with community input) The staff report gives the supposed reason the staff is asking you to adopt this policy:

Currently, the California State Legislature is considering various legislation that could potentially allow the conversion of unused or under-utilized commercial lands to residential lands. Senate Bill 6 (SB6) is just one example of this type of pending and proposed legislation.

On multiple occasions I have asked the staff to provide examples of 'various legislation' they are referring to but without any answer I assume the 'just one example' of SB6 is, in fact, the only example. Other than the one sentence in the staff report, no background has been provided as to whether the SB6 example applies to any property in Morgan Hill, what the status of the bill is, and what the likelihood that it will go anywhere is. By not providing any context whatsoever, it seems apparent that the 'potential' action is not considered to be serious but rather convenient to use as a reason to move forward with an idea that would otherwise have no justification whatsoever.

When the Industrial Preservation Policy was reviewed by the Planning Commission the fifth idea began with "encourage conversion'. Playing around with a single word, has now changed that to "explore conversion"- which changes nothing. The idea is being included because it is expected to become the basis for a future decision.

Please act in a way that is consistent with what you have said. There is nothing to lose by asking the staff to remove something that would potentially lead to changes in our guiding documents that would be made by a few people with very little community input and there is a lot to gain.

Regards,
Joe Baranowski
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Industrial Preservation Workplan
City Council
March 16, 2022

Economic Development’s Role
The Economic Development Element
establishes policy guidance to support
the community’s economic well-being.

Its strategies include diversifying the
local economy, increasing the quality
and quantity of available job
opportunities, decreasing the need for
commuting, creating a thriving
Downtown, and enhancing Morgan
Hill’s appeal as a tourist destination.
2035 General Plan
• Develop & maintain high-quality public
infrastructure & services
• Position Morgan Hill as a compelling
choice for companies by providing
flexibility
• Retain and attract businesses by
providing a business-friendly climate
• Create fiscal sustainability by cultivating
a diversified tax base
• Increase economic opportunity through
a robust and diverse range of business
activity

The Economic Blueprint identified 4 core industries, 13 strategies and 35 specific action items.
• Action #1: Adopting an employment (Industrial) land preservation policy, and
• Action #2: Strengthen General Plan language to prevent the conversion of Industrial lands.
2017 Economic Blueprint

Industrial
Preservation
• Economically Sustainable
• Jobs & Revenue
• Maintain Industrial Lands for Jobgenerating Uses
• Prevent incompatible uses

Industrial Preservation Meetings &
Action History
2020

ULI, SVEDA & PC
Workshops
Oct 2020
Council Prohibits
e-Commerce
Uses
April 2021
Council adopts
Urgency
Ordinance

• Morgan Hill continues to be an attractive destination for industrial users, including manufacturers, machine shops, and assembly businesses.
• Morgan Hill Ranch and Madrone Business Parks continue to be the strongest location for future industrial, R&D, and warehouse uses. • Demand for industrial buildings has outpaced building supply for manufacturing, machining, and assembly businesses.
• Morgan Hill firms have left to expand elsewhere, due to lack of industrial space availability.
• New construction is expensive and takes approximately 2 years to complete (plan, permit, construct).

Strategic Economics Study
Industrial Findings

• Vacant industrial (employment) land supply can accommodate 25 to 165 years of projected demand
• When currently entitled projects are considered, excluding Redwood Tech 101, the available land horizon drops to 19 to 95 years • Today, there are only 120 acres of industrial (employment) land remaining (vacant)
• 86.5 acres Light Industrial (IL)
• 6 acres General Industrial (IG)
• 27.5 acres Redwood Tech 101- planned and permitted
Strategic Economics Study
Industrial Findings

Industrial Land Preservation Strategies
➢ Use it. The best way to preserve industrial/employment lands is to use them for their industrial purpose.
➢ Revisit Policy CNF-17.1 language within the General Plan and replace ‘discourage’ with “prohibit” the conversion of industrial lands. ➢ Limit discretion of CUP uses in employment generating uses. ➢ Hold the line. Prioritize wanted uses such as OEM (original equipment manufacturer).
➢ Brand, market, and promote industrial parks.
➢ Incentivize industrial development. Explore how fee structures and taxes align with land use.
➢ Allow for mixed uses within industrial. Consider office or other uses. ➢ Consider post COVID-19 uses. The pandemic may create new products and uses that are not currently articulated in city codes. Be flexible to allow for industries and new operations.

Industrial Zoned Land

In November 2020, the City
Council adopts Ordinance 2317
amending the City's Industrial
Zoning Code prohibiting
fulfillment centers, defining Large
Scale Projects and moving review
and approval authority from City
staff to Planning Commission.

Addressed via Zoning Code
What actions has City taken?
✓ Fulfillment Centers Prohibited
✓ Sorting Centers Prohibited
✓ Last-mile (local) distribution Prohibited
✓ Large projects defined as >100 units or
>75,000 sq ft
✓ Large projects now require public hearing
✓ Review & Approval authority for large
projects moved to Planning Commission

In April 2021, City Council
passed Urgency Ordinance
2320.

Addressed via Building Type
What actions has City taken?
✓ Changed/created definitions for:
• Dock-High-Door
• Dock-High-Door to Square Foot Ratio
• Ceiling Height
• Light Manufacturing
✓ Added Section 18.76.140 – Maximum Dock
High Door Ratio for a facility that has a floor
area of 75,000 square feet or greater and a
ceiling height of more than thirty-four (34)
feet over more than twenty-five (25) percent
of the floor area is 1 Dock-High-Door:25,000
square feet.

Industrial
Ordinance
Replace existing Urgency
Ordinance 2320, which
sunsets April 2022, with
an adopted Industrial
Ordinance
Place a measure on the
November 2022 Ballot for
voter affirmation of the
adopted Industrial
Ordinance
Industrial
Preservation &
Optimization Policy
Encourage Innovation and
Manufacturing
Prohibit Stand-alone eCommerce Distribution &
Warehousing
Prohibit Conversions from
Industrial Land to non-job
generating uses
Encourage Conversions
from Commercial Land to
Industrial Land
Zoning Clean Up
Supports Industrial
Preservation &
Optimization Policy
Minimize incompatible
uses & CUPs
Encourage Conversions
from Commercial Land to
Industrial Land
Industrial Preservation Workplan

1 4
Industrial Preservation & Optimization
Policy
• In conjunction with the 2035 General Plan, Zoning Ordinance ZA2020-0003, and the Economic Blueprint, the policy will protect the City’s limited supply of industrial/employment land to support long term economic vitality.
• Identifies five key goals that provide direction and guidance when developing, implementing, and managing policies, programs, and projects, including implementation of the Zoning Code and General Plan, as they relate to industrial uses and industrial business parks. • Supports amending the current zoning code to minimize and reduce incompatible uses within the industrial lands.

1 5
Industrial Preservation & Optimization
Policy

1. Encourage the attraction and expansion of R&D, Office, and Advanced Manufacturing uses.

2. Prohibit stand-alone e-commerce Warehouse and Distribution uses.

3. Prohibit General Plan conversions of Industrial lands that cause a net loss of industrial employment lands.

4. Protect existing Industrial lands and business parks by prohibiting noncompatible uses such as community assembly and recreational uses, while expanding compatible uses.

5. Explore Encourage conversion of Commercial Lands to Industrial Lands where appropriate.

1 6
Industrial Preservation & Optimization
Policy

STRATEGY ACTIONS
Encourage the attraction and expansion of R&D, Office, and Advanced Manufacturing uses.

Marketing, Messaging & Outreach
Development of Incentive
Programs
Prohibit stand-alone e-commerce Warehouse and Distribution uses. Industrial Ordinance Zoning Code
Prohibit General Plan conversions of Industrial lands that cause a net loss of industrial employment lands.

General Plan
Protect existing Industrial lands and business parks by prohibiting non-compatible uses such as community assembly and recreational uses, while expanding compatible uses.

Zoning Code
Explore conversion of Commercial Lands to Industrial Lands where appropriate.

Marketing, Messaging & Outreach
City-initiated GP Conversions

• Minimize and reduce incompatible uses
• Minimize CUPs in industrial zoned areas
• Expand opportunity for medical office and healthcare
Updating Zoning Code

IG - General Industrial IL - Light Industrial
Land Use Existing Proposed Existing Proposed
Community Assembly CUP Not Permitted CUP Not Permitted
Commercial Rec. Indoor
< 15,000 sq. ft. CUP Not Permitted CUP Not Permitted
>15,000 sq. ft. CUP Not Permitted CUP Not Permitted
Colleges/Trade Schools CUP Not Permitted CUP CUP
Parks & Rec. CUP Not Permitted CUP CUP
Adult Businesses Permitted Not Permitted Permitted Permitted Public Safety Facilities CUP Not Permitted CUP CUP
Mini-Storage CUP Not Permitted CUP CUP
Home Improvement Ctr. – PC Recommended CUP Not Permitted CUP CUP Large Commodity Retail CUP Not Permitted CUP CUP
Professional Offices Permitted Not Permitted Permitted Permitted Manufacturing, General CUP CUP Not Permitted Not Permitted Medical Office & Clinics
< 20,000 sq. ft. – PC Recommended Not Permitted Not Permitted Not Permitted AUP > 20,000 sq. ft. Not Permitted Not Permitted Not Permitted CUP Proposed Zoning Code Changes

CI - Commercial Industrial IO - Industrial Office IC - Campus Industrial Land Use Existing Proposed Existing Proposed Existing Proposed Community Assembly CUP CUP Not Permitted Not Permitted Not Permitted Not Permitted Commercial Rec. Indoor
< 15,000 sq. ft. Permitted Permitted CUP CUP CUP CUP
>15,000 sq. ft. CUP CUP CUP CUP CUP CUP
Colleges/Trade Schools CUP CUP CUP CUP CUP CUP
Parks & Rec. CUP CUP Not Permitted Not Permitted Not Permitted Not Permitted Adult Businesses Not Permitted Not Permitted Not Permitted Not Permitted Permitted Permitted Public Safety Facilities CUP CUP Not Permitted Not Permitted Not Permitted Not Permitted Mini-Storage Not Permitted Not Permitted Not Permitted Not Permitted Not permitted Not Permitted Home Improvement Ctr. CUP CUP Not Permitted Not Permitted Not permitted Not Permitted Large Commodity Retail CUP CUP Not Permitted Not Permitted Not Permitted Not Permitted Professional Offices Permitted Permitted Permitted Permitted Permitted Permitted Manufacturing, General Not Permitted Not Permitted Not Permitted Not Permitted Not Permitted Not Permitted Medical Office & Clinics
< 20,000 sq. ft. – PC Recommended AUP AUP Not Permitted AUP Not Permitted AUP > 20,000 sq. ft. – PC Recommended CUP CUP CUP
Proposed Zoning Code Changes

Proposed Zoning Code Changes
Home Improvement Centers - Light Industrial (IL) Only
• Staff recommended Not Permitted.
• Planning Commission has recommended a Conditional Use Permit. • Staff continues to recommend, Not Permitted.

Medical Office and Clinics – IL, CI, IO, IC Zones
• Staff recommended allowing Medical Offices and Clinics as a Permitted use at <20,000 square feet.
• Planning Commission has recommended requiring an Administrative Use Permit at <20,000 square feet.
• Staff is recommending the following:
• 5,000 square feet or less - Permitted by right
• 5,001 - 20,000 square feet - Administrative Use Permit • 20,001 square feet or more - Conditional Use Permit

No Changes
(effective November 2020)

USE IL IG
Warehousing & Distribution
Warehousing and Distribution, Large C P
Warehousing and Distribution, Small P P
Warehousing and Distribution with Outdoor Storage C C
Heavy Distribution Not Allowed Not Allowed
Parcel Sorting Facilities Not Allowed Not Allowed
Parcel Hub Small Not Allowed Not Allowed
Parcel Hubs Large Not Allowed Not Allowed

1. Placed RG4MH Initiative on the ballot;

2. Adopted the collaborative ordinance as an “urgency ordinance”; and

3. Directed Planning Commission to review collaborative ordinance as a permanent ordinance and consider placement on ballot.

April 7, 2021 City Council Action
22 Industrial
Ordinance

Adds Section 18.76.140 – Maximum Dock High Door Ratio for a facility that has a floor area of seventy-five thousand (75,000) square feet or greater and a ceiling height of more than thirty-four (34) feet over more than twentyfive (25) percent of the floor area is 1 Dock-High-Door:25,000 square feet Change/create definitions for:
» Dock-High-Door
» Dock-High-Door to Square Foot Ratio
» Ceiling Height
» Light Manufacturing
Same as Urgency Ordinance
23 Industrial
Ordinance

2022 Schedule
24 Business &
Community
Outreach
January
Planning
Commission
February
City Council
March
City Places
Industrial
Ordinance
on
November
Ballot
MHRGC
Removes
Initiative
from
November
Ballot
Election
November 8

Questions

9 CITY COUNCIL STAFF REPORT
MEETING DATE: March 16, 2022
PREPARED BY:

Rich Buikema, Contract Planner
APPROVED BY: City Manager
ADOPT ZONING CODE AMENDMENT TO SECTION 18.26.020 (LAND
USE REGULATIONS) OF CHAPTER 18.26 (INDUSTRIAL ZONING
DISTRICTS) OF TITLE 18 (ZONING) TO MODIFY THE LAND USES

PERMITTED IN THE INDUSTRIAL ZONING DISTRICTS

RECOMMENDATION(S)

1. Open/close the public hearing.

2. Waive first and second reading of the Ordinance Amendment; and

3. Introduce Ordinance Amendment as recommended by staff and amended by the Planning Commission.

Estimated Time: 30 Minutes

COUNCIL PRIORITIES, GOALS & STRATEGIES
2022-2023 Strategic Priorities
Fiscal Sustainability
Economic Development
Guiding Documents
Economic Blueprint
Morgan Hill 2035 General Plan
REPORT NARRATIVE:

An Industrial Land Preservation and Optimization Policy has been developed for City Council consideration and supports amending the current zoning code to minimize and reduce incompatible uses within the industrial lands, while expanding opportunities for compatible uses in the medical, healthcare, and medical office and clinic industries that meet current market demand, creates quality jobs, and improves the quality of life for residents. A draft ordinance is being proposed that would amend the Industrial Land Use Regulations. The proposed amendments would implement the Morgan Hill General Plan, 2017 Morgan Hill Economic Blueprint and the pending Industrial Land Preservation and Optimization City Council Policy.

9 The proposed staff recommended amendments to Section 18.26.020 (Land Use Regulations) of the Municipal Code are described as follows:
a. Prohibit the following non-industrial uses in both the IG (General Industrial) and IL (Light Industrial) zoning districts.
i. Community Assembly
ii. Commercial Recreation, Indoor
iii. Home Improvement Centers
b. Prohibit the following non-industrial uses in the IG (General Industrial) zoning district. i. Colleges/Trade Schools
ii. Parks and Recreational Facilities
iii. Adult Businesses
iv. Public Safety Facilities
v. Mini-Storage
vi. Large Commodity Retail
vii. Professional Offices
c. Allow Medical Offices and Clinics of less than 20,000 square feet as a Permitted use in the LI (Light Industrial), CI (Commercial Industrial), IO (Light Office Industrial) and IC (Campus Industrial) zoning districts.
d. Allow Medical Offices and Clinics of 20,000 square feet or more as a Conditional use in the IL(Light Industrial) zoning district and as a permitted use in the CI (Commercial Industrial), IO (Light Office Industrial) and IC (Campus Industrial) zoning districts.

Planning Commission Action
The Planning Commission reviewed the proposed amendments on February 8, 2022.

Following discussion, the Planning Commission unanimously approved Resolution No. 22-03 recommending the City Council approve the proposed Amendments as presented by Staff with the following exceptions;

1. Maintain the requirement that Home Improvement Centers obtain a Conditional Use Permit in the IL-Light Industrial Zoning District
 Staff had recommended that Home Improvement Centers be prohibited. The Commission indicated that given the potential economic benefit of a home improvement center, those uses should continue to be allowed in the IL-Light Industrial zone, subject to a Conditional Use Permit by the Planning Commission.

2. Require an Administrative Use Permit for Medical Office and Clinics of less than 20,000 square feet.
 Staff had recommended allowing Medical Offices and Clinics as a permitted use

9 at 20,000 square feet. When the idea of requiring an Administrative Use Permit was raised, staff suggested consideration of the following:
 5,000 square feet or less - Permitted by right
 5,001-20,000 square feet - Administrative Use Permit
 20,000 square feet or more - Conditional Use Permit
 After further discussion, the Commission indicated that discretionary review was needed to address the potential for a Medical Office or Clinic being proposed next to an incompatible use or a concentration of those uses. The Commission recommended that an Administrative Use Permit, issued by the Community Development Director provided the appropriate level of review to address their concern. Administrative Use Permits can also be elevated to the Planning Commission.

COMMUNITY ENGAGEMENT:

Community engagement on this topic has taken place since July 2020 with the ULI and SVEDA seminars on industrial lands utilization & policy. The Planning Commission held meetings on this topic on September 22, 2020 and March 9, 2021. Information has been shared through the City’s Citywide 411 Newsletter, the Choose Morgan Hill Economic Development eNewsletter, and emails have been sent to stakeholders including industrial property owners, businesses, and commercial real estate brokers.

A 10-day public hearing notice was published in the Friday, February 18, 2022 edition of the Morgan Hill Times pursuant to Government Code Sections 65090-65096. Notice was also provided on the website and social media. On February 8, 2022, the Planning Commission held a public hearing regarding the proposed ordinance amendments in which a 10-day public hearing notice was published in the Friday, January 28, 2022 edition of the Morgan Hill Times.

On February 8, 2022, the Morgan Hill Planning Commission heard and adopted the proposed zoning amendments with two exceptions noted above.

ALTERNATIVE ACTIONS:

If the City Council does not take action on the proposed ordinance amendments, the Municipal Code will remain as-is, including the allowed uses within the industrial zoning districts. The Council may also adopt staff's original recommendation, make modifications to the proposed amendments, or not approve certain amendments that the Council deems appropriate.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

On June 6, 2018, the City Council adopted Ordinance No. 2277 N.S., a comprehensive update of Title 18 – Zoning of the City of Morgan Hill Municipal Code. The update included an amendment to the City’s official zoning map consistent with the Morgan Hill 2035 General Plan.

9 FISCAL AND RESOURCE IMPACT:

Staff regularly brings forward bundles of minor amendments as necessary to enhance, correct and/or refine the Code; and therefore, the cost is borne, and work is accommodated, within the respective division's annual workplan and budget.

CEQA (California Environmental Quality Act):

This ordinance is exempt from environmental review pursuant to Section 15061(b)(3) of the California Environmental Quality Act (CEQA) Guidelines, as the proposed text amendments to the Morgan Hill Zoning Code is not a project with potential for causing a significant effect on the environment requiring California Environmental Quality Act (CEQA) analysis. Additionally, on July 27, 2016, the City Council certified an environmental impact report (EIR) for the Morgan Hill 2035 General Plan. This ordinance is consistent with, and implements, the General Plan and therefore was analyzed in the EIR for the 2035 General Plan. Pursuant to Section 15162 and Section 15183 of the State CEQA Guidelines, no additional review under the California Environmental Quality Act is required.

4 PLANNING COMMISSION STAFF REPORT
MEETING DATE: February 8, 2022
PREPARED BY:

Rich Buikema, Contract Planner
APPROVED BY: Jennifer Carmen
ZA2021-0008: MUNICIPAL CODE AMENDMENT AMENDING SECTION 18.26.020 (LAND USE REGULATIONS) OF CHAPTER 18.26 (INDUSTRIAL ZONING DISTRICTS) OF TITLE 18 (ZONING) TO MODIFY THE LAND USES PERMITTED IN THE INDUSTRIAL ZONING

DISTRICTS

RECOMMENDATION(S)

1. Open/close public hearing; and,

2. Adopt Resolution recommending City Council approval of the Municipal Code Amendment.

PROJECT INFORMATION:

A draft ordinance is being proposed that would amend the Industrial Land Use Regulations. The proposed amendments would implement the Morgan Hill General Plan, 2017 Morgan Hill Economic Blueprint and the pending Industrial Land Preservation and Optimization City Council Policy.

