Agenda packet — Morgan Hill City Council, September 28, 2022 (part 2 of 2)

August 17, 2022
2 A special meeting of the City Council was called at 5:00 p.m. for the purpose of conducting a Mid-Year Goal Review Workshop

CALL TO ORDER

ROLL CALL ATTENDANCE

DECLARATION OF POSTING AGENDA

SPECIAL MEETING
5:00 p.m.- Mid-Year Goal Review Workshop

WORKSHOP

1. CITY COUNCIL MID-YEAR GOAL REVIEW WORKSHOP
Recommendation:

1. Review and discuss:
a. 2022-2023 Sustainable Morgan Hill, including Vision, Ongoing Priorities, and Strategic Priorities and
b. 2022-2023 Strategic Priorities Work Plan

2. Determine whether to have Future Agenda Items on the following*:
a. Term limits for Commissioners, Council Members, and the Mayor b. Methods on how to increase diversity on Commissions
c. Alignment, civility, and behavior of City Council Members d. Process to monitor outside committee assignments to identify when an alternate is needed and to share how City Council Members voted at those committees.
e. Council Member reimbursements for dependent care costs during Council meetings
f. Policy for deadlines for submittal of agenda item supplements and a policy limiting the number of times a Council meeting can be extended
g. Review of City Council budget, including establishing policy on how City Council Member attendance at conferences is funded

3. Review and discuss City Council Follow-up/Future Council Initiated Agenda Items.
*The above items were brought forward by City Council Members during the Future Council Initiated Agenda Items section of City Council meetings. At the Mid-Year Goal Setting, the City Council will be asked whether they want the items to be considered at a future meeting. If a majority of City Council Members

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August 17, 2022
3 want the items to be considered, they will be added to future agendas. See the attachment for City Council Follow-up/Future Council Initiated Agenda Items that will be brought forward as part of Staff’s Work Plan.

REGULAR MEETING

PROCLAMATIONS
Proclaiming the month of September as Emergency Preparedness Month

CITY COUNCIL REPORTS

CITY MANAGER'S REPORT

CITY ATTORNEY'S REPORT

OTHER REPORTS

PUBLIC COMMENT

PUBLIC COMMENT SUPPLEMENTS

ADOPTION OF AGENDA

CONSENT CALENDAR
Items appearing on the Consent Calendar are considered routine and may be approved by one motion. Pursuant to City Council Policies and Procedures (CP 97-01), any member of the Council or public may request to have an item removed from the Consent Calendar for comment and action.

Time Estimate for Consent Calendar: 1 - 10 Minutes

2. APPROVE PHASE 2 RECORDS RETENTION SCHEDULE UPDATE
Recommendation:

Approve changes to the City's Records Retention Schedule.

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August 17, 2022
4 3. APPROVE CONTRACT BETWEEN THE COUNTY OF SANTA CLARA AND

THE CITY OF MORGAN HILL FOR CONTINUATION OF HOMELESS

PREVENTION SERVICES
Recommendation:

Approve and authorize the City Manager to execute and administer a two-year contract with the County of Santa Clara to continue to support Homeless Prevention Services for a total of $100,000.

4. APPROVE PACIFIC GAS AND ELECTRIC COMPANY AGREEMENT TO

UNDERGROUND DRY UTILITIES FOR THE UPPER LLAGAS CREEK FLOOD CONTROL AND HALE AVENUE EXTENSION PHASE 2B PROJECT

BETWEEN WRIGHT AND MAIN AVENUES
Recommendation:

Approve and authorize the City Manager to execute and administer a Pacific Gas and Electric Company Agreement to underground dry utilities at the intersection of Main and Hale Avenues for a not to exceed amount of $589,199.

5. APPROVE SOLID WASTE FRANCHISE EXTENSION
Recommendation:

Authorize the City Manager to execute a four-month franchise extension with Recology South Valley.

6. APPROVE REVISIONS TO CITY COUNCIL POLICY CP-94-04, THE CITY'S

INVESTMENT POLICY
Recommendation:

Approve revisions to City Council Policy CP-94-04, the City's Investment Policy.

ITEM PULLED FOR DISCUSSION

7. AUTHORIZE THE CITY MANAGER TO AMEND THE AGREEMENT WITH FLOCK SAFETY TO ADD AN ADDITIONAL 25 FLOCK SAFETY AUTOMATED

LICENSE PLATE READERS
Recommendation:

Authorize the City Manager to amend the Agreement with Flock Safety to add an additional 25 Flock Safety cameras for a one-time cost of $74,750 for infrastructure and software upgrade, with an on-going annual cost of $66,000.

PUBLIC HEARINGS

8. PUBLIC REVIEW OF THE DRAFT CITY OF MORGAN HILL 2023-2031

HOUSING ELEMENT UPDATE AND APPROVE SUBMISSION OF CITY OF MORGAN HILL 2023-2031 HOUSING ELEMENT UPDATE TO THE

CALIFORNIA DEPARTMENT OF HOUSING AND COMMUNITY

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August 17, 2022
5 DEVELOPMENT
Recommendation:

Review the Draft City of Morgan Hill 2023-2031 Housing Element Update and adopt the Resolution directing the City to submit the Draft 2023-2031 Housing Element to the California Department of Housing and Community Development for review.

OTHER BUSINESS

9. APPROVE UPDATES TO THE HOTEL STRATEGY AND INCENTIVE POLICY

TO SUPPORT NEW HOTEL DEVELOPMENT AND REHABILITATION OF

EXISTING HOTELS
Recommendation:

Approve updates to the Hotel Incentive Policy to support new hotel development and rehabilitation of existing hotels.

10. RECEIVE MONTHLY BUDGET UPDATE; PRELIMINARY FY 21-22 FINANCIAL AND INVESTMENT REPORTS; CITY MANAGER AUTHORITY REPORT; AND ADOPT BUDGET AMENDMENTS
Recommendation:

1. Accept and file Preliminary Fiscal Year (FY) 2021-2022 Financial and Investment Report and City Manager Authority Report; and

2. Adopt resolution authorizing changes to the adopted Fiscal Year (FY) 2021-2022 City of Morgan Hill Operating Budget.

11. APPOINT VOTING DELEGATES FOR THE 2022 CALCITIES (LEAGUE)

ANNUAL CONFERENCE AND APPROVE CITY SUPPORT OF THE

RESOLUTION TO BE CONSIDERED
Recommendation:

1. Appoint a voting delegate and up to two (2) alternate voting delegates to the CalCities Annual Conference;

2. Direct the Clerk team to complete and forward the voting delegate form to CalCities;

3. Confirm "support" for the resolution to be considered on bylaws; and

4. Authorize the City’s voting delegate(s) to vote on the resolution to be considered at the CalCities annual conference.

FUTURE COUNCIL INITIATED AGENDA ITEMS

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August 17, 2022
6 CLOSED SESSION
CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION (§ 54956.9) Barker v. L&D Construction et al., Santa Clara County Superior Court Case No. 19CV342745
CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION (§ 54956.9) Jurevich v. City of Morgan Hill, Workers’ Compensation Claim No: MHL2000009

OPPORTUNITY FOR PUBLIC COMMENT

ADJOURN TO CLOSED SESSION

ADJOURNMENT

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August 17, 2022
7 NOTICE
Any documents produced by the City and distributed to the majority of the City Council less than 72 hours prior to an open meeting, will be made available for public inspection at the City Clerk’s Counter at City Hall located at 17575 Peak Avenue, Morgan Hill, CA, 95037 and at the Morgan Hill Public Library located at 660 West Main Avenue, Morgan Hill, California, 95037 during normal business hours. (Pursuant to Government Code 54957.5)

PUBLIC COMMENT
Members of the Public are entitled to directly address the City Council concerning any item that is described in the notice of this meeting, before or during consideration of that item. If you wish to address the Council on any issue that is on this agenda, please complete a speaker request card located in the foyer of the Council Chambers and deliver it to the Minutes Clerk prior to discussion of the item. You are not required to give your name on the speaker card in order to speak to the Council, but it is very helpful.

When you are called, proceed to the podium and the Mayor will recognize you. If you wish to address the City Council on any other item of interest to the public, you may do so during the public comment portion of the meeting following the same procedure described above. Please limit your comments to three (3) minutes or less.

Please submit written correspondence to the Minutes Clerk, who will distribute correspondence to the City Council.

Persons interested in proposing an item for the City Council agenda should contact a member of the City Council who may plan an item on the agenda for a future City Council meeting. Should your comments require Council action, your request may be placed on the next appropriate agenda. Council discussion or action may not be taken until your item appears on an agenda. This procedure is in compliance with the California Public Meeting Law (Brown Act) Government Code §54950.

City Council Policies and Procedures (CP 03-01) outlines the procedure for the conduct of public hearings. Notice is given, pursuant to Government Code Section 65009, that any challenge of Public Hearing Agenda items in court, may be limited to raising only those issues raised by you or on your behalf at the Public Hearing described in this notice, or in written correspondence delivered to the City Council at, or prior to the Public Hearing on these matters.

The time within which judicial review must be sought of the action by the City Council, which acted upon any matter appearing on this agenda is governed by the provisions of Section 1094.6 of the California Code of Civil Procedure.

For a copy of City Council Policies and Procedures CP 97-01, please contact the City Clerk’s office (408) 779-7259, (408) 779-3117 (fax) or by email [email protected].

AMERICANS WITH DISABILITIES ACT (ADA)
In compliance with the Americans with Disabilities Act, if you are a disabled person and you need a disability-related modification or accommodation to participate in this meeting, please contact the City Clerk's Office at (408)779-7259, (408)779-3117 (fax) or by email [email protected]. Requests must be made as early as possible and at least two-full business days before the start of the meeting.

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August 17, 2022
8

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10 CITY COUNCIL STAFF REPORT
MEETING DATE: September 28, 2022
PREPARED BY:

Mario Ramirez, Police Captain
APPROVED BY: City Manager

AUTHORIZE PURCHASE OF THREE POLICE VEHICLES TO INCLUDE

BUILD-OUT OF COMMUNICATION AND SAFETY EQUIPMENT

RECOMMENDATION(S)

1. Authorize the purchase and build-out of two unmarked police vehicles: 2023 Toyota Tacoma and 2023 Toyota Sienna, for a total amount not to exceed $116,409, which includes a 10% contingency of $10,583 from Priority 1 Public Safety Equipment;

2. Authorize the purchase and build-out of one Ford Explorer for use as Municipal Services Officer Patrol Vehicle for an amount not to exceed $98,435, which includes a 10% contingency of $8,949 from Priority 1 Public Safety Equipment;

3. Authorize the purchase of police radio equipment from Motorola for an amount not to exceed $25,611; and

4. Authorize the repurposing of two vehicles as pool cars: 2014 Ford Fusion (VIN ending in 007) and 2014 Honda Accord (VIN ending in 850).

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety
2022-2023 Strategic Priorities
Fiscal Sustainability
Guiding Documents
Public Safety Master Plan
REPORT NARRATIVE:

Police Department staff recommends the purchase of three new vehicles: one Ford Explorer to be utilized by the Multi-Service Officers for patrol; one unmarked Toyota Tacoma and one unmarked Toyota Sienna to replace an aged 2014 Ford Fusion and a 2014 Honda Accord currently utilized by Police Detectives. The purchase of the Ford Explorer will add one vehicle to the Police Department's fleet. The addition of this vehicle was approved during the budget development process for FY2022-23 to support

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10 the addition of one full-time (1FTE) Multi-Service Officer position. The Toyota Tacoma and Toyota Sienna will replace the two aged vehicles as follows:

Aged Vehicles Miles New
Vehicles
2014 Honda Accord # 310- unmarked
vehicle
99,318 2023 Toyota Tacoma
2014 Ford Fusion # 309- unmarked vehicle 82,720 2023 Toyota Sienna There are sufficient funds for the purchase of the Toyota Tacoma and Toyota Sienna including the safety equipment build-out and radio equipment for each in the Vehicle Replacement Fund for an amount not to exceed $116,409. The purchase of the Ford Explorer will be funded via the Public Facilities Impact Fund for an amount not to exceed $98,435. The use of this fund was approved during the FY2022-23 budget process.

FLEET BACKGROUND
The Police Department's Vehicle Replacement Plan allows the City to financially plan for scheduled vehicle purchases to maintain safe, operational police vehicles for patrol officers, detectives, and civilian members of the Department. The Police Department has 10 unmarked police vehicles that are assigned to six detectives and four administrators in the Special Operations and Police Administration divisions. Each vehicle has a replacement date of approximately six to ten years, depending on the type of vehicle and its assignment.

The following vehicles are scheduled for replacement:

1. 2014 Ford Fusion- Vehicle # 309 (82,720 miles)
The 2014 Ford Fusion is due for replacement to ensure the safety and reliability of our unmarked police vehicle fleet. The Ford Fusion will be replaced with a 2023 Toyota Tacoma. The Ford Fusion has a high number of engine hours equating to the vehicle having over 160,000 miles. The vehicle is still safe for emergency use and suitable as a pool car used for the remainder of the Community Tobacco Officer Grant position (ending June 2023); therefore, the Police Department requests this vehicle remain in the fleet as a pool car for one year or until the repairs exceed the costs of regular maintenance. The vehicle will be sent to auction or salvage upon the need for repair beyond normal maintenance.

2. 2014 Honda Accord- Vehicle # 310 (99,318 miles)
The 2014 Honda Accord is due for replacement to ensure the safety and reliability of our unmarked police vehicle fleet. The Honda Accord will be replaced with a 2023 Toyota Sienna. The Honda Accord has a high number of engine hours equating to the vehicle having over 200,000 miles. The Honda Accord is still safe for emergency use and suitable as a pool car, temporarily assigned to the Psychiatric Emergency Response Team (aka mental health clinician) position; therefore, the Police Department requests this vehicle remain in the fleet for one year or until the repairs exceed the costs of regular maintenance. The vehicle will be sent to auction or salvage upon the need for repair beyond normal

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10 maintenance.

The Police Department recommends the purchase of the Toyota Tacoma,Toyota Sienna, and Ford Explorer through a third party, Priority 1 Public Safety Equipment Installation Inc. Priority 1 Public Safety Equipment Installation Inc. will, in turn, purchase the two Toyotas through the state governmental competitive bid contract from San Fransico Toyota pursuant to Morgan Hill Municipal Code ("MHMC") Sections

3.04.150(2) and 3.04.180 as the fleet price obtained by (Contract#: 120716-NAF) competitive bid contract. The Ford Explorer will be purchased through Town Ford pursuant to Morgan Hill Municipal Code ("MHMC") Sections 3.04.150(2) and 3.04.180 as the fleet price obtained by (Contract#: 72305 on-going effective date: 08/03/2017) competitive bid contract. Staff recommends consolidating the purchase through Priority 1, Inc. as the Morgan Hill Ford Store is unable to procure the Police Interceptor Ford Explorer.

This competitive bid price does not include the vehicle build-out of communication and safety equipment. The costs associated with the build-out include but are not limited to lights, sirens, control modules, police radio equipment, radio installation, and cargo boxes listed under the financial section of this report. During the build-out there are inevitably some changes and adjustments that need to be made. As such, staff recommends a 10% contingency plan for each vehicle authorized to be purchased.

COMMUNITY ENGAGEMENT:

This staff report informs the community of the Police Department's Vehicle Replacement Plan. All police vehicles are outfitted with emergency communications and officer safety equipment. This is required to maintain a safe and operational fleet.

ALTERNATIVE ACTIONS:

The Council can elect to defer the purchase of the three vehicles for another year.

Should the Council choose to defer the purchase, the Police Department fleet will continue to maintain older vehicles, which will be costly. If the purchase of the Ford Explorer is deferred, the Department will not have the adequate number of safe and operational vehicles required for the patrol division with the addition of the 1FTE MultiService Officer.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The Council has previously authorized the use of Priority 1, Inc. for the purchase and build-out of police vehicles from 2016 through 2021.

FISCAL AND RESOURCE IMPACT:

The total price of the Toyota Tacoma is $50,439, and the Toyota Sienna is $55,388.

The cost for the two vehicles will be $105,827. Staff recommends a 10% contingency for the total authorized purchase price of $116,409. The breakdown of costs for each vehicle is below.

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10 Purchase and Build-out Cost
Toyota Tacoma $41,372
Emergency System Build-out$4,868
Sales Tax $4,199
Purchase and Build-out Cost
Toyota Sienna $45,705
Emergency System Build-out $5,091
Sales Tax $4,592
The total price for the MSO Ford Explorer is $89,487. The breakdown of costs is below.

It should be noted that the funds for purchasing the new Ford Explorer were appropriated in the 2022-2023 fiscal year budget. Staff recommends a 10% contingency for the total authorized purchase price of $98,435.

Purchase and Build-out Cost
Ford Explorer $52,580
Emergency System Build-out$29,446
Sales Tax $7,460
The total cost for the police radio equipment from Motorola is $25,611. This cost includes all of the police radio equipment for all three vehicles.

The Police Department's Vehicle Replacement Fund (VRF) has sufficient funds for the purchase and build-out of the Toyota Tacoma and Toyota Siena. The Public Safety Facilities Impact Fund has sufficient funds for the purchase and build-out of the Ford Explorer.

CEQA (California Environmental Quality Act):

Not a Project,
Continuing administrative activities, such as purchases of supplies and equipment, is not a project subject to environmental review.

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Estimate
Date
8/12/2022
Estimate #
3299
Name / Address
City of Morgan Hill
100 Edes Ct
Morgan Hill, CA 95037
Attention
Captain Ramirez
Priority 1 Public Safety
Equipment Installation Inc.
425 Harbor Blvd. #6
Belmont, CA 94002-4048
TEL: (650) 654-9900
FAX: (650) 654-9947
Vehicle#
Tacoma
Terms
Net 30
Rep
Marc
Total
Subtotal
Sales Tax (9.125%)
Item Description Qty Total
7570E 2022 Toyota Tacoma SR5, 4X4, Double Cab, V6 Engine, 6-Speed Transmission, 6-FT Bed, All Weather Floor Liners, Blackout Emblem Overlay, Bed Lighting Kit, Cast Aluminum Running Boards. Magnetic Gray Metallic with Cement Gray Cloth Interior
1 41,372.00T
PRI-KIT Wire harness-Relays, diodes, connectors, hardware etc. 1 300.00T 5046 Blue Sea 8 gsng fuse block 1 36.00T
EMPS2STS3R Sound Off Mpower red stud mount (windshield) 1 115.00T EMPS2STS3B Sound Off Mpower blue stud mount (windshield) 1 115.00T PMP2WSSSB Window shroud kit for Mpowers 2 36.00T
IONR Whelen ION series universal light head (grille & rear window, smoked)
2 270.00T
IONB Whelen ION Series universal light head (grille & rear window, smoked)
2 270.00T
2150A Whelen headlight flasher 1 60.00T
ELUC3H010 R Sound Off Hide-a-Way L.E.D, RED (taillight) 2 170.00T ELUC3H010 B Sound Off Hide-a-Way L.E.D, BLUE (taillight) 2 170.00T Tint Tint front door windows and top of windshield) 1 225.00 MB8U RG58 Coax antenna cable. 1 17.00T
CMUHF58 Mini UHF antenna connector. 1 5.50T
BETA112R Whelen Beta remote siren amp 1 265.00T
C3100U Code 3 100w siren speaker with universal mounting bracket 1 200.00T Toggle On / off toggle switch. 3 25.50T
MMSU1 Magnetic mic clip kit. 1 33.00T

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$50,438.87
$46,240.00
$4,198.87

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Estimate
Date
8/16/2022
Estimate #
3304
Name / Address
City of Morgan Hill
100 Edes Ct
Morgan Hill, CA 95037
Attention
Captain Ramirez
Priority 1 Public Safety
Equipment Installation Inc.
425 Harbor Blvd. #6
Belmont, CA 94002-4048
TEL: (650) 654-9900
FAX: (650) 654-9947
Vehicle#
Sienna Mini Van
Terms
Net 30
Rep
Marc
Total
Subtotal
Sales Tax (9.125%)
Item Description Qty Total
Sienna KLE 2022 Toyota Sienna XLE Mini Van, AWD 2.5-Liter-Hybrid, ECVT 7 Passenger Van, Predawn grey with graphite embassed softex and all weather floor liner
1 45,705.00T
PRI-KIT Wire harness-Relays, diodes, connectors, hardware etc. 1 300.00T 5046 Blue Sea 8 gsng fuse block 1 36.00T
EMPS2STS3R Sound Off Mpower red stud mount (windshield) 1 115.00T EMPS2STS3B Sound Off Mpower blue stud mount (windshield) 1 115.00T PMP2WSSSB Window shroud kit for Mpowers 2 36.00T
IONR Whelen ION series universal light head (grille / rear window) 2 270.00T IONB Whelen ION Series universal light head (grille / rear window) 2 270.00T 2150A Whelen headlight flasher 1 52.26T
ELUC3H010 R Sound Off Hide-a-Way L.E.D, RED (taillights) 2 170.00T ELUC3H010 B Sound Off Hide-a-Way L.E.D, BLUE (taillights) 2 170.00T Tint Tint all windows and windshield tint strip 1 475.00 MB8U RG58 Coax antenna cable. 1 16.10T
CMUHF58 Mini UHF antenna connector. 1 5.50T
BETA112R Whelen Beta remote siren amp with PA functions. PA sold seperate.
1 265.00T
C3100U Code 3 100w siren speaker with universal mounting bracket 1 181.65T Toggle On / off toggle switch. 3 25.50T
MMSU1 Magnetic mic clip kit. 1 33.00T
Labor Install and wire emergency equipment 1 2,500.00T
Freight Freight 1 55.00T
$55,387.80
$50,796.01
$4,591.79

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27.1.20 27 Circuit Power Distribution Center 1 730.00T
Z3 Code 3 Z3 siren controller 1 862.50T
C3100U Code 3 100w siren speaker with universal mounting bracket 1 181.65T 21TRPL47MC Code 3 21TR Multi-Color Red/Wht driver side and Blue/Wht passenger side and Red/Amber and Blue/Amber arrowstick
1 2,100.00T
BK2019ITU20 Setina Aluminum Pushbumper for 2020-2023 Police Interceptor Utility with Red/Blue/White Whelen ION LED's.
1 985.00T
FK0400ITU20 Setina Fender Wraps for PB400 Pushbumpers for 2020 Poilce Interceptor Utility
1 565.95T
MCRNTA Whelen micro ion for factory grill on Utility. Amber 2 310.00T VTX609A Whelen Vertex Hide-a-way LED, Amber 2 230.00T
VTX609R Whelen Vertex Hide-a-way super L.E.D, Red 1 115.00T VTX609B Whelen Vertex Hide-a-way super L.E.D, Blue 1 115.00T ent2b3 A Sound Off half dome intersector light 2 320.00T

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Estimate
Date
9/6/2022
Estimate #
3298
Name / Address
City of Morgan Hill
100 Edes Ct
Morgan Hill, CA 95037
Attention
Captain Ramirez
Priority 1 Public Safety
Equipment Installation Inc.
425 Harbor Blvd. #6
Belmont, CA 94002-4048
TEL: (650) 654-9900
FAX: (650) 654-9947
Vehicle#
2023 PIU (MSO)
Terms
Net 30
Rep
Marc
Total
Subtotal
Sales Tax (9.125%)
Item Description Qty Total
GK10301S1USSCA T-Rail dual gun mount with 1 universal and 1 shotgun. With handcuff key override
1 420.00T
PK0374ITU20TM Setina #6VS RP Coated Polycarbonate, Recessed Panel Partition (tall man)
1 718.00T
WK0040ITU20 Setina Window Barrier VS 3-Piece Set, Side Windows & Rear Hatch. Rear Cardo Compartment
1 338.00T
QK0566ITU20 Setina Full Replacement Prisoner Seat with Center Pull Seatbelt System. Includes #12VS Stationary Window Polycarbonate Cargo Partition
1 1,370.00T
WK0595ITU20 Setina Window Barrier VS Polycarbonate 1 305.00T CC-UV-L-20 Troy L shaped console for Ford Utility 1 430.95T AC-INBHG 4 Inch Cup Holder 1 43.00T
L3-AP1SET Troy DC outlet plug with black caps 2 21.84T
14152532 Blue Sea dual USB socket with cover 1 33.00T
MMSU1 Magnetic mic clip kit. 2 66.00T
TM-5502UDB-UNIB-E Hinit mount for Data 911 M8 for 2021 Ford Escape. 1 602.10T ASFC-155-U2-821 Panorama flexi 152-821 meg antenna 1 67.00T C23F-1MP Panorama antenna 1 19.75T
C74-FP-6-SMAP Sharkee GPS cable SMA male 1 19.05T
APG500-Q-BL GPS Low Profile Antenna, USB Connector 1 285.00T GPSB Panorama 4 element antenna 1 203.75T
INV-FF-ELETRAY-I... False Floor with Electronics Tray W/Wings Polyurea Finish for 2020 Utility
1 890.75T
INV-FF-BIRCHBOA... Birch board for false floor 1 40.00T

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$89,486.55
$82,026.29
$7,460.26

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Billing Address:

MORGAN HILL POLICE DEPT,

CITY OF
17605 MONTEREY HWY
MORGAN HILL, CA 95037
US
Shipping Address:

MORGAN HILL POLICE DEPT,

CITY OF
16200 VINEYARD BLVD
MORGAN HILL 95037
MORGAN HILL, CA 95037
US
Quote Date:07/26/2022
Expiration Date:10/24/2022
Quote Created By:

Ian Castro
Senior Account Manager
Ian.Castro@
motorolasolutions.com
916-796-7000
End Customer:

MORGAN HILL POLICE DEPT, CITY OF
Mario Ramirez
[email protected]
+1 408 7792101
Contract: 36273 - SOURCEWELL
Payment Terms:30 NET
Line # Item Number Description Qty List Price Sale Price Ext. Sale Price APX™ 8500
1 M37TSS9PW1AN APX8500 ALL BAND MP
MOBILE
1 $5,667.00 $4,136.91 $4,136.91
1a GA09007AA ADD: OUT OF THE BOX WIFI

PROVISIONING
1 $0.00 $0.00 $0.00
1b GA00250AA ADD: WIFI/GNSS STUBBY
ANTENNA LMR240
1 $110.00 $80.30 $80.30
1c G996AS ENH: OVER THE AIR

PROVISIONING
1 $110.00 $80.30 $80.30
1d GA00580AA ADD: TDMA OPERATION 1 $495.00 $361.35 $361.35 1e GA01513AB ADD: ALL BAND MOBILE
ANTENNA (7/8/V/U)
1 $105.00 $76.65 $76.65
1f G628AC ADD: REMOTE MOUNT
CABLE 17 FT APX
2 $17.00 $12.41 $24.82
1g W20CA ADD: KEYPAD MIC GCAI APX 2 $198.00 $144.54 $289.08 1h G51AT ENH:SMARTZONE 1 $1,650.00 $1,204.50 $1,204.50
1i G78AT ENH: 3 YEAR ESSENTIAL
SVC
1 $176.00 $176.00 $176.00
DRAFT QUOTE-1829226
APX8500 Mobile Single and Dual Head
Radio
Any sales transaction following Motorola's quote is based on and subject to the terms and conditions of the valid and executed written contract between Customer and Motorola (the ""Underlying Agreement"") that authorizes Customer to purchase equipment and/or services or license software (collectively ""Products""). If no Underlying Agreement exists between Motorola and Customer, then Motorola's Standard Terms of Use and Motorola's Standard Terms and Conditions of Sales and Supply shall govern the purchase of the Products.