BACKGROUND:

In April 2017, the City Council unanimously adopted the 2017 Morgan Hill Economic Blueprint that identified industrial preservation as a key strategy for long-term economic sustainability. A component of this strategy is to restrict non-industrial uses that have the potential to inhibit the operation of industrial uses and discourage new industrial users from locating in Morgan Hill.

In July 2020, the City’s Economic Development Team, in partnership with the Urban Land Institute (ULI) and the Silicon Valley Economic Development Alliance (SVEDA), hosted four independent seminars with industry experts, and planning and economic development professionals to better understand today’s market at a national, regional, and local level. The seminars took a deep dive into the future of industrial and retail sectors, especially post-Covid19, and identified tactical strategies for Morgan Hill to consider that support the City's industrial preservation and retail concentration goals.

On September 22, 2020, the Planning Commission conducted the first Industrial Preservation Policy Workshop. The findings of the July 2020 ULI and SVEDA seminars were shared during this meeting. The Planning Commission accepted the report and provided feedback on the industrial preservation concentration policies.

On March 9, 2021, the Planning Commission conducted a second Industrial Preservation Policy Workshop to review proposed changes to the Zoning Code to support an industrial preservation strategy. The Planning Commission reviewed, discussed, and provided feedback on the proposed changes to Section 18.26.020 (Land Use Regulations) of the Industrial Zoning Districts Chapter for alignment with industrial preservation goals. The Planning Commission was generally supportive of the proposed Zoning Code amendments. However, concerns were expressed by the Commission regarding higher rents due to locating commercial recreation uses, such as a gymnastics facility, outside of industrial areas. Staff responded that the need to preserve industrial land was of greater concern.

An Industrial Land Preservation and Optimization Policy has been developed for City Council consideration and supports amending the current zoning code to minimize and reduce incompatible uses within the industrial lands, while expanding compatible uses in the medical, healthcare, and medical office and clinic industries that meet current market demand, creates quality jobs, and improves the quality of life for residents. The policy document will be considered as a separate item.

4 PROJECT DESCRIPTION:

The City proposes the following amendments to Section 18.26.020 (Land Use Regulations) of the Industrial Zoning Districts Chapter to preserve the City’s limited supply of industrial land, prevent incompatible uses, and to accommodate additional medical services:
a. Prohibit the following non-industrial uses in both the IG (General Industrial) and IL (Light Industrial) zoning districts.
i. Community Assembly
ii. Commercial Recreation, Indoor
iii. Home Improvement Centers
b. Prohibit the following non-industrial uses in the IG (General Industrial) zoning district. i. Colleges/Trade Schools
ii. Parks and Recreational Facilities
iii. Adult Businesses
iv. Public Safety Facilities
v. Mini-Storage
vi. Large Commodity Retail
vii. Professional Offices
c. Allow Medical Offices and Clinics less than 20,000 square feet as a permitted use in the LI (Light Industrial), CI (Commercial Industrial), IO (Light Office Industrial) and IC (Campus Industrial) zoning districts.
d. Allow Medical Offices and Clinics of 20,000 square feet or more as a conditional use in the IL (Light Industrial) zoning district and as a permitted use in the CI (Commercial Industrial), IO (Light Office Industrial) and IC (Campus Industrial) zoning districts.

ANALYSIS:

The proposed ordinance implements the General Plan, 2017 Morgan Hill Economic Blueprint and the pending Industrial Land Preservation and Optimization City Council Policy. A chart displaying an overall summary of the proposed zoning amendments is attached (Attachment 3).

Prohibiting Nonindustrial Uses in Industrial Zones
The draft ordinance proposes to amend the Industrial Land Use Regulations to prohibit certain nonindustrial uses that are either currently permitted or that would be allowed with a Conditional Use Permit (CUP). Allowing non-industrial uses within industrial areas depletes the supply of industrial land, inhibits the operation of existing industrial uses, and potentially discourages new industrial businesses from locating or expanding in Morgan Hill. The proposed zoning amendment will avoid the establishment of “sensitive receptors” within the industrial zoned land that could be adversely affected from noise, dust, odor, and emissions typical of heavy industrial uses.

With no foreseeable expansion to the supply of industrial lands, prohibiting non-industrial uses will help extend the lifespan of the industrial land supply. While certain non-industrial uses are currently allowed only with a CUP, eliminating the CUP option will send a clear message of the importance of preserving industrial areas for primarily industrial uses.

Most of the changes are within the permitted use category in IG (General Industrial) zoning district (approximately 70 acres, of which six (6) acres are vacant) and IL (Light Industrial) zoning district (approximately 590 acres, of which 115 acres are vacant ). The use limitations are proposed because of the nature of heavy industrial operations and the potential for conflict non-industrial uses.

4 Below are the definitions of the non-industrial uses that are proposed to be prohibited in the IG (General Industrial) and/or IL (Light Industrial) zoning districts, as defined in the Zoning Code:

Community Assembly. Facilities that provide space for public or private meetings or gatherings.

Includes places of worship, community centers, meeting space for clubs and other membership organizations, social halls, union halls, banquet centers, and other similar facilities.

Commercial Recreation, Indoor. A commercial recreation facility primarily located indoors. Includes gymnasiums, health clubs, bowling alleys, indoor tennis and racquet courts, indoor swimming pools, laser tag and other similar games. Excludes "instructional services." Colleges and Trade Schools. Institutions of higher education provide curricula of a general, religious or professional nature, typically granting recognized degrees. Includes junior colleges, business and computer schools, management training, vocational education, and technical and trade schools.

Home Improvement Centers. A retail establishment which carries a full line of building materials, appurtenances, and decorator items primarily for homeowners (not contractors) to improve and maintain individual dwellings.

Colleges and Trade Schools. Institutions of higher education providing curricula of a general, religious, or professional nature, typically granting recognized degrees. Includes junior colleges, business and computer schools, management training, vocational education, and technical and trade schools.

Parks and Recreational Facilities. Non-commercial facilities that provide open space and/or recreational opportunities to the public. Includes parks, community gardens, community centers, passive and active open space, wildlife preserves, playing fields, tennis courts, swimming pools, gymnasiums, and other similar facilities.
"Adult businesses" include but are not limited to adult bookstores, adult video stores, adult novelty stores, adult arcades, adult motels, adult theaters, adult entertainment enterprises, adult cabarets, escort agencies, massage parlors, nude modeling studios; or places which engage in or allow couch dancing, topless dancing, nude or semi-nude mud wrestling or similar businesses.

Large Commodity Retail. A retail use where more than seventy-five percent of the gross floor area is used for display, sales, and related storage of bulky commodities, and which typically generate a demand for fewer parking spaces than do other types of retail uses. Includes retail sail of carpeting

4 and floor covering; catalog and mail order sales; construction equipment and machinery; garden and farm equipment; heating, ventilating, air conditioning, and other mechanical equipment and supplies; kitchen, bathroom and plumbing appliances, equipment, and supplies; lumber and building materials; office furniture, equipment, and machinery, including computers; and household furniture.

Professional Offices. A place of employment occupied by businesses providing professional, executive, management, or administrative services. Includes offices for accountants, architects, advertising agencies, insurance agents, attorneys, commercial art and design services, non-retail financial institutions, real estate agents, news services, photographers, engineers, employment agencies, real-estate agents, and other similar professions. Excludes "medical offices and clinics." Allowing Medical Offices and Clinics in Industrial Zones The draft ordinance proposes to amend the Industrial Land Use Regulations to:
 Allow Medical Offices and Clinics less than 20,000 square feet as a permitted use in the IL (Light Industrial), CI (Commercial Industrial), IO (Light Office Industrial) and IC (Campus Industrial) zoning districts.
 Allow Medical Offices and Clinics of 20,000 square feet or more as a conditional use in the IL (Light Industrial) zoning district and as a permitted use in the IC (Commercial Industrial), IO (Light Office Industrial) and IC (Campus Industrial) zoning districts.

The proposed allowance of Medical Offices and Clinics in the industrial districts will be in addition to their present allowance in the commercial zoning districts (Administrative Use Permit required in CH (Highway Commercial).

The ordinance is proposed because the existing prohibition of medical offices and clinics within light industrially zoned areas is not aligned or consistent with City Council and community priorities to attract and grow medical services in Morgan Hill. Specifically, General Plan Policy SSI-11.3 encourages the provision of a full range of medical services in the City, including an acute care hospital. Additionally, over the past several months, there have been several inquiries for medical uses looking to locate in Morgan Hill. Nearly all the inquires have been on land, or within buildings, designated as Light Industrial which does not currently allow for this use. The proposed ordinance will further facilitate new investments in Morgan Hill for specialized medical practices, rehabilitative care, imaging, and urgent care.

The proposed requirement for a CUP for medical offices and clinics more than 20,000 square feet is to provide the Planning Commission the opportunity to address the potential over-concentration of medical uses in the IL (Light Industrial) zoning district. Based on a sampling of medical office spaces currently on the market, the average medical office unit space is approximately 2,500 square feet, within a 20,000 square foot building.

Legal Nonconforming Uses
Upon adoption of the proposed ordinance amendments, previously allowed and conditional uses that are no longer allowed will become “legal non-conforming” uses. Section 18.68.060 (Nonconforming Use of Structures) of the Zoning Code will apply to any uses that are nonconforming upon adoption of the proposed ordinance.

18.68.060 Nonconforming use of structures.

A. Change in Ownership, Tenancy, or Management. A change in ownership, tenancy, or management of a nonconforming use shall not affect its legal nonconforming status.

B. Resuming a Nonconforming Use. A nonconforming use changed to a conforming

4 use shall not return to a nonconforming use.

C. Replacement of a Nonconforming Use. A nonconforming use may not be replaced by another nonconforming use.

D. Intensification of Use.

1. The enlargement of a structure or site occupied by a nonconforming use, or the intensification in any way of the operation of a nonconforming use, shall require the approval of an administrative use permit.

2. To approve a proposed intensification to a nonconforming use, the Community Development Director shall make all administrative use permit findings (Section 18.108.020) in addition to the findings in Section 18.68.080 (Findings).

E. Discontinuation of Use. A nonconforming use discontinued for six consecutive months or for twelve months during any two-year period shall not be reestablished and may be replaced only by a conforming use.

F. Uses Without Required Permits. A legally established use which is allowed in a zoning district, but which lacks a required permit (e.g., administrative use permit, conditional use permit) shall be considered a nonconforming use until the use receives the permit as required by the zoning code.

FINDINGS:

The proposed Zoning Amendment has been analyzed with respect to consistency with the: 1) General Plan; 2) Zoning Ordinance; and 3) California Environmental Quality Act.

1. General Plan
The proposed amendments are consistent with the General Plan as the amendments implement the following Goals and Policies:

GOAL CNF-17 Adequate land for maintaining and focusing industrial development in economically and geographically strategic locations.

Policy CNF-17.1 Industrial Land Conversion. Discourage the conversion of property designated for industrial to non-industrial uses.

Policy CNF-17.2 Industrial Land Use Conflicts. Ensure proposed new uses adjacent to industrial uses do not introduce land use conflicts that would adversely impact industrial activities.

GOAL HC-7 Access for all residents to health care facilities and other important community health amenities.

Policy ED-3.1 Business Retention, Expansion, and Attraction Efforts. Encourage retention and expansion of existing businesses, and attract new businesses, that:
• Generate revenue to the City General Fund (such as retail and point-of-sale manufacturing).
• Help provide greater fiscal strength and stability to the City; • Add industry diversity to the local economy.

4 • Stimulate other businesses to develop in the city.
• Augment or provide a service/amenity presently needed or lacking in the community, including higher education and medical services opportunities; and • Offer higher-paying, quality jobs for local residents.

Policy SSI-11.3 Medical Services. Encourage provision of a full range of medical services in the city, including an acute care hospital.

The proposed text amendments will implement many General Plan Goals and Policies and protect public health through the further restriction of potentially incompatible uses within industrial areas and increase access to health services for Morgan Hill residents.

2. Zoning Ordinance
The purpose of the Zoning Code is to implement the General Plan and to protect the public health, safety, and welfare. The City may approve a Zoning Amendment only if the following findings are made:
a. The proposed amendment is consistent with the General Plan and any applicable specific plan as provided by Government Code Section 65860.

Consistent
The proposed text amendments will implement many General Plan Goals and Policies, including those aimed at preserving industrial land and encouraging medical services as described above. b. The proposed amendment will not be detrimental to the public interest, health, safety, convenience, or welfare of the City.

Consistent
The proposed text amendments will protect public health through the further restriction of potentially incompatible uses within industrial areas and increase the access to health services for Morgan Hill residents.
c. The proposed amendment is internally consistent with other applicable provisions of the zoning code.

Consistent
The proposed text amendments will not create any internal inconsistencies with any other zoning code provisions, including the permitted uses in the Industrial and Commercial zoning districts.

CONCLUSION:

The proposed Zoning Code amendments will further support Morgan Hill's Industrial Preservation and Optimization Policy to protect and maximize the City’s limited supply of industrial (employment) land that is critical to the City’s future economic vitality and sustainability and provide greater opportunity for medical uses to locate in Morgan Hill.

CEQA (California Environmental Quality Act):

This ordinance is exempt from environmental review pursuant to Section 15061(b)(3) of the California Environmental Quality Act (CEQA) Guidelines, as the proposed text amendments to the Morgan Hill Zoning Code is not a project with potential for causing a significant effect on the environment requiring California Environmental Quality Act (CEQA) analysis. Additionally, on July 27, 2016, the City Council certified an environmental impact report (EIR) for the Morgan Hill 2035 General Plan. This ordinance is consistent with, and implements, the General Plan and therefore was analyzed in the EIR for the 2035 General Plan. Pursuant to Section 15162 and Section 15183 of the State CEQA Guidelines, no additional review under the California Environmental Quality Act is required.;

4 COMMUNITY ENGAGEMENT:

Proposed changes to the allowed uses in the Industrial zoning districts were discussed with the Planning Commission on September 22, 2020, and March 9, 2021. A 10-Day public hearing notice was published in the January 28, 2022 edition of the Morgan Hill Times pursuant to Government Code sections 65090-65096. Notices were also provided on the City’s 411, City’s website, and via social media. Staff also shared the proposed Zoning Code changes at the Morgan Hill Chamber of Commerce Economic Development Committee on January 13, 2022 and via a virtual City of Morgan Hill Townhall meeting on January 27, 2022.

RESOLUTION NO. 22-03

A RESOLUTION OF THE PLANNING COMMISSION OF

THE CITY OF MORGAN HILL RECOMMENDING

APPROVAL OF MUNICIPAL CODE AMENDMENT
(ZA2021-0008) TO TITLE 18, DIVISION I, ZONING CODE
AMENDING SECTION 18.26.020 (LAND USE
REGULATIONS) OF CHAPTER 18.26 (INDUSTRIAL

ZONING DISTRICTS) TO MODIFY THE LAND USES
PERMITTED IN THE INDUSTRIAL ZONING DISTRICTS.

WHEREAS, this proposed Ordinance (Zoning Amendment ZA2021-0008) was considered by the Planning Commission of the City of Morgan Hill at its regular meeting of February 8, 2022;
WHEREAS, the Planning Commission has reviewed recommendations contained in the February 8, 2022, staff report on this item;
WHEREAS, the amendments proposed by this Ordinance are necessary to aid in preserving the City’ limited supply of Industrial Land and; WHEREAS, this ordinance is exempt from environmental review pursuant to Section 15061(b)(3) of the California Environmental Quality Act (CEQA) Guidelines, as the proposed text amendments to the Morgan Hill Zoning Code is not a project with potential for causing a significant effect on the environment requiring California Environmental Quality Act (CEQA) analysis. Additionally, on July 27, 2016, the City Council certified an environmental impact report (EIR) for the Morgan Hill 2035 General Plan. This ordinance is consistent with, and implements, the General Plan and therefore was analyzed in the EIR for the 2035 General Plan. Pursuant to Section 15162 and Section 15183 of the State CEQA Guidelines, no additional review under the California Environmental Quality Act is required.; and
WHEREAS, testimony received at a duly noticed public hearing, along with exhibits and other materials have been considered in the review process.

NOW, THEREFORE, THE MORGAN HILL PLANNING COMMISSION DOES RESOLVE AS FOLLOWS:

SECTION 1. The proposed amendment is consistent with the General Plan and any applicable specific plan as provided by Government Code Section 65860.

City of Morgan Hill
Resolution No. 22-03

The proposed text amendments will implement many General Plan Goals and Policies including those aimed at preserving industrial land and encouraging medical services.

SECTION 2. The proposed amendments will not be detrimental to the public interest, health, safety, convenience, or welfare of the City.

The proposed text amendments will protect public health through the further restriction of potentially incompatible uses within industrial areas and increase the access to health services for Morgan Hill residents.

SECTION 3. The proposed amendment is internally consistent with other applicable provisions of the zoning code.

The proposed text amendments will not create any internal inconsistencies with any other zoning code provisions including the permitted uses in the Industrial and Commercial zoning districts.

SECTION 4. The Planning Commission hereby recommends approval of changes to the text of the Morgan Hill Municipal Code amending section 18.26.020 (land use regulations) of chapter 18.26 (Industrial Zoning Districts) to modify the land uses permitted in the industrial zoning districts which are shown by strike-out text for deletions and underline text for additions. All text amendments recommended to be made as shown in the draft ordinance (Attachment 2 of the staff report).

PASSED AND ADOPTED THIS 8th DAY OF FEBRUARY 2022, AT A REGULAR MEETING OF THE PLANNING COMMISSION BY THE FOLLOWING VOTE:

AYES: COMMISSIONERS:

NOES: COMMISSIONERS:

ABSTAIN: COMMISSIONERS:

ABSENT: COMMISSIONERS:

ATTEST: APPROVED:
_______________________________
JENNA LUNA, Deputy City Clerk MALISHA KUMAR, Chair
Date:

ORDINANCE NO. , NEW SERIES

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF MORGAN HILL AMENDING TITLE 18, DIVISION I,
ZONING CODE SECTION 18.26.020 (LAND USE
REGULATIONS) OF CHAPTER 18.26 (INDUSTRIAL

ZONING DISTRICTS) TO MODIFY THE LAND USES
PERMITTED IN THE INDUSTRIAL ZONING DISTRICTS.

THE CITY COUNCIL OF THE CITY OF MORGAN HILL DOES ORDAIN AS FOLLOWS:

Section 1. Section 18.26.020 (Land Use Regulations) of Chapter 18.26 (Industrial Zoning Districts) of Title 18 (Zoning) is hereby amended to read as follows (additions in underline, deletions in strikeout):

18.26.020 Land use regulations.

A. Permitted Land Uses. Table 18.26-1 identifies land uses permitted in the industrial zoning districts.

Table 18.26-1 Permitted Land Uses in the Industrial Zoning Districts Key
P Permitted Use
A Administrative Use Permit
required
C Conditional Use Permit required
— Use not allowed
Zoning District Additional
Regulations

CI IO IC IL IG
Residential Uses
Caretaker Quarters — — — C C
Public and Quasi-Public Uses
Colleges and Trade Schools C C C C C —
Community Assembly C — — C — C —
Instructional Services A — — — —
Medical Offices and Clinics

≤ 20,000 sq. ft. AP —P —P P —
> 20,000 sq. ft. AP —P —P C —
Parks and Recreational Facilities C — — C C —
Public Safety Facilities C — — C C —
Commercial Uses
Adult Businesses — — P P C — 18.92.020
Animal-Related Commercial Uses
Animal Boarding C — — C C
Veterinarian Clinics and Hospitals A A A C C
Banks and Financial Institutions C [4] — — — —
Business Support Services P C P P P
Cinemas and Theaters A — — — —
Commercial Recreation, Indoor
≤ 15,000 sq. ft. P C C C — C —
> 15,000 sq. ft. C C C C — C —
Eating and Drinking Uses
Restaurants, Fast Food C [4] —
[5]
—
[5]
—
[5]
—
[5]
Restaurants, Sit-Down C [4] —
[5]
—
[5]
—
[5]
—
[5]
Tasting Rooms P [6] — — A [6] A [6]
Lodging Facilities
Hotels and Motels P — — — —
Mini-Storage — — — C C — 18.92.100
Personal Service C [4] — — — —

[5] [5] [5] [5]
Plant Nurseries C — — P P
Professional Offices P P P P P —
Retail
Building Materials C — — P P
Convenience Markets C [4] —
[5]
—
[5]
—
[5]
—
[5]
General Retail C [4] —
[5]
—
[5]
—
[5]
—
[5]
Home Improvement Centers C — — C — C —
Large Commodity Retail C — — C — C —
Vehicle-Related Uses
Salvage and Wrecking — — — — C
Towing and Impound — — — C P
Vehicle Repair and Maintenance,
Major
— — — C P
Vehicle Repair and Maintenance,
Minor
— — — P P [1]
Vehicle Storage, Outdoor — — — C C 18.52.080.C
Wholesaling P — — P P
Industrial Uses
Construction and Material Yards C C C P P 18.26.030.C
Food and Beverage Production
< 5,000 sq. ft. [7] A [2] A [2] A [2] P [2] P [2]
5,000 sq. ft. to 10,000 sq. ft. [7] C [2] C [2] C [2] P [2] P [2] > 10,000 sq. ft. C C C P P

[2,8] [2,8]
Manufacturing, Light P C [3] C P P
Manufacturing, General — — — — C
Research and Development P P P P P
Warehousing and Distribution
Warehousing and Distribution,
Large
C C [3] C [3] C P
Warehousing and Distribution,
Small
C C [3] C [3] P P
Warehousing and Distribution
with Outdoor Storage
C — — C C
Heavy Distribution — — — — —
Parcel Sorting Facilities — — — — —
Parcel Hub Small < 75,000 sq. ft. — — — — —
Parcel Hub Large > 75,000 sq. ft. — — — — —
Recycling Facilities
Reverse Vending Machine P C C P P
Recycling Collection Facility C — — C C
Recycling Processing Facility — — — — C
Utilities, Major — — — C C
Wireless Communications Facilities See Chapter 18.96
Agriculture and Natural Resource
Uses
Crop Cultivation — —
Other Uses
Accessory Uses See Chapter 18.44

Temporary Uses See Section 18.92.150
Section 2. Severability. Should any provision of this ordinance be deemed unconstitutional or unenforceable by a court of competent jurisdiction, such provision shall be severed from the ordinance, and such severance shall not affect the remainder of the ordinance.