Motorola Solutions, Inc.: 500 West Monroe, United States - 60661 ~ #: 36-1115800

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Line # Item Number Description Qty List Price Sale Price Ext. Sale Price 1j GA00092AU ADD: APXM DUAL E5 CH 1 $627.00 $457.71 $457.71 1k GA09001AA ADD: WI-FI CAPABILITY 1 $330.00 $240.90 $240.90 1l G298AS ENH: ASTRO 25 OTAR W/

MULTIKEY
1 $814.00 $594.22 $594.22
1m B18CR ADD: AUXILIARY SPKR 7.5

WATT APX
2 $66.00 $48.18 $96.36
1n G843AH ADD: AES ENCRYPTION AND
ADP
1 $523.00 $381.79 $381.79
1o G444AH ADD: APX CONTROL HEAD

SOFTWARE
1 $0.00 $0.00 $0.00
1p G67EH ADD: REMOTE MOUNT E5 MP 1 $327.00 $238.71 $238.71 1q GA01517AA DEL: NO J600 ADAPTER

CABLE NEEDED
1 $0.00 $0.00 $0.00
1r G806BL ENH: ASTRO DIGITAL CAI OP
APX
1 $567.00 $413.91 $413.91
1s GA01670AA ADD: APX E5 CONTROL
HEAD
1 $717.00 $523.41 $523.41
1t GA01630AA ADD: SMARTCONNECT 1 $0.00 $0.00 $0.00
1u G361AH ENH: P25 TRUNKING

SOFTWARE APX
1 $330.00 $240.90 $240.90
1v GA05508AA DEL: DELETE VHF BAND 1 -$800.00 -$584.00 -$584.00 1w GA05509AA DEL: DELETE UHF BAND 1 -$800.00 -$584.00 -$584.00 2 GLN7278C ACCESSORY KIT,PTT

FOOTSWITCH
1 $85.32 $68.25 $68.25
3 RMN5054B SMART VISOR MIC 1 $64.80 $51.83 $51.83
APX™ 8500
4 M37TSS9PW1AN APX8500 ALL BAND MP
MOBILE
1 $5,667.00 $4,136.91 $4,136.91
4a G90AC ADD: NO MICROPHONE

NEEDED APX
1 $0.00 $0.00 $0.00
4b GA09007AA ADD: OUT OF THE BOX WIFI

PROVISIONING
1 $0.00 $0.00 $0.00
4c G996AS ENH: OVER THE AIR

PROVISIONING
1 $110.00 $80.30 $80.30
DRAFT QUOTE-1829226
APX8500 Mobile Single and Dual Head
Radio
Any sales transaction following Motorola's quote is based on and subject to the terms and conditions of the valid and executed written contract between Customer and Motorola (the ""Underlying Agreement"") that authorizes Customer to purchase equipment and/or services or license software (collectively ""Products""). If no Underlying Agreement exists between Motorola and Customer, then Motorola's Standard Terms of Use and Motorola's Standard Terms and Conditions of Sales and Supply shall govern the purchase of the Products.

Motorola Solutions, Inc.: 500 West Monroe, United States - 60661 ~ #: 36-1115800

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Line # Item Number Description Qty List Price Sale Price Ext. Sale Price 4d G72AD ADD: APX O3 HANDHELD CH 1 $1,041.00 $759.93 $759.93 4e G67DE ADD: REMOTE MOUNT 03 MP 1 $327.00 $238.71 $238.71 4f GA00580AA ADD: TDMA OPERATION 1 $495.00 $361.35 $361.35 4g GA01513AB ADD: ALL BAND MOBILE
ANTENNA (7/8/V/U)
1 $105.00 $76.65 $76.65
4h G235AC ADD: PTT FOOTSWITCH APX 1 $56.00 $40.88 $40.88 4i G51AT ENH:SMARTZONE 1 $1,650.00 $1,204.50 $1,204.50
4j W872AB ADD: MIC VISOR STD APX 1 $33.00 $24.09 $24.09 4k G78AT ENH: 3 YEAR ESSENTIAL
SVC
1 $176.00 $176.00 $176.00
4l GA09001AA ADD: WI-FI CAPABILITY 1 $330.00 $240.90 $240.90 4m G298AS ENH: ASTRO 25 OTAR W/

MULTIKEY
1 $814.00 $594.22 $594.22
4n B18CR ADD: AUXILIARY SPKR 7.5

WATT APX
1 $66.00 $48.18 $48.18
4o G843AH ADD: AES ENCRYPTION AND
ADP
1 $523.00 $381.79 $381.79
4p G444AH ADD: APX CONTROL HEAD

SOFTWARE
1 $0.00 $0.00 $0.00
4q GA01517AA DEL: NO J600 ADAPTER

CABLE NEEDED
1 $0.00 $0.00 $0.00
4r G806BL ENH: ASTRO DIGITAL CAI OP
APX
1 $567.00 $413.91 $413.91
4s GA01630AA ADD: SMARTCONNECT 1 $0.00 $0.00 $0.00
4t G361AH ENH: P25 TRUNKING

SOFTWARE APX
1 $330.00 $240.90 $240.90
4u GA00250AA ADD: WIFI/GNSS STUBBY
ANTENNA LMR240
1 $110.00 $80.30 $80.30
4v GA05508AA DEL: DELETE VHF BAND 1 -$800.00 -$584.00 -$584.00 4w GA05509AA DEL: DELETE UHF BAND 1 -$800.00 -$584.00 -$584.00 APX™ 8500
5 M37TXS9PW1AN APX8500 ALL BAND HP
MOBILE
1 $6,677.00 $4,874.21 $4,874.21
DRAFT QUOTE-1829226
APX8500 Mobile Single and Dual Head
Radio
Any sales transaction following Motorola's quote is based on and subject to the terms and conditions of the valid and executed written contract between Customer and Motorola (the ""Underlying Agreement"") that authorizes Customer to purchase equipment and/or services or license software (collectively ""Products""). If no Underlying Agreement exists between Motorola and Customer, then Motorola's Standard Terms of Use and Motorola's Standard Terms and Conditions of Sales and Supply shall govern the purchase of the Products.

Motorola Solutions, Inc.: 500 West Monroe, United States - 60661 ~ #: 36-1115800

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Line # Item Number Description Qty List Price Sale Price Ext. Sale Price 5a GA09007AA ADD: OUT OF THE BOX WIFI

PROVISIONING
1 $0.00 $0.00 $0.00
5b GA00250AA ADD: WIFI/GNSS STUBBY
ANTENNA LMR240
1 $110.00 $80.30 $80.30
5c G996AS ENH: OVER THE AIR

PROVISIONING
1 $110.00 $80.30 $80.30
5d GA00580AA ADD: TDMA OPERATION 1 $495.00 $361.35 $361.35 5e GA01513AB ADD: ALL BAND MOBILE
ANTENNA (7/8/V/U)
1 $105.00 $76.65 $76.65
5f G235AC ADD: PTT FOOTSWITCH APX 1 $56.00 $40.88 $40.88 5g G51AT ENH:SMARTZONE 1 $1,650.00 $1,204.50 $1,204.50
5h W872AB ADD: MIC VISOR STD APX 1 $33.00 $24.09 $24.09 5i G78AT ENH: 3 YEAR ESSENTIAL
SVC
1 $176.00 $176.00 $176.00
5j GA05508AA DEL: DELETE VHF BAND 1 -$800.00 -$584.00 -$584.00 5k GA05509AA DEL: DELETE UHF BAND 1 -$800.00 -$584.00 -$584.00 5l GA09001AA ADD: WI-FI CAPABILITY 1 $330.00 $240.90 $240.90 5m G298AS ENH: ASTRO 25 OTAR W/

MULTIKEY
1 $814.00 $594.22 $594.22
5n G618AC ADD: REMOTE MOUNT
CABLE 10 FT APX
1 $11.00 $8.03 $8.03
5o B18CR ADD: AUXILIARY SPKR 7.5

WATT APX
1 $66.00 $48.18 $48.18
5p G843AH ADD: AES ENCRYPTION AND
ADP
1 $523.00 $381.79 $381.79
5q G444AH ADD: APX CONTROL HEAD

SOFTWARE
1 $0.00 $0.00 $0.00
5r GA01517AA DEL: NO J600 ADAPTER

CABLE NEEDED
1 $0.00 $0.00 $0.00
5s G806BL ENH: ASTRO DIGITAL CAI OP
APX
1 $567.00 $413.91 $413.91
5t GA01670AA ADD: APX E5 CONTROL
HEAD
1 $717.00 $523.41 $523.41
DRAFT QUOTE-1829226
APX8500 Mobile Single and Dual Head
Radio
Any sales transaction following Motorola's quote is based on and subject to the terms and conditions of the valid and executed written contract between Customer and Motorola (the ""Underlying Agreement"") that authorizes Customer to purchase equipment and/or services or license software (collectively ""Products""). If no Underlying Agreement exists between Motorola and Customer, then Motorola's Standard Terms of Use and Motorola's Standard Terms and Conditions of Sales and Supply shall govern the purchase of the Products.

Motorola Solutions, Inc.: 500 West Monroe, United States - 60661 ~ #: 36-1115800

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Line # Item Number Description Qty List Price Sale Price Ext. Sale Price 5u W22BA ADD: STD PALM

MICROPHONE APX
1 $79.00 $57.67 $57.67
5v GA01630AA ADD: SMARTCONNECT 1 $0.00 $0.00 $0.00
5w G361AH ENH: P25 TRUNKING

SOFTWARE APX
1 $330.00 $240.90 $240.90
Subtotal $24,760.71
Estimated Tax $782.00
Estimated Freight $68.56
Grand Total $25,611.27(USD)
Notes:

DRAFT QUOTE-1829226
APX8500 Mobile Single and Dual Head
Radio
Any sales transaction following Motorola's quote is based on and subject to the terms and conditions of the valid and executed written contract between Customer and Motorola (the ""Underlying Agreement"") that authorizes Customer to purchase equipment and/or services or license software (collectively ""Products""). If no Underlying Agreement exists between Motorola and Customer, then Motorola's Standard Terms of Use and Motorola's Standard Terms and Conditions of Sales and Supply shall govern the purchase of the Products.

Motorola Solutions, Inc.: 500 West Monroe, United States - 60661 ~ #: 36-1115800

Page 5 ends

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Purchase Order Checklist
Purchase Order Checklist
Marked as PO/ Contract/ Notice to Proceed on Company Letterhead (PO will not be processed without this)
PO Number/ Contract Number
PO Date
Vendor = Motorola Solutions, Inc.

Payment (Billing) Terms/ State Contract Number
Bill-To Name on PO must be equal to the Legal Bill-To Name Bill-To Address
Ship-To Address (If we are shipping to a MR location, it must be documented on PO) Ultimate Address (If the Ship-To address is the MR location then the Ultimate Destination address must be documented on PO )
PO Amount must be equal to or greater than Order Total
Non-Editable Format (Word/ Excel templates cannot be accepted) Bill To Contact Name & Phone # and EMAIL for customer accounts payable dept Ship To Contact Name & Phone #
Tax Exemption Status
Signatures (As required)

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11 CITY COUNCIL STAFF REPORT
MEETING DATE: September 28, 2022
PREPARED BY:

Cynthia Iwanaga, Management Analyst
APPROVED BY: City Manager

AWARD TREE MAINTENANCE SERVICE AGREEMENT

RECOMMENDATION(S)

1. Award a Maintenance Service Agreement to West Coast Arborists, Inc. for up to $652,000 ($326,000 annually for a two-year period) subject to future annual budget appropriations by the City Council; and

2. Authorize the City Manager to execute and administer the said agreement.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety
Protecting the Environment and Preserving Open Space and Agricultural Land 2022-2023 Strategic Priorities
Fiscal Sustainability
REPORT NARRATIVE:

The purpose of this report is to summarize the results of the recent Request for Proposals (RFP) process and provide the City Council with an opportunity to award a tree maintenance service agreement to West Coast Arborists, Inc. in the not-to-exceed amount of $652,000 and authorize the City Manager to execute and administer the said agreement. The City has contracted with professional arborists for many years to service trees throughout the community as the City does not have the staffing resources or equipment to perform the work internally. Services provided under this agreement include grid pruning, tree trimming for safety and clearance purposes, tree removals, emergency response services, and arborist consultation services. The new agreement would have a two-year term from October 1, 2022 to September 30, 2024, with authorization for the City Manager to execute three consecutive one-year extensions subject to future annual budget appropriations by the City Council.

As the City's current maintenance service agreement expires on September 30, 2022, the Request for Proposals (RFP) was released on June 13, 2022. Three proposals were received on July 15, 2022, from Brightview Tree Care, Kingborough Atlas Tree Surgery, Inc., and West Coast Arborists, Inc. In soliciting proposals for this agreement, the City

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11 advertised in the Morgan Hill Times on June 10, 2022 and June 17, 2022. The RFP was posted on the City of Morgan Hill website, Public Purchase Online Plan Service, and the Builders' Exchange of Santa Clara County. Contractors registered on the City's Informal Bidders List with the required Contractor State Licensing Board (CSLB) license Class C27 (Landscape Contractor) were also notified of the RFP. The RFP may be viewed on the City website via the following link: https://www.morganhill.ca.gov/bids.aspx?bidID=395 The proposals were reviewed in a two-step process. Proposals were first evaluated based on narrative responses to questions. They were scored for previous work experience, work quality, references, staff qualifications, and communication systems.

There were 60 points available for the narrative responses to questions. Proposals receiving a minimum 45 out of 60 points were then evaluated based on weighted averages for each firm's pricing for grid pruning, average tree trimming unit pricing, tree and stump removal, tree planting, arborist's hourly rate, tree watering, average crew rental rates, and cost to spread mulch per square foot. All three contractors received the minimum 45 points in the narrative section and their cost schedules were then evaluated in the second step of the review process. Attached is the scoring summary (Attachment 1).

Based on the narrative responses and the weighted cost proposals scoring, West Coast Arborists, Inc. is the qualified bidder with the highest scoring narrative and lowest cost proposal. West Coast Arborists, Inc. has over 50 years of experience providing professional tree maintenance services to more than 330 municipalities and public agencies in California and Arizona. Prior to the City's current tree maintenance contract, West Coast Arborists, Inc. provided tree maintenance services to the City of Morgan Hill for over 10 years.

Staff recommends the award of the tree maintenance services agreement to West Coast Arborists, Inc. for the not-to-exceed amount of $652,000 for two years, which is $326,000 per year subject to future annual budget appropriations by the City Council (Attachment 2). The $326,000 annual amount includes a base amount of $226,000 for scheduled services and up to $100,000 in extra services related to emergencies and capital projects, like sidewalk repairs, that also require these services.

COMMUNITY ENGAGEMENT:

Inform
As tree maintenance services are a regular and expected City service, no efforts were made to inform the community about this proposed agreement. The actual tree maintenance work resulting from this agreement is shared via City communication tools, including "The Scoop," a weekly maintenance update on the City website and various social media channels. Signs will be posted when tree maintenance services are performed that will affect or impair access to the street or public sidewalks.

ALTERNATIVE ACTIONS:

An alternative action would be to not approve this agreement or to modify the approval

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11 in some way. This is not recommended as it would jeopardize ongoing tree maintenance and safety.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The Council has previously approved agreements for tree maintenance services. The City Council awarded the current tree maintenance service agreement to A Plus Tree, Inc. on September 23, 2020.

FISCAL AND RESOURCE IMPACT:

The funding for tree maintenance services is included in many areas of the City's operating budget (Fund 010) including Street Maintenance, Park Maintenance, Downtown Maintenance, as well as Landscape Assessment Districts and various Capital Improvement projects.

CEQA (California Environmental Quality Act):

Categorical Exemption
The activities described in this Staff Report are categorically exempt under CEQA, specifically pursuant to Section 15301 (c) of the CEQA Guidleines (Existing Facilities), as the subject work involves the repair, maintenance or minor alteration of existing City facilities involving negligible or no expansion of use of those facilities.

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Morgan Hill: 2022 Tree Maintenance Narrative and Cost Pricing RFP#: CSD2022-023 NARRATIVE SCORING NARRATIVE SCORING (60 points)
Points
Available Brightview
Kingborough
Atlas Tree
West Coast
Arborists

20.00 17.33 16.67 19.33

15.00 9.00 12.00 14.67

10.00 7.00 7.33 9.33

15.00 12.33 10.33 14.50

60.00 45.67 46.33 57.83
COST PRICING COST PRICING SCORING (40 points)
Item

Lowest
Bidder Brightview
Kingborough
Atlas Tree
West Coast
Arborists
Points
Available Brightview
Kingborough
Atlas Tree
West Coast
Arborists

1. Grid and Park Pruning Price 94.00 120.00 385.00 94.00 36.50% 14.60 11.44 3.56 14.60 2A. to 2E.

Average Trim Price 215.00 276.00 215.00 218.00 17.00% 6.80 5.30 6.80 6.71 3A. To 3B.

Average Tree Removal Price 45.00 137.00 121.50 45.00 20.00% 8.00 2.63 2.96 8.00

4. Stump Removal 8.00 8.00 15.00 18.00 1.00% 0.40 0.40 0.21 0.18 5A. To 5C.

Average Tree Planting Price 356.67 416.67 461.67 356.67 1.00% 0.40 0.34 0.31 0.40

6. Evaluation by Certified Arborist 119.00 175.00 250.00 119.00 2.50% 1.00 0.68 0.48 1.00

7. Tree Watering 500.00 1,000.00 1,200.00 500.00 1.00% 0.40 0.20 0.17 0.40

8. Average Crew Rental Price 330.00 355.50 480.00 330.00 20.00% 8.00 7.43 5.50 8.00

9. Cost to Spread Arbor Mulch per
Square Foot 2.00 2.00 45.00 4.00 1.0% 0.40 0.40 0.02 0.20 100% 40.00 28.41 19.99 39.28
100.00 74.08 66.33 97.12
2 3 1
Section 1: Previous Experience providing superior levels of tree maintenance service to like-sized public and/or private agencies
Section 2: Assessments of work quality, performance and working relationships by current and recent clients indicating high levels of satisfaction and effectiveness
Section 3: Qualifications of staff to be assigned to provide tree maintenance services to the City Section 4: Well organized communication systems and electronic reporting capabilities

SUBTOTAL- NARRATIVE POINTS

SUBTOTAL-PRICING POINTS

GRAND TOTAL

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1 Updated: July 2022

MAINTENANCE SERVICE AGREEMENT
West Coast Arborists, Inc.

Tree Maintenance Services
THIS AGREEMENT is entered into and becomes effective on _______________ (Effective Date), by and between the CITY OF MORGAN HILL, a municipal corporation, ("CITY"), and West Coast Arborists, Inc. a California corporation ("SERVICE PROVIDER") hereinafter referred to collectively as “Parties.” In consideration of the promises and the mutual covenants contained in this Agreement, the Parties agree as follows:

1. City Authority. This Agreement is entered into pursuant to the action of the Morgan Hill City Council taken on ___________, ____, 20___.

2. Term of Agreement. This Agreement shall cover services rendered from the Effective Date of this Agreement until September 30, 2024 at which time SERVICE PROVIDER’S services shall be completed. The City Manager is authorized to extend the term of this Agreement for a maximum of three one-year extensions. Any such extension shall be in writing and signed by both Parties to this Agreement.

3. Scope of Service. The services to be performed by SERVICE PROVIDER shall be tree maintenance services as further described in Exhibit A.

4. Compensation. SERVICE PROVIDER shall be compensated as follows:

4.1. Amount. $652,000.00. Total compensation to SERVICE PROVIDER under this Agreement during its initial term set forth in Section 2 above shall not exceed Six Hundred Fifty-Two Thousand dollars and shall be billed based on the rate and basis set forth in Exhibit B. If the City Manager extends the term of this Agreement pursuant to the provisions of Section 2 above, the City Manager shall have the authority to increase the maximum compensation allowed to be paid to SERVICE PROVIDER during that extended term period, so long as City Council has appropriated sufficient funds therefor, the Parties mutually agree to such amount in a writing signed by both Parties to this Agreement and provided further that in no event shall such maximum compensation allowed for each subsequent extended one-year term exceed 105% of the maximum compensation allowed to be paid to SERVICE PROVIDER for one year of service during the immediately preceding prior year of service.

4.2. Billing. SERVICE PROVIDER shall provide CITY with an invoice containing the dated, detailed, and itemized descriptions of all services performed and expenses incurred (if such expenses are reimbursable pursuant to Exhibit B) by SERVICE PROVIDER on a monthly basis unless otherwise specified in Exhibit B. All invoices shall be sent to the CITY addressed to the department head or project manager identified below in Section 14 Notices. Payment will be made to SERVICE PROVIDER within thirty (30) days of receipt of invoice by CITY. Any rate charged shall be prorated where services are interrupted or not provided for any rate period (for example, any monthly rate charge should be prorated when services were interrupted or provided for only part of the month). For services billed on an hourly rate, the minimum unit of billed time shall not exceed one tenth of one hour. CITY shall pay for services and expenses (if so provided in Exhibit B) up to the limit of compensation set forth above, that in the CITY’S judgment were necessary and reasonable. Services for work performed and expenses incurred in

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2 Updated: July 2022
excess of the total compensation set forth in paragraph 4.1 above shall be at no cost to CITY.

5. Termination. CITY or SERVICE PROVIDER shall have the right to terminate this Agreement, without cause, by giving thirty (30) days' written notice or less under urgent circumstances. Upon such termination, SERVICE PROVIDER shall submit to CITY an itemized statement of services performed for which compensation has not been paid. CITY may require SERVICE PROVIDER to complete certain work product or documents and SERVICE PROVIDER shall deliver to CITY all documents in its possession without additional compensation to SERVICE PROVIDER. The City Manager is authorized to terminate this Agreement, in whole or in part, on behalf of CITY.

5.1. Non-Appropriations. Notwithstanding anything contained in this Agreement to the contrary, if insufficient funds are appropriated, or funds are otherwise unavailable in the budget for CITY for any reason whatsoever in any fiscal year, for payments due under this Agreement, CITY will immediately notify SERVICE PROVIDER of such occurrence, and this Agreement shall terminate after the last day during the fiscal year for which appropriations shall have been budgeted for CITY or are otherwise available for payments.

5.2. Temporary Suspension of Services. CITY’S need for services may be suspended due to unforeseeable or unavoidable circumstances beyond its control. Such circumstances include, but are not limited to, earthquake, fire, explosion, flood, or other natural catastrophe; governmental legislation, condemnation, acts, orders, or regulation; war or acts of terrorism; strikes or labor difficulties; and quarantine, epidemic, or pandemic.

CITY shall provide a 5-days’ written notice or less under urgent circumstances to temporarily suspend services at specific CITY facilities. CITY reserves the right to request which CITY facilities are to be serviced or not serviced due to unforeseeable or unavoidable circumstances; and the level of service at each CITY facility. Upon suspension, SERVICE PROVIDER shall submit to CITY an itemized statement of services performed for which compensation has not been paid up to the date of the suspension. No further payments will be made for services provided after the date of the suspension. CITY shall provide 5 days’ written notice when the circumstances for the suspension of specific facilities’ services are removed for SERVICE PROVIDER to commence providing services.

6. Performance of Work. SERVICE PROVIDER represents that it is qualified by virtue of experience, training, education, and expertise to accomplish these services. Services shall be performed by SERVICE PROVIDER in accordance with professional practices in a manner consistent with a level of care, competence and skill exercised by qualified members of SERVICE PROVIDER’S profession. By delivery of completed work, SERVICE PROVIDER certifies that the work conforms to the requirements of this Agreement and all applicable federal, state, and local laws. SERVICE PROVIDER is liable for any property damage caused by SERVICE PROVIDER or its Subcontractors during performance of the services and shall notify the CITY of damage within 24 hours of the occurrence. SERVICE PROVIDER must promptly repair or replace any real or personal property damage, and must promptly restore the property to its original or intended condition. CITY may repair or replace the real or personal property damage if SERVICE PROVIDER fails to do so, and the cost of the repairs or replacement may be deducted or offset from any compensation due to SERVICE PROVIDER.