Section 3. Effective Date; Posting. This Ordinance shall take effect on ____ ______, 20__. The City Clerk is hereby directed to publish this Ordinance or a summary thereof pursuant to Government Code Section 36933.

This ordinance was introduced at a meeting of the City Council held on the _____ day of _____, 20__, and adopted at a meeting held on the _____ day of ________, 20__, and said ordinance was duly passed and adopted in accordance with law by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ATTEST: APPROVED:
______________________________ _______________________________ MICHELLE BIGELOW, City Clerk RICHARD CONSTANTINE, Mayor

CERTIFICATE OF THE CITY CLERK

I, MICHELLE BIGELOW, CITY CLERK OF THE CITY OF MORGAN HILL, CALIFORNIA, do hereby certify that the foregoing is a true and correct copy of Ordinance No. , New Series, adopted by the City Council of the City of Morgan Hill, California at their regular meeting held on the ____ day of ________, 2021.

WITNESS MY HAND AND THE SEAL OF THE CITY OF MORGAN HILL.

DATE: _____________________ _____________________________ MICHELLE BIGELOW, City Clerk

Land Use Existing Proposed Existing Proposed Existing Proposed Existing Proposed Existing Proposed Community Assembly CUP Not Permitted CUP Not Permitted CUP CUP Not Permitted Not Permitted Not Permitted Not Permitted Commercial Rec. Indoor< 15,000 sq. ft. CUP Not Permitted CUP Not Permitted Permitted Permitted CUP CUP CUP CUP>15,000 sq. ft. CUP Not Permitted CUP Not Permitted CUP CUP CUP CUP CUP CUPColleges/Trade Schools CUP Not Permitted CUP CUP CUP CUP CUP CUP CUP CUPParks & Rec. CUP Not Permitted CUP CUP CUP CUP Not Permitted Not Permitted Not Permitted Not PermittedAdult Businesses Permitted Not Permitted Permitted Permitted Not Permitted Not Permitted Not Permitted Not Permitted Permitted PermittedPublic Safety Facilities CUP Not Permitted CUP CUP CUP CUP Not Permitted Not Permitted Not Permitted Not PermittedMini-Storage CUP Not Permitted CUP CUP Not Permitted Not Permitted Not Permitted Not Permitted Not permitted Not PermittedHome Improvement Ctr. CUP Not Permitted CUP Not Permitted CUP CUP Not Permitted Not Permitted Not permitted Not PermittedLarge Commodity Retail CUP Not Permitted CUP CUP CUP CUP Not Permitted Not Permitted Not Permitted Not PermittedProfessional Offices Permitted Not Permitted Permitted Permitted Permitted Permitted Permitted Permitted Permitted PermittedMedical Office & Clinics<20,000 sq. ft. Not Permitted Not Permitted Not Permitted Permitted AUP Permitted AUP Permitted AUP Permitted≥ 20,000 sq. ft. Not Permitted CUP Permitted Permitted Permitted Permitted - Use allowed by right in Zoning. CUP - Conditional Use Permit Required AUP - Administrative Use Permit Required Proposed Change Proposed Industrial Zoning Changes
IG - General Industrial IL - Light Industrial CI - Commercial Industrial IO - Industrial Office IC - Campus Industrial INDUSTRIAL ZONING DISTRICTSGeneral Industrial (IG). The purpose of the IG zoning district is to provide areas for general industrial, manufacturing, wholesale and service uses needed by the city and region subject to regulations necessary to protect other nearby usesfrom hazards and noise and other disturbances.Light Industrial (IL). The purpose of the IL zoning district is to provide areas for research, administrative, lighter manufacturing, wholesale and heavy service commercial uses not suitable in commercial districts.

Commercial Industrial (CI). The purpose of the CI zoning district is to promote job-generating development of lands by allowing flexibility in the mix of industrial, office, and commercial uses that are compatible with existing development.Lodging uses (e.g., hotels) that support primary job generating uses within business districts are allowed.Light Office Industrial (IO). The purpose of the IO zoning district is to provide areas for mixed administrative and executive office uses in appropriate areas within the community.Campus Industrial (IC). The purpose of the IC zoning district is to provide an environment exclusively for and conducive to the development and protection of modern administrative facilities, research institutions and specialized manufacturing operations..

USE DEFINITIONS
Community Assembly. Facilities that provides space for public or private meetings or gatherings. Includes places of worship, community centers, meeting space for clubs and other membership organizations, social halls, union halls, banquet centers,and other similar facilities.Commercial Recreation, Indoor. A commercial recreation facility primarily located indoors. Includes gymnasiums, health clubs, bowling alleys, indoor tennis and racquet courts, indoor swimming pools, laser tag and other similar games.Excludes "instructional services."Manufacturing, General. Manufacturing of products from extracted or raw materials or recycled or secondary materials, or bulk storage and handling of such products and materials. Includes operations such as agriculture processing, apparel manufacturing; photographic processing plants; wood product manufacturing; paper manufacturing; chemical manufacturing."Adult businesses" include but are not limited to: adult bookstores, adult video stores, adult novelty stores, adult arcades, adult motels, adult theaters, adult entertainment enterprises, adult cabarets, escort agencies, massage parlors, nude modeling studios; or places which engage in or allow couch dancing, topless dancing, nude or semi-nude mud wrestling or similar businesses.

Large Commodity Retail. A retail use where more than seventy-five percent of the gross floor area is used for display, sales, and related storage of bulky commodities, and which typically generate a demand for fewer parking spaces than do other types of retail uses. Includes retail sail of carpeting and floor covering; catalog and mail order sales; construction equipment and machinery; garden and farm equipment; heating, ventilating, air conditioning, and othermechanical equipment and supplies; kitchen, bathroom and plumbing appliances, equipment, and supplies; lumber and building materials; office furniture, equipment, and machinery, including computers; and household furniture.

Home Improvement Centers. A retail establishment which carries a full line of building materials, appurtenances, and decorator items primarily for homeowners (not contractors) to improve and maintain individual dwellings.Excludes building supply yards and lumberyards for contractors and home builders.Medical Offices and Clinics. Facilities where medical, mental, dental, or other personal health services are provided on an outpatient basis using specialized equipment. Includes offices for physicians, dentists, and optometrists,diagnostic centers, blood banks and plaza centers, and emergency medical clinics offered exclusively on an out-patient basis. May include educational aspects such as medical instruction and/or training as well as house a laboratory, radiology/imaging, pharmacy, rehabilitation and other similar services as accessory uses. Excludes "hospitals."

From: Craig Erb
To: PC Public Comment
Subject: [EXTERNAL] Planning Commission 2/8/22
Date: Thursday, February 3, 2022 2:25:29 PM
Some people who received this message don't often get email from [email protected]. Learn why this is important
It appears Warehousing and Distribution, Large C C [3] C [3] C P is permitted or conditionally permitted according to proposed amendment to Section 18.26.020 (Land Use Regulations) and contrary to the "2020
City Council approved Zoning Code Amendments that prohibit stand-alone large fulfillment centers and parcel sorting centers".

WARNING: This message is from an external user. Confidential information such as social security numbers, credit card numbers, bank routing numbers, gift card numbers, wire transfer information and other personally identifiable information should not be transmitted to this user. For question, please contact the Morgan Hill IT Department by opening a new helpdesk request online or call 408-909-0055.

Item # 4
AGENDA DATE: 01/8/22
SUPPLEMENTAL # 1

Industrial Preservation Workplan
Planning Commission
February 8, 2022

Economic Development’s Role
The Economic Development Element
establishes policy guidance to support
the community’s economic well-being.

Its strategies include diversifying the
local economy, increasing the quality
and quantity of available job
opportunities, decreasing the need for
commuting, creating a thriving
Downtown, and enhancing Morgan
Hill’s appeal as a tourist destination.
2035 General Plan
• Develop & maintain high-quality public
infrastructure & services
• Position Morgan Hill as a compelling
choice for companies by providing
flexibility
• Retain and attract businesses by
providing a business-friendly climate
• Create fiscal sustainability by cultivating
a diversified tax base
• Increase economic opportunity through
a robust and diverse range of business
activity

The Economic Blueprint identified 4 core industries, 13 strategies and 35 specific action items.
• Action #1: Adopting an employment (Industrial) land preservation policy, and
• Action #2: To strengthening General Plan language to prevent the conversion of Industrial lands.
2017 Economic Blueprint

Industrial
Preservation
• Economically Sustainable
• Jobs & Revenue
• Maintain Industrial Lands for Jobgenerating Uses
• Prevent incompatible uses

Industrial Preservation Meetings &
Action History
2020

ULI, SVEDA & PC
Workshops
Oct 2020
Council Prohibits
e-Commerce
Uses
April 2021
Council adopts
Urgency
Ordinance

• Morgan Hill continues to be an attractive destination for industrial users, including manufacturers, machine shops, and assembly businesses.
• Morgan Hill Ranch and Madrone Business Parks continue to be the strongest location for future industrial, R&D, and warehouse uses. • Demand for industrial buildings has outpaced building supply for manufacturing, machining, and assembly businesses.
• Morgan Hill firms have left to expand elsewhere, due to lack of industrial space availability.
• New construction is expensive and takes approximately 2 years to complete (plan, permit, construct).

Strategic Economics Study
Industrial Findings

• Vacant industrial (employment) land supply can accommodate 25 to 165 years of projected demand
• When currently entitled projects are considered, excluding Redwood Tech 101, the available land horizon drops to 19 to 95 years • Today, there are only 120 acres of industrial (employment) land remaining (vacant)
• 86.5 acres Light Industrial (IL)
• 6 acres General Industrial (IG)
• 27.5 acres Redwood Tech 101- planned and permitted
Strategic Economics Study
Industrial Findings

Industrial Land Preservation Strategies
➢ Use it. The best way to preserve industrial/employment lands is to use them for their industrial purpose.
➢ Revisit Policy CNF-17.1 language within the General Plan and replace ‘discourage’ with “prohibit” the conversion of industrial lands. ➢ Limit discretion of CUP uses in employment generating uses. ➢ Hold the line. Prioritize wanted uses such as OEM (original equipment manufacturer).
➢ Brand, market, and promote industrial parks.
➢ Incentivize industrial development. Explore how fee structures and taxes align with land use.
➢ Allow for mixed uses within industrial. Consider office or other uses. ➢ Consider post COVID-19 uses. The pandemic may create new products and uses that are not currently articulated in city codes. Be flexible to allow for industries and new operations.

In November 2020, the City
Council City Council adopts
Ordinance 2317 amending the
City's Industrial Zoning Code
prohibiting fulfillment centers,
defining Large Scale Projects and
moving review and approval
authority from City staff to
Planning Commission.

Addressed via Zoning Code
What actions has City taken?
✓ Fulfillment Centers Prohibited
✓ Sorting Centers Prohibited
✓ Last-mile (local) distribution Prohibited
✓ Large projects defined as >100 units or
>75,000 sq ft_
✓ Large projects now require public hearing
✓ Review & Approval authority for large
projects moved to Planning Commission

In April 2021, City Council
passed Urgency Ordinance
2320.

Addressed via Building Type
What actions has City taken?
✓ Changed/created definitions for:
• Dock-High-Door
• Dock-High-Door to Square Foot Ratio
• Ceiling Height
• Light Manufacturing
✓ Added Section 18.76.140 – Maximum Dock
High Door Ratio for a facility that has a floor
area of 75,000 square feet or greater and a
ceiling height of more than thirty-four (34)
feet over more than twenty-five (25) percent
of the floor area is 1 Dock-High-Door:25,000
square feet

Industrial
Ordinance
Replace existing Urgency
Ordinance 2320, which
sunsets April 2022, with
an adopted Industrial
Ordinance
Place a measure on the
November 2022 Ballot for
voter affirmation of the
adopted Industrial
Ordinance
Industrial
Preservation &
Optimization Policy
Encourage Innovation and
Manufacturing
Prohibit Stand-alone eCommerce Distribution &
Warehousing
Prohibit Conversions from
Industrial Land to non-job
generating uses
Encourage Conversions
from Commercial Land to
Industrial Land
Zoning Clean Up
Supports Industrial
Preservation &
Optimization Policy
Minimize incompatible
uses & CUPs
Encourage Conversions
from Commercial Land to
Industrial Land
Industrial Preservation Workplan

1 2
Industrial Preservation & Optimization
Policy
• In conjunction with the 2035 General Plan, Zoning Ordinance ZA2020-0003, and the Economic Blueprint, the policy will protect the City’s limited supply of industrial/employment land to support long term economic vitality.
• Identifies five key goals that provide direction and guidance when developing, implementing, and managing policies, programs, and projects, including implementation of the Zoning Code and General Plan, as they relate to industrial uses and industrial business parks. • Supports amending the current zoning code to minimize and reduce incompatible uses within the industrial lands.

1 3
Industrial Preservation & Optimization
Policy

1. Encourage the attraction and expansion of R&D, Office, and Advanced Manufacturing uses.

2. Prohibit stand-alone e-commerce Warehouse and Distribution uses.

3. Prohibit General Plan conversions of Industrial lands that cause a net loss of industrial employment lands.

4. Protect existing Industrial lands and business parks by prohibiting noncompatible uses such as community assembly and recreational uses, while expanding compatible uses.

5. Encourage conversion of Commercial Lands to Industrial Lands where appropriate.

1 4
Industrial Preservation & Optimization
Policy

STRATEGY ACTIONS
Encourage the attraction and expansion of R&D, Office, and Advanced Manufacturing uses.

Marketing, Messaging & Outreach
Development of Incentive
Programs
Prohibit stand-alone e-commerce Warehouse and Distribution uses. Industrial Ordinance Zoning Code
Prohibit General Plan conversions of Industrial lands that cause a net loss of industrial employment lands.

General Plan
Protect existing Industrial lands and business parks by prohibiting non-compatible uses such as community assembly and recreational uses, while expanding compatible uses.

Zoning Code
Explore conversion of Commercial Lands to Industrial Lands where appropriate.

Marketing, Messaging & Outreach
City-initiated GP Conversions

• Minimize and reduce incompatible uses
• Minimize CUPs in industrial zoned areas
• Expand opportunity for medical office and healthcare
Updating Zoning Code

IG - General Industrial IL - Light Industrial
Land Use Existing Proposed Existing Proposed
Community Assembly CUP Not Permitted CUP Not Permitted
Commercial Rec. Indoor
< 15,000 sq. ft. CUP Not Permitted CUP Not Permitted
>15,000 sq. ft. CUP Not Permitted CUP Not Permitted
Colleges/Trade Schools CUP Not Permitted CUP CUP
Parks & Rec. CUP Not Permitted CUP CUP
Adult Businesses Permitted Not Permitted Permitted Permitted Public Safety Facilities CUP Not Permitted CUP CUP
Mini-Storage CUP Not Permitted CUP CUP
Home Improvement Ctr. CUP Not Permitted CUP CUP
Large Commodity Retail CUP Not Permitted CUP CUP
Professional Offices Permitted Not Permitted Permitted Permitted Manufacturing, General CUP CUP Not Permitted Not Permitted Medical Office & Clinics
< 20,000 sq. ft. Not Permitted Not Permitted Not Permitted AUP > 20,000 sq. ft. Not Permitted CUP
Proposed Zoning Code Changes

CI - Commercial Industrial IO - Industrial Office IC - Campus Industrial Land Use Existing Proposed Existing Proposed Existing Proposed Community Assembly CUP CUP Not Permitted Not Permitted Not Permitted Not Permitted Commercial Rec. Indoor
< 15,000 sq. ft. Permitted Permitted CUP CUP CUP CUP
>15,000 sq. ft. CUP CUP CUP CUP CUP CUP
Colleges/Trade Schools CUP CUP CUP CUP CUP CUP
Parks & Rec. CUP CUP Not Permitted Not Permitted Not Permitted Not Permitted Adult Businesses Not Permitted Not Permitted Not Permitted Not Permitted Permitted Permitted Public Safety Facilities CUP CUP Not Permitted Not Permitted Not Permitted Not Permitted Mini-Storage Not Permitted Not Permitted Not Permitted Not Permitted Not permitted Not Permitted Home Improvement Ctr. CUP CUP Not Permitted Not Permitted Not permitted Not Permitted Large Commodity Retail CUP CUP Not Permitted Not Permitted Not Permitted Not Permitted Professional Offices Permitted Permitted Permitted Permitted Permitted Permitted Manufacturing, General Not Permitted Not Permitted Not Permitted Not Permitted Not Permitted Not Permitted Medical Office & Clinics
< 20,000 sq. ft. AUP Permitted AUP Permitted AUP Permitted > 20,000 sq. ft. Permitted Permitted Permitted
Proposed Zoning Code Changes

No Changes
(effective November 2020)

USE IL IG
Warehousing & Distribution
Warehousing and Distribution, Large C P
Warehousing and Distribution, Small P P
Warehousing and Distribution with Outdoor Storage C C
Heavy Distribution Not Allowed Not Allowed
Parcel Sorting Facilities Not Allowed Not Allowed
Parcel Hub Small Not Allowed Not Allowed
Parcel Hubs Large Not Allowed Not Allowed

1. Placed RG4MH Initiative on the ballot;

2. Adopted the collaborative ordinance as an “urgency ordinance”; and

3. Directed Planning Commission to review collaborative ordinance as a permanent ordinance and consider placement on ballot.

April 7, 2021 City Council Action
19 Industrial
Ordinance

Adds Section 18.76.140 – Maximum Dock High Door Ratio for a facility that has a floor area of seventy-five thousand (75,000) square feet or greater and a ceiling height of more than thirty-four (34) feet over more than twentyfive (25) percent of the floor area is 1 Dock-High-Door:25,000 square feet Change/create definitions for:
» Dock-High-Door
» Dock-High-Door to Square Foot Ratio
» Ceiling Height
» Light Manufacturing
Same as Urgency Ordinance
20 Industrial
Ordinance

2022 Schedule
21 Business &
Community
Outreach
January
Planning
Commission
February
City Council
March
City Places
Industrial
Ordinance
on
November
Ballot
MHRGC
Removes
Initiative
from
November
Ballot
Election
November 8

Questions

RESOLUTION NO. 22-03

A RESOLUTION OF THE PLANNING COMMISSION OF

THE CITY OF MORGAN HILL RECOMMENDING

APPROVAL OF MUNICIPAL CODE AMENDMENT
(ZA2021-0008) TO TITLE 18, DIVISION I, ZONING CODE
AMENDING SECTION 18.26.020 (LAND USE
REGULATIONS) OF CHAPTER 18.26 (INDUSTRIAL

ZONING DISTRICTS) TO MODIFY THE LAND USES
PERMITTED IN THE INDUSTRIAL ZONING DISTRICTS.