6.1. Schedule. SERVICE PROVIDER shall perform all work and services under this Agreement in conformance with the time schedule set forth on Exhibit C, "Schedule of

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3 Updated: July 2022
Performance," attached hereto and incorporated herein by this reference. The City Manager is authorized on behalf of CITY to modify the timeframes set forth on the Schedule of Performance within the term of this Agreement.

6.2. Storage of Service Provider’s Equipment. If SERVICE PROVIDER desires to leave or store any of SERVICE PROVIDER'S equipment at a CITY site while SERVICE PROVIDER is performing work or service pursuant to this Agreement, SERVICE PROVIDER will first obtain the consent of the City Manager, or his/her delegate, to do so, and any such storage shall occur only in the manner and location allowed by such CITY official and entirely at SERVICE PROVIDER'S sole risk.

7. Hazardous Materials. Without limiting any other requirement or obligation of SERVICE PROVIDER under this Agreement, if SERVICE PROVIDER needs to use any material or chemical considered to be a hazardous material under any federal, state, or local law, regulation or policy, SERVICE PROVIDER agrees to fully and timely abide by and comply with all laws, regulations and policies pertaining to the use, transport, removal, handling, disposal, or other activity related to any and all such materials or chemicals. Prior to commencement of work or services under this Agreement, SERVICE PROVIDER shall provide CITY with a complete list of the hazardous materials SERVICE PROVIDER reasonably anticipates it may need to use to provide the services of SERVICE PROVIDER under this Agreement, together with the reasonably anticipated quantities thereof, if requested by CITY.

8. Insurance Requirements. SERVICE PROVIDER shall procure and provide proof of the insurance coverage required by this section in the form of certificates and endorsements. The required insurance must cover the activities of SERVICE PROVIDER, including its subcontractors, employees, and agents, relating to, or arising from, the performance of any work or service under this Agreement, and must remain in full force and effect at all times during the period covered by this Agreement. The coverages may be arranged under a single policy for the full limits required or by a combination of underlying policies with the balance provided by excess or “umbrella” policies, provided each such policy complies with the requirements set forth herein. Any deductibles or self-insured retentions must be declared to and approved by City. SERVICE PROVIDER further understands that CITY reserves the right to modify the insurance requirements set forth herein, with thirty (30) days’ notice provided to SERVICE PROVIDER, at any time as deemed necessary to protect the interests of CITY.

8.1. Insurance Types and Amounts.

8.1.1. Commercial General Liability (CGL). SERVICE PROVIDER shall maintain CGL against claims and liabilities for personal injury, death, or property damage providing protection in the minimum amount of: (i) one million dollars ($1,000,000.00) combined single limit for any one accident or occurrence, or (ii) the maximum amount of such insurance available to SERVICE PROVIDER under SERVICE PROVIDER’S combined insurance policies (including any excess or “umbrella” policies), whichever is greater.

8.1.2. Automobile Liability. SERVICE PROVIDER shall maintain Automobile Liability covering all owned, non-owned and hired automobiles (if SERVICE PROVIDER does not own automobiles, then SERVICE PROVIDER shall maintain Hired/Nonowned Automobile Liability) against claims and liabilities for personal injury, death, or property damage providing protection in the minimum amount of: (i) one million dollars ($1,000,000.00) combined single limit for any one accident or occurrence, or (ii) the maximum amount of such insurance available to SERVICE

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4 Updated: July 2022
PROVIDER under SERVICE PROVIDER'S combined insurance policies (including any excess or “umbrella” policies), whichever is greater.

8.1.3. Workers’ Compensation Insurance and Employer’s Liability. SERVICE PROVIDER shall maintain Workers Compensation coverage, as required by law, in the minimum amount of: (i) one million dollars ($1,000,000.00) for any one accident or occurrence, or (ii) the maximum amount of such insurance available to SERVICE PROVIDER under SERVICE PROVIDER'S combined insurance policies (including any excess or “umbrella” policies), whichever is greater. If SERVICE PROVIDER is self-insured, SERVICE PROVIDER shall provide its Certificate of Permission to Self-Insure, duly authorized by the Department of Industrial Relations.

8.1.4. Pollution (Environmental) Liability. If the performance of SERVICE PROVIDER’S work or service under this Agreement involves hazardous materials, contaminated soil disposal, and/or a risk of accidental release of fuel oil, chemicals or other toxic gases or hazardous materials, SERVICE PROVIDER shall procure and maintain Pollution Liability covering the SERVICE PROVIDER’S liability for bodily injury, property damage and environmental damage resulting from pollution and related cleanup costs arising out of the work or services to be performed under this Agreement. Coverage shall be provided for both work performed on site, as well as during the transport of hazardous materials. Such coverage shall be in the minimum amount of: (i) one million dollars ($1,000,000.00) for any one accident or occurrence, or (ii) the maximum amount of such insurance available to SERVICE PROVIDER under SERVICE PROVIDER'S combined insurance policies (including any excess or “umbrella” policies), whichever is greater.

8.1.5. Professional Liability.

8.1.5.1. If the performance of SERVICE PROVIDER’S work or service under this Agreement involves professional and/or technical services (examples include, but are not limited to, architects, engineers, land surveyors, and appraisers), SERVICE PROVIDER shall procure and maintain either a claims made or occurrence Errors and Omission liability insurance in the minimum amount of: (i) one million dollars ($1,000,000.00) each claim, or (ii) the maximum amount of such insurance available to SERVICE PROVIDER under SERVICE PROVIDER'S combined insurance policies (including any excess or “umbrella” policies), whichever is greater. Further, if SERVICE PROVIDER maintains a claims-made policy, SERVICE PROVIDER shall provide written evidence of such insurance to CITY for at least five (5) years after the completion of work performed under this Agreement.

8.1.5.2. If the performance of SERVICE PROVIDER’S work or service under this Agreement relates to Information Technology or related services (examples include, but are not limited to computer programmers, software designers, hardware engineers, or other systems consultants), SERVICE PROVIDER shall procure and maintain a claims made Errors and Omission liability insurance, including Cyber Liability and Data Breach, in the minimum amount of: (i) one million dollars ($1,000,000.00) each claim, or (ii) the maximum amount of such insurance available to SERVICE PROVIDER under SERVICE PROVIDER'S

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5 Updated: July 2022
combined insurance policies (including any excess or “umbrella” policies), whichever is greater.

8.1.6. Sexual Abuse/Molestation Liability (SML): If the performance of SERVICE PROVIDER'S work or service under this Agreement involves contact with minors, SERVICE PROVIDER shall procure and maintain Sexual Abuse and Molestation insurance in the minimum amount of: (i) two hundred thousand dollars ($200,000.00) each claim, or (ii) the maximum amount of such insurance available to SERVICE PROVIDER under SERVICE PROVIDER'S combined insurance policies (including any excess or “umbrella” policies), whichever is greater.

8.2. Endorsements. SERVICE PROVIDER shall provide proof of the following endorsements, listed for each policy for which endorsements are required, as outlined below:

8.2.1. General Liability and pollution liability (when pollution liability applies).

8.2.1.1. “Additionally Insured” - The City of Morgan Hill, its elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers are named as additional insureds on a form at least as broad as ISO Form CG 20 10 for ongoing operations.

8.2.1.2. “Waiver of Rights of Subrogation” - The insurer waives the right of subrogation against the City of Morgan Hill and CITY’S elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers; and

8.2.1.3. “Primary and Non-Contributing” - Insurance shall be endorsed to be primary and non-contributory and will not seek contribution from the City’s insurance or self-insurance and shall be at least as broad as ISO Form CG 20

01. 8.2.2. Workers Compensation.

If the performance of SERVICE PROVIDER’S work or service under this Agreement involves access to or activity on any property or premises owned or occupied by the CITY, including, but not limited to, SERVICE PROVIDER’S presence during site visits and meetings, then insurer waives the right of subrogation against the City of Morgan Hill and the CITY’S elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers.

8.3. Qualification of Insurers. All insurance required pursuant to this Agreement must be issued by a company licensed and admitted, or otherwise legally authorized to carry out insurance business in the State of California, and each insurer must have a current A.M.

Best's financial strength rating of “A” or better and a financial size rating of “VII” or better.

8.4. Certificates. SERVICE PROVIDER shall furnish CITY with copies of all certificates as outlined herein, whether new or modified, promptly upon receipt. In the event of a claim or legal action, SERVICE PROVIDER shall promptly furnish CITY of Morgan Hill with copies of all policies outlined herein. No policy subject to SERVICE PROVIDER’S agreement with CITY shall be canceled or materially changed except after thirty (30) days' notice by the insurer to CITY. A "material change" is a change that results in nonPage 209 of 284 6 Updated: July 2022
compliance with any insurance requirements in this section 8. Certificates, including renewal certificates, may be mailed electronically to [email protected] or delivered to the Certificate Holder address provided herein.

Certificate Holder address:

City of Morgan Hill
Attn: Risk Management
17575 Peak Avenue
Morgan Hill, CA 95037

9. Non-Liability of Officials and Employees of CITY. No official or employee of CITY shall be personally liable for any default or liability under this Agreement.

10. Compliance with Law.

10.1. SERVICE PROVIDER and its officers, employees, agents, and subcontractors shall comply with all applicable laws, ordinances, administrative regulations, and permitting requirements in carrying out their obligations under this Agreement. SERVICE PROVIDER and its officers, employees, agents, and subcontractors covenant there shall be no discrimination based upon race, color, creed, religion, gender, marital status, age, sexual orientation, national origin, mental disability, physical disability, medical condition, or ancestry, in any activity pursuant to this Agreement.

10.2. Without limiting the provisions of Section 10.1 above, each worker performing work under this Agreement shall be paid at a rate not less than the prevailing wage as defined in Sections 1771 and 1774 of the Labor Code. The prevailing wage rates are available online at http://www.dir.ca.gov/dlsr. SERVICE PROVIDER shall post a copy of the applicable prevailing rates at the Worksite. Pursuant to Labor Code Section 1775, SERVICE PROVIDER and any Subcontractor shall forfeit to CITY as a penalty up to two hundred dollars ($200.00) for each calendar day, or portion thereof, for each worker paid less than the applicable prevailing wage rate. SERVICE PROVIDER shall also pay each worker the difference between the applicable prevailing wage rate and the amount actually paid to that worker.

10.3. DIR Registration. CITY will not accept a Bid Proposal from or enter into a contract with a SERVICE PROVIDER, without first receiving proof to the satisfaction of CITY that SERVICE PROVIDER and its subcontractors are registered with the California Department of Industrial Relations to perform public work under Labor Code Section 1725.5, subject to limited legal exceptions. Under Labor Code section 1771.4, this Agreement is subject to compliance monitoring and enforcement by the California Department of Industrial Relations.

10.4. Compliance with Wage and Hour Laws: SERVICE PROVIDER, and any subcontractor it employs to complete work under this Agreement, shall comply with all applicable federal, state, and local wage and hour laws. Applicable laws may include, but are not limited to, the Federal Fair Labor Standards Act and the California Labor Code.

Final Judgments, Decisions, and Orders: For purposes of this Section, a “final judgment, decision, or order” refers to one for which all appeals have been exhausted or the time to appeal has expired. Relevant investigatory government agencies include: the federal

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Department of Labor, the California Division of Labor Standards Enforcement, or any other governmental entity or division tasked with the investigation and enforcement of wage and hour laws.

Prior Judgments against SERVICE PROVIDER and/or its Subcontractors: BY SIGNING

THIS AGREEMENT, SERVICE PROVIDER AFFIRMS THAT IT HAS DISCLOSED ANY

FINAL JUDGMENTS, DECISIONS OR ORDERS FROM A COURT OR
INVESTIGATORY GOVERNMENT AGENCY FINDING – IN THE FIVE (5) YEARS PRIOR TO EXECUTING THIS AGREEMENT – THAT SERVICE PROVIDER OR ITS SUBCONTRACTOR(S) HAS VIOLATED ANY APPLICABLE WAGE AND HOUR LAWS.

SERVICE PROVIDER FURTHER AFFIRMS THAT IT OR ITS SUBCONTRACTOR(S) HAS SATISFIED AND COMPLIED WITH – OR HAS REACHED AGREEMENT WITH THE CITY REGARDING THE MANNER IN WHICH IT WILL SATISFY – ANY SUCH JUDGMENTS, DECISIONS OR ORDERS.

Judgments or Decisions During Term of Contract: If at any time during the term of this Agreement, a court or investigatory government agency issues a final judgment, decision or order finding that SERVICE PROVIDER or any subcontractor it employs to perform work under this Agreement has violated any applicable wage and hour law, or SERVICE PROVIDER learns of such a judgment, decision, or order that was not previously disclosed, SERVICE PROVIDER shall inform the City Attorney, no more than fifteen (15) days after the judgment, decision or order becomes final or of learning of the final judgment, decision or order. SERVICE PROVIDER and its subcontractors shall promptly satisfy and comply with any such judgment, decision, or order, and shall provide the City Attorney with documentary evidence of compliance with the final judgment, decision, or order within five (5) days of satisfying the final judgment, decision, or order. CITY reserves the right to require SERVICE PROVIDER to enter into an agreement with CITY regarding the manner in which any such final judgment, decision, or order will be satisfied.

City’s Right to Withhold Payment: Where SERVICE PROVIDER or any subcontractor it employs to perform work under this Agreement has been found in violation of any applicable wage and hour law by a final judgment, decision or order of a court or government agency, CITY reserves the right to withhold payment to SERVICE PROVIDER until such judgment, decision or order has been satisfied in full.

Material Breach: Failure to comply with any part of this Section constitutes a material breach of this Agreement. Such breach may serve as a basis for immediate termination of this Agreement and/or any other remedies available under this Agreement and/or law.

Notice to City Related to Wage Theft Prevention: Notice provided to the City Attorney as required under this Section shall be addressed to: City Attorney, City of Morgan Hill, 17575 Peak Avenue, Morgan Hill, CA 95037. The Notice provisions of this Section are separate from any other notice provisions in this Agreement and, accordingly, only notice provided to the above address satisfies the notice requirements in this Section.

11. Independent Contractor. SERVICE PROVIDER is an independent contractor and not an agent or employee of CITY.

12. Confidentiality. All data, documents, or other information received by SERVICE PROVIDER from CITY or prepared in connection with SERVICE PROVIDER’S services under this Agreement are

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deemed confidential and shall not be disclosed to any third party by SERVICE PROVIDER without prior written consent by CITY.

13. Conflict of Interest and Reporting. SERVICE PROVIDER shall at all times avoid conflict of interest or appearance of conflict of interest in performance of this Agreement.

14. Notices. All notices shall be personally delivered or mailed, via first class mail to the below listed address. These addresses shall be used for delivery of service of process. Notices shall be effective five (5) days after date of mailing, or upon date of personal delivery.

Address of SERVICE PROVIDER is as follows:

West Coast Arborists, Inc.
2200 E. Via Burton
Anaheim, CA 92806
Address of CITY is as follows:

Public Services Director
City of Morgan Hill
17575 Peak Avenue
Morgan Hill, CA 95037
with a copy to:

City Clerk
City of Morgan Hill
17575 Peak Avenue
Morgan Hill, CA 95037

15. Licenses, Permits and Fees. SERVICE PROVIDER shall obtain a City of Morgan Hill Business License, all permits and licenses to the extent required by ordinances, codes, and regulations of the federal, state, and local government.

16. Service Provider’s Proposal. If applicable, this Agreement shall include SERVICE PROVIDER'S proposal or bid which is incorporated herein. In the event of any inconsistency between the terms of the proposal and this Agreement, this Agreement shall govern.

17. Maintenance of Records.

17.1. Maintenance. SERVICE PROVIDER shall prepare, maintain, and preserve all reports and records that may be required by federal, state, and CITY rules and ordinances related to services provided under this Agreement. SERVICE PROVIDER shall maintain records for a period of at least 3 years after receipt of final payment under this Agreement. If any litigation, claim, negotiation, audit exception, or other action relating to this Agreement is pending at the end of the 3-year period, then SERVICE PROVIDER shall retain said records until such action is resolved.

17.2. Access to and Audit of Records. CITY shall have the right to examine, monitor and audit all records, documents, conditions, and activities of SERVICE PROVIDER and its subcontractors related to services under this Agreement. Pursuant to Government Code Section 8546.7, if this Agreement involves the expenditure of public funds in excess of $10,000, the Parties to this Agreement may be subject, at the request of CITY or as part of any audit of CITY, to the examination and audit of the State Auditor pertaining to matters connected with the performance of this Agreement for a period of three years after final payment under the Agreement.

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17.3. Ownership of Work Product. All documents or other information developed or received by SERVICE PROVIDER for work performed under this Agreement shall be the property of CITY. SERVICE PROVIDER shall provide CITY with copies of these items upon demand or upon termination of this Agreement.

18. Familiarity with Work. By executing this Agreement, SERVICE PROVIDER represents that:
(1) it has investigated the work to be performed; (2) it has investigated the site of the work and is aware of all conditions there; and (3) it understands the difficulties and restrictions of the work under this Agreement. Should SERVICE PROVIDER discover any conditions materially differing from those inherent in the work or as represented by CITY, it shall immediately inform CITY and shall not proceed, except at SERVICE PROVIDER'S risk, until written instructions are received from CITY.

19. Time of Essence. Time is of the essence in the performance of this Agreement.

20. No Assignment. Neither this Agreement nor any portion shall be assigned by SERVICE PROVIDER, without prior written consent of CITY. Any attempted assignment not first approved by CITY shall be void and, at CITY'S option, shall terminate this Agreement effective as of the date of such attempted assignment.

21. Attorney Fees. In any legal action, dispute or arbitration arising out of or relating to this Agreement, the prevailing party shall be entitled to an award of its reasonable attorney fees, costs and expenses incurred.

22. Defense and Indemnification.

22.1. Defense and Indemnification. SERVICE PROVIDER shall, to the fullest extent permitted by law, indemnify, defend and hold harmless CITY, its elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers (“INDEMNITEES”) from and against any and all claims, liabilities, expenses, liens, or damages of any nature, including liability for bodily injury, property damage or personal injury, and including reasonable attorneys' fees and expenses, that arise out of, pertain to, or relate to the performance of this Agreement or the failure to comply with any obligations contained in this Agreement by SERVICE PROVIDER, and/or its agents, officers, employees, subcontractors, or independent contractors (“CLAIM”).

22.2. Exceptions. SERVICE PROVIDER is not required to indemnify INDEMNITEES against liability for bodily injury, property damage or personal injury, or any other loss, damage or expense arising from the sole negligence or willful misconduct of CITY.

22.3. Not limited by insurance. The indemnity, defense and hold harmless provisions of this Agreement apply to all CLAIMS alleged against an INDEMNITEE, regardless of whether any insurance policies are applicable. Policy limits do not act as a limitation upon the amount of indemnification or defense to be provided by SERVICE PROVIDER.

22.4. Right to Offset. CITY shall have the right to offset against any compensation due SERVICE PROVIDER under this Agreement any amount due CITY from SERVICE PROVIDER as a result of SERVICE PROVIDER'S failure to pay CITY promptly any indemnification arising under this Section (22) and any amount due CITY from SERVICE PROVIDER arising from SERVICE PROVIDER'S failure either to (i) pay taxes on amounts received pursuant to this Agreement or (ii) comply with applicable workers' compensation laws.

22.5. Interpretation. This Section shall constitute an agreement or contract of indemnity, incorporating the interpretations under California Civil Code Section 2778. It is expressly

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understood and agreed that the obligation of SERVICE PROVIDER to indemnify the INDEMNITEE shall be as broad and inclusive as permitted by the laws of the State of California and shall survive termination of this Agreement.

23. Entire Agreement; Modification; Conflicting Provisions. This Agreement constitutes the entire Agreement between the Parties and supersedes any previous agreements, oral or written. This Agreement may be modified or provisions waived only by a subsequent mutual written agreement executed by CITY and SERVICE PROVIDER. If the provisions contained in the main body of this Agreement conflict with any provision contained in an exhibit to this Agreement, the provisions of the main body of this Agreement shall govern and control over any provision contained in an exhibit to this Agreement.

24. Governing Law and Venue. This Agreement shall be construed in accordance with the laws of the State of California. This Agreement was entered into and is to be performed in the County of Santa Clara. Any action or dispute arising out of this Agreement shall only be brought in Santa Clara County.

25. Interpretation. This Agreement is a negotiated document and shall be deemed to have been drafted jointly by the Parties, and no rule of construction or interpretation shall apply against any particular Party based on a contention that the Agreement was drafted by one of the Parties including, but not limited to, California Civil Code § 1654, the provisions of which are hereby waived. This Agreement shall be construed and interpreted in a neutral manner.

26. Preservation of Agreement. If any term, provision, covenant, or condition of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, the rest of the Agreement shall remain in full force and effect and shall in no way be affected or invalidated.

27. Binding Agreement. Notwithstanding the provisions of Section 20 above, this Agreement shall bind any and all successors in interest, legal representatives and/or other permitted assignees or transferees of SERVICE PROVIDER in the same manner as if those successors in interest, legal representatives or other permitted assignees or transferees had entered into this Agreement originally.

28. Electronic Signatures. Unless otherwise prohibited by law or CITY policy, the Parties agree that an electronic copy of a signed contract, or an electronically signed contract, has the same force and legal effect as a contract executed with an original ink signature. The term “electronic copy of a signed contract” refers to a transmission by facsimile, electronic mail, or other electronic means of a copy of an original signed contract in a portable document format. The term “electronically signed contract” means a contract that is executed by applying an electronic signature using technology approved by the CITY.
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Signatures are on the following page.

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EXHIBIT A

SCOPE OF SERVICES
The Service Provider shall furnish all labor, tools, equipment, materials and supervision necessary to perform safety and grid pruning, removal and planting of trees, inventory system management, watering and other arboriculture related services as described in this section, including, but not limited to the items noted below. The contract includes the maintenance of street trees within public rights-of-way, as well as within parks, open spaces, City facilities and other City properties. This contract will include approximately 9,500 trees.

All trees are required to be included in a web-based computerized tree inventory system and database that will be updated on a monthly basis after work is performed. This inventory system and database will document services performed.

Section 1: Definitions and Terms
Wherever the following terms are used, they shall be understood to mean and refer to the following:
1-1 Agency & Owner: City of Morgan Hill
1-2 Council: City Council, City of Morgan Hill
1-3 Service Provider: West Coast Arborists, Inc.
1-4 Director of Public Services: The Director of Public Services of the City of Morgan Hill or his/her designee.
1-5 Engineer: The Director of Public Services, acting either directly or through the properly authorized agents, such agents acting within the scope of the particular duties entrusted to them or his/her designee.
1-6 General: Working titles having a masculine gender, such as workman and journeyman and the pronoun he, are utilized in the specifications for the sake of brevity and are intended to refer to persons of either sex.
1-7 Grid Trimming: Grid trimming shall be the pruning (complete trim) of all trees, large and small, within the City right-of-way in a designated area or on a particular street. 1-8 Park Trimming: Park trimming shall be the pruning (complete trim) of all trees, large and small, within designated City Parks.
1-9 Right-of-Way: Parkways (between sidewalk and curb) and Medians. 1-10 Certified Arborist: International Society of Arboriculture (ISA) Certified Arborist 1-11 ISA Certified Tree Worker: International Society of Arboriculture (ISA) Certified Tree Worker

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1-12 Maintenance Manager: The Maintenance Manager of the City of Morgan Hill or his/her designee.

Section 2: Scope of Work
2-1 Scope of Work. This work shall consist of pruning street trees and park trees for traffic and pedestrian clearance, tree health, removing trees as designated, stump removal, tree planting, staking and inventory of trees as well as leaving the work site in a neat, clean, and orderly condition upon completion of the work or at the end of the day, in the area as specified in these specifications and the special provisions. The Service Provider will cease all pruning activities when the designated number of trees has been pruned. Regardless of size of the tree the price to prune will be the same for all grid and park trees. This work also includes scheduled crew pruning on a daily basis as well as emergency call outs, over and above the grid pruning. All green waste to be disposed of by the Service Provider and the cost to be included within the various bid items.

2-2 General Conditions. These general conditions which shall apply to this executed Maintenance Services Agreement. Service Provider shall also comply with the International Society of Arboriculture (ISA) Pruning Standards, latest revised edition of the Western Chapter, Standards for Nursery Stock by the American Association of Nurserymen, and the American National Standards for tree care operations.

A certified arborist must be on the Service Provider’s staff. Although a certified arborist does not have to be onsite at all times, a certified arborist must be on-call and available to answer questions as they arise.
2-3 Estimated Annual Volume of Work. The estimated base annual volume of work is $226,000 plus extra services estimated at $100,000 for a total annual contract amount of $326,000.

Section 3: Pruning Services
The average number of trees in a grid is 1,880. There are five grids in the City limits. See Exhibit 2 – City Grid Pruning Zones Map.
3-1 Types of Pruning Services.
3-1.1 Scheduled Service. The Service Provider will furnish scheduled tree pruning service (complete trim) for trees designated by the City at the execution of the agreement. After executing of the agreement, City may add or delete other trees within the specified grids or within designated parks, at the same bid price.
3-1.2 Unscheduled Service. The Service Provider will also provide, if required by the City, unscheduled tree pruning. The City will provide at least 24-hour notice for unscheduled pruning. Crew and equipment shall consist of 2 workers, 1 of which is an ISA Certified Tree Worker, truck, and chipper plus all necessary pruning tools. The City may increase or decrease the quantity of these services at the same bid price. 3-1.3 Emergency Service. The Service Provider will also respond to emergency calls for service at any and all times day or night during the term of this agreement within (3) hours of

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being notified. Crew and equipment shall consist of 2 workers, 1 of which is an ISA Certified Tree Worker, truck, and chipper, plus all necessary pruning tools. 3-2 Work Schedule. The Service Provider shall perform the activities as outlined by the Director of Public Services Tree Trimming/Maintenance Contract work schedule. Said schedule must show the dates of the expected start and completion of the various items of the contract work. During a scheduling conference between the Service Provider and the Director of Public Services or designee, the work schedule will be discussed and modified, if necessary, by mutual agreement. The Service Provider will cease all grid and park tree pruning once the designated number of trees has been pruned. 3-3 Temporary Stoppage of Tree Trimming/Maintenance Activities. The Director of Public Services shall have the authority to suspend the contract work, wholly or in part, for such a period of time as the Director may deem necessary, due to unsuitable weather, or to such other conditions as the Director considers unfavorable for the proper execution of the work, or for such time as the Director may deem necessary due to failure on the part of the Service Provider or Service Provider’s workers to carry out orders or to perform any of the requirements of the contract. The Service Provider shall immediately comply with such an order from the Director of Public Services and shall not resume operations until so ordered in writing.
3-4 Extra Work. Extra work, when requested in writing by the Director of Public Services and accepted by the Service Provider, shall be paid for under written work order in accordance with the terms therein provided. Payment for extra work will be made at the unit price or lump sum previously agreed upon between the Service Provider and the Director of Public Services.

All extra work shall be adjusted daily upon report sheets prepared for the Director of Public Services or designee, furnished by the Service Provider and signed by both parties, and said daily report shall be considered thereafter the true records of extra work done. 3-5 Authority of the Director of Public Services. The Director of Public Services shall decide any and all questions that may arise as to the quality and acceptability of materials furnished and work performed as to the manner of performance and rate of progress of the work, and any and all questions which may arise as to the interpretation of the plans and specifications. The Director of Public Services shall likewise decide any and all questions as to the acceptable fulfillment of the contract on the part of the Service Provider, and all questions as to claims and compensations. The decision of the Director of Public Services shall be final, and he shall have relative authority to enforce and make effective such decisions and actions as the Service Provider fails to carry out promptly.

For the purposes of routine and normal supervision and coordination of work the Director of Public Services is the City’s authorized representative for all work within the scope of this agreement.
3-6 Interpretation of Specifications. Should it appear that the work to be done or any matter relative thereto, is not sufficiently detailed or explained in the specifications, the Service Provider shall request the Director of Public Services for such further explanation as may be necessary, and shall conform to such explanation or interpretation as part of the contract, so far as may be consistent with the intent of the original specifications. 3-7 Removal of Defective or Unauthorized Work. It is the intent of the specifications that only first-class work, materials and workmanship will be acceptable. All work which is

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defective in its construction or deficient in any of the requirements of the specifications shall be remedied or removed and replaced by the Service Provider in an acceptable manner, and no compensation will be allowed for such correction. Any work done beyond the lines shown on the plans or established by the Director of Public Services, or any extra work done without written authority will be considered as unauthorized and will not be paid for. Upon failure on the part of the Service Provider to comply forthwith with any order of the Director of Public Services made under the provisions of this paragraph, the Director of Public Services shall have authority to cause defective work to be remedied or removed and replaced and unauthorized work to be removed and to deduct the costs thereof from any moneys due or to become due the Service Provider. Damage done to trees as a result of pruning practices not in compliance with the specifications shall result in replacement of the tree by the Service Provider with no additional compensation. A similar size tree will be provided and planted (up to 48" box).
3-8 Sound and Vibration Control Requirements. The Service Provider shall comply with all local sound control and noise level rules, regulations and ordinances. No internal combustion engine shall operate on the project without a muffler of the type recommended by the manufacturer. Should any muffler or other control device sustain damage, the Service Provider shall promptly remove the equipment and shall not return said equipment to the job until the device is repaired or replaced. Said noise and vibration level requirements shall apply to all equipment on the job or related to the job, including, but not limited to truck, transit mixers or transit equipment that may or may not be owned by the Service Provider. 3-9 Air and Water Pollution Control. Service Provider shall comply with all air pollution control rules, regulations, ordinances and statues. All containers of paint, thinner, during compound, solvent or liquid asphalt shall be labeled to indicate the contents, fully complying with the applicable material requirements. The Service Provider shall comply with the provisions of the Clean Air Act, as amended (42 W.S.C. 1957 et seq.) and the Federal Water Pollution Control Act as amended (33 U.S.C. 1251 et. Seq.) and the regulations there under (40 C.F.R. part 15).

The Service Provider shall follow the appropriate best management practices contained in the California Storm Water Best Management Practice Handbook, which is available from the Santa Clara Valley Water District Non-Point Source Program. 3-10 Cleaning up. Upon completion of the scheduled work or at the end of the day, whatever occurs first, the Service Provider shall clean all the streets and grounds occupied by Service Provider in connection with the project, of all rubbish, debris, excess material, temporary structures and equipment, leaving the entire site of the work in a neat and presentable condition.
3-11 Public Convenience and Public Safety.

A. Attention is directed to Sections 7-1.03 and 7-1.04 of the Standard Specifications and the Manual of Warning Signs, Lights and Devices for Use in Performing Work upon Highways, published by the California Department of Transportation.

Full compensation for conforming to the requirements of Sections 7-1.03 and 7-1.04 of the Standard Specifications, the above referenced Caltrans Manual and these Special Provisions not otherwise provided for, shall be considered as included in the prices paid for the various contract items of work and no additional compensation will be allowed thereof.

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B. Warning and Protection Devices: The Service Provider will be responsible for providing, placing and maintaining approved signs, barricades, pedestals, flashers, delineators, fences, barriers, arrow boards and flagmen where needed, and other necessary facilities in the vicinity of the maintenance area and where any dangerous conditions may be encountered as a result thereof, for the protection of the motoring public. The Service Provider will not be allowed to proceed with the work until such time that a sufficient number of these protection devices have been delivered to the project site. Where parked vehicles are likely to interfere with the proposed work, the Service Provider will supply and post at no less than 200' intervals on each side of the street “Temporary No Parking” signs 48 hours before the start of construction and to report the time of posting to the City’s Police Department for the purpose of establishing “Tow Away” provisions. The Service Provider shall be responsible for the removal of the temporary signs upon the completion of the Work. All signs shall be kept graffiti free at all times.

Should the Service Provider appear neglectful in furnishing warning and protection devices as outlines above, the Director of Public Services may direct attention to the existence of a hazard and the necessity of additional or different measures which shall be furnished and installed by the Service Provider at Service Provider’s own expense, free of any cost to the City. Should the Service Provider refuse or fail to act in a timely manner to correct a hazardous condition, the Director of Public Services may direct City forces to provide the necessary protective and warning devices as deemed appropriate by the Director of Public Services.

The cost accrued by the City in connection therewith will be deducted from the Service Provider’s contract payment. Any action or inaction on the part of the City in directing attention to the inadequacy of warning and protective measures or in providing additional protective warning devices shall not relieve the Service Provider from responsibility for public safety or abrogate Service Provider’s obligation to furnish and pay for these devices.

The Service Provider shall submit any and all work schedules and/or traffic control plans to the Director of Public Services for approval as needed. 3-12 Construction Yard. It shall be the Service Provider’s responsibility to locate any storage sites for materials and equipment needed and such sites either located on public or private property must be approved in advance by the Director of Public Services.

When storage sites are to be located upon private property, the Service Provider shall be required to submit to the Director of Public Services, written approval from the record owner authorizing the use of the property by the Service Provider. 3-13 Equipment Requirements. Prior to beginning of Service Provider operations, the Service Provider shall furnish a current list indicating the equipment to be used for the project.

All equipment shall be in safe and working condition. Prior to the beginning of aerial operations, the Service Provider shall furnish, at no cost to the City, current certification for all aerial devices to be used in the completion of contract operations.

If special equipment is required such as a crane or loader, it will be charged per hour or per job as long as it is consistent and detailed in the job proposal and the related invoice.

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3-14 Preservation of Property. Existing improvements in areas adjoining the property whereon tree pruning work is being performed shall be protected from injury or damage resulting from operations of the Service Provider.
3-15 Emergency Work.

A. Emergency Response - The Service Provider shall have the capability to receive and to respond immediately to calls of an emergency nature during normal working hours and during hours outside of normal working hours. Calls of an emergency nature received by the City shall be referred to the Service Provider for immediate disposition.

B. Emergency Work - In the event that emergency work is required, the Service Provider shall notify the Director of Public Services or representative by telephone in advance before any emergency work is commenced. Non-emergency maintenance work requires written approval before the work is performed.

C. Emergency Personnel - In situations involving an emergency after normal work hours, the Service Provider shall dispatch qualified personnel and equipment to reach the site within three (3) hours. Service Provider’s vehicle shall carry sufficient equipment to effect safe control of traffic. When the Service Provider arrives at the site, the Service Provider shall set up traffic warning and control devices, if deemed necessary, and proceed to accomplish the necessary work.

The Service Provider shall supply the City with name(s) and telephone number(s) of responsible person(s) representing the Service Provider for twenty-four (24) hour emergency response. The above-mentioned information shall remain current at all times. Any changes shall be forwarded to the City in writing within twelve (12) hours of any such change. Failure to maintain emergency information current shall result in a $200.00 penalty for each occurrence.

D. Service Provider’s Response - The Service Provider must maintain telephone service so that all calls from the City to the Service Provider have no toll charge. Failure to respond by telephone or in person within one (1) hour of the City’s attempt to contact the Service Provider’s representative may result in a $200.00 penalty per incident. Failure to respond at any level will subject the Service Provider to any primary or secondary costs arising from said emergencies.

E. Complaint Requests - The Service Provider must correct all complaint requests within twenty-four (24) hours. Failure to respond/correct as requested may result in termination of the contract.
3-16 Pruning Standards. All trimming/maintenance work shall be in accordance with pruning standards as established by the latest edition of the International Society of Arboriculture Western Chapter. In all cases, the Director of Public Services shall have complete and sole discretion in determining conformance and acceptability of trees trimmed by the Service Provider. Trimmed trees rejected by the Director of Public Services shall be excluded from payment and may need to be replaced per Section 3-7.

A. All trees, large and small, shall be given a complete trim by grid and park area (see specifications for “Complete Trim”). The lists for grid pruning are typically scheduled in the same geographic area, and therefore the size or need of the tree is not taken into account when generating the list. If there are small trees, or other conditions that could be an

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exception, the City could remove the tree from the list if it is brought forward to the Maintenance Manager and (s)he approves the request to remove it from the scheduled list for that year.

B. Service Provider shall comply with Standards of CAL OSHA and the American National Standard Institute Safety Requirements.

C. The Service Provider shall exercise precautions as necessary when working adjacent to aerial and subterranean utilities. In the event that aerial utility wires present a hazard to the Service Provider’s personnel or others near the work site, work is to immediately cease, and the appropriate utility company notified. Work shall then commence in accordance with instructions from the utility company. In the event that work causes excavation, Service Provider is responsible for appropriate notification of Underground Service Alert (USA).

D. No hooks, gaffs, spurs or climbers will be used by anyone employed for such trimming.

Any vine plant growing on trees shall be removed at ground level.

E. Final pruning cuts shall be made without leaving stubs. Cuts shall be made in a manner to promote fast callous growth.

F. Unless otherwise approved, trees are to be trimmed block by block, subject to the instructions of the Director of Public Services or authorized representative.

G. Service Provider shall maintain at least one (1) English speaking ISA Certified Tree Worker, on-site, at all times. The Certified Tree Worker can be either specialty, aerial or climber.

H. When trimming fungus, disease or fire blight infected limbs or fronds, all pruning tools shall be cleaned after each cut with alcohol or bleach.

I. Topping shall not be done without prior approval of the City.

J. For trees that require more than a “full trim,” for example pruning for crown reduction or crown restoration, the work will be charged through a crew rental charge (agreed upon hourly pricing prior to any work starting). It can be time and material or negotiated price for this type of service.
3-17 Specifications for Complete Trim.

A. Low branches overhanging streets shall be removed, where practical, to a minimum height above the street grade to fifteen feet (15'). Low branches overhanging sidewalks and parkway shall be removed to a minimum height of seven feet (7') and without detracting from the natural shape of the tree.

B. Shorten the length of limbs which extend beyond the natural perimeter of an otherwise symmetrical form.

C. Prune end branches to lighten end weight where such overburden appears likely to cause breakage of limbs. Remove cross limbs, water sprouts and suckers. Perform crown reduction to ISA Specifications to approximately a 25 percent reduction in total crown size.

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19 Updated: July 2022
D. All trees on which vines are growing shall have said vines removed. Vine tendrils shall be removed in a manner which will not injure trees or cause scaring of low branches and tree trunks.
3-18 Specifications for Removals
3-18.1 Specifications for Complete Tree Removal
A. Removal of entire tree, stump remaining shall be no higher than four (4) inches above soil grade and shall be removed within 24 hours after tree removal per the unit bid price contained within “Complete Tree Removal.”
B. Work shall begin within 10 days after each request and be diligently pursued until completion.

C. Service Provider shall make all arrangements necessary to have power or utility lines temporarily disconnected if necessary, for the safe removal of the tree.

D. When the removal requires special or additional means, there shall be no additional units or overall cost to the City without the authorization of the Director of Public Services. 3-18.2 Tree Stump Removal
A. Type of Work: Provide complete tree stump and surface root removal.

B. Specifications for stump and surface root removal:

1. Removal of entire stump or grinding to a depth of 12 inches below average soil grade or deeper if specified by the Director of Public Services.

2. Removal of all lateral surface roots to a depth of 8 inches (8") below grade. a) When sidewalk is present, remove all surface roots between the curb and sidewalk.
b) When no sidewalk is present, remove surface roots.
c) Backfill material shall be compacted to provide for minimal settling. It shall consist of an equal mixture of soil and stumped material which shall be three (3) inches above grade to provide for any soil settlement.
3-19 Climbing Techniques. Climbing and pruning practices should not injure the tree except for the pruning cuts.

Climbing spurs shall not be used when pruning a tree unless the branches are more than the throw-line distance apart. In such cases, the spurs should be removed once the climber is tied in.

Spurs may be used to reach an injured climber and when removing tree.

Rope injury to thin barked trees from loading out heavy limbs should be avoided by installing a block in the tree to carry the load.

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20 Updated: July 2022
3-20 Competing Plant Materials. Competing plant material or plant material clinging to trunk, such as Ivy, volunteer trees, or woody shrubs shall be removed to provide a clear area of at least 18", but not more than 24" around the trunk of the tree, and the root crown. 3-21 Tree Specifications. If applicable, each replacement tree shall be selected in accordance with the standards set forth in the American Standard for Nursery Stock. 3-22 Tree Stakes and Ties. If applicable, tree stakes shall be 3" diameter pressure treated wood poles. Tree ties shall be “VIT” twist brace ties in 18" or 24" lengths. 3-23 Disposal of Material. Excavation material determined as unsuitable fill material by the Director of Public Services shall become the property of the Service Provider and shall be legally disposed of outside the site of the work by and at the expense of the Service Provider.

The Service Provider is required to recycle all green waste material generated from its operations, unless the Director of Public Services desires the material to be stock piled.

Green waste receipts are required and are to be submitted for material. 3-24 Public Convenience. Service Provider shall perform all tree trimming/maintenance operations in such a manner as to cause as little inconvenience as possible to abutting property owners. Convenient access to driveways, houses and buildings along the line of the work shall be maintained at least each morning and evening and temporary approaches to crossings or intersecting streets shall be provided and kept in good condition. 3-25 Tree Inventory. The City has a current tree inventory, and the selected Service Provider shall ensure that the tree inventory remains up to date. Service Provider to provide, operate, and maintain a web-based computerized tree inventory system that includes an interactive map display of the tree inventory and the ability to search inventory for trees by address. City users of the system will have the ability to export data from the system into GIS shape file format and comma-separated values (.csv) or Microsoft Excel (.xlsx) file formats.

Tree data will include both tree inventory and tree work history. Data fields include tree latitude/longitude, service dates and service request information, current health of tree, tree size, crown height, diameter at breast height (DBH), botanical and common names, current value of tree and other relevant information as supplied by the City. Service Provider will not be required to perform a new tree inventory at the beginning of the contract but will instead be responsible for importing data from the current tree inventory. The City will provide the legacy tree inventory data to the vendor in comma-separated values files (.csv), GIS shape file(.shp) and Excel file (.xlsx) format to be maintained in the Service Provider’s web-based computerized tree inventory system.

The Service Provider shall update tree inventory within one month after any work is performed to reflect:
• changes in baseline data (e.g. condition, height, DBH); • current photo;
• recommended corrections; to reflect work performed
• tree removal;
• tree planting;
• pruning;
• emergency response work; and
• other related data

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21 Updated: July 2022
The system shall be capable of maintaining and displaying all past work histories and list potential future work for all tree sites in the inventory. A preferred feature of the tree inventory system is the ability to request a work order for specific trees via the web-based program. 3-26 Quality Control Program. Service Provider shall provide the City with a copy of their quality control program. This program shall address how the Service Provider will address citizen concerns; communicate with the City and Service Provider’s employees. This program shall also include the Service Provider’s methods for ensuring that work is completed in a satisfactory manner and that adequate follow-up work is accomplished. The City or its designated representative, shall at all times, have access to the work and shall be furnished with every reasonable facility for ascertaining full knowledge respecting the progress, workmanship, and character of materials and equipment used and employed in the work. 3-27 Pictures. Service Provider is to supply representative of “Before and After” trimming pictures that are suitable for reproduction when requested by the City. 3-28 Tree Planting. Service Provider to follow the guidelines as outlined in the City’s Standard Tree Planting and Staking (L-17) standards and Tree Root Barrier (L-18) standards.

There is no tree establishment period, however, there is a 90-day warranty for the workmanship and health of the nursery stock for newly planted trees. If a tree failure is a result of vandalism, trauma or irrigation failures, however, the warranty shall not apply. 3-29 Property Damage. Service Provider shall be responsible for any and all damage to public and private property including driveway, fences, plants, shrubs, irrigation, etc. Service Provider shall replace with new material or correct any damaged property to the satisfaction of the City Maintenance Manager or his/her designee. The Service Provider shall be responsible for all costs related to replacement and correction of all incidental damages that occur during the course of work and no additional compensation will be allowed.

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22 Updated: July 2022

EXHIBIT B

SCHEDULE OF COMPENSATION RATES
The breakdown of costs for the two-year tree maintenance services agreement is listed below.

Also attached is the Schedule of Compensation for the individual line items per West Coast Arborists, Inc's cost proposal dated July 15, 2022.

ITEM AMOUNT
Street Tree Maintenance and Safety Pruning $ 89,000.00
Street Tree Grid Pruning $100,000.00
Park Tree Safety Pruning $ 25,000.00
Park Tree Grid Pruning $ 12,000.00
Other Extra Services $100,000.00
TOTAL ANNUAL AMOUNT $326,000.00
TOTAL TWO-YEAR AMOUNT $652,000.00

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EXHIBIT B - Continued

SCHEDULE OF COMPENSATION RATES
WEST COAST ARBORISTS, INC.

COST PROPOSAL SCHEDULE dated July 15, 2022

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Tree Care Professionals Serving Communities Who Care About Trees www.WCAINC.com West Coast Arborists, Inc.
2200 E. Via Burton · Anaheim, California 92806 · 714.991.1900 · 800.521.3714 · Fax 714.956.3745

COOPERATIVE PURCHASING
It is intended that other public agencies (i.e., city, county, school district, special district, public authority, public agency, and other political sub-division of the State of California) and/or other City departments shall have the option to participate in any agreement created because of this Request for Proposal with the same terms and conditions as to the price of the product and/or service. The City shall incur no financial responsibility in connection with a purchase order from another public agency. Any public agency that “piggy-backs” on any negotiated contract between the City and Contractor shall accept sole responsibility for negotiating, placing orders, and making payment to Contractor. The Contractor may or may not agree to the cooperative purchasing clause. It is understood that not all terms, conditions, or scope of work from one agency contract for tree maintenance may not be fully acceptable to another agency. Agencies may modify specific items for the purpose of making the agreement acceptable and agreeable.

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23 Updated: July 2022

EXHIBIT C

SCHEDULE OF PERFORMANCE
All work shall be planned in advance on a schedule to be agreed upon by the CITY and SERVICE PROVIDER.

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12 CITY COUNCIL STAFF REPORT
MEETING DATE: September 28, 2022
PREPARED BY:

Dat Nguyen, Finance Director
APPROVED BY: City Manager
RELEASING UNCLAIMED CREDITS LESS THAN $15

RECOMMENDATION(S)
Adopt resolution to release unclaimed credits less than $15.

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

Per California Government Code Section 50055, unclaimed checks or credits of less than $15, or any amount if the depositor’s name is unknown, which remains unclaimed for more than one year may be transferred to the General Fund by authorization of the City Council. A list of unclaimed checks and credits of less than $15 and an unknown deposit, which remain unclaimed for more than one year, is provided as an attachment to the draft Resolution. The credits listed are older than one year and this action brings the matter, including all credits, up to date. As a business practice, staff send out multiple notices as well as email those that have emails on record and remind them of the existing credits.

COMMUNITY ENGAGEMENT:

Inform
This staff report serves to inform the community of the transfer to the General Fund of the unclaimed credits less than $15.

ALTERNATIVE ACTIONS:

Not Applicable
PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

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12 On July 20, 2016, the City Council adopted a resolution to release unclaimed checks or credits less than $15.

FISCAL AND RESOURCE IMPACT:

The recommended action will increase General Fund revenues by $1,189.80.

CEQA (California Environmental Quality Act):

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

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RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MORGAN HILL

RELEASING UNCLAIMED MONEY
WHEREAS, the checks and credits on the list attached as Exhibit A have been outstanding and unclaimed for more than one year; and
WHEREAS, each of the checks or credits listed on the attached list is less than $15, or for an amount in which the depositor’s name is unknown.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MORGAN HILL DOES HEREBY FIND, DETERMINE, RESOLVE AND ORDER AS FOLLOWS:

Section 1. Recitals. The City Council does hereby find, determine and resolve that all of the foregoing recitals are true and correct.

Section 2. Approval and Authorization. The unclaimed checks and credits on the list attached hereto as Exhibit A in the total amount of $1,189.80 shall be transferred to the General Fund in accordance with Section 50055 of the California Government Code.

Section 3. This Resolution shall take effect immediately upon adoption.

PASSED AND ADOPTED by the City Council of the City of Morgan Hill at its meeting held on this 28th day of September, 2022 by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

DATE: _____________________ ___________________________________ Rich Constantine, MAYOR
 CERTIFICATION 
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 Resolution No.XXXX , adopted by the City Council at the meeting held on September 28, 2022.