WHEREAS, this proposed Ordinance (Zoning Amendment ZA2021-0008) was considered by the Planning Commission of the City of Morgan Hill at its regular meeting of February 8, 2022;
WHEREAS, the Planning Commission has reviewed recommendations contained in the February 8, 2022, staff report on this item and recommeded the following revisions; 1) Maintain the requirement that Home Improvement Centers obtain a Conditional Use Permit in the IL-Light Industrial Zoning District.
2) Require an Administrative Use Permit for Medical Office and Clinics of less than 20,000 square feet in the IL -Light Industrial zoning district.

WHEREAS, the amendments proposed by this Ordinance are necessary to aid in preserving the City’ limited supply of Industrial Land and; WHEREAS, this ordinance is exempt from environmental review pursuant to Section 15061(b)(3) of the California Environmental Quality Act (CEQA) Guidelines, as the proposed text amendments to the Morgan Hill Zoning Code is not a project with potential for causing a significant effect on the environment requiring California Environmental Quality Act (CEQA) analysis. Additionally, on July 27, 2016, the City Council certified an environmental impact report (EIR) for the Morgan Hill 2035 General Plan. This ordinance is consistent with, and implements, the General Plan and therefore was analyzed in the EIR for the 2035 General Plan. Pursuant to Section 15162 and Section 15183 of the State CEQA Guidelines, no additional review under the California Environmental Quality Act is required.; and
WHEREAS, testimony received at a duly noticed public hearing, along with exhibits and other materials have been considered in the review process.

City of Morgan Hill
Resolution No. 22-03

NOW, THEREFORE, THE MORGAN HILL PLANNING COMMISSION DOES RESOLVE AS FOLLOWS:

SECTION 1. The proposed amendment is consistent with the General Plan and any applicable specific plan as provided by Government Code Section 65860.

The proposed text amendments will implement many General Plan Goals and Policies including those aimed at preserving industrial land and encouraging medical services.

SECTION 2. The proposed amendments will not be detrimental to the public interest, health, safety, convenience, or welfare of the City.

The proposed text amendments will protect public health through the further restriction of potentially incompatible uses within industrial areas and increase the access to health services for Morgan Hill residents.

SECTION 3. The proposed amendment is internally consistent with other applicable provisions of the zoning code.

The proposed text amendments will not create any internal inconsistencies with any other zoning code provisions including the permitted uses in the Industrial and Commercial zoning districts.

SECTION 4. The Planning Commission hereby recommends approval of changes to the text of the Morgan Hill Municipal Code amending section 18.26.020 (land use regulations) of chapter 18.26 (Industrial Zoning Districts) to modify the land uses permitted in the industrial zoning districts which are shown by strike-out text for deletions and underline text for additions. All text amendments recommended to be made as shown in the draft ordinance (Attachment 2 of the staff report).

PASSED AND ADOPTED THIS 8
th DAY OF FEBRUARY 2022, AT A REGULAR
MEETING OF THE PLANNING COMMISSION BY THE FOLLOWING VOTE:

AYES: COMMISSIONERS: KUMAR, GONZALEZ-ESCOTO, MUELLER,

TANDA, DOWNEY, HABIB
NOES: COMMISSIONERS: NONE
ABSTAIN: COMMISSIONERS: NONE
ABSENT: COMMISSIONERS: NONE

City of Morgan Hill
Resolution No. 22-03

ATTEST: APPROVED:
_______________________________
JENNA LUNA, Deputy City Clerk MALISHA KUMAR, Chair
Date:

Malisha Kumar (Feb 11, 2022 09:39 PST) Feb 11, 2022 Page 274 of 350 Resolution No. 22-03 (Final)
Final Audit Report 2022-02-11
Created: 2022-02-11
By: Jenna Luna ([email protected])
Status: Signed
Transaction ID: CBJCHBCAABAAO62byXbKJi3PcNRmLb9urb1dxS8KVOxX "Resolution No. 22-03 (Final)" History
Document created by Jenna Luna ([email protected]) 2022-02-11 - 3:16:15 PM GMT- IP address: 68.189.124.146 Document emailed to Malisha Kumar ([email protected]) for signature 2022-02-11 - 3:16:45 PM GMT
Email viewed by Malisha Kumar ([email protected]) 2022-02-11 - 3:36:43 PM GMT- IP address: 172.225.89.145 Document e-signed by Malisha Kumar ([email protected]) Signature Date: 2022-02-11 - 5:39:27 PM GMT - Time Source: server- IP address: 71.95.130.164 Agreement completed.
2022-02-11 - 5:39:27 PM GMT

ORDINANCE NO. , NEW SERIES

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF MORGAN HILL AMENDING TITLE 18, DIVISION I,
ZONING CODE SECTION 18.26.020 (LAND USE
REGULATIONS) OF CHAPTER 18.26 (INDUSTRIAL

ZONING DISTRICTS) TO MODIFY THE LAND USES
PERMITTED IN THE INDUSTRIAL ZONING DISTRICTS.

THE CITY COUNCIL OF THE CITY OF MORGAN HILL DOES ORDAIN AS FOLLOWS:

Section 1. Section 18.26.020 (Land Use Regulations) of Chapter 18.26 (Industrial Zoning Districts) of Title 18 (Zoning) is hereby amended to read as follows (additions in underline, deletions in strikeout):

18.26.020 Land use regulations.

A. Permitted Land Uses. Table 18.26-1 identifies land uses permitted in the industrial zoning districts.

Table 18.26-1 Permitted Land Uses in the Industrial Zoning Districts Key
P Permitted Use
A Administrative Use Permit
required
C Conditional Use Permit required
— Use not allowed
Zoning District Additional
Regulations

CI IO IC IL IG
Residential Uses
Caretaker Quarters — — — C C
Public and Quasi-Public Uses
Colleges and Trade Schools C C C C C —
Community Assembly C — — C — C —
Instructional Services A — — — —
Medical Offices and Clinics

≤ 20,000 sq. ft. AP —P —P A —
> 20,000 sq. ft. AP —P —P C —
Parks and Recreational Facilities C — — C C —
Public Safety Facilities C — — C C —
Commercial Uses
Adult Businesses — — P P C — 18.92.020
Animal-Related Commercial Uses
Animal Boarding C — — C C
Veterinarian Clinics and Hospitals A A A C C
Banks and Financial Institutions C [4] — — — —
Business Support Services P C P P P
Cinemas and Theaters A — — — —
Commercial Recreation, Indoor
≤ 15,000 sq. ft. P C C C — C —
> 15,000 sq. ft. C C C C — C —
Eating and Drinking Uses
Restaurants, Fast Food C [4] —
[5]
—
[5]
—
[5]
—
[5]
Restaurants, Sit-Down C [4] —
[5]
—
[5]
—
[5]
—
[5]
Tasting Rooms P [6] — — A [6] A [6]
Lodging Facilities
Hotels and Motels P — — — —
Mini-Storage — — — C C — 18.92.100
Personal Service C [4] — — — —

[5] [5] [5] [5]
Plant Nurseries C — — P P
Professional Offices P P P P P —
Retail
Building Materials C — — P P
Convenience Markets C [4] —
[5]
—
[5]
—
[5]
—
[5]
General Retail C [4] —
[5]
—
[5]
—
[5]
—
[5]
Home Improvement Centers C — — C— C —
Large Commodity Retail C — — C — C —
Vehicle-Related Uses
Salvage and Wrecking — — — — C
Towing and Impound — — — C P
Vehicle Repair and Maintenance,
Major
— — — C P
Vehicle Repair and Maintenance,
Minor
— — — P P [1]
Vehicle Storage, Outdoor — — — C C 18.52.080.C
Wholesaling P — — P P
Industrial Uses
Construction and Material Yards C C C P P 18.26.030.C
Food and Beverage Production
< 5,000 sq. ft. [7] A [2] A [2] A [2] P [2] P [2]
5,000 sq. ft. to 10,000 sq. ft. [7] C [2] C [2] C [2] P [2] P [2] > 10,000 sq. ft. C C C P P

[2,8] [2,8]
Manufacturing, Light P C [3] C P P
Manufacturing, General — — — — C
Research and Development P P P P P
Warehousing and Distribution
Warehousing and Distribution,
Large
C C [3] C [3] C P
Warehousing and Distribution,
Small
C C [3] C [3] P P
Warehousing and Distribution
with Outdoor Storage
C — — C C
Heavy Distribution — — — — —
Parcel Sorting Facilities — — — — —
Parcel Hub Small < 75,000 sq. ft. — — — — —
Parcel Hub Large > 75,000 sq. ft. — — — — —
Recycling Facilities
Reverse Vending Machine P C C P P
Recycling Collection Facility C — — C C
Recycling Processing Facility — — — — C
Utilities, Major — — — C C
Wireless Communications Facilities See Chapter 18.96
Agriculture and Natural Resource
Uses
Crop Cultivation — —
Other Uses
Accessory Uses See Chapter 18.44

Temporary Uses See Section 18.92.150
Section 2. Severability. Should any provision of this ordinance be deemed unconstitutional or unenforceable by a court of competent jurisdiction, such provision shall be severed from the ordinance, and such severance shall not affect the remainder of the ordinance.

Section 3. Effective Date; Posting. This Ordinance shall take effect on ____ ______, 20__. The City Clerk is hereby directed to publish this Ordinance or a summary thereof pursuant to Government Code Section 36933.

This ordinance was introduced at a meeting of the City Council held on the _____ day of _____, 20__, and adopted at a meeting held on the _____ day of ________, 20__, and said ordinance was duly passed and adopted in accordance with law by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ATTEST: APPROVED:
______________________________ _______________________________ MICHELLE BIGELOW, City Clerk RICHARD CONSTANTINE, Mayor

CERTIFICATE OF THE CITY CLERK

I, MICHELLE BIGELOW, CITY CLERK OF THE CITY OF MORGAN HILL, CALIFORNIA, do hereby certify that the foregoing is a true and correct copy of Ordinance No. , New Series, adopted by the City Council of the City of Morgan Hill, California at their regular meeting held on the ____ day of ________, 2021.

WITNESS MY HAND AND THE SEAL OF THE CITY OF MORGAN HILL.

DATE: _____________________ _____________________________ MICHELLE BIGELOW, City Clerk

Industrial Preservation Workplan
City Council
March 2, 2022

Economic Development’s Role
The Economic Development Element
establishes policy guidance to support
the community’s economic well-being.

Its strategies include diversifying the
local economy, increasing the quality
and quantity of available job
opportunities, decreasing the need for
commuting, creating a thriving
Downtown, and enhancing Morgan
Hill’s appeal as a tourist destination.
2035 General Plan
• Develop & maintain high-quality public
infrastructure & services
• Position Morgan Hill as a compelling
choice for companies by providing
flexibility
• Retain and attract businesses by
providing a business-friendly climate
• Create fiscal sustainability by cultivating
a diversified tax base
• Increase economic opportunity through
a robust and diverse range of business
activity

The Economic Blueprint identified 4 core industries, 13 strategies and 35 specific action items.
• Action #1: Adopting an employment (Industrial) land preservation policy, and
• Action #2: Strengthen General Plan language to prevent the conversion of Industrial lands.
2017 Economic Blueprint

Industrial
Preservation
• Economically Sustainable
• Jobs & Revenue
• Maintain Industrial Lands for Jobgenerating Uses
• Prevent incompatible uses

Industrial Preservation Meetings &
Action History
2020

ULI, SVEDA & PC
Workshops
Oct 2020
Council Prohibits
e-Commerce
Uses
April 2021
Council adopts
Urgency
Ordinance

• Morgan Hill continues to be an attractive destination for industrial users, including manufacturers, machine shops, and assembly businesses.
• Morgan Hill Ranch and Madrone Business Parks continue to be the strongest location for future industrial, R&D, and warehouse uses. • Demand for industrial buildings has outpaced building supply for manufacturing, machining, and assembly businesses.
• Morgan Hill firms have left to expand elsewhere, due to lack of industrial space availability.
• New construction is expensive and takes approximately 2 years to complete (plan, permit, construct).

Strategic Economics Study
Industrial Findings

• Vacant industrial (employment) land supply can accommodate 25 to 165 years of projected demand
• When currently entitled projects are considered, excluding Redwood Tech 101, the available land horizon drops to 19 to 95 years • Today, there are only 120 acres of industrial (employment) land remaining (vacant)
• 86.5 acres Light Industrial (IL)
• 6 acres General Industrial (IG)
• 27.5 acres Redwood Tech 101- planned and permitted
Strategic Economics Study
Industrial Findings

Industrial Land Preservation Strategies
➢ Use it. The best way to preserve industrial/employment lands is to use them for their industrial purpose.
➢ Revisit Policy CNF-17.1 language within the General Plan and replace ‘discourage’ with “prohibit” the conversion of industrial lands. ➢ Limit discretion of CUP uses in employment generating uses. ➢ Hold the line. Prioritize wanted uses such as OEM (original equipment manufacturer).
➢ Brand, market, and promote industrial parks.
➢ Incentivize industrial development. Explore how fee structures and taxes align with land use.
➢ Allow for mixed uses within industrial. Consider office or other uses. ➢ Consider post COVID-19 uses. The pandemic may create new products and uses that are not currently articulated in city codes. Be flexible to allow for industries and new operations.

Industrial Zoned Land

In November 2020, the City
Council adopts Ordinance 2317
amending the City's Industrial
Zoning Code prohibiting
fulfillment centers, defining Large
Scale Projects and moving review
and approval authority from City
staff to Planning Commission.

Addressed via Zoning Code
What actions has City taken?
✓ Fulfillment Centers Prohibited
✓ Sorting Centers Prohibited
✓ Last-mile (local) distribution Prohibited
✓ Large projects defined as >100 units or
>75,000 sq ft
✓ Large projects now require public hearing
✓ Review & Approval authority for large
projects moved to Planning Commission

In April 2021, City Council
passed Urgency Ordinance
2320.

Addressed via Building Type
What actions has City taken?
✓ Changed/created definitions for:
• Dock-High-Door
• Dock-High-Door to Square Foot Ratio
• Ceiling Height
• Light Manufacturing
✓ Added Section 18.76.140 – Maximum Dock
High Door Ratio for a facility that has a floor
area of 75,000 square feet or greater and a
ceiling height of more than thirty-four (34)
feet over more than twenty-five (25) percent
of the floor area is 1 Dock-High-Door:25,000
square feet.

Industrial
Ordinance
Replace existing Urgency
Ordinance 2320, which
sunsets April 2022, with
an adopted Industrial
Ordinance
Place a measure on the
November 2022 Ballot for
voter affirmation of the
adopted Industrial
Ordinance
Industrial
Preservation &
Optimization Policy
Encourage Innovation and
Manufacturing
Prohibit Stand-alone eCommerce Distribution &
Warehousing
Prohibit Conversions from
Industrial Land to non-job
generating uses
Encourage Conversions
from Commercial Land to
Industrial Land
Zoning Clean Up
Supports Industrial
Preservation &
Optimization Policy
Minimize incompatible
uses & CUPs
Encourage Conversions
from Commercial Land to
Industrial Land
Industrial Preservation Workplan

1 4
Industrial Preservation & Optimization
Policy
• In conjunction with the 2035 General Plan, Zoning Ordinance ZA2020-0003, and the Economic Blueprint, the policy will protect the City’s limited supply of industrial/employment land to support long term economic vitality.
• Identifies five key goals that provide direction and guidance when developing, implementing, and managing policies, programs, and projects, including implementation of the Zoning Code and General Plan, as they relate to industrial uses and industrial business parks. • Supports amending the current zoning code to minimize and reduce incompatible uses within the industrial lands.

1 5
Industrial Preservation & Optimization
Policy

1. Encourage the attraction and expansion of R&D, Office, and Advanced Manufacturing uses.

2. Prohibit stand-alone e-commerce Warehouse and Distribution uses.

3. Prohibit General Plan conversions of Industrial lands that cause a net loss of industrial employment lands.

4. Protect existing Industrial lands and business parks by prohibiting noncompatible uses such as community assembly and recreational uses, while expanding compatible uses.

5. Explore Encourage conversion of Commercial Lands to Industrial Lands where appropriate.

1 6
Industrial Preservation & Optimization
Policy

STRATEGY ACTIONS
Encourage the attraction and expansion of R&D, Office, and Advanced Manufacturing uses.

Marketing, Messaging & Outreach
Development of Incentive
Programs
Prohibit stand-alone e-commerce Warehouse and Distribution uses. Industrial Ordinance Zoning Code
Prohibit General Plan conversions of Industrial lands that cause a net loss of industrial employment lands.

General Plan
Protect existing Industrial lands and business parks by prohibiting non-compatible uses such as community assembly and recreational uses, while expanding compatible uses.

Zoning Code
Explore conversion of Commercial Lands to Industrial Lands where appropriate.

Marketing, Messaging & Outreach
City-initiated GP Conversions

• Minimize and reduce incompatible uses
• Minimize CUPs in industrial zoned areas
• Expand opportunity for medical office and healthcare
Updating Zoning Code

IG - General Industrial IL - Light Industrial
Land Use Existing Proposed Existing Proposed
Community Assembly CUP Not Permitted CUP Not Permitted
Commercial Rec. Indoor
< 15,000 sq. ft. CUP Not Permitted CUP Not Permitted
>15,000 sq. ft. CUP Not Permitted CUP Not Permitted
Colleges/Trade Schools CUP Not Permitted CUP CUP
Parks & Rec. CUP Not Permitted CUP CUP
Adult Businesses Permitted Not Permitted Permitted Permitted Public Safety Facilities CUP Not Permitted CUP CUP
Mini-Storage CUP Not Permitted CUP CUP
Home Improvement Ctr. – PC Recommended CUP Not Permitted CUP CUP Large Commodity Retail CUP Not Permitted CUP CUP
Professional Offices Permitted Not Permitted Permitted Permitted Manufacturing, General CUP CUP Not Permitted Not Permitted Medical Office & Clinics
< 20,000 sq. ft. – PC Recommended Not Permitted Not Permitted Not Permitted AUP > 20,000 sq. ft. Not Permitted Not Permitted Not Permitted CUP Proposed Zoning Code Changes

CI - Commercial Industrial IO - Industrial Office IC - Campus Industrial Land Use Existing Proposed Existing Proposed Existing Proposed Community Assembly CUP CUP Not Permitted Not Permitted Not Permitted Not Permitted Commercial Rec. Indoor
< 15,000 sq. ft. Permitted Permitted CUP CUP CUP CUP
>15,000 sq. ft. CUP CUP CUP CUP CUP CUP
Colleges/Trade Schools CUP CUP CUP CUP CUP CUP
Parks & Rec. CUP CUP Not Permitted Not Permitted Not Permitted Not Permitted Adult Businesses Not Permitted Not Permitted Not Permitted Not Permitted Permitted Permitted Public Safety Facilities CUP CUP Not Permitted Not Permitted Not Permitted Not Permitted Mini-Storage Not Permitted Not Permitted Not Permitted Not Permitted Not permitted Not Permitted Home Improvement Ctr. CUP CUP Not Permitted Not Permitted Not permitted Not Permitted Large Commodity Retail CUP CUP Not Permitted Not Permitted Not Permitted Not Permitted Professional Offices Permitted Permitted Permitted Permitted Permitted Permitted Manufacturing, General Not Permitted Not Permitted Not Permitted Not Permitted Not Permitted Not Permitted Medical Office & Clinics
< 20,000 sq. ft. – PC Recommended AUP AUP Not Permitted AUP Not Permitted AUP > 20,000 sq. ft. – PC Recommended CUP CUP CUP
Proposed Zoning Code Changes

Proposed Zoning Code Changes
Home Improvement Centers - Light Industrial (IL) Only
• Staff recommended Not Permitted.
• Planning Commission has recommended a Conditional Use Permit. • Staff continues to recommend, Not Permitted.