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

DATE: _____________________ ___________________________________ Michelle Bigelow, CITY CLERK

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Date Payee Amount Funds Held In
03/05/02 REBECCA GONZALEZ $14.95 Enterprise Funds
12/07/99 EVELYN WYCOFF $14.93 Enterprise Funds
12/01/16 VICTORIA BISHOP $14.89 Enterprise Funds
04/02/01 DOUG BAILEY $14.72 Enterprise Funds
08/13/13 DAVID POWERS $14.69 Enterprise Funds
12/21/99 GERALD & ILSE ALLEN $14.66 Enterprise Funds
08/29/14 VINEYARD OFFICE $14.50 Enterprise Funds
11/17/03 ARNOLD AGUILAR $14.36 Enterprise Funds
02/28/00 SOUTH VALLEY DEVELOPERS $14.23 Enterprise Funds 02/10/00 ROGER MALECH $14.15 Enterprise Funds
01/09/06 JARED BEAULIEU $13.93 Enterprise Funds
06/18/01 RON & MARY BEAR $13.87 Enterprise Funds
12/17/10 LUIS G MARTINEZ $13.86 Enterprise Funds
04/24/00 WARMINGTON HOMES $13.45 Enterprise Funds
03/19/03 LOURIE JENKINS $13.41 Enterprise Funds
09/10/03 KR ANDERSON INC $13.36 Enterprise Funds
01/03/00 MADERA CONSTRUCTION $13.29 Enterprise Funds
11/08/16 AKEMI GARDNER $13.21 Enterprise Funds
04/17/12 EUGENE OWENS $13.10 Enterprise Funds
10/03/16 AMRAND LABRUCHERIE $13.02 Enterprise Funds
10/03/16 ARMAND LABRUCHERIE $13.02 Enterprise Funds
07/25/16 GLENN SAMPSON $13.00 Enterprise Funds
07/21/16 TONY KWONG $12.99 Enterprise Funds
10/03/06 KELLY LONDON $12.83 Enterprise Funds
06/10/02 MICHAEL MORRIS $12.59 Enterprise Funds
03/21/12 MICHAEL SPEARS $12.53 Enterprise Funds
01/10/00 KAUFMAN & BROAD $12.50 Enterprise Funds
09/14/09 FIRST COMMUNITY BANK $12.23 Enterprise Funds
02/12/14 SARITA ALANIS $12.23 Enterprise Funds
08/06/03 HAL & JEANIE HENDRICKSON $12.18 Enterprise Funds 08/28/01 CATHLEEN WEDLAKE $12.13 Enterprise Funds
09/30/13 MICHELE MYERS $12.12 Enterprise Funds
12/04/01 DPR CONSTRUCTION $12.06 Enterprise Funds
11/06/14 DANIEL W. COLLINS $11.94 Enterprise Funds
08/28/14 STEPHEN HOUGGARD $11.86 Enterprise Funds
05/22/03 MRS W M RICHARDSON $11.75 Enterprise Funds
03/07/11 MANUEL MENDOZA $11.73 Enterprise Funds
02/05/07 EVA MESTAZ $11.58 Enterprise Funds
01/22/03 JCS CONSTRUCTION $11.46 Enterprise Funds
04/16/14 KENDRA STARLING $11.45 Enterprise Funds
10/30/01 GLEN CREEK APTS $10.85 Enterprise Funds
10/01/99 JOE & CAROLYN GIANCOLA $10.53 Enterprise Funds 12/17/03 GINA HYATT $10.13 Enterprise Funds
10/30/03 ADVANCED HAIRCUTS $9.90 Enterprise Funds
02/02/00 WARMINGTON HOMES $9.80 Enterprise Funds
Unclaimed Deposit/Credit

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EXHIBIT A

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Date Payee Amount Funds Held In
Unclaimed Deposit/Credit
07/12/11 BRENDA SCHWARZ $9.64 Enterprise Funds
05/29/01 JOEL ANDERSON $9.56 Enterprise Funds
01/30/04 ST LOUISE REGIONAL HOSPITAL $9.40 Enterprise Funds 03/06/00 WARMINGTON HOMES $9.13 Enterprise Funds
12/14/99 JOSEPH & JOLENE MUENCHOW $9.02 Enterprise Funds 05/02/06 RN NETWORK $8.79 Enterprise Funds
03/26/12 TAMMY DORAN $8.71 Enterprise Funds
12/20/99 BOB TAYLOR HOMES INC $8.70 Enterprise Funds
11/12/99 EDWARD WILT $8.58 Enterprise Funds
09/12/14 TAYLOR MORRISON $8.57 Enterprise Funds
12/17/99 MARTHA GALLEGO $8.52 Enterprise Funds
03/27/00 LISA PEREZ $8.16 Enterprise Funds
08/18/15 RAJ KHANA $8.08 Enterprise Funds
10/15/02 KATY KVARNSTROM $8.07 Enterprise Funds
02/02/11 GO RUN SPORTS $8.00 Enterprise Funds
11/30/12 JOZEPH & JANA FULJER $7.83 Enterprise Funds
12/03/01 TIM WESTMORE $7.78 Enterprise Funds
04/06/10 GLADIS LINARES $7.74 Enterprise Funds
06/25/03 NATHAN POEHLMAN $7.72 Enterprise Funds
07/09/03 RA-TEK INC. $7.67 Enterprise Funds
04/01/11 MIKE BOSSIO $7.66 Enterprise Funds
03/09/15 HECTOR GUTIERREZ $7.64 Enterprise Funds
07/21/15 NATALIE RODRIGUEZ $7.63 Enterprise Funds
12/22/05 LOS GATOS CAPTIOL $7.52 Enterprise Funds
03/17/11 STACIE WILLIAMS $7.30 Enterprise Funds
10/21/04 MARIO QUINTANILLA $7.24 Enterprise Funds
06/03/16 GILBERT&VIRGINI HORTA $7.19 Enterprise Funds
01/18/02 TAMI ROYSTON $6.99 Enterprise Funds
04/12/00 CAROL CHIODO $6.88 Enterprise Funds
06/02/10 DAVID A PAUL $6.75 Enterprise Funds
06/23/08 KELLY CHRISTIANSEN $6.66 Enterprise Funds
03/18/03 DAVID & JENNIFE QUEVEDO $6.56 Enterprise Funds 01/19/12 STACY MILEWSKY $6.31 Enterprise Funds
06/28/01 GARRETT CARLSON $6.29 Enterprise Funds
07/31/00 RRK PROPERTIES $6.17 Enterprise Funds
10/23/01 ARTHUR FERTZAIG $6.11 Enterprise Funds
12/12/02 HMS DEVELOPMENT $6.01 Enterprise Funds
01/19/16 DAN STEFFEL $6.00 Enterprise Funds
03/18/04 KENNETH CRANE $5.99 Enterprise Funds
06/28/02 FERNANDO SILVA $5.97 Enterprise Funds
12/06/99 GOOD FOOD COMPANY $5.94 Enterprise Funds
10/03/02 DANIEL BARTOLI $5.91 Enterprise Funds
07/16/01 ROLANDO & ELISA RAMIREZ $5.90 Enterprise Funds 12/13/05 ERIC MOSUNIC $5.78 Enterprise Funds
06/03/05 JUAN DELATORRE $5.70 Enterprise Funds

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Date Payee Amount Funds Held In
Unclaimed Deposit/Credit
08/01/05 ANTONIO TAVARES $5.68 Enterprise Funds
07/01/09 ERIN COCKRELL $5.62 Enterprise Funds
11/20/09 DAVID MARTIN $5.52 Enterprise Funds
09/03/09 SHERMAN HOUSE ASSOCIATES $5.45 Enterprise Funds 02/29/00 ROSEHAVEN $5.28 Enterprise Funds
05/08/06 EDWARD CONTRERAS $5.22 Enterprise Funds
02/14/14 MARIA MARTIN $5.12 Enterprise Funds
01/12/00 RA-TEK INC. $5.04 Enterprise Funds
03/05/14 DAWN WOLFE $4.92 Enterprise Funds
05/09/01 MARK BIEHL $4.90 Enterprise Funds
03/13/02 STEVE & GERRI L WISNEWSKI $4.81 Enterprise Funds 02/17/00 JERRY C HENRY $4.80 Enterprise Funds
02/18/00 WARMINGTON HOMES $4.77 Enterprise Funds
06/30/03 SHARON SHAGHOIAN $4.71 Enterprise Funds
07/28/14 GEORGE T & PATR SNOW $4.67 Enterprise Funds
04/05/02 JIM & ADELE CHURCH $4.51 Enterprise Funds
03/15/02 RICK BEARDEN $4.41 Enterprise Funds
01/06/00 PACIFIC OAK PROPERTIES $4.32 Enterprise Funds
07/30/02 BURNHAM / MCFARLAND $4.21 Enterprise Funds
12/03/99 FMA DEVELOPMENT $4.19 Enterprise Funds
10/26/05 GUNA RAMIREDDY $4.15 Enterprise Funds
08/13/07 AMMIE HERINGER $4.10 Enterprise Funds
03/18/15 RAY & CHARLOTTE GOMES $4.09 Enterprise Funds
10/04/07 ERNEST J SMITH $3.74 Enterprise Funds
04/28/03 TOM THAI $3.73 Enterprise Funds
05/04/15 LISA & SCOTT ISAACS $3.70 Enterprise Funds
12/16/99 HSIU CHANG $3.66 Enterprise Funds
03/19/13 SHAWN HEWITT $3.65 Enterprise Funds
09/14/09 SARAH & ROBERT VADEBONCOEUR $3.60 Enterprise Funds 03/12/02 MARLENE RUBIO $3.59 Enterprise Funds
06/17/04 CLAIRE D'AMELIO $3.59 Enterprise Funds
08/05/03 VIOLET DURAN $3.54 Enterprise Funds
11/17/05 SOUTH VALLEY DEVELOPMENT $3.34 Enterprise Funds 06/09/11 EVA BRANDT $3.33 Enterprise Funds
02/10/09 DOLLY DUMAS $3.29 Enterprise Funds
09/02/09 LEESA JACK $3.29 Enterprise Funds
06/23/10 MOHAMMAD GHAEMMAGHAMI $3.10 Enterprise Funds
06/01/00 KEVIN & NATALIE KEYSER $3.09 Enterprise Funds
10/06/00 DEAN FLORY $3.04 Enterprise Funds
08/08/11 CHERYL ROSITANO $3.00 Enterprise Funds
07/16/12 JULIE SMITH $2.86 Enterprise Funds
08/31/09 CARI NORTON $2.77 Enterprise Funds
03/18/11 J. BARRIOS, INC. $2.74 Enterprise Funds
07/01/11 CALTRANS D-4 (MNHL) $2.70 Enterprise Funds
06/14/05 BERNADETTE GONZALES $2.65 Enterprise Funds

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Date Payee Amount Funds Held In
Unclaimed Deposit/Credit
01/05/15 RYAN PERRY $2.58 Enterprise Funds
02/27/04 VERONICA BOUDREAUX $2.50 Enterprise Funds
07/14/04 JANET SALINAS $2.37 Enterprise Funds
02/01/07 LAURA & JIM COLEMAN $2.33 Enterprise Funds
12/01/03 DONALD L PORTERFIELD $2.32 Enterprise Funds
07/15/04 RALPH DOUGHTY $2.32 Enterprise Funds
11/14/12 TEMME & RAY MILHEM $2.31 Enterprise Funds
08/02/11 VANESSA AQUILINA $2.29 Enterprise Funds
12/20/99 CRAIG AVILA $2.23 Enterprise Funds
06/27/11 DAVID & HEATHER MCNAMEE $2.18 Enterprise Funds 07/27/01 SYNCON HOMES OF CA $2.17 Enterprise Funds
08/03/00 MARK HOLDBROOK SEIDEL $2.15 Enterprise Funds
04/20/04 MING LOUNG $2.11 Enterprise Funds
12/08/04 SANTA MARIA RESTAURANT $2.10 Enterprise Funds
02/04/02 THOMAS POSAUNER $2.00 Enterprise Funds
09/04/09 BARRY HOGARTH $1.93 Enterprise Funds
03/10/00 TED ORTEZ $1.91 Enterprise Funds
11/18/13 MAYA COURTRIGHT $1.91 Enterprise Funds
01/06/00 LOUIS & IRENE HERRERA $1.89 Enterprise Funds
11/25/02 RHONDA CARTER $1.87 Enterprise Funds
11/16/09 MICHAEL BATES $1.87 Enterprise Funds
06/11/04 MON FONG LIN $1.85 Enterprise Funds
02/14/00 JOSEPH WILKENSON $1.83 Enterprise Funds
04/14/03 CARRIE GOSE $1.80 Enterprise Funds
11/18/03 DARYL ABBOTT $1.78 Enterprise Funds
12/14/04 URSULA MURO $1.77 Enterprise Funds
07/12/07 ART LOPEZ $1.77 Enterprise Funds
04/13/05 CLAIRE ALEXANDER $1.75 Enterprise Funds
12/13/99 LAWRENCE ROSS $1.73 Enterprise Funds
04/13/04 DONALD SANTANA $1.70 Enterprise Funds
04/05/02 FRANK TRAUT $1.68 Enterprise Funds
12/18/00 JENNIFER FOUST $1.66 Enterprise Funds
09/09/02 LARRY & AMPARO DECKER $1.62 Enterprise Funds
04/13/01 JAMES LEONARD $1.55 Enterprise Funds
01/03/00 ROBERT & KAREN ROBINSON $1.50 Enterprise Funds 12/03/99 VICTOR MARQUEZ $1.49 Enterprise Funds
08/31/09 HELEN REUTER $1.49 Enterprise Funds
08/09/07 CHRISTINE PIMENTEO $1.48 Enterprise Funds
01/10/00 CHARLES LEGALL $1.46 Enterprise Funds
07/14/16 GIGI MALONE $1.41 Enterprise Funds
09/12/00 JERRY COCHRANE $1.39 Enterprise Funds
04/03/09 BETTY HEEG $1.38 Enterprise Funds
11/02/11 LISA SHANNON $1.37 Enterprise Funds
09/07/00 MARK & KAREN MORGAN $1.35 Enterprise Funds
05/15/08 NANCY LYNCH $1.32 Enterprise Funds

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Date Payee Amount Funds Held In
Unclaimed Deposit/Credit
08/07/00 MICHAEL & KRIST GRANT $1.31 Enterprise Funds
01/14/99 ANNA ABSOLOM $1.30 Enterprise Funds
10/19/16 RADHA MURTHY $1.27 Enterprise Funds
12/06/99 CHRIS & CINDY DREIKOSEN $1.26 Enterprise Funds 06/23/10 LARRY LEE SMOOT $1.23 Enterprise Funds
07/06/00 CIDCO $1.17 Enterprise Funds
09/14/09 FIRST COMMUNITY BANK $1.15 Enterprise Funds
07/17/00 SACHS & LITTLE $1.13 Enterprise Funds
12/02/15 ROY JACKSON $1.09 Enterprise Funds
01/31/14 PATRICK CROSSEN $1.08 Enterprise Funds
09/03/09 AMANDA & CHRIS GERRITY $1.07 Enterprise Funds
08/28/09 LUIGI COVELLI $1.04 Enterprise Funds
TOTAL $1,189.80

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13 CITY COUNCIL STAFF REPORT
MEETING DATE: September 28, 2022
PREPARED BY:

Cynthia Hasson, Assistant City Attorney
APPROVED BY: City Manager
INTRODUCE AN ORDINANCE TO AMEND THE TEXT OF TITLE 14
RELATED TO INCLUSIONARY HOUSING AND TITLE 18 RELATED TO

THE DENSITY BONUS LAW

RECOMMENDATION(S)

1. Open/close the public hearing;

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

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

COUNCIL PRIORITIES, GOALS & STRATEGIES
2022-2023 Strategic Priorities
Affordable Housing and Homelessness
Guiding Documents
Morgan Hill 2035 General Plan
REPORT NARRATIVE:

Inclusionary Housing Ordinance
The City of Morgan Hill's Inclusionary Housing Ordinance (IHO), enacted in 2018 and amended in 2019 and 2020, is codified at Chapter 14.04 in Title 14 (Housing) of the City's Municipal Code. The IHO requires that specified percentages of residential units, typically in market-rate projects, be restricted as to affordability as described below.

AB 1763 significantly amended the State density bonus law (Government Code Section 65915) in 2019 effective January 1, 2020, requiring the City to award developer density bonuses, concessions and incentives, and waivers. Projects that receive the benefits of the density bonus provisions are required to restrict units for continuing affordability as described below.

Since that time, the City has received several applications for 100 percent affordable housing projects, all of which sought the benefits of the density bonus law. For rental

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13 projects, density bonus law requires affordability restrictions for 55 years for all units excluding the managers' units, and for-sale units are required to be restricted for 45 years. Meanwhile, the City's IHO requires that only 10 or 15 percent of units be deed restricted through an Inclusionary Housing Agreement, resulting in two separate agreements with different provisions and applicability being recorded on the same property.

The proposed ordinance will reduce conflicts between state law and other requirements by clarifying that the IHO does not apply to 100 percent affordable rental residential developments that are developed in accordance with, and subject to, a recorded governmental agency deed restriction or regulatory agreement that imposes rent and household income eligibility restrictions on all residential units in the Residential Development, with the exception of managers’ units. To be exempt from the IHO, it is required that the deed restriction or regulatory agreement be recorded against the property, must be binding on successors in interest for at least the same duration as would otherwise be required pursuant to this Chapter 14.04 (55 years), and must be executed by and between the property owner and any of the following entities and agencies: the City of Morgan Hill, the County of Santa Clara, the California Tax Credit Allocation Committee, the issuer of tax-exempt bonds used to finance the Residential Development, the California Department of Housing and Community Development or any other State of California agency, and the U.S. Department of Housing and Urban Development or any other federal agency.

Additionally, the ordinance is silent as to subordination, which means that on occasion the affordability restrictions could be subordinated to later loans. Language is proposed to be added to support the ongoing affordability of the deed-restricted units. The proposed language establishes that the affordability restrictions are senior in priority to any private liens or encumbrances. There is an exception if the City Manager determines that subordination is necessary to finance the affordable units. The primary intent is to prevent the loss of affordable units in the event of foreclosure.

Density Bonus Ordinance
Government Code Section 65915 requires that the City adopt an ordinance specifying how compliance with the density bonus law will be implemented. The City of Morgan Hill Zoning Code (Title 18) formerly included an Affordable Housing chapter (Chapter 18.48) that included density bonus provisions and contained some overlap with Title 14 Housing. With the changes in the law due to AB 1763 and the revisions to the City's IHO in December 2021, the intent was to revise the section, but it was inadvertently removed from title 18 without being added to Title 14. Chapter 18.48, as enacted by Ordinance number 2277 in 2018, required that the City Council grant the density bonus and one or more concessions or incentives. State law has made it increasingly difficult to deny density bonuses, concessions or incentives, or waivers or reductions in development standards for housing developments that contain the requisite minimum number of affordable units in a project. These may only be denied based on the findings of a specific adverse impact, as defined, upon health or safety, and for which there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact. California

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13 Government Code Section 65589.5(d)(2) defines a “specific, adverse impact” as a "significant, quantifiable, direct, and unavoidable impact, based on objective, identified written public health or safety standards, policies, or conditions as they existed on the date the application was deemed complete."
Additionally, other changes in state law restrict the City to no more than five meetings or hearings for any housing development project. Following the former process required the City to use one of the five allowed meetings to grant a density bonus and other incentives that are mandated by State law.The draft ordinance proposes the density bonus ordinance be reinstated in a revised form in Chapter 18.48 of the Zoning Code.

The draft ordinance provides for granting a density bonus, concessions incentives, and waivers or reduction of development standards at the administrative level by the Development Services Director. If the Development Services Director recommends findings for denial of any of the above, the Director would elevate the matter to the Planning Commission.

Findings Required for Amending the Zoning Code
Findings Pursuant to Section 18.114.060 (Findings for Approval), the City Council may approve a Zoning Code amendment only if all of the following findings are made:

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 General Plan Goals and Policies, including those aimed at creating and preserving affordable housing in the community.

2. The proposed amendment will not be detrimental to the public interest, health, safety, convenience, or welfare of the city. The proposed text amendments will not be detrimental to the public interest, health, safety, convenience, or welfare of the City because these are intended to clarify inclusionary housing program applicability and to reduce redundancy for 100 percent affordable projects, to protect against the loss of affordable units by restricting subordination, and to comply with State law density bonus requirements.

3. The proposed amendment is internally consistent with other applicable provisions of the zoning code. The proposed amendment is internally consistent with other applicable provisions of the zoning code because this ordinance clarifies existing requirements for inclusionary housing, and reinstates the density bonus provisions which were inadvertently repealed, consistent with existing provisions.

COMMUNITY ENGAGEMENT:

Inform
A 10-day public hearing notice was published for the August 23, 2022, Planning Commission meeting in the August 12, 2022 edition of the Morgan Hill Times pursuant to Government Code Sections 65090-65096. A 10-day public hearing notice was published for this meeting in the September 16, 2022, edition of the Morgan Hill Times

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13 pursuant to Government Code Sections 65090-65096.

ALTERNATIVE ACTIONS:

The City Council could choose to not introduce all or part of the ordinance.

If Section 14.04.040 of the Inclusionary Housing Ordinance (IHO) is not amended, developers of 100% affordable housing projects will continue to record two agreements with differing terms and restrictions.

If Section 14.04.060 of the IHO is not amended, the City’s inclusionary requirements may be subordinated to a senior loan and the affordability restrictions may be lost if the loan is foreclosed on.

The City will be in non-compliance with State law if it fails to adopt an ordinance to reinstate the Density Bonus provisions. As an alternative to the language proposed, the Council could decide to keep the density bonus provisions at the City Council level or modify the former process to have the Planning Commission act on the density bonus provisions. This would count towards the five meeting limit in processing a project.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

On July 25, 2018, Council adopted ordinance number 2278 creating Title 14 to the City’s Municipal Code creating the Inclusionary Housing Ordinance in Chapter 14.04.

On March 20, 2019, Council adopted ordinance number 2299 amending chapter 14.04 to allow for payment of in-lieu fees.

On December 15, 2021, Council adopted ordinance number 2326 amending Title 14.

The Planning Commission considered this ordinance at a public hearing on August 23, 2022 at which they unanimously recommended approval. Two commissioners expressed concern regarding transparency with the changes to the Density Bonus Chapter allowing for review at the administrative level. Additionally, one commissioner expressed concern that decisions to subordinate loans should be made by City Council; however, it was explained that the timing of processing loans does not allow for City Council review. (weblink)
FISCAL AND RESOURCE IMPACT:

There is no fiscal impact resulting from introducing this ordinance or implementing its provisions.

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

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13 (CEQA) analysis. All future discretionary development that may be impacted by the proposed Ordinance will be subject to a project-specific CEQA analysis as part of the required planning entitlement review to determine if there are any environmental impacts.

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ORDINANCE NO. , NEW SERIES

AN ORDINANCE OF THE CITY OF MORGAN HILL
AMENDING SECTION 14.04.040 (GENERAL
REQUIREMENTS) AND SECTION 14.040.060
(CONTINUED AFFORDABILITY AND CITY REVIEW OF
OCCUPANCY) OF CHAPTER 14.04 (INCLUSIONARY
HOUSING) OF TITLE 14 (HOUSING) TO CLARIFY

INCLUSIONARY HOUSING REGULATIONS AND
ENACTING CHAPTER 18.48 (DENSITY BONUS) OF
TITLE 18 (ZONING) OF THE MUNICIPAL CODE OF THE

CITY OF MORGAN HILL REGARDING GRANTING OF

DENSITY BONUS, INCENTIVES/CONCESSIONS AND

WAIVERS OR REDUCTION OF DEVELOPMENT

STANDARDS FOR HOUSING PROJECT THAT INCLUDE

AFFORDABLE UNITS, AS REQUIRED BY STATE LAW
(AB 1763)

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

Section 1. Section 14.04.040 (General Requirements) of Chapter 14.04 (Inclusionary Housing) of Title 14 (Housing) is hereby amended to read as follows (additions in underline, deletions in strikeout):

14.04.040 General requirements.

A. Percentage Requirement; In Lieu Fee.

1. Requirement. Except as provided in this paragraph A or in paragraphs B and D of this section or section 14.04.070 (Alternatives) at least fifteen percent of all units in residential projects shall be inclusionary units that shall be made available at Affordable Rents or affordable sales prices as prescribed in this section. The inclusionary units shall be approved, and construction of the inclusionary units shall be completed not later than the times prescribed in Section 14.04.050 of this chapter, unless an alternative requirement is approved pursuant to Section 14.04.070 of this chapter.

2. Fractional Number. Whenever application of the requirements of this chapter results in a fractional number of required inclusionary units, if the fraction is 0.50 or greater, construction of the next higher whole number of inclusionary Units shall be required, and where the fraction is 0.49 or less, payment of the applicable housing fee adopted by city council shall be required for the fractional unit.

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3. In-Lieu Fee Election for One-Half of Required Inclusionary Units.

Developers may elect to satisfy the applicable requirements set forth in paragraphs B, C, D, and E of this section by paying an in-lieu fee for up to one-half of the number of required inclusionary units and constructing the remaining required inclusionary units. If the required number of inclusionary units results in a fractional number, the provisions of the preceding paragraph regarding payment of a fee shall apply to the fractional unit.

B. For-Sale Projects in Downtown. All new for-sale residential projects consisting of two or more dwelling units located within downtown are required to restrict ten percent of the dwelling units for sale at affordable sales prices to moderateincome households. Such dwelling units must be sold to eligible households, and shall be subject to a recorded deed restriction that will impose resale price restrictions for a period of forty-five years.

C. For-Sale Projects Outside of Downtown. All new for-sale residential projects consisting of two or more dwelling units located within the city but outside of downtown are required to restrict fifteen percent of the dwelling units for sale at affordable sales prices to moderate income households. Such dwelling units must be sold to eligible households, and shall be subject to a recorded deed restriction that will impose resale price restrictions for a period of forty-five years.

D. Rental Projects in Downtown. All new rental residential projects consisting of two or more dwelling units located within downtown are required to restrict ten percent of the dwelling units for rent at Affordable Rents and occupancy by lowincome and very low-income households. Such dwelling units must be occupied by, or if vacant, available for occupancy by eligible households, and such restrictions shall be documented in a recorded inclusionary affordable housing agreement with a term of fifty-five years. At least one-half of the required inclusionary units shall be occupied by, or if vacant, available for occupancy at Affordable Rents to very low-income households.

E. Rental Projects Outside of Downtown. All new rental residential projects consisting of two or more dwelling units located within the city but outside of downtown are required to restrict fifteen percent of the dwelling units for rent at Affordable Rents and occupancy by low- income and very low-income households. Such dwelling units must be occupied by, or if vacant, available for occupancy by eligible Households, and such restrictions shall be documented in a recorded inclusionary affordable housing agreement with a term of fifty-five years. At least one-half of the required inclusionary units shall be occupied by, or if vacant, available for occupancy at Affordable Rents to very low-income households.

F. Inclusionary Housing Development Standards, Location and Design of Inclusionary Units. Residential projects that include inclusionary units shall conform to the following development standards. These incorporate the standards formerly known as the "Below Market-Rate (BMR) Program

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Development Standards" adopted by the City Council on September 26, 2018, as such may be amended from time to time.

1. All inclusionary units shall be geographically and proportionally dispersed throughout the residential project. In residential projects that will consist of more than one building, the inclusionary units shall be dispersed among all of the buildings that comprise the development. In residential projects that will consist of more than one product type, the inclusionary units shall be dispersed among the product types, proportionate in number among each of the product types that comprise the development.

2. In for-sale projects, the lot size for the inclusionary units shall be at least the same size as the smallest lot for market-rate units in the residential project.

3. The average bedroom and bathroom count in the inclusionary units shall be the same as the average bedroom and bathroom count in the marketrate units in the residential project.

4. The exterior trim, entry door hardware, and exterior finishes for the inclusionary units shall be of the same standard as the market-rate units in the residential project. There shall not be significant identifiable differences between inclusionary units and the market-rate units that are visible from the exterior of the dwelling units.