Medical Office and Clinics – IL, CI, IO, IC Zones
• Staff recommended allowing Medical Offices and Clinics as a Permitted use at <20,000 square feet.
• Planning Commission has recommended requiring an Administrative Use Permit at <20,000 square feet.
• Staff is recommending the following:
• 5,000 square feet or less - Permitted by right
• 5,001 - 20,000 square feet - Administrative Use Permit • 20,001 square feet or more - Conditional Use Permit

No Changes
(effective November 2020)

USE IL IG
Warehousing & Distribution
Warehousing and Distribution, Large C P
Warehousing and Distribution, Small P P
Warehousing and Distribution with Outdoor Storage C C
Heavy Distribution Not Allowed Not Allowed
Parcel Sorting Facilities Not Allowed Not Allowed
Parcel Hub Small Not Allowed Not Allowed
Parcel Hubs Large Not Allowed Not Allowed

1. Placed RG4MH Initiative on the ballot;

2. Adopted the collaborative ordinance as an “urgency ordinance”; and

3. Directed Planning Commission to review collaborative ordinance as a permanent ordinance and consider placement on ballot.

April 7, 2021 City Council Action
22 Industrial
Ordinance

Adds Section 18.76.140 – Maximum Dock High Door Ratio for a facility that has a floor area of seventy-five thousand (75,000) square feet or greater and a ceiling height of more than thirty-four (34) feet over more than twentyfive (25) percent of the floor area is 1 Dock-High-Door:25,000 square feet Change/create definitions for:
» Dock-High-Door
» Dock-High-Door to Square Foot Ratio
» Ceiling Height
» Light Manufacturing
Same as Urgency Ordinance
23 Industrial
Ordinance

2022 Schedule
24 Business &
Community
Outreach
January
Planning
Commission
February
City Council
March
City Places
Industrial
Ordinance
on
November
Ballot
MHRGC
Removes
Initiative
from
November
Ballot
Election
November 8

Questions

To Respected Mayor & Morgan Hill City Council Members,
My name is Dr. Hiral Khatri OTDR/L, a resident and critical medical service business owner in Morgan Hill. I opened my pediatric occupational therapy business named OT Park in Morgan Hill to treat kids with autism, ADHD, behavioral, sensory, and other developmental needs.

We leased a perfect place located on digital island (284 Digital Dr), where there was a prior physical therapy clinic for 7 years, this place was ideal for us because it gave us the square footage and floor plan, we need to design state of the art pediatric OT clinic. It was not until we applied for city business license, we were told by the city’s planning division that leased location comes under Industrial light zone which does not allow us to use for medical services such as providing occupational therapy to special needs kids. We have already invested so much hard work, time, effort, and money in making OT Park outstanding place for these kids and also an asset to Morgan Hill. It was surprising to found out that even though there was a physical therapy business prior on the same location for 7 years, our occupational therapy business was not allowed to provide critical medical services to special needs kids. We have been working with the city’s planning commission to understand how we can solve this.

Fortunately, we were told that city’s planning division that there is already a zoning ordinance change request in progress which allows medical office use in industrial light zone. This zoning ordinance change already went to planning commission on Feb 8th. it was approved by planning commission. It will be presented to city council members in the meeting on March 2nd. Below table mentions what is being proposed. Below is what will be presented to the city council.

OT Park Endorses Staff report’s recommendation on Zoning Ordinance change shown as below.

As a resident and business owner of OT Park located in Morgan Hill, I strongly support proposed zoning ordinance change to allow medical office use in industrial light (IL) zone. I strongly believe that this is a great step towards keeping our community healthy, boosting our economy, creating high quality and high paying jobs, creating high revenue businesses, and attracting communities located in southern and western bay to consider Morgan Hill as a viable option for healthcare needs.

Medical Office Use in IL zone Proposed Ordinance Change (To be presented to city council on March 2nd)
Less than 20,000 sqft Permitted
20,000 sqft or Greater CUP

I further believe this will have a tremendous positive impact on the economy of the city. Istrongly believe proposed ordinance change is in favor of City’s long-term goal of encouraging more health care facilities and medical offices being available for city’s residents. The positive impact on improved quality of life for city’s residents will be highly appreciated by residents. This will help parents, grandparents, and kids of the city to live a healthier quality life.

Alternative Proposal
If city council wants to have an alternative option in terms of medical use permits based on size of the business, then there can also be a three-tier model where you split the medical office as per industry standard of small, medium and large.

Medical Offices Proposed Ordiance Change
Small Medical Offices Less than 5000sqft Permitted
Medium Medical Offices 5000 - 20,000 sqft AUP
Large Medical Offices 20,000 sqft or Greater CUP
In this letter, I would like to share some additional insights on OT Park, its impact on the community and positive and long-term impact of this zoning ordinance change to the city.

I am seeking your support and encouragement to approve change in zoning ordinance to allow medical use in Industrial Light zone, which will be proposed in front of city council on March 2nd.

Sincerely,
Dr. Hiral Khatri, OTD R/L
CEO & Founder of OT Park, A premier and innovative pediatric therapy provider Lecturer, Department of Occupational Therapy at San Jose State University (SJSU) Director Of Region 3, Occupational Therapy Association of California (OTAC) California State Ambassador, American Occupational Therapy Political Action Committee (AOTPAC) Chair – Membership Committee, Asian Pacific Heritage Occupational Therapy Association (APHOTA)

APPENDIX A
Why Did I open OT Park in Morgan Hill? And Why OT Park Matters? I have done Doctor of Occupational Therapy, I have over 13 years of pediatric experience, I have worked all over the world providing innovative and high-quality pediatric occupational therapy.

I have been awarded as a Top 100 healthcare visionary of 2021. When I found my first home in Morgan Hill back in 2016, I fell in love with the city and it was clear to me that if an opportunity arises, I will open my dream clinic right here in Morgan Hill.

When pandemic happened, I got lot of requests from parents here in Morgan Hill and nearby cities that their special needs kids are struggling, they are not getting the therapy they deserve, there is no such place for them to go where they can fulfil their sensory seeking needs, Existing facilities have 6 months wait lists, tela-therapy was not as effective to these kids who needs in person care.

There is no denying that kids with special needs community is growing all over the country, there are not enough clinicsfor parents to take their kids to. There is waitlist of 6 months on an average.

Such a long duration is not acceptable for parents, they are struggling with their special needs kids on daily basis, they need and deserve high quality therapy.

I took this opportunity to start research and started working on building state of the art OT clinic to treat these special needs kids in very special way right here in Morgan Hill. As a result, OT Park is a clinic which is unique and innovative in entire bay area. I designed OT Park to stand out, where special needs kids feel happy, energetic, get treated while playing, a place where they feel safe while being treated. To this date, there is not a single place in entire bay area which fulfils all sensory needs of special needs kids like OT Park.

Anything Morgan Hill city can do to encourage businesses like OT Park to come in and provide high quality care to these kids will be extremely helpful to families of the city. Parents will be super happy to have a place like OT Park to treat their kids.

I believe city is taking right necessary first step by having this ordinance change to allow medical offices in available industrial light zone because this will allow business like OT Park to provide high quality therapy services. Below is some information on OT Park which might get you an idea why OT Park is a super valuable asset to Morgan Hill.

OT Park is located in Morgan Hill, our service offering such as pediatric occupational therapy helps children gain independence while also strengthening the development of fine motor skills, sensory motor skills, and visual motor skills that children need to function and socialize. As a child begins to successfully develop these skills, it creates a greater form of independence that helps contribute to achieving a higher sense of self-esteem. I work with kids with autism, ADHD, behavioral and social issues.

A child’s role in life is to play and interact with other children. Our pediatric occupational therapists evaluate a child’s current skills related to play, school performance, and daily activities and compare them with what is developmentally appropriate for that age group. OTs help children perform daily activities they may find challenging by addressing sensory, social, behavioral, motor, and environmental issues. To design such a kid friendly space, I need space in the range of 2500sqft - 5000sqft for small medical office. Such office allows us to design the space in a way which kid can find it close to their daily environment and make therapy much more effective.

Jobs created out of OT Park will be paying on an average of $40 - $55 per hour, doctorate therapist rate would be $75/hr or more. These will be highly qualified individuals specializing in pediatric development. We expect full time annual salary range from $85K to $350K per year for these therapists depending on skillsets. As you can imagine, these individuals wont only spend locally for their breakfast, lunch, dinner, groceries needs but also would want to get a rental apartment or do their first home purchase in Morgan Hill, thus contributing to local economy.

Families will be visiting OT Park from all over bay area will spend in local stores, hotels for multi-day or weeklong treatment programs. Thus, contributing even more to the hotel ‘TOT’ taxes which will contribute a large amount to the General Fund revenues which support Essential services like police, fire and EMS.

OT Park
Check out what Pediatric experts have to say about OT Park Dr. Gigi Smith, PHD, OTDR/L, FAOTA, Vice President Of OT Association of California https://www.youtube.com/watch?v=W0ZFJSFQCOs
Bryant Edwards, OTD, MA, OTR/L, BCP, MPH, President Of OT Association of California https://www.youtube.com/watch?v=0lG9DBzEQRY

We ran OT Park’s initial promo to gauge interest in pediatric occupational therapy in Morgan Hill, and we are awestruck by the responses. We have been getting so many inquiries from all over bay area. There is a tremendous interest in OT Park providing high quality pediatric occupational therapy services. You can find findings below. We have parents calling us, thanking us to open such facility in Morgan Hill. Please find data below.

OT Park is loved from all over bay area
Here is the chart which reflects number of inquiries vs cities we are getting on monthly basis within northern California seeking occupational therapy in Morgan hill. They all are super excited for OT Park.

As you can see from the chart, demand is coming from all over bay area who are seeking OT services from OT Park.

Interested Audience in OT Park Services by distance from Morgan Hill Having business like OT Park in Morgan hill, is going to be attraction for future entrepreneurs to think differently when it comes to pediatric therapy. OT Park will make kids life independent, make them confident, nothing beats mother’s satisfaction when they see their special needs child becoming independent. By this ordinance change, it will encourage and send a strong message to the medical community that Morgan Hill welcomes new innovative medical offices by being business friendly.

We strongly hope that city council will take all this in consideration to approve ordinance change to allow medical use in Industrial Light zone.

APPENIDX “B”
I would like to provide my comments on why small medical offices in IL zone should be permitted by right and its positive impact on the city, its residents and economy.

1. Positive Impact on Residents and Community
A. Opens access to various specialties of medical offices to come to Morgan Hill.

B. Attracts medical licensed highly qualified medically licenced professionals to open their medical office in Morgan Hill
C. Medical offices create High paying jobs with high revenue businesses D. Residents gets access to high quality, affordable medical specialties right here in Morgan Hill, compare to current option of going to San Jose, Palo Alto etc.

E. Achieves goal of Healthier community, More Healthcare facilities F. Morgan Hill becomes an attractive place to start medical office with proper space (2500sqft or more)

2. Positive impact on the Economy
A. High pay ($80K - $350K) job creation and local community spending increases B. Employees of these new medical offices will spend in the city for their various needs such as breakfast, lunch, dinner, and groceries.

C. It will also encourage these highly qualified individuals to consider moving to the city which will generate rental income, first house purchases in Morgan Hill.

D. Families coming into medical offices will also spend money in the city by having lunch, doing their groceries and contribute to local economy. As research suggests, Every $1 spent in local business, $0.67 stays within the city.

E. Families coming from all over california will stay in local hotels for multi-day or week long treatments, thus contributing to retail sales.

3. Morgan Hill’s unique position
A. Morgan Hill becomes an attractive health care hub for residents outside of Morgan Hill to meet their medical office needs
B. As a part of business demand and market research, it suggests that Morgan Hill is ideal location to commute for health care needs for residents of southern/western cities such as Hollister, Gilroy, Salinas, Monterey who are currently going to san Jose to get high quality care. They all do prefer Morgan Hill as a better choice.

C. You can find data on our inquiries we are getting for OT Park in the document.

4. Solves the current problem of not having enough land for medical use with 2500-5000sqft A. Currently in Morgan Hill, there are hardly any medical offices available to lease with space in the range of 2500sqft – 5000sqft, the only option for medical professionals have, is to look for industrial light zone which has complementary offices to lease.

B. If you will look at the total 86.5 acres available in IL zone, you will find that there are so many offices which are less than 4000 sqft which are perfectly suitable for medical offices and attract new medical profession businesses.

APPENDIX “B”
If city council wants to have an alternative option in terms of how to grant medical use permits based on size of the business, then there can also be a three-tier model where you split the medical office as per industry standard of small, medium and large.

Medical Offices Proposed Ordiance Change
Small Medical Offices Less than 5000sqft Permitted
Medium Medical Offices 5000 - 20,000 sqft AUP
Large Medical Offices 20,000 sqft or Greater CUP
It is vital important that small medical offices are permitted by right to provide critical care to residents.

Few reasons on why having to go through AUP for small medical offices (<5000 sqft) will discourage emerging medical business to start their own practice in Morgan Hill.

Þ AUP will be an entry barrier for small medical offices and young medical professionals starting their first clinic
o These medical professionals go through 10+ years of studies, then years of state/national level license exams to be in position to start their own practice. By putting entry barriers such as AUP for first time medical business owners, is only going to complicate things and will play part in getting them discouraged to choose Morgan Hill as viable option.
o Morgan Hill City already have a city license process in place which will work as a vetting mechanism to make sure only credible medical licensed professionals are allowed to do business in IL zone to provide care to residents. o Most of the first-time medical offices starts small with very less resources including time and money and knowledge on hand.
o Residents will not have well deserved access to critical medical services while AUP is in progress which usually takes long time.
o This also contradicts with overall Morgan Hill’s economic development goal of generating more health focused businesses to benefit our residents. o We do not think AUP needs to be an entry barrier for these highly qualified individuals starting their small medical office in Morgan Hill.

Þ AUP will be an expansion barrier for small medical offices in Morgan hill who are looking for bigger space to keep up with resident’s medical demands. o Existing small medical offices in Morgan Hill are not able to expand their businesses because there are not that many medical offices available with square footage of 2800 or more. They are only available in IL zone which are perfect for their expansions.

o Having to go through AUP will discourage these individuals and would encourage them to move out to different city for their business expansion. o As a result, residents of the city will lose access to critical medical services.

Þ Money is not the only cost; Time and effort contributes to cost as well. o Its costly process not only from money perspective but also from long delays to start, putting in efforts to get AUP approved, uncertainty of being able to give an opportunity to provide high quality medical care to residents. o Sure, AUP is less expensive in terms of time and money compared to CUP but still cost is a cost for first time medical professionals with very limited resources and budget o AUP will make city lose valuable businesses which focus on resident’s health. o During AUP process, business will lose valuable time which could have been used to offering medical services to community. unfortunately, barriers like AUP would make it hard for small businesses to start offering services as soon as place is ready. o It makes sense for medium size to go through AUP process if needed because these businesses are well established, have time and also usually bring larger traffic which could be checked to make neighborhood compatibility is there.

City Council Meeting: 03.02.2022
Agenda Item 17: ZA2021-0008: MUNICIPAL CODE AMENDMENT AMENDING SECTION 18.26.020 (LAND USE REGULATIONS) OF CHAPTER 18.26 (INDUSTRIAL ZONING DISTRICTS) OF TITLE 18 (ZONING) TO MODIFY THE

LAND USES PERMITTED IN THE INDUSTRIAL ZONING DISTRICTS
On behalf of the Morgan Hill Chamber of Commerce and Board of Directors we are submitting this letter to memorize our support of the staff recommendations and position on the Municipal Code changes with specific emphasis of interest in the Light Industrial (IL) zone.

I would first like to acknowledge the level of effort and analysis considered in the recommendations, put forth by the Economic Development Staff, the Urban Land Institute, the Silicon Valley Economic Development Alliance, Planning Commission, and Community input.

The proposed Municipal Code amendments will serve as a foundational construct in support of the proposed Industrial Land Preservation and Optimization Policy in four key areas of focus:
• Clear and concise permitting requirements for our General Industrial and Light Industrial zoning districts.
• Preservation of an ever-shrinking allocation of our industrial land footprint in MH • Encourage and support the recruitment of high-end job opportunities • Expansion of severely needed healthcare services and specific medical sub-specialties advancing the health and welfare for our residents and surrounding communities Light Industrial Zone Rational:

Positive impact on the Economy:
• The increase of growth for medial office and medical subspecialities are in direct alignment with the City’s goals of attracting higher paying jobs, inherently associated with this classification of the Healthcare business sector.
• Serve as an incubator for small medical practices and medical subspecialty business owners to take root, invest and scale their practice utilizing Morgan Hill as their home base of operation. • The municipal code adjustment will accelerate medical office and clinical subspecialty growth in the Light Industrial (LI) Zone associated with an associated :
o Increase in local spending as employees will utilize business services in Morgan Hill (i.e., retail, restaurants, recreation, professional service , and lodging business sectors). o Increase in local spending as patients and families will utilize business services in Morgan Hill (i.e., retail, restaurants, recreation, professional services, and lodging business sectors). o Encouraging prospective medical professionals to consider moving to Morgan Hill , which will generate both rental income and house ownership growth opportunities.

Leveraging Morgan Hill’s unique position:

Based upon market research, it suggests that Morgan Hill is geographically positioned as an ideal location to commute for medical subspecialty service needs for residents of southern/western cities such as Hollister, Gilroy, Salinas, Monterey who are currently going to San Jose to get high quality care.

Light Industtal (LI) Municipal code changes will position Morgan Hill’s Medical Service business sector as a destination location for highly needed “continuum of care” needs within this region.

Highlighting the Opportunity
To provide a real-world experience of the importance of the decision before you tonight, I would like to highlight just one of the areas of focus: the expansion of severally needed healthcare services.

Morgan Hill is fortunate / privileged to have within our Light Industrial (LI) LI footprint OT Park, currently serving our communities children’s Occupational Therapy skill development progression, with an emphasis on our special need’s pediatric population.

The owner’s singular purpose to enhance the quality of life for our special needs children and families through their research and development services is truly a distinguishable program in the bay area, located in Morgan Hill, their preferred home for their program, and a most noteworthy healthcare presence for Morgan Hill.

The opportunity to expand their business model, extend their outreach to treat and care for our children of special needs will allow them to apply lesson learned through adaptive treatment care plans, provide a comprehensive healthcare service aligning best practice research and clinical care and be recognized as a signature Healthcare business model representative of what Morgan Hill can offer to not only our children in MH, but children of special needs in our surrounding communities.

I highlight OT park as one of serval opportunities for consideration of the Light Industrial (IL) municipal code changes in front of the Council tonight and I encourage the Council to support the staff recommendations as drafted in the report or if further ordinance oversight is deemed necessary adoption of our alternative recommendation as outlined in our submission.

Morgan Hill Chamber of Commerce (IL) endorsement considerations:

Staff Recommendation
Medical Offices Proposed Ordinance Change
Less than 20,000 sq ft Permitted
20,000 sqft of Greater CUP
Alternate consideration
Medical Offices Proposed Ordinance Change
Medical Offices less than 5,000 sqft Permitted
Medical Offices 5,000-20,000 sqft AUP
Medical Offices 20,000 sqft or greater CUP
Sincerely,
Nick Gaich
CEO-President Morgan Hill Chamber of Commerce

From: Christina Turner
To: Michelle Bigelow; Angie Gonzalez
Subject: March 2, 2022 City Council Meeting Questions
Supplement for Item 17 – ADOPT ZONING CODE AMENDMENT TO SECTION 18.26.020 (LAND USE REGULATIONS) OF CHAPTER 18.26 (INDUSTRIAL ZONING DISTRICTS) OF TITLE 18 (ZONING) TO MODIFY

THE LAND USES PERMITTED IN THE INDUSTRIAL ZONING DISTRICTS Date: Tuesday, March 1, 2022
Staff Report: The proposed staff recommended amendments to Section 18.26.020 (Land Use Regulations) of the Municipal Code are described as follows:
a. Prohibit the following non-industrial uses in both the IG (General Industrial) and IL (Light Industrial) zoning districts.
i. Community Assembly
ii. Commercial Recreation, Indoor
iii. Home Improvement Centers
Question: This section prohibits the Home Improvement Centers in the IL zoning districts; however, the Planning Commission recommends keeping this in the IL with a Conditional Use Permit (CUP), please explain staff’s position?
Response: Staff had recommended that the Home Improvement Center use not be permitted in the Light Industrial (IL) zone due to the following reasons:
• Home Improvement Centers although not necessarily incompatible in a Light Industrial zone, they do require a significant use of land for both the building and parking. Available industrial land is at a premium and should be prioritized for industrial uses that drive a higher quality employer, higher property taxes, and uses that can’t be located in other zoning areas. • Home Improvement Centers can be located CG and CS zone. The CG zoning district is to provide a location for a broad range of commercial and employment uses to serve Morgan Hill residents, workers, and visitors. And the CS zoning district is to provide an area for commercial services that may be inappropriate in neighborhood or pedestrian-oriented shopping areas, and which generally require automotive access for customer convenience, servicing of vehicles or equipment, loading or unloading, or parking of commercial service vehicles. • The existing Home Depot location on Dunne Ave sits on approximately 8.12 acres within the CS zone.
• There are approximately 77 acres of vacant CG and CS zoned land available. And while there only may be a handful of sites that could accommodate a Home Improvement Center, there may be some existing developed sites that are underutilized and potentially suitable for redevelopment.
• Home Improvement Centers are not likely to go through the time and expense of the CUP process.
• Home Improvement Centers are focused on retail consumers, not wholesale business to business.
• The sale of Building Materials to contractors and home builders is permitted by right in the Light Industrial (IL).