5. The interior finishes, equipment, fixtures, and appliances for the inclusionary units shall conform to the following minimum interior standard finishes:
a. All closets shall have doors;
b. Interior doors to be raised panel type or same as market-rate; c. Door hardware to be brass finish or same as market-rate; d. Appliances shall be major brand name (if applicable); e. Microwave hood is required to be vented to the exterior. When applicable exhaust vent shall be installed over the range; f. Units shall be roughed in for AC including electrical and line set; g. Basic alarm system to secure all accessible openings to the home; h. Electric garage door opener (if applicable).

6. The size, design, and distribution of model types for the inclusionary units shall be comparable and proportionate in number to the size, design, and distribution of each of the model types for the market-rate units in the residential project.

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7. Occupants of inclusionary units shall be provided the same access to project amenities, recreational facilities, and common areas as occupants of market-rate units.

G. For-sale projects. The inclusionary units that are constructed in for-sale projects shall be sold for owner-occupancy at an affordable sales price to moderateincome households that qualify as eligible households. Accessory Dwelling Units (ADU's) constructed within for-sale projects will not be counted toward satisfaction of the requirement to construct inclusionary units.

H. Rental projects. The inclusionary units that are constructed in rental projects shall be occupied by, or if vacant, available for occupancy at Affordable Rents to lowand very low-income households. At least one-half of the required inclusionary units in rental projects, shall be occupied, or if vacant, available for occupancy at Affordable Rents to very low-income households.

I. Exceptions. The affordability levels required for a residential project may be modified by written agreement between the city and the applicant upon a finding that such modification is necessary to effectively achieve the City's RHNA goals in the then-current housing element cycle.

J. This Chapter shall not apply to rental Residential Developments that are developed in accordance with, and subject to, a recorded governmental agency deed restriction or regulatory agreement that imposes rent and household income eligibility restrictions on all residential units in the Residential Development with the exception of managers’ units. Such deed restriction or regulatory agreement must be recorded against the property, must be binding on successors in interest for at least the same duration as would otherwise be required pursuant to this Chapter, and must be executed by and between the property owner and any of the following entities and agencies: the City of Morgan Hill, the County of Santa Clara, the California Tax Credit Allocation Committee, the issuer of tax-exempt bonds used to finance the Residential Development, the California Department of Housing and Community Development or any other State of California agency, and the U.S. Department of Housing and Urban Development or any other federal agency.

Section 2. Section 14.04.060 (Continued affordability and city review of occupancy) of Chapter 14.04 (Inclusionary Housing) of Title 14 (Housing) is hereby amended to read as follows (additions in underline, deletions in strikeout):

14.04.060 Continued affordability and city review of occupancy.

A. Term of affordability—For-sale projects. A resale restriction, covenant, deed of trust and/or other documents in the form prepared by the city attorney, shall be recorded against each inclusionary unit upon the sale of each for-sale unit and shall be senior in priority to any private liens or encumbrances except as provided below, and shall be enforceable by the City against the applicant or the applicant's successors-in-interest to the property for the full affordability term.

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These documents shall have an initial term of forty-five years, and shall be renewed upon each change of title to the inclusionary unit. The resale restriction, or other documents required by this subsection, and any change in the form of any such documents, shall be approved by the City Manager or his or her designee prior to execution and recordation of such document. The city shall be a party to the resale restriction or other documents required by this subsection and shall have the right to enforce the covenants and restrictions contained therein. The City Manager shall have the authority to subordinate such restrictions to other liens and encumbrances if he or she determines that the financing of the affordable housing units would be infeasible without said subordination.

B. Term of affordability—Rental projects. A regulatory agreement, covenant, deed of trust, and/or other documents prepared by the city attorney, shall be recorded against each residential project that contains inclusionary units that are rental units. These documents shall have a term of fifty-five years. The regulatory agreement and other documents required by this subsection, shall run with the land, and shall not be affected by the sale of the property or units in the project, and shall be senior in priority to any private liens or encumbrances except as provided below, and shall be enforceable by the City against the applicant or the applicant's successors-in-interest to the property for the full affordability term.

The regulatory agreement and other documents required by this subsection, and any modification to such document, shall be approved by the City Manager or his or her designee and approved as to form by the city attorney, prior to execution and recordation of such document. The city shall be a party to the regulatory agreement or other documents required by this subsection and shall have the right to enforce the covenants and restrictions contained therein. The City Manager shall have the authority to subordinate such restrictions to other liens and encumbrances if he or she determines that the financing of the affordable housing units would be infeasible without said subordination.

C. Eligibility requirements. For-sale inclusionary units shall be sold only following city's approval of the affordable sales price and a determination that the purchaser is an eligible household. Such determinations shall be made by the city or its designated administrator as referenced in the Below Market-Rate (BMR) Program Administration, Chapter 14.12, Section 14.12.040, Duties of Program Administrator. If the city or its designee maintains a list of, or otherwise identifies, eligible households, initial and subsequent tenants of rental inclusionary units, and the initial and subsequent purchasers of for-sale inclusionary units shall be selected first from the list of identified households, to the maximum extent possible, in accordance with rules approved by the City Manager or his or her designee.

Section 3. Chapter 18.48 (Density Bonus) is hereby added to Title 18 (Zoning) to read as follows:

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Chapter 18.48 Residential Density Bonus Provisions.

18.48.010. Purpose.

These residential density bonus provisions are intended to implement state law in accordance with applicable sections of the California Government Code Section 65915 et seq., as may be amended from time to time.

18.48.020. Application requirements.

A. Application. The applicant must identify in its application materials the number of bonus units and any incentives, concessions, waivers or reductions of development standards or parking ratios requested pursuant to Section 65915. This application shall be filed concurrently with other housing development applications.

B. Eligible Project. To be eligible for a density bonus, a proposed housing development, as defined in Government Code Section 65915(i), shall include a percentage of affordable units as described in Government Code Section 65915(b)(1). The housing development shall comply with Government Code Section 65915(c) and Chapter 14.04 of the Morgan Hill Municipal Code to assure the continued affordability of the units.

C. Documentation. An applicant shall provide to the City reasonable documentation as described in the development application to establish eligibility for a requested density bonus, incentives or concessions, waivers or reductions of development standards and parking ratios.

18.48.030. Density Bonus.

For eligible projects, consistent with the requirements of this chapter and Government Code Section 65915, the Development Services Director shall grant an increase in the number of dwelling units permitted in the proposed project. The amount of density bonus is based on the number, type, and degree of affordable units as specified in Government Code Section 65915(f), (g), and (h).

18.48.040. Concessions or Incentives.

An applicant may request one or more concessions or incentives, as defined in Government Code Section 65915(k), from the City as provided in Government Code Section 65915(d). The Development Services Director shall grant the requested concessions or incentives unless he or she makes one or more findings described in Government Code Section 65915(d)(1).

18.48.050. Waiver or Reduction of Development Standards.

An applicant may request waivers or reductions of development standards that will have the effect of physically precluding the construction of a development meeting the criteria

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of subdivision 65915(b) at the densities or with the concessions or incentives permitted pursuant to Government Code Section 65915(e). The Development Services Director shall grant the requested waiver or reduction unless he or she makes a finding that the waiver or reduction would have a specific adverse impact as described in Government Code Section 65915(e)(1).

18.48.060. Parking Reductions.

An applicant may request a reduction in parking ratios as provided in Government Code Section 65915(p). The Development Services Director shall grant the requested waiver or reduction in parking ratios as described in Government Code Section 65915(p).

18.48.070. Review Authority.

A. The Development Services Director shall review and act on all density bonus, incentive/concession, waivers or reductions of development standards, and reduction in parking ratios requests.

B. If the Development Services Director recommends findings for denial for any request made pursuant to sections above for any reason, including denial based on the findings of a specific, adverse impact, as defined in Section 65589.5(d)(2), upon health or safety, and for which there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact, the Development Services Director shall elevate the request to the Planning Commission for review and final decision.

18.48.080. Public notice and hearing.

Public notice of a pending action on a density bonus application shall be provided in compliance with Section 18.104.100 (Notice of Pending Action). The Development Services Director shall hold a noticed public hearing for a density bonus application only upon receiving a written request for a public hearing.

18.48.090. Affordability restriction.

Every project that receives a density bonus, incentive, concession, or waiver or reduction of development standards, must comply with Title 14 of the Morgan Hill Municipal Code and Government Code Section 65915, including but not limited to recording an affordability restriction.

Section 4. 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 5. Effective Date; Posting. This Ordinance shall take effect thirty days after the date of its passage and adoption. The City Clerk is hereby directed to publish this Ordinance or a summary thereof pursuant to Government Code Section 36933.

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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 ________, 2022.

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

DATE: _______________________ _____________________________ MICHELLE BIGELOW, City Clerk

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14 CITY COUNCIL STAFF REPORT
MEETING DATE: September 28, 2022
PREPARED BY:

Rebecca Garcia, Housing Director
APPROVED BY: City Manager

CONDUCT TAX AND EQUITY FISCAL RESPONSIBILITY ACT (TEFRA)

HEARING APPROVING ISSUANCE OF BONDS FOR MORGAN HILL

SENIOR APARTMENTS LOCATED DIRECTLY SOUTH OF SAN PEDRO

AVENUE, EAST OF MONTEREY ROAD AND WEST OF CHURCH

STREET WITHIN THE CITY OF MORGAN HILL

RECOMMENDATION(S)

1. Open/close public hearing consistent with the requirements of the Federal Tax and Equity Fiscal Responsibility Act ("TEFRA") and Section 147 (f) of the Internal Revenue Code of 1986, as amended (the “Code”); and

2. Adopt resolution approving the issuance of bonds by the California Municipal Finance Authority (CMFA), for the acquisition, construction, improvement and equipping of a 82-unit multifamily rental housing project located on a 1.89-acre parcel situated directly south of San Pedro Avenue, east of Monterey Road and west of Church Street, in the City of Morgan Hill, California (the “City”).

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Supporting our Youth, Seniors, and Entire Community
Enhancing Diversity and Inclusiveness
Advancing Regional Initiatives
2022-2023 Strategic Priorities
Affordable Housing and Homelessness
Guiding Documents
Morgan Hill 2035 General Plan
REPORT NARRATIVE:

The Morgan Hill Senior Housing project is a 100% affordable rental project, comprised of 82 multi-family units, ranging from 25% of the Area Median Income (AMI) to 60% AMI. This senior apartment project is located on Monterey Road, south of San Pedro

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14 Avenue and west of Church Street on a 1.89-acre parcel. The project was entitled in late 2020 and is currently under Building Permit review.

The City is required to hold this public hearing allowing community members to speak in favor of or against the use of tax-exempt bonds for the financing of the Project. The City Council’s only role is to listen to public testimony regarding the appropriateness of bond financing. Following the close of the hearing, the City must approve the issuance of the bonds for the financing of the Project. The City has no financial obligation or legal risk with the bond issuance.

The project developer, Human Good Affordable Housing, a California limited partnership, has applied and received a very competitive award for Federal Low Income Housing Tax Credits (“LIHTC”) from the California Tax Credit Allocation Committee and a tax-exempt bond allocation from the California Debt Limit Allocation Committee (“CDLAC”). The Borrower, Morgan Hill Senior Housing, L.P., requested that the California Municipal Finance Authority (“CMFA”), a joint exercise of powers authority and a public entity of the State of California, serve as the municipal issuer of the taxexempt revenue bonds in an aggregate principal amount not to exceed $35,000,000.

The tax-exempt bond financing is a “conduit” financing in which the City has no exposure for the debt. Rather, Human Good Affordable Housing, the sponsor, asks the CMFA to issue the bonds upon CDLAC’s authorization and then solicits a lender who purchases all of the bonds in a private sale. CMFA is a public entity that is authorized and experienced in the issuance of such bonds.

As the nature of the financing vehicle is tax-exempt, the Tax and Equity Fiscal Responsibility Act (“TEFRA”) requires the local jurisdiction to support the transaction.

This requirement is fulfilled through the public hearing approving the conduit financing after public notice is published seven days prior, allowing the community members an opportunity to speak in favor of or against the use of tax-exempt bonds for the financing of the Project. Following the close of the TEFRA Hearing, the City must approve the issuance of the bonds for the financing of the Project through a resolution.

CALIFORNIA MUNICIPAL FINANCE AUTHORITY:

The CMFA was created on January 1, 2004, pursuant to a joint exercise of powers agreement to promote economic, cultural, and community development through the financing of economic development and charitable activities throughout California. The bonds to be issued by the CMFA for the Project will be the sole responsibility of the borrower Human Good Affordable Housing, and the City will have no financial, legal, moral obligation, liability, or responsibility for the Project or the repayment of the bonds for the financing of the Project. All financing documents with respect to the issuance of the bonds will contain clear disclaimers that the bonds are not obligations of the City or the State but are to be paid for solely from funds provided by the Borrower. Outside of holding the TEFRA Hearing and adopting the required resolution, no other participation or activity of the City or the City Council with respect to the issuance of the bonds will be required.

COMMUNITY ENGAGEMENT:

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14 The community was informed by a notice published in the Morgan Hill Times on September 16, 2022.

ALTERNATIVE ACTIONS:

There are no alternative actions as the City must approve the resolution after the public hearing.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

Government Code Section 65915(f)(3)(D)(i) and 65915(d)(2)(D) required the City to grant an 80 percent Density Bonus and four concessions. The resolution was adopted by the City Council on June 17, 2020.

FISCAL AND RESOURCE IMPACT:

There is no fiscal impact to the City. The Bonds will be issued as limited obligations of CMFA, payable solely from revenues and receipts derived from a loan to be made by CMFA to the Borrower with the Bond proceeds. The City bears no liability with respect to the issuance of the Bonds. Further, the City is not a party to any of the financing documents related to the Bond issuance and is not named in any of the disclosure documents describing the Bonds or the proposed financing.

CEQA (California Environmental Quality Act):

This is not a project but rather an administrative activity that will not result in direct or indirect physical changes in the environment. Thus, the administrative activity of the project is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3).

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RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

MORGAN HILL APPROVING THE ISSUANCE BY THE

CALIFORNIA MUNICIPAL FINANCE AUTHORITY

MULTIFAMILY HOUSING REVENUE BONDS FOR
MORGAN HILL SENIOR HOUSING, L.P., A CALIFORNIA

LIMITED PARTNERSHIP
WHEREAS, Human Good Affordable Housing (the “Sponsor”), on behalf of Morgan Hill Senior Housing, L.P., a California limited partnership, referred to herein as the “Borrower”, has requested that the California Municipal Finance Authority (the "Authority") adopt a plan of financing providing for the issuance of exempt facility bonds for a qualified residential rental project pursuant to Section 142(a)(7) of the Internal Revenue Code of 1986 (the “Code”), including bonds issued to refund such exempt facility bonds in one or more series from time to time, and at no time to exceed $35,000,000 in aggregate principal amount (the "Bonds"), to finance or refinance the acquisition, construction, improvement and equipping of a 82-unit multifamily rental housing project for low-income seniors (the “Project”) located on a 1.89-acre parcel situated directly south of San Pedro Avenue, east of Monterey Road and west of Church Street, in the City of Morgan Hill, California (the “City”); and
WHEREAS, pursuant to Section 147(f) of the Code, the issuance of the Bonds by the Authority must be approved by the City of Morgan Hill (the "City") because the Project is located within the territorial limits of the City; and
WHEREAS, the City Council of the City (the "City Council") is the elected legislative body of the City and is one of the "applicable elected representatives" required to approve the issuance of the Bonds under Section 147(f) of the Code; and WHEREAS, the Authority has requested that the City Council approve the issuance of the Bonds by the Authority in order to satisfy the public approval requirement of Section 147(f) of the Code and the requirements of Section 4 of the Joint Exercise of Powers Agreement Relating to the California Municipal Finance Authority, dated as of January 1, 2004 (the "Agreement"), among certain local agencies, including the City; and
WHEREAS, pursuant to Section 147(f) of the Code, the City Council has, following notice duly given, held a public hearing regarding the issuance of the Bonds, and now desires to approve the issuance of the Bonds by the Authority;

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MORGAN HILL DOES HEREBY FIND, DETERMINE, RESOLVE AND ORDER AS FOLLOWS:

Section 1. The above recitals are true and correct.

Section 2. The City Council hereby approves the issuance of the Bonds by the Authority. It is the purpose and intent of the City Council that this resolution constitute approval of the issuance of the Bonds by the Authority, for the purposes of (a) Section 147(f) of the Code

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City of Morgan Hill
Resolution No. 22-xxx

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by the applicable elected representative of the governmental unit having jurisdiction over the area in which the Project is located, in accordance with said Section 147(f) and (b) Section 4 of the Agreement.

Section 3. The officers of the City are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents that they deem necessary or advisable in order to carry out, give effect to and comply with the terms and intent of this resolution and the financing approved hereby.

Section 4. This resolution shall take effect immediately upon its passage.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Morgan Hill at a regular meeting held on the September 28, 2022.

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

APPROVED: ATTEST:
_____________________________ ________________________________ RICH CONSTANTINE, Mayor MICHELLE BIGELOW, City Clerk
 CERTIFICATION 
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 Resolution No. 22-xxx, adopted by the City Council at a regular meeting held on September 28, 2022.

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

DATE: _____________________ ___________________________________ MICHELLE BIGELOW, City Clerk

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City of Morgan Hill
Resolution No. 22-xxx

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15 CITY COUNCIL STAFF REPORT
MEETING DATE: September 28, 2022
PREPARED BY:

Dat Nguyen, Finance Director
APPROVED BY: City Manager
RECEIVE MONTHLY BUDGET UPDATE AND AUGUST 2022

FINANCIAL AND INVESTMENT REPORTS

RECOMMENDATION(S)
Accept and file report.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Preserving and Cultivating Public Trust
2022-2023 Strategic Priorities
Fiscal Sustainability
Community Outreach, 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 August 2022 financial and investment reports.

August 2022 Financial Report
The Revenue and Expense Summary for the month of August is included on the first page of the monthly financial report. Overall, General Fund revenues total $2.7 million.

Expenditures, including encumbrances, amounted to $12.2 million.

Budget Update
There has been no material change to the City’s revenue since the last budget update to the Council on August 17, 2022. Recreation Services revenues continue to recover from the pandemic and are on target with budget. For water revenue, Morgan Hill residents consumed about 17% less water through August compared to the prior threeyear average. As such, the 15% revenue stabilization water rate has been implemented.

COMMUNITY ENGAGEMENT:

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

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15 and investment decisions.

ALTERNATIVE ACTIONS:

No alternative action is recommended, as this is a monthly financial report on City transactions which have already occurred.

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.

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

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FINANCE DIVISION

CITY OF MORGAN HILL
August 31, 2022 - 17% of Year Complete
Prepared by:

Monthly Financial and Investment Reports

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CITY OF MORGAN HILL, CALIFORNIA
FINANCIAL STATEMENT ANALYSIS - FISCAL YEAR 2022-23
FOR THE MONTH ENDED AUGUST 2022 – 17% OF YEAR COMPLETE
 General Fund Revenues through August totaled $2.7 million, or about 5% of the budgeted revenues as some of the major revenue categories such as property tax are received later in the fiscal year. With respect to the property tax revenue forecast, the County estimates the City will receive approximately $17.2 million in property tax revenue for the current fiscal year, slightly less than budget of $17.4 million.

The chart below shows historical General Fund revenues by major revenue category from FY18-19 through FY20-21 Actual, Un-audited FY21-22, FY22-23 Budget, and YTD as of August 31, 2022.

General Fund expenditures and encumbrances as of August 31, 2022 totaled $12.2 million, of which approximately $3.6 million is attributable to outstanding encumbrances.  Community Services - The Community Services Department’s recreation operations, as reflected in the schedule presented on page 4 of the Monthly Financial and Investments Reports, shows a negative impact to the General Fund of approximately $1.3 million as of August 31, 2022. Recreation Services revenues continue to recover from the pandemic and on target with budget. $12.8 $14.5 $16.0 $16.7 $17.4
$2.7
$10.7 $9.7 $11.0 $12.6 $12.4 $5.1 $4.6 $4.4 $5.0 $5.4 $9.9 $8.3 $5.7 $7.5 $8.9 $4.9 $3.6
$9.7
$11.1 $6.4
0 10
20 30
40 50
60 FY18‐19 FY19‐20 FY20‐21 Un‐audited
FY21‐22
Budget
FY22‐23
YTD
FY22‐23
Millions ($)
Historical GF Revenues
Property Tax Sales Tax Franchise and Hotel Taxes Service Charges Other

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CITY OF MORGAN HILL, CALIFORNIA
FINANCIAL STATEMENT ANALYSIS - FISCAL YEAR 2022-23
FOR THE MONTH ENDED AUGUST 2022 – 17% OF YEAR COMPLETE
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 Development Services, 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 guidelines set forth in the Code of Federal Regulations Title 2, Chapter II, Part 200 (formerly 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 non-grant funded City operations like utilities and information services.
 Development Services Fund – Revenues through August totaled $1.1 million compared to prior year to date amount of approximately $0.9 million, partially due to a result of the fees increase approved by the City Council on January 19, 2022. Expenditures, including encumbrances, totaled $1.3 million.  Debt Service Funds – Expenditures through August totaled $1,219. 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
FY13‐14 FY14‐15 FY15‐16 FY16‐17 FY17‐18 FY18‐19 FY19‐20 FY20‐21 Un‐audited FY21‐22
FY22‐23
Budget
Millions (S)
Historical Net GF Impact

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CITY OF MORGAN HILL, CALIFORNIA
FINANCIAL STATEMENT ANALYSIS - FISCAL YEAR 2022-23
FOR THE MONTH ENDED AUGUST 2022 – 17% OF YEAR COMPLETE
 Wastewater Operations – Revenues from Sewer Operations through August totaled $1.3 million.

Expenditures and outstanding encumbrances totaled $1.9 million or 12% of the budget. The table below shows historical Sewer Operations revenues and expenditures from FY18-19 through FY20-21 Actual, Un-audited FY21-22, FY22-23 Budget, and YTD as of August 31, 2022. (amount in millions) FY18‐19 FY19‐20 FY20‐21
Un‐audited
FY21‐22
Budget
FY22‐23
YTD
FY22‐23
Revenues 11.4              11.9                         13.3                14.9             14.8 1.3 Expenditures             11.4 12.3                         13.3                14.7             16.3 1.9 Operating Margin               ‐ (0.4)                            ‐ 0.2                  (1.5)                              (0.6) Operating Margin
without Encumbrances                 (0.1) 0.4                             ‐ 0.2                  (1.5)                              (0.5)  Water Operations – Water Operations includes Utility Billing, Water Conservation, and Water Operations. Revenues from Water Operations through August totaled $1.8 million. Water Operations expenditures, including outstanding encumbrances, totaled $2.9 million. The table below shows Water Operations revenues and expenditures from FY18-19 through FY20-21 Actual, Un-audited FY21-22, FY22-23 Budget, and YTD as of August 31, 2022.
(amount in millions) FY18‐19 FY19‐20 FY20‐21
Un‐audited
FY21‐22
Budget
FY22‐23
YTD
FY22‐23
Revenues 14.2                         15.3 16.5             16.0               17.6               1.8 Expenditures             14.3             16.4 16.5             15.4               17.6               2.9 Operating Margin              (0.1) (1.1)              ‐               0.6                 ‐                                 (1.1) Operating Margin
without Encumbrances                 (0.1)              0.8 ‐               0.9                 ‐                                 (0.2)  Investments – Four securities were purchased. Total interest earnings received on investments were $61,000 during the month.

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% OF ACTUAL PLUS % OF

FUND NAME ACTUAL BUDGET ENCUMBRANCES BUDGET
General 2,652,221 $ 5% $ 12,186,459 22%
Development Services 1,148,740 19% 1,289,683 21%
Housing Successor Agency 180,846 77% 651,635 57%
Sewer Operations 1,279,728 9% 1,945,474 12%
Sewer Other 3,532,830 14% 4,611,729 10%
Water Operations 1,799,481 10% 2,893,376 16%
Water Other 902,056 15% 444,439 7%
Other Special Revenues * 371,568 7% 1,948,969 16%
Capital Projects & Streets 586,693 3% 13,518,837 30%
Debt Service 113,499 17% 1,219 0%
Internal Service 1,589,570 14% 3,711,837 30%
TOTAL FOR ALL FUNDS $ 14,157,233 9% $ 43,203,656 20%
* Includes all Special Revenue Funds except Development Services Fund, Street Funds, and RDA and Housing Successor Agencies.

REVENUES EXPENSES
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
General
Development
Services
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
August 31, 2022 - 17% of Year Complete
Revenues to Budget Expenses to Budget
17%

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% OF PRIOR YEAR % CHANGE FROM

REVENUE CATEGORY BUDGET ACTUAL BUDGET TO DATE PRIOR YEAR Property Tax 17,383,705 $ 30,732 $ 0% 10,278 $ 199%
Sales Tax 12,395,413 - (2,330) -100%
Franchise Tax 2,760,000 - - N/A
Hotel Tax 2,600,000 258,344 10% 155,528 66%
Licenses 223,975 100,993 45% 123,278 -18%
Other Agencies 1,304,130 63,276 5% 51,207 24%
Service Charges 8,942,658 1,737,307 19% 1,310,624 33%
Interest/Other 1,756,151 104,719 6% 190,626 -45%
Transfers In 3,145,538 356,851 11% 274,050 30%
TOTAL REVENUES $ 50,511,570 $ 2,652,221 5% 2,113,262 $ 26% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
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
August 31, 2022 - 17% of Year Complete
17%

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ACTUAL PLUS PRIOR YTD PLUS % CHANGE FROM
EXPENDITURE CATEGORY BUDGET ENCUMBRANCES % OF BUDGET ENCUMBRANCES PRIOR YEAR Administration $ 6,720,240 $ 1,787,836 27% $ 896,218 99% Community Services 15,909,129 4,519,354 28% 3, 308,078 37% Police 21,624,684 3,745,068 17% 3, 001,272 25%
Fire 8,653,847 1,919,647 22% 1, 231,100 56%
Transfers Out 1,287,315 214,552 17% 221,118 -3%
TOTAL EXPENDITURES $ 54,195,214 $ 12,186,459 22% 8, $ 657,786 41% 0% 10% 20% 30%
Administration
Community
Services
Police
Fire
Transfers Out
Total Expenditures
Percent of Actual to Budget
Morgan Hill YTD General Fund Expenditures
August 31, 2022 - 17% of Year Complete
17%

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City of Morgan Hill
Recreation Report - Fiscal Year 2022-23
For the Month Ended August 31, 2022
17% of Year Complete
% of
Budget August 2022 YTD Budget
Revenues
Membership Services & Rec Programs 5,136,869 $ 587,798 $ 1,082,020 $ Facility Rentals 819,459 110,679 274,547
Community Services 127,498 2,707 5,401
Transfers in 75,000 6,250 12,500
Total Revenues 6,158,826 $ 707,434 $ 1,374,468 $ 22%
Less: Expenditures
Membership & Program Services 6,772,195 $ 735,458 $ 1,182,654 $ Facility Rentals 546,870 41,749 90,017
Community Services 644,107 48,528 96,988
Total Expenditures 7,963,173 $ 825,734 $ 1,369,659 $ 17% Net Impact without encumbrances (1,804,347) $ (118,300) $ 4,809 $ Encumbrances - - 1,332,062
Net Impact with encumbrances (1,804,347) $ (118,300) $ (1,327,252) $

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

City of Morgan Hill
Monthly Investment Report ‐ August 31, 2022
The following are the snapshots of City's investment portfolio as of August 31, 2022. The first chart shows the portfolio composition by investment type:

LAIF ‐ $31.6M
18%
Treasury Note ‐ $20.8M
12%
Money Market‐
$0.1M
Treasury Bill ‐ $12.3M <1%
7%
Federal Agency
Issues‐ $99.1M
56%
Bond Reserves/Trust‐
$12.6M
7%
Cash & Other
Deposits ‐ $1.0M
<1%
Investment Portfolio Composition ‐ $177.4 Million
LAIF ‐ $31.6M
Treasury Note ‐ $20.8M
Money Market‐ $0.1M
Treasury Bill ‐ $12.3M
Federal Agency Issues‐
$99.1M
Bond Reserves/Trust‐
$12.6M
Cash & Other Deposits ‐
$1.0M
General Fund,
$25.0M Community
Development, $1.6M
RDA Successor
Agency (except
Housing), $5.8M
Housing Successor
Agency/CDBG, $4.7M
Water ‐ Operations,
$3.4M
Water Other, $18.8M
Sewer ‐ Operations,
$3.4M
Sewer Other, $48.2M
Other Special
Revenue, $8.3M
Streets and Capital
Projects (except RDA),
$35.7M
Debt Service ,
$0.5M
Internal Service,
$19.5M
Agency Funds
(assessment
dists./refundable
deposits), $2.5M
Cash Balances by Fund Type
$177.4 Million

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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%

3.00%

3.50%
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
Feb‐22
Mar‐22
Apr‐22
May‐22
Jun‐22
Jul‐22
Aug‐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%
0 100
200
300
400
500
600
700
800
900
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
Feb‐22
Mar‐22
Apr‐22
May‐22
Jun‐22
Jul‐22
Aug‐22
Days Yield
Portfolio Yield and Maturity Trends
Avg Days to Maturity Yield

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City of Morgan Hill
Investment Portfolio Detail
As of August 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 $ 31,623,541 17.83% $ 31,216,401 1.28%
City Managed
Treasury Bill 8/17/2022 4,972,808 2.80% 4,971,350 2.56% 11/17/2022 11/17/2022 Treasury Bill 8/17/2022 2,426,422 1.37% 2,419,525 3.22% 8/10/2023 8/10/2023 Treasury Bill 8/18/2022 4,930,640 2.78% 4,925,450 3.04% 2/16/2023 2/16/2023 Treasury Note 4/30/2018 4,470,121 2.52% 4,455,180 2.73% 3/31/2023 3/31/2023 Treasury Note 10/8/2021 1,989,876 1.12% 1,806,800 1.00% 9/30/2026 9/30/2026 Treasury Note 1/4/2022 1,999,424 1.13% 1,929,380 0.77% 12/31/2023 12/31/2023 Treasury Note 1/19/2022 1,992,936 1.12% 1,929,380 1.02% 12/31/2023 12/31/2023 Treasury Note 2/11/2022 1,984,128 1.12% 1,927,740 1.44% 1/31/2024 1/31/2024 Treasury Note 3/28/2022 1,997,071 1.13% 1,960,700 2.34% 4/30/2024 4/30/2024 Treasury Note 4/12/2022 1,990,243 1.12% 1,966,560 1.97% 06/30/2023 6/30/2023 Treasury Note 6/13/2022 1,909,347 1.08% 1,888,280 3.16% 11/15/2026 11/15/2026 Treasury Note 8/17/2022 2,449,434 1.38% 2,443,650 3.04% 5/15/2023 5/15/2023 FFCB Bond 4/8/2020 2,000,000 1.13% 1,910,700 0.88% 10/8/2022 4/8/2024 FFCB Bond 5/27/2020 2,000,000 1.13% 1,843,900 0.73% 11/27/2022 5/27/2025 FHLMC Bond 6/3/2020 2,000,000 1.13% 1,875,220 0.60% 12/3/2022 12/3/2024 FHLMC Bond 10/20/2020 2,000,000 1.13% 1,814,720 0.60% 10/20/2022 10/20/2025 FHLMC Bond 10/27/2020 2,000,000 1.13% 1,815,160 0.63% 10/27/2022 10/27/2025 FHLMC Bond 11/2/2020 2,000,000 1.13% 1,921,360 0.32% 11/2/2022 11/2/2023 FFCB Bond 11/3/2020 2,000,000 1.13% 1,809,140 0.54% 11/3/2022 11/3/2025 FNMA Bond 11/18/2020 2,000,000 1.13% 1,813,660 0.65% 11/18/2022 11/18/2025 FHLMC Bond 11/24/2020 2,000,000 1.13% 1,812,220 0.64% 11/24/2022 11/24/2025 FFCB Bond 11/24/2020 1,000,000 0.56% 906,130 0.60% 11/24/2022 11/24/2025 FHLMC Bond 11/25/2020 3,000,000 1.69% 2,716,920 0.63% 11/25/2022 11/25/2025 FHLMC Bond 11/30/2020 2,000,000 1.13% 1,812,560 0.65% 11/26/2022 11/26/2025 FFCB Bond 12/22/2020 2,000,000 1.13% 1,797,960 0.47% 12/22/2022 12/22/2025 FHLB Bond 1/22/2021 2,000,000 1.13% 1,800,200 0.63% 1/22/2023 1/22/2026 FNMA Bond 1/28/2021 2,000,000 1.13% 1,797,660 0.55% 1/28/2023 1/28/2026 FHLB Bond 1/28/2021 2,000,000 1.13% 1,803,860 0.65% 1/28/2023 1/28/2026 FHLB Bond 2/24/2021 2,000,000 1.13% 1,803,640 0.75% 2/24/2023 2/24/2026 FHLB Bond 2/25/2021 2,000,000 1.13% 1,797,780 0.66% 2/25/2023 2/25/2026 FHLB Bond 2/26/2021 2,000,000 1.13% 1,797,000 0.65% 2/26/2023 2/26/2026 FHLB Bond 3/10/2021 2,000,000 1.13% 1,808,280 0.85% 9/10/2022 3/10/2026 FHLB Bond 3/16/2021 2,000,000 1.13% 1,797,800 0.70% 9/16/2022 3/16/2026 FHLB Bond 3/16/2021 2,000,000 1.13% 1,804,280 0.80% 9/16/2022 3/16/2026 FHLB Bond 6/9/2021 2,000,000 1.13% 1,812,480 1.08% 12/9/2022 6/9/2026 FHLB Bond 6/30/2021 2,000,000 1.13% 1,810,640 1.00% 12/30/2022 6/30/2026 FHLB Bond 7/15/2021 3,000,000 1.69% 2,717,130 1.13% 1/15/2023 7/15/2026 FHLB Bond 7/15/2021 2,000,000 1.13% 1,840,120 0.85% 1/15/2023 7/15/2025 FHLB Bond 8/26/2021 2,000,000 1.13% 1,783,880 0.80% 2/26/2023 8/26/2026 FHLB Bond 8/26/2021 3,000,000 1.69% 2,696,850 1.00% 2/26/2023 8/26/2026 FHLB Bond 8/26/2021 2,000,000 1.13% 1,791,020 0.90% 2/26/2023 8/26/2026 FHLB Bond 9/13/2021 2,083,339 1.17% 1,881,120 0.82% 9/11/2022 9/11/2026 FFCB Bond 9/28/2021 1,986,144 1.12% 1,795,980 0.98% 9/10/2022 9/10/2026 FHLB Bond 9/29/2021 3,000,000 1.69% 2,704,350 1.13% 9/29/2022 9/29/2026 FHLB Bond 9/30/2021 2,000,000 1.13% 1,785,740 0.88% 9/30/2022 9/30/2026 FHLB Bond 9/30/2021 3,000,000 1.69% 2,696,220 1.05% 9/30/2022 9/30/2026 FHLB Bond 9/30/2021 3,000,000 1.69% 2,692,980 1.02% 9/30/2022 9/30/2026 FHLB Bond 10/19/2021 2,000,000 1.13% 1,791,620 1.00% 10/19/2022 10/19/2026 FHLB Bond 11/18/2021 2,000,000 1.13% 1,810,560 1.30% 11/18/2022 11/18/2026 FHLB Bond 12/29/2021 2,000,000 1.13% 1,920,520 0.75% 12/29/2022 12/29/2023 FHLB Bond 1/19/2022 2,000,000 1.13% 1,843,980 1.74% 1/19/2023 1/19/2027 FHLB Bond 1/25/2022 2,000,000 1.13% 1,882,620 1.51% 1/25/2023 7/25/2025 FHLB Bond 3/10/2022 2,000,000 1.13% 1,919,940 3.48% 9/10/2022 3/10/2027 FHLB Bond 3/30/2022 3,000,000 1.69% 2,970,390 1.62% 9/30/2022 3/30/2023 FHLMC Bond 5/3/2022 1,967,757 1.11% 1,947,820 2.25% 12/26/2022 6/26/2023 FHLB Bond 5/27/2022 3,000,000 1.69% 2,975,070 1.88% 11/23/2022 2/23/2023 FHLMC Bond 6/15/2022 2,000,000 1.13% 1,986,340 3.28% 12/15/2022 12/15/2025 FHLB Bond 7/28/2022 2,000,000 1.13% 1,971,420 4.30% 1/28/2023 7/28/2027 Sub Total/Average $ 132,149,691 74.52% $ 123,712,935 1.41% Money Market $ 53,464 0.03% $ 53,464 2.20%
Total City Managed/Average $ 163,826,697 92.38% $ 154,982,800 1.39% Bond Reserve Accounts - Held By Trustees $ 6,996,311 3.95% $ 6,996,311 Cash/Deposits $ 929,194 0.52% $ 929,194
PARS and CALPERS CERBT Trust $ 5,587,404 3.15% $ 6,030,261 GRAND TOTAL/AVERAGE $ 177,339,605 100% $ 168,938,565

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CITY OF MORGAN HILL CASH AND INVESTMENT REPORT
FOR THE MONTH OF AUGUST 31, 2022
FOR THE FISCAL YEAR OF 2022-23
Invested Book Value % of Market
in Fund Yield End of Month Total Value
Investments
State Treasurer LAIF - City All Funds Pooled 1.28% 20,773,115 $ 11.71% 20,505,670 $ 2015 Wastewater Rev Bonds - CIP Wastewater Fund 1.28% 10,850,426 6.12% 10,710,732 Federal Issues All Funds Pooled 1.25% 99,037,240 55.85% 91,088,940 US Treasury Notes All Funds Pooled 2.05% 20,782,581 11.72% 20,307,670 US Treasury Bills All Funds Pooled 2.88% 12,329,870 6.95% 12,316,325 Dreyfus Treas Cash Management Acct All Funds Pooled 2.20% 53,464 0.03% 53,464 SUBTOTAL $ 163,826,697 92.38% 154,982,800 $
Bond Reserve Accounts - held by trustees
Zions Bank - Civic Center/Library Facility
Blackrock Liq Fund Debt Service 0.41% 0.00% 1 1
Zions Bank - MH Police Facility Lease Revenue Bonds
Blackrock Liq Fund Debt Service 0.41% 0.00% 2 2
BNY - RDA Bonds
Dreyfus Cash Mgmt 521 Successor Fund 0.00% 5,783,086 3.26% 5,783,086 Zions Bank - MH Ranch 2015
Blackrock Liq Funds Fed Fund -DI -2015 Agency Fund 0.41% 615,555 0.35% 615,555 Zions Bank - Madrone Bus Park Taxable/ Tax Exempt 2015
Blackrock Liquidity Temp Fund-2015 Agency Fund 0.41% 0.34% 597,667 597,667 SUBTOTAL 6,996,311 3.95% 6,996,311
Other Cash/Deposits
General Checking All Funds 892,082 0.50% 892,082
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 3,887,404 2.19% 4,158,695
PARS - PENSION Trust 1,700,000 0.96% ** 1,871,566
SUBTOTAL 6,516,598 3.67% 6,959,454
Total Cash and Investments $ 177,339,605 100.00% $ 168,938,565 ** As of 7/31/2022

CASH ACTIVITY SUMMARY
FY 2022-23
07/1/21 Change in 8/31/2022
Fund Type Balance Cash Balance Balance
General Fund 19,007,873 $ 6,003,221 $ 25,011,094 $
Community Development 1,077,499 489,474 1,566,973
RDA Successor Agency (except Housing) 508,427 5,281,899 5,790,326 Housing Successor Agency/ CDBG 4,307,419 347,595 4,655,015 Water - Operations 2,573,349 794,490 3,367,839
Water Other 15,405,786 3,426,276 18,832,062
Sewer - Operations 1,593,140 1,809,049 3,402,189
Sewer Other 57,221,072 (9,016,069) 48,205,003
Other Special Revenue 7,425,644 921,692 8,347,337
Streets and Capital Projects (except RDA) 37,931,830 (2,191,048) 35,740,782 Debt Service 337,123 115,346 452,470
Internal Service 19,378,242 86,593 19,464,836
Agency Funds (assessment dists./refundable deposits) 3,356,940 (853,260) 2,503,680 Total $ 170,124,346 $ 7,215,259 $ 177,339,605
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

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City of Morgan Hill
Year to Date Revenues - Fiscal Year 2022-23
For The Month Ended August 31, 2022
17% 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 $ 14,753,873 14,753,873 n/a $ - $ n/a - Property Tax - RPTTF Residual Distribution 2,429,832 2,429,832 n/a - - n/a - Property Tax - Supplemental Roll 200,000 200,000 30,732 15% 10,278 20,454 199% Sales Tax 11,950,308 11,950,308 n/a - (2,330) 2,330 -100% Public Safety Sales Tax 445,105 445,105 n/a - - n/a -
Transient Occupancy Taxes 2,600,000 2,600,000 258,344 10% 155,528 102,816 66% Franchise (Refuse ,Cable ,PG&E) 2,760,000 2,760,000 n/a - - n/a - Property Transfer Tax 500,000 500,000 45,144 9% 82,086 (36,942) -45% TOTAL TAXES 35,639,118 35,639,118 334,220 1% 245,563 88,656 36%

LICENSES/PERMITS
Business License 170,000 170,000 98,030 58% 119,915 (21,885) -18% Other Permits 53,975 53,975 5% 3,363 2,963 (400) -12%
TOTAL LICENSES/PERMITS 223,975 223,975 100,993 45% 123,278 (22,285) -18%

FINES AND PENALTIES
Parking Enforcement 2,932 2,932 808 28% 192 321% 616
Bails & Fines 46,480 46,480 166 0% - 166 n/a
Administrative Citations 20,000 20,000 643 3% 2,382 (1,740) -73% TOTAL FINES AND PENALTIES 69,412 69,412 1,616 2% 2,574 (958) -37%

OTHER AGENCIES
Motor Vehicle in-Lieu 40,000 40,000 n/a - - n/a -
Other Revenue - Other Agencies 1,304,130 1,304,130 5% 51,207 63,276 12,069 24% TOTAL OTHER AGENCIES 1,344,130 1,344,130 63,276 5% 51,207 12,069 24%

CHARGES CURRENT SERVICES
Police False Alarm Charge 32,280 32,280 2,916 9% 2,411 21% 505 Business License Application Review 53,000 53,000 4,729 9% 3,829 24% 900 Membership Services & Rec Programs 5,136,869 5,136,869 1,082,020 21% 843,727 238,293 28% Facility Rentals 819,459 819,459 274,547 34% 83,125 191,422 230% Community Services 127,498 127,498 5,401 4% 35,445 (30,043) -85% General Administration Overhead 1,775,408 1,775,408 295,901 17% 305,384 (9,483) -3% Other Charges Current Services 998,144 998,144 7% 36,703 71,793 35,090 96% TOTAL CURRENT SERVICES 8,942,658 8,942,658 1,737,307 19% 1,310,624 426,684 33%

OTHER REVENUE
Use of money/property 774,829 774,829 34,724 4% 87,454 (52,731) -60% Other Revenues 371,910 371,910 6% 18,512 23,235 4,723 26% TOTAL OTHER REVENUE 1,146,739 1,146,739 57,959 5% 105,966 (48,007) -45%

TRANSFERS IN
One Time Transfer 180,000 180,000 30,000 17% 17,500 12,500 71% Public Safety Facilities Fund 50,000 50,000 8,333 17% 16,664 (8,331) -50% Supplemental Law Enforcement Fund 100,000 100,000 n/a - - n/a - Countywide Solid Waste 355,000 355,000 59,167 17% - 59,167 n/a Streets 904,438 904,438 n/a - - n/a -
Park Maintenance 650,000 650,000 108,334 17% 108,334 n/a - Sewer Operations 375,000 375,000 62,500 17% 59,526 2,974 5% Water Operations 375,000 375,000 62,500 17% 59,526 2,974 5% Open Space 81,100 81,100 13,517 17% - 13,517 n/a
Park Development 75,000 75,000 12,500 17% 12,500 n/a -
TOTAL TRANSFERS IN 3,145,538 3,145,538 356,851 11% 274,050 82,801 30% TOTAL GENERAL FUND 50,511,570 50,511,570 2,652,221 5% 2,113,262 538,959 26%

SPECIAL REVENUE FUNDS
202 STREET MAINTENANCE
Gas Tax 2105 - 2107.5 909,478 909,478 71,237 8% 75,888 (4,651) -6% Interest / Other Revenue/Other Charges 5 58 8 230 396% 29 201 697% 202 STREET MAINTENANCE 909,536 909,536 71,466 8% 75,917 (4,451) -6% FUND

REVENUE
SOURCE

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City of Morgan Hill
Year to Date Revenues - Fiscal Year 2022-23
For The Month Ended August 31, 2022
17% 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 1,438 1,438 139 10% 71 96% 68
Police Grant/SLEF/JAG 100,000 100,000 - n/a - - n/a
205 SUPPLEMENTAL LAW ENFORCEMENT FUND 101,438 101,438 139 0% 71 68 96% 206 DEVELOPMENT SERVICES
Building Fees 3,433,600 3,433,600 902,192 26% 541,936 360,255 66% Planning Fees 1,259,167 1,259,167 109,894 9% 141,350 (31,456) -22% Engineering Fees 1,142,289 1,142,289 86,485 8% 144,179 (57,694) -40% Other Revenue/Current Charges 346,181 346,181 14% 38,651 50,170 11,518 30% 206 DEVELOPMENT SERVICES 6,181,237 6,181,237 1,148,740 19% 866,116 282,624 33% 207 LONG RANGE PLANNING 995,882 995,882 166,718 17% 128,718 37,999 30% 215 and 216 HCD BLOCK GRANT
Interest Income/Other Revenue 244 244 15% 36 24 13 53%
215 and 216 HCD BLOCK GRANT 244 244 36 15% 24 13 53%
225 ASSET SEIZURE 979 979 72 7% 52 20 38%
229 LIGHTING AND LANDSCAPE 199,916 199,916 101 0% 60 41 68% 230 COMMUNITY FACILITIES DISTRICT 37,591 37,591 72 0% 49 22 46% 232 ENVIRONMENTAL PROGRAMS 553,277 553,277 89,834 16% 86,400 3,433 4% 234 MOBILE HOME PARK RENT STAB. 441 441 39 9% 23 16 71% 235 SENIOR HOUSING 1,787 1,787 131 7% 85 45 53%
236 HOUSING MITIGATION 1,571,677 1,571,677 74,731 5% 367,784 (293,052) -80% 237 BEGIN 2,369 2,369 38,188 1612% 96 38,091 39526%
238 CAL HOMES 2 2 45 2260% 30 16 53%
240 EMPLOYEE ASSISTANCE 20,673 20,673 1,387 7% 2,274 (887) -39% 246 COUNTYWIDE SOLID WASTE 1,628,603 1,628,603 - n/a - - n/a 247 ENVIRONMENT REMEDIATION 1,023 1,023 77 8% 49 28 56% 255 HOUSING SUCCESSOR AGENCY 233,641 233,641 180,846 77% 85,869 94,977 111% 260 PUBLIC ART 501 501 n/a - - n/a -
TOTAL SPECIAL REVENUE FUNDS 12,440,818 12,440,818 1,772,620 14% 1,613,617 159,003 10%

CAPITAL PROJECTS FUNDS
301 PARK DEVELOPMENT 1,369,271 1,369,271 65,650 5% 193,464 (127,814) -66% 302 PARK MAINTENANCE 60,773 60,773 2,708 4% 3,003 (295) -10% 303 LOCAL DRAINAGE 374,484 374,484 7,110 2% 135,411 (128,301) -95% 304 LOCAL DRAINAGE/NON AB1600 29,166 29,166 796 3% 2,513 (1,717) -68% 306 AGRICULTURE & OPEN SPACE PRESERVATION 5,058 5,058 19,347 383% 39,458 (20,111) -51% 308 STREET CIP 4,702,650 4,702,650 287,366 6% 215,359 72,007 33% 309 TRAFFIC IMPACT 5,019,799 5,019,799 30,861 1% 259,992 (229,130) -88% 315 PUBLIC SAFETY FACILITIES IMPACT 6,221,575 6,221,575 23,437 0% 65,146 (41,710) -64% 346 PUBLIC FACILITIES NON-AB1600 1,165,537 1,165,537 1,674 0% 33,404 (31,730) -95% 347 PUBLIC FACILITIES IMPACT 138,168 138,168 6,657 5% 18,376 (11,719) -64% 348 LIBRARY 480,582 480,582 24,222 5% 84,133 (59,912) -71% 350 UNDERGROUNDING 29,592 29,592 935 3% 362,602 (361,667) -100% 355 SCHOOL PEDESTRIAN/TRAFFIC SAFETY 482,291 482,291 n/a - 29,717 (29,717) -100% 360 COMMUNITY/REC IMPACT FUND 1,335,488 1,335,488 44,016 3% 128,660 (84,644) -66% 375 QUIMBY FEE 653,451 653,451 447 0% - 447 n/a
TOTAL CAPITAL PROJECTS FUNDS 22,067,885 22,067,885 515,226 2% 1,571,238 (1,056,012) -67%

DEBT SERVICE FUNDS
420 CIVIC CENTER DEBT 292,184 292,184 48,807 17% 50,895 (2,088) -4% 441 POLICE FACILITY BOND 387,490 387,490 64,692 17% 64,108 584 1% TOTAL DEBT SERVICE FUNDS 679,674 679,674 113,499 17% 115,004 (1,505) -1%

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City of Morgan Hill
Year to Date Revenues - Fiscal Year 2022-23
For The Month Ended August 31, 2022
17% 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 14,400,000 14,400,000 1,250,590 9% 1,203,827 46,763 4% Interest Income/Transfers 38,548 38,548 2,017 5% 880 1,138 129% Other Revenue/Current Charges 319,809 319,809 27,121 8% 22,944 4,177 18% 640 SEWER OPERATION 14,758,357 14,758,357 1,279,728 9% 1,227,651 52,078 4% 641 SEWER EXPANSION
Interest Income 64,455 64,455 11,989 19% 9,007 2,982 33% Development Impact Fee 4,336,657 4,336,657 200,693 5% 688,718 (488,025) -71% Transfer From-643 (Sewer Replacement) 13,310,782 13,310,782 2,218,464 17% - 2,218,464 n/a 641 SEWER EXPANSION 17,711,894 17,711,894 2,431,146 14% 697,725 1,733,421 248% 642 SEWER RATE STABILIZATION 50,000 50,000 9,917 20% 25,983 (16,066) -62% 643 SEWER-CAPITAL PROJECT 6,710,456 6,710,456 1,091,768 16% 776,711 315,056 41% TOTAL SEWER FUNDS 39,230,707 39,230,707 4,812,559 12% 2,728,069 2,084,489 76% 650 WATER OPERATION
Water Sales 16,400,000 16,400,000 1,600,771 10% 1,434,021 166,749 12% Meter Install & Service 50,000 50,000 2,134 4% 5,377 (3,243) -60% Transfers-In / Interest Income 580,372 580,372 93,670 16% 53,611 40,058 75% Other Revenue/Current Charges 614,770 614,770 102,907 17% 152,057 (49,150) -32% 650 WATER OPERATION 17,645,142 17,645,142 1,799,481 10% 1,645,067 154,415 9% 651 WATER EXPANSION
Interest Income/Other Revenue/Transfer 21,044 21,044 1,686 8% 1,266 33% 421 Development Impact Fee 918,214 918,214 51,359 6% 127,481 (76,122) -60% 651 WATER EXPANSION 939,258 939,258 53,045 6% 128,747 (75,701) -59% 652 Water Rate Stabilization - - 1,829 n/a 21,987 (20,158) -92% 653 Water Capital Project 5,128,809 5,128,809 847,181 17% 841,704 5,477 1% TOTAL WATER FUNDS 23,713,209 23,713,209 2,701,538 11% 2,637,505 64,033 2% TOTAL ENTERPRISE FUNDS 62,943,916 62,943,916 7,514,096 12% 5,365,574 2,148,522 40%