10 CITY COUNCIL STAFF REPORT
MEETING DATE: March 16, 2022
PREPARED BY:

Dat Nguyen, Finance Director
APPROVED BY: City Manager
MONTHLY BUDGET UPDATE AND JANUARY 2022 FINANCIAL AND

INVESTMENT REPORTS

RECOMMENDATION(S)
Accept and file report.

Estimated Time: 10 Minutes

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Preserving and Cultivating Public Trust
2022-2023 Strategic Priorities
Community Engagement and Messaging
REPORT NARRATIVE:

As part of the City Council’s expectation to maintain a high level of transparency and to be responsible stewards of public funds, staff is providing this monthly budget update, along with the January 2022 financial and investment reports.

January 2022 Financial Report
The Revenue and Expense Summary through the month of January 2022 is included on the page 4 of the monthly financial report. Overall, General Fund revenues total $22.0 million or about 43% of the budget. Expenditures, including encumbrances, amounted to $28.8 million or 57% of the budget.

Budget Update
There has been no material change to the City’s revenue since the last budget update to the Council on January 29, 2022. As previously shared with the Council and the community, Recreation Services revenues continue trending below budget. The indoor mask mandate which serves as an important tool to prevent the spread of coronavirus, regardless of vaccination status, is having a negative impact to the membership drive.

10 In addition, facility rental revenue for the year is expected to be minimal compared to prior years. However, staff is hopeful that the net impact won’t be significant as staff expects to further implement cost containment strategies to offset the reduction in revenue.

COMMUNITY ENGAGEMENT:

Inform
Finance staff prepares these financial reports to inform City officials, the Council, the community, and various lenders and stakeholders about the financial health of the organization, which assists each one of the interested parties in making sound financial and investment decisions.

ALTERNATIVE ACTIONS:

Not Applicable.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The City Council receives and files the financial and investment report for each month.

At the September 16, 2015 meeting, City Council recommended monthly financial and investment reports be agendized under the Consent Agenda, and quarterly financial and investment reports be presented to City Council as an “Other Business” item.

Beginning in FY 2020-21, budget reports are presented to the Council monthly.

FISCAL AND RESOURCE IMPACT:

The preparation of the report is a part of the Finance workplan. Staff does not recommend any budget adjustments at this time.

CEQA (California Environmental Quality Act):

Not a Project.

This report is not a project, as defined in Section 15378 of the State CEQA Guidelines.

Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment.

FINANCE DIVISION

CITY OF MORGAN HILL
January 31, 2022 - 58% of Year Complete
Prepared by:

Monthly Financial and Investment Reports

CITY OF MORGAN HILL, CALIFORNIA
FINANCIAL STATEMENT ANALYSIS - FISCAL YEAR 2021-22
FOR THE MONTH ENDED JANUARY 2022 – 58% OF YEAR COMPLETE  General Fund – Revenues through January totaled $22.0 million, or about 43% of the budgeted revenues. With respect to the property tax revenue forecast, on August 20, 2021, the ControllerTreasurer’s Department of the County of Santa Clara notified the cities and agencies within the County that the State of California Controller’s Office agreed with the County’s methodology of calculating excess Educational Revenue Augmentation Fund (ERAF), therefore, set aside provision is no longer required. The City of Morgan Hill is expecting to receive an additional $650,000 in excess ERAF for FY2021-22. However, the County cautioned cities and agencies in planning and budgeting this source of revenue as future legislation could impact the calculation methodology. The increase in excess ERAF distribution is mainly due to the growth of property tax outpacing the growth of school funding requirement and this revenue stream is becoming a large revenue category for the City in recent years.

Morgan Hill begun to receive excess ERAF distribution in FY2013-14 in the amount of $13,000 and it has grown to about $1.9 million in FY2020-21.

As for sales tax, the latest projection from our sales tax revenue consultant estimated this year’s revenue, before sales tax rebates, to be about $12.0 million versus about $11.0 million budgeted.

Pandemic based economic recovery contributed significantly to this upside forecast as well as the addition of a car dealership. One of the industries hit hardest across the state during the pandemic was the restaurants group which has experienced a strong rebound.

The chart below shows historical General Fund revenues by major revenue category from FY17-18 through FY20-21 Actual, FY21-22 Budget, and YTD as of January 31, 2022.

$11.4 $12.8 $14.5 $16.0 $15.8
$7.4
$10.7 $10.7 $9.7 $11.0 $11.1
$5.0
$4.9 $5.1 $4.6 $4.4 $4.6
$2.3
$9.3 $9.9 $8.3 $5.7 $8.2
$4.4
$5.4 $4.9 $3.6
$9.7
$11.2
$3.0
0 10
20 30
40 50
60 FY17‐18 FY18‐19 FY19‐20 FY20‐21 Budget
FY21‐22
YTD
FY21‐22
Millions ($)
Historical GF Revenues
Property Tax Sales Tax Franchise and Hotel Taxes Service Charges Other

CITY OF MORGAN HILL, CALIFORNIA
FINANCIAL STATEMENT ANALYSIS - FISCAL YEAR 2021-22
FOR THE MONTH ENDED JANUARY 2022 – 58% OF YEAR COMPLETE General Fund expenditures and encumbrances as of January 31, 2022 totaled $28.8 million, of which approximately $1.8 million is attributable to outstanding encumbrances.  Community Services – The Community Services Department’s recreation operations, as reflected in the schedule presented on page 7 of the Monthly Financial and Investments Reports, shows a negative impact to the General Fund of approximately $1.7 million as of January 31, 2022. The large budgeted operating loss for recreation operations reflects the restrictions and limited opening of recreation facilities since March 2020 due to the shelter-in-place order as a result of the coronavirus pandemic and the continued indoor mask mandate which is having a negative impact to the membership drive.

Due to longstanding governmental accounting and budgeting convention, the City’s recreation operations are not charged for indirect costs (known in Morgan Hill as “General Fund Administration”) from the central services departments of City Attorney, City Manager, and Administrative Services.

The City’s other governmental funds, such as Community Development, and the proprietary funds, such as Water and Wastewater, and the Information Services Fund, are assessed such charges through the City’s indirect cost allocation plan, prepared in compliance with the Federal government’s OMB Circular No. A-87, which mandates certain calculation and cost allocation practices that must be followed in order to qualify for Federal grant funding, but which also represent best practice for nongrant funded City operations like utilities and information services.  Development Services Fund – Revenues through January totaled $2.6 million. Expenditures, including encumbrances, totaled $3.3 million. The fund is budgeted at a higher revenue at $5.3 million compared to recent years’ actuals primarily due to the higher fees anticipated from the completion of the updated fee study.
 Debt Service Funds – Expenditures through January totaled $0.5 million. The debt service for the first half of the year includes both interest and principal, while the second half of the year will include interest only. Debt service payments were all scheduled when the bonds were issued, and are budgeted for in the months delineated in the underlying bond documents. The General Fund’s portion of the annual debt service payments is approximately $200,000, less than one percent of the General Fund’s budgeted revenues.
($2.5)
($2.0)
($1.5)
($1.0)
($0.5)
$0.0
$0.5
FY12‐13 FY13‐14 FY14‐15 FY15‐16 FY16‐17 FY17‐18 FY18‐19 FY19‐20 FY20‐21 FY21‐22 Budget
Millions (S)
Historical Net GF Impact

CITY OF MORGAN HILL, CALIFORNIA
FINANCIAL STATEMENT ANALYSIS - FISCAL YEAR 2021-22
FOR THE MONTH ENDED JANUARY 2022 – 58% OF YEAR COMPLETE  Wastewater Operations – Revenues from Sewer Operations through January totaled $7.4 million.

Expenditures and outstanding encumbrances totaled $7.6 million or 54% of the budget. The table below shows historical Sewer Operations revenues and expenditures from FY17-18 through FY20-21 Actual, FY21-22 Budget, and YTD as of January 31, 2022.
(amount in millions) FY17‐18 FY18‐19 FY19‐20 FY20‐21
Budget
FY21‐22
YTD
FY21‐22
Revenues 10.3               11.4             11.9             13.3               14.1               7.4 Expenditures 10.8               11.4             12.3             13.3               14.0               7.6 Operating Margin (0.5)                ‐               (0.4)              ‐                 0.1                             (0.2) Operating Margin
without Encumbrances               (0.3)                 (0.1) 0.4                                 ‐                0.1 0.0  Water Operations – Water Operations includes Utility Billing, Water Conservation, and Water Operations. Revenues from Water Operations through January totaled $8.3 million. Water Operations expenditures, including outstanding encumbrances, totaled $9.2 million through January. The table below shows Water Operations revenues and expenditures from FY17-18 through FY20-21 Actual, FY21-22 Budget, and YTD as of January 31, 2022.
(amount in millions) FY17‐18 FY18‐19 FY19‐20 FY20‐21
Budget
FY21‐22
YTD
FY21‐22
Revenues 13.0               14.2             15.3             16.5             16.3                               8.3 Expenditures              12.1            14.3            16.4 16.5             16.4                               9.2 Operating Margin                 (0.1) 0.9                          (1.1)                ‐                (0.1)                (0.9) Operating Margin
without Encumbrances                1.4                 (0.1) 0.8                                ‐                (0.1)                   0.0  Investments – Four securities were purchased. Total interest earnings received on investments were $43,000 during the month.

% OF ACTUAL PLUS % OF

FUND NAME ACTUAL BUDGET ENCUMBRANCES BUDGET
General 22,030,613 $ 43% $ 28,785,477 57%
Development Services 2,620,633 50% 3,292,587 59%
RDA Successor Agency 6,246,678 88% 490,200 7%
Housing Successor Agency 284,662 132% 802,877 80%
Sewer Operations 7,380,535 52% 7,560,100 54%
Sewer Other 4,840,677 40% 7,344,808 16%
Water Operations 8,251,245 51% 9,182,182 56%
Water Other 3,390,498 48% 1,348,355 14%
Other Special Revenues * 2,470,094 46% 2,549,083 42%
Capital Projects & Streets 18,360,779 81% 33,757,397 50% Debt Service 402,544 58% 546,437 79%
Internal Service 5,946,421 46% 7,223,504 54%
TOTAL FOR ALL FUNDS 82,225,379 $ 53% $ 102,883,009 44%
* Includes all Special Revenue Funds except Community Development, Street Funds, and RDA and Housing Successor Agencies.

REVENUES EXPENSES
0% 20% 40% 60% 80% 100% 120% 140%
General
Development Services
RDA Successor Agency
Housing Successor Agency
Sewer Operations
Sewer Other
Water Operations
Water Other
Other Special Revenues *
Capital Projects & Streets
Debt Service
Internal Service
Morgan Hill YTD Revenue & Expense Summary
January 31, 2022 - 58% of Year Complete
Revenues to Budget Expenses to Budget
58%

% OF PRIOR YEAR % CHANGE FROM

REVENUE CATEGORY BUDGET ACTUAL BUDGET TO DATE PRIOR YEAR Property Tax 15,771,000 $ 7,372,660 $ 47% 7,392,312 $ 0% Sales Tax 11,098,601 5,025,846 45% 3,532,485 42%
Franchise Tax 2,375,000 971,018 41% 898,869 8%
Hotel Tax 2,235,300 1,310,992 59% 736,955 78%
Licenses 198,825 167,142 84% 135,452 23%
Other Agencies 653,658 242,263 37% 239,700 1%
Service Charges 8,164,851 4,358,318 53% 3,004,549 45%
Interest/Other 7,230,495 873,932 12% 905,853 -4%
Transfers In 3,093,579 1,708,442 55% 1,522,153 12%
TOTAL REVENUES 50,821,309 $ 22,030,613 $ 43% 18,368,328 $ 20% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Property Tax
Sales Tax
Franchise Tax
Hotel Tax
Licenses
Other Agencies
Service Charges
Interest/Other
Transfers In
Total Revenues
Percent of Actual to Budget
Morgan Hill YTD General Fund Revenues
January 31, 2022 - 58% of Year Complete
58%

ACTUAL PLUS PRIOR YTD PLUS % CHANGE FROM
EXPENDITURE CATEGORY BUDGET ENCUMBRANCES % OF BUDGET ENCUMBRANCES PRIOR YEAR Administration $ 5,913,826 $ 2,906,392 49% 2, $ 592,745 12% Community Services 13,952,469 7,717,042 55% 6, 935,861 11% Police 19,133,242 10,672,459 56% 9, 755,081 9%
Fire 7,788,401 4,443,458 57% 4, 079,515 9%
Transfers Out 4,083,681 3,046,125 75% 333,179 814%
TOTAL EXPENDITURES $ 50,871,618 $ 28,785,477 57% 23, $ 696,381 21% 0% 10% 20% 30% 40% 50% 60% 70% 80%
Administration
Community
Services
Police
Fire
Transfers Out
Total Expenditures
Percent of Actual to Budget
Morgan Hill YTD General Fund Expenditures
January 31, 2022 - 58% of Year Complete
58%

City of Morgan Hill
Recreation Report - Fiscal Year 2021-22
For the Month and Seven Months Ended January 31, 2022
58% of Year Complete
% of
Budget January 2022 YTD Budget
Revenues
Membership Services & Rec Programs 4,713,801 $ 307,035 $ 2,400,054 $ Facility Rentals 506,683 51,072 312,322
Community Services 79,000 508 98,830
Transfers in 75,000 6,250 43,750
Total Revenues 5,374,484 $ 364,865 $ 2,854,957 $ 53%
Less: Expenditures
Membership & Program Services 5,648,211 $ 294,346 $ 2,877,255 $ Facility Rentals 1,313,549 41,007 307,660
Community Services 641,554 52,378 288,050
Total Expenditures 7,603,315 $ 387,730 $ 3,472,965 $ 46% Net Impact without encumbrances (2,228,831) $ (22,866) $ (618,008) $ Encumbrances - - 1,068,465
Net Impact with encumbrances (2,228,831) $ (22,866) $ (1,686,474) $

The chart below shows cash balances by fund type reconciled to City's financial system:

City of Morgan Hill
Monthly Investment Report - January 31, 2022
The following are the snapshots of City's investment portfolio as of January 31, 2022. The first chart shows the portfolio composition by investment type:
$176,699,898
General Fund,
$21,700,809
Community
Development,
$679,364
RDA Successor
Agency (except
Housing), $6,264,903
Housing Successor
Agency/ CDBG,
$4,421,788
Water - Operations,
$2,891,436
Water Other,
$17,739,918
Sewer - Operations,
$2,583,406
Sewer Other,
$55,321,596
Other Special
Revenue, $8,109,738
Streets and Capital
Projects (except RDA),
$34,098,816
Debt Service ,
$193,398
Internal Service,
$19,889,617
Agency Funds
(assessment
dists./refundable
deposits), $2,805,108
Cash Balances by Fund Type
LAIF - $67.8M
38%
Treasury Note - $6.4M
4%
Money Market-
$.02M
<1%
Federal Agency
Issues- $89.1M
50%
Certificate of
Deposits- $0.5M
<1%
Bond Reserves/Trust-
$11.5M
7%
Cash & Other
Deposits - $1.4M
1%
Investment Portfolio Composition - $176.7 Million
LAIF - $67.8M
Treasury Note - $6.4M
Money Market- $.02M
Federal Agency Issues-
$89.1M
Certificate of Deposits-
$0.5M
Bond Reserves/Trust-
$11.5M
Cash & Other Deposits -
$1.4M

The following chart illustrates a yield comparison by month among the City's portfolio, LAIF and 2-Year US Treasury:

The chart below illustrates monthly average days to maturity of the City's portfolio along with the weighted average yield for the past two years:

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%
Jan-20
Feb-20
Mar-20
Apr-20
May-20
Jun-20
Jul-20
Aug-20
Sep-20
Oct-20
Nov-20
Dec-20
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22
Yield Portfolio vs. Benchmarks
LAIF City 2 Yr US-Treasury

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

1.40%

1.60%

1.80%

2.00%
0 100
200
300
400
500
600
700
800
900
Jan-20
Feb-20
Mar-20
Apr-20
May-20
Jun-20
Jul-20
Aug-20
Sep-20
Oct-20
Nov-20
Dec-20
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22
Days Yield
Portfolio Yield and Maturity Trends
Avg Days to Maturity Yield