INTERNAL SERVICE FUNDS
730 INFORMATION SYSTEMS 2,233,768 2,233,768 373,301 17% 375,735 (2,434) -1% 740 BUILDING MAINTENANCE 1,655,704 1,655,704 275,958 17% 188,461 87,497 46% 741 BUILDING REPLACEMENT 836,114 836,114 136,987 16% 115,765 21,222 18% 745 CIP ADMINISTRATION 1,977,307 1,977,307 - n/a - - n/a 760 UNEMPLOYMENT INSURANCE 2,317 2,317 171 7% 120 50 42% 770 WORKERS COMPENSATION 719,150 719,150 159,121 22% 112,814 46,307 41% 790 EQUIPMENT REPLACEMENT 1,259,595 1,259,595 179,515 14% 170,405 9,110 5% 791EMPLOYEE BENEFITS 813,718 813,718 134,420 17% 101,258 33,162 33% 795 GENERAL LIABILITY INSURANCE 1,981,019 1,981,019 330,097 17% 286,344 43,753 15% TOTAL INTERNAL SERVICE FUNDS 11,478,692 11,478,692 1,589,570 14% 1,350,902 238,668 18% TOTAL FOR ALL FUNDS 160,122,555 $ 160,122,555 $ 14,157,233 $ 9% 12,129,597 $ 2,027,636 $ 17%

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City of Morgan Hill
Year to Date Expenses - Fiscal Year 2022-23
For the Month Ended Aug 31, 2022
17% 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 12,266 $ 430,915 $ 83,435 $ - $ 83,435 $ 19% 62,909 $ CITY ATTORNEY 67,826 1,081,769 141,467 159,970 301,437 28% 95,421 CITY MANAGER 53,487 854,800 106,326 43,515 149,841 18% 97,246 HUMAN RESOURCES 59,795 847,361 155,736 - 155,736 18% 94,622

COUNCIL SVCS & RECORDS MGMT
Council Svcs & Records Mgmt 36,995 595,414 105,488 4,800 110,288 19% 92,194 Elections - 357,836 - - - n/a 3,613
COUNCIL SVCS & RECORDS MGMT 36,995 953,250 105,488 4,800 110,288 12% 95,807 FINANCE 142,199 2,552,145 315,782 671,317 987,099 39% 250,519 TOTAL ADMINISTRATION 372,568 6,720,240 908,235 879,602 1,787,836 27% 696,523 II. COMMUNITY SERVICES
Membership Services & Rec. Programs 735,458 6,772,195 1,182,654 1,243,907 2,426,561 36% 1,000,462 Recreation Facility Rentals 41,749 546,870 90,017 53,980 143,997 26% 78,151 Innovative Transit 11,178 887,471 41,310 786,175 827,485 93% - Community Services 48,528 644,107 96,988 34,175 131,162 20% 64,650 Park Maintenance 80,498 1,495,918 159,571 45,233 204,804 14% 118,565 Environmental Services 20,190 390,733 37,816 37,816 - 10% 32,291 Countywide Solid Waste Program 27,786 354,416 62,365 62,365 - 18% 10,956 Street Maintenance 171,019 2,710,389 296,279 49,874 346,153 13% 245,676 Downtown Maintenance 15,864 325,886 23,543 32,350 55,893 17% 51,439 Cable Television 1,479 74,758 3,139 - 4 3,139 % 5,100
COMMUNITY SERVICES 1,153,750 14,202,742 1,993,683 2,245,694 4,239,376 30% 1,607,290 CODE COMPLIANCE 14,083 319,550 32,047 32,047 - 10% 25,401 INFRASTRUCTURE PLANNING & CONGESTION MGMT 491,888 24,204 55,632 12,000 67,632 14% 44,769 ECONOMIC DEVELOPMENT PROGRAMS 66,633 894,948 147,505 32,793 180,298 20% 91,642 TOTAL COMMUNITY SERVICES 1,258,670 15,909,129 2,228,868 2,290,487 4,519,354 28% 1,769,102 III. PUBLIC SAFETY
POLICE
PD Administration 186,274 1,676,697 330,855 43,854 374,708 22% 213,855 Field Operations 766,246 10,891,376 1,676,574 54,493 1,731,066 16% 1,368,646 Support Services 263,897 2,805,374 508,615 - 508,615 18% 438,779 Emergency Services/Haz Mat 15,580 234,368 36,719 - 36,719 16% 27,234 Special Operations 346,406 3,900,732 733,561 - 733,561 19% 451,139 Dispatch Services 151,247 2,116,137 360,399 - 360,399 17% 254,370 POLICE 1,729,652 21,624,684 3,646,722 98,346 3,745,068 17% 2,754,022 FIRE 619,597 8,653,847 1,551,503 368,144 1,919,647 22% 1,230,525 TOTAL PUBLIC SAFETY 2,349,249 30,278,531 5,198,225 466,490 5,664,715 19% 3,984,547 IV. TRANSFERS
Other 107,276 1,287,315 214,552 214,552 - 17% 221,118
TOTAL TRANSFERS 107,276 1,287,315 214,552 214,552 - 17% 221,118 TOTAL GENERAL FUND 4,087,763 54,195,214 8,549,880 3,636,579 12,186,459 22% 6,671,290

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City of Morgan Hill
Year to Date Expenses - Fiscal Year 2022-23
For the Month Ended Aug 31, 2022
17% 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 420 909,478 840 - 0% 722 840
205 PUBLIC SAFETY/SUPP.LAW 104 101,252 209 - 0% 1,208 209 206 DEVELOPMENT SERVICES FUND
Planning 122,322 1,772,972 278,606 1,489 280,095 16% 276,732 Building 164,167 2,452,139 375,824 69,326 445,149 18% 314,633 Engineering 109,933 1,907,855 247,226 317,212 564,438 30% 167,983 206 DEVELOPMENT SERVICES FUND 396,422 6,132,966 901,655 388,027 1,289,683 21% 759,348 207 LONG RANGE PLANNING 72,451 936,040 149,805 46,115 195,920 21% 83,627 215/216 CDBG 7 81 13 - 17% 13 916
225 ASSET SEIZURE 63 759 127 - 17% 127 -
229 LIGHTING AND LANDSCAPE 8,934 224,538 15,956 12,293 28,248 13% 14,759 230 COMMUNITY FACILITIES DISTRICT 2,182 39,852 4,962 - 4,962 12% 3,661 232 ENVIRONMENT PROGRAMS 29,838 525,533 76,698 9,000 85,698 16% 61,670 234 MOBILE HOME PARK 73 881 147 - 17% 147 74
236 HOUSING MITIGATION 62,751 1,890,588 127,547 147,203 274,750 15% 95,630 237 BEGIN 35,806 9,673 36,612 36,612 - 378% -
240 EMPLOYEE ASSISTANCE 3,597 20,919 3,673 - 3,673 18% 172 246 COUNTYWIDE SOLID WASTE PROGRAM 55,726 1,842,223 164,075 1,154,000 1,318,075 72% 85,416 255 HOUSING SUCCESSOR AGENCY 90,693 1,143,490 239,135 412,500 651,635 57% 208,338 260 PUBLIC ART 533 17,000 533 - 3% 533 3,750
TOTAL SPECIAL REVENUE FUNDS 759,602 13,795,273 1,721,988 2,169,138 3,891,126 28% 1,319,292

CAPITAL PROJECT FUNDS
301 PARK DEVELOPMENT 15,924 2,610,959 26,726 613,729 640,455 25% 208,414 302 PARK MAINTENANCE 54,342 650,000 109,383 109,383 - 17% 109,623 303 LOCAL DRAINAGE 2,672 8,221,231 5,343 211,561 216,905 3% 5,008 304 LOCAL DRAIN. NON-AB1600 244 181,113 488 19,889 20,377 11% 480 306 AGRICULTURE & OPEN SPACE PRESERVATIO 275,854 10,488 20,976 - 20,976 8% 4,498 308 STREET CIP 1,772,415 5,084,404 1,780,991 2,954,716 4,735,707 93% 31,997 309 TRAFFIC IMPACT 791,895 9,301,872 802,691 5,088,616 5,891,307 63% 1,785,626 315 PUBLIC SAFETY FACILITIES IMPACT 56,766 9,956,026 78,564 619,963 698,526 7% 39,196 346 PUBLIC FAC.NON AB1600 371 2,404,515 741 6,066 6,808 0% 36,038 347 PUBLIC FACILITIES IMPACT 2,429 279,154 4,859 - 4,859 2% 4,554 348 LIBRARY IMPACT 18,576 222,916 37,153 - 37,153 17% 36,118 350 UNDERGROUNDING 95 1,056,441 190 - 190 0% 190
355 SCHOOL PEDESTRIAN & TRAFFIC SAFETY 1,697 443,838 3,395 1,350 4,745 1% 422,633 360 COMM/REC CENTER IMPACT 2,289 1,466,276 3,581 1,061,050 1,064,631 73% 2,238 375 QUIMBY FEE 62,975 1,434,865 62,975 3,000 65,975 5% - TOTAL CAPITAL PROJECTS FUNDS 2,793,177 43,589,465 2,938,056 10,579,940 13,517,997 31% 2,686,613

DEBT SERVICE FUNDS
420 CIVIC CENTER DEBT 262 292,184 524 - 524 0% 1,772
441 POLICE FACILITY BOND DEBT 347 387,490 694 - 694 0% 676 TOTAL DEBT SERVICE FUNDS 609 679,674 1,219 - 1,219 0% 2,448

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City of Morgan Hill
Year to Date Expenses - Fiscal Year 2022-23
For the Month Ended Aug 31, 2022
17% 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 873,776 16,300,411 1,801,455 144,019 1,945,474 12% 2,185,603 641 SEWER CAPITAL EXPANSION 1 23,292,409 ,183,369 2,366,318 1,003,435 3,369,753 14% 54,344 642 SEWER RATE STABILIZATION 151 1,818 303 - 303 17% 190 643 SEWER-CAPITAL PROJECTS 10,539 23,494,295 34,926 1,206,747 5 1,241,673 % 382,015 TOTAL SEWER FUND(S) 2,067,836 63,088,933 4,203,002 2,354,201 6,557,203 10% 2,622,152 WATER
Water Operations 944,040 16,045,940 1,807,870 882,674 2,690,543 17% 1,801,980 Utility Billing 63,993 1,122,979 132,465 132,465 - 12% 138,468 Water Conservation 12,378 439,985 27,472 42,896 70,368 16% 13,760 650 WATER OPERATIONS 1,020,412 17,608,904 1,967,806 925,570 2,893,376 16% 1,954,208 651 WATER CAPITAL EXPANSION 60,883 893,125 118,626 30,412 149,039 17% 121,994 652 WATER RATE STABILIZATION 113 1,362 227 - 17% 227 62 653 WATER-CAPITAL PROJECTS 18,118 5,617,611 19,330 275,844 5 295,174 % 4,064 TOTAL WATER FUND(S) 1,099,527 24,121,001 2,105,990 1,231,826 3,337,815 14% 2,080,328 TOTAL ENTERPRISE FUNDS 3,167,363 87,209,934 6,308,992 3,586,026 9,895,018 11% 4,702,479

INTERNAL SERVICE FUNDS
730 INFORMATION SYSTEMS 106,087 2,518,930 279,102 69,140 348,242 14% 264,317 740 BUILDING MAINTENANCE 104,458 1,668,218 186,684 41,753 228,438 14% 152,468 741 BUILDING REPLACEMENT 51,577 1,611,451 62,996 25,823 88,819 6% - 745 CIP ADMINISTRATION 132,625 1,982,153 305,798 17,213 323,010 16% 254,432 760 UNEMPLOYMENT - 15,000 - - n/a - -
770 WORKERS COMPENSATION 490,712 1,106,358 487,955 487,955 - 44% 503,741 790 EQUIPMENT REPLACEMENT - 1,055,964 165,549 340,357 505,905 48% 63,236 791 EMPLOYEE BENEFITS FUND 63,822 700,000 147,812 147,812 - 21% 28,355 795 GEN. LIABILITY INSURANCE 43,360 1,893,436 1,577,006 4,650 1,581,656 84% 1,440,716 TOTAL INTERNAL SERVICE FUNDS 992,641 12,551,510 3,212,901 498,936 3,711,837 30% 2,707,266 REPORT TOTAL $ 11,801,156 $ 212,021,070 $ 22,733,037 $ 20,470,619 $ 43,203,656 20% 18,089,387 $

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City of Morgan Hill
Fund Activity Summary - Fiscal Year 2022-23
For The Month Ended August 31, 2022
17% of Year Complete
Un-audited Year to-Date
Fund Fund Balance YTD % of YTD % of Deficit or
No. Fund 06-30-22 Actual Budget Actual Budget Carryover Reserved1 Unreserved 010 GENERAL FUND 30,942,217 $ 2, $ 652,221 5% 8, $ 549,880 16% (5, $ 897,659) $ 3,636,579 $ 21,407,979TOTAL GENERAL FUND $ 30,942,217 $ 2,652,221 5% $ 8,549,880 16% $ (5,897,659) $ 3,636,579 $ 21,407,979 202 STREET MAINTENANCE 219 $ 71,466 8% $ 15% 70,626 840 $ $ - $ 70,846205 PUBLIC SAFETY/SUPPL. LAW 251,048 139 0% 13% 209 (70) - 250,978 206 DEVELOPMENT SERVICES (268,523) 1,148,740 19% 901,655 15% 247,085 388,027 (409,466) 207 LONG RANGE PLANNING 1,413,536 166,718 17% 149,805 16% 16,912 46,115 1,384,333 215 / 216 CDBG 29,749 15% 36 17% 13 23 - 29,772
225 ASSET SEIZURE 129,752 7% 72 127 n/a (55) - 129,698
229 LIGHTING AND LANDSCAPE 200,211 101 0% 15,956 7% (15,855) 12,293 172,063 230 COMMUNITY FACILITIES DISTRICT 132,641 0% 72 4,962 12% (4,891) - 127,751 232 ENVIRONMENTAL PROGRAMS 256,609 89,834 16% 76,698 15% 13,135 9,000 260,744 234 MOBILE HOME PK RENT STAB. 66,501 9% 39 17% 147 (108) - 66,392 235 SENIOR HOUSING 235,851 131 7% n/a - 131 - 235,982
236 HOUSING MITIGATION 5,198,552 74,731 5% 127,547 7% (52,816) 147,203 4,998,533 237 BEGIN 458,666 38,188 1612% 36,612 378% 1,575 - 460,242238 CAL HOMES 713 45 2260% n/a - 45 759 240 EMPLOYEE ASSISTANCE 62,506 1,387 7% 3,673 18% (2,286) - 60,219 246 COUNTYWIDE SOLID WASTE 129,936 8% - 164,075 9% (164,075) 1,154,000 (1,188,139) 247 ENVIRONMENT REMEDIATION 138,984 8% 77 n/a - 77 - 139,061 255 HOUSING SUCCESSOR AGENCY 3,642,513 180,846 77% 239,135 21% (58,289) 412,500 3,171,724 260 PUBLIC ART 67,129 n/a - 533 (533) - 66,596
TOTAL SPECIAL REVENUE FUNDS $ 12,146,594 $ 1,772,620 14% $ 1,721,988 12% $ 50,632 $ 2,169,138 $ 10,028,088 301 PARK DEV. IMPACT FUND $ (806,089) $ 65,650 5% 26,726 $ 1% 38,924 $ $ 613,729 $ (1,380,894) 302 PARK MAINTENANCE 2,689,798 2,708 4% 109,383 17% (106,675) - 2,583,123 303 LOCAL DRAINAGE 12,158,760 7,110 2% 5,343 0% 1,767 211,561 11,948,965 304 LOCAL DRAINAGE/NON-AB1600 1,412,884 796 3% 488 0% 308 19,889 1,393,303 306 AGRICULTURE AND OPEN SPACE PRESERVA 19,347 591,190 383% 20,976 8% (1,629) - 589,561 308 STREET CIP 5,949,841 6% 1, 287,366 35% (1, 780,991 493,625) 2,954,716 1,501,499 309 TRAFFIC IMPACT FUND 1,022,903 30,861 1% 9% ( 802,691 771,830) 5,088,616 (4,837,542) 315 PUBLIC SAFETY FACILITIES IMPACT 3,378,984 23,437 0% 78,564 1% (55,127) 619,963 2,703,894346 PUBLIC FACILITIES NON-AB1600 3,269,232 1,674 0% 741 0% 933 6,066 3,264,098 347 PUBLIC FACILITIES IMPACT FUND 1,062,044 6,657 5% 4,859 2% 1,798 - 1,063,842348 LIBRARY IMPACT FUND 1,513,320 24,222 5% 37,153 17% (12,931) - 1,500,389 350 UNDERGROUNDING 1,687,475 935 3% 190 0% 744 - 1,688,219355 SCHOOL PEDESTRIAN/TRAFFIC SFTY (46,062) - n/a 3,395 1% (3,395) 1,350 (50,807) 360 COMM/REC CTR IMPACT FUND 1,357,330 44,016 3% 3,581 0% 40,435 1,061,050 336,715 375 QUIMBY FEE 838,575 447 0% 62,975 4% (62,528) 3,000 773,047 TOTAL CAPITAL PROJECT FUNDS $ 36,080,183 $ 515,226 2% $ 2,938,056 7% $ (2,422,830) $ 10,579,940 $ 23,077,413 420 CIVIC CENTER DEBT $ 173,278 $ 48,807 17% $ 524 0% 48,283 $ $ 1 $ 221,560 441 POLICE FACILITY BOND DEBT 166,908 64,692 17% 694 0% 63,998 2 230,904TOTAL DEBT SERVICE FUNDS $ 340,186 $ 113,499 17% $ 1,219 0% $ 112,280 $ 3 $ 452,464 Revenues Expenses Ending Fund Balance

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SUMMARY BY FUND TYPE
GENERAL FUND GROUP 30,942,217 $ $ 2,652,221 5% 8, $ 549,880 16% (5, $ 897,659) $ 3,636,579 $ 21,407,979 SPECIAL REVENUE GROUP 12,146,594 1,772,620 14% 1,721,988 12% 50,632 2,169,138 10,028,088 DEBT SERVICE GROUP 340,186 113,499 17% 1,219 0% 112,280 3 452,464 CAPITAL PROJECTS GROUP 36,080,183 515,226 2% 2,938,056 7% (2,422,830) 10,579,940 23,077,413 ENTERPRISE GROUP 73,049,964 7,514,096 12% 6,308,992 7% 1,205,104 3,586,026 70,669,041 INTERNAL SERVICE GROUP 14,632,060 1,589,570 14% 3,212,901 26% (1,623,331) 528,936 12,479,793 TOTAL ALL GROUPS $ 167,191,204 $ 14,157,233 9% 22, $ 733,037 11% (8, $ 575,804) $ 20,500,622 $ 138,114,777 For Enterprise Funds: Unrestricted fund balance = Fund balance net of fixed assets and long-term liabilities. *Unreserved fund balance includes bond proceeds reserved for projects listed in bond documents. 1 Amount restricted for encumbrances, fixed asset replacement, long-term receivables, and bond reserves.

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16 CITY COUNCIL STAFF REPORT
MEETING DATE: September 28, 2022
PREPARED BY:

Nichole Martin, Community Services Coordinator
APPROVED BY: City Manager

COMMUNITY FUNDING POLICY REVIEW AND UPDATE

RECOMMENDATION(S)
Review policy and direct staff to make any updates to the Community Funding Policy.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Supporting our Youth, Seniors, and Entire Community
Preserving and Cultivating Public Trust
Enhancing Diversity and Inclusiveness
2022-2023 Strategic Priorities
Fiscal Sustainability
Economic Development
REPORT NARRATIVE:

Annually, the City Council considers funding requests from local non-profit organizations that host community-wide events. In November 2021, City Council adopted Council Policy CP-21-02, to establish a process for community organizations to request funding to support fee waivers, event sponsorship, and other funding requests from City Council. The policy included as Attachment 1.

To be considered for this funding, the following criteria must be met:
a. The organization requesting funding must be a nonprofit. b. The program, event, or activity provides a direct benefit to the Morgan Hill community.
c. Programs in alignment with the City Council’s Goals and Priorities shall be given priority. City Council priorities are established by the City Council in January of each year.
d. Each organization must submit an inclusivity statement describing how the organization and/or the proposed activity is inclusive of the entire community. e. Existing programs and events may be given priority.

Council requested that City staff bring the policy back for review and discussion on adding additional requirements or clarifications to the policy. The intent of this item is to allow Councilmembers to provide input on suggested updates to the policy. Should

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16 updates be desired by a majority of the Council, City staff shall return with an updated policy for review and approval by Council.

COMMUNITY ENGAGEMENT:

The Community Promotion Funding Request Applications were sent via email to organizations that have recently received Council support for events, fee waivers/facility use, or for partnership program support. Additionally, the application was posted to the website through a Newsflash, in the weekly 411, and on the City’s Facebook page, providing information on the annual process.

ALTERNATIVE ACTIONS:

1. The City Council could choose to make changes to the Community Funding Policy that was approved in November 2021.

2. The City Council could choose to make no changes to the Community Funding Policy that was approved in November 2021.

3. The City Council could choose to provide no funding for the events/programs, which could hinder the ability for events to take place.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

Annually, the City Council makes decisions to provide funding to support non-profit community events that benefit the entire community. In November 2021, City Council adopted Council Policy (CP-21-02) Council Funding Requests.

FISCAL AND RESOURCE IMPACT:

There is no Fiscal Impact related to updating the policy. The staff resources for the policy update are currently included in the Public Services Department's work plan. The Community Promotions are budgeted within the City Council’s budget, in the General Fund (010). Requests for FY 22-23 totaled $260,078. A total of $199,080 in funding allocations was approved through this Community Funding process.

CEQA (California Environmental Quality Act):

Council funding ultimately supports events held on public property. The support and permitting of the City to allow these events is categorically exempt under Class 1 Existing facilities, which consists of the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of use beyond that existing at the time of the lead agency's determination.

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CITY OF MORGAN HILL

CITY COUNCIL POLICIES AND PROCEDURES
CP-21-02
SUBJECT: CITY COUNCIL FUNDING REQUESTS
EFFECTIVE DATE: NOVEMBER 3, 2021
REVISED DATE: NA
ORIGINATING DEPARTMENT: COMMUNITY SERVICES DEPARTMENT
Purpose
The purpose of this policy is to establish a process for community organizations to request funding to support fee waivers, event sponsorship, and other funding requests from the City Council. The policy is intended to allow the City Council to fully evaluate all funding requests at one time along with budget appropriation.

Policy

1. Applicant Criteria
a. The organization requesting funding must be a nonprofit. b. The program, event, or activity provides a direct benefit to the Morgan Hill community.
c. Programs in alignment with the City Council’s Goals and Priorities shall be given priority. City Council priorities are established by the City Council in January of each year.
d. Each organization must submit an inclusivity statement describing how the organization and/or the proposed activity is inclusive of the entire community. e. Existing programs and events may be given priority.

2. Application Availability and Deadline
a. Applications for the next Fiscal Year (July-June) will be available on the City’s website annually in February.
b. Completed applications will be due annually in March.

3. Review and Approval Process
a. Applications will be reviewed by the City staff.
b. Funding applications and details will be included annually in the Budget Development or Mid-Cycle Budget Review process.
c. The City Manager will make recommendations on funding to the City Council based on established Council priorities and funding constraints. d. The City Council shall award and include final funding within the Budget.

4. Reporting Requirements
DocuSign Envelope ID: 87764CAC-F5F2-4AC2-921C-27D9BF34420E

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a. Within thirty days following the conclusion of the funded activity, the organization must submit a report to the City reporting out pertinent information related to the activity. For ongoing activities, an annual report must be submitted by July 30 for the prior fiscal year. b. The report shall include a record of the use of City funds and statistics and information that provides details on the activity’s impact to the community.

5. Late Requests
a. Requests received after the deadline shall not be accepted by City staff.

6. Council Member Initiated Event and Fee Waiver Requests a. A member of the City Council may request a fee waiver or funding be provided for an event by applying with the above application process by the March deadline. b. All Council Member initiated requests occurring after the March deadline must be provided to the City Manager 90 days in advance of the event to allow sufficient time to bring to City Council for approval.
c. The City Staff shall prepare a report for the City Council for approval of any Council Member initiated requests.

This policy shall remain in effect until modified by the City Council.

APPROVED:
_______________________________

RICH CONSTANTINE, MAYOR
DocuSign Envelope ID: 87764CAC-F5F2-4AC2-921C-27D9BF34420E

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Morgan Hill City CouncilSeptember 28, 2022

Morgan Hill City Council
September 28, 2022