City of Morgan Hill
Investment Portfolio Detail
As of January 31, 2022
Investment Settlement Book % of Market YTM Next Call Date of Type Date Value Portfolio Value at Cost Date Maturity
L A I F $ 67,800,048 38.37% $ 67,626,420 0.23%
City Managed
Treasury Note 4/30/2018 4,440,242 3.28% 4,532,535 2.73% 3/31/2023 3/31/2023 Treasury Note 10/8/2021 1,988,437 1.25% 1,934,760 0.88% 9/30/2026 9/30/2026 Treasury Note 1/4/2022 1,999,173 1.25% 1,984,380 0.77% 12/31/2023 12/31/2023 Treasury Note 1/19/2022 1,989,862 1.25% 1,984,380 1.02% 12/31/2023 12/31/2023 FFCB Bond 4/8/2020 2,000,000 1.13% 1,985,000 0.88% 4/8/2022 4/8/2024 FFCB Bond 5/27/2020 2,000,000 1.13% 1,945,640 0.73% 5/27/2022 5/27/2025 FHLMC Bond 6/3/2020 2,000,000 1.13% 1,956,020 0.60% 6/3/2022 12/3/2024 FHLMC Bond 10/20/2020 2,000,000 1.13% 1,934,780 0.60% 4/20/2022 10/20/2025 FHLMC Bond 10/27/2020 2,000,000 1.13% 1,936,900 0.63% 4/27/2022 10/27/2025 FHLMC Bond 11/2/2020 2,000,000 1.13% 1,971,080 0.32% 5/2/2022 11/2/2023 FFCB Bond 11/3/2020 2,000,000 1.13% 1,926,460 0.54% 5/3/2022 11/3/2025 FNMA Bond 11/18/2020 2,000,000 1.13% 1,938,700 0.65% 5/18/2022 11/18/2025 FHLMC Bond 11/24/2020 2,000,000 1.13% 1,931,600 0.64% 5/24/2022 11/24/2025 FFCB Bond 11/24/2020 1,000,000 0.57% 963,990 0.60% 5/24/2022 11/24/2025 FHLMC Bond 11/25/2020 3,000,000 1.70% 2,916,150 0.63% 5/25/2022 11/25/2025 FHLMC Bond 11/30/2020 2,000,000 1.13% 1,944,960 0.65% 5/26/2022 11/26/2025 FFCB Bond 12/22/2020 2,000,000 1.13% 1,916,720 0.47% 6/22/2022 12/22/2025 FHLB Bond 1/22/2021 2,000,000 1.13% 1,939,500 0.63% 7/22/2022 1/22/2026 FNMA Bond 1/28/2021 2,000,000 1.13% 1,933,920 0.55% 7/28/2022 1/28/2026 FHLB Bond 1/28/2021 2,000,000 1.13% 1,940,760 0.65% 7/28/2022 1/28/2026 FHLB Bond 2/24/2021 2,000,000 1.13% 1,928,540 0.75% 2/24/2022 2/24/2026 FHLB Bond 2/25/2021 2,000,000 1.13% 1,939,720 0.66% 2/25/2022 2/25/2026 FHLB Bond 2/26/2021 2,000,000 1.13% 1,924,500 0.65% 2/26/2022 2/26/2026 FHLB Bond 3/10/2021 2,000,000 1.13% 1,948,220 0.85% 3/10/2022 3/10/2026 FHLB Bond 3/16/2021 2,000,000 1.13% 1,941,280 0.70% 3/16/2022 3/16/2026 FHLB Bond 3/16/2021 2,000,000 1.13% 1,944,500 0.80% 3/16/2022 3/16/2026 FHLB Bond 6/9/2021 2,000,000 1.13% 1,963,520 1.08% 6/9/2022 6/9/2026 FHLB Bond 6/30/2021 2,000,000 1.13% 1,955,480 1.00% 6/30/2022 6/30/2026 FHLB Bond 7/15/2021 3,000,000 1.70% 2,944,200 1.13% 7/15/2022 7/15/2026 FHLB Bond 7/15/2021 2,000,000 1.13% 1,965,000 0.85% 7/15/2022 7/15/2025 FHLB Bond 8/26/2021 2,000,000 1.13% 1,946,400 0.80% 2/26/2022 8/26/2026 FHLB Bond 8/26/2021 3,000,000 1.70% 2,936,760 1.00% 2/26/2022 8/26/2026 FHLB Bond 8/26/2021 2,000,000 1.13% 1,945,700 0.90% 2/26/2022 8/26/2026 FHLB Bond 9/13/2021 2,095,408 1.19% 2,022,020 0.82% 3/11/2022 9/11/2026 FFCB Bond 9/28/2021 1,984,136 1.12% 1,929,560 0.98% 3/10/2022 9/10/2026 FHLB Bond 9/29/2021 3,000,000 1.70% 2,929,920 1.13% 3/29/2022 9/29/2026 FHLB Bond 9/30/2021 2,000,000 1.13% 1,943,620 0.88% 3/30/2022 9/30/2026 FHLB Bond 9/30/2021 3,000,000 1.70% 2,931,000 1.05% 3/30/2022 9/30/2026 FHLB Bond 9/30/2021 3,000,000 1.70% 2,927,880 1.02% 3/30/2022 9/30/2026 FHLB Bond 10/19/2021 2,000,000 1.13% 1,944,980 1.00% 4/19/2022 10/19/2026 FHLB Bond 11/18/2021 2,000,000 1.13% 1,974,800 1.30% 5/18/2022 11/18/2026 FHLB Bond 12/29/2021 2,000,000 1.13% 1,986,060 0.75% 6/29/2022 12/29/2023 FHLB Bond 1/19/2022 2,000,000 1.13% 1,984,920 1.74% 7/19/2022 1/19/2027 FHLB Bond 1/25/2022 2,000,000 1.13% 1,994,840 1.51% 7/25/2022 7/25/2025 CD - Goldman Sachs Bank USA 5/13/2020 250,000 0.14% 250,265 0.50% 5/13/2022 5/13/2022 CD - American Nat'l Bank 5/20/2020 250,000 0.14% 250,205 0.40% 5/20/2022 5/20/2022 Sub Total/Average $ 95,997,258 55.45% $ 93,872,125 0.93% Money Market $ 23,144 0.01% $ 23,144 0.01%
Total City Managed/Average $ 163,820,450 93.83% $ 161,521,689 0.64% Bond Reserve Accounts - Held By Trustees $ 6,780,648 3.84% $ 6,780,648 Cash/Deposits $ 1,411,396 0.80% $ 1,411,396
PARS and CALPERS CERBT Trust $ 4,687,404 2.65% $ 5,811,342 GRAND TOTAL/AVERAGE $ 176,699,898 100% $ 175,525,075

CITY OF MORGAN HILL CASH AND INVESTMENT REPORT
FOR THE MONTH OF JANUARY 31, 2022
FOR THE FISCAL YEAR OF 2021-22
Invested Book Value % of Market
in Fund Yield End of Month Total Value
Investments
State Treasurer LAIF - City All Funds Pooled 0.23% $ 51,294,165 29.03% $ 51,162,806 2015 Wastewater Rev Bonds - CIP Wastewater Fund 0.23% 16,505,883 9.34% 16,463,614 Federal Issues All Funds Pooled 0.87% 89,068,579 50.41% 88,839,120 US Treasury Notes All Funds Pooled 1.68% 6,428,679 3.64% 4,532,535 Certificate of Deposits All Funds Pooled 0.45% 500,000 0.28% 500,470 Dreyfus Treas Cash Management Acct All Funds Pooled 0.01% 23,144 0.01% 23,144 SUBTOTAL $ 163,820,450 92.71% $ 161,521,689
Bond Reserve Accounts - held by trustees
Zions Bank - Civic Center/Library Facility
Blackrock Liq Fund Debt Service 0.01% 3 0.00% 3
Zions Bank - MH Police Facility Lease Revenue Bonds
Blackrock Liq Fund Debt Service 0.01% 4 0.00% 4
BNY - RDA Bonds
Dreyfus Cash Mgmt 521 Successor Fund 0.01% 6,262,932 3.54% 6,262,932 Zions Bank - MH Ranch 2015
Blackrock Liq Funds Fed Fund -DI -2015 Agency Fund 0.01% 255,218 0.14% 255,218 Zions Bank - Madrone Bus Park Taxable/ Tax Exempt 2015
Blackrock Liquidity Temp Fund-2015 Agency Fund 0.01% 262,492 0.15% 262,492 SUBTOTAL 6,780,648 3.84% 6,780,648
Other Cash/Deposits
General Checking All Funds 1,374,284 0.78% 1,374,284
Workers' Comp Administrators Workers' Comp 30,000 0.02% 30,000 Petty Cash & Emergency Cash General Fund 7,112 0.00% 7,112 CALPERS CERBT - OPEB Trust 3,487,404 1.97% 4,249,175
PARS - PENSION Trust 1,200,000 0.68% 1,562,168 **
SUBTOTAL 6,098,800 3.45% 7,222,738
Total Cash and Investments $ 176,699,898 100.00% $ 175,525,075 ** As of 12/31/21

CASH ACTIVITY SUMMARY
FY 2021-22
07/1/21 Change in 1/31/2022
Fund Type Balance Cash Balance Balance
General Fund $ 19,007,873 $ 2,692,935 $ 21,700,809
Community Development 1,077,499 (398,135) 679,364
RDA Successor Agency (except Housing) 508,427 5,756,475 6,264,903 Housing Successor Agency/ CDBG 4,307,419 114,369 4,421,788 Water - Operations 2,573,349 318,088 2,891,436
Water Other 15,405,786 2,334,132 17,739,918
Sewer - Operations 1,593,140 990,266 2,583,406
Sewer Other 57,221,072 (1,899,475) 55,321,596
Other Special Revenue 7,425,644 684,093 8,109,738
Streets and Capital Projects (except RDA) 37,931,830 (3,833,015) 34,098,816 Debt Service 337,123 (143,725) 193,398
Internal Service 19,378,242 511,375 19,889,617
Agency Funds (assessment dists./refundable deposits) 3,356,940 (551,832) 2,805,108 Total $ 170,124,346 $ 6,575,552 $ 176,699,898
Note: See Investment Porfolio Detail for maturities of "Investments." Market values are obtained from the City's investment brokers' monthly reports.

I certify the information on the investment reports on pages has been reconciled to the general ledger and bank statements and that there are sufficient funds to meet the expenditure requirements of the City for the next six months. The portfolio is in compliance with the City of Morgan Hill investment policy and all State laws and regulations.

Prepared by: ____________________________________ Approved by:

Gina Nazareno, Senior Accountant
Reviewed by: ____________________________________
Dat Nguyen, Finance Director Caitlin Jachimowicz, Treasurer

City of Morgan Hill
Year to Date Revenues - Fiscal Year 2021-22
For The Seven Months Ended January 31, 2022
58% of Year Complete

CURRENT INCR (DECR)
ADOPTED AMENDED YTD % PRIOR FROM PRIOR %

BUDGET BUDGET ACTUAL OF BUDGET YTD YTD CHANGE
010 GENERAL FUND
TAXES
Property Tax - Secured/Unsecured $ 13,485,000 13,485,000 $ 6,492,699 48% $ 6,036,360 $ 456,339 8% Property Tax - RPTTF Residual Distribution 2,144,000 2,144,000 808,731 38% 1,123,570 (314,839) -28% Property Tax - Supplemental Roll 142,000 142,000 71,230 50% 232,383 (161,152) -69% Sales Tax 10,699,601 10,699,601 4,834,237 45% 3,407,731 1,426,507 42% Public Safety Sales Tax 399,000 399,000 191,608 48% 124,755 66,854 54% Transient Occupancy Taxes 2,235,300 2,235,300 1,310,992 59% 736,955 574,037 78% Franchise (Refuse ,Cable ,PG&E) 2,375,000 2,375,000 971,018 41% 898,869 72,149 8% Property Transfer Tax 541,000 541,000 388,040 72% 346,656 41,384 12% TOTAL TAXES 32,020,901 32,020,901 15,068,556 47% 12,907,277 2,161,278 17%

LICENSES/PERMITS
Business License 159,135 159,135 163,512 103% 132,833 30,679 23% Other Permits 39,690 39,690 9% 2,619 3,630 1,011 39%
TOTAL LICENSES/PERMITS 198,825 198,825 167,142 84% 135,452 31,690 23%

FINES AND PENALTIES
Parking Enforcement 8,240 8,240 1,977 24% 1,868 109 6%
Bails & Fines 75,854 75,854 21,340 28% 21,406 (66) 0%
Administrative Citations 10,331 10,331 - n/a 12,703 (12,703) -100% TOTAL FINES AND PENALTIES 94,425 94,425 23,318 25% 35,977 (12,660) -35%

OTHER AGENCIES
Motor Vehicle in-Lieu 26,026 26,026 n/a - 6,286 (6,286) -100% Other Revenue - Other Agencies 437,794 653,658 242,263 37% 239,700 2,563 1% TOTAL OTHER AGENCIES 463,820 679,684 242,263 36% 245,986 (3,723) -2%

CHARGES CURRENT SERVICES
Police False Alarm Charge 31,340 31,340 16,879 54% 29,719 (12,840) -43% Business License Application Review 38,007 38,007 24,377 64% 25,903 (1,526) -6% Membership Services & Rec Programs 4,238,989 4,713,801 2,400,054 51% 1,554,929 845,126 54% Facility Rentals 945,931 506,683 312,322 62% 84,996 227,327 267% Community Services 126,449 79,000 98,830 125% 4,082 94,748 2321% General Administration Overhead 1,825,440 1,825,440 1,068,844 59% 1,038,842 30,002 3% Other Charges Current Services 970,580 970,580 45% 266,079 437,011 170,932 64% TOTAL CURRENT SERVICES 8,176,736 8,164,851 4,358,318 53% 3,004,549 1,353,768 45%

OTHER REVENUE
Use of money/property 823,436 823,436 301,834 37% 224,954 76,880 34% Other Revenues 5,961,472 5,745,608 3% 291,979 160,740 (131,239) -45% TOTAL OTHER REVENUE 6,784,908 6,569,044 462,574 7% 516,933 (54,359) -11%

TRANSFERS IN
One Time Transfer 180,000 180,000 61,250 34% 119,574 (58,324) -49% Public Safety Facilities Fund 25,000 25,000 58,324 233% 100,000 (41,676) -42% Supplemental Law Enforcement Fund 100,000 100,000 100,000 100% 58,000 42,000 72% Countywide Solid Waste 324,763 649,526 325,000 50% 325,000 - n/a Streets 699,735 699,735 324,267 46% 408,156 (83,889) -21% Park Maintenance 650,000 650,000 379,169 58% 379,169 n/a - Sewer Operations 357,159 357,159 208,341 58% 206,752 1,589 1% Water Operations 357,159 357,159 208,341 58% 206,752 1,589 1% Park Development 75,000 75,000 43,750 58% 43,750 n/a -
TOTAL TRANSFERS IN 2,768,816 3,093,579 1,708,442 55% 1,522,153 186,289 12% TOTAL GENERAL FUND 50,508,431 50,821,309 22,030,613 43% 18,368,328 3,662,285 20%

SPECIAL REVENUE FUNDS
202 STREET MAINTENANCE
Gas Tax 2105 - 2107.5 699,735 699,735 319,937 46% 379,547 (59,610) -16% Interest / Other Revenue/Other Charges - - 394 n/a 775 (381) -49% 202 STREET MAINTENANCE 699,735 699,735 320,331 46% 380,322 (59,990) -16% FUND

REVENUE
SOURCE

City of Morgan Hill
Year to Date Revenues - Fiscal Year 2021-22
For The Seven Months Ended January 31, 2022
58% of Year Complete

CURRENT INCR (DECR)
ADOPTED AMENDED YTD % PRIOR FROM PRIOR %

BUDGET BUDGET ACTUAL OF BUDGET YTD YTD CHANGE
FUND

REVENUE
SOURCE

SPECIAL REVENUE FUNDS
205 SUPPLEMENTAL LAW ENFORCEMENT FUND
Interest Income 858 858 589 69% 741 (151) -20%
Police Grant/SLEF/JAG 100,000 100,000 94,618 95% 90,060 4,558 5% 205 SUPPLEMENTAL LAW ENFORCEMENT FUND 100,858 100,858 95,207 94% 90,801 4,407 5% 206 DEVELOPMENT SERVICES
Building Fees 3,195,787 3,195,787 1,648,906 52% 1,341,007 307,899 23% Planning Fees 766,776 766,776 497,986 65% 740,848 (242,862) -33% Engineering Fees 999,810 999,810 361,430 36% 268,951 92,478 34% Other Revenue/Current Charges 330,747 330,747 34% 75,055 112,311 37,256 50% 206 DEVELOPMENT SERVICES 5,293,120 5,293,120 2,620,633 50% 2,425,862 194,771 8% 207 LONG RANGE PLANNING 869,266 869,266 406,411 47% 376,653 29,758 8% 215 and 216 HCD BLOCK GRANT
Interest Income/Other Revenue 3,173 3,173 167 5% 278 (111) -40% 215 and 216 HCD BLOCK GRANT 3,173 3,173 167 5% 278 (111) -40% 225 ASSET SEIZURE 1,931 1,931 361 19% 611 (250) -41%
229 LIGHTING AND LANDSCAPE 2,573 2,573 104,867 4076% 104,175 692 1% 230 COMMUNITY FACILITIES DISTRICT 1,240 1,240 11,766 949% 20,282 (8,516) -42% 232 ENVIRONMENTAL PROGRAMS 481,008 481,008 307,233 64% 283,425 23,808 8% 234 MOBILE HOME PARK RENT STAB. 757 757 7,982 1054% 3,690 4,292 116% 235 SENIOR HOUSING 3,869 3,869 600 16% 1,000 (400) -40% 236 HOUSING MITIGATION 2,446,028 2,596,028 772,692 30% 1,289,159 (516,467) -40% 237 BEGIN - - 54,180 n/a 718 53,461 7445%
238 CAL HOMES - - 208 n/a 81,037 (80,829) -100%
240 EMPLOYEE ASSISTANCE 29,089 29,089 6,984 24% 8,683 (1,699) -20% 246 COUNTYWIDE SOLID WASTE 1,324,763 699,112 53% - 699,112 n/a 247 ENVIRONMENT REMEDIATION 2,448 2,448 1,225 50% 1,095 130 12% 250 COMH-SUCCESSOR AGENCY-MHRDA 7,100,496 7,100,496 6,246,678 88% 889,017 5,357,660 603% 255 HOUSING SUCCESSOR AGENCY 215,318 215,318 284,662 132% 298,696 (14,034) -5% 260 PUBLIC ART - - 1,100 n/a - 1,100 n/a
TOTAL SPECIAL REVENUE FUNDS 17,250,910 18,725,673 11,942,398 64% 6,255,503 5,686,895 91%

CAPITAL PROJECTS FUNDS
301 PARK DEVELOPMENT 1,748,480 7,131,498 5,934,606 83% 1,439,407 4,495,199 312% 302 PARK MAINTENANCE 360,613 360,613 458,182 127% 53,699 404,483 753% 303 LOCAL DRAINAGE 1,675,036 1,675,036 585,911 35% 787,472 (201,561) -26% 304 LOCAL DRAINAGE/NON AB1600 80,692 80,692 86,905 108% 6,947 79,958 1151% 306 AGRICULTURE & OPEN SPACE PRESERVATION 180,385 180,385 120,474 67% 123,468 (2,994) -2% 308 STREET CIP 4,050,523 4,050,523 3,110,049 77% 979,420 2,130,629 218% 309 TRAFFIC IMPACT 1,468,388 1,468,388 6,726,984 458% 853,873 5,873,112 688% 315 PUBLIC SAFETY FACILITIES IMPACT 864,417 864,417 148,515 17% 247,232 (98,718) -40% 346 PUBLIC FACILITIES NON-AB1600 611,488 911,488 35,760 4% 884,407 (848,647) -96% 347 PUBLIC FACILITIES IMPACT 265,536 265,536 35,706 13% 106,125 (70,419) -66% 348 LIBRARY 1,077,617 1,077,617 161,665 15% 455,779 (294,115) -65% 350 UNDERGROUNDING 86,073 86,073 403,828 469% 4,147 399,681 9637% 355 SCHOOL PEDESTRIAN/TRAFFIC SAFETY 591,967 591,967 29,720 5% 299,402 (269,682) -90% 360 COMMUNITY/REC IMPACT FUND 1,730,018 1,730,018 202,144 12% 695,714 (493,569) -71% 375 QUIMBY FEE 1,623,552 1,623,552 - n/a - - n/a
TOTAL CAPITAL PROJECTS FUNDS 16,414,785 22,097,803 18,040,448 82% 6,937,092 11,103,356 160%

DEBT SERVICE FUNDS
420 CIVIC CENTER DEBT 307,385 307,385 178,367 58% 181,102 (2,736) -2% 441 POLICE FACILITY BOND 385,639 385,639 224,177 58% 324,289 (100,112) -31% TOTAL DEBT SERVICE FUNDS 693,024 693,024 402,544 58% 505,391 (102,847) -20%

City of Morgan Hill
Year to Date Revenues - Fiscal Year 2021-22
For The Seven Months Ended January 31, 2022
58% of Year Complete

CURRENT INCR (DECR)
ADOPTED AMENDED YTD % PRIOR FROM PRIOR %

BUDGET BUDGET ACTUAL OF BUDGET YTD YTD CHANGE
FUND

REVENUE
SOURCE

ENTERPRISE FUNDS
640 SEWER OPERATION
Sewer Service Fees 13,812,501 13,812,501 7,176,755 52% 6,515,062 661,692 10% Interest Income/Transfers 37,425 37,425 5,723 15% 14,872 (9,149) -62% Other Revenue/Current Charges 268,241 268,241 198,057 74% 128,279 69,779 54% 640 SEWER OPERATION 14,118,167 14,118,167 7,380,535 52% 6,658,213 722,322 11% 641 SEWER EXPANSION
Interest Income 220,194 220,194 60,975 28% 97,141 (36,166) -37% Development Impact Fee 6,845,919 6,845,919 1,930,692 28% 2,245,100 (314,408) -14% 641 SEWER EXPANSION 7,066,113 7,066,113 1,991,667 28% 2,342,241 (350,573) -15% 642 SEWER RATE STABILIZATION 195,311 195,311 94,487 48% 11,482 83,005 723% 643 SEWER-CAPITAL PROJECT 4,707,648 4,707,648 2,754,522 59% 2,605,463 149,059 6% TOTAL SEWER FUNDS 26,087,239 26,087,239 12,221,212 47% 11,617,399 603,813 5% 650 WATER OPERATION
Water Sales 15,179,148 15,179,148 7,422,512 49% 8,064,148 (641,636) -8% Meter Install & Service 25,215 25,215 36,611 145% 52,054 (15,443) -30% Transfers-In / Interest Income 546,952 546,952 284,872 52% 270,508 14,364 5% Other Revenue/Current Charges 585,381 585,381 507,250 87% 478,277 28,973 6% 650 WATER OPERATION 16,336,696 16,336,696 8,251,245 51% 8,864,987 (613,742) -7% 651 WATER EXPANSION
Interest Income/Other Revenue/Transfer 64,003 64,003 8,764 14% 13,862 (5,098) -37% Development Impact Fee 1,782,143 1,782,143 341,051 19% 783,540 (442,489) -56% 651 WATER EXPANSION 1 1,846,146 ,846,146 349,815 19% 797,402 (447,587) -56% 652 Water Rate Stabilization 141,222 141,222 81,093 57% 38,144 42,950 113% 653 Water Capital Project 5,047,350 5,047,350 2,959,590 59% 2,848,568 111,022 4% TOTAL WATER FUNDS 23,371,414 23,371,414 11,641,743 50% 12,549,100 (907,357) -7% TOTAL ENTERPRISE FUNDS 49,458,653 49,458,653 23,862,955 48% 24,166,499 (303,544) -1%

INTERNAL SERVICE FUNDS
730 INFORMATION SYSTEMS 1,952,577 2,247,577 1,312,657 58% 1,099,523 213,134 19% 740 BUILDING MAINTENANCE 3,409,334 3,409,334 659,621 19% 1,999,732 (1,340,111) -67% 741 BUILDING REPLACEMENT 745,508 755,508 410,063 54% 397,716 12,347 3% 745 CIP ADMINISTRATION 1,798,889 1,798,889 1,106,214 61% 801,451 304,763 38% 760 UNEMPLOYMENT INSURANCE 2,513 2,513 840 33% 58,750 (57,910) -99% 770 WORKERS COMPENSATION 913,504 913,504 444,608 49% 420,211 24,397 6% 790 EQUIPMENT REPLACEMENT 1,086,223 1,086,223 654,094 60% 782,053 (127,959) -16% 791EMPLOYEE BENEFITS 1,043,858 1,043,858 355,179 34% 349,443 5,736 2% 795 GENERAL LIABILITY INSURANCE 1,504,188 1,737,188 1,003,144 58% 503,857 499,287 99% TOTAL INTERNAL SERVICE FUNDS 12,456,594 12,994,594 5,946,421 46% 6,412,737 (466,316) -7% TOTAL FOR ALL FUNDS 146,782,397 $ 154,791,056 $ 82,225,379 $ 53% 62,645,550 $ 19,579,829 $ 31%

City of Morgan Hill
Year to Date Expenses - Fiscal Year 2021-22
For the Month and Seven Months Ended January 31, 2022
58% of Year Complete

CURRENT

FUND MONTH PERCENT OF
NO. FUND/ACTIVITY ACTUAL AMENDED YTD OUTSTANDING TOTAL TOTAL TO PRIOR

EXPENSES BUDGET EXPENSES ENCUMBRANCE ALLOCATED BUDGET YTD 010 GENERAL FUND
I. ADMINISTRATION
CITY COUNCIL 42,092 $ 468,850 $ 224,067 $ 75,664 $ 299,731 $ 64% 175,763 $ CITY ATTORNEY 53,700 802,889 401,870 90,451 492,321 61% 376,100 CITY MANAGER 48,353 638,262 362,885 16,250 379,135 59% 289,030 HUMAN RESOURCES 61,430 830,904 404,758 - 404,758 49% 370,623

COUNCIL SVCS & RECORDS MGMT
Council Svcs & Records Mgmt 41,568 672,320 351,760 3,200 354,960 53% 327,844 Elections 2,037 28,180 13,941 - 13,941 49% 101,438
COUNCIL SVCS & RECORDS MGMT 43,605 700,500 365,700 3,200 368,900 53% 429,282 FINANCE 123,427 2,472,421 907,710 53,836 961,546 39% 815,934 TOTAL ADMINISTRATION 372,608 5,913,826 2,666,991 239,401 2,906,392 49% 2,456,733 II. COMMUNITY SERVICES
Membership Services & Rec. Programs 294,346 5,648,211 2,877,255 985,539 3,862,794 68% 2,598,361 Recreation Facility Rentals 41,007 1,313,549 307,660 18,753 326,413 25% 555,339 Community Services 52,378 641,554 288,050 64,174 352,224 55% 249,332 Park Maintenance 70,495 1,179,250 598,513 48,121 646,633 55% 595,441 Environmental Services 15,879 349,129 120,516 2,240 122,756 35% 113,344 Countywide Solid Waste Program 16,312 303,550 95,925 95,925 - 32% Street Maintenance 172,883 2,662,248 1,235,007 130,038 1,365,046 51% 1,194,132 Downtown Maintenance 15,980 318,869 155,309 35,649 190,958 60% 125,285 Cable Television 2,737 34,272 19,173 - 19,173 56% 12,651 COMMUNITY SERVICES 682,017 12,450,632 5,697,408 1,284,513 6,981,921 56% 5,443,885 CODE COMPLIANCE 14,679 174,873 101,686 101,686 - 58% 91,119 INFRASTRUCTURE PLANNING & CONGESTION MGMT 356,583 25,000 172,923 - 172,923 48% 203,759 ECONOMIC DEVELOPMENT PROGRAMS 40,920 970,380 411,432 49,079 460,512 47% 362,212 TOTAL COMMUNITY SERVICES 762,616 13,952,469 6,383,450 1,333,592 7,717,042 55% 6,100,975 III. PUBLIC SAFETY
POLICE
PD Administration 137,351 1,421,383 981,936 32,921 1,014,857 71% 930,945 Field Operations 805,860 9,314,988 5,300,715 139,909 5,440,624 58% 4,655,201 Support Services 202,181 2,596,110 1,498,329 - 1,498,329 58% 1,284,845 Emergency Services/Haz Mat 15,139 202,072 111,419 - 111,419 55% 102,084 Special Operations 194,934 3,700,816 1,560,573 15,671 1,576,244 43% 1,692,855 Dispatch Services 149,029 1,897,873 1,030,987 - 1,030,987 54% 928,548 POLICE 1,504,494 19,133,242 10,483,958 188,502 10,672,459 56% 9,594,477 FIRE 702,407 7,788,401 4,441,733 1,725 4,443,458 57% 4,058,581 TOTAL PUBLIC SAFETY 2,206,900 26,921,643 14,925,691 190,227 15,115,918 56% 13,653,058 IV. TRANSFERS
Other 910,559 4,083,681 3,046,125 - 3,046,125 75% 333,179 TOTAL TRANSFERS 910,559 4,083,681 3,046,125 3,046,125 - 75% 333,179 TOTAL GENERAL FUND 4,252,683 50,871,618 27,022,256 1,763,220 28,785,477 57% 22,543,945

City of Morgan Hill
Year to Date Expenses - Fiscal Year 2021-22
For the Month and Seven Months Ended January 31, 2022
58% of Year Complete

CURRENT

FUND MONTH PERCENT OF
NO. FUND/ACTIVITY ACTUAL AMENDED YTD OUTSTANDING TOTAL TOTAL TO PRIOR

EXPENSES BUDGET EXPENSES ENCUMBRANCE ALLOCATED BUDGET YTD

SPECIAL REVENUE FUNDS
202 STREET MAINTENANCE 324,628 704,068 326,794 - 326,794 46% 410,620 205 PUBLIC SAFETY/SUPP.LAW 100,604 107,245 104,228 - 104,228 97% 104,123 206 DEVELOPMENT SERVICES FUND
Planning 162,761 1,956,314 1,161,783 27,668 1,189,451 61% 886,390 Building 176,358 2,233,914 1,230,970 1,726 1,232,696 55% 1,138,080 Engineering 121,168 1,366,129 863,597 6,843 870,440 64% 716,846 206 DEVELOPMENT SERVICES FUND 460,288 5,556,357 3,256,350 36,237 3,292,587 59% 2,741,315 207 LONG RANGE PLANNING 44,022 861,202 349,241 61,183 410,424 48% 583,031 215/216 CDBG 458 5,499 3,206 - 3,206 58% 3,129
225 ASSET SEIZURE - 54,232 14,232 14,232 - 26% -
229 LIGHTING AND LANDSCAPE 18,692 168,130 93,356 15,404 108,760 65% 101,918 230 COMMUNITY FACILITIES DISTRICT 3,172 42,093 15,236 15,236 - 36% 14,398 232 ENVIRONMENT PROGRAMS 35,042 508,715 231,632 4,123 235,755 46% 225,988 234 MOBILE HOME PARK 37 449 259 - 58% 259 259
236 HOUSING MITIGATION 57,790 1,495,875 396,427 83,325 479,753 32% 251,627 240 EMPLOYEE ASSISTANCE 1,597 28,531 9,613 - 9,613 34% 8,132 246 COUNTYWIDE SOLID WASTE PROGRAM 105,285 1,324,763 615,036 548,587 1,163,624 88% - 250 COMH-SUCCESSOR AGENCY-MHRDA 587 6,939,408 490,200 490,200 - 7% 4,161,712 255 HOUSING SUCCESSOR AGENCY 85,445 1,003,785 644,544 158,333 802,877 80% 702,211 260 PUBLIC ART - 23,500 3,993 - 3,993 17% -
TOTAL SPECIAL REVENUE FUNDS 1,237,649 18,823,852 6,554,350 907,193 7,461,543 40% 9,308,463

CAPITAL PROJECT FUNDS
301 PARK DEVELOPMENT 355,443 9,738,856 4,149,377 2,479,259 6,628,635 68% 2,780,342 302 PARK MAINTENANCE 55,245 745,776 394,165 394,165 - 53% 379,169 303 LOCAL DRAINAGE 6,990 6,997,265 37,090 42,558 79,648 1% 270,633 304 LOCAL DRAIN. NON-AB1600 645 833,046 2,085 48,585 50,670 6% 173,027 306 AGRICULTURE & OPEN SPACE PRESERVATIO 2,249 5,480,009 5,400,261 5,400,261 - 99% 15,596 308 STREET CIP 41,944 6,587,142 2,894,890 131,769 3,026,659 46% 2,792,326 309 TRAFFIC IMPACT 426,037 30,480,782 6,634,065 9,088,932 15,722,997 52% 1,264,453 315 PUBLIC SAFETY FACILITIES IMPACT 19,734 565,180 138,922 138,922 - 25% 136,675 346 PUBLIC FAC.NON AB1600 2,466 1,127,968 88,029 44,322 132,351 12% 143,766 347 PUBLIC FACILITIES IMPACT 2,277 27,331 15,939 15,939 - 58% 34,340 348 LIBRARY IMPACT 18,187 216,704 128,041 128,041 - 59% 613,232 350 UNDERGROUNDING 95 139,398 665 - 0% 665 644
355 SCHOOL PEDESTRIAN & TRAFFIC SAFETY 31,630 1,160,466 1,149,060 31,456 1,180,516 102% 1,033,980 360 COMM/REC CENTER IMPACT 25,884 1,454,834 218,671 312,349 531,020 37% 1,443,807 375 QUIMBY FEE 9 600,000 114 - 0% 114 -
TOTAL CAPITAL PROJECTS FUNDS 988,836 66,154,756 21,251,373 12,179,229 33,430,603 51% 11,081,991

DEBT SERVICE FUNDS
420 CIVIC CENTER DEBT 886 304,947 233,828 233,828 - 77% 231,304 441 POLICE FACILITY BOND DEBT 338 389,497 312,609 312,609 - 80% 304,854 TOTAL DEBT SERVICE FUNDS 1,224 694,444 546,437 546,437 - 79% 536,158

City of Morgan Hill
Year to Date Expenses - Fiscal Year 2021-22
For the Month and Seven Months Ended January 31, 2022
58% of Year Complete

CURRENT

FUND MONTH PERCENT OF
NO. FUND/ACTIVITY ACTUAL AMENDED YTD OUTSTANDING TOTAL TOTAL TO PRIOR

EXPENSES BUDGET EXPENSES ENCUMBRANCE ALLOCATED BUDGET YTD

ENTERPRISE FUNDS
SEWER
640 SEWER OPERATIONS 864,037 14,126,884 7,365,690 194,410 7,560,100 54% 6,344,487 641 SEWER CAPITAL EXPANSION 40,505 22,987,165 297,983 524,140 822,123 4% 324,264 642 SEWER RATE STABILIZATION 95 1,138 665 - 665 58% 558 643 SEWER-CAPITAL PROJECTS 515,860 22,004,075 5,251,172 1,270,848 6,522,020 30% 2,109,414 TOTAL SEWER FUND(S) 1,420,497 59,119,262 12,915,510 1,989,399 14,904,908 25% 8,778,723 WATER
Water Operations 1,074,466 15,292,037 7,766,859 764,070 8,530,929 56% 6,689,516 Utility Billing 66,613 985,735 505,300 34,180 539,480 55% 408,705 Water Conservation 6,808 157,768 62,719 49,054 111,773 71% 32,703 650 WATER OPERATIONS 1,147,887 16,435,540 8,334,878 847,304 9,182,182 56% 7,130,924 651 WATER CAPITAL EXPANSION 77,751 2,281,063 480,220 3,029 483,250 21% 310,545 652 WATER RATE STABILIZATION 31 371 217 - 58% 217 180
653 WATER-CAPITAL PROJECTS 23,566 7,534,033 543,193 321,695 864,889 11% 121,998 TOTAL WATER FUND(S) 1,249,235 26,251,006 9,358,509 1,172,029 10,530,537 40% 7,563,647 TOTAL ENTERPRISE FUNDS 2,669,732 85,370,268 22,274,018 3,161,427 25,435,446 30% 16,342,370

INTERNAL SERVICE FUNDS
730 INFORMATION SYSTEMS 122,125 2,612,628 1,004,905 928,829 1,933,734 74% 888,320 740 BUILDING MAINTENANCE 85,954 3,507,595 603,732 86,241 689,972 20% 1,146,870 741 BUILDING REPLACEMENT 125,113 610,000 181,156 53,217 234,373 38% 45,239 745 CIP ADMINISTRATION 140,290 1,735,361 981,273 6,764 988,037 57% 788,644 760 UNEMPLOYMENT - 20,000 3,846 - 3,846 19% -
770 WORKERS COMPENSATION 35,184 876,877 707,534 707,534 - 81% 482,358 790 EQUIPMENT REPLACEMENT 263,620 1,546,014 423,735 212,867 636,602 41% 682,663 791 EMPLOYEE BENEFITS FUND 177,834 625,000 536,268 536,268 - 86% 295,244 795 GEN. LIABILITY INSURANCE 10,067 1,724,061 1,493,139 1,493,139 - 87% 1,192,755 TOTAL INTERNAL SERVICE FUNDS 960,188 13,257,537 5,935,587 1,287,918 7,223,504 54% 5,522,093 REPORT TOTAL $ 10,110,311 $ 235,172,476 $ 83,584,022 $ 19,298,987 $ 102,883,009 44% 65,335,020 $

City of Morgan Hill
Fund Activity Summary - Fiscal Year 2021-22
For The Seven Months Ended January 31, 2022
58% of Year Complete
Year to-Date
Fund Fund Balance YTD % of YTD % of Deficit or
No. Fund 06-30-21 Actual Budget Actual Budget Carryover Reserved1 Unreserved 010 GENERAL FUND 24,896,179 $ 22, $ 43% 27, 030,613 $ 022,256 53% (4, $ 991,643) $ 1,763,220 $ 18,141,315 TOTAL GENERAL FUND $ 24,896,179 $ 22,030,613 43% $ 27,022,256 53% $ (4,991,643) $ 1,763,220 $ 18,141,315 202 STREET MAINTENANCE 6,241 $ 320,331 46% $ 326,794 55% $ (6,463) $ - $ (222) 205 PUBLIC SAFETY/SUPPL. LAW 195,819 95,207 94% 104,228 63% (9,021) - 186,798 206 DEVELOPMENT SERVICES (484,553) 2,620,633 50% 3,256,350 59% (635,717) 36,237 (1,156,508) 207 LONG RANGE PLANNING 1,250,193 406,411 47% 349,241 41% 57,169 61,183 1,246,180 215 / 216 CDBG 34,893 167 5% 3,206 58% (3,039) - 31,854 225 ASSET SEIZURE 143,259 361 19% 14,232 n/a (13,872) - 129,387229 LIGHTING AND LANDSCAPE 172,706 104,867 4076% 93,356 56% 11,511 15,404 168,813 230 COMMUNITY FACILITIES DISTRICT 137,840 11,766 949% 15,236 36% (3,470) - 134,370 232 ENVIRONMENTAL PROGRAMS 213,442 307,233 64% 231,632 46% 75,601 4,123 284,920 234 MOBILE HOME PK RENT STAB. 58,766 7,982 1054% 58% 259 7,723 - 66,489 235 SENIOR HOUSING 234,588 600 16% n/a - 600 - 235,188
236 HOUSING MITIGATION 5,407,291 772,692 30% 396,427 27% 376,264 83,325 5,700,230 237 BEGIN 320,727 54,180 n/a n/a 54,180 - - 374,907238 CAL HOMES 276 208 n/a n/a - 208 484240 EMPLOYEE ASSISTANCE 62,190 6,984 24% 9,613 34% (2,630) - 59,560 246 COUNTYWIDE SOLID WASTE 699,112 50% 615,036 46% 84,075 548,587 (464,512) 247 ENVIRONMENT REMEDIATION 135,927 1,225 50% n/a - 1,225 - 137,152 250 COMH-SUCCESSOR AGENCY-MHRDA (493,066) 6,246,678 88% 490,200 7% 5,756,478 6,262,932 (999,520)255 HOUSING SUCCESSOR AGENCY 4,287,939 284,662 132% 644,544 64% (359,882) 158,333 3,769,724 260 PUBLIC ART 70,772 1,100 n/a 3,993 (2,893) - 67,879
TOTAL SPECIAL REVENUE FUNDS $ 11,755,250 $ 11,942,398 64% $ 6,554,350 35% $ 5,388,048 $ 7,170,124 $ 9,973,174 301 PARK DEV. IMPACT FUND $ 270,918 $ 5,934,606 83% 4, $ 149,377 43% 1, $ 785,229 $ 2,479,259 $ (423,112) 302 PARK MAINTENANCE 2,815,081 458,182 127% 394,165 53% 64,017 - 2,879,098 303 LOCAL DRAINAGE 10,947,520 585,911 35% 37,090 1% 548,821 42,558 11,453,783 304 LOCAL DRAINAGE/NON-AB1600 1,268,597 86,905 108% 2,085 0% 84,820 48,585 1,304,832 306 AGRICULTURE AND OPEN SPACE PRESERVA 6,011,689 67% 5, 120,474 99% (5, 400,261 279,787) - 731,902 308 STREET CIP 3,538,596 3, 77% 2, 110,049 44% 894,890 215,159 131,769 3,621,986 309 TRAFFIC IMPACT FUND 2,217,293 6,726,984 458% 6,634,065 22% 92,919 9,088,932 (6,778,720) 315 PUBLIC SAFETY FACILITIES IMPACT 3,650,943 17% 148,515 25% 9,593 138,922 - 3,660,536 346 PUBLIC FACILITIES NON-AB1600 1,100,016 35,760 4% 88,029 8% (52,270) 44,322 1,003,424347 PUBLIC FACILITIES IMPACT FUND 1,034,272 35,706 13% 15,939 58% 19,767 - 1,054,039348 LIBRARY IMPACT FUND 1,487,275 15% 161,665 59% 33,624 128,041 - 1,520,899 350 UNDERGROUNDING 1,073,838 403,828 469% 665 0% 403,163 - 1,477,001 355 SCHOOL PEDESTRIAN/TRAFFIC SFTY 181,922 29,720 5% 1, 99% (1, 149,060 119,340) 31,456 (968,874) 360 COMM/REC CTR IMPACT FUND 1,353,501 202,144 12% 218,671 15% (16,527) 312,349 1,024,625 375 QUIMBY FEE - n/a - 114 0% (114) - (114)
TOTAL CAPITAL PROJECT FUNDS $ 36,951,461 $ 18,040,448 82% $ 21,251,373 32% $ (3,210,926) $ 12,179,229 $ 21,561,306 420 CIVIC CENTER DEBT $ 165,528 $ 178,367 58% $ 233,828 77% (55, $ 461) $ 3 $ 110,064 441 POLICE FACILITY BOND DEBT 171,762 224,177 58% 312,609 80% (88,432) 4 83,327TOTAL DEBT SERVICE FUNDS $ 337,290 $ 402,544 58% $ 546,437 79% $ (143,893) $ 6 $ 193,391 Revenues Expenses Ending Fund Balance